TA Global, TA Enterprise up on Trump presidential win


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This article first appeared in The Edge Financial Daily, on November 10, 2016.

 

KUALA LUMPUR: TA Global Bhd and TA Enterprise Bhd saw their share prices rise 11.1% and 5.4% respectively, as investors trade on the counters on the back of Donald Trump’s victory against Hillary Clinton in the US presidential election yesterday.

Notably, TA Global, which is 60.17%-owned by TA Enterprise, is the joint developer of the Trump International Hotel and Tower project in Vancouver, Canada.

As Trump was elected as the 45th president of the US, shares in TA Global yesterday gained 2.5 sen to close at 25 sen, giving it a market capitalisation of RM1.33 billion. TA Enterprise shares also went up 2.5 sen to settle at 48.5 sen, giving it a market capitalisation of RM830.3 million.

TA Global and TA Enterprise bucked the trend to advance at a time when the FBM KLCI declined 1% to 1,647.62 points.

Interestingly, TA Global and TA Enterprise, which are often thinly traded, saw some 18.1 million shares and 2.94 million shares

respectively changing hands yesterday. With a Trump win, it appears that some investors are now chasing shares in the two companies.

“This is actually more like a trading play rather than an investment, so I think it (the share price spike) is not sustainable,” a senior analyst told The Edge Financial Daily.

Meanwhile, a veteran stockbroker speculated that TA Global could even secure more contracts from Trump in the future.

“When your business partner is the US president, it is a very rare and powerful connection,” he said.

Trump International Hotel and Tower Vancouver is being developed by West Georgia Development Ltd Partnership, in which TA Global and Birkbeck Trust own an equal 50% interest.

It is an iconic 63-storey mixed-use tower comprising a luxury hotel with 147 guest suites, 217 high-end residential suites, a four-level podium and an eight-level underground car park, which is scheduled to be fully completed this year.

In May this year, TA Global director Datin Alicia Tan Kuay Fong reportedly said the premium lifestyle property firm will realise the bulk of its profit from the successful construction of the Trump Tower in Canada in the financial year ending Dec 31, 2016 (FY16).

Trump International Hotel and Tower contributed RM46.4 million in profit, representing 57.4% of the group’s profit, in the 11-month period ended Dec 31, 2015 (FY15). The group had changed its financial year end from Jan 31 to Dec 31.

For FY15, TA Global recorded a net profit of RM43.62 million on a revenue of RM534.95 million. The group will keep three penthouses in the Vancouver project for recurring income.