CIMB, HONGLEONG, EON, PETRA,HOHUP

CIMB Group Holdings Bhd (CIMB MK, Buy, TP: RM15.00) says minority shareholders are key to whether it will delist
CIMB Thai Bank pcl after a dual listing in Thailand next year. Group CEO Datuk Seri Nazir Razak said it will consult the
small shareholders of its 93.2% owned CIMB Thai before a decision is made. The group bought into CIMB Thai, a Thai listed
local bank, last year. According to Nazir, Thailand doesn’t have a 10% squeeze-out rule, so the decision to delist will be in
consultation with the minority. A sample of opinion will be taken and action will be based on the feedback, he said. Investors in
Malaysia and Thailand reacted positively to the dual listing plan last month. The listing is expected to boost CIMB’s regional
profile, especially in Thailand, Nazir said. (BT)
* * * * *
EPF may back a deal to merge the country’s sixth and seventh largest banking groups if it offered an attractive price.
EPF holds 10.7% of EON Capital Bhd, which is being eyed for a takeover by Hong Leong Bank Bhd (HLBK MK, Hold, TP:
RM8.71). Hong Leong already has the consent of Bank Negara to talk to Rin Kei Mei and the Tiong family about buying their
shares. Rin and the Tiong family own about 32% of EON Capital. Khazanah Nasional Bhd holds a tenth of EON Capital and is
said to support the deal. According to the latest annual report, as at Aug 28, EPF also holds about 10.86% in Hong Leong.
Since obtaining permission from Bank Negara to hold talks with EON Capital, Hong Leong will have to wait for the EON Capital
board to decide if it wants to talk and subsequently present any proposal from Hong Leong to shareholders. Primus Pacific
Partners Ltd is one of Eon Capital’s largest shareholders and is said to have control of the board, according to industry
sources. EPF and Khazanah do not have representatives on the board. (BT)
* * * * *
Petra Perdana Bhd (PETR MK, Sell, TP: RM0.73) has received an interim ex-parte order by the High Court of Malaya
fixing an inter-parte hearing on Jan 11, 2010 on the application of Shamsul Saad to stop the sale of the remaining
29.59% stake in its associate, Petra Energy Bhd. Petra Perdana said the order had named the company, Tengku Datuk
Ibrahim Petra Tengku Indra Petra, his wife Datin Che Nariza Hashim, two other board directors Wong Fook Heng and Tiong
Young Kong and TA Securities Holdings Bhd as defendants. The order is to restrain Petra Perdana, Tengku Ibrahim, Nariza,
Wong, Tiong and any agents appointed by Petra Perdana as placement agent, from divesting the remaining shares in Petra
Energy until an extraordinary general meeting or the final disposal of the suit is held, whichever is earlier. Petra Perdana is now
awaiting further details of the suit and is seeking legal advice pending further announcements. (StarBiz)
* * * * *
Kuwait Finance House (KFH) has pulled out of a RM237m deal to buy recently-completed The Icon, Jalan Tun Razak
(East Wing) from Mah Sing Group Bhd. The failed deal was announced by Mah Sing last Thursday, which means that the
RM42.67m, being an 18% upfront cost KFH paid earlier, has been forfeited. Mah Sing also said that it has found a new buyer
for the property in the form of T.S. Law Realty Sdn Bhd. Mah Sing, in its filing to Bursa Malaysia, said the deal was terminated
after Prompt Symphony Sdn Bhd, a special purpose vehicle (SPV) set up by KFH and an Australian firm, failed to pay the
balance of the agreed price. Mah Sing, through wholly-owned Star Residence Sdn Bhd, had signed the sale and purchase
agrement with Prompt Symphony in late November 2007. Prompt Symphony is an 80:20 SPV set up by KFH unit and Autron
Corp Ltd. It originally planned to buy The Icon, which measures 278,182 sq ft and will have 301 car park bays. Mah Sing said
that T.S Law Realty will pay RM226m for The Icon Jalan Tun Razak's 20-storey East Wing. (BT)
* * * * *
Ho Hup Construction Bhd’s second-largest shareholder Low Chee & Sons Sdn Bhd (LCS) is opposing the board’s
proposed sale of two tracts of land. LCS, which holds a 24.7% equity stake, put up a notice to Ho Hup’s shareholders in 2
major newspaper urging shareholders not to support the proposed sale contending that the disposal price is “significantly
undervalued.” The first tract, measuring 5.5 acres located in Balakong, Selangor is proposed to be sold to Kentlee (M) Sdn Bhd
for RM7.2m cash, which is about RM30 psf. The second parcel of land held by 70%-owned subsidiary Bukit Jalil Development
Sdn Bhd, measuring 2.6 acres will be sold for RM5.67m or RM50 psf to Etnik Masyhur Sdn Bhd. Datuk Low Tuck Choy, one of
the owners of LCS, is of the opinion that the board fails to obtain the best prices for the land. The advertisement urged
shareholders to decide on what is “best for the proposals” at the coming EGM. Nonetheless, Ho Hup’s managing director Lim
Ching Choy disagreed with Low’s accusations. “The first plot of land in Balakong has no access from the main road. It is
actually lucky already that the adjacent landowner, who already has access to his own land, wants to buy it,” he said. (Financial
Daily)
* * * *

