Midas

Midas: Midas extended its run by 1.6% today, taking its two-day return to 24% despite SGX issuing a “trade with caution” after the group responded that it was not aware of any reason to explain the sudden jump in its share price. This came in the wake of news last week that China’s two largest state-owned rail companies, China CNR and CSR would merge to create a US$26b company, capable of competing for global rail deals against Germany’s Siemens and Canada’s Bombardier. Both CNR and CSR have been instrumental in building the world's largest high-speed rail network in China, and their merger is expected to improve resource efficiency, reduce operating costs and realizing its global expansion strategy. This should bode well for aluminium extrusion profile maker, Midas, which counts both CNR and CSR as its top two customers. Overall, Market Insight continue to remain bullish on China’s infrastructure sector and expect more good news to come in 1Q15, including monetary loosening, and more details on “One Belt One Road” development policy.