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https://theedgemalaysia.com/node/21672

OCI sells land for RM12m

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According to a Bursa Malaysia filing today, the company said the property has a land area of 124,946 sq ft comprising an industrial premises with a five-storey office building, a five-storey warehouse building, a four-storey warehouse building, a single-storey factory building, a single-storey warehouse building, guard house and refuse chamber building. OCI said the land has a 99-year lease that would expire on Nov 26, 2068, adding that it has a net book property value of RM14.77 million as at June 30, 2009. "The property is currently charged to Bank Islam Malaysia Bhd for credit facilities granted to OCI and its subsidiary companies," it added.

https://theedgemalaysia.com/node/45890

#Flash* KLCI slides 12 points in early trade, plantations weigh

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KUALA LUMPUR: Blue chips fell in early trade on Friday, March 11 as investors worried about the fallout from the Libyan revolt and record high oil prices. Investors fear unrest could spread from Libya to other oil-producing nations in the Middle East, driving energy costs higher and choking off the global economic recovery, Reuters reported. At 9.23am, the FBM KLCI was down 12.14 points to 1,504.77. Turnover was 107.29 million shares valued at RM85 million. Losers hammered gainers 284 to 33. Plantations were among the major losers on profit taking. RHB Research said  although current CPO price of RM3,500 a tonne was still above its RM3,100  price assumption for CY2011, “we believe valuations of plantation stocks may revert to market averages of 14-16x CY11 (from 15-17x currently)”. KL Kepong fell the most, down 30 sen to RM20.58, Batu Kawan 16 sen to RM15.22, IOI Corp 14 sen to RM5.57. Among infrastructure and building materials-related companies, YTL Cement fell 13 sen to RM4.80, TSR Capital and IJM 11 sen each to RM1 and RM6.02. HL Bank fell 12 sen to RM9.20 in thin trade. The bank had received approval for its proposed issue of up to US$300 million senior unsecured bonds from the Securities Commission. The proceeds from the issuance of the senior bonds will be used for working capital and general banking purposes.

https://theedgemalaysia.com/node/1530

Adopt conservative stance for now, say private bankers

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KUALA LUMPUR: While there are some who believe now is the time to jump right into the markets considering how low they have fallen, there are others who reckon it’s best to adopt a conservative investment strategy for now at least, until the middle of the year. According to CIMB Private Banking’s co-head Carolyn Leng, taking a conservative stance for investments now is recommended, unless an investor has a high-risk appetite. “Our view is that we will stay a little short term. We believe that for the first half of 2009, things will get pretty tough and the reporting numbers will not be pretty. We anticipate that market will be on a sideway or downward bias,” she told The Edge Financial Daily in an exclusive interview. “We are taking a longer-term approach — going with liquid investment and shorter-term tenure investments, so there can be a sense of control in that we don’t go too long,” she added. Leng said the strategy would be a bit more conservative for now at least until June. “We will have a better picture come end of March and early April because that’s when the numbers for January and February will be reported and we’ll be able to get a good sense of how the first half will be performing. “We can have a good sense of where the market is heading… there is a six months’ lag for the equity market.” For investors looking to take the conservative approach, CIMB Private Banking’s other co-head, Alan Inn, recommended that they look at placing their money with deposits, very high quality bond papers and capital-protected structured products. However, returns from these are a lot lower today compared to the riskier assets. “Right across the entire market, all the instruments closer to the risk-free side of things, the returns have bombed. “On the flipside, the risk return reward of risky assets have gone up such as equities, commodities,” he said adding that for investors adopting the conservative approach, it would be a strategy that had more to do with conserving one’s capital and not so much on making high returns. Inn said ‘aggressive investors’ with a high risk appetites could either take a long term view and start investing now or watch to see how things fared and invest later. For those who are a bit more aggressive and would like to enter into the equity market, Inn suggested they look at developed markets. “We favour equities in developed markets more than emerging markets. The reason, if you look at developed markets, they tend to lead the smaller markets because they are a lot bigger,” he said, adding that the developed markets would have a better opportunity to rebound compared to emerging markets. However, for investors who preferred to invest in equities closer to home, Inn recommended looking at China. “Within Asia, we like China. It has tremendous fiscal capacity. Their economy is large and they will make a huge impact. China’s market has fallen a lot and valuations look compelling.” For investors who have an appetite for risk but not a high-risk taker, Leng recommended exchange traded funds (ETF). “It’s one of the most viable ways to look at investing in a market per se rather than a particular stock. Honestly, at this particular juncture, every stock looks very attractive. “The key and million dollar question is when will it rebound? Nobody has an idea when it is. The best thing is to take a slightly conservative approach and yet if you have an appetite for risk, look at the ETF. You can take a more boarder type of view rather than specific,” she added. Meanwhile, Inn noted that as higher inflation was expected down the road, he suggested investment in properties and commodities such as oil and gold, to hedge against inflation. “Broadly speaking, there are three ways to get into properties – one is property equities, second is through REITs and third, is the actual property itself. At this juncture if you look at history, property developers and REITS have fallen ahead of real properties… and for these two categories, they look attractive,” he added. On CIMB Private Banking’s success stories, Inn said it had advised their clients to rebalance their portfolios earlier on –  to sell equities and shift to cash and fixed income – before things crashed. “Clients who followed us locked in some profits and limited their downside. The trap with this business is that it’s easy to be cheerleader when times are good… what we did is we held back our clients and pulled them back to do some reality checks,” he added. CIMB Private Banking is Malaysia ‘s first full service private bank specialising in ringgit-based assets. Launched in 2002 and with over RM3.88 billion in assets under its management, it has offices in Kuala Lumpur, Penang, Kuching and Kota Kinabalu. The company is organising an investment conference later this month for its clients as well as CIMB Group’s customers. This article appeared in The Edge Financial Daily, March 10, 2009.

https://theedgemalaysia.com/node/51263

CIH to distribute up to 90% of Permanis sale proceeds

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KUALA LUMPUR: CI Holdings Bhd (CIH) is looking at distributing no less than half of the RM820 million proceeds from the sale of its bottling unit Permanis Sdn Bhd to Asahi Group Holdings Ltd, said its management. “We may use a portion of the proceeds to acquire new businesses. Based on current proposals, these new acquisitions could only cost between RM20 million and RM80 million, so there is still a large portion to give back to our shareholders,” CIH managing director Datuk Johari Abdul Ghani told The Edge Financial Daily last Friday. “But if we cannot find a suitable business to acquire, it is likely that we will distribute 90% of the proceeds to shareholders,” he said. The sale of Permanis, if successful, would turn Permanis from having a net debt of RM105.15 million as at March 31, 2011 to a net cash of RM714.85 million, translating into a net cash per share of RM5.03 based on CIH’s outstanding issued share capital of RM142 million of RM1 share each. A distribution of half or up to 90% of the proceeds would translate into a cash payment of between RM2.89 and RM5.20 per share to shareholders. Johari emphasised that it was not necessary for CIH to acquire a new business as it would still be able to stand on its subsidiary Doe Holdings Sdn Bhd, which manufactures and trades taps and sanitary ware. But if CIH does, however, decide to look for new businesses, the acquisition may not necessarily have to rely on proceeds from the Permanis sale, said Johari, adding that the company could still call for other methods of fundraising.Johari, who owns 30% of CIH, said the company may be eyeing small-to-medium entities within the manufacturing sector and turn  them  around, as it did with Permanis. “We have had good experience with Permanis and we have proven our ability to drive the successful transformation of our investee companies, and we aim to explore opportunities to replicate this,” said Johari. Permanis revenue rose to RM479.9 million in FY10 ended June 30, from RM248.1 million in FY05. CIH acquired Permanis in 2004 for RM72 million, and now sells it for an amount that is 11.4 times its original cost. “If a company [a potential target for acquisition] is in trouble, we may enter and fix things, then take things from there, or if there has been a block to its potential to grow, we will rectify this. We want to buy it cheap and grow it,” Johari said on potential new investments for CIH. CIH won’t be able to jump into another beverage venture soon. The deal with Asahi includes a non-compete clause prohibiting CIH from engaging in the manufacturing and distribution of  ready-to-drink beverages in Malaysia for three years, following completion of the sale of Permanis. Permanis has bottling rights to manufacture and sell PepsiCo’s beverages brand in Malaysia until 2020, a factor likely to have contributed to the final price agreed by Asahi, which is about 37% higher than the previously reported price of RM600 million. On whether CIH is looking to invest more capital to expand Doe, Johari said: “We don’t think our tap business requires anymore capital, it is performing well on its own.” For 3QFY11 ended March 31, the group’s tap and sanitary ware division turnover rose 35.2% to RM10.7 million from RM7.9 million the year before. Its contribution to CIH’s total revenue increased to 7.6% from 5.7%. Following early speculation of the Permanis sale, shares in CIH rose to a 10-year high of RM4.08 last Wednesday, prompting the company to suspend trading in its shares last Thursday. It resumed trading last Friday and closed at RM4.61, with 5.07 million shares done. Asahi has allocated ¥400 billion (RM15 billion) this year for acquisitions in a bid to increase its overseas sales to between 20% and 30% or ¥2 trillion to ¥2.5 trillion. MIDF Research revised its target price for CIH to RM5 from RM3.92. “We are adopting sum-of-parts to better reflect the valuation of CIH. We are valuing the sanitary ware division at five times PER (price-earnings ratio) FY12 earnings, which we deem reasonable given the much lower contribution to its bottom line.” OSK Research raised its fair value for CIH to RM5.77 from RM4.30. “While we raise our fair value, we advise investors to take profit and sell into strength given some small uncertainty still on whether the deal will proceed and over how CIH would utilise its huge cash proceeds, though it has had a track record in growing Permanis,” said the research house. This article appeared in The Edge Financial Daily, July 25, 2011.

https://theedgemalaysia.com/node/43175

Higher interest rate on cost-push inflation

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KUALA LUMPUR: The cost-push inflation, which disappeared during the global financial crisis, is coming back to bite again amidst the escalating commodity prices that are driving up production costs. Consequently, the interest rate is widely expected to head higher although Bank Negara Malaysia (BNM) has been ahead of the curve, having raised the overnight policy rate (OPR) by 75 basis points (bps) since March last year to 2.75%. Since mid-2010, Malaysia’s headline inflation has inched up, driven by sustained economic recovery, higher food prices and subsidy rationalisation, but remains below 2008 levels, said CIMB Research. “Given the current direction of cost-driven price pressures, we believe that inflation risks remain biased to the upside. We project inflation to average 3% in 1H11 and accelerate further to 3.1% in 2H11, taking the average CPI growth to 3% this year, up from an estimated 1.7% in 2010,” CIMB Research commented in its report. Economists are anticipating BNM to raise OPR by at least 50bps to keep inflation in check in the second half of the year, if not earlier. Steven Yong, Citibank Bhd head investment strategist and research, wealth management products, said at the base case, BNM was anticipated to raise the OPR by 25bps in July and another 25bps in November this year. Yong believes interest hikes are highly possible in the emerging markets this year.   On Malaysia, he reasoned that the export trend in the country in 1H was anticipated “not to be very strong”, and as such inflation in the country would still be “basically stable” during the period. Hence, this would not prompt the central bank to have any real reason to raise interest rate. “The export figures will not be weak by any means but they won’t be extremely strong either (in the first half). We do not discount that potentially the interest rate hike would come in earlier,” Yong told a media briefing on Citi’s 2011 Retail Investment Outlook last Friday. He said softening exports in Malaysia would likely slow down the economic growth to around 4% over the next two quarters before accelerating by the second half of 2011, adding that the economy could be driven by exports such as commodities as well as consumer products for domestic consumption. HSBC Asian economist Wellian Wiranto shares the same view. He also expects the central bank to raise the OPR by 50bps in the second half of this year. According to Standard Chartered’s report on Global Focus 2011 — the Year Ahead, Malaysia’s inflation is expected to accelerate to 3.4% in 2011 from 1.7% in 2010 on the back of a narrowing output gap and the risk of a rise in commodity prices.Standard Chartered Bank regional head of research for Southeast Asia, Tai Hui, anticipates a more aggressive rate hike of 75bps this year, citing inflationary expectations are likely to rise underpinned by increased commodity prices and the gradual implementation of subsidy reforms. Tai foresees the first 25-bps hike would take place towards the end of the current quarter while another two increases of 25bps each to happen in the second quarter. He doesn’t rule out the possibility of OPR to be above the 3.5% level if inflationary pressure is greater than anticipated. According to CIMB Research, the timing of the resumption of rate normalisation is contingent on the economic growth outlook, which has already slowed considerably in 2H10 on the back of the fast decelerating pace of export growth. “Interest rates have its own limits in combating cost-pushed inflation. With growth risks taking centre stage, we think BNM will resume hiking rates by 50bp (25bp each in two rounds) in 2H11, taking the policy rate to 3.25% by end-2011,” CIMB Research commented. “We think BNM can tolerate a brief period of negative real interest rates. However, it may opt to adjust the statutory reserve requirement (SRR) ratio of 1% currently to help mop up the excess liquidity coming from capital inflows,” it added. Citi forecasts Malaysia’s GDP growth to expand by about 5% this year from 7% in 2010. For 2012, the GDP growth is expected to rise by 6.1%. Yong said while GDP growth was commendable in 2010 coming out of a global recession, growth is likely to be slower this year as there was a dip in exports in particular from the electronics sector, which has been slowing since the previous quarter. Citi projects global GDP growth to be at 3.4% in 2011 and 3.8% in 2012, with emerging markets particularly Asia leading the growth. With a slower pace of global economic growth, Yong said Citi suggested Malaysian investors start looking at equities in emerging markets, especially in Asia-Pacific countries whose economies are on a better footing, experiencing healthy debt levels and strong commodity prices as demand continued to increase. He stressed that most emerging markets had accelerated the development of their domestic consumer markets, stressing this had been evident in China which was one of the fastest growing consumer markets in the world. Yong noted that North Asian markets performed well in the second half of 2010 due to their large exposure to China where consumer spending increased and economy expanded strongly. On the ringgit, Yong said there is potential for it to strengthen to below the RM3 mark against the US dollar but does not expect the local currency to stay below the mark for a long period as there is no real reason for the greenback to further weaken. “If you look at the dollar-ringgit, it has already moved down quite substantially last year. We do think the global economy will stabilise and be positive this year,” he said. Asked if oil prices could hit the all-time high of US$147 (RM450) per barrel, he said, Citi does not anticipate oil prices to skyrocket this year but believes the commodity has the potential to hit the US$100 per barrel mark. Yong noted that with developed countries still facing a slow rate of economic growth, the demand and consumption of oil are not going to be substantially higher than in 2010. He added that the West Texas Intermediate (WTI) prices could average at US$90.80 per barrel in the 2011-2012 period, while gold price could average at US$1,503.60 per ounce this year and US$1,438.20 per ounce the following year. This article appeared in The Edge Financial Daily, January 17, 2011.

https://theedgemalaysia.com/node/85354

#GE13* Anwar to address gathering at stadium

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PETALING JAYA (May 6):  Datuk Seri Anwar Ibrahim has called on Malaysians to attend a gathering on Wednesday to "express our rejection and disgust at the unprecedented electoral fraud" allegedly committed by the BN and the Election Commission (EC) in GE13. "I  shall address the rakyat for the first time post the general election on Wednesday, May 8, 2013 at Kelana Jaya Stadium, at 8.30 pm," the PKR de facto leader said in a statement today. Separately, electoral process watchdog Bersih said it will refrain from recognising the newly elected government until concerns over electoral fraud are investigated. Bersih co-chairperson Datuk Ambiga Sreenevasan said a panel consisting of election experts will sift through complaints from the public. The panel will be formed in a week's time. She called for people who had witnessed any episodes of alleged fraud and irregularities to lodge police reports and create petitions. Ambiga, however, said Bersih is not organising a rally in the near future and is instead focusing on investigating alleged instances of electoral fraud. Anwar, in his statement, said Prime Minister Datuk Seri Najib Razak and the EC had chosen to ignore the wishes of the people to their own peril after having promised free and fair elections. Calling for the EC to be held responsible for "being complicit in the worst electoral frauds in our history", he pledged to devote his time and energy to work with Bersih and the people to ensure that a newly constituted and independent EC is in place as soon as possible to rectify the frauds. Anwar said the fact that Pakatan Rakyat won the popular votes by a large margin (50.3%, compared to BN's 46.8%) "confirms the mandate given to us and highlights that electoral frauds won" GE13 for Najib. "Our conscience cannot allow us to accept election results conjured through frauds and cheating. "My heart is with every Malaysian who does not accept the results," he added. Anwar said he will work towards a national consensus to question the legitimacy of the BN's government "achieved through such electoral frauds". "The movement for change is unstoppable," he said. On her part, Ambiga expressed frustration at the EC and called for its members to resign for handling the electoral process poorly. She said people had to resort to their own measures to safeguard the electoral process, even going as far as to stop busloads of phantom voters from polling stations. She also said the EC had spent RM10 million to purchase indelible ink which was not effective as people had complained they could wash it off with soap and water. Ambiga also said there were delays in the announcement of results for opposition wins and announcements for election results only began with BN's wins. When the EC started to release the information for other areas, there was a sudden freeze for recounting of ballots and the electricity in certain ballot counting centres had gone off, she added. The Bersih co-chairperson said all these allegations give rise to an impression that GE13 was far from being clean and fair. Ambiga also called upon the people to boycott mainstream newspapers such as The Star, New Straits Times, Utusan Malaysia and Berita Harian for allegedly contributing to the perpetrated fraudulence.

https://theedgemalaysia.com/node/38566

Aspects of the Divine

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In conjunction with the sacred Hindu celebration of Navarathri, Temple of Fine Arts (TFA) is organising an art exhibition entitled Aspects of the Divine by Singapore-born, Malaysia-based artist Kalawathi Schuebel. Navarathri means nine holy nights, and celebrates three major goddesses in the Hindu pantheon — Durga, the goddess of destruction, Lakshmi, the goddess of wealth and nourishment and Saraswathi, the goddess of wisdom and learning. A graduate of the Sharjah Arts Institute in the United Arab Emirates and the Pennsylvania Institute of Art in the US, Kalawathi is a mystical figurative artist who combining realism and contemporary art. An artist with profound spiritual intuition, Kalawathi shares her multi dimensional perspective on being and consciousness through this solo art exhibition, held at TFA for the first time. TFA initially approached the married mother of two with the idea of an exhibition based on nine goddesses, but the final product turned out to be something a little different. “The original plan was to create a collection of works based on nine goddesses,” she says. “But somehow, it didn’t work like that… It eventually had nothing to do with Navarathri itself, as I decided to opt to paint mythological figures. It’s based on the inherent values and nature of the three goddesses Navarathri is about, but expressed in the way that I understand them. “Technique wise, the works are very abstract — it’s impossible to do Indian figures in an Indian way in this day and age and expect it to fit, so I did it in a more abstract form. I am very inspired by cubist paintings, and you can really see that in the works as well,” she adds. Kalawathi has a personal connection to Navarathri that further inspired the work. As she is a dance student with TFA learning Odissi and Kathak, she performed during the previous Navarathri celebrations last year and it had a lasting impression on her. “It was the most wholesome, complete experience for me,” she recalls. “We were preparing for a month, so alongside the dance rehearsals, we were encouraged to be vegetarian and get into the right frame of mind. The energy I felt during that entire time was just so amazing, and once it was all over the energy was also gone, so I know it was something real.” Kalawathi’s works are influenced by the richness and the lifestyle of the Middle East as well as the ancient Mughal-Indian culture, which is clearly identifiable from her use of vibrant and pure colours. Her works feature cerulean to cobalt blues, greens to cadmium deeps, crimson reds to bright scarlets and touches of yellows, magentas, purples to splashes of gold, silver and fine finished with curve lines and decorative ornaments. The colour and grandeur often associated with Hindu gods therefore work very well with Kala’s unique aesthetic, and there is an odd sense of cohesion despite the bold and almost unruly arrangement of colours and tones in her paintings. There is a very vivid life and wild sense of excitement in her work, clearly demonstrating an artist who is herself inspired by her subject matter. Girlish yet womanly, childlike in its innocence yet mature in its overall feel, her works are wholesome in a way that’s hard to describe. Kalawathi generally works on various mediums like oil, acrylic and collages, with a focus on acrylic and glass. According to her, this gives her the strength to enjoy works in abstracts complimenting the basic principle of combining lines, shapes and colours in order to create poetry or a story in abstract art. Working with acrylic allows inspiration to flow uninterrupted, which oil painting doesn’t allow as there is a drying and waiting period involved. The exhibition consists of a total of 25 works ranging from RM2,000 to RM4,000, all the proceeds of which will be channelled to TFA’s many charitable activities. Although the works in this exhibition are oil on canvas, she hopes to present a full glassworks exhibition when she returns to TFA for a show next year. Apart from her work as an artist, Kalawathi is also a holistic theologian life coach with a Bachelors degree in Metaphysics and Holistic Theology. She has written one book so far on the subject — Transcend-Beyond Right and Wrong — with plans in the works for a sequel. Catch Aspects of the Divine till Oct 31 at The Temple of Fine Arts, 114-116 Jalan Berhala, Brickfields, KL. Hours are from 10am to 9pm (Tues-Fri); 9am to 1pm (weekends). Admission is free. Navarathri is celebrated at the Temple of Fine Arts with dance and music performances that are also held for free. Show time begins at 7pm, and the performances will go on daily till Saturday, Oct 16. Call (03) 2274 3709 for details on both events. The popular Lakshmi Narayan Temple is the hot spot every year for traditional, North Indian-style festivities for Navarathri. Beginning about 8pm, devotees dressed beautifully take part in a colourful celebration with energetic dancing well into the night. Men and women take their places in concentric circles with dandiya sticks, used while dancing to the beat of popular Hindi music interspersed with religious hymns. Crowds of more than 500 people take part in prayers to worship Durga, Lakshmi and Saraswathi and continue to do so until final prayers are said at 11.30pm. Everyone is welcome, and there is no admission fee. But since it is held at the temple grounds, you will have to dress accordingly. The Lakshmi Narayan Temple is located along Jalan Kasipillay, off Jalan Ipoh, KL. This article appeared on the Live it! page, The Edge Financial Daily, October 13, 2010.

https://theedgemalaysia.com/node/55629

Tech-related stocks retreat on weaker outlook

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KUALA LUMPUR: Technology and semiconductor-related stocks retreated on Monday, Oct 3 after MIDF Research downgraded the sector from positive to neutral, citing weakening global economic conditions that was affecting consumer confidence. At 11.27am, Unisem fell 2.5sen to 99.5 sen, MPI down 1 sen to RM3, JCY 1.5 sen to 40 sen, Globetronics 2.5 sen to 90 sen, KESM 1 sen to RM1.80, Green Packet 1 sen to 57 sen, Eng Teknologi 4 sen to RM2.02 while Kobay fell 8 sen to 66 sen. In a note Oct 3, MIDF Research said that global semiconductor sales showed a sequential year loss of 1.1% to US$24.9 billion in July 2011 for the first time after 20 consecutive month of growth. It said that the weakening consumer confidence would put pressure on demand, adding that it expects the weak demand to continue in 4Q FY11 due to the possibility of consumer electronics manufacturer scaling back its production in anticipation of slow demand next year. "Looking back at Oct 2008, the global sales fell 2.3% year-on-year (y-o-y) after an extended period of growth. This was followed by 12 consecutive months of contractions," it said However, it said July's global semiconductor sales were "steady" with only 0.1% loss. For specific stocks pick, the research house said it was currently reviewing its calls for both Unisem and Globetronics, with a strong possibility of downward bias. It said other barometers showed a possible slack in global demand, with the Book-to-Bill (BTB) ratio recorded bookings falling 8.8% month over month (m-o-m) and 34.8% y-o-y, while billings figure were down 3% m-o-m and 5% y-o-y compared to July 2011 and August 2010 respectively. "It appears that the BTB ratio is trending downwards as weaker dynamic random access memory (DRAM) demand, foundry spending reductions and near-term uncertainties about electronics demand were reflected in declining sales trends for new semiconductor manufacturing equipment," it said. In addition, it said HSBC’s China Flash PMI showed the Chinese factory sector contracted for the third consecutive month in Sep 2011 as both new orders and new export orders fell. "The flash PMI, which is a preview of China’s factory output before official data, hovered below the 50-point mark for the third straight month in Sep 2011, registering 49.4, down from 49.9 in Aug 2011," it said However, a PMI reading of 48 in China might still register a 12% to 13% annual growth in industrial output, which might moderate the slowdown as China’s domestic demand may be sufficient to provide support, it said.  

