Friday 29 Mar 2024
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KUALA LUMPUR: Again investors will have to brace for another volatile session on Monday, Nov 2 after the Dow industrials suffered its worst slide since July on Friday while the local market sentiment is expected to be cautious, as reflected in the recent week.

Overnight on Wall Street, investors' concerns are that the economic recovery won't be robust enough to sustain the seven-month stock rally, while financials sank on renewed worries about Citigroup's balance sheet.

The Dow Jones industrial average slid 249.85 points, or 2.51 percent, to end at 9,712.73. The Standard & Poor's 500 Index tumbled 29.92 points, or 2.81 percent, to 1,036.19. The Nasdaq Composite Index dropped 52.44 points, or 2.50 percent, to close at 2,045.11.

As for PPB Group, it will be in focus following its plans to exit its sugar refining business by selling it to the Federal Land Development Authority (Felda), netting a gain of more than RM1 billion at the company level.

Under the deal, PPB is selling its unit Malayan Sugar Manufacturing Co Bhd (MSM) to Felda's commercial arm, Felda Global Ventures Holdings Sdn Bhd, for RM1.2 billion.

PPB's cost of investment in MSM was RM50.8 million, made from 1976 to 1999. It stands to gain RM1.17 billion and RM723.8 million at the company and group level respectively.

Another company in focus is Tradewinds (M) Bhd (TWM). PPB's 49% associate Grenfell Holdings Sdn Bhd sold a 20% stake or 59.29 million shares in TWM to Felda.

The price tag for the 20% stake is RM207.5 million or RM3.50 per share, which is 25.90% and 21.95% over RM2.78 and RM2.87, the five-day volume weighted average market price (VWAP) and three-month VWAP of TWM shares up to Oct 29, respectively.

PPB, which closed at RM15.14, is trading at a price-to-earnings ratio of 14.52 times, which is below the average PER of 20.25 times for the sector.

Meanwhile, Ho Hup Construction Co Bhd could come under heavy selling pressure after it proposed a 20-into-one share capital reduction.

This involves cancelling 95 sen from each of its 102 million RM1 shares and consolidating the five sen shares under its capital restructuring exercise. It is also proposing a renounceable rights issue of 12.75 million new shares at RM1 per rights share after the proposed capital reduction and consolidation, on the basis of five rights shares for every two shares held.

Over at Gamuda Bhd, Platinum Investment Management Ltd has been slowing reducing its shareholding in the infrastructure-based company.

A recent transaction was the disposal of five million shares on Oct 22 in the open market, reducing Platinum Investment Management's shareholding to 125.59 million shares or 6.23%. Since Oct 6, it has sold 9.11 million shares. Gamuda's share price closed at RM3.14 on Oct 22.

As for ETI Tech Corp Bhd, its substantial shareholder, the Emirates Investment and Development Co sold six million shares from Oct 19 to 23. The shares were disposed of in the open market.

Following the disposals, the Dubai-based fund's shareholding was reduced to 87 million shares or 12.78%.

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