Hot Stock TA Enterprise share price climbs to four-year high

by **Cals** Thu 17 Jul 2014, 04:52

Hot Stock TA Enterprise share price climbs to four-year high

Business & Markets 2014

Written by Ahmad Naqib Idris Adzman Shah of theedgemalaysia.com

Wednesday, 16 July 2014 15:44

KUALA LUMPUR (July 16): TA Enterprise Bhd saw its share price rising by 16 sen or 19% over the past two weeks, to reach a high of RM1.01 today, from 85 sen at the star of this month.

At 3.26 pm, the counter rose 3.5 sen or 3.6% to trade at RM1, with some 18.6 million shares done so far today.

A remisier cited the long-running rumour of the group disposing its stockbroking arm, as the main catalyst for the recent spike in TA’s share price.

He said that the consolidation of the financial sector, which includes the potential merger of CIMB Group Holdings, RHB Capital Bhd and Malaysia Building Society Bhd into Malaysia’s biggest bank, may require its rivals to beef up their operation, by gaining size through merger and acquisition.

“If the CIMB-RHB-MBSB merger goes through, it could mean that the smaller firms in the financial segment may have to team up to compete.

“This could mean that another bank could be eyeing to acquire TA’s stockbroking business,” he told theedgemalaysia.com.

He also noted that Datuk Tony Tiah Thee Kian, co-founder and largest shareholder of TA, has been gradually accumulating shares in the company.

According to TA’s filing to Bursa Malaysia, Tiah owns 522.9 million shares or 30.55% equity interest in the group, as at July 4, 2014, compared to his 30.34% stake in March 2014 and 29.08% stake in August 2013.

Meanwhile, AllianceDBS Research Sdn Bhd said that TA’s stockbroking franchise has a sizeable market share of 6% of market volume and also has a strong retail base.

“Assuming a cash offer of 1x P/BV and based on book value of RM820 million (as at Jan 2014) for its broking and credit & lending business, this works out to be 48 sen per share, which can be distributed back to shareholders via special dividends,” said the research house in a note.

AllianceDBS keeps a “buy” call on the stock and a target price of RM1.20.