New IPO: Eversendai

En-route to Main Board of Bursa Malaysia on 1st July 2011, Eversendai Corp is a structural steel specialist with operations predominantly in the Middle East, Malaysia and India. Currently, the company is bidding for RM1.5 billion worth of infrastructure, high-rise building and power plant projects in Southeast Asia, India and Middle East after being invited by public and private sectors.

Its outstanding construction order book stood at RM1.4 billion as at 16th May 2011, while owning 4 fabrication plants in Malaysia and Middle East with a combined annual capacity of 119,000 tonnes.

What is so attractive about Eversendai?

According to RHB Research, Eversendai's key appeal to investors lies in:

1. It being a rare "outside-looking-in" home-grown construction company that has excelled in the international market, particularly, the Middle East, based on its own strength, practically almost indifferent to the local construction cycle;
2. The recognition by key international contractors as a highly reliable structural steel contractor from past assignments puts Eversendai in a sweet spot in the sense that it is often named the structural steel subcontractor by most international contractors participating in the same international tenders;
3. Its strong market position in UAE and Qatar by virtue of its 26.5% market share in terms of fabrication capacity; and
4. Its good earnings visibility underpinned by RM1.4 billion outstanding order book and strong likelihood of securing about another RM1 billion worth of new jobs by end of the year.

Eversendai's expertise in power plant was gained from the construction of the Tanjung Bin, Manjung and Jimah power plants several years ago. In India, it has 4 on-going power plant projects.

Source: Business Times

Source: RHB Research

Maybank Investment Bank Bhd is the sole adviser, underwriter and book runner for the IPO. Meanwhile, RHB Research is projecting the earning per share (EPS) of Eversendai to grow by 15.1% and 12% in FY12/12-13, assuming it is to secure RM1.4bn, RM1.5bn, and RM1.6bn worth of new contracts in FY12/11-13. As such, it arrived at an indicative fair value of RM2.27 for Eversendai based on 14x FY12/12 EPS.

If that is true, there is a 33% upside from the RM1.70 IPO price. Would it be a good BUY?

Update:
Eversendai final retail price fixed at RM1.62 per share, while institutional price at RM1.70.

Globalization Index 2010: Malaysia better than BRIC?

Brought to you by "Ernst & Young", the Globalization Index was created to measure the extent to which the 60 largest economies (by GDP) are connecting to the rest of the world. The indicators fall into 5 broad categories:

1. Openness to trade
2. Capital movements
3. Exchange of technology and ideas
4. Labor movements
5. Cultural integration

 

How did Malaysia fared in 2010?

Yes... Malaysia perform better by sitting on the 27th place, one spot ahead of US!!! On top of that, we're globalizing better than BRIC (Brazil, Russia, India, China) countries. Of course, the Index has its method of measurements.

Top 10 ranking

How did the Index measures?

The Index measures "relative" rather than "absolute" globalization. This means that an economy's trade, investment, technology, labor and cultural integration with other economies is measured relative to its GDP rather than by the absolute value of these elements being exchanged.

As a result, smaller economies (like Hong Kong and Singapore) that depend on international integration will tend to have a high level of globalization, while larger economies (like US and BRIC) that can rely on a big domestic market will tend to have a lower level, even though the total amounts exchanged internationally involved may be much greater.

The Index, therefore, reflects the degree to which the global integration of an economy is observable or experienced from within that economy.

Key highlights of Globalization Index 2010:

Once again, technology remains the key driver behind deepening globalization. In the emerging markets, the rapid adoption of the internet and mobile technologies is a powerful engine behind the greater integration of trade, capital, culture and labor. And, in some cases, it leapfrogging the West in terms of their infrastructure.

Click here to view the full list of the Globalization Index 2010

Related post: Again, Malaysia falls in competitiveness

New Fund: Public Islamic Infrastructure Bond Fund

Public Islamic Infrastructure Bond Fund is an Islamic bond fund that seeks to provide annual income to investors through investments in sukuk of companies in the infrastructure sector.

The fund allows investors to access the sukuk market, which is usually inaccessible to the average investor as it is a market for institutions where the standard transaction lot is RM5 million. Sukuk issued by companies in the infrastructure sector are generally underpinned by predictable cash flows and stable income stream over the respective issuer's concession period. Example, companies with power plant concessionaires, telecommunication service providers, toll-road concessionaires and port operators.

The fund invests up to 98% of its NAV in a portfolio of sukuk of companies involved in the infrastructure sector and the balance of its assets in Islamic money market instruments. To achieve increased diversification, the fund may invest up to 25% of its NAV in foreign sukuk, which includes Singapore, United Kingdom, Japan, Australia, Hong Kong and other permitted markets.

The fund is suitable for investors seeking the stability of annual income with some safety of principal via participating in sukuk issued by companies in the infrastructure sector.

Source: Public Mutual