September 21, 2010

SIME - Sime up slightly, CIMB has HOLD, TP RM8.40

Stock Name: SIME
Company Name: SIME DARBY BHD
Research House: CIMB

KUALA LUMPUR: SIME DARBY BHD [] shares are up slightly in late afternoon trade on Tuesday, Sept 21, but off high of RM8.44.

At 3.29pm, 4.45 million shares done at prices ranging from RM8.32 to RM8.44.

CIMB Equities Research has HOLD call on Sime Darby with target price of RM8.40.

Sime Darby announced Monday the forensic and legal consultants tasked to look into certain projects under Sime Darby's energy and utilities division have found evidence of breaches in four key projects.

The work group, which completed their investigations and submitted their report to the board on Monday, suggested that on prima-facie basis, there may have been breaches of duties and obligations and inappropriate conduct. Sime Darby, said based on the findings of the work group, it has resolved to initiate legal proceedings and, where appropriate, to lodge reports with relevant authorities.

Sime was advised by its legal counsel to keep confidential the details of the report and nature of such proceedings so as not to adversely affect the interests of the group.

'The outcome is within market expectation but the decision to keep details of the report confidential will disappoint investors who are looking for more information on the reasons behind the huge losses at the energy & utilities.

'Sime plans to initiate legal proceedings, where appropriate, will likely keep this issue in the limelight in the medium term. CIMB has a HOLD call with a target price of RM8.40,' it said.


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