Isnin, 18 November 2013

The Star Online: Business

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The Star Online: Business

Berjaya Auto zooms past expectations in listing


PETALING JAYA: Berjaya Auto Bhd's listing blew past expectations, opening at RM1.55 – more than double its initial public offering (IPO) price – despite concerns about its liquidity.

Exuberant trading sent its shares to a high of RM2.20 yesterday, far exceeding the issue price of 70 sen, before settling at RM1.82 for a market capitalisation of RM1.56bil.

Some 72 million shares changed hands in the counter, making it the day's most active.

The stock also soared past projections by analysts, who had set a target price of 92 sen for the Mazda car retailer.

"The share price has run far ahead of fundamentals. And it is too tightly held," commented an analyst.

Berjaya Auto has a free float of 25% – the minimum required public shareholding spread on Bursa Malaysia – and did not issue any new shares for its IPO, but this proved no deterrent to investors.

At yesterday's close, Berjaya Auto was valued at 24 times forward earnings, trumping MBM Resources Bhd's nine times, UMW Holdings Bhd's 15 times, Tan Chong Motor Holdings Bhd's 12 times and DRB-Hicom Bhd's 13 times, as well as the sector average of 11 times.

Chief executive officer Datuk Ben Yeoh Choon San told reporters after the listing ceremony that Berjaya Auto saw potential for double-digit growth in total industry volume (TIV) in the Philippines from about 4% now.

This compares to a TIV growth of 4% over the next two years in Malaysia's saturated passenger vehicle market. Berjaya Auto has a market share of about 1.5% in Malaysia, where TIV growth is expected to remain in single-digit territory.

Its Philippine operations, via 60%-owned Berjaya Auto Philippines, has already contributed to 5.2% of group sales despite starting in January.

In the longer term, Berjaya Auto is aiming for revenue from the Philippines to increase to 15%-20% of group turnover, Yeoh said. The company is the sole importer and distributor of Mazda cars there.

Analysts say the Philippines is a strong growth market for Berjaya Auto, given its huge population of 106 million people and low car ownership of only 3.2%.

Sales could expand as much as 200%, 20% and 10% in the financial years ending April 2014 through 2016, Hong Leong Investment Bank Research said in a note to clients earlier this month.

Yeoh also said that under the Asean Free Trade Area, manufacturers were able to move goods more easily within the region, opening new export markets for Berjaya Auto.

"But we would focus on the Philippines and Thailand for the moment," Yeoh said.

The firm currently exports its locally assembled Mazda CX5 to Thailand.

The Mazda CX5 sport utility vehicle is Berjaya Auto's bestseller, with a backlog of 3,000 units and a waiting time of up to six months, according to Yeoh.

"We plan to launch the new completely-built-up Mazda 3 next year to test the market before embarking on the completely-knocked-down version," he added.

Locally assembled cars make up 60% of Berjaya Auto's volume.

The IPO raised RM58mil from an offer for sale of 82.76 million shares. Most of the proceeds will be used for working capital.

Berjaya Corp Bhd remains Berjaya Auto's single largest shareholder post-listing with a 68% interest, followed by Yeoh with 7.1%.

DiGi expects M2M mobile service SME subscribers to double in 12 months


KUALA LUMPUR: DiGi Telecommunications Sdn Bhd expects to double the take-up rate of its newly launched machine to machine (M2M) mobile service to 30% of its small and medium enterprise (SME) customers in 12 months from 15% currently.

DiGi chief marketing officer Albern Murty said on Tuesday the new service would allow business users to improve efficiency and reduce cost savings.

"This service will help customers have access to real-time information that was not initially available," he said at the launch of the M2M service.

Plans for the M2M service starts from as low as RM8 per SIM card per month, with rates depending on the level of services required by the customer.

Asian shares climb to 2-week high on sexy China reforms


TOKYO: Asian shares edged to a two-week high on Tuesday, adding to the previous day's hefty gains on China's economic reform plans, while the dollar was hobbled by expectations the US Federal Reserve will keep its stimulus a little longer.

MSCI's broadest index of Asia-Pacific shares outside Japan added 0.2%, building on Monday's 1.4% rally fed by a sharp jump in Chinese stocks and heading for a fourth straight day of gains.

"China's reform pledge was sexier than perceived, bringing risk back into play in emerging markets including South Korea which is still comparably low valued," said Kim Yong-goo, a market analyst at Samsung Securities.

China's CSI300 Index surged 3.3% on Monday, its biggest one-day rise in two months, to hit a four-week peak. The index took a breather on Tuesday, slipping 0.4%.

In Tokyo, the Nikkei fell 0.8%, further moving away from a six-month high hit on Friday, with a trader saying domestic investors continued to cash in recent gains.

The yen was up 0.4% at 99.64 yen to the dollar , adding to a 0.2% rise overnight to end a two-day run of losses.

The euro rose 0.1% to US$1.3515, not far from a two-week high of US$1.3542 reached on Monday. Against a basket of major currencies, the dollar eased 0.2% to 80.661, languishing near a more than one-week low of 80.565 reached on Monday.

As the dollar weakened on expectations that the Fed will continue its bond-buying campaign under incoming chief Janet Yellen, the 10-year U.S. Treasuries yield slipped to below 2.7%.

Investors remained on guard for any clues as to when the U.S. central bank will start unwinding its US$85bil-a-month stimulus programme, although many in the markets now see any move unlikely until March.

A number of Fed speakers offered more insights into the central bank's stimulus on Monday. The latest was Charles Plosser, president of the Philadelphia Fed, who said improved economic and labour market conditions suggest the Fed should set a fixed dollar amount on its current bond-buying programme and end the programme when that amount is reached.

William Dudley, the president of the Federal Reserve Bank of New York, said he was becoming "more hopeful" about the US economy.


Investors will turn more cautious early next year as they try to front-run when the Fed will start unwinding its stimulus, said Evan Lucas, market strategist at IG in Melbourne.

"The markets will start to front run the Fed like they did in August leading into the September meeting," he wrote in a note. "Come late January I suspect there will be a change of sentiment from fund managers and hedge funds alike as they start to predict the end and that will affect the current run."

When that happens, emerging assets would likely come under pressure after being buoyed by cheap money from central banks over the past few years.

The Indonesian rupiah was up 0.2% at 11,600 per dollar on Tuesday, still not far from a 4-1/2 year low of 11,670 touched last week.

Overnight, U.S. stocks were mixed. The Standard & Poor's 500 ended lower while the Dow Jones industrial average eked out a slight gain but failed to close above its milestone level of 16,000, as stocks sold off late in the session after cautious comments by activist investor Carl Ichan on the equities market.

US S&P 500 E-mini futures were little changed in Asian trade.

Among commodities, US crude prices held steady at about US$93 a barrel, having fallen 0.9% overnight to near a 5-1/2 month low of US$92.51 touched last Thursday.

Gold stabilised at around $1,273 an ounce after sliding 1.2% in the previous session – Reuters. 


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