KUALA LUMPUR: MALAYSIAN RESOURCES CORP [] Bhd (MRCB), IJM Land Bhd’s proposed merger has been called off after both parties failed to agree on the terms of the MoU which expired.
Shares of both companies and IJM Corp fell on Thursday, Dec 30 ahead of the announcement which was made at midday. Trading in the shares of MRCB, IJM Corp and IJM Land has been suspended from 12pm and will resume trading on Monday, Jan 3 at 9am.
At 12pm, IJM Land was down 38 sen to RM2.86 with 21.53 million shares done while IJM Land-WA fell 28 sen to Rm1.61 with 44.39 million units transacted.
IJM and its warrants, IJM-WC fell 27 sen each to RM6.23 and RM2.76. MRCB shed six sen to RM1.99 with 4.86 million shares done.
MRCB said that after a series of discussions, MRCB and IJM Land have not been able to reach an agreement on the definitive terms and conditions of the proposed merger.
“As such, the memorandum of understanding in relation to the proposed merger has lapsed and ceased to have any further effect,” it said.
To recap, The Edge FinancialDaily reported the merger between MRCB and IJM Land was expected to create the country’s second-largest property company with a market capitalisation of over RM7 billion and landbank of more than 9,000 acres.
The newly merged entity (newco) is expected to be listed after the second quarter of next year.
In the proposed merger, shareholders of both companies will exchange their shares for shares in the newco. Shareholders of MRCB and IJM Land will be offered a non-binding offer price for their shares at RM2.30 and RM3.65, respectively, which are at premiums of 15.6% and 18.1%, respectively, over their last traded prices last Friday.
The offer valued IJM Land at a price-to-book ratio of 2.43 times and MRCB at 2.61 times, based on their latest reported results as at Sept 30.
The newco is also expected to have combined revenues of over RM2 billion and an asset base in excess of RM3 billion.
The Employees Provident Fund (EPF) is a common shareholder in all the companies involved in the merger. The EPF owns a 19.4% equity stake in IJM Corp, while it is the single largest shareholder of MRCB with a 41.63% stake. IJM Land is in turn a 62.48%-owned unit of IJM Corp Bhd.
The property development activities of MRCB are mainly concentrated in KL Sentral, although it has a 4,000-acre township in Perak.
IJM Land’s strength is in township developments with projects focused in the Klang Valley, Penang, Johor, Negri Sembilan, Sabah and Sarawak. It also has projects in Vietnam and China, and a total landbank of over 5,000 acres.
The merged company is also widely expected to gain from the development of the 3,300 acres of Rubber Research Institute (RRI) land in Sungai Buloh, which was awarded to the EPF.
Written by Joseph Chin
Thursday, December 30, 2010
Public Mutual declares distributions for 3 funds
KUALA LUMPUR: Public Mutual Bhd has declared distributions for its Public Savings Fund, Public Focus Select Fund and Public Islamic Enhanced Bond Fund.
It said on Thursday, Dec 30 the total gross distributions declared for the financial year ending Dec 31, 2010 were nine sen per unit for the Public Savings Fund and two sen per unit for the Public Focus Select Fund. It declared a gross distribution of three sen for the Public Islamic Enhanced Bond Fund.
Public Mutual’s chief executive officer Yeoh Kim Hong said all the three funds had delivered respectable returns to its investors.
“Public Savings Fund and Public Focus Select Fund have recorded one-year double-digit returns of 17.94% and 25.77% respectively for the period ended Dec 3, 2010. Both funds are open for EPF Members Investment Scheme,” she said.
Public Savings Fund, launched in 1981, is the company’s maiden fund. The investment strategy of the fund is to achieve long-term capital appreciation and at the same time produce a reasonable level of income. Public Focus Select Fund, launched in 2004, targets capital growth through investments in medium-sized companies in terms of market capitalisation from diversified economic sectors.
Public Islamic Enhanced Bond Fund, launched in 2006, recorded a one-year return of 4.88% for the same period.
The Shariah-compliant bond fund targets to provide a combination of annual income and modest capital growth primarily through a portfolio allocation across Islamic debt securities and equities that comply with Shariah requirements.
Written by Joseph Chin
It said on Thursday, Dec 30 the total gross distributions declared for the financial year ending Dec 31, 2010 were nine sen per unit for the Public Savings Fund and two sen per unit for the Public Focus Select Fund. It declared a gross distribution of three sen for the Public Islamic Enhanced Bond Fund.
