Kuala Lumpur, 28 August 2013 – Maybank Investment Bank Berhad (“Maybank Investment Bank”) is listing eight new European style cash-settled call warrants (“SW”) over ordinary shares of AirAsia Berhad (“AIRASIA”), Bumi Armada Berhad (“ARMADA”), BIMB Holdings Berhad (“BIMB”), Dayang Enterprise Holdings Berhad (“DAYANG”), Malaysian Airline System Berhad (“MAS”), Malaysia Building Society Berhad (“MBSB”), Malaysia Marine and Heavy Engineering Holdings Berhad (“MHB”) and Petronas Chemicals Group Berhad (“PCHEM”). The warrants will be listed on Wednesday, 28 August 2013 with an issue size of 100 million each.
Bank Negara Malaysia has on the 21 August 2013, announced a weak second quarter GDP growth and lowered its full year GDP forecast. In concurrence with the news, FBMKLCI has dropped by approximately 3.76% (from 1,788.24 on 16 August 2013 to 1,721.07 on 23 August 2013) trading in the lower region since May 2013. This provides the opportunity for savvy investors to participate in a potentially volatile market. The primary focus of this tranche is a broad exposure to the oil and gas sector, ranging from offshore services to petrochemical products. This tranche also has additional exposure to the financial services sector as well as the airlines industry. The call warrants offer investors the opportunity to capture upside potential of the underlying shares at a fraction of the price of the underlying shares if they have a positive view on the shares.
ARMADA is an international offshore oilfield services provider. The company is in the advanced stages of bidding for floating production, storage, and offloading (FPSO) tenders for the Kraken (North Sea) and Madura (Indonesia) fields. ARMADA is also participating in a number of offshore support vehicle (OSV) tenders. Maybank Investment Bank has maintained a buy call on ARMADA as of 21 August 2013, with a target price of RM4.40.
DAYANG is a major mid-cap oil and gas maintenance and support services provider that has recently been awarded a major maintenance services contract from Petronas Carigali, which is estimated to be valued at RM1.2 billion. The prospects for this company remain positive given its strong current order book, and healthy financials.
BIMB is a diversified provider of Islamic banking services, including takaful and unit trust management. It is currently undergoing a deal to gain full control of Bank Islam, which will help solidify its position in a rapidly growing sector. Maybank Investment Bank has maintained a buy call on BIMB, and revised upwards its target price to RM4.70 as of 2 August 2013.
AIRASIA, a leading low cost airline, is expected to benefit from its strong balance sheet and value crystallisation from the listing of its associates, namely AirAsia Indonesia and AirAsia X. Maybank Investment Bank’s target price for AIRASIA as of 22 August 2013 is RM2.95.
The consensus estimate of analysts’ target price on AIRASIA, ARMADA, BIMB and DAYANG are RM3.50, RM4.11, RM4.48 and RM6.541 respectively.
AIRASIA, ARMADA, BIMB, DAYANG, MAS, MBSB, MHB and PCHEM SW each have a gearing ratio of 5.28 times, 4.38 times, 4.00 times, 3.24 times, 3.40 times, 5.07 times, 6.97 times and 7.36 times respectively. 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.