PROPERTY STOCKS -- OVERWEIGHT

FROM ECM LIBRA
A perfect Christmas gift
· Property tax only for sale within 5 years of acquisition
Prime Minister Datuk Seri Najib Tun Razak presented the perfect Christmas gift to the Malaysian property market when he announced yesterday that the real property gain tax (RPGT) of 5% will only apply to property sold within 5 years of the date of purchase. Recall that the government has re-introduced the RPGT during the 2010 Budget which imposes a flat 5% tax on gains from sale of property regardless of the year of acquisition with effect from 1 January 2010.

· An affirmative signal of accommodative stance
While there is still a 5% RPGT for property sold within 5 years going forward, we believe the toning down by the government from its earlier proposal will provide a much needed relief to the property sector as it sends an affirmative signal that the government will adopt an accommodative stance to support growth in the property sector. Although the revised property tax regime will dampen speculative activities, we took comfort from the fact that the flat tax rate of 5% is minimal as compared to the reducing scale rate from 30% to 5% of the RPGT tax regime prior to its suspension on 1 April 2007 (refer to Figure 2 for comparison).

· Residential properties sales will be strong
Even with the RPGT, over the past few weeks, we have noticed very strong take-up rates for landed residential properties, especially super-link terrace houses, semi-detached houses and bungalows which cater to the upper-middle class. We attribute such strong buying interest on the low interest rate environment as well as improving sentiment on brighter economic outlook. With the relaxation of the RPGT regime, we believe buying interest to pick up pace especially among upgraders who need to sell their existing properties first.

· Maintain OVERWEIGHT
We have upgraded the property sector earlier this month from neutral to overweight due to the convergence of sustained property demand, despite the RPGT, and recent price correction affecting property stocks which led us to believe that the property sector will be an outperformer going into 2010. We believe developers with residential properties catering to middle to upper-middle class such as Sunway City and SP Setia to benefit from strong demand and hence, rate these two as our top picks for the sector. Among non-rated property stocks, we also like IJM Land and Mah Sing.

MAH SING, JETSON,MPCORP, PJI

Mah Sing Group Bhd plans to use the bulk of the RM97.6m raised in its recent private placement exercise that wascompleted on Dec 10 to subscribe for shares in a company in China. The company said it would use RM81.9m of theproceeds raised to meet the initial capital requirements to incorporate a 100% subsidiary in China as part of a deal to securethe land use rights in Wujin District, Changzhou City in China. Mah Sing said it would use only RM15.4m for working capitalrequirements and RM300,000 would be used for expenses of the exercise. The developer is involved in a mixed propertydevelopment project in the Wujin District with a joint venture partner, Danlong Realty (Beijing) Ltd. (Financial Daily)

