The Star Online: Business
The Star Online: Business |
- MSW AGM/EGM Weekly Watch June 13-17
- RHB ‘war’ may not happen as Maybank and CIMB would not want to overpay
- Malaysian construction companies have bountiful opportunities in China
| MSW AGM/EGM Weekly Watch June 13-17 Posted: 12 Jun 2011 05:45 PM PDT Monday June 13, 2011MSW AGM/EGM Weekly Watch June 13-17   For latest Bursa Malaysia indices, charts and other information click here |
| RHB ‘war’ may not happen as Maybank and CIMB would not want to overpay Posted: 12 Jun 2011 05:38 PM PDT PETALING JAYA: A bidding war for RHB Capital Bhd may not materialise as both Malayan Banking Bhd (Maybank) and CIMB Group would be mindful of overpaying, said a research house. In a report on Friday, OSK Research said assuming a majority share swap funding scenario, all things being equal and on current share price levels (Maybank at RM8.75, CIMB at RM8.35), it estimated that the merger would still be marginally earnings per share accretive if Maybank and CIMB were to offer up to RM10.80 and RM11.30 per RHB Capital share respectively. "CIMB's higher price to book value of 2.3 times versus Maybank's 2.1 times gives CIMB more share swap pricing power," the research house told clients. In its report, the research house said that however, given the downside risk on return on equity post merger and limited synergistic upside, it believed that both banks were likely to display pricing discipline, which in its view could cap the offer pricing for RHB Cap below the 2.25 times price to book value multiple. This would translate into a potential offer pricing cap of RM10.80, or about a 9% premium to RHB Capital's current share price of RM9.90. RHB Capital's relatively high double leverage of 150% may also be something which potential suitors would want to price into their valuation and consider the impact on the enlarged group's capital ratios post implementation of Basel 3, OSK noted. In its report, OSK also touched on the ongoing consolidation in the local banking sector. The research house said that the consolidation would certainly widen the scale disparity of the top four domestic full fledged commercial banks with that of the smaller domestic banks. Currently, the top four banks are Maybank, CIMB, Public Bank Bhd and the newly merged entity of Hong Leong Bank Bhd and EON Bank Bhd. "As such, it would make commercial sense for the smaller banks to merge with one another to develop scale," OSK said. Having said that, the research house said it believed that smaller banks would still be able to survive if they were able to be innovative and continue to develop a strong consumer-centric culture and niche markets. Full Feed Generated by Get Full RSS, sponsored by USA Best Price. |
| Malaysian construction companies have bountiful opportunities in China Posted: 12 Jun 2011 05:18 PM PDT JOHOR BARU: Bountiful opportunities await Malaysian-based construction companies in China following a boom in the country's construction sector and the rapid development going on there. Malaysia External Trade Development Corp (Matrade) construction services and building materials division director Ong Yew Chee said many infrastructure projects would be built in China in the years to come. He said the projects included construction of bridges, roads, highways, property development projects as well as public projects such as hospitals, schools and universities. Ong said opportunities were also good for environmental services providers involved in waste water treatment, garbage disposal, landfills and providing clean drinking waters for households and factories. "China is not a straight-forward market and companies planning to go there must do their research and homework to better understand the way to do business there,'' he told a press conference that was held recently in conjunction with a promotional conference for companies in the southern region for the upcoming Eight China-Asean Expo 2011 to be held in Nanning, Guangxi, from Oct 21 to 26. Ong said it was not that easy for foreign companies to enter into the Chinese market as it was in the process of building up mutual trust, adding that this would require time. However, he said this should not stop local companies from venturing to China as the country was not to be ignored. If Malaysian companies did not make inroads into China, others would, he added. He said those planning to venture into China should not only focus on the major cities such as Beijing and Shanghai, but also the second and the third-tier cities which offered equal business opportunities. Among the second-tier and the third-tier Chinese cities that Malaysian companies should look into include Chongqing, Hangzhou, Suzhou, Tianjin, Wenzhou and Zhengzhou. "China is not only for the big corporations which have deep pockets but also for the small and medium enterprises (SMEs),'' he said. He said one of the ways for local SMEs to venture into China was to team up with their Chinese counterparts to access the market there as these Chinese companies had better knowledge of the country. Ong said Matrade would also encourage more Malaysian companies, especially the government-linked companies (GLCs), to set up joint-venture companies with China's GLCs to bid for infrastructure projects in other countries. As for other emerging markets, Ong said Malaysian construction players would be looking at Qatar for construction-related projects as the kingdom would be hosting the World Cup in 2022. He said many new stadiums would need to be built. as the game's venues, besides infrastructure projects such as roads and highways, while existing stadiums needed to be upgraded. "The Middle East is an important region for our construction companies as it accounts for about 41% of the global construction activities,'' said Ong. Full Feed Generated by Get Full RSS, sponsored by USA Best Price. |
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