Maybank Investment Bank Issues 8 New Call Warrants
Kuala Lumpur, 5 March 2014 – Maybank Investment Bank Berhad (“Maybank Investment Bank”) is issuing eight new European style cash-settled call warrants (“CW”) over ordinary shares of Cahya Mata Sarawak Berhad (“CMSB”), Gamuda Berhad (“GAMUDA”), Goldis Berhad (“GOLDIS”), IJM Corporation Berhad (“IJM”), Malaysian Resources Corporation Berhad (“MRCB”), Puncak Niaga Holdings Berhad (“PUNCAK”), Wah Seong Corporation Berhad (“WASEONG”) and WCT Holdings Berhad (“WCT”). The warrants will be listed on Thursday, 6 March 2014 with an issue size of 100 million each.
This tranche features the construction segment of our market. The construction contracts awarded in 9M2013 is expected to support sector earnings in 2014. Construction job flows should also persist in 2014 driven by both public and private spending on infrastructure, property and onshore O&G related projects. Maybank Research has the view that valuation for construction stocks remains undemanding with an average of 13.3x 12M forward Price-Earnings ratio, below KLCI’s 16.3x with an OVERWEIGHT call on the construction sector in 2014 driven by successful execution in 2013, more jobs in 2014 and undemanding valuations.
Maybank Research’s top pick for the construction sector is IJM with its potential major construction orderbook replenishment and strong unbilled property sales.
CMSB, being a Sarawak-based company may benefit from the accelerating developments in the Sarawak Corridor of Renewable Energy (SCORE).
The call warrants have the following gearings, CMSB-CF (4.04x), GAMUDA-C12 (3.83x), GOLDIS-CA (4.53x), IJM-CS (4.79x), MRCB-CX (3.38x), PUNCAK-CB (3.81x), WASEONG-CK (3.30x) and WCT-CQ (4.73x). The tenure of all eight CWs is approximately 12 months.
The terms and conditions of the above call warrants are stated in their respective term sheets and investors should read the term sheets together with the Base Prospectus dated 2 October 2013 and the First Supplementary Base Prospectus dated 15 January 2014.