Capital markets executive summary | Mon 11 Dec 2023

Capital markets executive summary | Mon 11 Dec 2023

Jati Tinggi IPO oversubscribed 16.11 times

The infrastructure utilities engineering services provider, which will be listed on the ACE Market on 20 Dec, received 5,195 applications for 335.37m new shares allocated for the Malaysian public. 2,879 applications for 145.12m shares were received for the bumiputra portion or 13.81 times oversubscribed. 2,316 applications for 190.25m shares were received for the other public portion or 18.41 times oversubscribed. 10m shares for directors and employees and 23.2m shares for selected investors have been fully placed out. Jati Tinggi will raise RM18m by issuing 66.8m new shares at 27 sen. TA Securities is the principal adviser, sponsor, underwriter and placement agent.

Bank Pembangunan’s AAA and P1 ratings affirmed

RAM Ratings affirmed the bank’s financial institution ratings and the AAA rating of the RM7b conventional medium term notes and sukuk murabahah programmes (2006/2036) based on continued government support in the form of capital injection, grants, cost of funds compensation, profit subsidies, and government guarantees for some facilities. The government-owned development financial institution traditionally financed the infrastructure, high technology, maritime, and oil and gas sectors. Since 2020, it expanded into other sectors with socio-economic impact especially sustainable financing. Danajamin’s business was transferred to the bank on 1 Mar 2023. In Budget 2024, the government indicated that the merger of BPMB, SME Bank and EXIM Bank will proceed. Gross impaired financing ratio increased from 10.7% at end-Dec 2021 to 11.3% at end-Mar 2023. Pre-tax profit jumped 49% from RM254.4m in FY2021 to RM379.3m In FY2022 due to a larger net financing margin and net earned premiums. Return on risk-weighted assets grew from 1.1% in FY2020 to 1.6%. Adjusted gross impaired financing coverage ratio including infrastructure support fund was 190% and bank-level tier-1 capital ratio was 35% at end-Mar 2023.
Would you like us to email you when our latest executive summary is available?

UDA’s MARC-1 and AA- sukuk ratings affirmed

MARC Ratings affirmed the ratings the RM100m Islamic commercial papers programme and RM1b Islamic medium term notes programme with a RM1b combined limit, incorporating a one-notch uplift from the standalone credit profile because of government support. UDA is wholly owned by the MOF although it falls under the Ministry of Entrepreneur and Cooperatives Development (MECD). Ongoing gross development value (GDV) surged from RM494.8m at end-Sep 2022 to RM868.2m at end-Jun 2023. Average take up rate for ongoing projects was 58.1% and the RM239.3m inventory at end-Jun 2023 could grow in 2024. Revenue from investment properties rose from RM85m to RM120m in 2022. Average occupancy rate for commercial properties was 85.2% at end-Jun 2023. Average occupancy rate for its hotels and golf resort was 41.4%. Income from facility management services was RM40m. Unbilled sales of RM275.2m at end-Jun 2023 give near term earnings visibility. Revenue plunged 30% year-on-year to RM181.1m in 1H2023 because of lower property sales. Pre-tax loss was RM10.5m due to lower revenue and higher input and financing costs. Total borrowings grew to RM1b for working capital, to finance property development and to repay existing borrowings. In Sep 2023, a RM165.3m MOF loan was converted into equity. Gross debt-to-equity ratio fell from 0.36 times at end-Jun 2023 to 0.28 times at end-Sep 2023.

YTL Power to build AI data centre using Nvidia technology

The 1st phase of the data centre, owned and managed by 60% subsidiary YTL Communications Sdn Bhd, should begin operations by 1H2024. It will be hosted in YTL Power’s 500MW solar-powered Green Data Centre Park in Johor. YTL will use Nvidia’s H100 Tensor Core GPUs, which accelerates large language model development 30 times. The data centre will also offer Nvidia AI Enterprise software, including Nvidia NeMo, a cloud-based framework for building and deploying generative AI models. Johor’s attraction as a data centre investment destination is due to Singapore’s 60MW annual limit on new data centres. YTL Power closed at RM2.42.

Australia’s Woodside and Santos discussing AUD80b merger

The combination of the 2 largest Australian oil and gas companies would create the biggest liquefied natural gas (LNG) producer in the country with 16m metric tonnes annual sales. Australia is the world’s 2nd largest exporter of LNG, whose growth is driven by Asia’s energy transition needs. Both companies recently complained about production challenges, rising capital expenditure and regulatory issues with ongoing projects.