Public Bank: ALTHOUGH the privatisation of Public Finance Bhd is expected to be completed by the first half-year, with about 6% or RM2bil of the banking group's loans to be readjusted to the commercial bank's rates, OSK Investment Research said the amount was relatively insignificant and unlikely to affect the group's interest spread. The privatisation will result in Public Bank Bhd's (PBB) share base ballooning to more than 5 billion shares from 406 million shares. Meanwhile, PBB is expected to save between RM30mil and RM40mil in costs from the merger between the finance and banking units, although the impact would only be seen from 2004 onwards, she added. PBB has 168 finance units and 213 bank branches currently.
BToto: ANALYSTS said shares of Berjaya Sports Toto Bhd (BToto) were trading at cheap valuations especially with the cut in betting duty and the abolishment of its 1.5% royalty payment effective this year. These factors would boost the profit of the gaming company despite the expectation of ticket sales falling by about 4% this year. For the nine months to January, BToto reported a net profit of RM208.1mil, lower than RM229.5mil in the previous corresponding quarter. The results fell below analysts' expectations by about 10%, on an annualised basis. Sales fell to RM1.5bil, down from RM1.7bil in the comparative period. Analysts attributed the diversion of punters' bet to the World Cup in June as one of the reasons for weaker sales.
UMW: ANALYSTS who recommend UMW Holdings as a buy cited its two franchises - Toyota and Perodua - as its forte, in addition to its excellent relationship with its Japanese partners to maximise efficiency while minimising costs. At an analysts' briefing last week, the management said the Toyota Camry was still selling well, with its waiting period now reduced to three months, from about 4 months when the model was first launched last July. This year, only Toyota will launch new models while Perodua will offer facelift versions of existing models. Analysts have a consensus estimate of RM226.9mil for this financial year ending Dec 31. In the last financial year, UMW recorded RM220.4mil in net profit.
MISC: WITH Petronas agreeing to continue supplying liquefied natural gas (LNG) to Tokyo Electric Power Co Ltd and Tokyo Gas Co Ltd under new contracts, an analyst from a foreign research house estimates that the time charter rates for the LNG vessels could be between 30% and 40% lower than the previous rate in view of the smaller scope of work involved. Despite the lower rates, he expected Malaysia International Shipping Corp Bhd (MISC), the LNG vessels owner, to maintain an internal rate of return of more than 10% from the contract. Another analyst said excluding the LNG segment, MISC's liner division continued to be bogged down by over-capacity and depressed freight rates.
Gamuda: THE recent review of the letters of intent by the government for construction projects was not expected to have an impact on the group, GK Goh Research said, adding that Gamuda Bhd remained its top construction pick. In the construction scene, the letter of intent is an integral part of the process that contractors go through to secure projects from the government. Coupled with the additional steps contractors have to take, the process culminates with a letter of award, the Singapore-based research house said. On Wednesday, Gamuda announced a six-month net profit of RM121.5mil, compared with RM93.6mil in the previous corresponding period. According to the Multex Consensus estimate, analysts expect Gamuda to post RM271mil in net profit for the financial year ending July.