STOCKS NEWS MALAYSIA-Kenanga starts Sapura Kencana with outperform

Tue Apr 24, 2012 3:42am BST

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Kenanga Research started Malaysia's Sapura Kencana Petroleum Bhd with an outperform call, seeing the group positively with its enlarged scale and global track record after the merger.

Sapura Kencana is an entity to be formed upon the planned merger of oil and gas services firms Sapuracrest Petroleum Bhd and Kencana Petroleum Bhd.

"We are positive on the newly merged entity as we believe it has the necessary scale and track record to lift it beyond just being a local oil and gas service player," Kenanga said in a research note on Tuesday.

The broker pegged Sapura Kencana a target price of 2.63 ringgit a share.

It said the new entity, which was expected to be relist in mid-May, will be offered at a price closer to 2.20 ringgit a share based on the current share price of Kencana at 3.35 ringgit and Sapuracrest at 5.05 ringgit.

"At this juncture, Sapuracrest is the more attractive entry point into the merged entity with an upside of 17.9 percent as compared with Kencana's upside of 15.9 percent," said Kenanga.

By 0236 GMT, both Sapuracrest and Kencana shares climbed 1.19 percent respectively, outperforming the Malaysia's benchmark stock index that dropped 0.15 percent.

1039 (0239 GMT)

(Reporting by Anuradha Raghu in Kuala Lumpur; anuradha.raghu@thomsonreuters.com) ****************************************************************

9:58 STOCKS NEWS MALAYSIA-MIDF raises Eastern & Oriental to buy

MIDF Research upgraded Eastern & Oriental Bhd to buy with an unchanged target price of 1.70 ringgit per share following the property firm's maiden foray into the United Kingdom.

The broker said of Eastern & Oriental's share price also rendered the counter attractive, h projected total return of more than 15 percent.

"At yesterday (Monday)'of 1.42 ringgit per share, investors would be paying 38 percent lower than what Sime Darby paid for its stake in Eastern & Oriental at 2.30 it per share," MIDF said in a note on Tuesday.

Eastern & its proposal to buy an office cum retail building known as Princes House in London for some 101 million ringgit.

By 0150 GMT, shares of Eastern & Oriental was unchanged at 1.42 ringgit per share, as compared with the Malaysian benchmark stock index that shed 0.14 percent.

0953 (0153 GMT)

(Reporting by Yantoultra Ngui in Kuala Lumpur; yantoultra.ngui@thomsonreuters.com) ****************************************************************

9:45 STOCKS NEWS MALAYSIA--Maybank ups Top Glove to buy

Maybank IB Research upgraded Malaysia's Top Glove Corp Bhd to buy from sell as sales outlook of the world's largest rubber glove maker turns stronger.

"We have turned positive on Top Glove -- its sales has picked up further and is almost back to its H1N1 peak; and latex cost (key input) has begun its seasonal downtrend," said the broker in a research note on Tuesday.

The research house also raised Top Glove's target price to 5.40 ringgit per share from 4.20 ringgit previously.

"Our new target price-to-earnings ratio of 16 times pegs the stock back to its mean valuations as we believe sentiment towards the stock has turned positive on long-term global rubber supply surplus outlook," it added.

By 0143 GMT, Top Glove's shares fell 0.42 percent, underperforming the Malaysian benchmark stock index that dropped 0.05 percent.

0943 (0143 GMT)

(Reporting by Anuradha Raghu in Kuala Lumpur; anuradha.raghu@thomsonreuters.com)