Stocks To Watch - Dialog, Barakah, Iris, BAT, Tenaga, E&O, Kulim, IOI Properties

KUALA LUMPUR (April 14): Based on corporate announcements and news flow today, stocks that may attract interest tomorrow (April 15) include the following:

Dialog Group Bhd said it had completed phase 1A of its proposed RM5 billion Pengerang oil terminal project in Johor.

Dialog said phase 1A, comprising 25 tanks with total storage capacity of 432,000 cubic metres (cbm), had started operations. Dialog said the terminal received its first shipment from a reputable international oil trader last Saturday (April 12).

"With the completion of phase 1A, phase 1 of Pengerang Terminal is progressing well with construction of the other phases on schedule for completion by end of 2014.

"Phase 1’s development covers 150 acres (60ha) of reclaimed sea-bed land with initial storage capacity of approximately 1.3 million cbm together with six berths, at a cost of RM2.0 billion," Dialog said.

According to Dialog, phase 1 is undertaken by its joint-venture company Pengerang Independent Terminals Sdn Bhd (PITSB) in collaboration with the Johor state government. Dialog owns 51% of PITSB.

Barakah Offshore Petroleum Bhd announced that its wholly-owned unit PBJV Group Sdn Bhd has received a letter of award from GOM Resources Sdn Bhd for the provision of pipeline pre-commissioning services.

It said that the services would be carried out for a 282km pipeline from onshore Kerteh Terengganu towards the border of Malaysia/Thailand Joint Development Area.

The group expects to commence works in the third quarter of FY14, to be completed by the first quarter of FY15. However, it did not state the value of the job.

“The contract is expected to contribute positively towards the earnings and net assets per share of Barakah group for the duration of the contract.”

Iris Corporation Bhd has diversified into an RM71 million agricultural business via a joint venture (JV) with Alvery Resources Limited in Papua New Guinea.

The digital solutions provider said today it had entered into a JV agreement with Alvery Resources for the proposed development of 247,105 acres of land in Oro District, Papua New Guinea, for an agricultural business.

The JV agreement covers land clearing, logging, plantation and setting up of factories for various agricultural commodities.

“The proposed agreement is to enable the group to expand its business in the realty and development industry overseas, and expanding on plantation and plantation commodities,” said Iris.

British Amercian Tobacco (Malaysia) Bhd said it supplies semi-finished goods to South Korea but the amount is small.

“BAT Malaysia does supply semi-finished goods to BAT South Korea but the amount is immaterial to our bottomline,” said a spokesman from BAT Malaysia in response to a news report on a major legal suit against BAT in South Korea.

Shares of BAT fell today after news that South Korea's state health insurer is seeking an initial 53.7 billion won ($51.9 million) from three tobacco companies, including British American Tobacco (BAT), to offset treatment costs for diseases linked to smoking.

At midday market break, BAT Malaysia – the top loser at that time -- lost 40 sen or 0.65% to RM61.60, ending its more than one-week rising streak. At market close today, the stock ended at RM61.88.

BAT Malaysia is part of the British American Tobacco group.

The National Health Insurance Service (NHIS) of South Korea said it spent more than US$1.6 billion each year on treating smoking-linked diseases.

Philip Morris and BAT combined account for about a third of South Korea's $9.3 billion tobacco market.

Tenaga Nasional Bhd announced that it had signed a power purchase agreement (PPA) with 1MDB Solar Sdn Bhd for the construction of a solar power plant in Kedah.

“The PPA provides that 1MDB will design, construct, own, operate and maintain a solar photovoltaic energy (Solar PV) generating facility with a capacity of 50 megawatts alternate current (MWac) proposed to be located in Kedah Darul Aman,” said the national utility company in a statement today.

The PPA also governs the obligations of the parties to sell and purchase the net electrical output generated by the facility for a period of not more than 25 years.

Eastern & Oriental Bhd (E&O) has received a conditional approval letter from the Department of Environment, Ministry of Natural Resources and Environment (DOE) for the detailed Environmental Impact Assessment for Phase 2 of Seri Tanjung Pinang.

According to AmResearch, the gross development value of this phase of the project totaled RM25 billion. The research house expects phase 2 to be developed over 15 years in two phases.

Shares of Eastern & Oriental Bhd (E&O) surged after the news was released today. The stock closed up 21 sen or 9% at RM2.46 on heavy trades.

Kulim Bhd announced that E.A. Technique, a subsidiary of Kulim held through Sindora Bhd, is seeking listing on the Main Market of Bursa Securities.

To facilitate the initial public offering (IPO), Sindora had today entered into a conditional agreement with Datuk Abdul Hak bin Md. Amin and Datin Hamidah binti Omar to acquire an aggregate of 56,100,000 ordinary shares in E.A. Technique, representing 14.4% of the present issued and paid-up share capital of E.A. Technique for RM30.294 million cash.

E.A. Technique has proposed to undertake a public issue of 114,000,000 new E.A. Technique shares, representing 22.6% of the enlarged issued and paid-up share capital of E.A. Technique.

It will seek the listing for its entire enlarged issued and paid-up share capital of RM126,000,000 comprising 504,000,000 E.A. Technique shares on the Main Market of Bursa Securities.

Kulim believes that the proposed IPO will contribute positively to the earnings of Kulim group in the future as E.A. Technique Group will have direct access to the capital market for future growth and expansion.

IOI Properties Bhd’s controlling shareholder Tan Sri Lee Shin Cheng has been supporting the stock after its shares began to fall from January’s highs.

According to the company’s filings to Bursa Malaysia, the most recent purchases made by Lee were on April 9 when he bought 2.11 million shares at average price of RM2.74 per unit and on April 10, when he bought 2.31 million shares at RM2.748 per unit.

On April 9, the Employees Provident Fund was also a net buyer in its buy-and-sell trades.

IOI Properties has fallen from over RM3.00 since it was listed on Jan 15. Its listing price was RM2.51 per unit.

It closed flat at RM2.75 per share today.

Written by Ho Wah Foon of theedgemalaysia.com