https://theedgemalaysia.com/node/9815

Lion Industries post RM27.6m 1Q net profit

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KUALA LUMPUR: Lion Industries Bhd posted a net profit of RM27.6 million for the first quarter ended Sept 30 (1QFY12), turning the corner from a net loss of RM18.8 million for the corresponding period a year earlier. The group’s revenue rose 42.4% to RM1.33 billion compared with RM936 million a year earlier. For the three months in review, the company posted basic earnings per share of 3.85 sen versus a basic loss per share of 2.62 sen a year ago. In its filing with Bursa Malaysia, Lion Industries said the higher revenue was due to higher sales tonnage and selling prices of its steel products. After accounting for higher profits from associate companies and jointly-controlled entities of RM25.3 million, Lion Industries posted a profit before tax of RM37 million against a loss before tax of RM36.4 million a year earlier. On its outlook, Lion Industries said the group’s operating environment would remain challenging in view of uncertainties surrounding the global economy. “Demand for steel products is expected to be soft while raw material prices remain volatile. On the domestic front, demand for steel products is expected to recover, driven primarily by the initiatives implemented under the Economic Transformation Programme (ETP),” it said. It added that its steel business would achieve a satisfactory set of results in the next quarter due to ETP initiatives. Lion Industries rose two sen to close at RM1.36 yesterday with 452,100 shares done.     This article appeared in The Edge Financial Daily, November 30, 2011.

https://theedgemalaysia.com/node/61937

BNM Annual Report 2011: Fiscal deficit to narrow to 4.7% in 2012

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KUALA LUMPUR (March 21): Bank Negara Malaysia (BNM) expects the fiscal deficit to narrow further from 5.0% of gross domestic product (GDP) in 2011 to 4.7% of GDP in 2012, underlining the government’s commitment to fiscal consolidation. It said on Wednesday the government faces the challenging task of balancing between fiscal consolidation and to support initiatives to transform the country into a high-income economy. “In the medium-term, the government will remain committed to fiscal consolidation. A successful implementation of the ETP (Economic Transformation Programme) and all other reform initiatives are expected to ensure sustainable growth which will enhance tax revenues, thus contributing to the efforts to strengthen the fiscal position of the government,” it said. BNM said revenue collection was expected to improve to RM186.9 billion due to better tax administration and higher compliance in tax submission and collection. Total expenditure, BNM added, would continue to support of growth with an allocation of RM181.6 billion for operating expenditure and RM49.2 billion for development expenditure. Development expenditure would be channeled for projects and programmes under the second rolling plan (RP2) of the 10th Malaysia Plan (10MP) including transformation initiatives under the National Key Result Areas (NKRAs), National Key Economic Areas (NKEAs) and Strategic Reform Initiatives (SRIs) “The government will continue to finance the fiscal deficit from domestic sources, mainly through the issuances of Malaysian Government Securities (MGS) and Government Investment Issues (GII), given the high domestic savings and the ample liquidity in the financial system,” it said. As for the monetary policy in 2012, BNM said the Malaysian economy entered 2012 with increasing downside risks to growth amid softening inflationary pressures domestically. BNM said the monetary policy would continue to operate in a complex global environment characterised by slower growth, rising uncertainties and increased volatility in the financial and commodities markets amid high liquidity in the international monetary system. “Monetary policy in 2012 will focus on ensuring the sustainability of economic growth in an environment of price stability. Emphasis will also be placed on ensuring monetary policy remains appropriate to avoid the build-up of financial imbalances,” it said. BNM said despite the highly challenging external environment, the fundamentals supporting the economy remain intact. It said the Malaysian economy was expected to remain resilient and to grow within the range of 4 - 5% in 2012. “Domestic demand will continue to be the anchor for growth. Private sector economic activity will be sustained, underpinned by stable employment conditions and a favourable outlook for the domestic- oriented sectors. “This will be further reinforced by public sector spending and investment via the ETP and policy initiatives announced during the 2012 Budget such as the one-off financial assistance to low and middle income groups, upgrading of schools, hospitals and basic rural infrastructure and the construction of public housing,” it said.

https://theedgemalaysia.com/node/55978

Chinese press: OTK questions Chua-Liow's peace plan

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Last Updated: 5:16pm, Dec 13, 2013 PETALING JAYA (Dec 13): Like Gan Ping Sieu, another MCA presidential candidate Datuk Seri Ong Tee Keat has come forward to voice his objection against the peace deal between party president Datuk Seri Dr Chua Soi Lek and deputy president Datuk Seri Liow Tiong Lai's factions.   He slammed both camps for doing so and questioned whether there was an external intervention prompting the deal and whether it would put a stop to the infightings within the party. "How to bar a non-selected leaders from nominating themselves as candidates? Can the peace deal solve the problems of factionalism?" he told Oriental Daily News. The former MCA president said many were puzzled how Chua was able to enter into a peace deal with Liow, whom he had previously described as being weak, non-decisive and often dodged major issues. Pointing out that the people's support toward MCA had dropped to record low, Ong said it is now urgent to lead MCA out of the shadows. "If the peace deal was a result of an external intervention, how can MCA rise and face the people?" he asked. Meanwhile, Ong dismissed claims that there was just infighting and no reform during his time, saying he had attempted to bring reform but his plan fell through as some people had plotted to bring him down. "I only led MCA for 17 months. Seven of which, people had plotted to hold an extraordinary general meeting to topple me," he said. On the prediction that the upcoming MCA leadership election would be the end of his political career, Ong just laughed off the idea and pointed out that people predicted the same too when he lost his party and government posts after the March 28, 2010 MCA re-election and being dropped as a Barisan Nasional candidate in the 13th general election. He who had been described as Lone Ranger said, unlike another former MCA president Datuk Seri Ong Ka Ting, he had never said he would quit politics. He also stressed that he had never thought of jumping ship after losing the election. Liow attempting to uproot Ong's force? It came as a surprise for both MCA members and observers that MCA central committee member Datuk Wee Jeck Seng was dropped from the candidates list of the peace deal. Now speculation is rife that Liow is attempting to uproot Ka Ting's force in the party. In earlier reports, the vernacular papers listed the Tanjung Piai parliamentarian as one of the four proposed vice-presidential candidates in the peace deal between Chua's and Liow's camp. Three others are former MCA Wanita chief Datuk Paduka Chew Mei Fun, CC member Datuk Lee Chee Leong and MCA Young Professionals Bureau chief Datuk Chua Tee Yong. However, recent reports said Wee was removed from the latest list, and Dr Hou Kok Chung, who announced his intention to vie for a vice-president post together with Chew Mei Fun, had taken up the space instead. Meanwhile, it was said that purported secretary-general candidate under the peace plan, Datuk Seri Ong Ka Chuan, was also dropped as a secretary-general candidate and was proposed as a CC candidate instead under the bilateral deal. A columnist in China Press, TY Yan, commented that Liow chose Hou and Chew instead of Wee because the duo's lacked of grassroot supports and thus easier to be controlled. At the same time, Liow had taken the opportunity to weaken Ong's internal force in a bid to build up his own base, she said. The columnist pointed out that Jeck Seng could pose a threat to Datuk Wee Ka Siong's political base should he be elected as a vice-president because he was both MCA division chief for Tanjung Piai and a member of parliament from Johor. During an interview with Sin Chew Daily, Jeck Seng admitted that candidates listed in the peace plan were more advantageous than others, however, he said, he had his morale boosted up knowing that he was dropped from the list. "Because I have the confidence and I know that the central delegates would have their own decisions and own stands. They would be able to assess the candidates and refuse to be a "yes man"." he said. For more stories, go to www.fz.com, the website for freedom of expression and fairness in articulation.

https://theedgemalaysia.com/node/25135

Hot Stocks For The Week

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DSC Solutions BhdThe stock, which was listed on the ACE Market on Dec 9, saw active trading last Thursday, with some 43.38 million shares changing hands. The stock lost six sen last Thursday to close at 34.5 sen. The counter jumped on its first day of trading, rising 24.5 sen from its initial public offering price of 50 sen apiece, representing a near 50% jump. However, the price has steadily come down since Dec 10. There is no substantial filing with Bursa to explain the decline in the share price, but the spike on its debut day may have prompted profit-taking by IPO subscribers. This article appeared in Capital page of The Edge Malaysia, Issue 786, Dec 21-27, 2009.

https://theedgemalaysia.com/node/27239

AmResearch keeps Buy call on AFG

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KUALA LUMPUR: AmResearch keeps a Buy call on Alliance Financial Group (AFG) with a fair value of RM2.90/share based on P/BV 1.4 times, on back of its ROE of 10.8% FY11F. It said on Friday, Feb 12 AFG's 3QFY10 financial performance was above expectations. It added the surprise came in the loan loss provision line, which was exceptionally low at only RM1.3 million (on write-backs). "But headline NPL numbers have improved across the board on a QoQ basis. Dissecting the NPLs further, we remain comfortable with the gross NPL trend. In terms of operating top line, net interest income came in 9.8% above our forecasts," it said. AmResearch remains positive on AFG, which is one of the cheapest banking stocks at P/BV of 1.2x F11. It is also further reassured that operations at the bank remains status quo until the issue is resolved.

https://theedgemalaysia.com/node/42940

Perisai’s private placement exercise to raise RM165.9m cash

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Perisai PetroleumTeknologi Bhd(Feb 17, RM1.67)Upgrade to outperform at a higher target price of RM2.53: Last week, Perisai announced a proposal for a 10% private placement exercise. At an indicative issue price of RM1.53 per share, the exercise will raise cash proceeds of RM165.9 million. Management guided that the placement exercise is to raise funds to pare down its debt and/or for capital investment for jack-up drilling rigs and/or mobile offshore production units (MOPU). We were not surprised by the announcement as we had earlier expected Perisai to look for additional equity funding given that: (i) the remaining 80% payment (of about RM520) for its first rig is due soon; and (ii) it acquired a third jack-up drilling rig a month ago. The exercise will lift its share base to 1.19 billion shares from 1.08 billion and result in a potential reduction in net gearing to 0.25 times (versus 0.7 times as at the end of financial year 2012 ended Dec 31 [FY12]) and interest savings of around RM2 million. However, this exercise will also lead to FY14 earnings per share (EPS) dilution of 7.4%. Perisai’s fourth quarter (4QFY13) results will be released at the end of February and we believe they could be weak given that its derrick lay barge, Enterprise 3 (E3), and Rubicone MOPU are currently lying idle. According to management, both the E3 and MOPU Rubicone are bidding for domestic and international projects. We believe Perisai will be able to secure contracts for its soon-to-be-delivered rig given that there are at least 17 rig contracts that are expiring from mid-2013 to 2015. As investors are now looking to end-calendar year 2015 (CY15) for longer term prospects for the oil and gas sector, we have introduced our FY15 net profit estimate of RM171.0 million, which features: (i) full-year utilisation of E3, MOPU, FPSO and first jack-up rig; and (ii) half-year contribution of the second jack-up rig. Our roll forward target price based on 16 times CY15 EPS is raised to RM2.53 (from RM1.63). Post the private placement, our target price is likely to be diluted by about 8% to RM2.32. — Kenanga Research, Feb 17 This article first appeared in The Edge Financial Daily, on February 18, 2014.

https://theedgemalaysia.com/node/60168

With song and sadness, South Africans mourn Mandela

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(06/12/13 19:15:46) * Some worry his death might stir racial tensions* Tutu calls for "united" South Africa to honour Mandela* His absence could hurt ANC in long term -analyst* Flags fly at half mast, state funeral planned JOHANNESBURG (Dec 6): South Africans united in mourning for Nelson Mandela on Friday, but while some celebrated his remarkable life with dance and song, others fretted that the anti-apartheid hero's death would make the nation vulnerable again to racial and social tensions. As the country's 52 million people absorbed the news that their beloved former president had departed forever, many expressed shock at the passing of a man who was a global symbol of reconciliation and peaceful co-existence. South Africans heard from President Jacob Zuma late on Thursday, that the statesman and Nobel Peace Prize laureate died peacefully at his Johannesburg home in the company of his family, after a long illness. Despite reassurances from public figures that Mandela's passing, while sorrowful, would not halt South Africa's advance away from its bitter apartheid past, some still expressed unease about the absence of a man famed as a peacemaker. "It's not going to be good, hey! I think it's going to become a more racist country. People will turn on each other and chase foreigners away," said Sharon Qubeka, 28, a secretary from Tembisa township, as she headed to work in Johannesburg. "Mandela was the only one who kept things together," she said. Flags flew at half mast as South Africa entered a period of mourning, leading up to a planned state funeral for its first black president next week. Trade was halted for five minutes on the Johannesburg stock exchange — Africa's largest bourse — out of respect. But the mood was not all sombre. Hundreds filled the streets around Mandela's home, in the upmarket Johannesburg suburb of Houghton; many singing songs of tribute and dancing. The crowd included toddlers carrying flowers, domestic workers still in uniform and businessmen in suits. Many attended church services, including another veteran anti-apartheid campaigner — former Anglican Archbishop of Cape Town Desmond Tutu. He said that like all South Africans, he was "devastated" by Mandela's death. "Let us give him the gift of a South Africa united, one," Tutu said, holding a mass in Cape Town's St George's Cathedral. An avalanche of tributes continued to pour in for Mandela, who had been ailing for nearly a year, with a recurring lung illness, dating back to the 27 years he spent in apartheid jails, including the notorious Robben Island penal colony. U.S. President Barack Obama and British Prime Minister David Cameron were among world leaders who paid tributes to him, as a moral giant and exemplary beacon. The loss was also keenly felt across the African continent. "We are in trouble now, Africa. No one will fit Mandela's shoes," said Kenyan teacher Catherine Ochieng, 32. Politicians now "nothing like Mandela" For South Africa, the death of its most beloved leader comes at a time when the nation, which basked in global goodwill after apartheid ended, has been experiencing labour unrest, growing protests against poor services, poverty, crime and unemployment, and corruption scandals, tainting Zuma's rule. Many saw today's South Africa — the African continent's biggest economy but also one of the world's most unequal — still distant from being the "Rainbow Nation" ideal of social peace and shared prosperity that Mandela had proclaimed, on his triumphant release from prison in 1990. "I feel like I lost my father, someone who would look out for me," said Joseph Nkosi, 36, a security guard from Alexandra township in Johannesburg. Referring to Mandela by his clan name, he added: "Now without Madiba, I feel like I don't have a chance. The rich will get richer and simply forget about us. The poor don't matter to them. Look at our politicians, they are nothing like Madiba." The crowd around Mandela's home in Houghton preferred to celebrate his achievement in bringing South Africans together. For 16-year-old Michael Lowry, who has no memory of the apartheid system that ended in 1994, Mandela's legacy means he can have non-white friends. He attended two schools where Mandela's grandchildren were also students. "I hear stories that my parents tell me, and I'm just shocked that such a country could exist. I couldn't imagine just going to school with just white friends," Lowry said. Shortly after the news of Mandela's death, Tutu had tried to calm fears that the absence of the man who steered South Africa to democracy, might revive some of the ghosts of apartheid. "To suggest that South Africa might go up in flames — as some have predicted — is to discredit South Africans and Madiba's legacy," Tutu said in a statement, on Thursday. "The sun will rise tomorrow, and the next day and the next ... It may not appear as bright as yesterday, but life will carry on," Tutu said.May hurt ANC in long term Zuma and his ruling African National Congress face presidential and legislative elections next year, which are expected to reveal discontent among voters, about pervasive poverty and unemployment, 20 years after the end of apartheid. But the former liberation movement is expected to maintain its predominance in South African politics. Mark Rosenberg, Senior Africa Analyst at the Eurasia Group, said that while Mandela's death might even give the ANC a sympathy-driven boost for elections due next year, it would hurt the party in the long term. He saw Mandela's absence "sapping the party's historical legitimacy, and encouraging rejection by voters who believe the ANC has failed to deliver on its economic promises, and become mired in corruption." Mandela rose from rural obscurity, to challenge the might of white minority rule — a struggle that gave the 20th century, one of its most respected and loved figures. He was among the first to advocate armed resistance to apartheid in 1960, but was quick to preach reconciliation and forgiveness when the white minority began easing its grip on power, 30 years later. He was elected president in landmark all-race elections in 1994, after helping to steer the racially-divided country towards reconciliation and away from civil war. Mandela was awarded the Nobel Peace Prize in 1993, an honour he shared with F.W. de Klerk — the white Afrikaner president who released him in 1990. Reacting to his death, the Nobel Committee said Mandela would remain one of the greatest ever prizewinners. In 1999, Mandela handed over power to younger leaders who were better-equipped to manage a modern economy — a rare voluntary departure from power, cited as an example to African leaders. This made him an exception, on a continent with a bloody history of long-serving autocrats and violent coups.

https://theedgemalaysia.com/node/73524

Suhakam unhappy with Asean human rights stand

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PETALING JAYA: The Human Rights Commission of Malaysia (Suhakam) has expressed regret over the gaps in the Asean Human Rights Declaration (AHRD) that was signed by member nations two days ago. “The commission is disappointed that they permit restrictions to be made on grounds wider than what are accepted internationally,” Suhakam chairman Tan Sri Hasmy Agam said in a statement yesterday. “General Principle 7, which declares on one hand that all human rights are universal, indivisible, interdependent and interrelated, recognises on the other, that member states may take into consideration their political, economic, legal, socio-cultural, and historical backgrounds in the realisation of human rights in their countries,” he noted. Citing the Vienna Declaration and Programme of Action, Hashmy said that it is the duty of states to promote and protect human rights and fundamental freedoms, regardless of their political, economic and cultural systems. The Suhakam chief also questioned the lack of transparency and consultations in coming out with the declaration. “The commission regrets the declaration was drafted with limited openness and transparency, and inadequate extended consultations with various stakeholders, including the national human rights institutions which were keen to contribute and anxious to ensure that the AHRD would be on a par with other regional human rights declarations,” he said.Despite the shortcomings, Hashmy said AHRD’s adoption is a positive development in the promotion and protection of human rights in the region. “The commission is greatly encouraged by the reaffirmation by the Asean countries of their commitment to the Universal Declaration of Human Rights (UDHR), the Charter of the United Nations, the Vienna Declaration and Programme of Action and other international human rights instruments to which Asean member states are parties,” he said. He added that Suhakam, along with the other members of the South East Asia National Human Rights Institutions Forum (SEANF), will continue to engage with the Asean governments and the Asean Intergovernmental Commission on Human Rights in the process of the full and unimpeded implementation of the AHRD. Prime Minister Datuk Seri Najib Razak and leaders of the other nine Asean countries signed the non-binding regional declaration in the Cambodian capital of Phnom Penh, where they have gathered for the Asean summit. Critics said the AHRD falls short of minimum standards and could give some countries an excuse to ignore actual human rights abuses. This article first appeared in The Edge Financial Daily, on Nov 21, 2012.

https://theedgemalaysia.com/node/74250

Don’t insult Malaysia’s intelligence, says PM

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KUALA LUMPUR: Inviting foreign observers to monitor the general election is an insult to the intelligence of Malaysians, according to Umno president Datuk Seri Najib Razak. The Prime Minister said critics of the government have been attacking the country’s institutions continuously with the intention to create “confusion and suspicion” among the people. One example of an institution under attack was the Election Commission (EC) he said. “EC was attacked to the extent that street protests were organised. We know that this is a pre-emptive measure so if they lost the election, although it was due to a lack of public support, they would still blame the EC for its ‘incompetence and unfairness’,” he said in his opening speech. “That’s why they have no qualms about complaining to foreign bodies and internationalising domestic problems although they know that it embarrasses the country and insults the intelligence of Malaysians,” he said. Najib said the fact that PAS had ruled Kelantan for 22 years and the five-state win by the Opposition in 2008 proved that the election system was indeed “clean and that the people have matured and were smart in making their choice”. Recently, opposition leader Datuk Seri Anwar Ibrahim was said to have written to Australian Foreign Minister Senator Bob Carr seeking the country’s assistance to help ensure that the upcoming 13th general election in Malaysia is free of fraud and corruption. Carr, however, declined the offer.   For more stories, go to www.fz.com, the website for freedom of expression and fairness in articulation. This article first appeared in The Edge Financial Daily, on Nov 30, 2012.

https://theedgemalaysia.com/node/95347

London’s property market beckons

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Property sector Our recent site visit to London and meeting with global commercial real estate services and investment firm, CBRE UK, reveal that there is still upside to Central London’s property market, especially residential, given: (i) housing supply is one-third below the government’s target; (ii) strong rental market (4% to 5% yield; 5% to 7% growth per annum); (iii) weak foreign exchange rate (£/USD down 28% from peak); (iv) euro woes likely a long drawnout affair with London regarded as a safe haven; and (v) government incentives to stimulate mass housing demand. The return of local buying (banks are starting to ease lending slightly) will be a strong growth driver (currently just 20% of buyers). Transaction prices are hitting £1,000 (RM5,028) to £2,000 per sq ft (psf) with high-end enclaves (Mayfair, Knightsbridge) crossing £4,000 psf. About 38% of buyers are from Asean countries, 15% from the Middle East and 13% from Russia. We were impressed by the Battersea Power Station development’s showroom and strong sales — Phase 1 was fully sold in record time. Its competitive advantages are: (i) strategic location near West End; (ii) integrated development with the iconic power station and river frontage; (iii) improving infrastructure with Northern line extension (£1 billion  government funding; targeted completion end-2019); (iv) relocation of US and Dutch embassies to create 10,000  jobs; and (v) deep value: £1,000 psf against £3,000 psf in neighbouring Chelsea. Phase 2 of Battersea Power Station is slated for launch in the first half (1H) of 2014 at £2,000 psf (prime units above the power station), while Phase 3 may see conversion of office space to residential. S P Setia Bhd, a member of the consortium behind the Battersea development, offers the largest exposure to Central London’s burgeoning property market. We also visited Eastern and Oriental Bhd’s (E&O) Prince House near the London School of Economics and IJM Land Bhd’s mixed development near the Tower of London. Interest in Prince House is reportedly overwhelming at £1,500 psf, while Phase 1 of IJM Land’s project is set to be launched in October at £1,000 to £1,200 psf. Contribution to earnings and revised net asset value are small, but these could be stepping stones to more London ventures. There may be upside to IJM Land’s RM1.5 billion gross development value if its hotel is converted to another residential tower. — Hwang DBS Vickers Research, Aug 12 This article first appeared in The Edge Financial Daily, on August 13, 2013.

https://theedgemalaysia.com/node/87289

Malay press: Saifuddin Nasution to handle S'gor political affairs

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PETALING JAYA (May 28): The Selangor state government will undergo a reshuffle to pave the way for PKR secretary general Datuk Saifuddin Nasution Ismail to assume the responsibility of handling Pakatan Rakyat's political affairs in the state. According to Malay daily Sinar Harian, a source close to Menteri Besar Tan Sri Abdul Khalid Ibrahim disclosed that the reshuffle will take place in the near future. The reshuffle and Saifuddin's appointment has already gotten the go ahead from Abdul Khalid and PKR de-facto leader Datuk Seri Anwar Ibrahim at a meeting last week. The issue was also one of the reasons for the delay in the finalising of the state executive council lineup, the source said. “The reshuffle may be discussed on Wednesday, Saifuddin will take care of political affairs in Selangor in line with the 14th general election,” the source was quoted saying. “He will be tasked with mobilising the machinery in the rural areas to counter Barisan Nasional (BN) which is determined to win Selangor back.” Saifuddin’s appointment will also help create a more efficient infrastructure development and see through the various welfare programmes which has been on hold since Pakatan’s previous administration term in the state. “This term, Abdul Khalid has promised to spend the Selangor reserves to activate more welfare programmes,” the source said. On the other hand, Saifuddin will work to create a new image for the Selangor government to instil the perception that Selangor is now a Pakatan state and no longer a BN fortress. “The rebranding is not only for the civil servants but it will also see government buildings and other infrastructure painted with another colour, not BN's blue.” The source also said Abdul Khalid will be working on the ground to build a repertoire among the people and also increase his political abilities following criticism during his previous term in office. At the PKR 9th National Congress last weekend, fz.com had reported that the state government will establish a Political Liaison Office to solidify PKR and Pakatan Rakyat's role in Selangor. Abdul Khalid said he had learnt that one could not be too rigid in politics because it would stem growth. Abdul Khalid is known to be a by-the-book administrator. This has drawn much criticism from grassroots as well as top party leadership.

https://theedgemalaysia.com/node/91551

#Hot Stock* Gabungan AQRS falls 15%, trades ex-bonus issue

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KUALA LUMPUR (July 15): Gabungan AQRS Bhd fell as much as 15% before paring losses at midday break as shares of the construction firm trade ex-bonus issue today. At 12.30pm, Gabungan AQRS settled at RM1.40 with some 538,000 shares done. The second-largest decliner across the bourse had earlier fallen as much as 23 sen to RM1.35. Gabungan AQRS is making a bonus issue of 159.98 million free warrants in the company. The exercise is undertaken on the basis of nine warrants for every twenty existing shares held. According to a note by Kenanga Investment Bank Bhd today, the consensus target price for Gabungan AQRS shares comes to RM1.50. From a techical viewpoint, Kenanga said its analysis shows that Gabungan AQRS shares have an immediate support at RM1.55 while resistance is seen at RM1.73.

https://theedgemalaysia.com/node/93236

Is IJM looking to float its cash cows?