* * * * *

Naza Group has drafted Kumpulan Jetson Bhd as a partner to develop the country's largest exhibition centre on 62.45acres of prime federal land off Jalan Duta in Kuala Lumpur. Naza, through wholly-owned TTDI KL Metropolis Sdn Bhd, andKumpulan Jetson sealed a pact to form a 51:49 joint venture (JV) called TTDI Jetson Sdn Bhd. Kumpulan Jetson will eventuallyget a RM628m job to build the proposed Matrade Centre, which will have a 1m sq ft of gross floor area. TTDI Jetson will sign aproper development agreement with TTDI KL Metropolis once Kumpulan Jetson has obtained shareholders' nod for theproposed JV at an extraordinary general meeting to be convened soon. TTDI Jetson will then award Kumpulan Jetson thecontract to build the Matrade Centre for RM628m, the latter said. "The company will carry out the planning, design, constructionand complete the Matrade Centre," Kumpulan Jetson said. The company will build the Matrade Centre for the government at itsown cost. In return for the exhibition centre, TTDI KL Metropolis has the exclusive rights to develop the land into a mixedproject tentatively dubbed the "Naza KL Metropolis Development". The project will boast of hotels, offices, residences andshopping malls, with a gross development value of RM15bn over 15-20 years. Naza and Kumpulan Jetson have estimated thatthey would have to fork out some RM800m to render Matrade Centre functional plus the land premium for conversion of the25ha into commercial status. (BT)

* * * * *

Malaysia Pacific Corp Bhd (MP Corp) hopes to start construction of the RM4bn Asia Pacific Trade & Expo City (APTEC)next year. The company was finalising joint-venture partners for various parcels of the project, which is expected to becompleted in eight years. President and CEO Datuk Bill C.P. Ch’ng said the intention was to build the whole project in one go.To do this APTEC will be broken up into 18 to 20 different parcels with each parcel to be funded separately, so that the variouscomponents will take off simultaneously without incurring heavy financial burden to the company. MP Corp pared down currentliabilities to RM5.6m as at June 30, compared to RM150m a year ago. The company also proposed a rights issue to raiseRM54m to enlarge its capital base. APTEC will accommodate 2.5m sq ft of exhibition space in four trade halls as well as retailmalls. Hotels including a 50-storey five-star property, as well as offices and commercial units are being planned on the 60-acresite in Iskandar Malaysia. (Star Biz)

* * * * *

PJI Holdings Bhd is eyeing a contract to provide mechanical and electrical engineering services worth RM400m toRM500m at the new LCCT terminal. It plans to fund the job through private financing initiatives (PFIs). CEO Lim Chong Lingsaid that next year the company will also explore water-related projects. PJI is also waiting for details of the 10th Malaysia Planas it saw many opportunities in relation to its core business of mechanical and electrical engineering services. The companyhas tendered for jobs worth RM500m since June, mainly in mechanical and electrical engineering services and waterinfrastructure. PJI now has an orderbook of about RM150m and hopes to add RM150m to RM200m by June 2010. (StarBiz)

EONCAP, YTL,PETRA,E&O, KPJ,MRCB, TALIWORK

Two major shareholders of EON Capital Bhd (EON Cap) – Singaporean Rin Kei Mei through Kualapura Sdn Bhd andLintang Emas Sdn Bhd, and the Tiong group through RH Development Sdn Bhd – have received the green light fromBank Negara to negotiate the sale of their stakes in the banking group. EON Cap said its board had been notified by RHDevelopment Corp, Kualapura and Lintang Emas that they had received approval from Bank Negara to start negotiations withHong Leong Bank Bhd (HLB) (HLBK MK, Hold, TP: RM8.71). Based on past merger and acquisition (M&A) transactions, whichwere largely a combination of share swaps and some cash outlay, the potential merger could also enable EON Capshareholders to ride on HLB’s future growth and upside in share price. (StarBiz)
* * * * *

