On The Platter
MSC (FV RM5.60 – BUY) Initiating Coverage: Tin is in Malaysia
Smelting Corporation (MSC), one of the world’s leading integrated producers of
tin metal products, is set to derive steady income from its custom tin smelting and mining operations in Malaysia
and Indonesia. That said, the group’s long-term value will be enhanced by
efforts to acquire new tin assets and divest its remaining non-tin assets. Assuming
the worst-case scenario for its foreign mining concessions, as well as an aggressive
WACC for its tin smelting and mining DCF and a moderate BV on its non-tin business,
we arrive at a SOP-based FV of RM5.60. We initiate coverage on MSC with a BUY
rating.
ARMADA (FV: RM4.37 – NEUTRAL) Corporate News Flash: Secures
RM200m Lukoil Job
GENP (FV: RM10.13 – BUY) Corporate News Flash: Enlarges
Indonesian Footprint
NOTION (FV: RM2.41
–TRADING BUY) Corporate News Flash:
Making Inroads in China
Market Review
Heads south. The FBM KLCI shed 5.61 pts to end trading at
1,597.51 following renewed concerns over the eurozone crisis that dampened
the global investment sentiment. Today’s
key headlines include: the Securities Commission has started investigations
into alleged financial irregularities of Xian Leng Holdings as
PricewaterhouseCoopers found that the company could not account for RM85.7m set
aside to build ponds, and IGB Corp Bhd’s unit Kris Assets Holding Bhd has
reiterated plans to set up a real estate investment trust (REIT) comprising two
shopping malls, The Gardens Mall and Mid Valley Megamall, to be listed in Bursa
Malaysia. Meanwhile, MMC-Gamuda JV SB may subcontract 4km of the My Rapid
Transit (MRT) tunnelling works to foreign parties, Bumi Armada bags USD200m
Lukoil EPIC contract and CIMB Group Holdings Bhd will sign a deal soon to buy
60% of San Miguel Corp’s unlisted banking arm. On the global front, the US
markets closed mix while the price of crude oil closed higher yesterday. The
price of crude oil was up by USD0.73 to close at USD103.19/barrel.
MEDIA HIGHLIGHTS
Bumi Armada unit gets
USD200m pipeline contract from Russia’s Lukoil
Bumi Armada's indirect unit Bumi Armada Caspian LLC has
secured a USD200mil contract from Russia's OAO Lukoil for a pipeline project in
the Caspian Sea. It said on Monday the
contract involved the engineering, procurement, installation and
pre-commissioning of subsea in-field and inter-field pipelines for the
Filanovsky field in the Russian sector of the Caspian Sea. Bumi Armada said the
completion period of the contract was estimated at 32 months and to be
substantially completed by end-2014. (StarBiz) Please see accompanying report
IGB proposes REIT,
comprising The Gardens Mall, Mid Valley
IGB Corp Bhd has proposed to set up and list a real estate investment trust (REIT) on
the Main Market, comprising of two malls in Kuala Lumpur. It said on Monday the
initial properties would comprise of The Gardens Mall – which is eight-storey
retail mall – and Mid Valley Megamall, which is a five-storey retail mall with one
mezzanine floor. These properties are currently owned by IGB's subsidiary,
KrisAssets. “In conjunction with the proposed REIT establishment and listing,
IGB has today acquired a newly established subsidiary, IGB REIT Management SB,
to act as the proposed management company for IGB REIT,” it said. (StarBiz)
TSM Global accepts
takeover offer from West River Capital
TSM Global has agreed to the proposed takeover offer for its
shares at RM1.25 a shares from West River Capital SB (WRC) and the joint
offerors, which hold a 28.1% stake. TSM Global said on Monday it was not seeking
an alternative offer following the voluntary general offer (VGO). The
acceptance deadline expired at 5pm on Monday after it was extended from 6
April. To recap, WRC and the joint offerers – Tzel Capital SB, KYM SB, Cheong
Chan Holdings SB, Sierra Indah SB, Datuk Lim Kheng Yew, Lim Tze Thean and
Melissa Lim Su Lin – had made a takeover offer for TSM on 28 Feb. (StarBiz)
Khazanah plans
USD1.5bn healthcare IPO
Malaysia’s state investor Khazanah Nasional is expected to
list its healthcare assets here and in Singapore in the second half of the
year, a deal that could fetch USD1.5bn (RM4.6bn), said two sources with direct knowledge
of the deal. The dual listing could be the fourth-biggest initial public
offering (IPO) in the city state’s history and Malaysia’s second-largest this
year after the planned listing of plantation group Felda Global Venture Holdings.
