IHH puts money where its mouth is, makes binding offer for Fortis
PETALING JAYA: IHH Healthcare Bhd, which previously made a non-binding offer to invest up to 40 billion rupees (RM2.36 billion) for much sought after Fortis Healthcare Ltd, has revised its offer to a binding immediate equity infusion of 6.5 billion rupees without prior due diligence and a non-binding proposal for a subsequent infusion of up to 33.5 billion rupees.
The board of Fortis has until May 4 to respond to the offer, after which the proposal will be withdrawn.
The binding offer comes with a stipulation for the right to appoint two directors to the board of Fortis and the monies from the immediate capital injection be used mainly for immediate dues to employees, creditors and debt servicing needs of Fortis.
It is also subject to confirmation by Fortis that IHH will be given immediate access to carry out a legal and financial due diligence and the receipt of applicable approval from Fortis’ shareholders and any relevant regulatory approvals.
IHH plans to complete the due diligence exercise within three weeks and to agree on the terms of the definitive documents in relation to the subsequent equity infusion during a four week exclusivity period which will run concurrently with the due diligence exercise.
Upon the completion of the subsequent equity infusion, IHH said it expects appropriate representation on the board of Fortis to commensurate with its stake in Fortis.
At this juncture, IHH said, the parties have not entered into any discussions, negotiations or transactions in relation to the revised proposal.
IHH does not need the approval of shareholders for the revised offer. The group advised its shareholders or investors to exercise caution and seek appropriate independent advice when dealing in its shares.
IHH was down one sen at RM6.09 today on volume of 4.18 million shares.
Sarawak Consolidated Industries calls off Carlton Gardens deal
PETALING JAYA: Sarawak Consolidated Industries Bhd (SCIB) has terminated its proposed acquisition of the entire equity interest in Carlton Gardens Sdn Bhd (CGSB) for RM9.5 million due to a breach by the sellers.
CGSB owns and operates an interlocking block Industrialised Building System factory in Beaufort, Sabah and has been awarded a contract by Stone EPC (Sabah) Sdn Bhd (SEPC) for the supply and installation of interlocking blocks and associated structural and finishing works for SEPC’s project to construct 620 residential units together with necessary amenities, utilities, facilities and infrastructure at Beaufort, Sabah.
SCIM had on April 19, 2018 issued a notice of termination of the share sale agreement dated Dec 28, 2016, entered into between SCIB and Asgari Mohd Stephens, Brian Francis Ticcioni and Gaya Belian Sdn Bhd. The purchase price was supposed to be paid in two tranches.
“SCIB’s solicitors were of the view that there was a breach by the sellers and SCIB has a cause for action for misrepresentation, hence SCIB is entitled to terminate the contract or void the contract for misrepresentation. As a result, SCIB was of the view that there is a good chance that all costs can be recovered. Hence, the termination of the share sale agreement is not expected to have material impact on the financial position of SCIB group,” SCIM said.
SCIB closed down 5% to 57 sen today on 5,000 shares done.
Bond Pricing Agency eyes Philippines entry
KUALA LUMPUR: Bond Pricing Agency Malaysia (BPAM), which today launched the new Asean3 Government Bond Indices (A3GBI) in partnership with Indonesia Bond Pricing Agency and the Thai Bond Market Association, hopes to include the Philippines in the Asean index this year and invite more member countries to participate.
The A3GBI is designed to track the performance of local currency-denominated government bonds in ringgit, rupiah and baht. Setting up an investable and replicable index, which consists of the largest market-makers and liquid bonds from the government segment, is expected to provide greater visibility of Asean market behaviour.
Local currency bond markets in Asean have grown significantly and as at the end of 2017, the combined market size in dollar terms reached US$1.23 trillion (RM4.8 trillion). With this, the need for reliable and sophisticated data sets to measure and track market performance is becoming important. This environment formed a perfect setting for cooperation between the bond pricing providers in Asean. The A3GBI marks the first of such collaboration in Asean.
BPAM CEO Meor Amri Meor Ayob said the experience of building the A3GBI was a valuable learning opportunity for all three countries to develop their bond data and analytical capabilities.
The A3GBI also marks the first step in its ambition to build more cross-border products with its Asean neighbours.
A3GBI tracks daily movement to observe the direction of the market. A3GBI and sub-indices serve as a benchmark to measure performance. Over time, A3GBI reveals peaks and troughs to illustrate significance of market events.
The data may be used as a comparison with other data sets, and is useful for formulating trading strategies. Its constituents may allow for portfolio emulation for index funds of exchange traded funds.
BPAM chief business officer Shah Zain said it also plans to have more joint product development later, such as an Asean Corporate Bond Index and Asean Sukuk Index. He said the bond market has always been strong and is much stronger than the stock market.