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IJM Corp Bhd(July 22, RM5.80) Maintain outperform at RM5.72 with a target price of RM6.80:  Local highway concessions remain IJM’s cash cows, according to an article in a local daily. Bundling them with other tollways and listing the entity would be positive, but it is not a new plan. Relooking at this strategy to unlock value is timely given the West Coast Expressway (WCE) project’s rollout. We retain our earnings per share forecasts and target price, which remain based on a 10% revised net asset value (RNAV) discount. Valuations are supported by concession assets which make up 37% of RNAV. Maintain “outperform”. IJM’s longer-term fundamental strength is its main appeal. But medium-term catalysts are pinned on job flows (WCE and Kuantan Port), with likely positive surprises from oil and gas infrastructure. In an interview, IJM managing director Datuk Teh Kean Ming acknowledged that the stock is undervalued. Here are some key points from the interview: (i) the group may bundle and list its highway concession assets; (ii) potential new jobs are the RM4 billion WCE project and RM2 billion Kuantan Port extension project; (iii) it is vying for MRT 2; (iv) it is scouting for oil and gas infrastructure projects; and (v) it expects slightly higher dividends in 2014 financial year due to disposal of concession assets. The potential listing of its highway concession assets is not new as management had been considering this for some time. However, it appears timely this time around as work on WCE will begin in 2014. As an infrastructure conglomerate, IJM owns the largest number of highway concession assets in the country. It constitutes 67% of the group’s total value of concession assets and 37% of RNAV. A listing would further unlock its value. On the construction side, a positive surprise is the group’s strategy to pursue oil and gas infrastructure/construction-related jobs. Projects could be sizeable and look likely to come from Petroliam Nasional Bhd’s refinery and petrochemicals integrated development (Rapid) project in Pengerang, Johor. Accumulate the stock. This article should revive investors’ interest in IJM as it is one of the laggard blue-chip contractors. The oil and gas infrastructure angle should add a new dimension to the group’s job win prospects. — CIMB Research, July 22 This article first appeared in The Edge Financial Daily, on July 23, 2013.

https://theedgemalaysia.com/node/14369

PetGas posts net profit RM333.46m in 1Q2012

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KUALA LUMPUR (May 9): Petronas Gas Bhd (PetGas) posted net profit RM333.46 million for the three months ended March 31, 2012, which was relatively flat year-on-year. The company said on Wednesday that its revenue for the quarter rose 2.6% of RM23.6 million to RM914.8 million, mainly due to higher utilities sales and gas transportation revenue. “Profit before tax for the current quarter was RM446.9 million, a decrease of RM17.7 million (3.8%) from the preceding quarter ended 31 December 2011 mainly due to higher other expense resulting from unrealised loss from the revaluation of Currency Exchange Agreement (CEA) and retranslation of term loan,” it said. Earnings per share was 16.85 sen while net assets per share was RM4.49. Reviewing it s performance, PetGas said its earnings will remain stable as a result of the fixed fee structure under the Gas Processing and Transmission Agreement (GPTA) with additional earnings potential from performance based structure which is dependent on the level of production of by-products and their prices. “The completion of the LNG Regasification Terminal in Melaka within the next twelve months will have a positive impact to the group’s earnings in terms of additional income from regasification and transportation services,” it said. On its outlook, PetGas said prospects for the utilities business will mainly depend on petrochemical customer demand. “Any variation in gas price will be immediately reflected in the pricing to customers,” it said.

https://theedgemalaysia.com/node/27346

Harris Associates sells 6.78m Media Prima shares

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KUALA LUMPUR: US-based Harris Associates LP disposed of 6.78 million shares of Media Prima Bhd from Feb 2 to 4, reducing its total shareholding to 62.13 million shares or 6.35%. A filing to Bursa Malaysia showed it sold 830,000 shares on Feb 2 and 2.88 million shares the next day. It disposed of 3.07 million shares on Feb 4. The share price closed at RM1.82 on Feb 2 and RM1.79 the next day and RM1.83 on Feb 4. CIMB Equities Research has a neutral call on Media Prinma with a target price of RM2.17 while ECM Libra has a Buy with a target price also at RM2.17.

https://theedgemalaysia.com/node/57892

Eversendai order book RM1.6b, with RM132m Manjung job

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KUALA LUMPUR (Nov 21): Eversendai Corporation Bhd’s order book has increased to RM1.60 billion with the latest contract secured by its subsidiary Shin Eversendai Engineering (M) Sdn Bhd to build part of the Manjung power plant. It said on Monday the contract was for the boiler and auxiliary equipment for the Manjung Unit 4, which was awarded by Alstom Services Sdn Bhd. “The contract value of this particular package is RM132 million and there are several other packages within this project that Shin Eversendai and Alstom are in negotiation currently,” it said. Eversendai group managing director Datuk A.K Nathan said with a sturdy order book of RM1.6 billion after the inclusion of this new project, “we expect to exit FY2011 in a firmer position and have the growth visibility into FY2012 and beyond”. He said the group was currently building the structural steel works for contact piers, sky bridge and satellite building for KLIA 2 and fabrication of pipe racks structures for Sabah Oil & Gas Terminal (SOGT) projects which have contributed to 5.0% of the overall group revenue.

https://theedgemalaysia.com/node/9463

Glomac's 4Q net profit surges 66% to RM7.2m

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The jump in quarterly earnings was due mainly to recognition of revenue from the sale of Glomac Tower and the fair value gain for Wisma Glomac 3. Revenue for the three-month period rose 38.7% to RM99.88 million from RM72 million a year earlier. However, for the 12-month period, net profit slipped 8.12% to RM32.29 million from RM35.15 million, due to the additional provision for impairment loss in a sub bond set off by the effect of the recognition of fair value gain for Wisma Glomac 3. Revenue was 8.4% higher at RM351.57 from RM324.34 million previously. Glomac proposed a final dividend of 3.5 sen per share less tax, bringing total gross dividend for the year to six sen, versus five sen in FY08. Based on the ongoing development projects and the level of work targeted to be completed, the group's performance for the financial year ending April 30, 2010 would remain satisfactory, Glomac said in a statement to Bursa Malaysia yesterday.

https://theedgemalaysia.com/node/38332

A new wave

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It’s funny that in a country where more than 50% of the population is made up of Malays, you’d think that fine Malay cuisine abound. Just recently at a dinner, someone put forth the question, “Where can you get a good rendang?” One mentioned an Aunty So-and-so who does it well while another suggested a neighbourhood warung, but I suppose the best answer would be from one friend who said, “I don’t know… but when it’s good, it’s really good.” That’s the thing about Malay cuisine — it is something we’re more familiar with at a warung, somebody’s house or at a wedding, but for a while, it had no relevance or place amid the emerging trendy and fine dining eateries that were cropping up around Kuala Lumpur. However, the last five years has seen a new wave of creative chefs and restaurateurs who have taken Malay cuisine’s raw and rustic style, refined it and packaged it for the discerning 21st century diner. Where previously we used to rely on hotel coffee house buffets to allow our out-of-town guests to sample Malay cuisine — in other words, to enjoy ikan assam pedas in an air-conditioned setting — we now are able to take them to an outfit that makes the effort to excite us locals as well despite the flavours being so familiar. We can also now enjoy the challenge of finding wines that pair well with our favourite dishes. It is an exciting time for Malay cuisine, although there is still much room for improvement. Japanese, Chinese and Thai cuisine have had a lead in evolving their fare to play amongst the gastronomical greats, with some of their players having earned Michelin stars. It’s time we caught up. Here are a few of the city’s choice picks of Malay fine dining. Ibunda Malay Fine Dining251 Jalan Bukit Bintang, KLTel: (03) 2148 8488Website: www.ibunda-finedine.com.my Ibunda has been making waves in the KL dining scene. Employing the talents of chef Zabidi Ibrahim, who was the award-winning chef at Gulai House, the Malay restaurant in Langkawi’s Andaman. What’s caught everyone’s attention has been dishes like pan-fried foie gras with ciku, kiwi coriander dressing (Hati Itik Buah Chiku) and grilled lobster meat with black caviar and dried plum sorbet (otherwise known as Udang Kara Ais Kepal Asam Boi). The Ikan Sutera Kukus Halia Kekacang, is apparently a must-try. It is RM88 for a river fish, but it is a specific wild river fish known as Ikan Sultan, a species of wild Jelawat that lives only in streams near waterfalls. Steamed with seven types of organic beans, it is served with a sliver of lobster with sautéed ginger, garlic and dried shrimp as a sauce. There are several private rooms, including a cigar room with a readily available selection of fine cigars. Bunga EmasThe Royale Chulan, Level 15 Jalan Conlay, KLTel: (03) 2688 9688Probably the youngest of the lot, Bunga Emas opened September last year, with the kitchen helmed by chef Khairul Ghazali, who has served at The Andaman and Four Seasons Resort in Langkawi, Sutera Harbour & Spa in Sabah, and Carcosa Seri Negara in KL. His culinary creations are mainly presented in Malay “hidangan” style so you should come in a group, enabling you to sample various flavours and textures at once. Khairul is experimental indeed with presentation and textures but stays true in terms of taste. The 39 RestaurantPNB Darby Park, Level 3910 Jalan Binjai, KLTel: (03) 7490 3939The 39 Restaurant is where you can enjoy traditional Malay cuisine with an enchanting view of the Kuala Lumpur skyline. Those afraid of heights can choose to sit inside whilst the braver diners can opt for the alfresco tables. Some of their signature dishes are Sup Ekor served in Farmer Bread Skin, Tenggiri Otak-Otak, Pindang Lautan, Rendang Warisan, Ayam Golek Perchik, Jenahak Asam Pedas, Daging Kerutup, and Gulai Ayam Kampung. You might want to also try the Patin Tempoyak Cili Padi or the Rusuk Kambing Kurma. Open for lunch and dinner daily (accept for Sundays and public holidays) this is an ideal spot to power lunch, and for a deal too — a special promo offers a buffet lunch (12.30pm to 3pm) at RM59++ per person. Enak KL LG2, Feast Floor, Starhill GalleryJalan Bukit Bintang, KLTel: (03) 2142 8973Website: www.enakkl.com Enak KL claims to be the city’s premier Malay fine dining restaurant. Nestled within Starhill Gallery’s Feast Village, Enak KL has indeed been garnering a fair bit of attention for its repertoire. Specialities include Ayam Goreng Lengkuas, Rendang Padang, Botok-Botok (sea mackerel wrapped in aromatic ground spices and herbs then steamed), Gado-Gado and Kerabu Asparagus. Apparently there are family and corporate packages available so do call them to inquire. Bijan Bar & Restaurant3 Jalan Ceylon, KLTel: (03) 2031 3575Website: www.bijanrestaurant.com Bijan Bar & Restaurant is probably one of the earliest to express Malay cuisine in an elegant way. Opened in September 2003, Bijan is a refurbished old bungalow, with a lot of wood and stone finishing that set the tone for a chic and intimate yet roomy space that has proven to be very popular for corporate entertainment and product launches. Highly recommended dishes are the Masak Lemak Ikan dengan Belimbing and the Rusuk Panggang. Bijan’s innovation of the traditional recipes is done with much restraint that even though the dishes are seemingly presented in more modern plates, there’s still a hint of hominess to the flavours. As it is located within KL’s central business district, do consider this a lunch destination during weekdays as that is when Bijan’s Nasi Hidang is on offer, described as “an innovative concept that allows diners to sample a wide variety of dishes on a small budget”. This article appeared on the Live it! page, The Edge Financial Daily, October 8, 2010.

https://theedgemalaysia.com/node/25977

Week In Tech (WIT)

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NetV@lue 2.0's writer Aishah Mustapha interviews Dr Reezal Abdul Latiff in this three-part episode of the Week in Technology. {youtube}B52N-5V9IwM{/youtube} {youtube}H39wGqj2v5s{/youtube} {youtube}sNJR_solKDQ{/youtube}    

https://theedgemalaysia.com/node/40180

Special Focus: DiGi balances investments with shareholder rewards

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Mobile network operator DiGi.Com Bhd has a proven track record of returning excess cash to shareholders. At the same time, it does not fail to fulfil its financial obligations and has the financial flexibility to invest in growth opportunities. “Beyond hard numbers, we place a lot of emphasis on running a sustainable and ethical business company-wide; from inculcating sound corporate governance and offering quality products and services to investing in the well-being of our employees and developing communities around us; all key pillars that contribute to shareholder value creation,” says DiGi.Com CEO Henrik Clausen. It is therefore not surprising that DiGi made it to the top five of the KPMG survey on shareholder value creation in 2009. The survey ranks companies on how optimally they use their capital resources to generate profit, using the economic profit over invested capital (EC/IC) ratio. DiGi’s EP/IC ratio of 37.43% earned it fourth place on the SVA list, but with an EP of RM955.4 million, DiGi is the clear winner in its own sector. Last year, DiGi was second overall. “Our guiding principle to create and maintain good shareholder value is ensuring DiGi consistently delivers higher returns to shareholders compared with other investments carrying similar risks,” says Clausen. Since its listing over a decade ago, DiGi has improved its efforts to create shareholder value and is one of the better dividend stocks in its sector, if not the best. Maybank Investment Bank, in a recent note, estimates that DiGi offers the highest dividend yield of 7.6% for FY2010 ending Dec 31. By comparison, Telekom Malaysia Bhd yields 5.9% and Maxis Communications Bhd 6.5%. For FY2011, DiGi is expected to lead its peers by offering an estimated 6.6% dividend yield. Clausen notes that DiGi also recently raised its payout ratio to a minimum of 80% of net earnings, to be paid quarterly. “In fact, our dividend payout has been consistently above our committed dividend policy over the past few years. We have a clear capital management road map that focuses on having an optimal balance sheet in the long term,” he says. Interestingly, DiGi also shows higher returns on equity (ROE) compared with its peers. The company offers an ROE of more than 50% while that of its peers range from 11% to 30%. While generous to its shareholders, DiGi has been splurging on improving its infrastructure and offerings over the past two years. It invested more than RM700 million in capital expenditure (capex) in 2009 and estimates the amount will be about the same for this year and next. Clausen notes that most of DiGi’s capex in these three years is primarily for the rollout of its 3G/HSPA network. Still, DiGi is expecting a higher absolute operating cash flow (Ebitda minus capex) than the RM1.4 billion achieved in 2009. Market consensus is also that FY2010 will be a better year for DiGi.This year, analysts are expecting DiGi to post a net income of RM1.1 billion, up 7% from RM1.03 billion last year, on the back of improved revenue of RM5.24 billion. For FY2011, DiGi’s earnings are expected to rise 6% to RM1.16 billion. Its share price has gained 12% year to date and reached its 52-week high of RM25 on Aug 27. Still, the counter is trading at a healthy FY2010 price-earnings ratio of 17 times, which is in line with the industry’s average. Clausen adds that the company is also pleased that it has improved its market share YTD. Although he did not give details, RHB Research in a recent note estimates DiGi to command more than 20% of the postpaid and over 27% of the prepaid markets. OSK believes DiGi’s latest iPhone plans, which are cheaper than those of its peers, will widen its addressable market by lowering the barriers to ownership. This is expected to induce more subscribers to upgrade and encourage users from other networks to port-in. The house notes that the lower monthly access can be offset somewhat by lower handset subsidies, which could mitigate the near-term pressure on margins. Nonetheless, Clausen says DiGi’s potential for growth lies in mobile internet. He says data consumption, easy access to the Internet via handsets as well increased ownership of smart phones are important revenue drivers, going forward. “In addition, we see opportunities in our voice business, particularly in certain target segments of the market, although the penetration rate is above 100%. “We are working hard to offer a stronger differentiated proposition that is customised to segment needs, and delivering on our promise for excellent customer experience across the board,” he adds. Be that as it may, DiGi has certainly shown that it is able to strike a good balance in using its cash resources. This article appeared in Special Focus, The Edge Malaysia, Issue 827, Oct 11-17, 2010 

https://theedgemalaysia.com/node/83196

#Global Markets* Japan stocks extend falls; Swiss franc, yen up on safety flight

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TOKYO (Oct 24): Japan's Nikkei fell to a two-week low on Thursday and the Swiss franc held near a two-year high against against the dollar, sparked by concerns about China's economic outlook. On Wednesday, Chinese money-market rates rose to three-month highs after the central bank declined to inject cash for a second day as regulators showed signs of concern that loose liquidity might again be fuelling risky credit growth. MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.1 percent, however, after shedding 0.9 percent on Wednesday to end a four-day winning streak. The Nikkei share average dropped 0.6 percent as the yen gained ground on the dollar, extending the previous session's 2 percent slide. But a Tokyo-based equity trader at a foreign bank said some investors were picking up battered Japanese stocks. Investors will get further clues to the health of the world's second-largest economy with a preliminary survey on Chinese manufacturing activity data due at 0145 GMT. "The initial reaction to the rise in China's money market rates has translated into lower U.S. Treasury yields and weaker equity markets," analysts at BNP Paribas wrote in a note. "The pullback in risk sentiment should remain temporary as the delay to the Fed's QE tapering plans until the first quarter of 2014 makes long carry positions attractive. This implies that commodity and emerging market currencies should regain the ground lost over the past 24 hours." Before the concerns over China checked the market bullishness, global equity markets had been rallying after the resolution of the U.S. budget impasse and on expectations the Federal Reserve would extend its cheap money stimulus into 2014. After a run of record highs, the U.S. Standard & Poor's 500 index fell 0.5 percent on Wednesday as shares of heavy-equipment maker Caterpillar and semiconductor companies tumbled after reporting earnings. According to Thomson Reuters I/B/E/S, the one-month earning momentum for S&P 500 companies deteriorated to minus 3.6 percent from minus 1.5 percent last month. U.S. S&P E-mini futures inched up 0.1 percent in Asian trade on Thursday. The dollar was at 0.8919 franc, just above a two-year low of 0.8908 hit on Wednesday. It was holding at 97.46 yen , near a two-week low touched in the previous session. Against a basket of major currencies, the dollar was little changed at 79.257, within striking distance from an eight-month low of 79.137 touched on Wednesday. U.S. Treasury yields fell to three-months lows on more bets that the Fed will maintain its stimulus efforts into next year. U.S. crude prices rose 0.5 percent to about $97.30 a barrel after falling to a 3-1/2 month low of $96.16 on Wednesday. - Reuters

https://theedgemalaysia.com/node/48804

Ex-post thoughts on early rate normalisation

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Bank Negara Malaysia (BNM) hiked the overnight policy rate (OPR) by 25 basis points (bps) to 3% last Friday, as we expected, and raised the statutory reserve requirement (SRR) by 100bps to 3%. The 25bps-hike in the OPR was in line with our expectation, but market views were more divided. Although KLIBOR futures were already pricing in 50bps of hikes by end-2011, nine out of 16 economists surveyed by Bloomberg expected no change. The OPR-hike was a pre-emptive strike on pipeline inflation pressures as the output gap closes. Inflation, both supply and demand-driven, is already creeping upward. Core inflation is moving up and inflation is becoming more broad-based, suggesting that it is not merely the result of food and fuel prices. From a historical inflation perspective, the inflation numbers are clearly reaching the limits of their comfort zone. Gross domestic product (GDP) growth also appears to have surprised on the upside, helped by net exports. Officials had indicated an acceleration in GDP growth of 5% to 6% year-on-year in January/February 2011 (4Q: 4.8%), which may have led to the rising core inflation and broadening of inflation pressures. The trade surplus, meanwhile, fell by a smaller 7.3% y-o-y in 1Q11 (4Q: -21.3%), and likely expanded sequentially after seasonal adjustment. From a future growth perspective, our understanding is that BNM expects the output gap to turn positive in 2H11. This suggests that demand-pull pressures may become more prominent going forward, even if this is not the case now. In addition, as we have pointed out many times, capacity utilisation and inflation rates are already showing that resource utilisation is tighter than indicated by the conventional GDP output gap estimates. We suspect the massive under-investment in the past has resulted in the economy hitting supply constraints now as exports recover. If 1Q GDP growth in fact hits 5% to 6% y-o-y, the output gap could well close earlier than we had previously thought. Arguments that raising SRR rates could substitute for OPR hikes are not strong, in our view. The SRR is a liquidity management tool to drain excessive liquidity from capital inflows (and deal with financial imbalances), not a signal of the monetary policy stance, unlike the OPR which is used to tackle consumer price index (CPI) inflation pressures. This was reiterated in no uncertain terms in BNM’s press statement that “the SRR is an instrument to manage liquidity and is not a signal of the stance of monetary policy. The... OPR is the sole indicator used to signal the stance of monetary policy”. The possible delaying of the general election was also argued to justify the delay in hikes. But if BNM were to hike anyway, would it not be better to front load the hike well before a delayed election, rather than to have to wait for the pressure to build before the election? In fact, a delayed election could mean ever greater urgency to implement investment projects to “pump prime” voter sentiment, which would only raise upside growth/inflation risks. BNM also did not appear concerned over the impact on leveraged households and consumption growth. Our last conversation with BNM suggested that this was not a binding constraint, as base lending rates (BLR) tend to rise less than the OPR. Macro-prudential measures, such as the recent mortgage lending and credit card restrictions, have  mitigated these concerns. The increased borrowing costs that would be incurred by heavy Malaysian Government Securities and Government Investment Issue issuance in 2Q11 could possibly have delayed hikes. But to factor this into monetary policy formulation, whether explicitly or implicitly, would risk undermining the credibility and independence of the central bank. This article appeared in The Edge Financial Daily, May 10, 2011.

