Stocks To Watch Perak Corp, MMC, DFZ, Eco World, Glove stocks, HLFG, RHBC, IOI, Bina Puri

Business & Markets 2013
Written by Ho Wah Foon of   
Monday, 06 January 2014 20:10

KUALA LUMPUR (Jan 6): Based on corporate announcements and market news today, the stocks to watch tomorrow could include the following:

Perak Corporation Bhd informed the stock exchange that it has been directed to undertake a selective capital reduction (SCR) and repayment exercise that will see Perbadanan Kemajuan Negeri Perak (PKNP) and three other associated firms owning the company.

The offer for shares not already owned by them is at RM3.90 per unit, said the offer document.

In a filing to Bursa Malaysia, PCB said it has today received a letter from Perbadanan Kemajuan Negeri Perak, Fast Continent Sdn Bhd, Cherry Blossom Sdn Bhd and Perak Equity Sdn Bhd, requesting the company to undertake the SCR pursuant to Section 64 of the Companies Act.

“The board, save for the interested directors, will deliberate on the proposed SCR and will decide on the next course of action,” said Perak Corp.

Currently, state-owned PKNP owns a direct stake of 52.27% in the company while the other three companies hold 0.63% shares.

Perak Corp was last traded at RM3.50 before trading in its shares was suspended. It will resume trading tomorrow.

MMC Corporation Bhd share price, which surged as much as 10% this morning to a three-year high on privatisation talk, said it has not received any proposal to undertake a capital reduction exercise and to subsequently delist MMC, as reported in an article.

The stock closed at RM3.04 after hitting a high of RM3.17 in late morning trades, with some 15.6 million shares done.

DFZ Capital Berhad (DFZ) has fully redeemed and cancelled its RM60 million CP/MTN facility (2007/2014) and RM60 million MTN facility (2007/2017), said RAM Ratings.

“Consequently, RAM no longer has any rating obligation in respect of the said facilities and has withdrawn the respective A1/Stable/P1 and A1/Stable ratings accorded to them,” said a statement from  RAM.

Eco World Development Group Bhd, controlled by a son of SP Setia Bhd’s president and chief executive officer Tan Sri Liew Kee Sin, rose to its highest in about 16 years after the company was picked by many to be one of the stocks to watch this year.

But its share plunged after the stock exchange issued an “unusual market activity” (UMA) on the company, demanding the company explain why the stock had gone up sharply in active trades.

The stock, which had earlier risen by as much as 10% to RM4.85 today, fell to close at RM4.36 after losing three sen compared to Friday’s close of RM4.39 per share.

From mid-November to today’s close, the stock has doubled its price.

Glove Stocks may continue to come under watch if the flu outbreak in the United States gets worse.  

According to US Today, this year's flu season is now “in full swing”. It said:

“Nationally, people are beginning to be hospitalised and die due to the flu, which is in all parts of the country and still on the up slope, public health agencies report.

“North Carolina has reported 13 deaths, according to the state's Department of Health and Human Services. Hidalgo County in Texas has had six deaths and two people have died in Salt Lake City, according to Utah health officials.

“The flu season began most heavily in the South but has now spread nationwide with cases increasing in all states, said Joseph Bresee, a flu expert with the Centers for Disease Control and Prevention.

Hong Leong Financial Group (HLFG) and RHB Capital (RHBC) may emerge as privatisation candidates for the year in an effort to optimise their balance sheets, according to HwangDBS Vickers Research today.

As such, HwangDBS is retaining its “buy” calls on the stocks, with HLFG having a target price (TP) of RM18.80 per share and RHBC having a TP of RM8.80 per share.

EITA Resources Bhd said its unit EITA Power System Sdn Bhd has entered into an agreement with Universal Cable (M) Bhd to promote and market the latter’s safety cables in the fire resistant range of cables within Malaysia, Indonesia, Brunei, Singapore, Thailand, Philippines, Vietnam, Laos and Cambodia.

Universal Cable, established in Malaysia in March 1967, is the single largest cable and wire manufacturer in Malaysia and the Asean region.

The agreement will not have any material effect on the earnings per share, net assets per share or gearing of EITA for the financial year ending 30 September 2014.

IOI Corporation Bhd’s target price has been slashed by Maybank Investment Bank Bhd.

Maybank IB said it has downgraded IOI Corp to “sell” and reduced its target price (TP) to RM3.95 from RM5.42, as the stock lacks a re-rating catalyst after its demerger exercise.

The research house said that the spin-off of the group’s property arm, IOI Properties Group, will leave IOI Corp as a pure integrated plantation player without a property development angle.

“The remaining plantation land bank post-demerger does not have any property development potential in the near term.”

The research house has also cut its earnings forecast for the group for FY14, FY15 and FY16 by 15%, 33% and 34% respectively to reflect its pure plantation earnings.

Bina Puri Holdings Bhd announced that Crystal Crown Aerocity Sdn. Bhd, its wholly-owned subsidiary, has received the approval from FELCRA Properties Sdn. Bhd. to allow it to perform exploration and production works relating to a “Prospecting and Mining Scheme for Iron Ore Mining on Land of Felcra Bhd” within Sungai Atok Jani area in Kuala Lipis, Pahang.

This is not expected to have any material effect on the earnings of Bina Puri Group for the financial year ending 31 December 2014.