Jan 15th - Stocks To Watch CIMB, Sime, Puncak Niaga, KDEB, Naim Hldgs, CYL, Scomi Energy, Minetech, INS BioScience

Stocks To Watch CIMB, Sime, Puncak Niaga, KDEB, Naim Hldgs, CYL, Scomi Energy, Minetech, INS BioScience
Business & Markets 2014
Written by Ho Wah Foon of theedgemalaysia.com
Monday, 13 January 2014 19:03

KUALA LUMPUR (Jan 13): Based on news flow and announcements today, the following companies may lure some interest on Wednesday (Jan 15).

The stock market will be closed tomorrow (Jan 14) in conjunction with the birthday of Prophet Mohammad.

CIMB Group Holdings Bhd, which suspended trading of its securities today pending a “material announcement”, is raising as much as $1.1 billion through new shares to boost its core capital as Southeast Asia's fifth largest lender takes on its rivals in credit and equity markets at home and abroad, Reuters reported.

At press time (7.00 pm), CIMB still has not come out with any official statement yet.

Reuters added CIMB is bracing for more credit demand on the back of rapid economic growth in Malaysia and a pipeline of large initial public offerings this year.

Its consumer and corporate loan businesses have also been growing at double-digit rates, fuelled by strong economic growth in Southeast Asia.

CIMB's core capital has lagged larger regional peers. Its common equity tier 1 ratio was 8.2 percent at the end of September, below local rival Maybank's 10.79 percent. DBS Group Holdings', Southeast Asia's biggest lender, had a common equity tier 1 ratio of 13.3 percent at the end of September.

The CIMB share sale is the biggest in Malaysia since Malayan Banking Bhd, or Maybank, tapped equity markets with a $1.2 billion offering in October 2012, Thomson Reuters data showed.

CIMB is selling 400 million new shares for 7.10 ringgit to 7.25 ringgit each, representing a discount of 2.7 percent to CIMB's Friday closing price, according to a term sheet of the deal seen by Reuters on Monday.

Underwriters of the offering have the option to increase the deal by up to $222 million to meet additional demand, taking the total deal size to $1.1 billion.

"The base deal size shares is covered at the wide end of the range. Large orders from existing shareholders, key local institutions and international investors," said a person with direct knowledge of the matter who declined to be named.

The bank will use the proceeds to fund growth in subsidiaries, reduce debt and for working capital needs, the term sheet said.

Sime Darby Bhd’s rating stays. Fitch Ratings has affirmed Sime Darby Long-Term Foreign and Local Currency Issuer Default Ratings (IDR), and senior unsecured rating at 'A'. The outlook is stable.

Fitch has also affirmed the rating on SIME's US$1.50 billion sukuk issue at 'A'.

“The ratings reflect Sime Darby's scale and business diversity, its strong market position in the crude palm oil (CPO) business, consistent generation of positive fund flows from operations and moderate financial leverage,” said the international rating agency.

“Although Sime Darby's financial performance was weaker in its fiscal 1Q ended 30 September 2013, Fitch expects it to maintain its performance at FY13 levels because of stronger CPO prices,” it added.

Puncak Niaga Holdings Bhd’s Selangor raw water license was terminated today in favour of Kumpulan Darul Ehsan Berhad (KDEB), said Selangor Mentri Besar Tan Sri Abdul Khalid Ibrahim.

He said in a statement: “We have instructed the Selangor Water Management Authority to coordinate the issuance of raw water to be given to state-owned company, Kumpulan Darul Ehsan Berhad (KDEB), in line with the restructuring plans of Selangor's water industry.

“Accordingly, the raw water license which has been granted to concessionaires including Puncak Niaga will be terminated.”

Khalid said the state government will start the project Horas (Hybrid Off River Augmentation System) in Sungai Selangor, which he said is able to supply 600-700 million litres of clean water per day.

“With Horas, Selangor people will not be too dependent on the Langat 2 plant project and that the water consumers in Selangor, Kuala Lumpur and Putrajaya will get continuous water supply.”

Companies expected to be involved in the 4.14-billion ringgit Langat 2 project include Puncak Niaga-linked companies and Gamuda Bhd.

Naim Holdings Bhd announced that it had on Jan 9 and Jan 10 disposed 15 million shares or 2.7% stake in Dayang Enterprise Holdings Bhd on the open market for RM84,008,025.

“The proceeds represent a premium of RM4.43 per share or 378.6% above the unaudited net asset per share of Dayang of RM1.17 as at 30 September 2013,” said Naim in a filing with Bursa Malaysia.

Naim said the proceeds from the disposal would be utilised for working capital of the company. It said the company held 33.63% equity interest in Dayang prior to the disposal.

The Sarawak company said based on the unaudited consolidated quarter report of Naim as at Sept 30, 2013, the proforma effects of the disposal on the net asset per share and gearing of Naim are expected to improve to RM3.77 and 0.38 times, from RM3.52 and 0.40 times, respectively.

“Naim expects to record a proforma gain of about RM62 million from the disposal in the current year.”

CYL Corporation Bhd announced that the company has declared an interim tax exempt dividend of 4% amounting to RM2 million in respect of the financial year ending 31 January 2014.

The interim tax exempt dividend will be paid on Feb 12 to the shareholders, whose names appear in the Record of Depositors on Jan 29, 2014, said the company.

Scomi Energy Services Bhd (SESB) has secured a RM75 million contract from Virginia Indonesia Co.

SESB chief executive officer Shah Hakim Zain said today the contract entails the provision of solids-control equipment and environmental-handling services for a period of 36 months.

With the new contract, SESB’s order book now stands at over RM5.2 billion.

Minetech Resources Bhd clarified it is in the exploratory stage of discussions with a party, on a casino and hotel project in Cambodia, but there is no firm commitment yet.

The discussion revolves around undertaking construction and raw material supply in relation to the project, said the mining firm in reference to a local daily reporting of its possible casino venture in Cambodia.

“Matters are still at a very preliminary stage and nothing is confirmed yet,” said the firm. “Minetech has yet to be awarded any job in relation thereto.”

INS BioScience Bhd’s further appeal for an extension of time up to Jan 31, 2014, to submit the company’s regularisation plan has been rejected by Bursa Malaysia.

Due to this latest development, the securities of the company will be removed from the official list of Bursa Securities on Monday, 20 January 2014, said Bursa Malaysia.

Upon de-listing of the company, the ACE-Market company will continue to exist but as an unlisted entity.