https://theedgemalaysia.com/node/81786

BCorp’s 3Q net profit down 93%, dragged by BToto

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KUALA LUMPUR: Berjaya Corp Bhd’s (BCorp) net profit in the third quarter (3Q) ended Jan 31 fell 93.3% from a year ago to RM1 million on lower revenue from its unit, Berjaya Sports Toto Bhd (BToto). Revenue fell to RM1.77 billion from RM1.81 billion previously. Earnings per share tumbled to 10 sen from 35 sen. The group did not declare any dividend for the quarter. BCorp said BToto reported lower revenue from its principal subsidiary, Sports Toto Malaysia Sdn Bhd. This was due to the previous corresponding quarter which had benefited from the traditionally high sales during the Lunar New Year coupled with strong sales recorded by the Supreme 6/58 game, which recorded its highest jackpot ever of RM57.2 million in  January 2012 and the higher number of draws. According to BToto’s announcement, its net profit fell 23.7% to RM86.1 million for 3Q from a year ago on lower revenue due to a higher prize payout during the period. Apart from its gaming unit, BCorp’s retail distribution business reported lower revenue due to unfavourable sales in the more mature market. Similarly, its hotels and resorts business registered a decline in revenue as a result of lower occupancy rates. However, the motor distribution and property development segments reported higher revenues. These were due to higher sales volume of new car models and higher progress billings of several residential and commercial development projects. For the nine months ended Jan 31, the group’s net profit fell to RM49.2 million from RM308.8 million a year ago. Revenue grew a marginal 0.9% to RM5.34 billion. BCorp said that in the previous corresponding period, its pre-tax profit included one-off exceptional gains from the disposal of subsidiary companies, resulting in a net profit of RM308.8 million. It added that the group incurred higher finance costs during the period. The higher revenue was mainly contributed by an increase in revenue from the marketing of consumer products and services, and property investment and development segments. The group said “given the cautious economic outlook, the directors are of the view that the group’s performance will remain challenging in the remaining quarter of the financial year ending April 30, 2013.” This article first appeared in The Edge Financial Daily, on March 28, 2013.

https://theedgemalaysia.com/node/8391

Emergency motion of PKFZ rejected

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Pandikar said the motion was not necessary as the Ministry of Transport had already established two committees to study the issue and parliament's Public Accounts Committee (PAC) had already conducted an inquiry on the matter. According to Lim's notice of motion to the Speaker dated June 11, Lim (Ipoh Timur-DAP) sought to move a motion of urgent definite public importance for leave to discuss the establishment of a royal commission of inquiry into the PKFZ development. Speaking at a press conference later, Lim slammed Transport Minister Datuk Seri Ong Tee Keat for being absent from parliament today. "Was Ong so cocksure that my motion for an urgent debate on the PKFZ scandal today would be rejected by the Speaker that he could just go off overseas?" Lim said. Lim said that as Transport Minister, Ong's first duty was to be accountable to parliament for his parliamentary duties. That question formed part of Lim's daily three questions to Ong which is published on Lim's blog. The veteran MP also cited a New Straits Times report today that Ong would make a ministerial statement on the PKFZ project and was "expected to answer all points raised by opposition MPs". "Is Ong prepared to cut short his Paris trip and rush back to parliament to make a ministerial statement on Wednesday or Thursday to make amends for the contempt he has shown parliament and MPs by scooting overseas without a proper parliamentary accounting of the RM12.5 billion PKFZ scandal?" Lim said. Lim also asked if Najib was prepared to order Ong's return "to drive home the point that his new government of 1Malaysia. People First. Performance Now" must be taken seriously by cabinet ministers themselves.

https://theedgemalaysia.com/node/10477

#Stocks to watch:* BLand, BToto, Mitrajaya, Satang, GBH

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In the US, stocks fell to their lowest level in 10 weeks on Tuesday as talk of a second government stimulus plan heightened fears that the economy is not yet on the path to recovery and that the corporate earnings season starting this week will be weak. Crude palm oil (CPO) futures have extended their declines, in line with the fall in crude oil price, and weaker outlook.  CPO for third-month delivery fell RM60 to RM2,069. Stocks to watch include Berjaya Land Bhd, Berjaya Sports Toto, Mitrajaya Holdings Bhd and plantation stocks including IOI Corp, KL Kepong and soon-to-be suspended Satang Holdings Bhd and TMC Life Sciences. BLand raised RM190 million after placing out 40 million shares in BToto. The shares, representing a 3.18% stake in BToto, were placed out at RM4.75 per share. This was 30 sen or 5.94% below the weighted average market price of BToto shares for the past three days ended July 6 of RM5.05 per BToto share. Mitrajaya, which has fallen from investors’ screen for years, secured a contract valued at RM63.64 million for the main building works of a university in Iskandar Malaysia, Johor. Satang may come under selling pressure again as it faces suspension on July 13 for failing to submit its revamped plan to the authorities by the July 6 deadline. Satang’s share price fell as much as 19 sen or 48% to a low of 20 sen in intra-day trade. It closed nine sen lower to 30 sen. In Goh Ban Huat, Tan Sri Robert Tan Hua Choon raised his stake in the company to 33.11% or 20.5 million shares after acquiring 1.65 million shares on June 30 and July 2. The board is seeking another offeror as it describes Tan's offer of RM1.25 per share as loo low since GBH's net tangible asset per share is RM2.54. An independent advice circular is expected to be released on July 25, which will incorporate the valuation of the land. The Edge Financial Daily had recently reported that according to the company’s annual report for fiscal year ended Dec 31, 2008, GBH owns 56,874 sq metres of land with a total net book value of RM119.98 million. Of the 56,874 sq metres, the report shows that 52,910 sq metres are freehold land and the remaining land are storage yards. Two largest pieces of freehold land, partly occupied by factories, measure 42,224 sq metres valued at RM92.42 million and are in Segambut, Kuala Lumpur. The net asset value (NAV) per share of the company is RM2.54 per share. This is much higher than the RM1.25 per share which Tan, who is the single largest shareholder with 30.45% stake or 18.85 million shares, is offering to the other shareholders of the loss-making company. The stake was acquire in January last year. Meanwhile, TMC Life Sciences Bhd has seen the emergence of Utilico Emerging Markets Ltd as a substantial shareholder. It bought 7.5 million shares of TMC Life Science on Feb 24, raising its stake to 31.479 million shares or 5.23%. Chemical Company of Malaysia Bhd faces tough times and RAM Ratings downgraded CCM’s long-term ratings for its RM200 million fixed-rate bonds (2002/2009) and RM500 million musharakah commercial papers/medium-term notes programme (2008/2023). RAM Ratings downgraded the bonds and commercial papers from stable to negative and expressed concerns the credit profile may worsen or be prolonged.

https://theedgemalaysia.com/node/47380

Goldis cash pile swells above RM350m

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KUALA LUMPUR:  Goldis Bhd, major shareholder of IGB Corp Bhd, will see its cash coffer ballooning to RM354 million after it has sold off the equity stake in Hoepharma Holdings Sdn Bhd, a specialist dermatological services, for RM289.2 million. In an announcement to Bursa Malaysia yesterday, Goldis said the company and six other shareholders wanted to divest the entire shareholding in Hoepharma to Taisho Pharmaceutical Co, which is listed in Tokyo, for RM370 million cash. Goldis, which owns a 78.15% stake in Hoepharma, would receive RM289.2 million cash from the disposal, while the six individuals, who collectively hold 21.85% shareholding, would pocket RM81 million cash. The six are Khoo Joo Lee, Hum Hoe Mei, Lee Boon Kian, Kwek Eng Lam, Woon Kim Toon and Soh Thian Boon. Japan-based Taisho is principally involved in self-medication business achieved through over-the-counter medicines and health-related products and prescription pharmaceuticals. According to Goldis, its original investment in Hoepharma was RM1.8 million made in February 2002. The private equity firm will stand to gain RM209.3 million from the proposed divestment. The one-off gain from the proposed divestment is expected to boost Goldis’ earnings per share by 34 sen for FY12 ending Jan 31, based on share capital of 609.8 million. For FY11 ended Jan 31, Goldis posted a lower net profit of RM23.6 million against RM38.9 million the year before as its revenue fell to RM60.3 million from RM76.5 million previously. The price tag of RM370 million values Hoepharma’s assets at RM60.8 million, including RM22.7 million cash, at about 6.1 times as at Jan 31, and at about 17.7 times its earnings before interest, taxation, depreciation and amortisation (Ebitda) of RM20.9 million. Hoepharma’s unit HOE Pharmaceuticals Sdn Bhd owns seven shop lots with strata titles, of which title registrations are still pending completion with the Selangor Land and Mineral Office. The company’s earnings have been on an upward trend since FY08 ended Jan 31. Its revenue grew to RM76.5 million for FY11 from RM60.3 million, while net profit increased several folds to RM13.9 million from RM2.05 million in FY08. Despite the enlarged cash coffer, Goldis did not reveal the likelihood of generous dividend for shareholders going forward. In the announcement, the board said that it was still considering the best option available to utilise the cash consideration and until such time the usage of the cash consideration is determined or deployed, it would be held in bank deposits and or money market financial instruments.   As at Jan 31, Goldis had cash balances of RM65.23 million while it had bank borrowings amounting to RM318.9 million. “The proposed disposal provides a timely opportunity for Goldis to realise and unlock the value of its investment in Hoepharma group,” said the company, adding that the disposal was expected to be completed by 2HFY11. “The proposed disposal will enable Goldis group to focus on its core business operations and to raise funds for part settlement of its borrowings and/or invest in other businesses,” it said. Following the disposal, Goldis will be principally involved in investment holding, property investment holding, information and communications technology services, paper manufacturing, the provision of engineering services for water treatment plants and related services and aquaculture. Goldis owns a 27.5% equity interest in IGB Corp, which in turn holds a majority stake of 73.5% stake in KrisAssets Holdings Bhd. The private equity firm has investments in G Tower, which is a hotel-and-offices block located in the vicinity of KLCC, and mobile messaging gateway service provider Macrokiosk Bhd, as well as broadband service provider Macro Lynx Sdn Bhd, among others. Goldis also has investments in China, such as water treatment and paper manufacturing. This article appeared in The Edge Financial Daily, April 8, 2011.

https://theedgemalaysia.com/node/21638

#PAC on PKFZ* KDSB blames failure on PKA, bureaucracy

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According to transcripts of proceedings in the Public Accounts Committee’s (PAC) inquiry tabled in parliament yesterday, Faizal said PKFZ was not attractive to investors because “the number one problem with this free zone is actually the bureaucracy”. Faizal noted that other free zone authorities around the world could function as a “sovereign authority”, with some empowered to give approvals or, at least, act as a “one-stop service” for approvals. “This free zone must be seen as efficient, fast, free zone... This is very bad because how (can) we compete with our neighbouring countries?  “People are willing to pay a premium for an efficient service... Cheap is no more the marketing power. We must be efficient,” he said in reply to a question from PAC member Tan Ah Eng (Gelang Patah-BN). The PKFZ reportedly has a low occupancy rate of 15%-20%, resulting in it not getting enough revenue to cover its operating expenses. PKFZ’s unattractiveness also stemmed from unclear incentives given to different industries, the development’s marketing strategy as well as the “bad coverage” it had garnered, Faizal said. PAC member Datuk Kamaruddin Jaafar (Tumpat-PAS) interjected, pointing out that the nation’s other mega projects, such as Putrajaya and KLCC Twin Towers, did not run into similar problems. Faizal, who was summoned before PAC on Aug 26, defended KDSB saying he believed the company had done “nothing wrong” with regard to the contract it signed with PKA. KDSB’s lawyer Nahendran Navaratnam, who was present with Faizal, earlier told PAC to instead question PKA, which had agreed to the terms of contract with KDSB. “Our job is to try and secure the best possible deal for us as a private individual,” Nahendran said. He claimed that certain public perceptions had been “created” to disguise and deflect attention from the project’s failure in securing tenants. According to Nahendran, KDSB and PKA’s “dynamic” contractual relationship and their respective roles had also been “misunderstood”. The lawyer also continued his tirade against auditors PricewaterhouseCoopers (PwC) and their position report on the controversial project, which he claimed “shifted the burden” from PKA to KDSB. Auditor-General Tan Sri Ambrin Buang later told PAC that PKA, as the project manager, should have monitored the project’s implementation to ensure that it stayed within its budget. This article appeared in The Edge Financial Daily, November 5, 2009.

https://theedgemalaysia.com/node/91162

Oil dips to around $105 as supply concerns ease

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* Egypt army topples president, announces transition * US crude stocks post biggest summertime drop in 13 years * Coming Up: ECB interest rates decision, 1145 GMT (Adds quote, updates prices) By Alex Lawler LONDON, July 4 (Reuters) - Oil slipped on Thursday from a two-week high above $106 a barrel after Egypt's armed forces toppled its president, easing concerns over the threat of supply disruption in the Middle East. The Suez Canal, a vital waterway for oil shipments, was not affected by the unrest, but analysts said real and threatened supply disruptions in the Middle East, which pumps a third of the world's oil, and in other regions would support prices. "It is too early to say that the situation has calmed down, but the safe operation of the Suez, which is in the interest of both Persian Gulf countries and oil-consuming nations, seems to be guaranteed," Tamas Varga, an analyst at oil brokers PVM, said. Brent crude fell 82 cents to $104.94 a barrel by 1002 GMT, after rising as high as $106.03 on Wednesday. U.S. crude slipped 48 cents to $100.76, falling from a 14-month peak of $102.18 hit in the prior session. Besides the perceived risks to Middle East supply due to tension in Egypt, disruption to exports in Libya and Iraq and relatively scarce supply of Russian crude into the Mediterranean have tightened physical oil flows. "It is still too early to sound the all-clear," said Carsten Fritsch, an analyst at Commerzbank in Frankfurt. "Supply risks are likely to lend continued support to oil prices." The premium of Brent to U.S. crude <CL-LCO1=R> was just above $4.30 after having fallen sharply to reach $3.09 on Wednesday, its narrowest since December 2010. In addition to concerns about Middle East supplies, the U.S. benchmark received a boost when a weekly inventory report showed stockpiles fell by more than 10 million barrels, the biggest drop for the time of year since 2000. The European Central Bank is expected to leave interest rates unchanged on Thursday. The decision on rates will be announced at 1145 GMT and a news conference follows at 1230 GMT. Traders are also waiting for Friday's U.S. non-farm payrolls report for affirmation that economic recovery is on track. It could also give an indication on when the Federal Reserve will start to scale back its bond-buying programme. (Additional reporting by Florence Tan in Singapore; editing by Jane Baird)

https://theedgemalaysia.com/node/9012

Masteel expects to be profitable this year

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Its managing director and chief executive Datuk Seri Tai Hean Leng said after Masteel’s AGM here yesterday that he expected margins to improve to around RM150-RM160 per tonne, compared with around RM100 in the first quarter.   Masteel also aims to increase its revenue from exports to 50% in two to three years from around 20% to 25% currently. This is part of its move to offset rising competition in the local market following the liberalisation move announced by the government. The company made a net loss of RM30.45 million in the first quarter ended March 30, 2009, compared with net profit of RM19.14 million a year earlier. Sales were down 25.4% to RM130 million from RM174.37 million. Steel bar prices had risen to about RM2,000 a tonne after dropping to a low of RM1,600 in the first quarter but were still way off the RM3,800-level achieved in July last year, Tai said. This article appeared in The Edge Financial Daily, June 19, 2009.

https://theedgemalaysia.com/node/25694

Additional electoral roll bill on display from today

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KUALA LUMPUR (Jan 21): The Election Commission (EC) has put the Additional Electoral Roll Bill (DPT Bill) for Q4/2013 on display at 930 locations nationwide for two weeks starting today. Public Relations Officer Sabri Said said in a statement today, the DPT Bill involves applications for voter registrations made in October, November and December last year. "The EC received a total of 28,059 voter registration applications consisting of 21,754 new voters and 6,305 applications for change of polling centres registered with the EC. "For new registrations, if the applicant's name is not listed, he may stake a claim by using Form B and sent it to the Registrar (State Director of Elections) for the registration area." Sabri said registered voters who wished to object to the inclusion of certain persons in DPT Bill may do so by using Form C. The objection can only be made against not more than 20 persons in accordance with sub-regulation 15 (3) Election Regulations (Registration of Voters) (Amendment) Act 2012 and sent to the registrar (State Director of Elections) for the registration area. "During the display, the EC will also list the names of voters who will be removed from the electoral roll. "The basis for removal include that the voters have died, stripped of citizenship, or retired from the Armed Forces or Police which means they lose their eligibility as postal voters and others." The DPT Bill will be displayed at the state election offices, computerised post offices, government office complexes, district/land offices, municipal/district council offices. For inquiries about DPT Bill, the public can contact the EC headquarters at 03-88856565 or fax 03-88889117 or any state election office. The public can also visit the EC website at www.spr.gov.my to check the DPT Bill.

https://theedgemalaysia.com/node/58832

#Tong Kooi Ong blogs* Tenaga powers up

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LONG shunned by investors in favour of the independent power producers (IPPs), Tenaga Nasional Bhd (TNB)’s prospects are now powering up nicely. Investors have historically preferred the IPPs over Tenaga for their earnings certainty and consistent dividends. Much of the IPPs’ appeal, ironically, has been at the expense of Tenaga. This week’s tariff hike is only one of many re-rating catalysts. More importantly, we believe the government is becoming more receptive to tariff hikes to ensure that the national utility has the financial capability to sufficiently invest for the country’s growing power needs. Thus, we expect more gradual tariff hikes ahead. On its own, Tenaga is employing a more aggressive approach in expanding its own generating capacity, and is taking on more market share after having lost out to the IPPs over the last two decades. Its cost outlook is looking good, as the company controls its fuel cost mix and benefits from low coal prices. Tenaga is also shaping up to be one of the market’s cheapest large cap stocks with a decent yield to boot. The tariff hike announced this week, combined with higher capacity, will give earnings a major lift over the next two years. The stock is currently trading at P/E multiples of only 13.2 and 10.8 times for FYAug14-15, with a net dividend yield of 3-3.7%, comparable to bank deposit rates. Demand for electricity is expected to grow by between 3.5-4% per annum going forward. With the tariff increase, Tenaga’s turnover is estimated to grow by some 10% pa, on average, for the next two years. Cost-wise, things are also looking good for Tenaga. Thermal coal prices have fallen well off their peak. They averaged as high as US$142 per tonne in January 2011, and are currently selling for around US$85 per tonne. Prevailing market forecasts for the next few years are modest, with prices ranging from US$80-US$100 per tonne. This will help keep a lid on Tenaga’s future fuel bill. Coal is the cheaper fuel compared to gas and oil. Its per unit cost is roughly 11 sen compared to about 13 sen for subsidised gas and up to 35 sen for imported LNG. Tenaga is building proportionately more coal plants. The coal-fired Manjung 4 and 5 with total capacity of 2,000MW are slated to commission in FY15 and FY18, respectively, while only 1,000MW of gas-fired plant is planned for FY16. It is also commissioning two hydro plants which have zero fuel cost. These have a total capacity of 637MW and will be commissioned in FY16. In short, the overall fuel cost per unit generation is expected to be relatively steady while the company builds up its own capacity. We forecast Tenaga’s net profit will rise to nearly RM4.7 billion in FY14 and RM5.7 billion in FY15 – up from RM4.12 billion in FY13, excluding unrealised forex gains. At the current price of RM10.94, its shares are trading at 13.2 and 10.8 times our estimated earnings for the two years. In line with the higher earnings and operating cash flows, we expect Tenaga to raise its dividends to about 33-40 sen per share in FY14-FY15, respectively. That will earn shareholders net dividend yields of 3-3.7%. Based on our forecasts, its balance sheet will remain strong with gearing estimated at 39% and 36% for the two years. A more detailed analysis is carried in The Edge Malaysia this week. Tong Kooi Ong is executive chairman of The Edge Media Group. Feedback is welcomed at www.tongkooiong.com

https://theedgemalaysia.com/node/74132

MAA sells MAAKL for RM53m

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KUALA LUMPUR (Nov 13): Insurer MAA Group Bhd (MAAG) is selling its entire stake in 55%-owned fund management subsidiary MAAKL Mutual Bhd for RM53.06 million. In a statement to the exchange today, MAAG said the buyer is Manulife Holdings Bhd which intends to acquire 100% of MAAKL from other shareholders of the MAAKL. The proposed deal values the entire stake in MAAKL at RM96.48 million. MAAG said the sale of MAAKL allows the seller to unlock the value of the asset. MAAG said : "The proposed disposal represents an excellent opportunity for the MAAG group (the group) to unlock the value and realise its investment in MAAKL Mutual at a more than satisfactory price. "It will allow the group to re-strategise and re-deploy its financial and capital resources which may include using the disposal proceeds for future business and investment opportunities and/or for the additional capitalisation of MAA Takaful Bhd and MAAG." The other shareholders of MAAKL are Khyra Liberty Sdn Bhd, Edmond Cheah Swee Leng, Wong Boon Choy and Nge Koh Nguon.

https://theedgemalaysia.com/node/11851

Stocks To Watch: Index-linked stocks, AirAsia X, YTL Corp, MAHB, Petra Energy, Muhibbah

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KUALA LUMPUR (Feb 4): Index-linked stocks may continue to be hit tomorrow if foreign selling of equities in Asia’s emerging markets continues unabated. The FBM KLCI fell 1.4% at market close today. But if the selloff is seen as overdone, stocks that have been beaten down today may stage a rebound. In a report today, Societe Generale (SG) said that equities of emerging markets in Asia are no longer appealing and the current derating process, which is at its initial stage, may intensify in the coming months. The French multinational bank said fiscal tightening measures by the US government had exposed the weaknesses of emerging equity markets, as they were the main beneficiaries of the US quantitative easing (QE) programme. “However, after reaping profits over the last five years, what was considered a yield-attractive destination became a risky area when initial signals regarding a future tapering of the Fed programme were sent back to the market at the end of May 2013,” said the bank. The deterioration in the balance of payments of ASEAN countries like Malaysia, Indonesia, Thailand and the Philippines had also triggered substantial outflows since the end of May 2013, and this continued to accelerate. But UBS AG CEO Sergio Ermotti said today the selloff in emerging-market assets that sent the benchmark equity index to the lowest valuation since the 2008 financial crisis may have gone too far. Global investors pulled US$6.3 billion from developing-nation equities in the week through Jan. 29, the biggest outflow since August 2011. AirAsia X Bhd (AAX) today announced that its unit Thai AirAsia X Co. Ltd (TAAX) has been given the nod to operate in Thailand. The low-cost long haul carrier said “TAAX has officially received the approval from the Department of Civil Aviation of Thailand for the Air Operator's Certificate (AOC) on 3 February 2014.” It added that with the AOC, TAAX would now commence application for operating permits and slots to its intended international routes. It said TAAX would lease two Airbus 330-300 from a subsidiary of the company in its first year of operations. AAX will hold 49% of the share capital of TAAX. The carrier also announced that Nadda Buranasiri has been appointed CEO of TAAX. YTL Corporation Bhd announced today that its wholly-owned subsidiary, YTL Hotels & Properties Sdn Bhd (YTLHP), has acquired Thermae Development Company Ltd, the operator of Thermae Bath Spa complex. YTLHP bought the entire issued and paid-up share capital of Thermae Development for a total of RM65.2 million (£12,000,000). “The acquisition is not expected to have any material effect on the earnings, gearing and net assets of YTL Corp group for the current financial year.” Malaysia Airports Holdings Bhd (MAHB) said today the main contractor for its new low-cost terminal klia2 has missed the Jan 31 handover deadline. The operator of Malaysia’s 39 airports announced it has yet to receive the certificate of completion and compliance (CCC) for the klia2 terminal building from UEMC-Bina Puri JV, scheduled on Jan 31. The klia2 terminal building is targeted to open on May 2, 2014, but many analysts believe this deadline could again be pushed to a later date. Without the contractor’s handover of the main terminal, MAHB will not be able to carry out the required rehearsals for operations of the new budget terminal — touted to be the world’s largest — before opening its doors to the public on May 2. Petra Energy Bhd said its joint venture company working on Petronas’ risk service contract (RSC) has discovered oil. Petra Energy stated that Petroliam Nasional Berhad (Petronas) had announced the first oil production from the Kapal, Banang & Meranti (KBM) Cluster fields, offshore Peninsular Malaysia. The production commenced on Dec 16, 2013. The initial production rate from the cluster were over 10,000 barrels of oil per day (bopd), with peak production reaching 13,000 bopd. The KBM Cluster, operated by Coastal Energy KBM Sdn Bhd, was developed with Petra Energy’s joint venture partner under a RSC since June 2012. “The KBM Cluster is an eight-year development project, with Kapal being in its first development and production phase.” Muhibbah Engineering Bhd’s unit has secured a contract worth RM30 million for steel structure erection works in Bintulu, Sarawak. The company said its wholly-owned unit Muhibbah Steel Industries Sdn Bhd had on Jan 30, 2014, accepted the letter of award from JGC Sdn Bhd (JGC) for the project involving Petronas LNG Train 9 in Bintulu. JGC is the main contractor of Petronas LNG 9 Sdn Bhd, a wholly owned subsidiary of Petronas. Muhibbah said the contract is scheduled to commence in February 2014 with a targeted completion date by the second quarter of 2015. The contract was expected to contribute positively to its earnings for the current and future financial years, said Muhibbah.

