Capital markets executive summary | Tue 12 Dec 2023

Capital markets executive summary | Tue 12 Dec 2023

UOB priced Exsim’s Asean SRI sukuk private placement

The bank reportedly priced the private placement of the company’s maiden RM365m ASEAN Green Sustainable and Responsible Investment (SRI) sukuk musharakah. The order book was 3.9 times the issuance size. According to bixmalaysia.com, the 4-year AA3 rated sukuk was issued on 30 Nov with profit rate of 5.6%. It was last traded on 6 Dec at a yield of 4.97%. The company will use the issuance proceeds to acquire the beneficial interests in D’Clover and D’Terra Residences in Damansara Perdana. The projects have received provisional Gold certifications from GreenRE. UOB is lead arranger and lead manager.

Petronas Dagangan’s AAA and MARC-1 ratings affirmed

MARC Ratings affirmed the ratings on the company’s RM10b Islamic commercial papers and Islamic medium term notes programme. PDB has a network of over 1k petrol stations. It built 10 new stations in 2022 and will add 10-15 more every year. The company’s relationships with major local carriers underlie its market share for jet fuel. Retail sales volume gained 7% in 3Q2023 as domestic demand recovered and commercial sales volume rose 12% with the recovery in international travel. Revenue inched up 0.8% to RM27.5b as the average selling price in the commercial segment fell 15% due to lower crude oil prices. Pre-tax profit improved to RM1.05b as the margin widened to 3.8%. Larger subsidy receipts helped cash flow from operations (CFO) increase to RM781.4m. Cash and cash equivalents were RM2.7b against borrowings of RM152.9m at end-Sep 2023 for a debt-to-equity ratio of 0.03 times. The company should not be making significant borrowings because its capex requirement is only RM450m per annum. Another positive rating factor is the company’s strategic importance to Petronas as the retail and marketing arm for downstream petroleum products. The counter closed at RM21.66.
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Mestron transferred to Main Market

Bursa Malaysia approved the transfer of the company’s entire issued share capital from the ACE Market to the Industrial Products & Services sector of the Main Market in a letter dated 8 Dec 2023. The company was listed on the ACE Market on 18 Jun 2019. The transfer should raise the company’s profile among its customers, suppliers, business associates, employees and shareholders, and expand its shareholder base to include institutional investors. Mestron manufactures specialty poles especially for the telecommunications sector. In recent years, the company has ventured into renewable energy, in particular, solar and biogas. Net profit grew 40.2% year-on-year from RM6.72m to RM9.41m in 9M2023 because raw material costs fell and demand for specialty poles in the telecommunications sector was stronger. Revenue increased 29.28% from RM82.10m to RM106.14m. The counter closed at 46 sen.

Jentayu-related Telekosang Hydro 2 feed-in-tariff in 30 days

Jentayu Sustainables Bhd will be buying 2 run-of-river hydropower plants in Tenom, Sabah, the 24MW Telekosang Hydro 1 and the 16MW Telekosang Hydro 2. The 1st plant achieved feed-in-tariff commencement date (FiTCD) in Feb. The 2nd plant achieved its initial operation date on 9 Dec and the FiTCD is scheduled within the next month. The plants, which are currently operated by the private vehicle of Jentayu’s major shareholders, will be injected into Jentayu, together with a 5.99MW solar power plant in Kedah, in return for 9% cash and the balance in shares. Jentayu has paid the cash deposit while the new shares will be issued after receiving regulatory and shareholders’ approvals. Last Fri, Jentayu announced a private placement to raise RM46.22m-RM62.9m for pre-development spending on its RM2.8b 170MW run-of-river hydropower plant in Sipitang called Project Oriole. The company received a letter of intent for the project from the energy ministry in Oct 2022 and the project was included as a confirmed project in the Plant Up Plan for Sabah released on 19 Sep 2023. The counter closed at RM1.23.

Macy’s received USD5.8b offer from investor

The operator of Bloomingdale’s and Macy’s received the buyout offer from Arkhouse Management and Brigade Capital Management. The investors offered USD21 per share against the stock’s Fri close of USD17.39. Despite the rally in US stocks this year, concerns over the effect of high interest rates on consumer spending cool investors’ sentiment towards retail stocks. Shoppers are also going to specialty and off-mall retail outlets instead of to department stores. Macy’s reported same-store sales were down 7% in 3Q2023. Macy’s share price has fallen 16% this year.