Capital markets executive summary | Mon 30 Oct 2023

Capital markets executive summary | Mon 30 Oct 2023

Malakoff buys 49% of solid waste management company

Tuah Utama Sdn Bhd, wholly-owned by Malakoff Corp Bhd, is buying the E-Idaman Sdn Bhd shares from Metacorp Bhd for RM133.2m cash. E-Idaman’s wholly-owned subsidiary, Environment Idaman Sdn Bhd, provides municipal waste collection and disposal services in Kedah and Perlis under a 22-year concession from the federal government. The acquisition allows Malakoff to expand its waste management and environmental services business, in line with its sustainability commitments and environmental, social and governance strategy. It is also a part of Malakoff’s portfolio diversification that integrates environmental services in order to achieve a zero waste circular economy. The counter closed at 60 sen.

Khazanah funding conduits’ sukuk AAA ratings affirmed

RAM Ratings affirmed the ratings of RM7b Rantau Abang Capital sukuk musharakah (2006/2041), RM10b Danga Capital Islamic securities programme (2009/2044), RM1b Ihsan Sukuk Islamic medium term notes programme and RM20b Danum Capital Islamic medium term notes programme. The ratings reflect Khazanah’s contractual obligation to top up any shortfall in meeting expected income distributions and capital returns on the sukuk, or in the case of Ihsan Sukuk, Khazanah’s commitment to meet either full or partial repayment of the sukuk. The company’s credit strength mirrors the government’s given its long-term mandate to grow the nation’s wealth, for example, championing the country’s green initiatives. In 2022, the 4-year rate of return on the net asset value of the investment portfolio fell to 2.2%, below the company’s 5-year target of consumer price index plus 3%. The top 3 sectors’ share of portfolio realisable asset value (RAV) declined from 44.8% at end-Jun 2022 to 41.9% at end-Jun 2023. Foreign investments grew from 32.7% to 37.2%. Dividend income to interest coverage spiked from 1.7 times in FY2021 to 2.8 times in FY2022. Total debts grew from RM49.96b at end-Jun 2022 to RM51.03b at end-Jun 2023. Net gearing improved from 1.23 times to 0.98 times. Portfolio RAV debt cover was down from 2.8 times at end-Dec 2021 to 2.7 times at end-Dec 2022, against the company’s long-term target of above 3 times.
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Meta Bright expands into Sabah ready-mixed concrete

The company will acquire 70% of Expogaya Sdn Bhd, a ready-mixed concrete manufacturing company in Sabah, for RM28.04m settled with RM5m cash and the balance through 98m new Meta Bright shares at 23.4 sen. Expogaya manufactures and trades ready-mixed concrete with 16 batching facilities located near major hubs of construction activity in Sabah. Expogaya also manufactures and supplies other building materials such as cement sand bricks, sand and stone. Meta Bright’s property development business will be able to enjoy reasonably priced materials. The company’s other businesses include hotel operations, property investment, renewable energy, energy efficiency, money lending, leasing of machineries and equipment, and hire purchase. The counter closed at 26 sen, up 52% year-to-date.

Google invests USD2b on AI start-up Anthropic

The internet giant has subscribed for USD500m convertible notes issued by the artificial intelligence (AI) company, which will convert to equity at the Anthropic’s next funding round, and has committed to subscribe for USD1.5b more in future. Earlier this year, Amazon.com subscribed for up to USD4b convertible notes in Anthropic. The latest investment is on top of the USD550m Google injected Anthropic earlier this year. Prior to that, Google signed a cloud agreement with Anthropic for Anthropic to use Google’s suite of computing services over a number of years.

Singapore’s Sheffield Green IPO fully subscribed

The company provides human resources services to the renewable energy industry in Singapore, Japan and Taiwan, in particular, procuring and training talent for the offshore wind market. The company’s offering of 24m shares were fully subscribed at 25 cents. The public offer of 3.6m shares closed on 26 Oct with applications for 4.9m shares or 1.4 times oversubscribed. The 20.4m placement shares were also taken up for SGD5.1m. The proceeds are for business coverage and geographic expansion, and to develop complementary offerings. Sheffield Green will be listed on the SGX Catalist. Evolve Capital Advisory Private Limited is sponsor, issue manager and joint placement agent.