FBM30 1661.95 -4.40points (-0.26%) Volume 1,276mil Value 1,463mil
1) KLCI fell following weaker DOW on Friday as weaker
corporate earnings and a sharp drop in Japan's export dented investors risk
appetite. Index however failed to recover inline with regionals which rose on
optimism China's government will introduce measures to boost equities before a
leadership transition next month. Market breadth was negative with decliners
leading gainers 407:259. Futures closed 1664pts (2 points premium).
2) Heavyweights: MAYBANK-0.55% RM9.04, DIGI-0.73% RM5.44,
CIMB-0.53% RM7.58, TENAGA-0.58% RM6.92, TM-0.99% RM5.99, PCHEM-0.76% RM6.51, PPB+4.29% RM13.14, PBBANK+0.4% RM14.94
3) DBT: IGBREIT 327.6mil @ RM1.25 (9.6% PUC, 8.7%
discount), DGSB 15.5mil @ RM0.045 (1.1% PUC, 18% discount), BENALEC 5.5mil @
RM1.43 (2.7% discount)
4) Situationals:
EIG+15% RM0.495: Esthetics International Group (EIG) said
it had received an unconditional mandatory takeover offer from
Providence to acquire the remaining shares and warrants in the company not
owned by the acquirer. Providence which already owns about 60% of EIG and 85%
of the warrants, is offering 50sen per EIG share and 12sen per warrant.
BAT-0.22% RM63.86, JTI-1.28% RM2.32: all cigarette packs
has been raised by 20sen effective today after cigarette manufacturers were
notified by Royal Malaysian Customs on Thursday of a mandated uplift in the
ex-factory pricing.
5) CSL/ Pelikan
CSL entered into
two (2) conditional sale and purchase agreements with the following
vendors,Mahir Agresif (M) Sdn Bhd and PBS Office Supplies Holding Sdn Bhd; and
Persada Bina Sdn Bhd to acquire acquiring a total amount of 50,000,000 ordinary
shares of RM1.00 each in Pelikan, representing 9.79% of the equity interest in
Pelikan for a total purchase consideration of RM50m equivalent to
RM1.00/Pelikan Share, which is to be satisfied by the issuance of up to
47,169,812 new ordinary shares each in CSL at an issue price of RM1.06/ CSL
shares.
CSL has opted for the issuance of up to 47,169,812 new
CSL Shares as payment for the Purchase Consideration and additional 3,000,000
new CSL Shares as payment for the professional fees rather than other available
financing alternatives.
The Proposed Acquisition represents a strategic move on
the part of CSL and its subsidiary companies as it will immediately provide a
pathway for both the CSL Group and the Pelikan Group to work together to grow
the business in the sales, distribution and procurement of Pelikan's stationery
products in the markets, and to fully leverage on the CSL Group's strong market
network and access, namely China.The Proposed Acquisition will also enhance the
value and recognition of CSL as a global stationery player.
It is also envisaged that the Proposed Acquisition will
enhance the strategic collaboration between the two (2) groups and will provide
and create synergy and value-added enhancement to the parties in terms of
sharing of resources, market insights and networking, which will lead to the
added benefit of cost effectiveness in the operation of the respective groups.
Comments : It remains to be seen how both companies plan
to integrate as Pelikan historically have priced themselves more in the premium
market while its acquirer CSL is more targeted at the mass market.
6) Market - With the global economy now showing some
stability, we remain bullish for a strong performance in the equity market for
4Q and early 1Q 2013. We continue to advocate accumulation to laggard quality
names, ie MISC, Waseong, Genting Msia, Bumi Armada.