The Penang Development Corp (PDC) and YTL Land & Development Bhd yesterday signed an agreement to developluxury apartments on a 1.38ha land in Lebuh Farquhar in Penang. Each party will hold 50% equity in the project and theycould start anytime soon, Penang Chief Minister Lim Guan Eng said. A hotel was originally to be built on the site by PDCHeritage Hotel Sdn Bhd, a joint venture between YTL Hotels & Properties Sdn Bhd,a wholly-owned subsidiary of YTL Corp Bhd(YTL MK, Buy, TP: RM8.00) and PDC. After the project was shelved due to the economic slowdown, PDC Heritage Hotelsought to change the type of development from hotel to luxury apartment. Subsequently, it applied to change the type oflandholding to freehold and the condition of land use to residential and business. "The state government approved PDCHeritage Hotel's application on June 3 2009 subject to three additional conditions," Lim said. He said the building height mustfollow the Unesco guidelines which was not more than 5 storeys and all costs pertaining to condition changes which exceededRM8.2m must be borne by YTL Hotels. The new project comprises three six-storey 76-unit apartment blocks including anunderground basement, a clubhouse and a restaurant. (BT)
* * * * *

Petra Perdana Bhd (PETR MK, Sell, TP: RM0.73) has made certain declarations in relation to its divestment of shares inPetra Energy Bhd, including saying that Tengku Datuk Ibrahim Petra will continue to helm both companies. “IbrahimPetra will continue to helm, post divestment, both Petra Perdana and Petra Energy in his capacities as executive chairman andCEO, and executive chairman respectively,” the company said in a statement. It also said Petra Perdana would continue tooperate its business in the offshore marine industry. In this regard, the company would continue to explore opportunities in thevessel charter business in line with the new deliveries and improving market conditions. (StarBiz)

* * * * *
Maybank Investment Bank Bhd and Mizuho Securities Co Ltd (MHSC) have formed a strategic alliance to worktogether in areas such as primary and secondary markets, mergers and acquisition advisory and Islamic markets. In ajoint statement yesterday, the two parties said they would leverage on their mutual expertise, experience and robust globalnetworks to further develop markets in Malaysia, Japan, and other regions. The statement preceded the signing of amemorandum of understanding between Maybank IB and MHSC. (Financial Daily)

* * * * *
Eastern & Oriental Bhd has proposed to dispose of a piece of freehold land in Kuala Lumpur to Menara Hap Seng SdnBhd for RM103m with the proceeds to be used as working capital and repay bank borrowings. The property developersaid in an announcement that its wholly owned unit, Radiant Kiara Sdn Bhd had entered into a sale and purchase agreement tosell the 0.46ha parcel of freehold land with preliminary construction works in KL to Menara Hap Seng. E&O said the proposeddisposal is expected to result in a one-off gain of RM31m. The proceeds would be fully used by 2010 as working capital andpare down its borrowings of RM1.03bn as of Nov 30, 2009. If the entire proceeds were used to pare down borrowings, theannual savings in interest is expected to be about RM5.8m based on average interest rate of 5.7% per annum. On March 31,2009 the net book value of the land stood at RM55.1m and was acquired for RM26.58m in May 2006. The proposed disposal isexpected to be completed in 1Q 2010. (Financial Daily)

* * * * *
KPJ Healthcare Bhd has estimated a capital expenditure (capex) of RM150m for next year. Chairman Tan SriMohammad Ali Hashim said the money would be spent on upgrading its current medical facilities and building new hospitals inthe country. “The company usually spends around RM150m annually on capex but this also depend son the stability of theeconomy,” he said. “In spite of the economic slowdown, KPJ is confident that its performance for fiscal year 2009 would bebetter than the previous year,” he said. At the EGM, KPJ received approval from its shareholders to proceed with its proposedshare split, bonus and warrant issues. The exercise will involve the sub-division of one ordinary share of RM1 each in KPH into2 ordinary shares of 50 sen each, followed by a 1-for-4 bonus issue and a subsequent 1-for-4 free warrant issue. Uponcompletion of the exercise and full conversion of the warrants, KPJ will increase its share base to 660m from 211m. (Starbiz)

