Stocks To Watch IOI Prop, UEM, HL Cap, AWC, Perdana Pet, P.REIT, CIMB, Brahim’s, XDL, Nomad

Business & Markets 2014
Written by Ho Wah Foon of   
Thursday, 16 January 2014 19:43

KUALA LUMPUR (Jan 16): Based on news flow and corporate announcements released up to 7.00 pm today, stocks that may get investors excited on Monday (Jan 20) could include the following:

IOI Properties Group Bhd will become a component stock in the FBM KLCI index effective January 21 and UEM Sunrise Bhd will be deleted from the index, said Bursa Malaysia.

In a statement, Bursa Malaysia said the constituent changes follow the listing of IOI Properties. IOI Properties' market capitalisation now ranks the biggest among property stocks

“As a result of the demerger exercise of IOI Properties from IOI Corporation Bhd on December 19 last year, the firm is added to the FBM KLCI,” said Bursa.

The stock exchange said IOI Properties will also be included in the FBM Emas Shariah Index and FBM Hijrah Shariah Index.

Hong Leong Capital Bhd (HL Cap) has been slapped with an “unusual market activity” (UMA) by Bursa Malaysia on the "unusual rise" in the latter's share price in recent months.

HL Cap’s share continued to rise sharply in thin trades today even after the UMA. At market close, the stock had risen 96 sen or 8% to end at RM12.8 per unit on thin trades of 13,800 shares.

HL Cap's share price has soared from RM1.71 a year earlier.

HL Cap is the holding company for Hong Leong Investment Bank Bhd and Hong Leong Asset Management Bhd.

Last year, there was a failed attempt by tycoon Tan Sri Quek Leng Chan to privatise the company.

Due to the hefty rise in share price, there could be profit-taking on Monday. But if the privatisation bid is revived, share prices could stay high.

AWC Bhd announced that its unit Ambang Wira Sdn Bhd (AWSB) has received a letter from the Public-Private Partnership Unit of the Prime Minister’s Department, informing AWSB that the Federal Government has agreed in principle for AWSB to implement a privatisation project.

The privatisation contract concerns the management and maintenance services of federal government buildings for the “Southern Zone and Sarawak Zone”.

AWC said the deal is subject to the terms and conditions to be negotiated.

AWC provides integrated facilities management and engineering services. It operates in facilities, engineering and environment segments.

Perdana Petroleum Bhd announced it has via its wholly-owned subsidiary secured a vessel contract worth RM50 million.

The upstream oil & gas service provider said its wholly-owned unit Perdana Nautika Sdn Bhd has accepted a letter of award (LOA) from Talisman Malaysia Limited.

The LOA, for the charter of one unit of anchor handling tug supply vessel, is expected to contribute positively to the revenue and earnings of the group for the financial year ending Dec 31, 2014 and subsequent periods for the duration of the contract.

Pavilion Real Estate Investment Trust’s net profit slumped 65.4% for the fourth quarter ended Dec 31, 2013 (4QFY13).

The group’s net profit fell to RM168.1 million for the 4QFY13 from RM485.9 million in the corresponding quarter last year.

But the group announced a final income distribution of 3.71 sen per unit for the financial year end Dec 2013, which comprise of 3.61 sen (taxable) and 0.1 sen (non-taxable), payable on Feb 26.

The lower profit was due to much higher fair value gain of investment properties being recognised in the fourth quarter of 2012 (4QFY12), the company said.

“Excluding the fair value gain, income before taxation for the 4QFY13 was higher by RM4.6 million or 9% compared to Q4 2012,” said the group.

However, its revenue for the 4QFY13 stood at RM96.5 million, compared to RM91.9 million last year.

CIMB Group Holdings Bhd may gain some attention after Moody’s said its move to raise RM3.55 billion via a private placement of 500 million shares to support growth is “credit positive”.

The new capital will not only help to enhance capital positions of the Malaysian banking units of CIMB Group and increase their loss absorption capacities, but will also reduce leverage of the group, commented the international rating agency.

CIMB Group’s share price rebounded a bit after the report. On Wednesday, its share price plunged after analysts warned that the financial group’s earnings per share could be diluted.

CIMB Group has said it will issue the new shares by the end of this month.

“The additional capital is credit positive for the holding company because it will reduce leverage. It is also credit positive for CIMB Group’s Malaysian units, CIMB Bank Bhd (A3 stable, C-/baa1 stable1) and CIMB Islamic Bank Berhad (A3 stable, D+/ba1 stable), which need capital to support growth,” said Moody’s today.

Brahim’s Holdings Bhd (BHB) announced that it has entered into a memorandum of understanding (MOU) with Labuan Halal Hub Sdn Bhd (LHH) to produce and supply halal meals to offshore oil platforms and vessels.

The MOU, effective in 2014 also covers distribution of Brahim’s ready-to-eat meals and cooking sauces to East Malaysia and Brunei. 

BHB will also collaborate with LHH to provide technical support in the management of halal process and accreditation to new overseas markets developed by LHH, said Brahims in its filing with Bursa Malaysia.

A developer and operator of the Labuan Halal Hub, LHH is also involved in the promotion of “Halal” certification for products and services, according to Brahim’s.

XiDeLang Holdings Ltd (XDL) is targeting a double-digit growth for its revenue and net profit for current financial year ending December 31, 2014.

Ding Peng Peng, managing director and CEO of XiDeLang, said he is optimistic on the prospects this year, as he expects the sports industry in China to pick up in the second half of the year.

Currently, the locally-listed Chinese company is selling 85% of its sports apparels, shoes and related products in China and exports 15% to Europe and US. There are no sales in Malaysia yet.  

Speaking to the media at the signing of a distributorship agreement with Universal Fitness and Leisure Sdn Bhd (UFL) earlier today, Ding said the company expects the partnership to contribute RM50 million in revenue and RM10 to RM20 million in net profit in its first year of operations in 2014.

Through this partnership, XiDeLang will introduce its sports shoes, apparels and accessories products into the Malaysian market. UFL holds distributorships of several premier brands of sporting products, and has a dealer network of about 300 in Malaysia.

In the pipeline for XiDeLang is the opening of 10 exclusive stores in Malaysia this year.

XiDeLang’s share and warrant rose today as the signing was taking place. At market close, the share was up 6 sen or 10.6% at 62.5 sen and its warrant XDL-WA rose 1.5 sen or 6% to 27 sen in active trades.

Bio Osmo Bhd’s share was dealt a blow today after it announced that Perbadanan Nasional Bhd (PNS) has sold its entire stake of 9% in the company.

Bio Osmo, which manufacturers drinking water, said PNS has sold 41.57 million shares in the firm which has an issued base of 455.36 million shares.

According to Bio Osmo's annual report, PNS was formerly the largest shareholder with a 20.78% stake prior to the expansion of Bio Osmo's share base.

PNS, owned by the Ministry of Finance Inc, oversees the development of Malaysia's franchise industry.

Bio Osmo share price fell two sen or 9% to 20.5 sen per unit in active trades today.

The Nomad Group Bhd (TNGB) announced that the company has entered into a share sale agreement with Paradox Corporation Sdn Bhd, Lim Peng Cheong and his four family members for the sale of its entire 30% shareholding in Malacca Securities Sdn Bhd for cash of RM18.48 million.

Lim Peng Cheong is currently the managing director of Malacca Securities.

“The group is expected to record a loss of approximately RM1.22 million arising from the proposed disposal. TNGB intends to utilise the proceeds for working capital and to fund new investments,” said the company.