BAD TIMING
Written by Joseph Chin
Saturday, 08 May 2010 08:12
KUALA LUMPUR: AmInvestment Bank Bhd will list new call warrants on MISC BHD [] and TAN CHONG MOTOR HOLDINGS BHD [] (TChong) on Monday, May 10.
It said on Friday, May 7 the nine-month, cash-settled call warrants continue AmInvestment Bank’s focus on thematic plays and on stocks well supported by AmResearch calls.
“This call warrant will be AmInvestment Bank’s second call warrant on TChong. The share price has rallied strongly since the first call warrant was issued in January with a strike price of RM2.90,” it saidd.
It added the call warrant is now deeply in-the-money and provides less gearing or “speed” on the upside.
AmInvestment said the new TChong warrants have a strike price of RM4.55 and will offer investors more leveraged exposure to the share. It also said the pullback in equity markets over the week provided a more affordable entry level for investors.
“TChong share price consolidation from its April highs at RM5.20 levels provides a breathing space before the next rally. TChong closed at RM4.24 on May 6. AmResearch has a Buy call on the stock with a target price of RM5.10,” it added.
AmInvestment Bank is also issuing its first call warrant on MISC. AmResearch had a BUY call on the stock on April 23, with a target price of RM11.80.
It said key drivers for the stock include the plan to list its unit Malaysian Marine and Heavy Engineering (MMHE), and the expectation that freight rates have bottomed.
MMHE is one of seven local fabrication yards licensed by Petroliam Nasional Bhd and has RM6.4 billion order book at end-2009. MISC raised RM5.2 billion from its rights issue in February, increasing its prospects for a value-added acquisition.
“MISC shares are ‘expensive’ at almost RM9 a share and tend to be illiquid. AmInvestment Bank’s call warrant on MISC gives investors more affordable, leveraged exposure in a 15 sen warrant with a premium of less than 10%. MISC closed at RM8.82 on May 6,” it said.
AmInvestment’s call warrants will be issued via direct listing.