- Khazanah has disposed of its 4.74% stake in Westports Holdings Bhd at an average price of RM2,90/share.

- TheStar reported that a total of 161.52mil shares were transacted in an off-market deal last Friday, equivalent to the number of shares owned by Khazanah.

- The report said that the transaction was carried out via a book building exercise. It had been reported earlier that Khazanah was looking at divesting the stake, in line with its policy to divest non-strategic investments.

- We are neutral on Khazanah’s exit.

- Westports’ prospects have picked up on news that three main line operators – CMA CGM, China Shipping Container Lines Co Ltd (CSCL) and United Arab Shipping Co (UASC), have formed a route-sharing alliance known as Ocean Three (O3).

- The alliance, which is expected to be functional by year-end, is positive news for Westports, which already serves all the three international liners. The three liners reportedly accounted for ~30% of container throughput at Westports in FY13 and that is expected to increase with the implementation of the O3 Alliance.

- This is a significant change in fortunes for Westports from the beginning of this year when uncertainties revolved around the now-aborted proposed P3 Alliance that would have threatened to negatively impact throughput at the port.

- The now proposed O3 alliance would cover routes between Asia and Europe, as well as Asia and North America. CMA-CGM is the world’s third largest container liner, behind Maersk and MSC.

- For now, we maintain HOLD on Westports, with an unchanged DCF-derived fair value of RM2.91/share, pending a meeting with management.

Source: AmeSecurities