MalaysiaMalaysian Resources Corp Bhd (MRCB) has made an informal approach to buy or help develop thousands of acres offederal land in the Klang Valley. But its recently-appointed chief executive officer Mohamed Razeek Hussain stressed that noformal bid has been submitted. "We have expressed our interest. It's up to the government to whom it wants to allocate theland," Razeek said in response to whether MRCB had made a bid to the government for prime land in two areas. He wasspeaking after MRCB's extraordinary general meeting on its proposed rights issue in Kuala Lumpur yesterday. The governmentrecently announced plans to sell or co-develop its prized landbank in Cheras, Kuala Lumpur and Sungai Buloh in Selangor.The latter land is sited near an industry park in Kota Damansara, with an estimated market rate of RM30 per sq ft. Razeek saidMRCB is keen on increasing its landbank to turn it into mixed development projects. MRCB, he said, is unlikely to make anycash call in the next 5 years after its proposed renounceable one-for-two rights issue. Shareholders yesterday gave their nodon the exercise that will raise gross proceeds of between RM508m and RM541m. Meanwhile, the rights issue at RM1.12 ashare will raise MRCB's share capital to between 1.36bn and 1.44bn from the present 907.62m shares. (BT)

* * * * *
Taliworks Corporation Bhd has proposed to issue RM395m of secured bonds 2009/2024, which would partly financethe early redemption of its convertible bonds that will expire in 2012. It told Bursa Malaysia that the 2009/2024 bondswould be issued via its special purpose vehicle, Destinasi Teguh Sdn Bhd, which would act as a funding conduit to raise fundsfor the group. Funds raised from the proposed 2009/2024 bonds will be used to redeem 50% of the RM225m nominal value of2.25% convertible bonds 2007/2012. The statement also said that the funding exercise will suit the group’s long-term financingneeds and mitigate early redemption risk of the convertible bonds which will arise in 2010. On Dec 17, Taliworks also enteredinto a bond purchase agreement with the holders of the 2007/2012 bonds to purchase 50% of the bonds. Despite using part ofthe proceeds raised to redeem 50% of the 2007/2012 bonds it had offered to purchase the bonds to reduce financing costsbecause of a possible delay in the implementation of the private debt securities. (Financial Daily)

* * * * *
The government plans to compulsorily buy a piece of land measuring 0.38ha on Jalan Tun Razak, Kuala Lumpur, fromproperty developer IGB Corp Bhd. The land is near Megan Phileo Promenade and a stone's throw from the Petronas TwinTowers. Should the government pay the prevailing price of around RM1,200 per sq ft for the piece of land, the land may be soldfor some RM40m, a source said. It is understood that the government may build a fire station on that location. "IGB has alreadyreceived a development order to build 166 units of high-end service apartments with 200,000 sq ft of net saleable area," asource told Business Times. The source added that IGB hopes to get at least RM1,200 per sq ft, given that land prices invicinity of the Kuala Lumpur City Centre ranges from RM1,900 to RM2,200 per sq ft. Should IGB be paid RM1,200 per sq ft, itmay get some RM40m from the government. "The project is in the pipeline, but it has not been launched yet," another sourcesaid. (BT)

* * * * *
Car sales expanded for the second consecutive month in November indicating market conditions have improvedcompared with a year earlier. The Malaysian Automotive Association (MAA) said passenger and commercial vehicle salesvolume grew 23%, or 4,335 units, to 45,200 units in November from 40,865 a year earlier. Production of vehicles was 17.26%lower at 40,074 units from 48,431 units a year earlier. YTD, car sales volume fell 3.75% to 489,237 units from 508,290 units ayear earlier. Production also fell 10.77% to 444,755 units from 498,419 units. For December 2009, MAA said year-on-yearexpansion of car sales was expected although month-to-month volume was likely to be lower, as December was a vacationand it was normal for customers to take delivery of vehicles in 2010 instead of 2009 year-end. (Financial Daily)

