Stocks to watch: MAS, Brahim’s may be on investors’ radar today

by **Cals** Mon 11 Aug 2014, 22:50

Business & Markets 2014

Written by Ahmad Naqib Idris Adzman Shah of theedgemalaysia.com

Monday, 11 August 2014 09:15

KUALA LUMPUR: Based on corporate news and developments last Friday, stocks that may garner interest today may include Malaysia Airline System Bhd (MAS), Brahim’s Holdings Bhd and rubber glovemakers like Top Glove Corp Bhd, Supermax Corp Bhd, Kossan Rubber Industries Bhd and Hartalega Holdings Bhd.

MAS shares will resume trading today after the announcement last Friday that Khazanah Nasional Bhd is offering 27 sen per share through a selective capital reduction and repayment to take the national carrier private. MAS shares were last traded at 24 sen prior to the announcement.

In a statement last Friday, Khazanah, which owns 69.37% of MAS, said it had submitted a formal request to MAS to undertake a selective capital reduction and repayment exercise, which will cost the government investment arm some RM1.38 billion.

Khazanah noted that subject to the necessary approvals from the relevant authorities, it would announce the proposed restructuring scheme within a period of six to 12 months.

“We reiterate that the proposed restructuring will critically require all parties to work closely together to undertake what will be a complete overhaul of the national carrier on all relevant aspects of, inter alia, the airline’s operations, business model, finances, human capital and regulatory environment,” it said.

Meanwhile, there are uncertainties over Brahim’s’ prospects as there are concerns that MAS’ restructuring would affect its catering contract with the national carrier.

An analyst said it is “too early to tell” what impact the corporate exercise would have on Brahim’s operations. “It will depend on what the restructuring exercise will entail,” the analyst commented.

Meanwhile, another analyst said the privatisation would not have much impact on Brahim’s, and attributed the small slide in its share price to the weak market sentiment last Friday.

“Even though MAS will be privatised, Brahim’s will still be operating as usual. The counter is most likely down due to the fall in the KLCI last Friday,” said the analyst.

Rubber glove stocks such as Top Glove, Supermax, Kossan and Hartalega may be in the limelight as the World Health Organisation (WHO) had declared the Ebola virus as an international health risk.

Reuters quoted WHO as saying that the possible consequences of further worldwide spread of the virus, which has killed almost 1,000 people in four West African countries, are “particularly serious” in view of the virulence of the virus.

“A coordinated international response is deemed essential to stop and reverse the international spread of Ebola,” WHO said in a statement after a two-day meeting of its emergency committee on Ebola.

Meanwhile, Astral Supreme Bhd has appointed CH International Advisory Sdn Bhd to conduct an investigative review on its financial statements for the financial year ended Dec 31, 2011 (FY11), FY12 and FY13.

This is the second investigative review to be conducted by the company this year.

In a filing with Bursa Malaysia last Friday, Astral Supreme said: “The circumstances leading to the appointment of CH International is to carry out an investigative review on the financial statements of Astral Supreme for the past three financial years other than that performed by PKF Advisory Sdn Bhd for the financial year ended Dec 31, 2013”.

Datuk Dr Yu Kuan Chon continued to accumulate more shares in Rapid Synergy Bhd. Its filing with Bursa showed that Dr Yu had bought an additional 234,000 shares last Friday. He has been mopping up shares in Rapid Synergy on the open market lately.

Currently, the property tycoon holds a direct and indirect 26.42% equity stake in Rapid Synergy, a Penang-based precision tool manufacturer for the semiconductor industry.

Dr Yu, the major shareholder of developer YNH Property Bhd, is known for his investment in Hong Leong Capital Bhd, which prevented the latter from being privatised by Hong Leong Financial Group Bhd last year.

The additional purchase of shares in Rapid Synergy raised Dr Yu’s total interest in the firm, to 22.49 million shares or a 25.74% stake.

Rapid Synergy’s share price has risen from around RM5.00 in the beginning of July to the recent peak of RM6. It closed at RM5.97 last Friday.

Petronas Gas Bhd (PetGas) posted a net profit of RM435.26 million for its second quarter ended June 30 (2QFY14) versus RM944.94 million in the previous corresponding quarter. Revenue rose 18% to RM1.10 billion, from RM930.77 million in the year before.

The sharp fall in net profit was due mainly to the recognition of deferred tax assets arising from investment allowance granted to the liquefied natural gas regasification terminal in the previous corresponding period.

For the six-month period ended June 30, PetGas’ net profit came in lower at RM853.27 million compared with RM1.31 billion in the same period the year before, while cumulative revenue rose 17% to RM2.16 billion from RM1.84 billion earlier.

The group declared an interim dividend of 20 sen per share for FY14.

This article first appeared in The Edge Financial Daily, on August 11, 2014.