https://theedgemalaysia.com/node/30075

#Today's Diary* What to expect on May 17, 2010

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1. Indonesian business delegates to visit Selangor at SSIC Bhd, No. F1-2-G, Jln Multimedia 7/AG, CityPark, i-City, Shah Alam, Selangor at 8.40am 2. Signing ceremony of joint-venture agreement between Itramas Technology, Malaysia and Flammini Group Tecnopolo SpA, Italy for the development and marketing of green technology lighting products and applications to Italy and Europe at Grand Putrajaya Ballroom II, Marriott Hotel, Putrajaya at 9.30am 3. Nestle organises forum discussion on Committed Towards Sustainable Palm Oil and Biodiversity at Jasmine Room, Lower Lobby, One World Hotel, PJ at 10.30am 4. Weststar Aviation Services Sdn Bhd certification award ceremony at Senja Restaurant, The Saujana, Selangor at 11am 5. Opening of the first Samsung Digital Centre in Kuala Selangor at 43 & 45, Jln Medan Niaga 2, Medan Niaga Kuala Selangor, Selangor at 11.30am 6. Announcement of MAHB financial results for the first quarter ended 31 March 2010 at Auditorium, Malaysia Airports Corporate Office, Persiaran Korporat KLIA, Sepang at 1.30pm 7. Dialogue session between The Chief Minister of Selangor and Selangor Business Council members at Plenary Hall, Level 1, SACC Convention Centre, No 4 Jln Perbadanan 14/9, Shah Alam at 3pm 8. MAS 1st quarter 2010 financial results announcement at Lecture Theatre 2, Level 2, West Wing, Malaysia Airlines Academy, Kelana Jaya, Selangor at 5pm 9. Official launch of Malaysia Plus, the first Malaysian luxury magazine in Russian language that focuses solely on Malaysia, at Impiana Hotel KLCC at 6.30pm

https://theedgemalaysia.com/node/40280

Tan Chong Motor to venture into luxury cars manufacturing

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KUALA LUMPUR: Tan Chong Motor Holdings Bhd will invest RM285.0 million to manufacture and assemble luxury passenger cars at the Kota Kinabalu Industrial Park in Sabah. Tan Chong said on Friday, Nov 12 it had received an approval from the Ministry of International Trade and Industry for a manufacturing licence at the industrial park to manufacture and assemble luxury passenger vehicles and commercial vehicles. “The approval letter is subject to, among others, the condition that the manufacturing and assembly activities shall be for luxury passenger cars with engine capacities of 1,800cc and above, at on the road price of not less than RM150,000,” it said. Tan Chong said the project would focus on the construction of a manufacturing facility for 4-wheel drive vehicles with an initial planned production capacity of 3,000 units per annum. “The group plans to invest up to RM285 million for the project (including purchase of 50 acres of land in the industrial park), which will be implemented over several phases,” it said. The Sabah-owned industrial estate is 25 km north of Kota Kinabalu and occupies 8,320 acres, and it is set to be the next major centre of growth for the state. Tan Chong said the state government’s plan was to establish Sabah as the gateway to the Brunei-Indonesia-Malaysia-Philippines-East ASEAN Growth Area (BIMP-EAGA).

https://theedgemalaysia.com/node/85454

MAS-OR closes at 12% discount to share price

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KUALA LUMPUR: Malaysian Airline System Bhd’s (MAS) rights entitlement (MAS-OR) closed sharply lower at 10 sen — 42.9% below its reference price of 17.5 sen in heavy trade on its maiden trading day yesterday. This happened as the underlying MAS shares fell 7.4% or 3 sen to 37.5 sen as investors cashed in on profits after the market rally on Monday. “There is value [on MAS-OR and MAS underlying shares] at current levels relative to our target price and some clients have taken positions. But it is still early to tell whether there is a good arbitrage opportunity on MAS-OR,” said Maybank Investment Bank’s (Maybank-IB) aviation analyst Mohshin Aziz, who has a “buy” call and 46 sen target price on MAS. MAS-OR — which investors can use to subscribe to underlying MAS shares at 23 sen apiece — shed 7.5 sen to close at its day low of 10 sen. This reflects roughly 4.5 sen or 12% discount to MAS’ 37.5 sen  close yesterday. “Some profit-taking (on the underlying MAS shares) is normal after the run-up,” said Mohshin, pointing out that MAS gained 26.6% or 8.5 sen over three market days to 40.5 sen on Monday, before falling 3 sen or 7.4% to close at 37.5 sen yesterday. The reference price of 17.5 sen for MAS-OR is the difference between MAS’ 40.5 sen closing price on Monday — one day before MAS-OR commenced trading — and the 23 sen rights subscription price. Analysts are confident that the national airline’s 4-for-1 rights issue would succeed due to Khazanah Nasional Bhd’s irrevocable undertaking for 69.37% of the rights, which would raise the minimum RM2.13 billion required for the exercise to go through. As at March 31, MAS had RM11.41 billion debt and has approved RM6.89 billion in capital expenditure, including for aircraft purchases through 2017. But Maybank-IB’s Mohshin said MAS has enough capital to last for at least two years, even if only 70% of the rights shares are taken up, considering that there are other financing options. “RM2.2 billion is a significant capital injection. It is not going to be magic [instant turnaround] but we take comfort in the fact that the business itself is in positive territory … we believe there will be significant cost savings this year from new aircraft and productivity improvement,” he added. Another local analyst who has a “sell” call on MAS, however, thinks it is “safer” to wait until after the rights issue is completed “unless MAS falls below 30 sen”, which is below its 52-week low of 31.3 sen on Feb 21, 2013. There were six “sell” calls on MAS versus four “buys” calls while two others were “neutral”, Bloomberg data showed. Price targets range between 29 sen and 48 sen. MAS-OR will cease trading on May 14 and the last day of subscription for the rights is May 21. This article first appeared in The Edge Financial Daily, on May 8, 2013.

https://theedgemalaysia.com/node/61636

MATRADE: Malaysian firms notch up sales of US$54.3m at Gulfood 2012 in Dubai

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KUALA LUMPUR (March 27): Malaysian participants notched up sales totalling US$54.3 million during the four-day Gulfood 2012 exhibition held in Dubai last month. In a statement Tuesday, the Malaysia External Trade Development Corporation (MATRADE) said the exhibition in Dubai, with its over one million square feet of exhibition space allocated for approximately 5, 000 exhibitors, proved a feasible avenue to showcase Malaysian products to a very lucrative market. MATRADE said of the Total sales concluded amounting to US$54.3 million, potential sales volume was recorded at US$29.9 million and immediate sales at US$24.4 million. “The biggest contributors included; palm oil with 53.3 percent from total sales, followed by confectionary 17.3%, and beverages 17.1%,” it said. MATRADE said its participation this year was particularly significant as the Gulfood exhibition saw a record of 110 national pavilions hosting products from various countries. The agency said this year marked its eighth participation and involved 50 companies supplying various food products and beverages. Total enquiries received were 9,602; derived largely from GCC, India, Pakistan, Bangladesh, Central Asia, Iraq, Iran and Africa, it said. Gulfood is one of the largest and most significant trade events for the food and beverage industry in the UAE. This year’s event which was held at the Dubai International Convention and Exhibition Centre attracted in excess of 70,000 trade visitors from more than 150 countries. In recent years, Gulfood has gaineda reputation as the gateway for business opportunities within the region, it said. UAE carries an important strategic role as the primary trade hub for the Gulf region and also acts as an entry point, showcase and regional leader for new products, outlets and other trends. It serves an adequate platform for Malaysian businesses to position and penetrate the Middle Eastern market, said MATRADE.  

https://theedgemalaysia.com/node/51314

MCA: Don't brand Chinese M'sians as unpatriotic based on their voting choice

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Last Updated: 2:10pm, Dec 20, 2013 KUALA LUMPUR (Dec 20): The patriotism of Chinese Malaysians should not be judged based on who they voted for in the general election, an MCA leader said today, stressing that the community has proven to be good citizens. "A person’s choice of whether to support or vote for the ruling party or not should not be equated with patriotism or the lack of it, " said outgoing Wanita MCA chairperson Datuk Yu Chok Tow. Yu said the Chinese community has been law abiding, diligent in pursuing education, paying taxes on time and contributing to the economy. "Voting in an election is only one of the many duties and obligations of a citizen. Voting is not the only duty of any citizen," she said in when addressing the Wanita MCA annual general assembly at Wisma MCA. "Election is a one-time affair and voters’ choice may change over time. But the overall interest of a nation is for the long term. "No one should accuse the Chinese Malaysians as being ungrateful or not patriotic simply on the basis of their voting choice" she added. Yu noted that Prime Minister Datuk Seri Najib Razak had announced measures to empower Bumiputeras in the economic sector. "It is clear that it was aimed at thanking and rewarding the Malays and Bumiputeras for their support to the Barisan Nasional during the 13th General Election. "In the political reality of political rivalry, there is practical political consideration when a ruling party rewards or treats its supporters well," she said. However, any policy empowerment extended to the Bumiputeras should not lead to any marginalisation of other ethnic communities, she stressed. In her speech, Yu also pointed out the country's poor standing in the latest Global World Gender Report, where it was ranked 102nd among 136 countries in the region. "The government needs to redouble its efforts to improve, uplift and empower women’s overall political and economic participation," she said. On MCA's future, Yu said the party desperately needs to undergo substantial reform or it will sink into oblivion. "Reforms are vital and painful. It is a formidable task and a daunting challenge. MCA has no other choice but to bite the bullet. We must rise to the challenge and MCA must prevail!" Yu noted that the 64-year-old party has contested in a total of 13 general elections, and has faced the DAP in 9 of them with 6 wins and 3 losses. "This shows that Chinese voters supported MCA more times than the DAP. As long as we are determined to work harder and show a greater level of political will and courage, we will be able to win over the trust of the Chinese community," she added. For more stories, go to www.fz.com, the website for freedom of expression and fairness in articulation.

https://theedgemalaysia.com/node/95048

Market Open: KLCI falls 0.4% in early trade

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KUALA LUMPUR (Aug 7): The FBM KLCI fell 0.4% in early trade on Wednesday, in line with the weaker overnight close at Wall Street and lower opening at most regional markets, ahead of the extended weekend with the Hari Raya Aidlifitri holidays. At 9.10am, the FBM KLCI fell 7.27 points to 1,777.37. Losers led gainers by 110 to 79, while 131 counters traded unchanged. Volume was 57.77 million shares valued at RM48.84 million. The top losers included Petronas Gas, PPB, DKSH, Malaysia Smelting Corp, BAT, BIMB, AMMB, Petronas Chemicals, Public Bank and Axiata. Hwang DBS Vickers Research in a market preview Wednesday said Wall Street was weak last night, adding that key US equity indices lost between 0.6% and 0.7% at the closing bell on concerns that the US Federal Reserve might start to slow down its bonds purchase program soon following the announcement of buoyant economic indicators. It said the poor external sentiment could spill over to the Malaysian bourse, which is on a half-day session today. “Its benchmark FBM KLCI is expected to back off from the 1,785 resistance line as trading slows ahead of the long festive break. “In terms of news flows, the index of industrial production (IPI) report for June is due for release this afternoon. On the corporate scene, of probable interest today are stocks like: (a) Puncak Niaga, which has been given a job by Petronas for a pipeline replacement project (contract value was not disclosed); (b) Kinsteel, as it plans to raise funds by undertaking a private placement of up to 10% of paid-up share capital at an issue price to be determined later; and (c) Faber, whose shares will continue to see active trading after jumping by 30% yesterday in response to its proposed acquisition of new businesses from its major shareholder,” it said. Asian stocks fell to their lowest since mid-July early on Wednesday following a second day of losses on Wall Street as uncertainty about when the Federal Reserve will start to reduce stimulus kept a leash on market bulls, according to Reuters. The dollar ground lower against a basket of major currencies. It hit a six-week low against the yen, which in turn weighed on Japanese stocks, it said.  

https://theedgemalaysia.com/node/91897

Market Close: KLCI up 0.1% on US, China equity gains

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KUALA LUMPUR (July 10): The FBM KLCI rose 2.22 points or 0.1% as investors took the cue from overnight gains in US markets, analysts said. This is despite China announcing weaker external trade data today. At 5pm, the KLCI settled at 1,768.71 on gains in stocks like Genting Malaysia Bhd and Public Bank Bhd. "Asian markets had risen on overnight gains in US markets," TA Securities Holdings Bhd research head Kaladher Govindan told theedgemalaysia.com over telephone. "But the outook for Asian equities is volatile in anticipation of cuts in the US' quantitative easing scheme," Kaladher added. Weaker trade data from China had however not dampened sentiment. This is in anticipation that policymakers will undertake monetary easing to sustain the world's second-largest economy. The Shanghai and Shenzen Composite rose 2.17% and 2.85% respectively. Reuters reported that Chinese shares rose sharply on Wednesday, with traders citing talks that China's central bank may ease policy to boost growth after the country's exports fell for the first time in 17 months. China's exports fell 3.%  in June from a year earlier, while imports dropped 0.7%, severely missing market expectations and reinforcing signs of a second-quarter economic slowdown in the world's second-largest economy. Beijing also warned of a "grim" outlook for trade. Across Bursa Malaysia, 1.23 billion shares worth RM1.7 billion changed hands. There were 308  gainers versus 441 decliners. The top gainer was Coastal Contracts Bhd while Panasonic Manufacturing Malaysia Bhd led decliners. The most-active entity was newly-listed AirAsia X Bhd. Analysts said gains in AirAsia X shares might have been curbed by "selling pressure" from investors who had acquired the stock at lower prices prior to its initial public offering (IPO). An analyst said these investors might have bought shares of the long-haul budget airline at levels below the IPO price of RM1.25 each for institutional and retail investors. "I suspect selling pressure from pre-IPO investors as they are not subjected to moratorium," the analyst said. Across Asian markets, Japan's Nikkei fell 0.39% while Hong Kong's Hang Seng rose 1.07%. Nearer to home, Singapore's Straits Times was up 0.32%.

https://theedgemalaysia.com/node/75487

TH Heavy Engineering, YTLP, SILK, ELK-Desa

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KUALA LUMPUR (Dec 17): The FBM KLCI could extend its losses on the still continuing external uncertainties that have kept most global markets edging lower toward the final days of 2012. European shares fell at the start of what is likely to be a volatile week on Monday given uncertainty over US budget talks, according to Reuters. Many in the market believe a deal on the US budget will be struck, but any news to the contrary could open the way to fresh index falls, especially as traded volumes remain thin, it said. Among the stocks that could be in focus on Tuesday on Bursa Malaysia are TH Heavy Engineering Bhd (THHE); YTL Power International Bhd (YTLP); SILK Holdings Bhd; and ELK-Desa Resources Bhd THHE — formerly known as Ramunia Bhd — is in the midst of finalising a joint venture (JV) agreement with an international oil and gas engineering, procurement, construction and installation (EPCI) company later this week. On Monday, theedgemalaysia.com — citing a source close to the company — said that the JV would be awarded with a risk service contract (RSC) to develop marginal oilfield in Malaysia. This will be among major contracts that the group clinches after being lifted out from Practice Note 17 (PN17) status at end October 2012, it said. YTL Corporation Bhd has stated its intention to eventually privatise its 51.4%-subsidiary YTLP, according to a report released this morning by Maybank Investment Bank Bhd (Maybank IB). A check with Bursa Malaysia and YTL's website showed that it had not made any official public announcement on the privatisation move. But on Monday morning, Maybank IB said its present target price revision of YTLP to RM1.80 from RM2.20 while maintaining their "Buy" call is centered on the eventual privatisation of the subsidiary. SILK reported a first quarter (1QFY13) profit after tax and minority interest (PATMI) of RM2.82 million, reversing the loss after tax and minority interest of RM 2.19 million recorded in the previous year’s corresponding quarter. Chairman Datuk Mohd Azlan Hashim in a statement Monday said the company continued to solidify its financial footing with the profit recorded. "In addition, it remains cash flow positive on an operational basis. Operationally, the group has also continued to advance," he said. Meanwhile, ELK-Desa — the spin-off from Unico-Desa Plantations Bhd's hire purchase (HP) operations — will be listed on the Main Market of Bursa Malaysia on Tuesday. The company is set to raise RM29 million gross proceeds from its initial public offering (IPO). The shares are priced at RM1.16, valuing the HP business at a price-earnings ratio of 9.1 times, based on earnings per share of 12.75 sen for the financial year ended March 31 (FY12) and 7.7 times its annualised earnings of 15 sen per share for the period ended Aug 31. ELK-Desa will issue 25 million new shares, of which 62.5% or 15.63 million shares are earmarked for bumiputera investors approved by the Ministry of International Trade and Industry. ELK-Desa does not have a dividend policy currently. However, its board intends to recommend and distribute about 50% of its profit to shareholders for the fiscal year ending March 31, 2013, its prospectus read. The IPO of Elk-Desa Resources has been oversubscribed 11.6 times.

https://theedgemalaysia.com/node/3777

Weak US$ not big bullish factor for CPO

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Despite the bearish outlook for crude palm oil (CPO), prices have been getting a boost from a weakening US dollar since last Thursday, even as Intertek Testing Services — an independent cargo surveyor — reported an 8.9% month-on-month drop in Malaysia’s palm oil exports in the first 20 days of March. On the same day, news of the removal of import duties on crude soyabean oil in India, which puts it on a level playing field with CPO, did little to curb the increase in CPO price. The greenback lost the wind in its sails when the US Federal Reserve announced last Wednesday that it would buy up to US$300 billion (RM1.09 trillion) in treasuries as well as hundreds of billions more in mortgage-backed securities in its efforts to revive the moribund US economy. The move sent the US dollar plunging against the euro while crude oil surged above US$50 a barrel. Meanwhile, CPO third month futures inched higher, closing at RM1,985 per tonne on the Bursa Malaysia Derivatives Exchange last Friday. It had opened the week at RM1,932; it then hit a low of RM1,902 on Monday before going on an uptrend on Thursday. The performance of palm oil stocks was mixed. Wilmar International Ltd closed at S$3.22 (RM7.75), or up 6.6% week on week. Sime Darby Bhd rose 4.6% while IOI Corp Bhd and Kuala Lumpur Kepong Bhd declined 1.6% and 3.8% respectively.   Will the weak US dollar send investors and speculators rushing to commodities as they did in the last few years before the collapse in the financial markets? Is the uptick in CPO prices sustainable or is it just a flash in the pan? The analysts and market players The Edge spoke to are sceptical about the sustainability of CPO’s price strength and most are mindful of the bearish factors presented at the Palm & Lauric Oils Conference and Exhibition held two weeks ago. At the conference, speakers forecast CPO prices at RM1,400 to RM2,300 for various timeframes within 2009. “What you’re seeing right now is just speculative play and paper trading, which doesn’t reflect the real scenario,” says Jim Teh, a palm oil trader with Interband Group, citing the potentially high level of CPO stocks from Malaysia and Indonesia as a dampener on high CPO price levels. Teh adds that the small number of futures contracts traded shows that only local speculative players are in the market currently while the foreign funds are still absent. Prices may be supported in the immediate term, but largely due to temporary speculative play and not based on demand and supply fundamentals. James Ratnam, investment analyst at TA Securities Holdings Bhd, agrees that ultimately, long-term CPO price sustainability is still largely dictated by fundamental supply and demand outlook. Although currency movement plays a role, it is only one of the factors dictating CPO prices by influencing the price discount between soyabean and CPO. “Historically, CPO prices are negatively correlated with RM/US dollar movement. The reason being a weak ringgit would make CPO more competitive compared with its competing oil, namely soyabean oil. Likewise, a strong ringgit would translate to narrower price discount with soyabean,” he explains. Malaysia’s inventory of CPO continued to decline for the third straight month in February to 1.56 million tonnes from November’s high of 2.27 million tonnes, according to data released by the Malaysian Palm Oil Board. The decline could be attributed to lower CPO production of 1.18 million tonnes in February, which was 10.7% lower than the month before. Exports were strong too, rising 18% from a year ago although it fell 7.2% m-o-m. February’s low production is typical of the oil palm fruit production cycle, currently in its low production season. Planters often cite the 45:55 ratio when talking about the oil palm production cycle, where 45% of the year’s production comes from the first half during the low production period and 55% from the second half in the high production season. Hence, the bearish view of those who believe CPO prices at current levels may not be sustainable once fruit production picks up. Furthermore, CPO’s discount to soyabean oil has been narrowing, eroding CPO’s price attractiveness over that of soyabean oil.    An industry player says while the US dollar’s weakness is a bullish factor for CPO, he does not expect a return of the stratospheric price level seen in early 2008, given investors’ risk aversion and the poor global economic outlook. “We must remember that we are still in the midst of a recession and while investors’ risk appetite may be returning, it will be minimal. It (the weak dollar) is not a big bullish factor but it is still positive. However, at the end of the day, it goes back to supply and demand,” he says. For CPO sales done in US dollars, oil producers will have to ask for higher prices, given a weaker dollar. The industry player does not view this as a major deterrent to buyers as long as CPO trades at a discount to soyabean oil. “It is okay as palm oil is still the cheapest oil to produce,” he adds. An analyst with a foreign brokerage house says she is not convinced the dollar weakness will last and prefers to wait for a stronger case in support of the US dollar debasement story to emerge. She says the quantitative easing measures taken by the US government is not the solution to the financial crisis. “Although we have been talking about US dollar debasement for a while, we don’t think quantitative easing is the solution. Our house view is you have to take the toxic assets off the banks and nationalise them. Until then, we’re not convinced that things are hunky dory, it’s just a stopgap measure,” she adds. Given the view on US dollar, she says CPO’s price strength will not be sustained. “It’s just a bear market rally,” she says. At the recently concluded palm oil conference, speaker Dorab Mistry of Godrej International Ltd, said given that the US is a major debtor nation, the dollar must fall, perhaps in late 2009 or 2010. “If and when that happens, we shall all have to scramble to buy commodities and become devotees of that great investment guru Mr Jim Rogers,” he said in jest. Based on what analysts and industry players are saying, the scramble is not likely to happen any time soon. This article appeared in the Corporate page, The Edge Malaysia, Issue 747, March 23-29, 2009  

https://theedgemalaysia.com/node/17700

CIMB: Attractive valuations for O&G stocks

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In a note last Friday, CIMB Research said service providers which operated fabrication yards and tank terminals, besides those that offered offshore infrastructures and maintenance services, were expected to benefit under the current landscape. “We expect the performance of most companies in our O&G portfolio to improve as the year progresses. “The rising oil price provides further impetus to order book growth. We remain bullish on the O&G  sector, anchored by growing order books and prudent management,” CIMB said.Meanwhile, the sector’s valuations are deemed undemanding at current average price-to-earnings ratio (PER) of 10 to 13 times, compared with 19 times in July 2007. CIMB said valuations of Malaysian O&G stocks were more attractive than their Singaporean peers. The research house, which maintained its overweight call for the Malaysian O&G fraternity, has also retained its stock recommendations and fair values, besides players’ earnings estimates. It was reported recently that Petroliam Nasional Bhd (Petronas) may consider listing more subsidiaries and  initiate more bond issues to raise funds to finance its capital expenditure (capex). These initiatives, which will depend on  market condition besides the availability of funds and liquidity, is in anticipation that the cost of extracting hydrocarbon resources will be more expensive against the backdrop of Petronas’ larger global operations now, its president and chief executive officer Tan Sri Mohd  Hassan Marican had said. Petronas recently sold US$4.5 billion (RM15.88 billion) worth of bonds, the largest US dollar-denominated sale by an Asian entity outside Japan so far this year. The national oil company has earmarked US$12 billion as capex for current financial year ending March 2010 and is initiating cost cuts to counter the impact of higher charges by service providers and costlier steel. Among O&G stocks, Kencana Petroleum Bhd is CIMB’s top pick due to the support service provider’s  exciting prospects, and rig-building and drilling ventures. These initiatives have placed the firm ahead of  its fabrication peers, and on par with established drillers. “We believe Kencana’s news flow and order book replenishment for the next few months will be exciting. Already over the past few weeks, it has topped up its order book by some RM200 million,” said CIMB, which rated Kencana as outperform. The stock is deemed fairly valued at RM2.57, a 33.2% upside from the its closing price of RM1.93 last Friday. Crude oil for October 2009 at the New York Mercantile Exchange stood at US$68.38 a barrel at 1.55 pm last Friday. The commodity’s price had risen over 50% so far this year.