CIMB, PETGAS,HONG LEONG,HONG LEONG,MAYBAN ,IOI,MAS

CIMB Bank Bhd, a subsidiary of CIMB Group Holdings (CIMB MK, BUY, TP: RM15.00), is in talks to sell down its stakein Southeast Asia Special Asset Management Bhd (Seasam) that manages its legacy non-performing loans (NPLs).CIMB said it would consider a cross-listing in Indonesia if rules permitted. “Logically, we would like to deconsolidate Seasam.(Selling) more than 51% would be nice,” CIMB Group chief executive Datuk Seri Nazir Razak told the media. A wholly ownedunit of CIMB, Seasam is a special purpose company that holds gross loans amounting to RM8.4bn and has a net book value ofRM928m. CIMB added that while the portfolio had been written down to RM928m, the total value of the collateral wasestimated to be RM2.1bn. Nazir feels Seasam would make a profit over time. (StarBiz)

* * * * *
Tenders called for Kimanis plant. Tenders for the purported RM900m Kimanis power plant from the consortium of PetronasGas Sdn Bhd (PetGas) (PTG MK, Buy, TP: RM10.90) and Yayasan Sabah are in the process of being given out to the shortlisted 12 companies, say sources. Pre-qualification for the project, which started in April, was only completed at the beginningof December and local parties in the running include Muhibbah Engineering (M) Bhd (MUHI MK, Sell, TP: RM0.74) and GadangHoldings Bhd. However, it’s unknown who the companies are partnering in this venture or whether they are spearheading aconsortium of their own. The usual practice is for local companies to joint venture with established multinationals forinfrastructure projects of this nature. The source says the shortlist includes Japanese firms Sumitomo, Marubeni, and Mitsuigroup. The final cost of the 300MW gas plant is yet to be finalised although Yayasan Sabah says the plant is expected to becompleted in 2013. Under the agreement, Kimanis Power Sdn Bhd was established to implement the project with PetGasholding 60% and Yayasan Sabah holding the rest. The power will be sold to Sabah Electricity Sdn Bhd, which is under theumbrella of Tenaga Nasional Bhd (TNB MK, Buy, TP: RM9.90). (The Edge)

* * * * *
Hong Leong Bank Bhd (HLB) (HLBK MK, Hold, TP: RM8.71) may acquire assets and liabilities, including equityinterests, in EON Capital Bhd. The banking group had received Bank Negara’s approval to commence negotiations withcertain shareholders of EON Cap. HLB did not disclose specifically which shareholders it would approach to start thenegotiation, saying it would make further announcements. Primus Pacific Partners Ltd, RH Development Corp Sdn Bhd,Kualapura (M) Sdn Bhd, the Employees Provident Fund and Khazanah Nasional Bhd are among the substantial shareholdersof EON Cap. (StarBiz)

* * * * *
Two shareholders of EON Capital Bhd, who hold a combined 32.57% stake, have dismissed speculation that they arewilling to sell their stakes in EON Capital at RM8.20 per share to Hong Leong Bank Bhd (HLBK MK, Hold, TP: RM8.71).Rin Kei Mei, who owns a 15.46% stake, and the Tiong family (17.11%) said in a joint statement last Saturday that they wouldnot be selling their stakes to Hong Leong Bank. (Financial Daily)

** * * *

Malayan Banking Bhd (Maybank) (MAY MK, BUY, TP: RM8.10) has completed the acquisition of 17.8m shares or 5% inVietnam’s An Binh Commercial Joint Stock Bank for about 356.3bn dong (RM66.4m). Maybank Investment Bank Bhd saidon behalf of Maybank that the bank currently held 60.56m shares in An Binh following its latest acquisition. Earlier, thecountry’s largest lender spent RM430m to acquire a 15% stake in An Binh Bank. With a 20% stake, Maybank’s holdings in theVietnamese bank are at the maximum allowed for a foreign partner in Vietnam. (StarBiz)

* * * * *
IOI Corp Bhd (IOI MK, HOLD, TP: RM5.21) will be focusing on new plantings on its Indonesian estates next year tohasten contributions from its foreign landbank. The group had added two new estates in Indonesia during the financial yearended June 30, 2009, bringing its total landbank to 172,980ha. According to its latest annual report, about 68% of the group’splantation holdings are in East Malaysia, 31% in Peninsular Malaysia and the remaining 1% in Indonesia. The report showsthat the group’s landbank in Indonesia measures about 2,110ha where most of its land is still undeveloped or are mostlyimmature oil palms. (Financial Daily)

