Stocks To Watch TNB, Btoto, Ekovest, Axiata, Sime Darby, SPK, DRB-Hicom, Kossan, TSH

Business & Markets 2013
Written by Ho Wah Foon of   
Monday, 02 December 2013 19:32

KUALA LUMPUR (Dec 2): Tenaga Nasional Bhd (TNB) may lead the gainers tomorrow (Dec 3) after it announced a hike in electricity tariffs today.

The other companies that may also attract market attention tomorrow could include Btoto, Ekovest, Axiata, Sime Darby, SPK, DRB, Kossan and TSH.

Tenaga Nasional Bhd announced today it will increase electricity tariff in Peninsular Malaysia effective Jan 1 next year.

For commercial consumers, they will experience an average increase of 16.85%, which ranges from 1.2% to about 18%. Industrial consumers will see an average increase of 16.85%, ranging from 0.9% to about 17%.

But for domestic consumers, the rate for monthly consumption of up to 200 kWh (Lifeline Band) is maintained at a subsidised rate of 21.8 sen per kWh.

“For consumers using 300 kWh per month and below, the rate is maintained at 33.4 sen per kWh,” said TNB.

“Hence, there will be no tariff increase to 70.7% of the household consumers that is 4.6 million consumers.”

As a result of this electricity rate increase, companies that have not priced this cost in will be impacted.

Berjaya Sports Toto Bhd (Btoto) announced today that it is cancelling its plans to list its wholly owned subsidiary Sports Toto Malaysia Sdn Bhd as a business trust on the Singapore Stock Exchange.

“The difficult market conditions brought about by the anticipation of imminent interest rates rise and the poor performances of listed yield stocks like real estate investment trusts (REITs) and other business trusts have left the board of directors with little choice but to call off the exercise,” said the company in a press statement.

In fact, Berjaya Sports Toto has obtained all the approvals to proceed with the listing and all that remained was the execution of the offering, it said.

“However tentative feedback had fallen short of expectations leading to the board’s decision,” said the company.

Axiata Group Bhd's Indonesian unit PT XL Axiata has secured approval from policymakers there to buy the entire stake in PT Axis Telekom Indonesia for some RM2.8 billion, including Axis Telekom's debt.

Axiata said it has obtained written approval from Indonesia's communications and informatics ministry for the proposed acquisition.

It said the acquisition will "result in the merger of XL and Axis. The approval includes the condition for the return of 2x10 MHz of the 2.1 GHz (3G) spectrum license to the Government of Indonesia"

Analysts said the latest updates bode well for Axiata.

Ekovest Bhd announced it has via its 70% owned subsidiary issued bonds worth a total of RM2.48 billion to part-finance the DUKE Phase-2 project.

The construction firm said Konsortium Lebuhraya Utara-Timur (KL) Sdn Bhd (Kesturi) today issued RM2.3 billion in nominal value Sukuk Musharakah and RM180 million in nominal value Junior Bonds.

The aggregate proceeds from the issuance of the Sukuk Musharakah and Junior Bonds will part-finance the construction costs, development costs, financing costs, fees and expenses in relation to DUKE Phase-2.

Ekovest said the Sukuk Programme and Junior Bonds have been accorded ratings of AA-IS and A- with stable outlook, respectively, by Malaysian Rating Corporation Berhad (MARC).

Sime Darby Bhd is venturing further into Australia’s luxury motor market by buying motor firms there.

Sime Darby Motors Wholesale Australia Pty Ltd (SDMW), a subsidiary of Sime Darby, plans to acquire 70% of the equity stake in LMM Holdings Pty Limited (LMMH) and 70% of units in the Brisbane BMW Unit Trust (BBUT) for a total of RM66.5 million.

Sime Darby said that it has also entered a share and unit sale deed with LMMH, which operates the BMW, MINI and Lamborghini motor dealership businesses in Brisbane, and BBUT (a trust which owns the said dealerships).

On the same day, SDMW had also entered into a property sale and purchase agreement with LMMH and BBUT to acquire three properties for RM169.9 million, necessary for the operations of the businesses.

SapuraKenana Petroleum Bhd (SKP) and DRB-Hicom Bhd, which rose in late trades after news that former premier Tun Dr Mahathir Mohamad has quit as advisor to national oil company Petronas, may catch attention tomorrow.

While SKP, partly controlled by Mahathir’s son, jumped 18 sen to RM4.45 in heavy trades, DRB-Hicom Bhd, set up by Mahathir’s government during his reign as prime minister, rose 28 sen to RM2.71.

Other stocks that had benefited from their link with Mahathir may be in focus too.

Kossan Rubber Industries Bhd announced that its unit Ideal Quality Sdn. Bhd today entered into an agreement with Panorama Positif Sdn. Bhd for the acquisition of a piece of freehold industrial land of 3.7493 hectare in Klang, Selangor, for  RM19.37 million.

The rubber products and gloves maker said the acquisition is in line with the group’s strategy to replenish its land bank to generate long term sustainable income and viability.

TSH Resources Bhd announced that its substantial shareholder and director Datuk Kelvin Tan Aik Pen had on Nov 29 bought 245,000 shares in the company.

This purchase has raised his stake in TSH to 11.65%.

TSH rose 8 sen to RM2.89 today.