SD Guthrie selldown driven by ‘market overreaction’

Maybank IB said SD Guthrie Bhd’s fundamentals remain intact despite its recent share price weakness. (SD Guthrie pic)

PETALING JAYA: SD Guthrie Bhd’s recent share price weakness was driven by the market’s overreaction to Permodalan Nasional Bhd’s (PNB) latest exchangeable sukuk (ES) issuance, said Maybank Investment Bank (Maybank IB).

It added PNB’s US$300 million (RM1.22 billion) exchangeable sukuk announced last Wednesday has no earnings per share impact on SD Guthrie.

“We believe concerns over ES potential overhang are over and largely misunderstood,” Maybank IB said in a note today.

The five-year sukuk, or Islamic bond, will be exchangeable into ordinary shares of SD Guthrie, one of the world’s largest palm oil producers. The sukuk carries a profit rate of 1.5% and an exchange premium of 10%.

This is PNB’s second ES offering after a similar US$300 million issuance in January this year that is exchangeable into shares of Gamuda Bhd.