Chip Eng Seng

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CES did a share buyback of 1.1m shares yesterday, which explains the counter's relative resilience in a jittery market and despite fears about Tower Melbourne's problems.

It also announced yesterday that its Malacca land buys are cancelled. I view this as mildly positive in view of the risk of the Malaysian economy negatively impacted by plunging oil price. Should economies falter in an oil-shock crisis, there will be ample opportunities for cheaper land buys and developments in future, so failed land purchases are not worrying IMO.

Meanwhile, the rout in oil and gas stocks could lead to some market-wide selling as investors switch holdings, hold cash for safety or liquidate to cover losses. Stocks with high RNAV to add as cushion, good dividends to deter holders from selling, and respectable "visible" earnings to warrant confidence should hold better, but few would be spared at least some negative spill-over effect.

well, for the Melaka land, it is quite a pity.
The land cost is quite reasonably cheap and the area location is good. Most importantly, that is a mix-development project, which is the area CEL always did well.

Actually, it is not a pity. The potential EPS gain from the Malacca project might be around 5 cents (at max).

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