https://theedgemalaysia.com/node/82229

Dr M: Malaysia's economic growth is very real

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PETALING JAYA (April 2): Citing the hive of activity at the Subang airport, former prime minister Tun Dr Mahathir Mohamad asserted Malaysia's economic growth was real. "Only the blind and the deaf will maintain that it is not real," he wrote in his blog, chedet.cc today. In pointing out more examples, Dr Mahathir said the rebuilding of Terminal 2 to cater to the needs of Firefly's turboprops and that of other local airlines; foreign manufacturers of helicopters such as Eurocopter and Cessna general aviation housing its servicing and engineering facilities in Subang. He also cited how Asian airlines often sent their passenger jets to be serviced by Malaysian aerospace companies as proof of economic growth. Dr Mahathir reasoned that "clearly a lot of investments" were going into the reactivating of Subang. "It reflects the growth of the aerospace industries in Malaysia, which contributes toward Malaysia's economic growth," he wrote. Last month Prime Minister Datuk Seri Najib Razak said Malaysia's gross national income (GNI) per capita rose 49% since he took over the administration in 2009. Najib said that GNI per capita had rose from US$6,670 (RM20,586.96) in 2009 to US$9,970 in 2011. The opposition, in particular DAP supremo Lim Kit Siang took Najib to task, arguing that the World Bank showed that the figure was a more modest 16.2%. Lim further pointed out that the GNI per capita growth during the same period was behind neighbouring Philippines (18.18%), Thailand (19%), Singapore (19.15%) and Indonesia (36.1%).

https://theedgemalaysia.com/node/93104

#Hot Stock* PRK driven to 7-yr high by privatization talk, speculative mid-cap buy

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KUALA LUMPUR (July 22): Market talk that Perak Corporation Bhd (PRK) could be privatized and that it is possibly one of the good mid-cap stocks favoured by funds drove up its share price in morning trades. At 12.30 pm noon break, PRK rose 22 sen or 8.7% to RM2.76 per share, after hitting a high of RM2.81 earlier, on trades of some 1.4 million shares. The stock price of the third top gainer across the exchange was at a high of more than seven years. “There is market talk that PRK will either be privatized or be taken over in a reverse takeover. That’s why the stock shot up today,” said a senior dealer. The dealer noted that since May, the share price of PRK has been climbing steadily. Compared to RM1.45 in early May, the stock price has almost doubled. Another dealer noted that PRK is also one of the good mid-cap companies which investment funds may be looking at in response to the latest policy move. Prime Minister Datuk Seri Najib Razak recently made a call to government-linked investment funds to invest in mid-cap stocks that are well-managed. As net asset per share of PRK is RM4.65 as of end-March 2013, investors see room for the stock to rise. In the first quarter of this year, the company posted a net profit of RM6.8 million, up 46% year-on-year. This was gained on the back of a revenue of RM32.3 million, which was also higher by 46% year-on-year. Last year, it registered a net profit of RM38.1 million on revenue of RM157.4 million.   The company operates mainly infrastructure and township development. It is involved in the ownership and operation of Lumut Maritime Terminal that provides tuggage, pilotage, berthing, stevedorage, cargo handling, storage, and ancillary services; and operation of Lekir Bulk Terminal, a deep water seaport located in the Malacca Straits, Perak; and sale/rental of port related land.

https://theedgemalaysia.com/node/68182

#Stocks to Watch* Plantation-related stocks, KKB, KUB, Handal, Gunung Capital, Axiata

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KUALA LUMPUR (Sept 4): The FBM KLCI could extend its gains further on Tuesday after rising to a fresh all-time high a day earlier, in line with improved sentiment at most global markets. Asian shares inched up on Monday after US Federal Reserve chairman Ben Bernanke kept the door open for further stimulus if needed, but gains were capped by weak economic indicators across the region and caution over US data due later this week, according to Reuters. Bernanke stopped short of clearly signalling an imminent move last week, prompting investors to turn to reports from China to Australia that highlighted how the eurozone's debt crisis has eroded growth and threatened further slowdowns, it said. However, with US investors out for the Labour Day holiday, markets were likely to trade in a limited range, said Reuters. Expectations that central banks would take steps to boost growth increased after two Chinese surveys showed factory activity in world's second largest economy slowing more than expected in August, it said. Among the stocks that could be in focus on Bursa Malaysia are plantation-related counters; KKB Engineering Bhd; KUB Malaysia Bhd; Handal Resources Bhd; Gunung Capital Bhd; and Axiata Group Bhd. Plantation-related counters could draw some attention after crude palm oil (CPO) futures rose on Monday to above the RM3,000-per tonne mark. KKB subsidiary Harum Bidang Sdn Bhd has received a two-year contract with CMS Infra Trading Sdn Bhd (CMSIT) worth RM74.4 million to supply various steel pipes on an as and when required basis. KKB said on Monday the contract was for the supply of various concrete-lined mild steel pipes and mild steel mechanical couplings. "A written agreement will be entered into between Harum Bidang Sdn Bhd and CMS Infra Trading Sdn Bhd in due course," it said. Cahya Mata Sarawak Bhd (CMSB) is a major shareholder of KKB, and CMSIT is a subsidiary of CMSB. KUB unit KUB Power Sdn Bhd (KUB Power) has landed a contract worth RM33.9 million to install an electrical system in Tanjung Langsat, Pasir Gudang. In a filing on Monday, KUB said KUP Power received the contract from Bahru Stainless Sdn Bhd to supply and install a 275V Outdoor Conventional Single Busbar Electrical System. It said the contract tenure was for a period of 365 days. KUB said the contract would contribute positively to its earnings for the financial year ending Dec 31, 2012. Handal announced Monday that its wholly-owned unit Handal Offshore Services Sdn Bhd (HOSSB) has received a Letter of Award from Newfield Peninsula Malaysia Inc to provide crane maintenance services for NewField's production operations. The value of the contract is about RM4.7 million, and the effective date of the two-year service contract is Aug 29, 2012, with an option of one year extension, the company said in a filing with Bursa Malaysia. "The contract is expected to contribute positively to revenue and earnings and net assets per share of the HRB group for the financial year ending Dec 31, 2012, and thereafter," it said. Gunung Capital has entered into a joint venture (JV) agreement with Perak Hydro Renewable Energy Corp Sdn Bhd (PHREC) for the development of selected renewable energy mini-hydropower plants in Perak. According to a filing with Bursa Malaysia on Monday, the introduction of the Renewable Energy Act 2011 also provides a mandatory requirement for the utility to buy renewable energy power. The collaboration will involve the development of two plants, each with an estimated capacity of 10MW. The plants will be located at Telok Datok and Chenderoh, both alongside Sungai Perak. Gunung Capital will have a 70% shareholding in the JV, while PHREC will own a 30% stake in the JV entity, Gunung Hydropower Sdn Bhd. Axiata could extend its gains on Tuesday after its unit Celcom's voice-revenue in the first half grew by 6.2% to RM2.31 billion from the previous year as minutes of use (MOUs) per subscriber rose by 27.6% to 254 minutes. "I think we are possible the only Telco in Malaysia and one of the few in the world that is seeing a growth in the voice-segment. This was driven by our new pricing strategy and contributions from the various products we have launched," said chief executive Datuk Seri Mohammad Shazalli Ramly at a briefing Monday. Shazalli pinned the sharp increase in the voice minutes on Celcom's new dynamic billing system which allows it to optimise its new billing strategy. Unlike other players in the industry that charge by one minute or 30-second blocks, Celcom is charging 28 sen for 10 minute blocks. Celcom is a wholly-owned subsidiary of Axiata and contributed RM957.55 million or 67.7% of its parent's profits for the first half ended June 30.

https://theedgemalaysia.com/node/83013

Good gains from land disposal

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Gabungan AQRS Bhd (April 10, 94 sen) Maintain add at 93 sen with a target price of RM1.22: Gabungan AQRS Bhd has announced that Grand Meridian Development Sdn Bhd, a wholly owned subsidiary of AQRS The Building Co Sdn Bhd which in turn is a wholly owned subsidiary of the company, had on  April 8 entered into a conditional sale and purchase agreement (SPA) with Ocean Mix Sdn Bhd for the disposal of two contiguous parcels of freehold development land for RM50 million cash. The land is held under Geran 54243, Lot 3413 and HS(D) 55933, Lot 6154, both located in Mukim 6 in the  Seberang Perai Tengah district in Penang. The proposed disposal is expected to be completed by third quarter of 2013. One tract is located along the north-eastern side of the North-South Expressway and it adjoins the second tract on the north-western side of the expressway where the Juru rest and service area is located. The total combined land area of these two tracts is approximately 15.7 acres (6.34ha). Based on the company’s consolidated financial statements in December 2012, the net book value of the two pieces of land was RM31.6 million. An independent valuer’s report has ascribed their market value at RM35.8 million (implying a 39.7% premium from the proposed disposal price). At present, the land is vacant and fenced up. In view of the premium price being offered and after taking into consideration of the real property gain tax and expenses, the group is expected to recognise a one-off gain of RM15.4 million from the disposal. This will unlock more capital resources for the group to focus on its property development activities. In the southern region, there are two on-going projects in Johor, namely The Peak and another yet to be named project in Permas Jaya, with a combined gross development value of RM654 million. We are positive on the proposed disposal as we believe the disposal price of about RM73 per sq ft is above the average selling price in the area. We maintain FY13 headline net profit forecast pending the completion of the disposal. We maintain our price target of RM1.22 based on a target 2013 calendar year price-earnings of 8 times. We maintain our “add” call. — Affin IB Research, April 10 This article first appeared in The Edge Financial Daily, on April 11, 2013.

https://theedgemalaysia.com/node/29362

Asas Serba’s proposed takeover seen unlikely

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KUALA LUMPUR: Asas Serba Sdn Bhd’s RM50 billion offer to take over all tolled roads in the country with a promised 20% toll rate cut while maintaining the same profit margin is unlikely to materialise, said analysts. They said the largest operator in the country, PLUS Expressways Bhd, with a 63% market share and seen as key to the takeover offer, was unlikely to leave government hands. PLUS is 55% owned by government investment agency Khazanah Nasional Bhd directly and through UEM Group Bhd. “PLUS’ highways are matured toll roads and cash cows. The offer price would have to be quite high to entice the major shareholders to part with such returns. I don’t see the takeover as a possibility at present,” one analyst said. Another 28.3% of PLUS is owned by other government-related entities such as the Employees Provident Fund, Kumpulan Wang Persaraan (KWAP) and Permodalan Nasional Bhd (PNB) all of whom also depended on the toll road operator for the stability of returns, according to HwangDBS Vickers Research in a report yesterday. Asas Serba on Monday offered to give bond investors returns of 7% fixed annual interest, with an additional profit sharing element that it expects will add 2.5-5 percentage points, through a hybrid debt equity tool known as “dividend bonds”. At the same time, it intends to cut toll rates by 20% and maintain the rates until 2038. Asas Serba said this would save the government RM114 billion in toll compensation from now till 2038. On the other hand, a TA Securities Research analyst said Asas Serba’s deal “is workable”. He said such a large bond offering may strain the financial system but many operators, including PLUS, had high gearings, and if existing bondholders were willing to swap their bonds for new bonds in the new entity, the problem would be avoided. Asas Serba would be able to refinance the bonds at a later date to lower interest costs if its operations and assets are viewed more positively, he added. “If the price is right, the major shareholders would be willing to sell,” he said. The analyst sees synergies from the consolidation of tolled roads in Malaysia that could lead to cost savings including a more efficient connection between highways than they are now under separate ownerships, the analyst said. Spearheading Asas Serba’s bid is its chairman Datuk Syed Amin Aljeffri, who is also the chairman of the Kuala Lumpur Malay Chamber of Commerce, director Ibrahim Bidin, who was a former chief operating officer of PLUS, Sepang Aircraft Engineering Sdn Bhd CEO Syed Budriz Putra and former director of Babcock & Brown and Fieldstone International Kamaruddin Wan Mohd Ali. In a report yesterday, OSK Research said: “We think it is very unlikely that the government will allow Asas Serba to privatise PLUS. PLUS is a key stock on Bursa that provides sizeable exposure to Malaysian tolled roads and is among the top 10 tollroad operators globally by market capitalisation.” It added that the relisting of Maxis Bhd was a clear indication that the government wanted key companies to remain listed. On Asas Serba’s proposed RM50 billion bond issuance to finance the takeover, it said a debt issue of that size would test the liquidity of the local market. “Rationally speaking, the acquirer would want the share prices of its targets to be as low as possible, not higher,” it said, adding that Asas Serba’s public disclosure of its plans would potentially drive up share prices of PLUS and Lingkaran Trans Kota Holdings Bhd (Litrak), another operator. PLUS rose nine sen to an intra-day high of RM3.40, before easing to RM3.34 for a daily gain of three sen, with 3.09 million shares traded, while Litrak added seven sen to a high of RM3.12 but closed unchanged at RM3.05, with 616,600 shares changing hands. This article appeared in The Edge Financial Daily, May 5, 2010.

https://theedgemalaysia.com/node/95694

#US Stocks* Wall St falls on uncertainty about Fed's bond buying

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NEW YORK (Aug 15): U.S. stocks fell on Wednesday, with the Dow industrials posting the worst day since late June, as investors speculated when the Federal Reserve might begin to reduce its ultra-loose monetary policy, which has helped propel stocks to record highs. Trading volume has been low as the earnings season winds down and economic indicators present a mixed view, complicating predictions of the Fed's next policy action. The Fed has been buying $85 billion in bonds each month to keep interest rates low. Some analysts expect the Fed to start tapering bond purchases as early as September if data shows the economy is improving. Wednesday's decline accelerated in the final hour of trading after a top Fed official said the U.S. central bank, which meets again in September, should have more evidence about the economy and inflation before it can make a decision. "There is a growing consensus that individual data points don't really matter at this point and that the Fed has made up its mind to have completed the bond purchases by the middle of next year," said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co in New York. Retail stocks were among the day's top decliners after Macy's Inc department store reported an unexpected decline in sales and blamed hesitation by consumers to spend on non-essential items. Shares of Macy's fell 4.5 percent to $46.33. Rival Nordstrom Inc lost 1.1 percent to $59.54. But shares of retailer J.C. Penney Co Inc jumped late in the session on high volume - 37 percent of trading in Penney's stock came in the last 10 minutes. The stock ended up 3.4 percent at $13.11. The New York Post said on Twitter that same-store sales are positive so far this month, citing sources. Apple was another stand-out as the stock extended gains for a second day, ending up 1.8 percent at $498.50 after topping $500 a share. On Tuesday, investor Carl Icahn, using Twitter, said that he has a large position in Apple. Hedge fund filings with regulators also showed that Leon Cooperman's Omega Advisors took a stake in Apple. After the closing bell, shares of Cisco Systems Inc fell more than 9 percent to $23.97. The network equipment marker said it would cut 4,000 jobs, or 5 percent of its work force. Chief Executive John Chambers said the company aims to reduce costs and refocus on areas of growth in the face of uncertain demand for its networking equipment. The bleak outlook from Cisco weighed on other tech companies, like competitor Juniper Networks Inc, which fell 4 percent to $20.25 in extended trade. Hewlett-Packard fell 1.3 percent to $26.83 and Ciena lost 2.1 percent to $22.02. The Dow Jones industrial average ended down 113.35 points, or 0.73 percent, at 15,337.66. The Standard & Poor's 500 Index was down 8.77 points, or 0.52 percent, at 1,685.39. The Nasdaq Composite Index fell 15.17 points, or 0.41 percent, at 3,669.27. The S&P 500, which has fallen six out of the past eight sessions, is down about 0.4 percent so far this week but for the year is up 18 percent. St. Louis Federal Reserve President James Bullard said the central bank needs to gather more evidence that the economy is improving and inflation heading higher before deciding to taper its bond buying. In economic news, U.S. producer prices were flat in July, below expectations for a 0.3 percent increase. As the death toll in Egypt worsened, the Market Vectors Egypt Index ETF fell 3.3 percent to $44.61. The country's interim vice president resigned and a state of emergency was imposed following political clashes in the country. Volume was roughly 5.4 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, below the average daily closing volume of about 6.4 billion this year. On the NYSE, advancing stocks beat decliners by 2,032 to 960. On the Nasdaq, advancing stocks beat decliners by 1,441 to 1,033. - Reuters

https://theedgemalaysia.com/node/37710

FBM KLCI down on ADB's lower 2H GDP growth outlook

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KUALA LUMPUR:  The FBM KLCI slipped into the red at midday on Tuesday, Sept 28, partly due to the weaker key regional markets and a less upbeat economic outlook for Malaysia from the Asian Development Bank (ADB). At 12.30pm, the 30-stock FBM KLCI declined 0.23% or 3.37 points to 1,461.34. Gainers trailed losers by 213 to 389, while 288 counters traded unchanged. Volume was 539.91 million shares valued at RM573.77 million. The ringgit weakened 0.03% against the US dollar to 3.0905; crude oil fell 37 cents per barrel to US$76.15, gold lost US$1.72 an ounce to US$1,292.63 while crude palm oil for the third month delivery fell RM9 per tonne to RM2,726. The decline of the FBM KLCI was also in line with the general cautious trading mood across key regional markets, following the overnight dip at Wall Street.   ADB said Malaysia’s economy was expected to moderate to a shade over 4% in the second half of this year and expand at 5% in 2011. The slower 2H growth would mainly be due to a base effect compared with 2H2009 when the economy picked up. At Bursa Malaysia, the top loser was F&N that fell 16 sen to RM14.54; DFZ Capital shed 12 sen to RM3.78, PacificMas, BAT and Tenaga lost 10 sen each to RM4.50, RM48.38 and RM8.90 respectively, while WCT, Ingress and Public Bank fell eight sen each to RM2.99, 84 sen and RM12.48. RHB Capital fell five sen to RM7.05, while CIMB and Gamuda lost three sen each to RM8.22 and RM3.86. Genting was the top gainer and rose 14 sen to RM9.87 after OSK Research maintained its buy call on the stock and upped its target price to RM14.05. Cycle & Carriage and QL Resources added 12 sen each to RM4.90 and RM4.67, Proton up 11 sen to RM4.91, Country View up 10.5 sen to 57.5 and Boustead up 10 sen to  RM4.48. The actively traded stocks were Karambunai, SAAG, Sunway REIT and Jaks Resources.

https://theedgemalaysia.com/node/34951

Gloves fall on downgrade

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KUALA LUMPUR: Glove makers fell in late morning trade on Monday, Aug 9 after Hwang DBS Vickers Research said demand could be normalising to lower levels as the flu outbreak is under control and customers are reducing inventory holding periods to one to two months. At 11.57am, Supermax was down 15 sen to RM5.99, Hartalega shed 12 sen to RM7.98, Top Glove 11 sen lower at RM6.13 and Kossan 10 sen to RM3.17. The FBM KLCI fell 1.88 points to 1,358.57. Turnover was 286.23 million shares valued at RM311 million. Hwang DBS Vickers Research said demand could be normalising to lower levels as the flu outbreak is under control and customers are reducing inventory holding periods to 1-2 months (vs 3-4 months during the outbreak). “We expect Top Glove’s 4Q10 (FYE Aug) revenue to contract 5-10% q-o-q because of this. The slowdown is made worse by new capacity coming on stream. We expect Top Glove’s utilization rate to fall below 75% when Factories 18 and 21 start operating at the end of this year,” it added. The research house said the USD has weakened against the Ringgit by another 2.5% m-o-m in July to RM3.16/USD, a 2-year low. Latex costs remain high at about an average of RM6.95/kg, despite having fallen 2.3% m-o-m in July. However, average selling prices for powdered gloves have remained at about USD26 per 1000 pieces since June. “We understand that the slower demand has made it difficult to pass on costs to customers. Hence, we expect Top Glove’s 4Q10 (Jun-Aug) net profit – due out in early October - to be weaker than 3Q10. For Kossan (FYE Dec), we expect 2Q10 net profit to be stable (vs 1Q10), but 2H10 earnings would be weaker than 1H10,” it said.

https://theedgemalaysia.com/node/35026

Kurnia remains an outperform, says RHB

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Kurnia Asia Bhd (Aug 9, 49.5 sen)Maintain outperform at 50.5 sen with fair value of 63 sen: Kurnia announced that it is planning to undertake a 10% private placement of its shares, which would increase its share capital to 1.65 billion shares of 25 sen each (from 1.5 billion previously). The shares will be allocated to institutional investors who will be identified at a later date. The indicative price of the placement shares has yet to be determined. However, it is expected to be priced based on a discount of not more than 10% from the five-day weighted average market price (WAMP) of Kurnia shares immediately preceding the yet-to-be-determined price-fixing date. Assuming an indicative issue price of 52 sen per share, Kurnia's placement is expected to raise proceeds of RM77.4 million. RM40 million of the proceeds will be used to repay Kurnia's borrowings, while the balance (ex-RM1.65 million for placement expenses) will be used for its working capital or for the strengthening of its internal capital adequacy ratio (ICAR). We understand that any deviation from the proceeds of RM77.4 million will be adjusted against the amount allocated for working capital purposes. The proposed placement is not expected to have any dilutive effects on Kurnia's FY10 net EPS. However, our forecast FY11 EPS will be diluted by about 9.1% to 6.3 sen, from seven sen. Risks to our view include a change in government policy that may result in lower car prices, a jump in claims ratio and the total expense ratio may exceed 100%. We are leaving our forecasts unchanged, pending the completion of the placement and Kurnia's 2Q FY12/10 results. We believe the EPS dilution may not be well received by investors given the concerns over the delay in the government's decision on the motor tariff proposal. We are maintaining our fair value estimate at 63 sen based on nine times FY12/11 EPS, but we will review our assumptions and our outperform call after speaking with the management. — RHB Research Institute, Aug 9 This article appeared in The Edge Financial Daily, August 10, 2010.

https://theedgemalaysia.com/node/7699

FBM KLCI may advance on Monday, says HDBSVR

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KUALA LUMPUR: Hwang DBS Vickers Research (HDBSVR) said there is a possibility that the key FBM KLCI could advance on Monday, April 26, riding on positive external sentiment. In its outlook, it said if so, then the benchmark index will attempt to test (and may break away from) its immediate resistance threshold of 1,340 ahead. Essentially, regional peers are expected to rise following last Friday’s buoyant performance on Wall Street. Major U.S. equity bellwethers jumped between 0.4% and 0.7% at the closing bell – reaching fresh highs since the rebound began in Mar last year – lifted by strengthening corporate earnings momentum and improving economic fundamentals. Meanwhile, in terms of individual company developments on the home front, HDBSVR said it expects a bit more interest in Hong Leong Bank (and possibly its parent Hong Leong Financial Group). Hong Leong Bank has formally submitted an application to the central bank to acquire the entire assets and liabilities of EON Capital; and (b) it has proposed a rights issue of up to RM1.6b to raise capital. These moves basically represent a step forward for the merger deal to go through.

