Stockwatch


  • TA Enterprise: NEWS of setting a floor on fees of local brokerages to curb unhealthy competition did not help boost the share prices of listed broking firms. Dealers said lethargic interest in equities investment had intensified the cut throat competition in the stockbroking industry. Stockbrokers are slashing their commission rates to fight for business volume. The Securities Commission and the Association of Stockbroking Companies Malaysia are working on a framework for the minimum commission rates. But investors, who are paying commissions may ponder just how low is low, as viewed by the authorities. 

  • Park May: PARK May was classified as a PN4 company last Thursday. The announcement sent the share price to a historical low of 21 sen the next day, although that was not actually shocking news. The company, which operates buses, had failed to drive onto the recovery track even after it had undergone a debt-restructuring scheme aided by the Corporate Debt Restructuring Committee two years ago. The firm has debts of RM115.4mil, and an accumulated loss of RM106.6mil. Shareholders' funds have gone below zero. Many expect government intervention, given the importance of bus services to the community. 

  • Kumpulan Guthrie: THIS plantation stock has been in the spotlight after the government made known of its intention to merge government-linked companies in the common sector. Given the existence of common shareholders and management teams in Kumpulan Guthrie, Guthrie Ropel Bhd and Highlands and Lowlands Bhd, they are seen as the likely candidates for government-driven mergers. Permodalan Nasional Bhd is their common major shareholder. But it is difficult to arrive at valuations, given their current soft share prices, which are below their net tangible assets. Some see such mergers as providing opportunities for shareholders to unlock value in these companies. 

  • Celcom: CELCOM shareholders will cast their votes on the proposed merger with Telekom Malaysia on Thursday. Minority shareholders, who had bought Celcom shares cheap, may like to see the proposed resolution being passed at the coming EGM so that they can opt for Telekom's mandatory general offer at RM2.75. But 8% major shareholder DeTeAsia, a unit of Deutsche Telekom, will not agree. The German telco filed a request for arbitration with the Secretariat of the International Court of Arbitration of the International Chamber of Commerce in Paris. DeTeAsia claims that it can veto the merger. 

  • Top Glove: TOP Glove has hiked its product prices by an average of US$1, starting this month, to counter the sharp rise in latex prices, which is at a seven-year high, according to TA Securities. The management indicated that demand for rubber gloves remained strong despite their higher selling prices. After annualising its first quarter financial numbers, the company expects to see a 16% growth in net profit. It posted a net profit of RM5.07mil on a turnover of RM55mil for the first quarter ended Nov 30 last year. It has achieved a consistent turnover growth of 30% in the past five years. The ex-date for the company's two-for-five bonus issue is Thursday. 

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