price tag

 
 

Ringgit ends at highest level since Aug 1, 2018

KUALA LUMPUR: Steady crude oil prices, positive market sentiment in Malaysia and optimism over US-China trade talks pushed the ringgit to finish at its highest level in more than six months.

At 5pm, the local note surged 140 basis points, or 18%, to 4.0640/0700 against the US dollar from 4.0780/0830 on Tuesday, the highest level since Aug 1, 2018 when it touched 4.0640/0680.

A dealer said the steadier crude oil prices which saw benchmark Brent crude hover above US$66 per barrel today, continued to fuel investor optimism as firmer oil prices was a boon to the country’s oil and gas revenue.

“Meanwhile, news that Malaysia is in the last mile in its negotiations with China for a lower price tag for the US$20 billion East Coast Rail Link project also helped improve market sentiment in the country,“ he said.

Externally, the dealer said rising hopes for progress on the US-China trade talks that resumed this week had whipped up investor appetite for riskier emerging market currencies.

“This has lent support to the ringgit’s performance,“ he added.

At the close, the ringgit was, however, traded mostly lower against other major currencies, except against the Japanese yen.

It slid against the Singapore dollar to 3.0066/0115 from 3.0052/0093 on Tuesday, declined against the British pound to 5.2986/3081 from 5.2680/2761 and retreated versus the euro to 4.6106/6195 from 4.6085/6158.

Vis-a-vis the Japanese yen, the local unit appreciated to 3.6679/6743 from 3.6812/6867 previously. — Bernama


Ringgit surges on positive market sentiment

KUALA LUMPUR, Feb 20 — Steady crude oil prices, positive market sentiment in Malaysia and optimism over US-China trade talks pushed the ringgit to finish at its highest level in more than six months. At 5pm, the local note surged 140…


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Can-One pares gains, Kian Joo up 6.46%

PETALING JAYA: Can-One Bhd’s share price fell as much as 4.20% to RM2.08 in early trade after an analyst flagged its mandatory general offer (MGO) for Kian Joo Factory Bhd as having a steep price tag and not being earnings accretive.

At 11.50 am, the stock was trading at RM2.10 with some 105,200 shares done.

Meanwhile, Kian Joo Can Factory Bhd, which hit limit up last Friday, rose as much as 6.46% to RM2.80.

It was trading at RM2.76 at 11.50 am with 1.76 million shares done.

MIDF Research said in a note on Friday that while the MGO presents Can-One with the opportunity to further increase its shareholding in its associate, additional earnings contribution could also be offset by higher borrowing costs.

Can-One’s net gearing could increase to 2.19 times from 0.51 times upon full acceptance of the MGO, as Can-One will have to gear up to fund the acquisition.

MIDF Research retained its “neutral” recommendation on Can-One with an unchanged target price of RM2.09 pending the outcome of the MGO.

It said a high acceptance level may result in a downward revision to its target price and possibly a downgrade in its recommendation.


MIDF Research negative on Can-One MGO for Kian Joo

PETALING JAYA: Can-One Bhd’s mandatory general offer (MGO) for Kian Joo Factory Bhd has a steep price tag and may not be earnings accretive, said MIDF Research.

“While this presents an opportunity for Can-One to further increase its share-holding in its associate, additional earn-ings contribution could also be offset by higher borrowing costs.

“We think the premium paid by Can-One for Kian Joo shares in relation to the latter’s market price is steep, as it is 51.3% higher than its five-day volume weighted average price (VWAP), 47.8% higher than its one-month VWAP, 40.2% higher than its three-month VWAP, 30.6% higher than its six-month VWAP and 14.7% higher than its 12-month VWAP,” it said in its report.

Kian Joo’s share price hit limit-up last Friday after the MGO and closed 60 sen or 29.6% higher at RM2.63, while Can-One rose 21 sen or 10.9% to RM2.14.

MIDF Research noted that the indicative offer price represents a 6% discount to Kian Joo’s net asset per share.

“Although the price to earnings ratio (PER) of 15.3 times is within peers’ average, enterprise value to earnings before interest, taxation, depreciation and amortisation (EV/ebitda) of 10.2 times is higher than peer average,” it added.

To recap, Can-One triggered an MGO after acquiring an extra 0.49% in its 32.9%-owned associate Kian Joo from a single shareholder, namely, the former general manager of Box-Pak (M) Bhd Tan Kim Seng.

The purchase consideration works out to RM6.7 million based on its offer price of RM3.10 per share. As a result, Can-One has to make the same offer to other shareholders.

Meanwhile, its major shareholder Yeoh Jin Hoe and parties acting in concert were reprimanded and fined by the Securities Commission Malaysia for failing to launch an MGO for the rest of Kian Joo’s shares after they triggered the 33% threshold.

According to MIDF Research, Can-One’s net gearing could increase to 2.19 times from 0.51 times upon full acceptance of the MGO, as Can-One will have to gear up to fund the acquisition.

“We think that 2.19 times is a stretch given uncertain macro economy and business outlook (in view of the still unresolved external issues such as the US-China trade war and Brexit). Historically, Can-One’s net gearing had ranged below 1 time save for 2007 and 2008 at 1.13 times and 1.24 times respectively,” it said.

“Based on our estimation, the 0.49% purchase will not have a meaningful impact on its FY19F earnings but, depending on the MGO acceptance levels, will have negative impact in a range of 8% to 30% due to higher finance costs, which could possibly offset the higher earnings contribution from Kian Joo,” it added.

MIDF Research retained its “neutral” recommendation on Can-One with an unchanged target price of RM2.09 pending the outcome of the MGO. It said a high acceptance level may result in a downward revision to its target price and possibly a downgrade in its recommendation.


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