Stock to Watch AirAsia, Ken Holdings, Scomi, Gas Malaysia

Business & Markets 2012
Written by Surin Murugiah of   
Monday, 15 October 2012 19:14

KUALA LUMPUR (Oct 15):  The FBM KLCI could trend upward on Tuesday after having snapped its losing streak on Monday, in line with the early gains at European markets.

However, the gains could be limited as global investors have yet to completely shrug off concerns over the global economic growth. European shares gained in early trade on Monday and the euro trimmed some of its losses after Chinese data offered evidence for stronger than expected global growth on Monday, but uncertainty over when Spain might request a bailout weighed on investors, according to Reuters.

Data over the weekend from China, the world's second largest economy, showed inflation subdued in September while exports had rebounded at nearly twice the rate expected, helping to dispel concerns ahead of Chinese gross domestic product numbers on Thursday which are still expected to point to slight slowdown, it said.

Among the stocks that could be in focus on Bursa Malaysia are AIRASIA BHD []; KEN HOLDINGS BHD []; SCOMI GROUP BHD []; and Gas Malaysia Bhd.

Low cost carrier AirAsia has backed out of its deal to acquire Batavia Air and will instead be exploring to collaborate.

Its chief executive officer Tan Sri Tony Fernandes said AirAsia would remain focused in Indonesia and push for its Indonesian initial public offer (IPO) plan, while still maintaining close co-operation with Batavia Air. "In our minds, the timing was perhaps not appropriate as it would have induced too many risks and would ultimately be earnings dilutive to our shareholders," said Fernandes in a statement Monday.

Through its Indonesia arm, PT Indonesia AirAsia the group had proposed to acquire a 49% stake in the small Indonesian budget airlines which would have cost approximately US$80 million (RM240 million)

PT Fersindo Nusaperkasa, which holds 51% of Indonesia AirAsia was to buy the remaining 51% in Batavia.

AirAsia said that after extensive study and discussion, the diverse nature of the two businesses had prompted an alteration to the initial agreement.

"The precise scale of integration, including a re-fleeting exercise as well as streamlining an amalgamation of cultures is expected to take up considerable time and effort, joint resources which can be more efficiently utilised in a targeted manner," it said.

Ken Holdings plans to build a mixed development property spanning five acres atop the popular highlands getaway, said its executive chairman Datuk Kenny BK Tan.

"There are a lot of facilities in Genting but not many condominiums or apartments. Plans are on the drawing board for a mixed development of commercial land near the casino," he told after its extraordinary general meeting on Monday.

The company will be submitting plans to relevant authorities for the five acre land that is situated "close to the bus station" soon, he said.

Currently, Ken Holdings has close to 20 acres of land in the Genting vicinity.

Tan said the company was also exploring opportunities in Melaka and Kelantan.

Scomi has decided not to proceed with the proposed sale of its subsidiaries — Scomi Oilfield Ltd, Scomi Sosma Sdn Bhd and Scomi KMC Sdn Bhd — worth RM783.51 million.

Scomi, in a filing on Bursa Malaysia, said: "After due and careful deliberation, the board has decided not to proceed with the proposed offer for sale."

Gas Malaysia has entered into a Memorandum of Understanding (MoU) with IEV Energy Sdn Bhd to explore the prospects to jointly transport and market Liquefied Natural Gas (LNG).

In a filing Monday, Gas Malaysia said the MoU was to conduct a feasibility study to explore the prospects of cooperation between the two parties.

It said IEV was a member of the Singapore-listed IEV Holdings ltd.

Gas Malaysia said IEV had developed and operated mobile infrastructure to transport and distribute natural gas in order to maximise domestic gas consumption in South East Asia region since 2007.

It said the feasibility study was scheduled to be completed within 90 days from the date of the MoU.