Journey to Wealth
News Highlights - IOI Corporation, Timber Sector
IOI CorporationBhd (RM5.34/share)
Bumitama to list onSGX
IOI Corp Bhd is set to register at least US$226.0mil(RM696.0mil) or a 360.0% gain ' on paper ' from its investment inIndonesia-based Bumitama Agri Ltd. The latter has just filed for an IPO on theSingapore Exchange (SGX), which is said to fetch a market capitalisation ofbetween S$1.2bil and S$1.3bil (RM2.9bil and RM3.2bil).
According to a filing with Bursa, IOI acquired a 33.0% stakein PT Bumitama Gunajaya Agro (BGA) in 2007 for US$62.6mil. After restructuring,BGA was 90.0% owned by Bumitama, in which IOI now has a 36.0% stake. Itsholdings shall be diluted to 30.4% upon completion of the IPO, according toBumitama's prospectus filed with the Monetary Authority of Singapore yesterday.
IOI has been providing plantation management services andtechnical support to Bumitama since it acquired a stake in 2007. It is worthnoting that agribusiness giant Wilmar International Ltd is buying a small stakein Bumitama via subscription of the IPO shares. This is its second sharepurchase in an Indonesian palm oil firm after taking a 20.0% stake in KencanaAgri Ltd in August 2010. ' The Edge
Timber Sector
Japan boost forplywood
Sarawak plywood manufacturers will benefit from ananticipated stronger demand from Japan at the start of spring next month.Sarawak Timber Association (STA) panel products' committee chairman Wong KaiSong said that new orders from Japan's plywood importers had continued to flowin since late last year.
Most Japanese importers halted or slowed down buying betweenJune and September last year due to high inventories. Their warehouses arereportedly stocked up following aggressive buying in the April-June 2011period, in anticipation of high utilisation of plywood when reconstruction andrestoration works started after the devastating earthquake and tsunami a yearago. However, the overstock situation has been adjusted in recent months.
Japan increased its plywood imports from Sarawak by about5.0% to 1.31 million cu m worth RM2.4bil last year, from 1.25 million cu mvalued at RM1.9bil in 2010.
Wong also said that Sarawak plywood was expected totrade firmer at between US$500 and US$550 per cu m in the export market fromUS$460 and US$500 per cu m now. - StarBiz
Source: AmeSecurities
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