On The Platter
MAS (FV RM0.90 – SELL) Corporate News Flash: Better Exposure
Via Preference Shares
There has been significant interest on MAS’ redeemable convertible
preference shares (RCPS) which currently trade at RM0.935 and below its
redemption value of RM1 upon maturity on 30 Oct 2012. There were concerns from
some quarters that MAS will not be able to meet the redemption of the RCPS. We
think the likelihood of MAS defaulting on its redemption obligation is low as
this will significantly tarnish the credibility of the company as a
national-flagged carrier as well as
impact the overall Malaysian
capital market. BUY the RCPS for short-term lower risk gain.
AJIYA (NOT RATED)
Discontinuing Coverage: Remains a Good ETP Play
BAT (FV RM52.90 –
NEUTRAL) 1QFY12 Results Review: Higher on Low 1Q Base
GAMUDA (FV
RM4.57 – BUY) Corporate News Flash:
Shops For Tunnel Boring Machines
TGOFFS (FV
RM0.53 – SELL) Corporate News Flash:
Sells Marine Services Arm to Ekuinas
KRUNG THAI BANK (FV
THB16.10 – NEUTRAL) 1QFY12 Results
Review: Sharp Moderation In Provisions
Market Review
Overhanging
uncertainties. The FBM KLCI closed 8.05 pts lower to 1,583.8 as uncertainties over economic reforms in Europe hampered
global sentiment. Domestic corporate news flows include: KFC Holdings and QSR
Brands have agreed to sign definitive agreements of a share sale with Massive
Equity SB which is jointly owned by Johor Corp and CVC Capital Partners,
Fajabaru is expected to secure a RM299m LRT construction contract, Tanjung
Offshore has proposed to sell its marine business to Ekuinas, MMC-Gamuda JV
will purchase six variable density boring machines for RM360m and Sapura Crest
and Kencana shares will be suspended next Wednesday before the capital
repayment exercise. On the global front, the Dow closed 102 pts lower as
political turmoil in Europe cast doubts on the
eurozone's ability to push through meaningful budget and economic
reforms. The poor global market
sentiment could also be attributed to the declining business confidence in the
eurozone, with the Market PMI falling to a five-month low – thereby,
confounding expectations for a rise.
MEDIA HIGHLIGHTS
US stocks join global
selloff amid Europe’s political concern
US stocks joined a global selloff as political uncertainty
in France and the Netherlands intensified concern about Europe’s sovereign debt
crisis. The Standard & Poor’s 500 Index fell 0.8% to 1,366.94, near its
highest level of the day. The Dow Jones Industrial Average slid 102.09 points,
or 0.8%, to 12,927.17. The Russell 2000 Index retreated 1.5% to 791.85. About 6.6bn
shares changed hands on US exchanges, or 2.5% below the three-month average.
(Bloomberg)
MMC Gamuda seals
RM360m deal for MRT project
MMC Gamuda KVMRT SB, a JV between MMC Corp and Gamuda,
sealed a RM360m sales and purchase agreement for six tunnel boring machines
(TBMs). The six custom-designed TBMs will be used to tunnel through karstic
limestone forming half of the proposed 9.5km mass rapid transit (MRT) stretch
from Semantan North Portal to Maluri South Portal. (Financial Daily) Please see
accompanying report
TM’s HyppTV launches
France 24
Telekom Malaysia’s (TM) pay TV service, HyppTV, is
optimistic of attracting subscribers from the French community here with the
launch of France 24, the first and only premium French International news
channel in Malaysia. HyppTV is an Internet Protocol TV service and France 24
will be aired via TM’s high-speed broadband service, UniFi. (Financial Daily)
KFCH, QSR to ink
share sale deals with MESB
KFC Holdings (KFCH) and QSR Brands have agreed to sign
definitive agreements of a share sale with Massive Equity SB (MESB). The
companies told Bursa Malaysia separately yesterday that the date of execution
would be no later than 21 May or another mutually agreeable date. (StarBiz)
Tanjung offers to
sell marine op to Ekuinas
Tanjung Offshore has proposed to sell its marine business to
major shareholder E-Cap (Internal) One SB for RM220m under a demerger exercise.
