Stocks To Watch Maybank, SapuraKencana Petroleum, CIMB Group, Power Root, Sarawak Oil Palms, Scomi Energy Services, SCH Group


Business & Markets 2014
Written by Liew Jia Teng of  
Wednesday, 30 July 2014 20:26

KUALA LUMPUR (July 30): Based on news flow and corporate announcements today, the stocks that may be in focus on Thursday (July 31) could include Malayan Banking Bhd (Maybank), SapuraKencana Petroleum, CIMB Group Bhd, Power Root, Sarawak Oil Palms, Scomi Energy Services and SCH Group.

FBM KLCI-linked stocks with substantial foreign shareholding like Malayan Banking Bhd and SapuraKencana Petroleum Bhd may be closely watched as investors digest the US' latest monetary policy, and economic growth data. This is because the monetary policy and economic updates may have an impact on global fund flows.

Reuters reported that Asian shares touched a six-and-half-year peak on Wednesday and the dollar was steady, with investors waiting for second quarter U.S. growth data, as well as a US Federal Reserve meeting that some believe might yield a more hawkish policy outlook.

Later on Wednesday, the US Federal Reserve is expected to cut its monthly bond-buying program by US$10 billion. Also later in the session, the Commerce Department is expected to report that the economy grew at a 3.2% annual pace in the second quarter, after it shrank 2.9% in the previous quarter.

The country’s second largest lender, CIMB Group, is said to be eyeing a stake in the Philippines Business Bank (PBB), the Philippine Daily Inquirer reported.

The acquisition is expected to give CIMB a foothold in the consumer and SME (small and medium enterprises) banking sector in Philippines, a country where it has yet to build a banking presence.

CIMB, also the fifth largest banking group in Asean, currently operates in Mynmar, Thailand, Cambodia, Vietnam, Brunei, Singapore and Indonesia.

PBB, a thrift bank listed in the Philippines, led by the group of Zest-O founder Alfredo Yao, is valued by the stock market at 9.91 billion pesos (RM726.3 million).

It currently has 102 branches, two of which opened this year. A total of 26 branches are set to open in 2014, according to the report.

“Industry sources privy to the discussions confirmed that Yao was interested in taking CIMB as a strategic partner in PBB, similar to how he entered into an airline partnership deal with Malaysian budget carrier AirAsia (Bhd),” said the daily.

However, it said that Yao at present, would only consider ceding to CIMB, a maximum of 35% stake in PBB, which is worth around 3.5 billion Philipine pesos (RM256.5 million).

Ready-to-drink (RTD) beverage products maker Power Root Bhd saw declines of net profit and revenue in first quarter ended May 31, 2014 (1Q FY15). The group’s net profit decreased 6% to RM9.33 million, from RM9.93 million a year ago. Meanwhile, its revenue was almost flat at RM87.75 million, from RM87.82 million a year before.

In a filing with Bursa Malaysia, Power Root said the decrease in profit was mainly due to higher advertising and promotional expenses, on its consumer contests launched in FY15.

Going forward, the group expects the operating environment in food and beverage industry to remain challenging, particularly the weaker consumer sentiment locally.

Sarawak Oil Palms Bhd and Pelita Holdings Sdn Bhd had mutually agreed to rescind a JV agreement, as both parties and the land owner were unable to create sufficient land bank that was economical for oil palm development, after many months of negotiations.

To recap, a JV agreement was signed between Sarawak Oil Palms and Pelita Holdings on Oct 25, 2011, with the latter having been nominated by the Sarawak Government, to act as trustee for and on behalf of the land owners of Native Customary Rights (NCR) land, situated at Sungai Arang, Bakong, Baram, Miri, Sarawak, containing a gross area about 1,645 ha.

It is desirous that the land be developed into an oil palm plantation, for the benefit of the land owners.

Scomi Energy Services Bhd plans to undertake a renounceable rights issue of up to RM140.51 million of five-year redeemable convertible bonds.

The issuance will be on the basis of RM6 in nominal value of convertible bonds, for every 100 existing shares in Scomi Energy Services subscribed by the shareholders. The board has yet to determine the issue price of the convertible bonds.

Scomi Energy Services plans to use RM45 million to repay bridging loan within three months, with another RM92 million for working capital in the next two years. It also said the corporate exercise is expected to contribute positively to the future performance of the group.

SCH Group Bhd announced first interim single-tier dividend of 10% or 1 sen apiece for the financial year ending Aug 31, 2014 (FY14). The group has set an ex-date for the dividend on Aug 14, payable on Aug 29.