* * * * *
Malaysian Airline System Bhd (MAS) (MAS MK, SELL, TP: RM2.00) will increase capacity next year to prepare for anindustry upturn, after a 12%-13% reduction this year. “When we increased capacity by 10%, there was a 20% increase in(passenger) traffic,” managing director and CEO Tengku Datuk Azmil Zaharudin said. Azmil said the airline had seen stronggrowth in passenger traffic in the 3Q and 4Q of the year, a sign that recovery might be under way for the air transport industry.(Financial Daily)

BERJAYA SPORTS TOTO ---BUY

FROM ECM LIBRA
Supplies lottery system to related party GAMING
· News
Berjaya Sports Toto Bhd (BToto) yesterday announced that International
Lottery & Totalizator, Inc (ILTS), an indirect subsidiary, entered into a
Purchase Agreement with Natural Avenue Sdn Bhd (NASB), a 65%-
owned subsidiary of Berjaya Assets Bhd (BAssets).
Under the agreement, ILTS will sell a lottery system comprising on-line
lottery terminals, central systems hardware, software and project services
for a total cash consideration of US$3.2m (RM12.67m). ILTS is a leading
supplier of computerized wagering systems for the online lottery and parimutuel
racing industries.
NASB is acquiring the lottery system to replace its existing 14-year old
betting system which has limited capacity.
The proposed sale is expected to be completed by 2H10. The cash
proceeds from the sale will be used by ILTS for working capital. (Bursa)
· Comments
We are neutral on this development given that while the proposed sale is
a related party transaction (RPT) since they share a common major
shareholder in Berjaya Corporation Bhd, the amount involved is relatively
small.
We note that BAssets has a gaming operation via NASB, which runs a
number forecasting operation in Sarawak. NASB’s gaming operations
contributed about 68% of BAssets total revenue in FY09.
As we expect minimal to BToto’s earnings, we have maintained our
earnings forecast. We reiterate our BUY call on BToto with a DCF-derived
(WACC: 7.5%, g: 2%) target price of RM5.30. Risks include (1)
intensifying competition from alternative jackpot games (2) higher than
expected prize payout and (3) lower than expected dividend payout ratio.

HONG LEONG, MAYBANK, BOUSTEAD

HSBC Holdings plc, Bank of Nova Scotia and Hong Leong Bank Bhd (HLBK MK, HOLD, TP: RM 8.71) are amongbidders for a stake in Siam City Bank Pcl. Thailand’s central bank is seeking about US$1bn (RM3.4bn) for its 47.6% stake,people with knowledge of the matter said last month. Thailand, wracked by violent political protests in the past two year, iseasing restrictions on foreign ownership of banks to encourage investment and boost competition in the financial industry.Yvonne Chia, managing director of Hong Leong Bank, didn’t respond to an email regarding the bid (Financial Daily)

* * * * *

Malayan Banking Bhd (MAY MK, Buy, TP: RM8.10) will raise its stake in Vietnam’s An Binh Bank to 20% from 15%, theVietnamese lender said yesterday. An Binh Bank will sell 17.8m shares today for 20,000 dong each. The share sale wouldraise its registered capital by 22% to 3.48trn dong (RM638.3m). (Financial Daily)

* * * * *

Boustead Holdings Bhd (BOUS MK, SELL, TP: RM3.05) has terminated a sale and subscription agreement to acquire a51% stake in Atlas Hall Sdn Bhd for RM8m and came up with a new agreement to acquire the stake at half the price. Ina statement to Bursa Malaysia, it said it would buy 400,000 shares, equivalent to a 20% stake in Atlas Hall from Tan Sri AbdulRashid Abdul Manaf for RM1.41m and subscribe to 1.27m new shares in the company for RM2.67m, or RM2.11 apiece,representing a share premium of RM1.11. It said the amount it would now pay for the acquisition, amounted to RM4.08m.(Financial Daily)* *