Friday, July 11, 2014

Market Roundup | 10 July 2014


 
FBMKLCI   1892.62    +1.46pts    (+0.08%)     Volume  1.621b   Value 1.982b
 
1) The KLCI saw tepid sideway trading today before closing in positive territory inline with the stronger US markets overnight which were modestly higher after the FOMC minutes revealed that policy makers decided to end the Fed's bond purchase program as early as October 2014 if the country's economy continue to thrive. In the regional market, bourses were mixed as the HSI climbed +0.27% while the SHCOMP -0.01 remained at overnight level after trade data today improved but missed estimates; NIKKEI closed lower at -0.55%. In the local market, PROPERTY index +0.90% reported the biggest gain amongst the sectors boosted by IOIPG +2.85%, E&O +6.69% and UEMS +1.47%. Market breadth was positive as gainers outpaced losers by 440 : 354. Futures closed at 1888.5 (4pts discount).
 
2) Heavyweights : IHH +1.95% RM4.70, IOICORP +0.77% RM5.22, ASTRO +1.79% RM3.40, FGV +1.20% RM4.21, HLFG +2.56% RM16.80, YTL -1.82% RM1.61, PETDAG -2.33% RM22.60, TM -0.93% RM6.36
 
3) DBT : DUTALND 16.784mil @ RM0.52 (1.98% PUC), MAYBANK 13.5mil @ RM9.99, PUC 11.083mil @ RM0.115 (1.31% PUC @ 45.3% discount), YINSON 3mil @ RM2.91
 
4) Situational:-
 
BJFOOD +3.06% RM1.68 - Berjaya Food Sdn Bhd has incorporated a new subsidiary in Cambodia. The principal activities of Berjaya Roasters (Cambodia) Ltd are  to develop and operate the Kenny Rogers Roasters chain in that market, the company mentioned. BFI is taking a 70.0% stake in the venture, with the remainder belonging to CE Roosters Ltd, the local partner in Cambodia.
 
5) Parkson Holdings
 
Parkson Holdings announced that it had entered into 3 sale and purchase agreements for the acquisitions of 60% equity interest in Giftmate Sdn Bhd (“Giftmate”) for a cash consideration of RM8 million, 50% equity interest in Valino International Apparel Sdn Bhd (“Valino”) for a cash consideration of RM3 million and 60% equity interest in AUM Hospitality Sdn Bhd (“AUM”) together with its group of companies for a cash consideration of RM48 million.
 
Giftmate’s principal operations are in the areas of producing branded premium and OEM premium gift related products which include items like “GoldArt” and “Zhuai Mao”.
 
Valino specialises in menswear and owns the “Kent” brand from Indonesia targeting young fashion office and leisure wear. It also markets “Geoffrey Beene”, a modern classic office wear from the United States of America.
 
AUM’s principal operations are in the areas of food, beverage and entertainment. There are currently 12 brands under AUM which include amongst others “Johnny Rockets” and “Quiznos” from the USA, “Bumbu Desa” from Indonesia, “The Library Coffee Bar” and “The Library Restaurant & Bar” owned by AUM. AUM has achieved a proforma unaudited consolidated PATMI of approximately RM3.1 million and revenue of approximately RM73.3 million for the financial year ended 31 December 2013.
 
The rationale for the acquisitions is to provide synergy to the Parkson Holdings Group’s existing retail locations and at the same time, complementing the Group’s shopping mall and retail operations, representing a new thrust for the Parkson Holdings Group & providing a new business and income stream for the Group. These collaborations will enable the Group to target a new business segment in corporate gift sales, venture into the food and beverage sector, and also tap more effectively into the fashion retail market which complements Parkson’s current retail business, through both international brands and private labels. Valuation of AUM acquisition at 16x is fair.
 
6) Market: risk aversion selling is expected after the holding company of one of Portugal’s biggest banks missed debt payments.