Stocks to watch: Sarawak Energy, MPHB, RHB Cap, KFCH, AIRB

KUALA LUMPUR: Bursa Malaysia should see the blue chips and mid-cap extending their gains on Tuesday, Oct 20, buoyed by fresh corporate news and the strong overnight close on Wall Street where US stocks rose to fresh 12-month highs.

The Dow Jones industrial average added 0.96%, to end at 10,092.19. The Standard & Poor's 500 Index gained 0.94% to 1,097.91. The Nasdaq Composite Index rose 0.91% to 2,176.32.

Optimistic investors rode a wave of solid quarterly earnings, which continued after the session's close when Apple Inc's shares jumped on its results.

At Bursa Malaysia, Sarawak Energy Bhd's shares are likely to jump after the Sarawak government launched a takeover offer at RM2.65 a share. Its offer price is a 51 sen, or 23.8%, premium over its last traded price before it was suspended yesterday.

The state government already owns 987.54 million shares, or 64.65% of Sarawak Energy. Its offer to buy the remaining shares amounted to RM1.38 billion.

Another company to benefit from the sale is MPHB, which owns about 3% or 48 million shares in Sarawak Energy, according to reports. Based on the offer price, MPHB will receive RM127.2 million cash.

RHB CAPITAL BHD [] has proposed to buy an 80% stake in Indonesia's PT Bank Mestika Dharma for RM1.16 billion cash. The price tag is 3.5 times price-to-book ratio based on the bank’s audited net assets of RM415.4 million as at Dec 31, 2008.

RHB Cap had also proposed a renounceable rights issue, of indicatively 361.11 million shares of RM3.60 per share, of new RHB Cap shares to raise RM1.3 billion to fund the acquisition.

In KFC Holdings Bhd, Singapore-based Arisaig Asean Fund ceased to be a substantial shareholder after selling all its 13.65 million shares. KFCH closed 50 sen higher at RM8, wich was a two-year high.

Analysts said it was unlikely that major shareholder QSR would launch a takeover offer as it already holds more than 50% and it is able to equity account the earnings from cash-rich KFCH.

Arisaig sold the shares in an off-market deal to undisclosed buyers.

ALIRAN IHSAN RESOURCES BHD [] has declared a special dividend of 12 sen per share, in wich MMC owns 74.23% stake. MMC stands to receive RM19.83 million in special dividends.

The share price of The New Straits Times Press (Malaysia) Bhd should stabilise after falling the most in almost three years after MEDIA PRIMA BHD [] offered to buy the newspaper group at less than half its book value and at a 19% discount to its last traded price.

CIMB Research said MPB's offer to buy out other shareholders of the group at a reference price of RM2 came as an "unwelcome surprise" for NSTP minority shareholders as it was below its RM2.46 share price last Friday.

NSTP share price fell by 15%, the most in nearly three years, to close at RM2.09, with 4.79 million shares done.

Written by Ellina Badri