The Star Online: Business
The Star Online: Business |
- Malaysia-Market factors to watch on April 16(Tuesday)
- Bursa attracting special purpose acquisition companies
- TAS Offshore bucks market after winning RM160m contract
| Malaysia-Market factors to watch on April 16(Tuesday) Posted: 15 Apr 2013 06:42 PM PDT KUALA LUMPUR: Following is a list of events in Malaysia as well as news company-related and market news which could have an influence on the Malaysian market. GLOBAL MARKETS-Yen firms as risk assets brace for another rout SE Asia Stocks-Down; Indonesia, Philippines lead WHAT IS HAPPENING IN MALAYSIA, IN TIMES LOCAL FOLLOWED BY GMT: * Malaysia External Trade Development Corp (Matrade) seminar on Doing Business in Chile, Mexico and Brazil at Menara Matrade, Kuala Lumpur at 0900am (0100). * Malaysian Insurance Institute Annual Claims Convention 2013, Mahkota II Ballroom, Hotel Istana, Kuala Lumpur at 0900am (0100). * Malaysian Institute of Economic Research Corporate Briefing, Plaza 02 Hall, Lower Lobby, Parkroyal Hotel, Kuala Lumpur At 0900am (0100). * Maybank launches "M2u Pay" to facilitate online blog trading, Menara Terrace, Level 1, Menara Maybank, Jalan Tun Perak, Kuala Lumpur At 1030am (0230). MARKET NEWS > Tokyo's Nikkei share average falls 2.03 pct > Wall St posts worst day since Nov. 7 on gold's drop, Boston blasts > Prices gain on safety bid, Boston explosions > Yen jumps, commodity currencies tumble as risk sentiment sours > Gold investors run for the exits, prices suffer biggest-ever drop > Brent oil drops 3 pct to near $100 in commodities rout > Palm drops to 4-mth low on slowing exports, China data MALAYSIA IN THE NEWS: > ING targets May launch of $1.2 bln Thai bank stake sale -sources > POLL-Malaysia's March inflation likely picked up on robust domestic demand > LVMH-backed fund buys stake in Aussie bushwear firm R.M. Williams > World Bank cuts East Asia growth estimate; welcomes BOJ stimulus > TABLE-World Bank lowers China, Indonesia growth estimate > Malaysia's Islamic insurers hesitant on overseas investment > Malaysia's April 1-15 palm oil exports down 4 pct -ITS > Malaysia's April 1-15 palm oil exports down 7.2 pct -SGS > Malaysia sets May crude palm oil export tax at 4.5 percent - Reuters VEGOILS-Market factors to watch April 16(Tuesday) KUALA LUMPUR: The following factors are likely to influence Malaysian palm oil futures and other vegetable oil markets. FUNDAMENTALS * Malaysian palm oil futures fell to a 4-month low on Monday, hurt by easing exports and disappointing Chinese data that raised concerns about the outlook for global commodity demand. * U.S. grain and soybean futures slid sharply on Monday along with many other commodities as disappointing economic growth in China triggered selling, with Chicago wheat falling the most in two weeks. * Brent crude oil fell by almost 3 percent to near $100 a barrel on Monday, extending a two-week selloff that has sliced nearly 10 percent off prices, as part of a wider flight by investors from commodities. MARKET NEWS * The yen firmed against the dollar and the euro early in Asia on Tuesday while riskier markets were likely to encounter another bout of selling after investors dumped commodities and stocks overnight on concerns over slowing growth in China and the U.S. * Gold closed sharply lower on Monday after its biggest two-day drop in 30 years and oil, copper and grains prices also tumbled as investors fled financial markets after disappointing Chinese economic data underscored global growth worries. RELATED NEWS > Indonesia's Tahija family aims to raise $175 mn in palm oil IPO > Malaysia's April 1-15 palm oil exports down 4 pct -ITS > Malaysia's April 1-15 palm oil exports down 7.2 pct -SGS > U.S. soy crush edges up in March, oil yield surges -NOPA > U.S. farmers expect Japan to slash tariffs in Trans-Pacific pact > China farmers plan to grow more rice and corn;less soy, cotton > Grains fall as China growth slows, wheat dives 3 pct - Reuters
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| Bursa attracting special purpose acquisition companies Posted: 15 Apr 2013 06:35 PM PDT KUALA LUMPUR: Malaysia's bull market is seeing a type of initial public offering (IPO), still fairly new to Asia, that takes a special kind of company public: one with no profits, revenues or assets. CLIQ Energy Bhd last week became the second such firm, known as a special purpose acquisition company (SPAC), to list in Kuala Lumpur, with three more preparing for IPOs. The spurt comes after Malaysian equities rose for four straight years, including a banner year for IPOs in 2012, and as investors anticipate a jump in mergers and acquisitions in South-East Asia. But SPACs have historically been high-risk, high-reward investments. Some United-States-listed SPACs have performed well and built market value, while others have failed to make any acquisition, being forced to delist. "If the historical experience in the United States is any indication, then it should provide a warning sign that these investments may not turn out to be particularly good ones," said Stefan Lewellen, a SPAC expert who authored a study on US SPACs at Yale University. Listings of SPACs are also known as blank check IPOs, because such companies raise money through the