Stocks to Watch Tenaga, YTL Corp, MAS, AirAsia, Maybank, Sumatec, Theta Edge, KNM, OKA, BHS

Business & Markets 2014
Written by Ahmad Naqib Idris Adzman Shah of   
Friday, 11 July 2014 18:26

KUALA LUMPUR (July 11): Based on newsflow and corporate announcements today, the spotlight may be on the following stocks next Monday (July 14):

A firmer ringgit versus the US dollar will benefit companies with substantial US dollar-denominated debt like state-controlled utility Tenaga Nasional Bhd and diversified group YTL Corp Bhd.

This is because these companies' loans will be less in ringgit terms as the local currency strengthens against the US dollar.

Tenaga's US dollar loans, after conversion to the local currency, amounted to RM2.72 billion as at February 28 this year, according to notes accompanying the group's latest financials.

YTL's US dollar-based borrowings came to US$674.55 million (RM2.15 billion) as at March 31 this year, the company indicated.

The ringgit was traded at RM3.1865 against the US dollar today versus RM3.3511 last February. The ringgit had strengthened ahead of Bank Negara Malaysia's decision yesterday (July 10) to raise the overnight policy rate by 25 basis points to 3.25% from 3%.

Meanwhile, airlines like Malaysian Airline System Bhd and AirAsia Bhd will also benefit from a firmer ringgit.

As airlines buy jet fuel in US dollars, a stronger ringgit will translate into lower fuel cost for these firms.

Malayan Banking Bhd will raise its deposit rates by 15 basis points (bps) while the base lending rate (BLR) will rise by 25 bps.

In a statement today, Maybank said the move, effective this Wednesday (July 16), was in line with Bank Negara Malaysia’s decision to raise the overnight policy rate (OPR) by 25 bps to 3.25% from 3%.

Maybank said its BLR would rise by 25 bps to 6.85% a year from 6.6%.

Meanwhile, the base financing rate (BFR) of Maybank Islamic Bhd will also be revised upward by 25 bps to 6.85%.

“The last revision in Maybank’s BLR and Maybank Islamic’s BFR was on 11 May 2011 when they were revised from 6.30% p.a. (per annum) to 6.60% p.a,” said Maybank.

Sumatec Resources Bhd plans to buy the entire stake in Borneo Energy Oil and Gas Ltd in a cash and share deal valued at US$250 million (RM796.45 million).

In a statement today, Sumatec CEO Chris Dalton said the firm had signed a framework agreement with Abu Talib Abdul Rahman and Dr Murat Safin for the purchase of Borneo, which owns marine oil and gas fields in Kazakhstan.

Theta Edge Bhd has accepted a letter of award from THP Bina Sdn Bhd, for the execution and completion of ICT and security works for the Tabung Haji Hotel and Convention Centre for RM33.1 million.

Theta Edge, which is in the telecommunications business, is scheduled to complete the project by April 30, 2016. THP Bina Sdn Bhd is a wholly-owned subsidiary of Lembaga Tabung Haji.

“The project will not have any material effect on the company’s consolidated net assets for the financial year ending Dec 31, 2014,” said Theta Edge. “It is expected to contribute positively to the future consolidated earnings of the company.”

The Employees Provident Fund (EPF) has raised its stake in KNM Group Bhd to 5.63% after acquiring additional shares in the company.

In a statement to the exchange today, KNM said the EPF had last Tuesday (July 8), acquired 1.28 million of its shares, raising its stake to 90.80 million shares or 5.63% in KNM.

This compares to the EPF's 5.55% stake on July 7, and 5.51% on July 4.

OKA Corp Bhd has proposed a bonus issue of 30.46 million shares of 50 sen each to reward its shareholders, on the basis of one bonus share for every four shares held by shareholders.

“Upon completion of the proposed bonus Issue, the issued and paid-up share capital of the Company will be RM76,141,250 comprising 152,282,500 OKA shares,” said OKA in an announcement to the exchange.

The firm expects the proposals to be completed by the fourth quarter of 2014.

BHS Industries Bhd was issued an unusual market activity (UMA) query by Bursa Malaysia, after rising 4% in early morning trades.

The company's share price rose 4% or 10 sen to RM2.63 per share on some 1.5 million trades.

Bursa had asked the company to report any corporate developments relating to its group business or rumours that might have accounted for the trading activity.

BHS is a printer of magazines, school textbooks, general publications, directories, corporate annual reports, as well as brochures and pamphlets.


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