https://theedgemalaysia.com/node/70774

Exports to remain weak in coming months

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KUALA LUMPUR (Oct 8): Malaysia's exports are expected to remain weak in coming months as a result of weak sales of electrical and electronic (E&E) products and earnings from major commodities, economists said. In August, exports fell to -4.5% from -2.6% in July, significantly lower than market expectations of -1.5%. This was due to steep declines in exports of palm oil, crude petroleum, metal, chemicals and chemical products as well as E&E products. "The continued weak demand for E&E products suggest that Malaysia's exports are likely to slow in the months ahead," said Alan Tan, Affin Investment Bank economist in a note on Monday. He added that although the European Central Bank (ECB) had committed to do whatever it takes to ensure the stability of the euro as well as stabilising financial markets, the slowdown in the euro zone economy could still lead to weakness in Asian exports. "The trends are already evident in some Asian countries where exports growth in South Korea, Singapore and Taiwan, have contracted further in September, attributed mainly to weak exports of E&E to Europe and US," Tan said. Exports of E&E fell into negative territory for a second straight month in August to -5.2% compared with -4.8% in July while exports of chemical and chemical products plunged to -12.2% from -4.8% previously as a result of weakened demand in Asean and the EU. Meanwhile, imports growth slowed to 2.8% in August from 9.5% in July. Tan said that signs of slower export orders will likely result in less imports of intermediate inputs and slow production given the uncertain overseas demand for E&E. This could lead to a possible trade deficit in Malaysia's economy should imports continue to outweigh the growth of exports, according to MIDF Research chief economist Anthony Dass. "Concerns will brew if imports shrink with exports collapsing much faster than imports," he said. However, should the economy fall into a trade deficit the impact would be temporary and not a major concern. Dass added that in spite of the recently announced QE3 by the US Fed, the current global slowdown will weigh on the prices of commodities unlike QE2 when commodity prices were moving up.

https://theedgemalaysia.com/node/62564

Sime makes cash advance to Bakun dam JV

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KUALA LUMPUR: Sime Darby Bhd yesterday announced that its indirect wholly-owned subsidiary, Sime Engineering Sdn Bhd, intends to provide about RM30 million to the Malaysia-China Hydro Joint Venture (MCH JV) for the Bakun Hydroelectric project in Sarawak. In a filing with Bursa Malaysia yesterday, it said Sime Engineering, which has an effective interest of 35.7% in the MCH JV, intends to fund about RM30 million progressively based on a projected monthly requirement. It said the cash funding is required to meet overheads and third party subcontractor payment requirements and that Sime Engineering will impose interest on the cash advance based on the prevailing market rates. The cash advance of RM30 million will be set off against future cash calls to be made by the MCH JV against the joint venture partners, it added. Sime Darby said the cash advance will have no material financial impact on its FY12 ending June 30. Further announcements on the status of the disbursement of the RM30 million cash advance to the MCH JV will be made not later than two months after the end of each quarter of Sime Darby’s financial year. This article appeared in The Edge Financial Daily, March 8, 2012.

https://theedgemalaysia.com/node/36248

Corporate: Growth potential factored into Berjaya Retail

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Taiwan, which has a population of 23 million, has about 13,000 convenience stores scattered around the island. Using this as a rough guide, Berjaya Retail Bhd’s executive director Ng Su Onn believes there is growth potential for the company’s 7-Eleven convenience store business. In Ng’s view, the domestic convenience store market is far from saturated. “There are 13,000 convenience stores in Taiwan, including 4,800 7-Eleven stores. Malaysia has a population of 28 million and fewer than 1,500 convenience stores, thus there is certainly room for expansion,” he tells The Edge. Currently, there are about 1,150 7-Eleven stores nationwide, of which 615 stores are in the Klang Valley and 116 in Johor. “Our target is to have 2,000 stores within five years,” says Ng, adding that this is feasible.  An increase in the number of stores would mean an increase in sales revenue. For FY2009 ended Dec 31, 7-Eleven achieved a sales revenue of RM1.185 billion and profit after tax of RM25.4 million. According to Ng, the average sales revenue per store is about RM100,000 a month or RM1.2 million a year. Back-of-the-envelope calculations show that the company’s sales revenue could easily reach, if not exceed, RM2 billion as the number of stores rises to 2,000. On top of opening new stores, Ng says 7-Eleven is looking at providing charged ser­vices, such as fax and photocopier, to enhance its revenue base. “People do a lot of things, for instance, pay bills and buy concert tickets, at 7-Eleven stores in Japan. We are exploring the possibility of providing such services here.” Although the retail business is generally perceived to be highly competitive, Ng is unfazed. Currently, 7-Eleven has the lion’s share of the convenience store market in the country, thanks to the government’s ban on the entry of new foreign convenience stores. Apparently, about 60% of the sales in 7-Eleven stores is generated from 7pm to 7am. Thus, 7-Eleven is not competing directly with the hypermarkets and traditional sundry shops. Even the petrol kiosks are not its competitors because they do not operate 24 hours. An emerging local player, KK Convenience Store, is probably the only direct rival for 7-Eleven, but this new kid on the block is much smaller. In short, Berjaya Retail’s convenience store business is in a high growth market where competition is minimal, at least for now. Nonetheless, 7-Eleven is not the only growth story in Berjaya Retail, in which tycoon Tan Sri Vincent Tan owns a 51.8% stake after its listing exercise. Apart from the convenience store chain, Berjaya Retail also sells sewing machines, home appliances and furniture under the Singer brand, and distributes motorcycles. Its target market for white goods or electrical appliances is the middle to low-income group in the rural and suburban areas, for instance Felda settlers. In addition, Singer provides micro consumer credit to customers who purchase its home appliances. Executive director Yeap Dein Wah, who is also the managing director of Singer (M) Sdn Bhd, says barely 15% of its sales are in cash. The bulk of sales is on credit and paid off in instalments. “We provide easy payment schemes for our customers by charging them monthly interest of 1.5% to 1.8%, with the credit period ranging from 6 to 48 months,” says Yeap. The provision of credit facilities is another income stream for Berjaya Retail. “In addition to the profit we earn from the sales of home appliances or furniture, we also gain from the interest we charge customers,” Yeap explains. For FY2010 ended April 30, Singer recorded a sales revenue of RM380 million, with consumer credit contributing RM80 million or 21% to the amount, says Yeap. He believes consumer credit could become a major income avenue for Berjaya Retail in the future should the company manage to raise more working capital to expand such business.  “You may one day look at us as a company like AEON Credit Bhd. In fact, since we have wider coverage in terms of network, we may be able to do it better,” Yeap adds. Asked about their success rate in collection, Yeap says it is a problem but not a major one. The company’s non-performing loans represent only 4% of Singer’s total sales revenue, he reveals. While the economic recovery and improved consumer sentiment augur well for the growth potential in Berjaya Retail,  this may not translate into upside potential for Berjaya Retail’s share price when the stock makes its debut on Aug 16. The consumer group’s IPO is priced at 50 sen per share. This implies a PER of nearly 22 times based on pro forma EPS of 2.3 sen for FY2009 ended Dec 31. In the company’s IPO prospectus, the pro forma income statement shows that Berjaya Retail’s revenue rose 5.5% to RM1.54 billion in FY2009 from RM1.46 billion the previous year. Ebitda went up to RM104.9 million from RM100.4 million, but profit attributed to shareholders was lower at RM34.4 million compared with RM41.6 million before. Convenience stores contributed nearly 75% to Berjaya Retail’s revenue and 64% to its gross profit of RM490.5 million. “The valuation is rather steep in terms of PER, which is close to that of Parkson Holdings. And the two companies are different since Parkson offers exposure in China,” says an analyst, noting the slim profit margin that Berjaya Retail is earning. The group has an Ebitda margin of 6.5%. As for Berjaya Retail’s fair value, RHB Research has it at 51 sen, Kenanga Research at 49 sen and TA Securities at 53 sen. RHB has forecast the company’s EPS to jump over 40% to 3.3 sen in FY2010 and 3.7 sen in FY2011. Still, this translates to a PER of 15.1 times on an EPS of 3.3 sen. In the IPOs unveiled so far this year, Berjaya Retail is probably priced at the highest valuation in terms of PER. JCY International Bhd was valued at 10.8 times and Masterskill Education Group Bhd at about 12 times. Furthermore, analysts note the potential shareholding and earnings dilution as a result of the conversion of a chunk of irredeemable convertible preference shares (ICPS) in the future. There are 962.4 million ICPS in Berjaya Retail. Tan, through his investment vehicle Premier Merchandise Sdn Bhd, holds nearly 92% of the ICPS while Cosway owns 7.7%. The ICPS were issued when Berjaya Retail acquired 7-Eleven and Singer from Tan and Cosway Corp Ltd respectively. Berjaya Retail is the second company to go public in the Berjaya group in less than a year. In a backdoor listing, Cosway took over the listing status of Berjaya Hong Kong Ltd in Hong Kong last December. It may not be the last. Plans are already in place to list Berjaya Food Bhd, which houses Berjaya Roasters (M) Sdn Bhd and Berjaya Pizza Co Sdn Bhd, on Bursa Malaysia by the end of the year. A high valuation is beneficial to the promoter of an IPO, but it may not be a good bargain for investors since there is little upside potential to tap, especially when market sentiment turns soft. This article appeared in Corporate page, The Edge Malaysia, Issue 818, Aug 9-15, 2010

https://theedgemalaysia.com/node/32578

Strong growth drivers for life insurance business

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Insurance sectorMaintain overweight: As of FY2009, there are 16 life insurance companies operating in the country (including the composite insurers) with a total 11.9 million policies and annual premiums worth RM17.4 billion. The major players in the life-insurance segment, based on total assets, are Great Eastern Life, AIA, ING and Prudential. We believe that life insurance premiums will grow by 12% to 13% per annum for FY2010-12, driven largely by these factors: 1) the relatively low-market penetration rate compared with other countries in the region; 2) it is a disciplined savings method for individuals to supplement their retirement benefits; 3) rising healthcare costs; and 4) encouragement by the government in the form of tax relief. The market penetration rate in Malaysia for life insurance, as expressed in terms of percentage of premiums to gross domestic product (GDP), is 3%. This is relatively low compared with more developed countries in the region like Singapore (7.9%), Taiwan (13.9%) and South Korea (9.1%). We believe many individuals want alternative income streams for retirement besides EPF savings. As life insurance premiums are paid monthly and in a disciplined manner, we believe that the increasing popularity of life insurance as a savings plan, on top of providing protection, is another key earnings driver for insurance companies. In our view, as healthcare costs increase, so does the need for health coverage. The out-of-pocket expenditure of households on healthcare increased at a compound annual growth rate (CAGR) of 14.8% for 2000-08 versus Malaysia’s GDP which expanded at a CAGR of 5.3% over the same period. While health insurance policies are sold by both general and life insurers, medical benefits are usually packaged with a life insurance product, thus offering additional avenues for cross selling. Our forecasts for the insurance companies under coverage do not assume any changes to the motor policies. In view of negative external factors like the European debt crisis, and potentially sharper-than-expected slowdown in the global economy, we believe the insurance sector, which is largely a domestic play, will be relatively resilient. We thus maintain our overweight stance on the sector. Our top pick is Allianz (outperform, fair value = RM6.68). — RHB Research Institute Sdn Bhd This article appeared in The Edge Financial Daily, June 29, 2010.

https://theedgemalaysia.com/node/72557

Bank Negara introduces Renminbi liquidity facility

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BEIJING (Nov 18): In a move to facilitate more effective renminbi liquidity management by Malaysian financial institutions, Bank Negara Malaysia will introduce a Renminbi Liquidity Facility (RLF) to licenced onshore banks. The facility is aimed at enhancing renminbi liquidity in the domestic market by providing an additional avenue for licensed onshore banks to obtain or invest RMB with the central bank, said Bank Negara Malaysia Governor Dr Zeti Akhtar Aziz. The bank, through its own access to the interbank market in China, would offer these liquidity facilities via the renminbi/ringgit foreign exchange market, and the renminbi money and repurchase markets in the Malaysian interbank market, the Governor said in conjunction with the opening of the Bank Negara Malaysia's Beijing representative office here today. She also announced that non-resident financial institutions that meet the prudential requirements would be permitted to offer ringgit trade financing in collaboration with resident financial institutions. "In this regard, banks in China will also be allowed to provide ringgit trade financing in China," Zeti said. A memorandum of understanding was also signed today between Bank Negara and the People's Bank of China to establish a cross-border collateral arrangement (CBCA) that will provide financial institutions access to the central bank's liquidity facilities. The CBCA would enable the use of home currency collateral in the form of securities or cash to obtain domestic liquidity from the host country in the future, she added. Bank Negara Malaysia signed CBCAs with the Monetary Authority of Singapore and Bank of Thailand in 2011 and 2012, respectively.  On the establishment of the Beijing representative office, Zeti said it was Bank Negara's very first presence in Asia and was a reflection of the growing importance of China in the global economy and the international financial system. The Beijing office, the third overseas after London and New York, became a reality after an agreement was signed by the Governor of the People's Bank of China Zhou Xiaochuan and Zeti in 2011 to facilitate the opening.

https://theedgemalaysia.com/node/92511

#Highlight* Helping Muslim women get their dues

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NON-PAYMENT of maintenance is the main problem faced in syariah courts. However, if the judgement order is not enforced, there is another avenue through which the winning party can get their dues without going to the courts. This is through the Family Support Division (BSK) which was established in October 2008 by the Syariah Judiciary Department which is under the Prime Minister's Department.   BSK was set up primarily to deal with the non-payment of maintenance, although it does provide legal assistance with regards to other issues concerning family matters in the syariah courts. BSK has managed to help thousands of Muslim single mothers and ex-wives whose maintenance payments were not paid by their ex-husbands or fathers of their children. According to Dr Mohd Na'im Mokhtar, the director of BSK, this is indeed the biggest problem in syariah courts. He said the court wins by the single mothers and ex-wives are merely in theory when the monies are not paid. Na'im is very much focused on this issue. He was recently a visiting fellow at Harvard University in the United States to assist BSK in its research paper entitled "Enforcement and Execution of Maintenance Order in Syariah Court of Malaysia: Study on the Doctrine of Separation of Powers and Conflict of Interest". He said the first thing he did when he took over BSK was to get a record of all the cases where the party has won judgment orders. "We have about 100 people in our staff in all states. They were asked to look into all maintenance orders that were not enforced between 1990 and 2012 in all the syariah courts. "We found more than 12,000 cases that we could look into then. "Then we contacted one by one to conduct a check. There were quite a number which could not be traced due to the fact that they had moved house or changed their contact numbers. "We have a network with other agencies such as the Road Transport Department, the Prime Minister's Department and the Employees Provident Fund. So, our search is quite extensive," said Na'im. Those who could be contacted were called in and the department then mediates between the single mothers and ex-wives and the judgment debtors (ex-husbands and fathers who have not paid up). "In some cases, the fathers had refused to pay as the mothers had denied access to the children and some just did not pay as there was no enforcement from the courts on the orders, so they let it be. "What we do is we advise both parties and ask both to give in. In most cases, we would highlight the best interests of the children. "We do it free of charge and there is no need for the creditors to return to court to get their dues," said N'aim. He said if not for BSK, the judgment creditors would have to return to the courts and go through another bureaucratic process and fork out more money to appoint lawyers. He cited success cases where thousands of ringgit was paid up completely by the judgment debtors when BSK mediated. From January 2012, there is an e-filing system for all judgment orders by syariah courts in all states, which BSK has access to. BSK would now immediately know when there is a judgment order for the payment of maintenance. And when the first payment is due, BSK takes it upon itself to call up the creditor and check if she or he has received the money. Na'im claims that unlike civil law where, according to him, the judge's duty ends when he has given a judgment, there is recorded evidence from one of the Caliphs of Islam, Omar el-Khattab, that "there is no point in issuing judgment unless it is executed". "This is the philosophy which we need to work on if syariah courts were to reduce cases of non-payment of maintenance. We have to get the syariah court judges to realise that it is not enough to give good judgments if they are not to be executed and just tossed aside," said Na'im. He pointed out that although the law provides for a few ways to enforce the judgments - such as writ of seizure, judgment debtor summons, committal proceedings and writ of possession - not many judges would resort to them. Na'im suggests that BSK or the courts be allowed to revoke or confiscate the driving licences or passports of the judgment debtors. This would be one good way of ensuring that tens of thousands of single mothers and ex-wives get their dues, said Na'im. On suggestions that an execution court be set up in the syariah court system to deal with those who do not pay up, he said BSK is a good alternative as single mothers and ex-wives need not go through the courts again pay legal fees.

https://theedgemalaysia.com/node/45785

Brokers' Digest: Foreign equities

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Beijing Enterprises Holdings Ltd Feb 8, HK$43.70BOC INTERNATIONAL (FEB 7) BUY: Beijing Enterprise’s (BEH) share price has markedly underperformed its peers and the overall market of late. Beijing Gas, the main operating subsidiary of BEH’s city gas business, announced on Jan 19 that gas consumption in Beijing rose 12% y-o-y in 2010, reaching 6.81 billion cu m. This was 2% below our previous estimate. As such, we trim our FY2011/12E sales volume projections. However, the well-anticipated construction and commissioning of combined cycle gas turbine (CCGT) power plants will boost gas usage. Once these projects are announced, we see upside in our estimated volumes. We revise down our FY2010/12 earnings estimates for Petro-China Beijing Gas, the midstream joint venture with Kunlun Energy, by 3.4% to 10.7%. This is due to higher depreciation and electricity costs (which amount to HK$800 million and may shrink our forecast net margin for FY2010 by 4ppts) upon the launch of the Phase 2 pressure-increasing facilities. However, as Phase 3 of the Shaanxi-Beijing pipeline is launched later in 2011, we expect the electricity costs on a per cu m basis to peak and margins to hit bottom.Our new net profit projection is 4.8% to 5.8% lower than our previous estimate and 5.5% to 6.5% lower than consensus. We have not factored in any residential gas price hikes, which may now be delayed until after March 2011. The impact is about HK$200 million. BEH’s stock price has performed weakly of late compared with the overall sector. Although the overhangs of residential price hike delays and Kunlun’s accidents, among others, may take their toll on investment sentiment toward BEH, we reckon the market has overreacted on the valuation. We have not factored in the hike anyway, and the earnings impact would be less than 7%. With regard to Kunlun Energy’s residential gas pipe explosions reported in December 2009 and January 2011, they had nothing to do with the long-distance midstream business PBG is involved in. The most likely culprit was Kunlun’s inexperience in the downstream business. Compared with the sector average forward PER and price-to-book ratio (PB) of 16.5 times and 2.1 times, BEH now trades at 15.8 times and 1.2 times. Using price-to-book value-return on equity regression, we reckon its fair forward PB should be 1.38 times, implying the stock trades at HK$48. Using a price-earnings-to-growth ratio (FY2011/12 compound annual growth rate of 16%), BEH currently trades below one times.We see the current share price level providing a good entry point and reiterate our “buy” call with a target price of HK$50. Banpu PCLFeb 8, THB740PHILLIP SECURITIES (FEB 8) BUY: We forecast Banpu will sell about 5.9 million tonnes of coal in 4Q2010, above 3Q2010’s level of 5.03 million tonnes, while average coal selling prices for the period are expected to be similar to 3Q2010 at about US$78 per tonne. Including sales revenue from the power business and others, we estimate Banpu will achieve 4Q2010 revenue of THB15,087 million, up 10.22% q-o-q. Including revenue from the recently acquired Centennial Coal, the top line figure should rise to THB21,087 million. Margins should be slightly better than the previous quarter on higher sales volumes amid flat average selling prices. Selling, general and administrative expenses are expected to rise sharply on bonus expenses and demurrage charges. Profit from subsidiaries is projected at about THB1,850 million, lower than in other quarters due to the maintenance shutdown of its 50%-owned BLCP power station, but no exceptional expenses as in the previous quarter are anticipated in this period. Including pre-tax gain of about THB3.3 billion on the sale of Ratchaburi Electricity Generating Holding Public Co Ltd (RATCH) and tax expenses, we forecast Banpu will post a 4Q2010 net profit of THB4,550 million. For the whole of FY2010, we expect Banpu to report strong net profit of up to THB24,354.91 million boosted by exceptional gains on the sale of its stakes in ITMG and RATCH. The widely watched Australia Barlow Jonker spot price, a gauge of spot thermal coal prices, averaged as high as US$129.42 per tonne in early 2011. To reflect higher coal prices, we plan to revise upwards our average coal selling price assumption for Banpu to between US$85 and US$90 per tonne from a previous estimate of US$80 per tonne. But Banpu would also book additional annual amortisation charges of about THB1.5 billion for mining property of the recently acquired Centennial Coal. Net-net, we expect the revised FY2011 net profit for Banpu to be similar to our current estimate of THB19,817 million. We rate Banpu shares a “buy” with a target price of THB912. Realtek Semiconductor CorpFeb 8, NT$65.70CREDIT SUISSE (FEB 8) UNDERPERFORM: Realtek held its 4Q2010 investor conference on Jan 31, the first day of the Chinese New Year market holiday in Taiwan. The company didn’t release its financials but discussed key metrics for 4Q2010 results and 1Q2011 guidance. Sales were already released, with monthly sales down 11% q-o-q (guidance of double-digit fall) on slow sales in PC peripherals and a late rebound in ADSL networking and retail routers. Gross margins declined more than expected to around 36%, down 320bps q-o-q, on appreciation of the new Taiwan dollar and price pressure across networking and PCs. The lower margins drove 4Q2010 EPS to NT$0.01 and full-year EPS to NT$3.46, below our FY2010 estimate of NT$3.98 and the street’s NT$4.02. Inventory remained high at NT$43.2 billion, down NT$500 million and seven days, to 97 days (above the 70 day five-year average).Sales for 1Q2011 was guided up 15% to 20% q-o-q, above our prior +8% q-o-q and the street’s +4% q-o-q, but was still down around 10% y-o-y. The company had three consecutive sequential declines from 2Q2010, so it is rebounding off a low base across product lines, as customers have depleted inventory. The company updated opportunities for 2011, which include share gains into Gb Ethernet commercial sockets with PC share expected to rebound from 45% to 60% (10% to 15% sales), WLAN into AP routers and PCs, and more connected TV content (Ethernet, USB card readers, WLAN, digital media processors). On the flip side, pricing and competition remain fierce across mature product lines, and PC-related products (65% to 70% of sales) could remain dampened by slowing units and tablet encroachment. We adjust our FY2011/12E EPS from NT$4.34/NT$0.24 to NT$4.34/NT$5, below the street’s NT$4.47/NT$4.44. Our “underperform” rating and NT$60 target price is based on 14 times our FY2011E EPS of NT$4.34. The stock still trades at a premium at 15.9 times our FY2011E EPS and 15.4 times the street’s EPS, at the upper end of its peers which are trading at 11 to 15 times. This article appeared in Capital, The Edge Malaysia, Issue 845, Feb 14-20, 2011

https://theedgemalaysia.com/node/83571

#GE13* Chinese Press: Two beaten up while removing 1Malaysia flag

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PETALING JAYA (April 17): Six men, who were wearing 1Malaysia t-shirts, beat up a 54-year old hawker and a 23-year old man as they were trying to remove a 1Malaysia flag in their courtyard. Guang Ming Daily, in a front page report, said the six men hit the victims with a stick, helmet and metal paint bucket until they were seriously injured. The hawker, Zhang Fu Chun from Penang, suffered wounds on his chin, face and forehead, requiring more than 20 stitches at his eyebrow area, and steel screws to be placed on his broken forehead. Zhang is still being treated in the intensive care unit in hospital. His family, including his 81-year old mother, related their ordeal at a press conference held by the outgoing Sungai Pinang state assemblyman, Koid Teng Guan. Zhang's wife, Lee Ya Yu, said her husband told her that he had warned some people not to tie the flags around their house and it has caused him inconvenience. "On Monday night, my husband went out for a drink with his friend. When he returned home after midnight, he saw the 1Malaysia flags were hanging in the courtyard and on the swing. He untied those flags but ended up being beaten up violently unexpectedly," she said. Lee added that before her husband fainted, he also told the family that the perpetrators were wearing 1Malaysia t-shirts. Wangsa Maju MCA cease campaign Oriental Daily News reported that the decision of the MCA top leadership to loan the Wangsa Maju parliamentary seat to Umno has caused anger among MCA campaigners in the area. The Wangsa Maju MCA election operations office has stated that it will stop campaigning for BN and also indicated that it will ensure that the Umno candidate, Datuk Shafie Abdullah, loses. Lim Choon Hong, who heads the office, said: "Not only us, even the Chinese voters said they will make sure Shafie will have a crushing defeat. Some Malay voters too said the same." MCA had agreed to loan out the Wangsa Maju seat to Umno as BN chairman Datuk Seri Najib Razak had insisted on fielding "winnable candidates" in GE13. Shafie, who is the Wangsa Maju BN chief and Najib's political secretary, has been picked as the BN candidate for the seat over Wangsa Maju MCA division chairman Datuk Yew Teong Look. Yew lost to PKR candidate Wee Choo Keong by a slim margin of 150 votes in the 2008 general election. Wee quit PKR in 2010 and became an independent MP after that. The paper said that even though Malays accounted for 55% of the total voters in the constituency, Chinese voters still played a key role in the election. Shafie may be able to gain some support from the Malays but lose some Chinese votes. "It is not known yet if Yew will campaign for him (Shafie). If the former agrees to help, then Shafie will be safe in Wangsa Maju," added the report. Four-corner fight in Bukit Gasing A four-cornered fight is now expected for the Bukit Gasing state seat in Petaling Jaya, according to Oriental Daily News. The daily said that apart from the son of former Bukit Gasing assemblyman Edward Lee Poh Lin, Simon Lee Chung Hsin, another person will be contesting as an independent – former Petaling Jaya City Council (MBPJ) councillor Mak Khuin Weng. The report said Simon Lee is active in NGOs while Mak is campaigning for freehold land titles for Petaling Jaya and for the implementation of development rules in a transparent and accountable manner. The other two expected candidates are DAP's Kasthuri Rani Patto, who  is the daughter of late DAP strongman P Patto,  and the BN's Juan Sei Chang, who is the Bukit Gasing Gerakan coordinator. Edward Lee defeated BN's Datuk Dr Lim Thuang Seng in the 2008 election with a majority of  8,812 votes.

