JIT News - UEM L/Mulpha/Tebrau,SP Setia,Hubline,Suria C,TC, MasterSkill.. 14/1/2011

UEM Land Bhd, Tebrau Teguh Bhd and Mulpha International Bhd are among Malaysian property companies that will benefit from a “re-pricing” of the land and property values in the southern Johor state. The re-rating of the Johor property play started following the negotiation of the land swap deal between Singapore and Malaysia . The re-rating process was further accelerated by the introduction of the Government’s economic transformation program.

SP Setia: Sources say SP Setia is likely to get a 30-year concession to build and operate the Penang International Convention Centre It has emerged as the leading contender to build the Penang International Convention Centre (PICC) on the grounds of the Penang International Sports Arena ( Pisa ).

Hubline: RAM Rating Services Bhd has reaffirmed the ratings of Hubline’s RM220 million debt notes but revised the outlook on the long-term ratings from stable to negative.The outlook may be revised to stable if Hubline is able to demonstrate sustainable improvement in its financial profile on the back of improved cargo volumes for its dry-bulk shipping services and its ability to command better freight rates for its niche routes. On the other hand, Hubline’s ratings could be downgraded if it experiences prolonged deterioration in its financial metrics.

Suria Capital: It and its partners have secured a RM1 billion contract to build a 300MW power plant in Kimanis, Sabah . Its unit SCHB Engineering Services Sdn Bhd and its partners CTCI Corporation, CTCI Overseas Corporation Ltd, CTCI Malaysia Sdn Bhd and Steamline ( Malaysia ) Sdn Bhd were awarded the contract by Kimanis Power Sdn Bhd.

The contract is expected to contribute positively to the earnings of SCHB Engineering for the financial year ending Dec 31, 2011. The contract does not have any material effect on the net assets per share, share capital and substantial shareholders' shareholding of Suria Capital.

Tan Chong Motor: It saw 4.75 million shares transacted in several off-market deals at an average price of RM5.35 apiece.

Masterskill: FMR LLC and FIL Ltd sold more shares disposed of 2.42 million shares on Jan 6 2011 and 1.33 million shares on Jan 7, 2011, reducing its shareholding to 29.74 million shares or 7.26%.

JIT News - Petra, IJM Land/MRCB, Maybulk/Hubline ... 4/1/2011

Petra Energy/Petra Perdana: Sources say Petra Energy Bhd is close to securing a rm100 million contract from Murphy Oil for hook up and commissioning works. It is learnt that Petra Energy Bhd could make an announcement to the local bourse soon after ironing out a few minor issues. Petra Energy is 29% owned by Petra Perdana.

Target Price: 1.21 (OSK), 1.92 (CIMB), 0.98 (CIMB), 1.26 (ECM)

IJM Land/MRCB: Despite the termination of merger talks between IJM Land and MRCB, prospects of both MRCB and IJM Land are still upbeat. In fact, industry observers said the aborted plans may work out to be a blessing in disguise in favor of MRCB. MRCB is well regarded as the front runner in securing the lead developer role, if not a major participation in the development of the 3300 acre RRIM land in Sungai Buloh. This is by virtue of the fact that the EPF is MRCB’s controlling shareholder with a 41.63% stake.

For EPF to maximize its returns from the RRIM Land , MRCB holds a significant interest has to play a major role. If the merger talks were to be reignited after it is being firmed up that MRCB would have a major role in the RRIM land, the latter’s shareholders – which include the EPF – would benefit from a higher swap ratio against IJM Land shares.

While details on why the deal fell through remain doubts at this stage, it is believed that a contributing factor was the pricing for MRCB’s concession assets. They were rationalized by IJM Land and would make up the potential cash payout on top of the swap price of rm2.30 for MRCB. The ref price for IJM Land was set at rm3.65. The termination of the merger deal is less negative for MRCB given its lower valuation for the swap price.

However, optimists did not expect this would not be the end to possible future partnerships between the two entities. With MRCB and IJM Land having the EPF as a common major shareholder, it is inevitable that both will enter into future partnerships or contemplating another merger again.

Target Price: IJM Land : 3.88 (ECM), 3.50 (RHB), 3.88 (AmResearch), 3.20 (Credit Suisse)

MRCB: 2.90 (HDBS), 1.96 (RHB), 2.30 (OSK)

Maybulk/Hubline: The Baltic Dry Index (BDI) a barometer of global shipping prices for the dry bulk cargoes including coal, iron ore, and grain fell 41% to 1773 points on year end 2010 compared with a high of 2995 in Sept 2010. The dwindling demand for dry bulk cargo such as iron ore and an oversupply of vessels have resulted in lower charges for transporting these items. This has lent credence to expectations that dry bulk shipping companies profitability in the near future could be under threat as vessel capacity supply grows faster than the growth in dry bulk cargo consumption.

Target Price: Maybulk: 2.70 (CIMB), 3.70 (OSK)