Market Roundup | 23 May 2012

FBM30 1539.71   -7.13points (-0.46%) Volume 960.8mil   Value 1,288.6mil 

1) Markets fell to a low of 1535.11 (-11.73pts) as investors traded with caution ahead of meeting between EURO leaders  with renewed fears Greece would leave the euro. World bank also cut china 2012 growth forecast to 8.2% from 8.4% while Fitch cut japan's rating to A+ from AA. CPO fell below RM3,000/MT, the lowest levels since Dec 2011. Broader market turned negative as decliners led advancers 437:243. Futures closed 1530.5 (9 points discount). 

2) Heavyweights: GENTING-2.34% RM10.02, CIMB-0.97% RM7.18, GENM-2.21% RM3.54, PPB-1.76% RM15.60, BAT-2.01% RM51.74, IOICORP-0.6% RM4.97, MAXIS-0.97% RM6.10, AXIATA+1.12% M5.44

3) DBT: SCOPE 10mil @ RM0.10 (53% discount), FSBM 6mil @ RM0.19 (7% discount) 

 

 

4) Situationals:

 

 

RAMUNIA+5.41% RM0.39: According to Ramunia chairman, Datuk Azizan Abdul Rahman, Ramunia plans to complete its financial regularisation plan by end of July which will then be submitted to Bursa in a bid to lift its PN17 status. FPSO has yet to secure any contracts but were pursuing three projects with 3 oil companies in Malaysia and hope to make  some announcement soon. 

5) MPHB

The company has proposed a demerger is expected to involve an internal restructuring, whereby MPHB will dispose of substantially all its businesses and undertakings, including the assets and liabilities, which are involved in the SPV Capital Businesses to SPV Capital, a wholly-owned subsidiary of MPHB for a total consideration to be satisfied through the issuance of new ordinary shares in SPV Capital and/or cash to MPHB. MPHB will then offer for sale all its SPV Capital Shares, representing the entire equity interest in SPV Capital, to the entitled shareholders of MPHB at an offer price to be determined later. The provisional allotment of the SPV Capital Shares is renounceable and will be traded on Bursa Securities. The entitled shareholders of MPHB may sell their entitlements under the Proposed Offer for Sale in the open market. The SPV will then be listed as a separate entity on the main market. Upon completion of the Proposed Offer for Sale, the Company proposes to carry out a capital repayment exercise of all the net proceeds under the Proposed Offer for Sale by way of reduction of the share premium (as at Dec 31 2011 amounted to RM1,413.1 million.)


The post-demerger MPHB Group will substantially comprise subsidiaries involved in the operation and management of the licensed four digit numbers forecast betting games while SPV Capital and its proposed subsidiaries will be mainly involved in the operations of financial services and credit, general insurance, and leasing businesses ("Financial Services Businesses"), hospitality and other investments).

The stockbroking business has been identified for disposal. However, SPV Capital intends to retain the credit business of the stockbroking business of Dynamic Pearl Sdn Bhd through Multi-Purpose Credit Sdn. MPHB will remain listed on the Main Market of Bursa Securities. Pursuant to the Proposed Demerger, the Company intends to change its name to incorporate the word "Magnum".

 

 

 

 The Company believes that the Proposed Demerger will provide a platform for the respective entities to pursue different and a more tailored business strategy for each division. This in return will allow the respective entities to manage their growth through explicit management mandates and accountability for each respective business entities. The New MPHB Group can fully focus on its Gaming Business while SPV Capital can continue to grow primarily its Financial Services Businesses. It is intended for the Gaming Business to pay out at least 80% of its gaming consolidated profit after tax subject to, amongst others, business prospects within the gaming segment, growth or expansion strategy and adequacy of reserves. To facilitate the foregoing, it is intended for the existing debt in the gaming business to be replaced by a long dated paper. 

+ve as expected to be value accretive with its non gaming assets conservatively valued at RM1.70/share, meaning that its gaming division with 37% market share and 485 outlets will be valued at RM1.77bn vs BJToto's market capitalization of RM5.8bn with 39% market share and 681 outlets.

6) Market - Choppy conditions with negative tendencies to continue ahead of developments in the EU. Select blue chips with high foreign shareholding exposure have bore the brunt of selling including Genting Bhd which is  testing its 7mth low of RM10.00. A breach below these levels could see it dip a further 5% to around the RM9.50 levels.