Tanjung Offshore said it had entered into a conditional agreement for the purchase
and sale of shares with Kota Bayu Ekuiti SB (KBE), a wholly-owned by E-Cap,
which in turn a major shareholder of Tanjung Offshore, for disposal by Tanjung
of 10m ordinary shares of RM1 each in Tanjung Kapal Services SB (TKS),
representing the entire equity interest in TKS, to KBE for a cash consideration
of RM220m. (StarBiz) Please see accompanying report
DRB-Hicom denies
selling Lotus Group
DRB-Hicom has come out in the open to deny that it has
decided to sell newly-acquired Lotus Group International – post takeover of Proton Holdings. The
former is currently undertaking an operations audit on Lotus Group as part of
its governance exercise. “Contrary to reports that Lotus Group would be put
under administration, DRB-Hicom is still supporting Lotus Group, both
financially and management wise,” declared the company in a press release.
(Malaysian Reserve)
ECONOMIC
HIGHLIGHTS
Singapore: Inflation
accelerates more than estimated to 5.2%
Singapore’s inflation accelerated more than economists
estimated in March, justifying the central bank’s decision to tighten monetary
policy this month. The consumer price index rose 5.2% from a year earlier,
after climbing 4.6% in February, the Department of Statistics said in a
statement yesterday. That exceeded the predictions
of 17 of 18 economists in a Bloomberg News survey, where the median estimate
was for a 4.7% increase. The core inflation rate was 2.9% in March. (Bloomberg)
Australia: Producer
prices unexpectedly fell last quarter
Prices paid by Australian producers unexpectedly fell last
quarter for the first time in more than two years, weakening the local currency
and raising bets the central bank will cut interest rates next week. The
producer price index dropped 0.3% in the January-to-March period from the prior
quarter, when it gained 0.3%, the Bureau of Statistics said in Sydney
yesterday. The median estimate of 17 economists surveyed by Bloomberg News was
for a 0.4% increase, with only one predicting a decline. The index rose 1.4% in
the first quarter from a year earlier, less than the median forecast of 2.2%.
(Bloomberg)
EU: Euro-Region debt
rises to highest in single currency history
The debt of the euro region rose last year to the highest
since the start of the single currency as governments increased borrowing to
plug budget deficits and fund bailouts of fellow nations crippled by the fiscal
crisis. The debt of the 17 euro nations climbed to 87.2% of gross domestic
product in 2011 from 85.3% the previous year, official European Union figures
showed yesterday. That’s the highest
since the euro was introduced in 1999. Greece topped the list with debt at
165.3% of GDP, while Estonia had the least at 6% of GDP. (Bloomberg)
EU: ECB rejects Geithner-IMF
push for further crisis measures
European Central Bank officials led by President Mario
Draghi resisted calls from the International Monetary Fund and US Treasury to
do more to stem the debt crisis roiling
the euro-area economy. As talks of global finance chiefs ended yesterday in
Washington, euro-area central bankers from Draghi to Bundesbank President Jens
Weidmann argued they have done enough by cutting interest rates and issuing
more long-term bank loans. Officials in Europe and around the world are
bickering about additional crisis-calming steps, as turmoil returns to the
continent’s bond market amid concern that Spain may need a bailout. (Bloomberg)
EU: Spanish GDP
contracts for second quarter, Bank of Spain says
Spain’s economy contracted in the first quarter, entering
its second recession since 2009 that threatens the nation’s deficit goals. The
economy contracted 0.4% in the first quarter, the Bank of Spain said, after
shrinking 0.3% in the previous three months. Gross domestic product fell 0.5%
from a year ago, the Bank of Spain said, citing estimates based on data that
are still incomplete. The National Statistics Institute publishes its first estimate
on 30 April. (Bloomberg)
EU: Italian consumer
confidence falls to record low on recession
Italian consumer confidence plunged to the lowest in more
than 15 years in April as Prime Minister Mario Monti’s austerity drive deepens
the recession in Europe’s fourth-biggest economy. The confidence index declined
to 89, the lowest since the series began in 1996, from a revised 96.3 in March,
national statistics office Istat said in Rome yesterday. Economists forecast a
reading of 96.2, according to the median of 12 estimates in a Bloomberg News
survey. (Bloomberg)
Source: OSK188
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