Capital markets executive summary | Fri 14 Jul 2023

Capital markets executive summary | Fri 14 Jul 2023

MyMBN oversubscribed 30.77 times

The Melaka-based company which processes and sells bird’s nest will be listed on 25 Jul. It is offering 19.3m shares to the public at 21 sen. A total of 7,712 applications for 613.14m shares were received, according to Malaysian Issuing House Sdn Bhd. The 18.68m shares for directors and employees were also fully taken up. The company has managed to place out all 60.02m shares made available via private placement. Successful applicants will receive their notice of allotment on 24 Jul. Mercury Securities is the sole placement agent. Apex Research valued the company at 30 sen based on 16 times price-earnings multiple of FY Dec 2024.

Venture capital firm Antler partners Khazanah to expand into Malaysia

The partnership will offer support to Malaysian entrepreneurs by providing access to Antler’s global platform and network. The firm will launch its first venture generation programme in Malaysia in Oct. It targets to invest in 30 start-ups in the next 3 years. Malaysia is the 4th country in Southeast Asia after Singapore, Indonesia and Vietnam. Its presence in 26 locations worldwide is a global platform for scaling and capital. This partnership falls within Khazanah’s RM6b Dana Impak to support local start-ups over 5 years. With Antler, founders will be able to scale their companies faster by building teams, joining a global network of founders and accessing capital. Antler has invested in 792 companies in 26 cities globally with portfolio value of USD3.7b.

RP Hydro’s green sukuk assigned final rating of AA3

RAM Ratings assigned the final rating to RP Hydro (Kelantan) Sdn Bhd’s RM975m ASEAN Green SRI sukuk under the shariah principle of wakalah bi al-istithmar (2023/2043). RP Hydro is 70% owned by Malakoff Corporation Berhad and 30% by Rising Promenade Sdn Bhd. The company signed a 21-year renewable energy power purchase agreement (REPPA) with Tenaga Nasional Berhad (TNB), for each of its 3 small run-of-river hydropower plants in Kuala Krai and Gua Musang, Kelantan. The plants in Kuala Geris (25MW), Kemubu (29MW) and Serasa (30MW) are developed along Sungai Galas with 84MW aggregate installed capacity. The projects are scheduled to be completed on 15 Dec 2025. The rating reflects strong project fundamentals, favourable REPPA terms and low offtake risk. Priority of dispatch from TNB mitigates the absence of fixed capacity payments. Other positive factors include proven technology and standard equipment warranties from reputable manufacturers, and simple plant operations with technical support from the original equipment supplier. The project is exposed to monsoons and flooding which moderates the rating. Malakoff closed at 60 sen.

Tanjung Bin Power’s sukuk AA2 rating affirmed

RAM Ratings affirmed the rating of the Malakoff-owned company’s RM4.5b sukuk ijarah programme. Its 2,100MW coal-fired power plant’s operating performance and favourable power purchase agreement (PPA) with TNB contribute to robust cashflows and debt coverage. There was a less than 1% loss in available capacity payments, which accounts for 85% of capacity rate financial, due to boiler issues. The loss is covered by additional daily utilisation payments, which make up the remaining 15%, in FY2022. Despite higher coal prices, the company managed to pass-through the costs to TNB by operating within the heat rate threshold in the PPA. The company’s annual finance service coverage ratio (FSCR) without cash balances will be less than 1 time. Its average FSCR with cash balances post-distribution is 2.39 times and minimum is 1.65 times.

China outbound shipments shrank 12.4% year-on-year in Jun 2023

The contraction in exports, the largest in 3 years, follows a fall of 7.5% year-on-year in May 2023. Imports declined 4.5% in May and 6.8% in Jun. The economic recovery’s momentum in 1Q2023 has dissipated and the global economic slowdown plus US-China trade sanctions will continue to depress exports. Analysts are revising their GDP growth estimates for 2023. Exports contribute 1/5 of China’s economy while the troubled property sector accounts for 1/3. Amidst weak exports and deflationary pressures, Chinese Premier Li Qiang promised government support but very little have been announced so far. Semiconductor imports were down 15.3% in May and 13.6% in Jun.