MMC, OSK and PJ Development among companies in focus today

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KUALA LUMPUR: The stocks that may be in focus today could include the following: MMC Corp Bhd, OSK Property Holdings Bhd, PJ Development Holdings Bhd (PJD), Cepatwawasan Group Bhd and Ni Hsin Resources Bhd.

Following the announcement of Budget 2015, pipe makers and water treatment plant contractors, infrastructure and construction counters, as well as hotel operators and aviation counters, could also see some trading action.

An MMC consortium with Sumitomo Corp of Japan have won the contract to build the Langat centralised sewage treatment plant and sewage pipes worth RM1.51 billion.

In a filing with Bursa Malaysia last Friday, MMC said it had received a letter of award from the Ministry of Energy, Green Technology and Water for the project.

“The project is expected to contribute positively towards the earnings and net assets of MMC group, commencing from the financial year ending Dec 31, 2015,” said MMC.

Property firms OSK Property Holdings and PJD will continue to steal the limelight as the two have confirmed merger talks.

“We wish to confirm that the company is presently negotiating for a possible merger and consolidation exercise involving PJD. However, the structure has not been finalised and no definitive agreement has been executed as at to date,” OSK Property Holdings told the exchange last Friday. Separately, PJD also made the same announcement to Bursa Malaysia.

Oil palm planter Cepatwawasan Group Bhd plans to undertake a reverse takeover (RTO) of Timah Resources Ltd, which is listed on the National Stock Exchange of Australia. Cepatwawasan will inject its biogas power generation outfit, Mistral Engineering Sdn Bhd, into Timah Resources for A$8.55 million (RM24.8 million). In return, Cepatwawasan will receive 85.5 million shares of Timah Resources at A$0.10 apiece. It will also subscribe to 10 million shares in the latter for A$2 million cash.

The proposed RTO will result in Mistral Engineering being listed in Australia through Timah Resources.

Cookware manufacturer Ni Hsin Resources saw some interesting changes in its boardroom last week amid market talk of a possible venture into the oil and gas (O&G) sector.

According to a Bursa filing, Rizvi Abdul Halim has been appointed as independent and non-executive director of Ni Hsin, while Ida Suzaini Abdullah has been appointed as executive director. Both Rizvi and Ida have a background and experience in the Q&G  industry.

Rizvi is a director of Ideal Jacobs (M) Corp Bhd, which is in the midst of a proposed RTO by O&G companies Cekap Technical Services Sdn Bhd and Mecip Global Engineers Sdn Bhd. Ida was previously an adviser to Persada Nuri Sdn Bhd — an O&G services and consultancy firm — from 2006 to 2008.

Water treatment plant contractors including Salcon Bhd, MMC, and Ahmad Zaki Resources Bhd could be in focus as the government said the construction of the RM3 billion Langat 2 water treatment plant would be expedited to address the water supply shortage in the Klang Valley.

Pipe makers such as Engtex Group Bhd, Jaks Resources Bhd, YLI Holdings Bhd and Hiap Teck Ventures Bhd could benefit from the government’s allocation of RM112 million to detect and repair leaking pipes.

Infrastructure and construction counters may see trading interest as the government announced the implementation of several mega infrastructure projects.

Most notable is the construction of the 56km second mass rapid transit line from Selayang to Putrajaya at an estimated cost of RM23 billion, as well as the light rail transit project which will link Bandar Utama in Petaling Jaya to Shah Alam and Klang at an estimated cost of RM9 billion.

Hotel operators and aviation stocks could also see trading action as the government allocated RM316 million to attract 29.4 million foreign tourist arrivals with an expected income of RM89 billion, in conjunction with Malaysia — Year of Festivals 2015.

This article first appeared in The Edge Financial Daily, on October 13, 2014.