Public Mutual’s chief executive officer Yeoh Kim Hong said all the three funds had delivered respectable returns to its investors.
“Public Savings Fund and Public Focus Select Fund have recorded one-year double-digit returns of 17.94% and 25.77% respectively for the period ended Dec 3, 2010. Both funds are open for EPF Members Investment Scheme,” she said.
Public Savings Fund, launched in 1981, is the company’s maiden fund. The investment strategy of the fund is to achieve long-term capital appreciation and at the same time produce a reasonable level of income. Public Focus Select Fund, launched in 2004, targets capital growth through investments in medium-sized companies in terms of market capitalisation from diversified economic sectors.
Public Islamic Enhanced Bond Fund, launched in 2006, recorded a one-year return of 4.88% for the same period.
The Shariah-compliant bond fund targets to provide a combination of annual income and modest capital growth primarily through a portfolio allocation across Islamic debt securities and equities that comply with Shariah requirements.
Written by Joseph Chin
SUNWAY - Real construction growth forecasted at 4pc
Stock Name: SUNWAY
Company Name: SUNWAY HOLDINGS BHD
Research House: OSK
Real construction growth for 2011 has been projected at four per cent, OSK Research said in its 2011 report.
It re-rated valuations upwards for the construction sector fuelled by the possibility of an early general election, implementation of the proposed projects under the Economic Transformation Programme and Budget 2011.
In its research note, OSK Research said the top pick was Sunway with a target price of RM2.72 and within the small cap space, AZRB, with a target price of RM1.51.
"Investors should pick Gamuda (TP: RM4.31) for the euphoria over the proposed MRT. Lastly, we recommend Naim (TP: RM5.10) for the Sarawak theme," OSK Research said.
In its overview of the construction sector, OSK Research said it was a constructive year for the construction sector.
"The KL Construction Index chalked up a year-to-date return of 24 per cent," it said, adding that a reduction was however expected for 2011 and 2012 development expenditure which would be negative for the sector.
"For 2011, development expenditure is targeted at RM48.5 billion, down 9 per cent year-on-year (y-o-y).
"We expect the negatives of lower development expenditure to be offset by more jobs being implemented via private finance incentives (PFI)," OSK Research added.
It said the momentum of contract awards would continue into 2011 and conservatively set domestic job wins at an estimated RM15 billion.
"Jan-Oct domestic contract awards totalled RM12.1 billion (+66.8 per cent y-o-y) and is very likely to surpass 2010 target of RM13 billion," OSK Research elaborated.
Company Name: SUNWAY HOLDINGS BHD
Research House: OSK
Real construction growth for 2011 has been projected at four per cent, OSK Research said in its 2011 report.
It re-rated valuations upwards for the construction sector fuelled by the possibility of an early general election, implementation of the proposed projects under the Economic Transformation Programme and Budget 2011.
In its research note, OSK Research said the top pick was Sunway with a target price of RM2.72 and within the small cap space, AZRB, with a target price of RM1.51.
"Investors should pick Gamuda (TP: RM4.31) for the euphoria over the proposed MRT. Lastly, we recommend Naim (TP: RM5.10) for the Sarawak theme," OSK Research said.
In its overview of the construction sector, OSK Research said it was a constructive year for the construction sector.
"The KL Construction Index chalked up a year-to-date return of 24 per cent," it said, adding that a reduction was however expected for 2011 and 2012 development expenditure which would be negative for the sector.
"For 2011, development expenditure is targeted at RM48.5 billion, down 9 per cent year-on-year (y-o-y).
"We expect the negatives of lower development expenditure to be offset by more jobs being implemented via private finance incentives (PFI)," OSK Research added.
It said the momentum of contract awards would continue into 2011 and conservatively set domestic job wins at an estimated RM15 billion.
"Jan-Oct domestic contract awards totalled RM12.1 billion (+66.8 per cent y-o-y) and is very likely to surpass 2010 target of RM13 billion," OSK Research elaborated.
QL - Consumer spending to remain resilient in 2011
Stock Name: QL
Company Name: QL RESOURCES BHD
Research House: RHB
Consumer sector
Maintain neutral: The government recently raised the prices of petrol and sugar by 2.7% and 2.8% respectively, and we expect a similar hike to follow in 1H2011, in line with its plan to reduce subsidies every six months. Due to the gradual and small nature of the subsidy reduction, we believe that it will have a minimal impact on consumer spending, which RHB Research Institute projects will grow by 5.4% in 2011 (against 5.6% estimated for 2010).
