Capital markets executive summary | Tue 23 May 2023

Capital markets executive summary | Tue 23 May 2023

AirAsia X issues RM50m shares for working capital

The company will place out 32.26m new shares or 7.78% of its total shares at RM1.55 per share. It has entered into conditional share subscription agreements with Lavin Group Sdn Bhd (16.13m shares), AHAM Asset Management Berhad (12.91m shares) and AIIMAN Asset Management Sdn Bhd (3.22m shares). The price is at a 15.96 sen or 9.34% discount to 5-day volume weighted average market price of RM1.7096 on 19 May. The proceeds will be used for, amongst others, aircraft activation and maintenance costs, and other operating expenses such as leases and insurance. AirAsia X (AAX) currently has a fleet size of 17 aircraft with 11 operational. It is planning to have more aircraft operational this year. Lavin Group is controlled by businessman Calvin Lau Chuen Yien. AHAM is 63%-owned by private equity firm CVC Capital Partners and 27% by Nikko Asset Management. AIIMAN is the wholly-owned shariah investment unit of AHAM. AAX closed at RM1.92, the highest in 3 years and up 220% since 3 Jan.

Petronas Gas 1Q net profit up 3.31%

The figure was slightly higher from RM410.58m the prior year to RM424.18m in 1QFY2023. The company attributed the results to higher product prices and lower tax expenses which fell from RM150.73m – due to the prosperity tax in 2022 – to RM108.64m. Earnings per share rose from 20.75 sen to 21.44 sen. Revenue climbed 14% from RM1.46b to RM1.67b due to larger contribution from the utilities segment and higher product prices. The company declared an interim dividend of 16 sen payable on 20 Jun. Operating profit fell 10.6% though because of higher operating expenses, namely, fuel gas, internal gas consumption and depreciation. The resulting 5.3% drop in profit before tax was cushioned by higher interest income and larger share of profit from joint ventures. The company’s outlook is driven by stable-earning contracts although high gas prices could offset. The counter closed at RM16.98.

SC reprimands Huobi and its CEO for illegal digital asset exchange

Huobi Global Ltd had been operating a digital asset exchange (DAX) in Malaysia without registration. The Securities Commission (SC) issued a public reprimand against Huobi and its chief executive officer Leon Li. The SC also ordered Huobi to disable its website and mobile applications on Apple Store, Google Play and all other digital application platforms. The company was also instructed to stop advertising in email and social media platforms to Malaysian investors. The SC said that operating a DAX without obtaining the its registration as a recognised market operator is an offence under s7(1) of the Capital Markets and Services Act. Malaysian investors who have been using Huobi have been urged to stop trading, withdraw their investments and close their accounts.

Syed Mokhtar mulls selling 30% of MMC Ports

The deal would value the largest port operator at RM12b. Investors have approached MMC Corp to register their interest in the ports business. MMC Ports runs 7 ports in Malaysia – Port of Tanjung Pelepas, Johor Port, Northport, Penang Port, Tanjung Bruas Port, SPT Services and Andaman Port. The deal could set the company up for a listing in the next few years. Infrastructure assets offer stable long-term returns for global sovereign, pension and private equity funds. In addition, global container volumes have soared following supply chain disruptions and congested ports. The outlook for the ports business is driving investor interest. For example, Temasek-owned PSA International is planning to sell its 20% interest in CK Hutchison Holdings’ port business.

Monetary Authority of Singapore to collaborate with banks and schools on AI

The parties will develop training programmes that incorporate the latest developments and trends in artificial intelligence (AI). The Monetary Authority of Singapore (MAS) said that almost every function of the financial sector requires AI. Global resources for AI is scarce and rising demand has spurred investments with nations building up a pipeline of talent. MAS will concentrate on experimentation and financing ideas which are commercially scalable. Singapore aims to be a leader in developing and deploying AI solutions in key sectors such as health, finance and education by 2030.