stock market without a single asset on their books. SPACs are mere shell companies, with no business to speak of other than a plan to buy corporations that will be folded into the entity. Investors in a SPAC typically buy a unit and receive a warrant, which trades separately and can only be exercised when the company completes a takeover. Some investors prefer to take a position on a SPAC's warrants, which are cheaper than units, but the holdings can turn into dust if no acquisitions are made. CLIQ Energy raised US$120mil (RM364.50mil) through its IPO to buy oil and natural gas assets in Asia-Pacific. While the funds raised surpassed the company's minimum target by more than two-fold, its units slumped 24% on its debut, as investors sold off the unit to take a position in CLIQ's warrants. The warrants have doubled in price since the IPO, underscoring the speculative nature of the investment. Three more Malaysia-based SPACs, TerraGali Resources Bhd, Australaysia Resources and Minerals Bhd and Sona Petroleum Bhd, are slated to list in the coming weeks, with a combined value of at least US$300mil. SPACs are relatively new to Asia, with South Korea the only other established market for such products. In the United States, there is a long line of examples where such companies failed to make an acquisition and were forced to delist. Even those that did make a deal, on the whole, have not historically performed well. US SPACs that have declined since completing acquisitions include 57th Street General Acquisition Corp, down nearly 80% from its IPO, Jaguar Acquisition Corp, down 97.5%, and Ideation Acquisition Corp, down 83%. Lewellen's research showed that US SPACs with completed acquisitions between 2003 and 2008 posted negative returns in excess of 36.5% a year. In another study, only half of all SPACs launched in the United States in the last 10 years have completed an actual acquisition, and have posted negative annual returns of 18.6% on average, according to figures from research firm SPAC Analytics. According to Thomson Reuters data, 247 SPAC IPOs have raised US$27.7bil since 2003 in countries, including the United States, Britain, the Netherlands and Germany. Hedge funds and other institutional investors make up most of the buyers of US SPACs, according to the data. This only adds to the challenge of them catching on in Asia, where markets such as Malaysia, South Korea and Greater China are driven heavily by retail investors. Most of the SPAC listings took place during the boom years in capital markets, with issuance peaking in 2007 at US$10.9bil from 82 offerings. "SPACs were popular in the United States and now are sort of dead," said an equity capital markets banker in Hong Kong, who was not authorised to speak publicly on the matter. "I'm very sceptical on SPACs. It's risky, it's illiquid. It's a very difficult product to become mainstream." But not all shell companies are equal. South-East Asia's first listed SPAC Hibiscus Petroleum Bhd has doubled since listing in Kuala Lumpur in July 2011. Hibiscus is now an oil and gas exploration firm after making acquisitions in the Middle East and Norway. The structure of SPACs is similar in most countries, with about 90% of the IPO funds held in a trust until a takeover target is found. Because the IPO proceeds are invested in Government bonds or money market funds until the SPAC makes an acquisition, returns should mirror those of a fixed-income fund but that has not always been the case. After a spurt of listings and a surge in prices in 2010, SPAC issuance in South Korea ground to a halt as prices crashed and companies delisted. Daewoo Securities Green Korea SPAC and Mirae Asset No 1 SPAC, the first two listed, were among companies that surfed on the retail investor frenzy and nearly doubled in price within weeks of their IPOs. "Those kinds of stock bubbles were caused by ... financial illiteracy of individual investors," said Kab Lae Kim, head of corporate policy at the Korea Capital Market Institute in Seoul and author of a report on SPACs. "In that sense, SPACs have lost market confidence." - Reuters
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| TAS Offshore bucks market after winning RM160m contract Posted: 15 Apr 2013 06:34 PM PDT Published: Tuesday April 16, 2013 MYT 9:35:00 AMKUALA LUMPUR: Shares of TAS Offshore Bhd rose to a high of 42 sen early Tuesday, after its unit secured new contracts for the sale of four vessels totalling RM160mil. At 9.21am, it was up four sen to 41.5 sen. There were 1.04 million shares done at prices ranging from 40.5 sen to 42 sen. The FBM KLCI fell 7.35 points to 1,690.42. Turnover was 71.94 million units valued RM75.16mil. The broader market was cautious, with decliners beating advancers nearly four to one. There were 196 losers, 51 gainers and 153 counters unchanged. TAS announced on Monday that it had secured new contracts for the sale of two units of anchor-handling tug oil recovery supply vessels and two units of offshore construction vessels. The four vessels are to be sold to foreign-based customers, it said, adding that it expects the contracts to contribute positively to earnings for the financial years ending May 31, 2014 and 2015.
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