The stable consumer spending growth outlook of 5.4% will provide a growth platform for the retail stocks under our coverage that derive their revenues locally. We expect Aeon's ('market perform', fair value = RM6.47) same store sales (SSS) to grow at 3.5% in 2011 (2010: 2.5%). Parkson, on the other hand, will continue to ride on China's strong consumer spending growth in 2011 (2010: 10%), which is expected to grow by 9.4%, according to consensus estimates.
We believe domestic demand for F&B products such as those manufactured and distributed by CI Holdings ('outperform', FV = RM4.90), KFCH ('market perform', FV = RM3.85) and QL Resources ('outperform', FV = RM6.50) will continue to be resilient. However, in terms of growth, we expect F&B companies to be driven by expansion in either capacity (CI Holdings), geographical (KFCH), or both (QL Resources).
Dark days continue for the tobacco sub-sector and BAT ('underperform', FV=RM42.92), as the recent hike in excise duty of about 5% per stick effectively raised cigarette prices for both premium and value segments by 7.5% to 9%. We expect the higher cigarette prices, coupled with other government initiatives to reduce smoking, to cause legal total industry volume (TIV) to contract by 6% in 2011. Unlike tobacco, the brewery sub-sector was spared a hike in excise duty in Budget 2011, marking the fifth time in a row duty was not raised. However, Malaysia's excise duty on beer is the second highest in the world after Norway.
Risks include a further drop in consumer disposable income and rising costs of goods and services, reducing spending power.
We maintain our 'neutral' stance on the sector. Our top pick is CI Holdings as we are optimistic on its growth outlook. In our view, the stock is still inexpensive relative to its F&B peers. ' RHB Research Institute Sdn Bhd
Company Name: QL RESOURCES BHD
Research House: RHB
Consumer sector
Maintain neutral: The government recently raised the prices of petrol and sugar by 2.7% and 2.8% respectively, and we expect a similar hike to follow in 1H2011, in line with its plan to reduce subsidies every six months. Due to the gradual and small nature of the subsidy reduction, we believe that it will have a minimal impact on consumer spending, which RHB Research Institute projects will grow by 5.4% in 2011 (against 5.6% estimated for 2010).
The stable consumer spending growth outlook of 5.4% will provide a growth platform for the retail stocks under our coverage that derive their revenues locally. We expect Aeon's ('market perform', fair value = RM6.47) same store sales (SSS) to grow at 3.5% in 2011 (2010: 2.5%). Parkson, on the other hand, will continue to ride on China's strong consumer spending growth in 2011 (2010: 10%), which is expected to grow by 9.4%, according to consensus estimates.
We believe domestic demand for F&B products such as those manufactured and distributed by CI Holdings ('outperform', FV = RM4.90), KFCH ('market perform', FV = RM3.85) and QL Resources ('outperform', FV = RM6.50) will continue to be resilient. However, in terms of growth, we expect F&B companies to be driven by expansion in either capacity (CI Holdings), geographical (KFCH), or both (QL Resources).
Dark days continue for the tobacco sub-sector and BAT ('underperform', FV=RM42.92), as the recent hike in excise duty of about 5% per stick effectively raised cigarette prices for both premium and value segments by 7.5% to 9%. We expect the higher cigarette prices, coupled with other government initiatives to reduce smoking, to cause legal total industry volume (TIV) to contract by 6% in 2011. Unlike tobacco, the brewery sub-sector was spared a hike in excise duty in Budget 2011, marking the fifth time in a row duty was not raised. However, Malaysia's excise duty on beer is the second highest in the world after Norway.
Risks include a further drop in consumer disposable income and rising costs of goods and services, reducing spending power.
We maintain our 'neutral' stance on the sector. Our top pick is CI Holdings as we are optimistic on its growth outlook. In our view, the stock is still inexpensive relative to its F&B peers. ' RHB Research Institute Sdn Bhd
Wednesday, December 29, 2010
Tobacco industry volume may drop 8pc: OSK
OSK Research is projecting an eight per cent drop in tobacco industry volume which will result in tobacco manufacturers experiencing an earnings decline of between five per cent and ten per cent next year.
