KUALA LUMPUR, Jan 14 – Sime Darby Bhd’s shares were traded higher today following the Securities Commission’s approval for its US$1.5 billion multi-currency Sukuk Issuance programme.
As at 10.27am, the company’s shares inched up a sen to RM9.60 with a total of 519,700 units changing hands.
The Sukuk Programme, issued through its wholly-owned subsidiary, Sime Darby Global Bhd, is a significant landmark for the company.
It is the first internationally rated multi-currency sukuk programme by an Asian corporate, under the Shariah principle of Ijarah.
The Sukuk Programme provides Sime Darby with the financial agility to meet funding requirements moving forward, as it expands its business portfolio globally.
Kenanga Research in a note today said it was neutral on the news.
“We believe this is just part of Sime Darby’s normal business operation to refinance its existing loans with attractive rates.
“Sime Darby’s total short-term debt stood at RM5.09 billion as of end-September 2012. The remaining amount of RM560 million could be financed by Sime Darby’s strong operating cash flow,” it added.
Kenanga said the near-term outlook for the conglomerate appears to be challenging as the second quarter 2013 result should reflect the low Crude Palm Oil (CPO) price impact of below RM2250 per metric tonne.
“However, Sime Darby’s long-term growth remains intact premised on the long term bullish CPO price outlook and good earnings support from its non-plantation divisions.
The research house maintained a “market perform” on Sime Darby’s share with a target price of RM9. – Bernama