Capital markets executive summary | Thu 7 Sep 2023

Capital markets executive summary | Thu 7 Sep 2023

YTL REIT to buy Hotel Stripes for RM138m

Maybank Trustees Bhd, the trustee for YTL Hospitality REIT, entered into a conditional sale and purchase agreement with Hotel 25 Sdn Bhd, wholly-owned by YTL Corporation Bhd. After the acquisition, Maybank Trustees will lease the property to Hotel 25 for a period of 15 years with an option for Hotel 25 to renew the lease for an additional 15 years. The acquisition aligns with YTL REIT’s investment objective of acquiring and investing in high quality hospitality properties in Malaysia and abroad with a view to provide long-term and sustainable income distribution to unitholders and achieve long-term growth in the net asset value per unit. The lease agreement will provide YTL REIT with fixed rentals from Hotel 25 with a 5% rental escalation every 5 years. YTL REIT closed at RM1 and YTL Corporation closed at RM1.52.

UEM’s sukuk rating upgraded from AA2 to AA1

RAM Ratings upgraded the rating of UEM Group Berhad’s RM2.2b Islamic medium term notes (IMTN) programme (2012/2042) issued via United Growth Berhad. The proposed RM7b IMTN programme via UEM Olive Capital Berhad, wholly-owned by UEM, is assigned a AA1 rating. UEM has a new role as the green investment vehicle for Khazanah Nasional Berhad as it champions the integrated Renewable Energy (RE) Zone, one of 10 flagship projects under the government’s National Energy Transition Roadmap (NETR). Khazanah’s sustainable energy unit, Cenergi SEA Berhad, was recently consolidated under UEM. The upgrade reflects an uplift from moderately high to high likelihood of extraordinary support from Khazanah Nasional Berhad. UEM signed a memorandum of understanding with several partners for the development of a 1 gigawatt solar photovoltaic (PV) plant and an RE industrial park. UEM’s standalone credit profile is supported by UEM Edgenta Berhad and UEM Sunrise Berhad, both leaders in their respective industries with proven track records. Notwithstanding, its business strength moderated after the restructuring of the toll subsidiary and some weakness in debt coverage levels.
Would you like us to email you when our latest executive summary is available?

EcoWorld buys land for RM1.58b GDV business park in Johor

The company entered into a conditional sale and purchase agreement with IOI Prima Property Sdn Bhd for the acquisition of 403.78 acres of land located in Kulai, Johor for RM211.065m cash. Eco World Development Group Bhd plans to develop Eco Business Park VI for light and medium industries. Eco Business Park sales enjoyed 51% annual growth in FY2020-FY2022. In 7MFY2023, the 4 existing Eco Business Parks achieved RM838m in sales or 111% of the RM753m total sales in FY2022. The strong industrial growth came from international customers and local business owners who successfully reinvented their businesses and gained confidence to invest in new premises. The company’s total industrial landbank with the latest acquisition will increase to 2,416 acres of which 1,647 acres are in Iskandar Malaysia. The counter closed at RM1.02.

Systech receives takeover offer at 22 sen

The mandatory takeover offer from Liew Choon Lian and his private vehicle Smartpro Capital Sdn Bhd comes after Liew’s purchase of 180.69m shares or 52.25% from Leinet Technology Bhd yesterday for RM39.75m. Liew has proposed to acquire all remaining shares of the e-business solutions and cybersecurity company not already owned by him and persons acting in concert, JCap Sdn Bhd, Sun Jianwei and Low Min Yew, amounting to 47.75%. Liew, the founder and CEO of IT solutions provider MDT Innovations Sdn Bhd and CEO of Nasdaq-listed Evergreen Corp, intends to retain Systech’s listing on the ACE Market. The 22 sen offer price is 41.33% lower than the last traded price of 37.5 sen, which may make it unattractive. Systech’s share price jumped 50% since the beginning of 2023. The cash offer is open for acceptance until 5pm 21 days from 6 Sep or a later date to be announced. Systech turned around in 1Q ended 30 Jun 2023 with a RM580k net profit or 17 sen per share versus a RM816k net loss or 24 sen in 1QFY2023. Revenue climbed 36.85% from RM4.75m to RM6.5m as the e-logistics and cybersecurity segments improved.

India’s top palm oil buyer sees record imports for 2022/2023 year

Patanjali Foods Ltd predicts that India’s palm oil imports will rise 26% to a record high amid a consumption recovery and attractive prices. With refiners increasing purchases for the upcoming festivals, India could import 1.8m tonnes in the next 2 months bringing total shipments for the 2022/23 marketing year ending 31 Oct to 10m tonnes, exceeding the 9.5m tonnes in 2014/15. India meets more than 2/3 of its edible oil needs via imports. In 10M 2022/23, the country imported 14m tonnes of edible oils comprising 8.2m tonnes of palm oil, soyoil 3.2m tonnes and sunflower oil 2.5m. Edible oil consumption has been depressed in the last 3 years due to high prices and Covid-19. Dealers expect a growth of 2%-4% this year.