KUALA LUMPUR (May 14): Shares of MMC Corporation Bhd rose in early trade today ahead of the listing of its unit Malakoff Corporation Bhd on Friday.

At 9.15am, MMC Corp rose 2.27% or 6 sen to RM2.70 with 40,200 shares done.

AllianceDBS Research last week rated MMC Corp a “Buy” at RM2.60 with a target price of RM4.95 and said the listing of Malakoff would be earnings accretive to MMC Corp, raising FY15F–FY16F EPS by 5%–11% after interest cost-savings.

At 12.30pm, MMC Corp (fundamental: 1.00; valuation: 1.40) rose 2.69% or seven sen to RM2.67 with 788,800 shares done.

In a note today, the research house said this was based on MMC Corp’s 51% stake being reduced to 38%, which would remove RM18.2 billion of debt from its balance sheet.

“As such, we also expect gross gearing to fall to just 0.65x from 2.3x currently. ROEs should also improve to 6.1%–7.5% from 5.8%–6.8%.

“Positive impact on balance sheet and earnings,” it said.