FBM30 1538.91 +6.45points (+0.42%) Volume 780mil Value 1,078.7mil
1) KLCI rebounded inline with the regionals as investors took comfort from the G8 meeting where leaders vowed to take steps to combat financial turmoil and promote growth. China's Premier Wen also pledge to boost growth raising speculation of monetary easing. Index ended close to day's high on late buying of SIME, TENAGA, YTLCORP. Broader market turned positive with gainers leading losers 385:306. Futures closed 1537 (2 points discount).
2) Heavyweights: SIME+1.73% RM9.40, TENAGA+1.11% RM6.40, AXIATA+0.75% RM5.36, YTL+2.37% RM1.73, YTLPOWR+4.55% RM1.61, PPB+1.69% RM15.60, TM+0.75% RM5.38, MAYBANK-0.24% RM8.44
3) DBT: GPRO 17mil @ RM0.05 (54% discount), ARREIT 11mil @ RM0.84 (9% iscount)
4) Situationals:
BRAHIMS+3.6% RM1.15: Brahims proposes to acquire 49% in Brahim's -LSG ky Chefs Holdings Sdn Bhd for RM130mil in cash. This will turn the company into a wholly owned subsidiary. The purchase consideration values the stake at historical PE of 6.47x.
5) BOUSTEAD/ UAC
Boustead has proposed a privatization of its 65.2% subsidiary UAC by way of a proposed select capital repayment and proposed dividend undertaken by UAC. Under the Proposed SCR, all Entitled Shareholders (excluding Boustead) will receive a total cash payment of RM85.43m which represents a cash amount of RM3.30 per UAC Share. Boustead will waive its entitlement to the repayment of capital pursuant to the Proposed SCR in favour of the remaining Entitled Shareholders. In view that the number of UAC Shares to be cancelled is more than the existing issued and paid-up share capital of UAC, a bonus issue of up to 12,023,463 new UAC Shares ("Bonus Shares") is proposed to be undertaken by UAC to increase the paid up share capital of UAC to a level that is sufficient for the Proposed SCR. Shareholders will receive a total capital repayment and dividend payment of RM3.30 and RM1.00 translating to the Deemed Offer Price to the Entitled Shareholders apart from BHB of RM4.30 per UAC Share.
Based on the audited PAT of UAC Group for the FYE 31 December 2011 the acquisition price represents a 27x PE multiple and a PB of 1.03x.
Upon completion of the Proposals, UAC will be wholly-owned subsidiary of BHB. Accordingly, BHB expects to be able to integrate its building materials businesses to realize synergies from improved economies of scale for better terms from suppliers which translates to better margin and more efficient resource allocation.
6) Market - Global Equities are attempting to stage a rebound after the intense sell down last week. The sustainability of this technical bounce will hinge on the outcome of meeting between German and French finance ministers in Berlin as a prelude to the European Union Summit on May 23.
The KLCI has so far proven be more resilient under the current uncertain conditions and hence will likely also under perform the expected technical bounce in the region.
