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Wednesday, December 14, 2011

Some stocks may benefit from delisting of PLUS (Star)

The delisting of PLUS Expressways Bhd can benefit certain stocks if investors decide to reinvest in Bursa Malaysia.

PLUS is to return RM9.1bil in cash, which is 41% of 5 bil shares at RM4.45 per share, to their minority shareholders after today. How the shareholders plan to reinvest the cash is dependent on their investment mandate.

ECM Libra analyst said in a report that if the shareholders' investment mandate was for dividend yield, then stocks with a market capitalisation of more than RM10bil with a dividend yield similar or better than PLUS would benefit.

Stocks that could benefit from the delisting are Malayan Banking Bhd, Maxis Bhd, Telekom Malaysia Bhd, Petronas Chemicals Group Bhd, RHB Capital Bhd, MISC Bhd, Public Bank Bhd, Digi.Com Bhd, YTL Power International Bhd, Kuala Lumpur Kepong Bhd, British American Tobacco (Malaysia) Bhd, Petronas Dagangan Bhd and Petronas Gas Bhd.

However, if their mandate were for concessionaire-type businesses, then similar stocks benefiting from the delisting would be YTL Power and Lingkaran Trans Kota Holdings Bhd.

If the purpose for shareholders holding PLUS shares were to benchmark against the FTSE Bursa Malaysia Kuala Lumpur Composite Index, stocks that would most likely replace the shares would be AirAsia, Bumi Armada and UEM Land.

For funds originally owning PLUS shares, it will depend on the funds' purpose and the decision of the institutional fund managers.

PLUS shares have been suspended since Dec 8 to facilitate the distribution of cash proceeds that will arise from the disposal of its entire business and undertaking, including all its assets and liabilities, via a special dividend and selective capital reduction and repayment.

The 2.13 sen special dividend that was paid out with ex-date Dec 12 is an addition to the offer price of RM4.45 per share.

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