E-Malt.com News article: Malaysia: Carlsberg Brewery Malaysia and Guinness Anchor stocks gain on expectations of strong Q4 results

Carlsberg Brewery Malaysia Bhd and Guiness Anchor Bhd (GAB) snatched the two top spots among gainers on February 11 as investors expect their fourth quarter results to be strong, The Edge Malaysia reported.

At 12.30 pm noon break, Carlsberg – the top gainer – jumped 44 sen or 3.6% to RM12.62 per share on trades of 215,000 shares. The stock has been rising from RM11.10 in the past several trading days.

GAB, which ranked second among risers, soared 36 sen or 2.6% to RM14.48 on 99,300 shares. Like Carlsberg, it has started to rise earlier this month.

“It could be due to expectations of higher profitability. There were fewer measures (against the breweries) in the recent Budget and there were a few positive brokers' reports over the past few weeks,” said Ian Yoong, a private investor and former investment banker.

Yoong also told theedgemalaysia.com: "The recent M&A activity in the global alcoholic beverage sector has raised the bar to about 20-25x EBITDA.

“Malaysian breweries Guinness Anchor and Carlsberg are trading way below this benchmark. The interest in these stocks may be an indication of impending M&A (merger and acquisition) activity."

A dealer said fourth quarter results of these companies could be better due to the festive season in December and January.

“Malaysians, particularly the Chinese, drink a lot of beer during festive season. Many people had stocked up alcoholic drinks ahead of the lunar Chinese New Year (end-January).”

14 February, 2014