Kuala Lumpur, 17 September 2013 – Maybank Investment Bank Berhad (“Maybank Investment Bank”) is issuing four new European style cash-settled call and four new put warrants (“SW”) over ordinary shares of AMMB Holdings Berhad (“AMBANK”), CIMB Group Holdings Berhad (“CIMB”), Eastern & Oriental Berhad (“E&O”) and WCT Holdings Berhad (“WCT”). The warrants will be listed on Wednesday, 18 September 2013 with an issue size of 100 million each. “News of an economic slowdown has affected property prices and bank loans.
Regional markets have been volatile with news of the Federal Reserve tapering as well as Malaysia’s revised GDP numbers. The theme of this tranche is property and finance, both sectors that reflect the health of a nation’s economy. Maybank Investment Bank is now offering both call and put warrants to investors who have a directional view on these underlying companies. The call warrants offer investors with a bullish view the opportunity to participate on the upside of the underlying shares for a fraction of the price while the put warrants offer investors with the opportunity to gain should the underlying price falls”.
AMBANK is Maybank Investment Bank’s top pick in the banking sector. Factors that support this is its sustainable Return On Equity as well as capacity to drive earnings much faster by focusing on efforts on building up its small and medium enterprises franchise, lowering funding costs, plucking low hanging fruit from the insurance division and keeping costs under control. Maybank Investment Bank has maintained a BUY call on AMBANK as of 26 August 2013, with a target price of RM9.10.
CIMB, one of the leading universal banking groups in the region provides consumer banking, investment banking, Islamic banking, asset management and insurance products and services. CIMB has managed to make inroads outside its Page 2 of 5 traditional market of South East Asia by acting as a joint bookrunner for the USD400 million convertible bond issued by Advanced Semiconductor Engineering of Taiwan. Maybank Investment Bank has maintained a HOLD call on CIMB as of 27 August 2013, with a target price of RM8.10.
E&O has been in the news for its plan to undertake RM25 billion worth of residential and commercial projects to be carried out over 20 years for the second phase of Seri Tanjung Pinang. This would involve reclaiming 307ha of landbank in Tanjung Tokong. It has also been mentioned that E&O may be taken private by Sime Darby which owns 32% of the company. Sime Darby may pool its assets together with the stake in E&O and Battersea into a separate company and list them on the exchange.
WCT has shown stellar construction earnings driven by a strong orderbook estimated at RM2.7 billion as at end-Jun 2013. WCT has secured an estimated RM511 million in construction jobs year-to-date. Even though there is news of potential delays in infrastructure growth in Malaysia, their orderbook could grow from potential job wins in Qatar. WCT has bid for RM2 billion worth of projects in Doha, Qatar. Maybank Investment Bank has maintained a BUY call on WCT as of 23 August 2013, with a target price of RM3.00.
The call and put warrants have the following gearings, AMMB SW (9.92x), CIMB SW (8.20x), E&O SW (4.40x) and WCT SW (7.90x). The tenure of all eight SWs above is approximately 12 months.
The terms and conditions of the above call warrants are stated in their respective term sheets and investors should read the term sheets together with the Base Prospectus dated 19 September 2012 and First Supplementary Base Prospectus dated 27 August 2013.