Stocks To Watch UMW O&G, Focal Aims, Tasek, CCM, Sime Darby, Destini


Business & Markets 2013
Written by Ho Wah Foon of theedgemalaysia.com   
Friday, 01 November 2013 20:18


KUALA LUMPUR (Nov 1): Based on corporate announcements today, the stocks to watch on Monday could include UMW O&G, Focal Aims, Tasek, CCM, Sime Darby and Destini.

UMW Oil & Gas Corporation Bhd, whose shares rose 30 sen or 11% to end at RM3.10 on trades of some 221.3 million shares on the first day of its trades today, could continue to attract investor interest.

The firm was the most active counter and fifth top gainer across the stock exchange today.

The closing price of the stock went beyond the fair value and target price of some analysts. Many put the fair value at RM3.00-RM3.10.

Reuters said the outlook for UMW O&G is rosy as investors bank on the company’s close ties with state oil firm Petroliam Nasional Bhd (Petronas) to provide it with a steady stream of revenue for years to come.

Petronas, which is pursuing a policy of replacing foreign-owned rigs with locally-owned ones when contracts expire, is determined to spread more of its largesse to domestic firms.

Petronas has budgeted to spend some US$19 billion annually in the five years to 2015.

UMW O-G, controlled by the government ultimately, owns four of the 48 jack-up rigs deployed in Southeast Asia, where heavyweights like Noble Corp and Ensco Plc dominate, Reuters reported.

Speaking to reporters at the opening ceremony today Rohaizad said UMW O&G would focus on the 10 markets in Southeast Asia and for a longer term, the Asia Pacific region.

Rohaizad said the Thailand, Vietnam, Indonesia, Philippines and Myanmar economies are ‘very aggressive’, which he opined would provide near-term opportunities.

Focal Aim Holdings Bhd may attract interest after an investment bank said the offer price of parties to take over the firm is not fair and not reasonable.

The planned take-over offer for Focal Aims by parties linked to S P Setia Bhd president Tan Sri Liew Kee Sin is "not fair and not reasonable", independent adviser Kenanga Investment Bank Bhd said.

In a shareholder circular today, Kenanga recommended that shareholders of Focal Aims, a Johor-based property developer, reject the offer.

Kenanga said its recommendation has taken into account several factors. The offer price is below Focal Aims’ revised net asset value, it noted.

Focal Aims said last September that Eco World Development Holdings Sdn Bhd and Liew Tian Xiong was buying a controlling 65.05% stake in Focal Aims for RM230.69 million or RM1.40 share cash.

Eco World and Tian Xiong had signed a conditional share sale agreement with various shareholders of Focal Aims to acquire the stake comprising 164.78 million shares. Tian Xiong is Kee Sin’s son.

The buyers are obliged to extend a mandatory general offer to holders of the remaining shares in Focal Aims for RM1.40 each.

Tasek Corporation Bhd reported a flat net profit of RM23.12 million in the third quarter ended September 30, 2013, compared with RM23.11 million a year ago, due to intense competition and cost factor.

Revenue for the quarter under review of RM143.93 million was 2.5% higher than the previous year’s  RM140.40 million.

“The group's total net revenue for the current quarter of RM143.9 million is higher than the corresponding quarter of previous year by RM3.5 million mainly attributable to higher local sales of cement and ready-mixed concrete,” Tasek told Bursa Malaysia.

Tasek said for the quarter, lower profit margin was seen in the local cement sector arising from continuous competitive pricing and higher production cost.

For the nine months ended September, Tasek Corp recorded a net profit of RM66.65 million as compared to a higher RM71.13 million from the previous year.

Revenue for the nine-month period fell 2.02% to RM422.02 million from RM430.76 million a year ago, despite an increase in local cement sales, it added.

Chemical Company of Malaysia Bhd (CCM) announced an internal restructuring that involves the selling and buying of its own units within the group.

CCM told Bursa Malaysia that its board has approved a proposed internal restructuring exercise on the acquisition by CCM Usaha Kimia (M) Sdn Bhd (UKSB) of 99.07% equity interest in CCM Innovative Solutions Sdn Bhd (CCMIS) and 80% equity interest in CCM Chemicals Sdn Bhd (CCMC) from CCM.

CCM is an investment holding and management company with subsidiaries engaged in the manufacturing and marketing of fertilizers, chemicals and pharmaceuticals products and services.

“The proposed internal restructuring is part of CCM Group’s continuous performance enhancement programme, with all three business divisions implementing various operational initiatives to consolidate their positions, which include cost optimization and business portfolio rationalization strategies,” said CCM.

The restructuring, said to complete in the first quarter of 2014, will create a chemicals division flagship company which will be under the purview of a single board.


Sime Darby Berhad announced that Sime Singapore Limited (SSL), an indirect wholly-owned subsidiary of Sime Darby, has on 1 November 2013 entered into two agreements to venture into the auto sector of Vietnam.

The two agreements signed were:

(1)        a conditional agreement with several parties for the purchase of 19,558,539 ordinary shares, representing 89.15% of the share capital of Europe Automobiles Corporation Holdings Pte. Ltd. (EACH) for cash at RM93.73 million.

(2)        a conditional agreement with two parties for the purchase of 5,865,842 ordinary shares, representing 16.02% of the share capital of Europe Automobiles Corporation (EAC) for cash at RM20.22 million.

EACH currently holds 82.98% equity interest in EAC. Upon completion of the EACH acquisition and the EAC acquisition, Sime Darby will hold an indirect interest of 89.15% shareholding in EACH and an effective interest of 90% shareholding in EAC.

EAC is a joint stock company registered in Vietnam and holds the distribution rights of BMW vehicles and MINI vehicles in Vietnam. 

EACH is a private company in Singapore, which is an investment holding company.

Destini Berhad expanded its presence into the oil and gas sector by acquiring the entire issued and paid up share capital of Samudra Oil Services Sdn Bhd, a wholly owned subsidiary of Kejuruteraan Samudra Timur Berhad (KSTB) for RM80.0 million.

The acquisition will be fully satisfied via the issuance of 228.6 million Destini shares at an issue price of RM0.35 per Destini share, the company said.

Samudra Oil is the sole local player in the provision of tubular handling and running services for the oil and gas industry.

Its clients comprise global oil and gas players such as Petronas Carigali Sdn Bhd, Shell Malaysia, ExxonMobil Exploration And Production Malaysia Inc., MDC Oil and Gas Ltd, Talisman Malaysia Limited and Petrofac Limited.

Destini’s group managing director, Dato’ Rozabil Abdul Rahman, said this acquisition will allow Destini the opportunity to expand into the lucrative oil and gas sector both locally and globally.