Capital markets executive summary | Fri 9 Jun 2023

Capital markets executive summary | Fri 9 Jun 2023

Tokio Marine is selling Southeast Asia life insurance business

The Tokyo-listed insurer was founded in 1879 as Japan’s first non-life insurance company, but now offers both life and non-life insurance. Its international business in 46 countries contributed 54% of profits. The company has appointed Goldman Sachs and Jefferies for the sale worth USD1b. The sale process will be launched in the next 2 months. The affected life insurance businesses could include Malaysia, Thailand and Singapore. This follows Tokio Marine’s review of its businesses to improve profitability. In 2022, the company sold its Tokio Marine Highland’s US construction division to Intact Insurance Group. Conversely, it is expanding in Canada with a new property and casualty insurance unit launched in 2022. The stock has risen 12.6% this year.

Sentral REIT to buy Menara CelcomDigi

The 27-storey office tower on leasehold land in Petaling Jaya is owned by Puncak Wangi Sdn Bhd – a wholly-owned subsidiary of Malaysian Resources Corp Berhad (MRCB). The building has 1.06m square feet of gross floor area including 3 basement parking levels with 788 car parking bays and 287 motorcycle parking bays. It is leased to Celcom Berhad and the 15-year term may be extended automatically for 2 additional terms of 3 years each. Sentral REIT Management Sdn Bhd – the management company of Sentral Real Estate Investment Trust (REIT) – has accepted a letter of intent from MRCB to start negotiations. Maybank Trustees Berhad will be acting for Sentral REIT in negotiations with Puncak Wangi. Sentral REIT closed at 84 sen while MRCB closed at 30 sen.

Sapura Energy wins RM1.4b contracts in Asia Pacific and Atlantic

The debt-ridden company secured 10 contacts between Dec 2022 and May 2023. More than 70% of the combined contract value is for foreign projects. They include offshore transportation and installation services for ENI Congo, offshore wellhead platform and pipeline installation and removal for Chevron Thailand, intervention and removal of wellbore plug for Woodisde Energy in Western Australia, Tui field decommissioning for the New Zealand government, semi-submersible tender-assist drilling rig services in Malaysia for Vestigo, Larut Complex and Shell. The company is deploying some assets to new regions, which allows it to secure new clients and overcome its financial constraints. This strategy has already delivered operating profit of RM751m in the financial year ended 31 Jan 2023 compared to an operating loss of RM2.2b in the previous financial year, in spite of working capital limitations and macroeconomic challenges. The counter closed at 3.5 sen.

Proton’s May sales jump 40.9%

The company’s sales hit 13,268 units in May. For the 1st 5 months, Proton sold 62,970 units, up 38.9% year-on-year. 2Q2023 started slow because of the expiry of the tax-exempt car deliveries in Mar plus the festive season. Proton’s May market share is 21.5% of the estimated total industry volume of 61,600, which grew by 32.2%. The company now exports to 12 countries, the latest being Mozambique in May. Models being offered are the X50 and X70. The company exported 217 units, led by the Saga. The model is also the overall best seller with 5,819 units sold in May and 27,214 units for 5M2023 +51% year-on-year. Year-to-date sales growth for other models are X50 +31%, Persona +78% and Exora +39%. The company will launch an electric vehicle in 2023 through subsidiary Pro-Net. DRB-Hicom closed at RM1.31.

Canadian AI start-up Cohere raises USD270m

The company was founded in 2019 to build large language models which are trained to generate text. Cohere’s CEO Aidan Gomez co-wrote the 2017 landmark paper on artificial intelligence (AI) entitled Attention is All You Need when he was with Google. The COO was a senior executive in YouTube. The latest fundraising round values the company at USD2.1b-USD2.2b. Inovia Capital led with participation from Oracle, Nvidia, Salesforce, Deutsche Telekom, Mirae Asset, Schroders Capital, SentinelOne, Thomvest Ventures and Index Ventures. Cohere builds and trains models for enterprise customers and plans to use the proceeds to meet computing needs and expand into new technologies.