A source said the listing was set for
June or July, with pre-marketing to start next month. Another source said Khazanah was still making
acquisitions “to bulk up the IPO”. (BT)
MMC-Gamuda to
subcontract 4km of tunnelling works
MMC-Gamuda Joint Venture SB is looking to subcontract 4km of
the My Rapid Transit (MRT) tunneling works to foreign parties, said sources. A
source told The Edge Financial Daily that the consortium would subcontract a 4km
stretch of the total 9.5km MRT tunneling works to foreign firms and would also
lease the machines to them. The source said the subcontract would allow
MMC-Gamuda to focus on the more challenging karstic limestone formation which
dominates the ground between Pavilion and the south portal at Maluri, Cheras.
(Financial Daily)
SC starts probe into
Xian Leng
The Securities Commission (SC) Malaysia has started
investigations into alleged financial irregularities at publicly listed
ornamental fish breeder Xian Leng Holdings. As reported earlier, troubles at
Xian Leng surfaced when a forensic audit by PricewaterhouseCoopers (PwC)
Advisory Services founds that the company could not account for RM85.7m set
aside to build ponds. PwC was engaged in October by Xian Leng to investigate alleged
irregularities in capital expenditure incurred by its wholly-owned subsidiary
Xian Leng Trading SB and Xian LengAcquatic (Kluang) SB, over a seven-year
period from 1 Feb 2011 to 31 Jan 2008. (Financial Daily)
ECONOMIC
HIGHLIGHTS
India: RBI signals
fastest BRIC inflation constrains rate cuts
India's central bank said price pressures must be restrained
even as policy needs to shift to help growth, signaling that elevated inflation
will limit the magnitude of interest-rate cuts forecast. “Monetary policy has
to recognize the need for keeping inflation expectations anchored in an
environment of significant upside risks to inflation, while shifting the
balance of policy to arrest the deceleration in growth momentum,” the Reserve
Bank of India said yesterday in a review of the economy ahead of its rate
decision in Mumbai due today. (Bloomberg)
EU: Seeks bigger IMF
war chest on Spanish concerns
European officials travel to Washington this week seeking a
bigger global war chest to combat the debt crisis as Spain’s government battles
to quell renewed market turmoil over its finances. Three weeks after European leaders
unveiled emergency euro-area funding exceeding the symbolic USD1trn mark,
concerns about Spain’s position have ratcheted the nation’s borrowing costs to
the highest levels this year. Crisis-fighting resources will dominate talks at
the International Monetary Fund’s spring meeting in Washington from 20-22
April. (Bloomberg)
World: Kim is chosen
to head World Bank, extending US monopoly
Jim Yong Kim was chosen to be president of the World Bank,
becoming the first physician and Asian-American to head the lender after
emerging markets failed to rally around a challenger to the US monopoly on the
job. The World Bank board of directors said it chose Dartmouth College
President Kim to succeed Robert Zoellick, whose term ends 30 June. (Bloomberg)
US: Retail sales
climb more than forecast on jobs
Retail sales in the US rose more than forecast in March as
Americans snapped up everything from cars and furniture to clothes and
electronics. The 0.8% gain was almost three times as large as projected and
followed a 1% advance in February, Commerce Department figures showed. An
improving job market is giving households confidence to sustain spending in the
face of higher gasoline costs, boosting sales at chains such as Gap Inc. and
Target Corp. Strengthening consumer demand raises the odds that the world’s
largest economy will weather a recession in Europe and slower growth in China.
(Bloomberg)
US: Confidence among
homebuilders fell in April to a three-month low
The National Association of Home Builders/ Wells Fargo index
of builder confidence decreased to 25 this month from 28 in March, the
Washington-based group said yesterday. Economists projected no change in the
index, according to the median forecast in a Bloomberg News survey. (Bloomberg)
US: Companies boosted
inventories in February as sales rose
Companies in the US increased inventories in February as
sales picked up, indicating factories will probably keep receiving orders as
businesses rebuild stocks. The 0.6% rise followed a revised 0.8% advance the
prior month, the Commerce Department reported yesterday in Washington. The
median projection in a Bloomberg News survey called for a 0.6% gain. Sales
climbed 0.7% after a 0.4% gain in January. (Bloomberg)
Source: OSK188
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