The research house said its slightly higher natural attrition rate for tobacco consumption was mainly due to more smokers kicking the habit owing to the currently high price of cigarettes, it said in its research note today.
A steep hike in the excise duty of cigarettes, of as much as three sen per stick a week before 2011 Budget, made tobacco manufacturers revise selling price by more than the quantum of duty increase in order to pass on the cost to consumers.
'In view of that, we expect the sector to see higher selling prices in downtrading to value-for-money brands from premium brands, a greater incidence of illicit trade and a greater likelihood of brand switching next year.
'We think the resulting higher selling prices of a pack of cigarettes, at RM10, would curb the consumption and further encourage the proliferation of illicit cigarettes next year.
'Keeping our bearish view, we maintain our underweight recommendation for the sector,' OSK added.
The research house said its slightly higher natural attrition rate for tobacco consumption was mainly due to more smokers kicking the habit owing to the currently high price of cigarettes, it said in its research note today.
A steep hike in the excise duty of cigarettes, of as much as three sen per stick a week before 2011 Budget, made tobacco manufacturers revise selling price by more than the quantum of duty increase in order to pass on the cost to consumers.
'In view of that, we expect the sector to see higher selling prices in downtrading to value-for-money brands from premium brands, a greater incidence of illicit trade and a greater likelihood of brand switching next year.
'We think the resulting higher selling prices of a pack of cigarettes, at RM10, would curb the consumption and further encourage the proliferation of illicit cigarettes next year.
'Keeping our bearish view, we maintain our underweight recommendation for the sector,' OSK added.
FBM KLCI just 8 pts away from historic high
KUALA LUMPUR: The FBM KLCI advanced on Wednesday, Dec 29, chalking up more than six points at the midday break to 1,523.61 but the benchmark index was still eight points away from the all-time intra-day high of 1,531.99 on Nov 9.
At 12.30pm, the FBM KLCI was up 0.41% or 6.17 points to 1,523.61, lifted by index-linked PLANTATION [] stocks that advanced on still favourable crude palm oil prices, as well as key blue chips including Genting and DiGi. The index had earlier risen to its intra-morning high of 1,526.93.
Gainers led losers by 378 to 269, while 288 counters traded unchanged. Volume was 417.08 million shares valued at RM607.83 million.
Key regional markets rose on bargain hunting activities earlier in the day before profit taking set in as investors wary of the weaker data from US and the holiday-shortened trading week at key regional markets are reluctant to take positions ahead of the year-end holidays.
The ringgit strengthened 0.06% to 3.0925 versus the US dollar; crude palm oil for the third month delivery eased RM28 per tonne to RM3,750, crude oil fell 18 cents per barrel to US$91.31 while gold lost US$2.02 per troy ounce to US$1,403.88.
At the regional markets, Hong Kong's Hang Seng Index jumped 1.04% to 22,856.00, Singapore's Straits Times Index rose 0.69% to 3,205.70, Japan's Nikkei 225 added 0.44% to 10,337.79, South Korea's Kospi rose 0.30% to 2,039.34, Taiwan's Taiex edged up 0.02% to 8,872.83 while the Shanghai Composite Index was up 0.10% to 2,735.82.
At Bursa Malaysia, the top gainer was BAT that added 64 sen to RM45.20; PPB and Hap Seng added 30 sen each to RM17.40 and RM6.89, CBIP rose 26 sen to RM3.95, Tradewinds Plantations was up 21 sen to RM3.31, and KLK, DiGi and Padini gained 20 sen each to RM22.84, RM25.14 and RM5.45 respectively
Genting rose 10 sen to RM11.08 while Sime Darby and Genting Plantations gained seven sen each to RM8.84 and RM8.85.
Mudajaya added 14 sen to 4.35. Tejari was the most actively traded counter this morning with 18.35 million shares done. The stock shed two sen to 17.5 sen.
Other actives included Compugates, Maxbiz, JAKS, Timecom, Olympia and CIMB.
The top loser was QSR that fell 14 sen to RM5.19; The Store lost 12 sen to RM2.48, MPI fell nine sen to RM5.60, Latexx lost eight sen to RM2.55 while Warisan and Lafarge fell seven sen each to RM2.40 and RM7.90.
At 12.30pm, the FBM KLCI was up 0.41% or 6.17 points to 1,523.61, lifted by index-linked PLANTATION [] stocks that advanced on still favourable crude palm oil prices, as well as key blue chips including Genting and DiGi. The index had earlier risen to its intra-morning high of 1,526.93.
