Views & News, Maybank IB (2010-11-08)
Tuesday, November 9, 2010
Sunrise RM2.52: Accept offer
Cheaper entry to UEM Land Shariah-compliant
Take up the offer. We view UEM Land's (UEML) conditional takeover offer (CTO) for Sunrise shares positively as the price offered is fair. We advise Sunrise shareholders to take up the share swap instead of the redeemable convertible preference shares (RCPS) option. The enlarged UEML will offer an exposure into the largest property developer in Malaysia. Based on 20sen net DPS declared by Sunrise earlier and our estimate of RM2.15-2.20 RNAV per UEML share post-Sunrise acquisition, the deal offers a cheaper entry to UEML.
Technicals
The FBM KLCI gained 6.08-points last week as some further investor enthusiasm boosted above the 1,510-mark.The market remains strong in the weeks ahead. But do remain cautious as technically we are in very high chart territory. The obvious support areas for the FBM KLCI are located in the 1,476 to 1,511-zone. The key resistance areas of 1,513 and 1,524 may cap any rebound activity.
Weekly trading idea is a SHORT-TERM BUY call on KFC.
Other Local News
Axiata: Signs 5-year pact with Ericsson. Axiata Group Bhd will streamline its procurement of products and services with Ericsson to realise business efficiencies and competitive advantage through cash flow improvement for the next five years. Last week, it signed an agreement to facilitate regular exchange of information on technical and technology areas relating to products, works and services purchased by Axiata group of companies. (Source: Business Times)
Maybank: Fixes new shares under dividend reinvestment at RM7.70. Malayan Banking Bhd has fixed the issue price of new Maybank shares to be issued under the dividend reinvestment plan at RM7.70 per share. On behalf of the Board, Maybank IB, announced the Book Closure Date pursuant to the Final Dividend and Dividend Reinvestment Plan has been fixed for 18 November 2010. The new Maybank Shares arising from the Dividend Reinvestment Plan will be listed on the Main Market of Bursa Malaysia Securities Berhad on 21 December 2010. (Source: Bursa Malaysia)
Star Pubs: MCA buys 42% stake in Star for RM1.28b. MCA announced it has bought a 42.4% stake in Star Publications (M) Bhd for RM1.28b, or RM4.09 a share, from its wholly-owned subsidiary Huaren Holdings Sdn Bhd and is in the process of maintaining its beneficial interests in Star. (Source: The Star)
LBS Bina: China Project expected to start next year. LBS Bina Group Bhd's China project in the southern city of Zhuhai with an estimated gross development value of (GDV) of RM5b is expected to start in the third or fourth quarter of next year. Last month, LBS Bina announced that it will sell a 10% equity stake in its Chinese joint ventures (JV) to its JV partner, Zhuhai Special Economic Zone Long Yi Enterprises Co for RMB200m (RM9.25m). Each party will own 50% of the JVs post transaction. The agreement would pave way to kick-start the property project which was deadlocked in the past. (Source: The Edge Financial Daily)
Mulpha: Goldman Sachs increases Mulpha stake to 5.74%. Mulpha International Bhd, which saw active trading recently on news that its associate FKP property was a takeover target, saw The Goldman Sachs Group Inc accumulate more shares in Mulpha. Goldman Sachs increased its shareholding to 135.2m shares or 5.74% equity interest. It was reported that FKP was a possible takeover target by Stockland, a leading Australian property developer. (Source: The Edge Financial Weekly)
Sapura Resources: Disposes of stakes in APIIT, UCTI. Sapura Resources Bhd (SRB) has proposed to dispose of 51% equity interest each in APIIT Sdn Bhd and Asia Pacific UCTI Sdn Bhd (UCTI) to Ontime Sdn Bhd for RM102m. SRB said net proceeds from the proposed disposal may be channelled towards the acquisition of new businesses, expansion of existing business and to pare down borrowings. The proposed disposal is expected to result in a one-off net gain of RM68.9m and upon completion of the exercise. (Source: The Star)
External reserves: Higher in the second half of October 2010. External reserves increased slightly in the second half of October 2010 to RM324.9b (USD105.3b) as at 29 October 2010 from RM322.7b (USD104.6b) on 15 October 2010. The latest reserve amount is equivalent to 8.8 months of retained imports and 4.5 times short-term external debt. (Source: Bank Negara)
Cheaper entry to UEM Land Shariah-compliant
Take up the offer. We view UEM Land's (UEML) conditional takeover offer (CTO) for Sunrise shares positively as the price offered is fair. We advise Sunrise shareholders to take up the share swap instead of the redeemable convertible preference shares (RCPS) option. The enlarged UEML will offer an exposure into the largest property developer in Malaysia. Based on 20sen net DPS declared by Sunrise earlier and our estimate of RM2.15-2.20 RNAV per UEML share post-Sunrise acquisition, the deal offers a cheaper entry to UEML.
