12/01/2012 (Borneo Post) - (M) Bhd (AmBank) is issuing six new European style cash-settled structured warrants to meet investor demand for investment alternatives and trading opportunities.

According for a press release, AmBank’s upcoming issuance of six call warrants over the ordinary shares were UEM Land Bhd (UEM Land), Malaysian Resources Corporation Bhd (MRCB), Berjaya Sports Toto Bhd (Sports Toto), IJM Corporation Bhd (IJM), Boustead Holdings Bhd (Boustead) and Malaysian Airline System Bhd (MAS).

The structured warrants would have tenures of approximately seven months and listed on January 12 with issue size of up to 100 million each.

As we move into 2012, the Malaysian stock market remains resilient in the face of external uncertainties owing to strong domestic consumption, robust commodities exports with firm crude oil and crude palm oil prices and reviving construction spending arising from the implementation and progress of various projects under the government’s Economic Transformation Programme (ETP),”said Ng Ee Fang, director or head, equity derivatives, AmInvestment Bank Bhd.

UEM Land was the listed developers in Malaysia with market capitalisation exceeding RM9 billion and included in the FBMKLCI 30 Index, replacing PLUS Expressways. It was the co-master developer of Iskandar Malaysia, one of the government’s major growth corridors.

Within Iskandar Malaysia, UEM Land was the main land owner and master developer of Nusajaya with 8,300 acres of landbank out of which it was allocating 4,500 acres for Nusajaya West, a housing development with gross development value GDV of about RM18 billion. AmBank’s warrants on UEM Land was priced at 15 sen with gearing of 5.38 times.

MRCB’s joint-venture with Ekovest was just recently appointed the Project Delivery Partner (PDP) for the implementation of the government’s River of Life project. The project would involve the rehabilitation and beautification of both Klang and Gombak rivers at an estimated cost of RM4 billion over a period of three years. AmBank’s warrants on MRCB was priced at 15 sen with gearing of 7.07 times.

Sports Toto had seen an improvement in ticket sales with the introduction of the 4D Jackpot in June 2011. was 4D Jackpot game had generated good demand with sales per draw ranging between RM1.5 to RM2.1 million since launch.

As a result, market share under this segment is almost at 50:50 between Sports Toto and its competitor Magnum. The market share for Sports Toto’s 4D Jackpot stood at about 45 per cent. AmBank’s warrants on Sports Toto was priced at 15 sen with gearing of 7.27 times.

Construction conglomerate IJM had a healthy order book of RM3.8 billion. IJM was expected to benefit from an increase in infrastructure spending in Malaysia which was looking to finalise the concession terms for the West Coast Expressway by financial year-end followed by the New Pantai Expressway extension in the financial year 2013. AmBank’s warrants on IJM was priced at 15 sen with gearing of 6.16 times.

Diversified group Boustead was looking to rake in record profits for the financial year 2011 due to strong performance of its plantation division. The plantation division was the main driver for the group’s earnings and expected to contribute about 40 per cent of profits.

Moving forward, Boustead would be looking to grow its pharmaceuticals business via construction of new plants and expansion or upgrade of existing ones. AmBank’s warrants on Boustead is priced at 15 sen with gearing of 6.97 times.

MAS’ latest business plan saw the group returning to profit by 2013. The two key areas identified to achieve that were a recovery plan to reduce cost and improve revenue and new game changing strategies.

For its recovery plan, MAS was looking to achieve RM1.2 to RM1.5 billion in improvement over the next 12 months. MAS was also expecting higher cost efficiency in operating a brand new fleet, largely to be delivered by end of 2012. AmBank’s warrants on MAS is priced at 15 sen with gearing of 4.33 times.

This offer was aimed at sophisticated traders who wanted to trade on the direction and volatility of UEM Land, MRCB, Sports Toto, IJM, Boustead, and MAS. The new call warrants had gearings ranging between 4.33 and 7.27 times and targeted at investors who wanted leveraged exposure to the underlying counters.