“The bond market is fundamental to any economy, simply because the government issues bonds. It doesn’t issue shares. We chose government bonds because it is the way countries raises money. The prospects in the future is always there,” Shah told reporters after the A3GBI launch.
He said the biggest bond market in Asia is China, followed by Japan and Korea. Malaysia is ranked fourth in terms of percentage of gross domestic product.
“Index is a powerful fundamental tool to investors. Indexation is still under-developed in the region but advanced in the rest of the world,” he added.
Petronas delivers first LNG cargo to S-Oil Corp
PETALING JAYA: Petroliam Nasional Bhd (Petronas), through its subsidiary Petronas LNG Ltd (PLL), has delivered its first liquefied natural gas (LNG) cargo to South Korean oil refining company S-Oil Corp last Sunday.
The delivery marks the beginning of PLL’s supply to S-Oil via a 15-year sale and purchase agreement, it said in a statement. Under the agreement, PLL will deliver up to 0.7 million tonnes of LNG per annum to S-Oil.
Petronas said the cargo was delivered from its LNG Complex in Bintulu, Sarawak, to POSCO Gwangyang Terminal by Puteri Zamrud Satu, the LNG vessel chartered by MLNG and operated by Petronas’ subsidiary MISC Bhd.
Petronas vice-president of LNG marketing and trading Ahmad Adly Alias said the success of the delivery was due to the efficient and effective collaboration between the group, S-Oil, POSCO and MISC, in ensuring all operational challenges were addressed effectively.
“As an integrated global oil and gas player, Petronas remains committed to becoming the most reliable LNG supplier, through innovative and flexible solutions to accommodate the different needs of our buyers,” he added.
Ringgit extends downtrend against US dollar
KUALA LUMPUR: The ringgit extended its downtrend to close lower against the US dollar today on strong buying interest for the greenback as US bond yields increased, a dealer said.
At 6pm, the ringgit was quoted at 3.9030/9080 from 3.8965/8995 on Monday.
It was reported that the 10-year US Treasury yield, which could potentially hit and break the three per cent level, could cause problems for the global economy as borrowing money would become more expensive.
OANDA Head of Trading Asia-Pacific, Stephen Innes, said the sell-off of local bonds also weakened the ringgit.
“Investors continue to pare back the ringgit's exposure as locals are turning increasingly risk-averse as they think the (coming) general election results could be a lot tighter than initially predicted,” he said.
The ringgit, however, closed mixed against a basket of major currencies.
The local note fell against the Singapore dollar to 2.9510/9559 from 2.9452/9481 on Monday and eased against the British pound to 5.4466/4552 from 5.4411/4464 yesterday.
It rose against the yen to 3.5860/5913 from 3.6005/6043 on Monday and strengthened versus the euro to 4.7644/7713 from 4.7658/7706 yesterday. — Bernama
Westports expects growth to return in second half
KUALA LUMPUR: Westports Holdings Bhd expects growth to return in the second half of the year after the normalisation of the realignment in alliances.
“On the outlook, we expect slight modest growth this year. There will be a slight decline in the first quarter, second quarter will be flat and then it will start growing strongly in the third and fourth quarters,” said its group managing director Datuk Ruben Emir Gnanalingam.
Speaking to reporters at its AGM today, he said the impact from the realignment of shipping alliances, which happened in April last year, would last for about 15 months after which there would likely be growth.
However, despite the projected improvement in the second half of the year, the group does not expect to achieve another record year this year.
Westports handled nine million twenty foot equivalent units (TEUs) in financial year ended Dec 31, 2017 and reported its highest revenue ever of RM2.1 billion. Its net profit also hit a record of RM652 million.
Bursa Malaysia closes at intra-day low
KUALA LUMPUR: Bursa Malaysia ended at an intra-day low today on selling pressure across-the-board in tandem with most Southeast Asian bourses, taking the cue from the weaker overnight performance on Wall Street, dealers said.
The benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) ended at 1,865.34, down 15.02 points from Monday's close of 1,880.36.
It opened 3.39 points higher at 1,883.75 and moved between 1,865.34 and 1,885.32 throughout the day.
Market breadth was negative with losers outpacing gainers by 573 to 291 while 387 counters remained unchanged, 663 untraded and 28 others suspended.
Volume fell to 1.93 billion units worth RM2.32 billion from 1.94 billion units worth RM1.66 billion yesterday.
A dealer said Bursa Malaysia extended profit-taking consolidation today due to an overbought technical momentum after hitting an all-time high of 1,895.18, up 15.86 points, on Thursday last week.
“Concerns over the rising yields in US government bonds and the downturn among technology companies sapped optimism in most Southeast Asian equities markets which prompted a sell-off,” he said
Bursa Malaysia opened higher but succumbed to profit-taking after 15 minutes of trading with selling in blue-chips led by Press Metal Aluminium and telecommunication stocks.
