Wednesday, April 6, 2011

Berjaya Food queried over unusual market activity

KUALA LUMPUR: Berjaya Food Bhd, whose shares had risen in active trade, prompted the stock market regulator on Wednesday, April 6 to query it over the sharp increase in price and high volume in the shares.

At 12.30pm, BFood had risen three sen to RM1.17 with 15.59 million shares done. On Tuesday, it rallied 31.5 sen to RM1.14.

The FBM KLCI slipped 1.99 points to 1,551.08.'' Turnover was 759.44 million shares valued at RM808.20 million. There were 343 gainers, 349 losers and 299 stocks unchanged.

Bursa Malaysia Securities Bhd said in accordance with the corporate disclosure policy on response to unusual market activity (UMA) under the listing requirements, BFood would have to provide an announcement for public release on the cause of the UMA.

The regulator also said BFood had to publicly confirm whether there was any corporate development relating to its group's business and affairs that has not been previously announced that may account for the UMA including those in the stage of negotiation / discussion.

BFood also had to confirm if there was any rumour or report concerning the business and affairs of the group that may account for the UMA.

On Tuesday, CIMB Equities Research said BFood was a stock to watch in the coming months.

It said as Berjaya Corp was likely to use BFood as its listed vehicle for F&B, there could be interesting M&A plays for the stock.

CIMB Research said first in line could be Berjaya's 50% stake in the Starbucks operator in Malaysia. Next could be Papa John's pizza, Wendy's and the overseas operations of Kenny Rogers Roasters.

'Despite the 30% upsurge in B-Food's share price over the past two weeks, it continues to trade at a sizeable discount to our RM1.24 SOP estimate, which suggests 51% appreciation potential.

'Furthermore, 28% of its share price is backed by 23 sen net cash/share. Any asset injection that could enhance its EPS in the near future would be viewed positively by investors and would bring the company one step closer to its 5-year target of RM1 billion market cap,' it said.

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