Stocks to watch: Proton, DRB-Hicom, MISC, Green Packet

Written by Joseph Chin
Monday, 21 September 2009 22:54

KUALA LUMPUR: The trade-shortened week, which starts on Wednesday, Sept 23, could see interest in telco stocks including Axiata Group Bhd and DIGI.COM BHD [] after Maxis Corp Bhd's (MCB) announcement to relist the local operations.

After the listing exercise, MCB would still hold 70% or 5.25 billion shares of the paid-up. A very large chunk of the 30% stake offered for sale (comprising of 2.25 billion shares) will go to institutions (2.075 billion shares) and the remaining 174.79 million shares for the public and customers.

Apart from telcos, other stocks to watch on Wednesday are PROTON HOLDINGS BHD [] and DRB-HICOM BHD [], MALAYSIAN RESOURCES CORP [] Bhd (MRCB), MISC BHD [], GREEN PACKET BHD [] and EASTERN & ORIENTAL BHD [] (E&O).

DRB-Hicom's major shareholder Tan Sri Syed Mokhtar Al-Bukhary has submitted a bid to purchase a block of shares in Proton, but this will not trigger a mandatory general offer.

MRCB and the Employees Provident Fund have secured the approval from the federal government to acquire and develop certain strategically located pieces of land belonging to the federal government.

In MISC, the company plans for US$3.4 billion in capital expenditure in the next three years, primarily in the offshore, petroleum and heavy engineering segments with funding that could put additional pressure on MISC's financial risk profile, according to Standard & Poor's Ratings Services.

While the ratings agency had affirmed its 'A-' corporate credit rating on MISC but the outlook on the rating remains negative. This is the possibility of higher leverage as MISC takes delivery of new debt-funded vessels over the next few years.

In Green Packet, the issue of 197.61 million rights shares was oversubscribed by 126.78% when the total acceptances and excess applications were 448.15 million at the close of the acceptance date on Sept 17. The rights shares with free detachable warrants were issued on the basis of one rights shares with one warrant for every two shares held.

In MALAYSIA PACIFIC CORP BHD [] (MPCorp), the company has proposed renounceable two-call rights issue of up to 129.44 million shares of RM1 each together with up to 129.44 million free detachable warrants at an issue price of RM1 per rights share.
This is on the basis of three rights shares with three warrants for every four shares held.

The first call of 42 sen per rights share will be payable in full on application in cash and the second call of 58 sen is to be capitalised from the retained profits account.

In E&O, its managing director Datuk Tham Ka Hon has given an irrevocable letter of undertaking to subscribe for his full entitlement of the proposed 10-year irredeemable convertible secured loan stocks (ICSLS) 2009/2019 of 65 sen each and also 33% of Ample Echo Ltd's entitlement if renounced to him.

Tham has also proposed to further subscribe up to RM20 million of the ICSLS to ensure than about 45.46% of the ICSLS to be issued will be at the minimum subscription level of RM92.81 million.