Technicals
The FBM KLCI gained 6.08-points last week as some further investor enthusiasm boosted above the 1,510-mark.The market remains strong in the weeks ahead. But do remain cautious as technically we are in very high chart territory. The obvious support areas for the FBM KLCI are located in the 1,476 to 1,511-zone. The key resistance areas of 1,513 and 1,524 may cap any rebound activity.
Weekly trading idea is a SHORT-TERM BUY call on KFC.
Other Local News
Axiata: Signs 5-year pact with Ericsson. Axiata Group Bhd will streamline its procurement of products and services with Ericsson to realise business efficiencies and competitive advantage through cash flow improvement for the next five years. Last week, it signed an agreement to facilitate regular exchange of information on technical and technology areas relating to products, works and services purchased by Axiata group of companies. (Source: Business Times)
Maybank: Fixes new shares under dividend reinvestment at RM7.70. Malayan Banking Bhd has fixed the issue price of new Maybank shares to be issued under the dividend reinvestment plan at RM7.70 per share. On behalf of the Board, Maybank IB, announced the Book Closure Date pursuant to the Final Dividend and Dividend Reinvestment Plan has been fixed for 18 November 2010. The new Maybank Shares arising from the Dividend Reinvestment Plan will be listed on the Main Market of Bursa Malaysia Securities Berhad on 21 December 2010. (Source: Bursa Malaysia)
Star Pubs: MCA buys 42% stake in Star for RM1.28b. MCA announced it has bought a 42.4% stake in Star Publications (M) Bhd for RM1.28b, or RM4.09 a share, from its wholly-owned subsidiary Huaren Holdings Sdn Bhd and is in the process of maintaining its beneficial interests in Star. (Source: The Star)
LBS Bina: China Project expected to start next year. LBS Bina Group Bhd's China project in the southern city of Zhuhai with an estimated gross development value of (GDV) of RM5b is expected to start in the third or fourth quarter of next year. Last month, LBS Bina announced that it will sell a 10% equity stake in its Chinese joint ventures (JV) to its JV partner, Zhuhai Special Economic Zone Long Yi Enterprises Co for RMB200m (RM9.25m). Each party will own 50% of the JVs post transaction. The agreement would pave way to kick-start the property project which was deadlocked in the past. (Source: The Edge Financial Daily)
Mulpha: Goldman Sachs increases Mulpha stake to 5.74%. Mulpha International Bhd, which saw active trading recently on news that its associate FKP property was a takeover target, saw The Goldman Sachs Group Inc accumulate more shares in Mulpha. Goldman Sachs increased its shareholding to 135.2m shares or 5.74% equity interest. It was reported that FKP was a possible takeover target by Stockland, a leading Australian property developer. (Source: The Edge Financial Weekly)
Sapura Resources: Disposes of stakes in APIIT, UCTI. Sapura Resources Bhd (SRB) has proposed to dispose of 51% equity interest each in APIIT Sdn Bhd and Asia Pacific UCTI Sdn Bhd (UCTI) to Ontime Sdn Bhd for RM102m. SRB said net proceeds from the proposed disposal may be channelled towards the acquisition of new businesses, expansion of existing business and to pare down borrowings. The proposed disposal is expected to result in a one-off net gain of RM68.9m and upon completion of the exercise. (Source: The Star)
External reserves: Higher in the second half of October 2010. External reserves increased slightly in the second half of October 2010 to RM324.9b (USD105.3b) as at 29 October 2010 from RM322.7b (USD104.6b) on 15 October 2010. The latest reserve amount is equivalent to 8.8 months of retained imports and 4.5 times short-term external debt. (Source: Bank Negara)
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