IGB REIT TOMORROW LISTING, let's wait and see
KUALA LUMPUR (Sept 21): The FBM KLCI could extend its losses on Friday, as investors may be reluctant to take positions ahead of the weekend, given the growing uncertainties over the global economic health that prompted frenzied selling at most global markets a day earlier.
European shares and the euro fell on Thursday after weak Chinese and French data underlined worries about global economic growth, and a promise of extra oil from Saudi Arabia also helped to push crude prices to a six-week low, according to Reuters.
Global shares have lost momentum this week with investors now taking stock after a nearly 17% rise in the MNSI world index since the start of June, it said.
Analysts said the weaker global investor sentiment affected the local market badly, with foreign funds selling down blue chips.
Affin Investment Bank Bhd vice president and head of retail research Dr Nazri Khan said that back to back disappointing data on Thursday affected investor sentiment badly.
He said the dip in the local market was due to foreign fund selling in tandem with the region.
"Equities, commodities and growth-focused currencies are in correction after bad economic data," he said.
Nazri said the HSBC Flash China manufacturing Purchasing Managers' Index (PMI) fell to a three-year low, Japan's exports slid for the third month and French business activity in September fell at its fastest pace since April 2009.
"All point to a global economic slowdown," he said.
Nazri said that Malaysia had one more negative uncertainty: "The political election [is] widely expected after the budget — another good reason investors [will] stay away," he said.
Among the stocks that could be in focus at Bursa Malaysia on Friday are IGB Real Estate Investment Trust (IGB REIT); MALAYAN BANKING BHD  (Maybank); DRB-HICOM BHD ; Harrisons Holdings Bhd; and JOHAN HOLDINGS BHD .
IGB REIT will be listed on the Main Market of Bursa Malaysia on Friday. It would see the initial public offering (IPO) with the sale of 670 million shares at an offer price RM1.25 per share. MIDF Research has valued the stock at RM1.43.
The research house in a note Sept 6 had said the retail IPO price of RM1.25 implied distribution yield of 5.5% for FY13 and P/NAV of 1.26 times.
"The yield appears to be much lower as compared to the market average," the research house said.
Nevertheless, the valuation is not overly stretched comparing it with the bigger cap M-REITs including Sunway, CMMT and Pavillion REIT, it said.
"Our fair valuation for IGB REIT is RM1.43, based on Gordon Growth Model (WACC 8.22%, Long term growth 3.45%).
Fitch Ratings has assigned Maybank's US$800 million (RM2.45 billion) 3.25% fixed rate subordinated notes due 2022, issued under the bank's US$5 billion multicurrency medium-term note programme, a final rating of "BBB+".
This follows the completion of the notes issue, as well as the receipt of final documents conforming to information previously received. The final rating is same as the expected rating assigned on Sept 13.
The notes are rated one notch below Maybank's "a-" Viability Rating to reflect their subordinated status and the absence of any going-concern loss-absorption mechanism. This is in accordance with Fitch's criteria on rating bank regulatory capital and similar securities.
DRB-Hicom group managing director Datuk Seri Haji Mohd Khamil bin Jamil said that the group had plans to partner its new subsidiary Proton Bhd with a foreign carmaker to improve the national carmaker’s quality.
While he did not specify any potential partners, Khamil said there will be "a paradigm shift in Proton" to improve the brand’s overall quality.
The group also targets to sell 200,000 units of Proton cars a year, from previous target of 167,000.
Malaysia's customs Kastam DiRaja Malaysia (Kastam) has given Harrisons Trading (Sabah) Sdn Bhd (HTSB) 14 days to settle RM91.75 million in alleged unpaid duties and sales tax or face legal action.
The 14-day period has started from Sept 19, 2012.
In an announcement to Bursa Malaysia, Harrisons said its Sabah unit is seeking legal advice on this matter after receiving a letter dated Sept 19 from the customs.
It added that HTSB, using argument that it has various business models, had failed to convince Kastam that it should not be liable to pay for duties, excise duties and sales tax totalling RM91,750,419 demanded by the Customs in a letter dated Feb 15.
Johan fell into deeper losses, as its net loss for its second quarter (2Q) ended July 31, 2012 increased by 92.1% to RM9.79 million from a net loss of RM5.1 million a year ago due to lower revenue from its engineering and property businesses.
Revenue for the period also fell 3.4% to RM76.74 million from RM79.44 million previously.