Dufu Technology proposes bonus issue
KUALA LUMPUR: Corporate bond issuance continues to be healthy with RM6.1bil of private sector debt issued in August.
RAM Rating Services Bhd said in comparison, the quasi-government sector saw more muted issuance activity of RM2.2bil.
“This (issuance) was mainly attributed to Danainfra Nasional Bhd, the funding vehicle for the ongoing MRT project.
“We maintain our expectation of relatively benign issuance by this segment on account of the government’s continued cost rationalisation,” it said in a statement yesterday.
To date, RAM said overall corporate debt issuance remained higher year-on-year at RM69.9bil compared to RM66.3bil last year, despite more fragile market conditions due to persistent geopolitical and domestic policy uncertainties.
Meanwhile, it said yield movements in August were relatively muted, with the 10-year Malaysian Government Securities yields falling marginally to an average of 4.05% (July: 4.08%), underpinned by domestic support as bid-to-cover ratios mostly kept sturdy above 2%. RAM said the global scene was still dominated by risk aversion and flight to safety to the US dollar and US Treasury assets amid escalating trade war rhetoric.
Additionally, the rating agency opined that the threatening contagion from troubled emerging markets of Turkey and Argentina along with no clear sign of any abatement in liquidity tightening by the US Federal Reserve and the European Central Bank despite these downside risks, also contributed to less buying interest amongst foreign investors.
“As such, the ringgit weakened against the US dollar along with some outflow pressure on government bonds, as shown by the 1.1% net outflow in August for long- and short-term papers,” RAM added. — Bernama PETALING JAYA: Dufu Technology Corp Bhd has proposed to undertake a bonus issue of up to 87,735,185 new ordinary shares on the basis of one bonus share for every two existing shares.
It said the entitlement date will be determined and announced after all relevant approvals were obtained.
In a filing to the stock exchange, the group said its rationale for the exercise was to reward its existing shareholders for their loyalty and continued support.
“After due consideration of the various options available, the board is of the view that the
proposed bonus issue is an appropriate avenue for the company to reward its shareholders,” it said.
It said the exercise will enable existing shareholders to have greater participation in the equity of the company, whilst maintaining their percentage of equity interest.
The move will also enhance the marketability and trading liquidity of its shares, thereby providing opportunity for greater participation from a broader range of investors, the group said.
While the move is not expected to have any effect on the group’s earnings for FY18, it noted that there will be a corresponding dilution in its earnings per share for the period.