Regionally, Japan's Nikkei gained 0.86% to 22,278.12, Hong Kong's Hang Seng rose 1.26% to 30,636.24, South Korea's Kospi declined 0.40% to 2,464.14, the Singapore's Straits Times Index was 0.08% better at 3,582.54 and Indonesia's Jakarta Composite index slipped 1.19% to 6,232.88.
Among heavyweights, Public Bank and CIMB shed two sen each to RM24.10 and RM7.22 respectively, Petronas Chemicals bagged three sen to RM8.49 while Maybank and Tenaga were flat at RM10.62 and RM15.88 respectively.
For actives, Sapura Energy and PUC eased 1.5 sen each to 70.5 sen and 22 sen, Hibiscus shed 3.5 sen to 82.5 sen and Nexgram eased half-a-sen to 39.5 sen.
The FBM Emas Index fell 105.25 points to 12,974.41, FBM Emas Shariah Index dropped 114.34 points to 13,131.70, FBMT 100 Index eased 106.52 points to 12,790.59 and the FBM 70 dipped 139.57 points to 15,286.24.
The FBM Ace bagged 23.83 points to 5,322.46.
Sector-wise, the Finance Index declined 104.94 points to 18,305.04, Industrial Index slipped 41.44 points to 3,211.79 and the Plantation Index shed 11.64 points to 7,991.96.
Main Market volume fell to 1.18 billion shares worth RM2.19 billion from 1.21 billion shares worth RM1.51 billion on Monday.
Warrants volume widened to 458.49 million units valued at RM78.38 million from 430.75 million units valued at RM96.66 million yesterday.
Volume on the ACE Market shrank to 284.65 million shares worth RM51.80 million from 299.25 million shares worth RM50.37 million on Monday.
Consumer products accounted for 33.13 million shares traded on the Main Market, industrial products (306.97 million), construction (66.09 million), trade and services (555.33 million), technology (72.09 million), infrastructure (14.69 million), SPAC (6.68 million), finance (46.20 million), hotels (3.46 million), properties (47.87 million), plantations (17.10 million), mining (8,000), REITs (11.19 million) and closed/fund (nil). — Bernama
Lotte Chemical not seeing margin squeeze despite rising oil prices
KUALA LUMPUR: Despite higher oil prices, petrochemical firm Lotte Chemical Titan Holdings Bhd foresees its profit margin remaining at a reasonable level given strong demand for petrochemical products with limited market supply capacity.
“Our business is a margin game. As long as there is strong demand with limited supply, the margin will be maintained. If oil prices go up, the polymer prices will pick up as well,” Lotte's executive vice president of corporate planning Philip Kong told reporters after the group's first AGM since its listing on July 11, 2017.
Kong expects oil prices to range between US$50 and US$70 per barrel this year.
“That's fine with our industry because we believe with demand, the market can absorb any increase in our polymer prices,” he explained.
Lotte produces olefins and polyolefins, which are raw materials for plastic product manufacturing.
EPF invests RM4.86b in small and medium-cap companies
PETALING JAYA: The Employees Provident Fund (EPF) has invested a total of RM4.86 billion in small and medium capitalised stocks in Malaysia through both its internal and external fund managers.
The equities portfolio remains the largest contributor to the retirement fund's income, which recorded an 8% increase from RM309.48 billion in 2016 to RM334.23 billion as at end December 2017, it said in a statement.
EPF said this affirms reports of the country's positive growth, and as indicated by the performance of the stock market index, FTSE Bursa Malaysia KLCI (FBM KLCI) last Thursday, which reached an all-time high in the country's economic history.
“As our funds continue to grow, we are constantly open to new investment opportunities that can provide income that are sustainable and long term,” its CEO Datuk Shahril Ridza Ridzuan said.
“Our strong investment performance was largely driven by our investments in equities. We have been investing in stocks across various sectors, which include small and medium-cap companies,” he added.
As at end 2017, Shahril said EPF has invested in 192 small and medium-cap companies and it is committed to find more good companies to add to its existing portfolio.
Shahril added that EPF would constantly monitor and assess the performance of the country's small and medium-cap companies to see if they are suitable for investment and fit the retirement fund's risk return profile.
He said among the qualities that the EPF would look for in such companies include good governance, cost structure and sound business performance.
“The EPF has been doing co-investments with the small and medium-cap companies to help their growth as we see future potential in them, which should also help to spur economic growth and boost EPF's investment income,” he added.
In the recently tabled Annual Report 2017, EPF's total gross investment income as at Dec 31, 2017 was RM53.14 billion and total investment asset RM791.48 billion with return on investment (ROI) of 7.3%.