Gainers led losers by 378 to 269, while 288 counters traded unchanged. Volume was 417.08 million shares valued at RM607.83 million.
Key regional markets rose on bargain hunting activities earlier in the day before profit taking set in as investors wary of the weaker data from US and the holiday-shortened trading week at key regional markets are reluctant to take positions ahead of the year-end holidays.
The ringgit strengthened 0.06% to 3.0925 versus the US dollar; crude palm oil for the third month delivery eased RM28 per tonne to RM3,750, crude oil fell 18 cents per barrel to US$91.31 while gold lost US$2.02 per troy ounce to US$1,403.88.
At the regional markets, Hong Kong's Hang Seng Index jumped 1.04% to 22,856.00, Singapore's Straits Times Index rose 0.69% to 3,205.70, Japan's Nikkei 225 added 0.44% to 10,337.79, South Korea's Kospi rose 0.30% to 2,039.34, Taiwan's Taiex edged up 0.02% to 8,872.83 while the Shanghai Composite Index was up 0.10% to 2,735.82.
At Bursa Malaysia, the top gainer was BAT that added 64 sen to RM45.20; PPB and Hap Seng added 30 sen each to RM17.40 and RM6.89, CBIP rose 26 sen to RM3.95, Tradewinds Plantations was up 21 sen to RM3.31, and KLK, DiGi and Padini gained 20 sen each to RM22.84, RM25.14 and RM5.45 respectively
Genting rose 10 sen to RM11.08 while Sime Darby and Genting Plantations gained seven sen each to RM8.84 and RM8.85.
Mudajaya added 14 sen to 4.35. Tejari was the most actively traded counter this morning with 18.35 million shares done. The stock shed two sen to 17.5 sen.
Other actives included Compugates, Maxbiz, JAKS, Timecom, Olympia and CIMB.
The top loser was QSR that fell 14 sen to RM5.19; The Store lost 12 sen to RM2.48, MPI fell nine sen to RM5.60, Latexx lost eight sen to RM2.55 while Warisan and Lafarge fell seven sen each to RM2.40 and RM7.90.
Tambun Indah finalising land acquisitions, plans project on Penang with GDV of RM178m
KUALA LUMPUR: A leading property developer in Penang, Tambun Indah Land Bhd is finalising the acquisition of two pieces of land in the northern state to add to its current landbank of more than 200 acres while planning to venture into the Klang Valley in the near future.
Tambun Indah managing director Teh Kiak Seng said the group had identified a piece of land in Penang island measuring over four acres with estimated gross development value (GDV) of RM170 million as well as another piece of land with similar size in the mainland with a much lower GDV of RM8 million.
He said the group hoped the acquisitions could be completed in the next few months.
"We are actually looking at land all the time. It is important to get quality land so that you can be visible and get good return for it," he said during the launch of the group's prospectus for its initial public offering on Wednesday, Dec 29.
Tambun Indah's IPO involved a public issue of 32 million new ordinary shares of 50 sen each comprising of 11.05 million new shares for application by the Malaysian public, another 11.05 million shares for application by eligible directors, employees and business associates as well as 9.9 million new shares for application by investors via placement at an issue price of 70 sen apiece.
The group is also offering to sell 22.1 million ordinary shares of 50 sen each for application by bumiputera investors. It is expected to be listed on the Main Market of Bursa Malaysia Securities on Jan 18, 2011.
Tambun Indah managing director Teh Kiak Seng said the group had identified a piece of land in Penang island measuring over four acres with estimated gross development value (GDV) of RM170 million as well as another piece of land with similar size in the mainland with a much lower GDV of RM8 million.
He said the group hoped the acquisitions could be completed in the next few months.
"We are actually looking at land all the time. It is important to get quality land so that you can be visible and get good return for it," he said during the launch of the group's prospectus for its initial public offering on Wednesday, Dec 29.
Tambun Indah's IPO involved a public issue of 32 million new ordinary shares of 50 sen each comprising of 11.05 million new shares for application by the Malaysian public, another 11.05 million shares for application by eligible directors, employees and business associates as well as 9.9 million new shares for application by investors via placement at an issue price of 70 sen apiece.
The group is also offering to sell 22.1 million ordinary shares of 50 sen each for application by bumiputera investors. It is expected to be listed on the Main Market of Bursa Malaysia Securities on Jan 18, 2011.
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