https://theedgemalaysia.com/node/14024

King urges people to support government for national development

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KUALA LUMPUR (Feb 1): The Yang di-Pertuan Agong Tuanku Abdul Halim Mu'adzam Shah today urged the people to fully support the government to ensure efforts to develop the nation can be continued. He said efforts to develop the nation by the government should be praised because it had enabled Malaysia to become the 12th most competitive nation in commerce. "I am proud of the success of the government. I am also confident the transformation currently being carried out will ensure Malaysia achieve the status of a developed nation by 2020," he said at an investiture at Istana Negara in Jalan Duta, here, in conjunction with the Federal Territories Day. Raja Permaisuri Agong Tuanku Hajah Haminah was also present at the ceremony. Also present were Prime Minister Datuk Seri Najib Tun Razak and wife, Datin Seri Rosmah Mansor, Deputy Prime Minister Tan Sri Muhyiddin Yassin and wife,  Puan Sri Noorainee Abdul Rahman. Tuanku Abdul Halim said Malaysia's position as the 12th most competitive nation must be enhanced because it formed the strength in making the nation the focus of foreign investors.        He reminded the people on the importance of the need to maintain the current racial solidarity because it formed the fortress and main force in facing all challenges and could spur Malaysia towards development. "Cast aside political differences and racist attitudes inherent in ourselves. Give priority to racial unity which is the foundation since the nation became independent 56 years ago," he said.  On KuaLa Lumpur, the Yang di-Pertuan Agong expressed hope that the federal capital could develop more prolifically and become the most competitive city by 2020. He was confident all efforts and projects implemented by the government in Kuala Lumpur and its surrounding areas such as the MyRapid Transit (MRT), River of Life and Greater Kuala Lumpur/Klang Valley would turn it into a comfortable city for the prosperity of the people. I hope Kuala Lumpur can lure many multi-national and international companies to come and turn the city into a financial destination," he said.     He said Kuala Lumpur must take advantage of the 2014 Visit Malaysia Year by organising numerous programmes and activities to ensure the target of 15 million arrivals was met. "The 2014 Visit Malaysia Year must be a national mission to ensure the arrival of 28.3 million tourists is successful. "Surely, Kuala Lumpur will also become the focus of tourists. I hope the target of 15 million tourist arrivals to Kuala Lumpur and a profit of RM24.9 million from spendings can be achieved," he said. He also wanted the Federal Territory of Labuan to continue to be developed not only as an offshore financial hub, but also as an international tourism centre. – Bernama

https://theedgemalaysia.com/node/6395

KNM offer price to be reduced?

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KUALA LUMPUR: KNM Group Bhd has not extended BlueFire Capital Group Ltd’s (Bidco) exclusivity period for due diligence but still aims to conclude talks in four weeks, raising speculation that a revised lower offer price could be in the offing for the takeover of the oil and gas firm. KNM said although it had not extended the period for Bidco’s exclusive due diligence, which expired yesterday, it had agreed to wrap up negotiations with the parties involved by April 16. “An announcement will be made on the outcome of such discussions when they are concluded,” KNM said in a filing with Bursa Malaysia yesterday. Bidco is controlled by KNM’s managing director and major shareholder Lee Swee Eng. In January, Bidco had roped in other investors, namely GS Capital Partners VI Fund LP and Mettiz Capital Ltd, to take over KNM’s assets and business for some RM3.5 billion or 90 sen per share. Since Lee owns a 23% stake in the oil and gas firm, the success of the takeover relies heavily on the votes of other shareholders, in particular the Employees Provident Fund which has a 12.21% interest. Maybank Investment Bank Research in a note yesterday said since the offer price was contingent on the findings of the due diligence exercise, there was a high possibility the offer price could be revised. It said this was especially so given the kitchen-sinking exercise at KNM after the takeover announcement. “This would be favourable to the acquiring party but not to minorities, some of whom are already unhappy with the offer price. Should this prove true, we can expect the share price to weaken further,” said the research house. It had also downgraded KNM’s target price to 74 sen from RM1.04 previously. It noted that the 90 sen offer price valued KNM at 1.84 times 2009 book and below the rights price of RM1.33 per share in 2008. Maybank IB said KNM’s position could possibly mirror Sime Darby’s price revision for Ramunia’s fabrication yard in a proposed takeover. For its fourth quarter (4Q) ended Dec 31, 2009, KNM posted a net loss of RM31 million, in contrast to its third quarter profit of RM32 million. The main reason for the poor 4Q results was provisioning for forseeable losses in its operations in Brazil, Canada and Indonesia, coupled with a revaluation of the group’s Canadian properties. With the poor 4Q performance, it is understandable that the bidding parties may want to revise their offer price downwards. Maybank IB, which issued a note before KNM’s announcement yesterday, had said the bidding parties — KPMG and McKinsey — would request for more time to complete the due diligence exercise. The research house said subsequently, it was also possible that a proposal to revise the offer price for the underlying business would be submitted to the board for consideration. Maybank IB said in such an event, five out of the eight directors would vote on the deal while the other three, namely Lee and two executive directors who are related to him, would abstain. However, another analyst with a foreign house maintained his view that the deal would go through at 90 sen, giving shareholders a 15% upside opportunity. The analyst argued that if the exercise fell through or the offer price was lowered, KNM’s share price would likely tank lower than the offer price of 90 sen and may even revisit the previous low of 32 sen. “Somehow, I don’t think that this is what Lee wants to see happening to the share price.   “Also, with the SC and Bursa now looking at plugging the loophole in the privatisation of companies, this might well be Lee’s last chance to privatise KNM, something that he has always wanted to do,” said the analyst. After two years of turbulence, KNM, which used to be a darling stock in the oil and gas sector, is now trading below its initial public offering price of RM1.48 compared with its previous highs of more than RM7. The stock fell 1.5 sen to 77 sen yesterday, with over 27 million shares done. Issues pertaining to the acquisition of German-based oil company Borsig put further pressure on the stock when share markets worldwide were battered in 2008. Coupled with the plunge in commodity prices and massive selldown of KNM shares by foreign holders amid the recession, the counter fell to a record low of 32 sen in March 2009. Interestingly, it was last March — when KNM shares got its worst beating — that Lee first publicly expressed his intention of a management buyout. However, the exercise was not viable then given the management’s limited financial muscle to execute the takeover of KNM, which was listed in August 2003. This article appeared in The Edge Financial Daily, March 23, 2010.

https://theedgemalaysia.com/node/57224

Adenan declines comment on being named next S'wak CM

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KUCHING (Feb 13): Sarawak Minister in the Chief Minister's Office (Special Functions) Tan Sri Adenan Satem has declined to comment on being named the next chief minister. "Not today, maybe some other time," he told reporters, who sought his reaction, as he entered his car after attending the conferment of a state award to Deputy Prime Minister Tan Sri Muhyiddin Yassin at the Astana Negeri here today. Yesterday, Chief Minister Tan Sri Abdul Taib Mahmud handed his resignation letter effective Feb 28 to Yang di-Pertua Negeri Tun Abang Muhammad Salahuddin Abang Barieng and announced Adenan as his successor.

https://theedgemalaysia.com/node/48909

Hap Seng Consolidated falls on lower placement price

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KUALA LUMPUR: Shares of Hap Seng Consolidated Bhd fell in late afternoon trade on Thursday, May 12 after it fixed the price for the share placement at RM5.25 a piece. At 3.44pm, the shares were down 14 sen to RM5.62 with 3.48 million shares done. The FBM KLCI fell 1.05 points to 1,534.98. Turnover was 644.13 million shares valued at RM879.27 million. There were 245 gainers, 432 losers and 280 stocks unchanged. The company said the book-building exercise for the proposed placement of 43.80 million shares saw interest exceeding the amount offered. There was interest for about 62 million shares. The 43.80 million shares represented 7.8% of the paid-up share capital of RM563.52 million shares, excluding 59.138 million treasury shares. “Accordingly, the placement will raise a gross proceed of RM229.95 million,” it said.

https://theedgemalaysia.com/node/2206

#Stocks to watch:* Maybank, TMI, SP Setia, JTI, Asiatic

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KUALA LUMPUR: Two research houses made surprising upgrades for Maybank and TM International on March 19, which galvanised investors’ interest in the two battered down stocks. Maybank, TMI, SP Setia, JTI and Asiatic could see trading interest on March 20 following the recent developments. Maybank rose the most in five weeks on March 19 after HwangDBS Vickers Research upgraded the stock to a trading buy with a fair value of RM4.60. The ex-date for Maybank rights was extended to March 31. TMI also benefited from OSK Investment Research’s view there was a trading opportunity in the stock ahead of the fixing of the rights issue on March 27. It upgraded TMI to a trading buy from neutral. Meanwhile, SP Setia posted net profit of RM31.17 million in 1Q ended Jan 31 (1QFY09), down 35% from RM48.52 million a year ago. However, the 1QFY08 earnings had included RM26 million from a land sale. As for TSR Capital, it has secured two government-related construction contracts totalling RM136.7 million. Its subsidiary TSR Bina Sdn Bhd would build a rehabilitation camp in Kuantan for RM45 million as well as UiTM's Terengganu Branch in Bukit Besi for RM91.7 million. Malaysia Airlines has secured a charter deal worth RM18.7 million with the Defence Ministry to move some 36,000 national service trainees between Peninsular Malaysia and Sabah and Sarawak within two years. Telekom Malaysia’s unit Celcom aims to strengthen its dominance in mobile broadband services with the introduction of the first data only prepaid mobile broadband services and targets a 120% growth in subscriber base for this year. Celcom has the widest broadband coverage, reaching 71% of the total populated areas in the country and the only one with services coverage in every state.  Subscriber growth was 300% last year and the total subscribers at end-February was 270,000. JT International’s cash distribution of 75 sen for every one existing share of RM1 each via a share capital reduction takes effect on March 20. The capital repayment does not affect the number of the ordinary shares held by all shareholders. Asiatic’s JV to develop about 15,800 hectares of agricultural land into oil palm plantation in Kabupaten Ketapang, Kalimantan has received the Indonesian government’s approval. Hunza Properties has sought a six-month extension from April 4 to Oct 3 to undertake its corporate exercise. Hunza had proposed a renounceable rights issue of up to 39.44 million new shares on a one for four basis, with up to 39.44 million five-year warrants on the basis of one warrant for every rights share.

https://theedgemalaysia.com/node/54978

Lee wins record fourth Superseries Finals title

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KUALA LUMPUR: World No 1 Lee Chong Wei yesterday became the first player to win four titles in the season-ending BWF World Superseries Finals when he crushed Indonesia’s Tommy Sugiarto. It is the Malaysian ace’s seventh Superseries title this year — the most he has ever won in a calendar year — following victories in South Korea, Malaysia, India, Indonesia, Japan and Hong Kong. The Olympic silver medallist, who won this tournament in 2008-2010, easily beat Sugiarto 21-10, 21-12 in the men’s singles final on home turf. Lee used the full length of the court to move his opponent throughout the match with the fourth seed still feeling the strain of beating Japan’s Kenichi Tago in three games on Saturday. “I sensed he was not 100% [fit] and attacked him from the start,” Lee said. Lee took a quick 4-0 lead before Sugiarto earned his first point and later went on a run of eight straight points from 5-2 for a 13-2 lead. Victory was never in doubt after Lee opened up an 18-4 lead. He slowed down towards the end before closing out the first game 21-10. The second game followed a similar pattern, with Lee winning points at will. The 31-year-old said he believed he could maintain his form into the next year. “To me, age is just a number. I don’t see why I can’t continue as I still have the desire to win titles,” he said. “I still love training as hard, and 2014 is going to be a big year with several team events as well.” Lee’s rival Lin Dan, who did not participate in the Superseries Finals this year, won in 2011, while last year Chen Long, also from China, triumphed. Earlier yesterday, third seeds Christinna Pedersen and Kamilla Rytter Juhl of Denmark became the first European winners of the women’s doubles when they defeated fourth seeded Chinese pair Ma Jin and Tang Jinhua 21-19, 21-12. China’s Wang Xiaoli and Yu Yang triumphed the last three years. Before that, a Malaysian duo won twice. On a roll, Pedersen teamed up with Joachim Fischer Nielsen in the mixed doubles to defeat world champions Zhang Nan and Zhao Yunlei of China 12-21, 21-19, 21-10. With this, the Dane became the first player in history to win two titles in the same Superseries Finals. Pedersen and Nielsen already won in 2009 and 2012, while Zhang and Zhao triumphed in 2010 and 2011. The US$500,000 (RM1.6 million) Superseries Finals bring together the top eight performers in each of the five categories based on points earned from 12 Superseries tournaments. The men’s and women’s singles champions pocket US$40,000 each with the runners-up collecting US$20,000. The doubles champions earn US$42,000 while the losing finalists receive US$20,000. — AFP This article first appeared in The Edge Financial Daily, on December 16, 2013.

https://theedgemalaysia.com/node/6498

#Update* CIMB well capitalised to support overseas units

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KUALA LUMPUR: CIMB Group Holdings Bhd will not need to raise capital even if it were to inject equity into its subsidiaries in Indonesia and Thailand, as the Malaysian banking group is well-capitalised, said its group CEO Datuk Seri Nazir Razak. He said the banking group had a total risk-weighted capital ratio in excess of 15% currently and hence was in a comfortable position to support its overseas subsidiaries PT Bank CIMB Niaga and CIMB Thai Bank pcl. "There is no issue of CIMB (being) in need of capital or equity capital. The rights issue in CIMB Thai is only RM300 million maximum and similarly, in Indonesia, even if we were to contemplate (a rights issue), the amount will also not be significant. "Both CIMB Thai and Niaga also have ample capabilities to fund their operations via bonds as opposed to equities," Nazir told reporters after signing a US$300 million (RM981 million) loan facility agreement with Japan Bank of International Cooperation (JBIC) here on Monday, March 29. Recently, CIMB's Indonesian and Thai subsidiaries announced plans to beef up their capital. Nazir said CIMB Niaga currently had no plans to raise capital via equity, but would issue US$300 million of subordinated debt papers that was announced last week. He said discussion on whether CIMB Niaga would require a rights issue was ongoing and whether the subsidiary would make a cash call depended on its growth momentum. CIMB Niaga president director Arwin Rasyid, who was also at the signing ceremony, said the bank would expand its branch network to capture higher loans growth this year. "For this year, the central bank of Indonesia has projected the loan growth industry average to be over 20%, and we will see CIMB Niaga achieving along that range or even higher," he said. For CIMB Thai, the bank had last week announced that it would raise three billion baht via a two-for-nine rights issue at one baht (10.1 sen) each and sell up to six billion baht of subordinated debt papers. The bank is also seeking shareholders' approval to divest its 99.99% stake in wholly owned bad bank unit Sathorn Asset Management to its parent CIMB Group for about RM23 million. CIMB Thai president Subhak Siwaraksa said as part of the bank's restructuring exercise, it would divest 99.99% of mutual fund management company BT Asset Management Co Ltd to CIMB-Principal Asset Management Bhd and sell a 20% stake in Worldclass Rent A Car Co to CIMB Group for a total of RM20 million to RM30 million. Nazir said CIMB Thai would be listed in June this year. Later, Subhak told The Edge Financial Daily that upon receiving the central bank of Thailand's and shareholders' approval, the bank would sell the shares of the bad bank unit to CIMB Group. After the stake sale, CIMB Thai could potentially sell to Sathorn non-performing loans (NPLs) with a nominal value of RM500 million but the book value could be between RM200 million and RM300 million, he said. Subhak added that CIMB Group would then inject additional capital into Sathorn to enable the bad bank unit to acquire more NPLs from CIMB Thai. "From CIMB Thai's perspective, it (Sathorn) will be de-consolidated from the bank. By doing so, the gross NPLs in our books will be reduced to not more than 5% from 10% currently. CIMB Thai will have one of the lowest NPL ratios among Thai banks," he said. Meanwhile, the US$300 million JBIC Asean Facility is the largest JBIC facility provided to a commercial bank and the first to be channelled directly to businesses across the region via a single banking group. Nazir said the loans, which are mainly for small and medium businesses, would be channelled to Japanese and domestic companies that have dealings with Japanese firms in Asean countries via CIMB Bank, CIMB Niaga and CIMB Thai. JBIC resident executive officer for Asia and Oceania Ryuichi Kaga said CIMB Group's regional presence was the driving factor behind JBIC's decision to partner the group for the loan facility. On another matter, Nazir declined to comment on a news report that said CIMB Investment Bank pitched for advisory, placement and underwriting work for the initial public offering of Bumi Armada Bhd, but "confirmed" that he was interested in "nice" transactions.

https://theedgemalaysia.com/node/83011

LBS sells Zhuhai land for HK$1.56b

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KUALA LUMPUR: LBS Bina Group Bhd yesterday signed a conditional sale and purchase agreement with Zhuhai Holdings and its subsidiary Jiuzhou Tourism Property for the disposal of Dragon Hill subsidiary Lamdeal Consolidated Development Ltd, which holds 60% equity interest in tract 197 in Zhuhai city, for HK$1.56 billion (RM608.93 million). In a filing with Bursa Malaysia, LBS said it is also selling another subsidiary of Dragon Hill, Lamdeal Golf & Country Club Ltd, which owns the 36-hole Lakewood Golf Club adjacent to the land, for HK$90.5 million. In return, LBS will receive HK$500 million cash, plus 225.56 million new shares in Hong Kong-listed Zhuhai Holdings at HK$1.33 per share or HK$300 million and a deferred cash payment worth HK$850 million. Consequently, LBS will be the third largest shareholder in Zhuhai Holdings with 16.78% equity interest. The deferred cash payment will be settled in four stages, paid annually until end-2017. The proposed disposal is expected to record an estimated total proforma gain on disposal of about RM240.39 million for LBS. Holding shares in Zhuhai Holdings is a more liquid investment than shares held in Lamdeal Development and Lamdeal Golf, which are unlisted private companies. “The board believes the proposed disposal is timely and provides an opportunity for LBS to unlock the value of its investment in Lamdeal Development and Lamdeal Golf & Country Club,” said LBS. In total, LBS stands to gain HK$1.65 billion from the sale. Analysts said it is a value enhancing deal, but shareholders will not get an instant windfall from the land divestment considering the bulk of the cash will be settled over four years. The announcement confirms a news report in The Edge Financial Daily on Monday that LBS would end its long drawn out negotiations and seal its land divestment deal in China soon. LBS noted that its net assets per share will climb to RM1.74, up by 48.71% from RM1.17, at one fell swoop. LBS said it will utilise RM93.27 million of the sale proceeds for general working capital expenses, RM99.65 million to pare down its bank borrowings and RM6.38 million for estimated expenses in relation to the proposed disposal. As at end-2012, LBS’ audited borrowings stood at RM429.33 million. The land sale is expected to trim its gearing to 0.55 times from 0.81 times. LBS said the disposal is expected to complete in the third quarter of this year. Zhuhai Holdings intends to build a mixed development project on the 79ha piece of land. The five-phase project is expected to kick off in May 2016 and is set to be completed in December 2026. Analysts said holding a stake in Zhuhai Holdings will allow LBS to benefit from the project that has been delayed for over 10 years in the city in southern China. This article first appeared in The Edge Financial Daily, on April 11, 2013.

https://theedgemalaysia.com/node/54825

CIMB Research positive on domestic construction sector

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KUALA LUMPUR: CIMB Equities Research remains positive on the domestic construction sector, underpinned by the progress of the Economic Transformation Programme (ETP) and the Greater KL projects could accelerate towards the end of this year and 2012. It said the sector remains an Overweight and its top picks are IJM Corporation Bhd and WCT Bhd. In its analysis of the sector, released on Thursday, Sept 15, it said Malaysian contractors’ earnings performance during the recent reporting period indicated that construction pretax margins would hold steady in the coming quarters. “We also expect some upside to margins due to the recognition of new jobs and expectations of lumpy project wins with better margins,” it said. CIMB Research said the recent awards of larger-scale jobs, that is the light rail transit (LRT) extension package 2, should be followed by the tenders and awards for the Klang Valley MRT project over the next two to three months. The research house also said that on average, the share prices of the contractors under its coverage had fallen 21% year-to-date as investors were increasingly wary of cyclical and high-beta stocks amid the global economic concerns. To recap, it said compared to the previous reporting season when only one company came in below expectations, two companies, Mudajaya and WCT, missed its forecasts this time. Mudajaya’s numbers were below expectations due to the impact of delays in the Indian independent power producer, which was mainly a timing issue. As for WCT, its performance was affected by forex translation losses due to the weakening of the Qatari riyal, which is pegged to the US dollar. As for the projects which have been awarded in Malaysia, it said the awards continued to pick up pace. Major project awarded year-to-date totalled RM6.4 billion. Among the recent notable awards were the RM1.3 billion LRT extension package B for the Ampang Line to Malaysian Resources Corp Bhd (MKRCB) and the RM569 million LRT extension package B for the Kelana Jaya line to Sunway. These awards are the last of the packages for the estimated RM7 billion LRT extension project, which is targeted for completion in two to three years. Another major award went to Taliworks for the subcontract works of Mengkuang Dam, Penang, which is worth RM339 million. “We expect the trend for the awards of large-scale jobs to continue for the next couple of months,” it said. CIMB Research said in the pipeline were the tenders and awards for the first packages of the RM20 billion MRT SBK line, the award for the estimated RM700 million to RM800 million civil works for the 1,000MW extension of the Tanjung Bin power plant and the signing of concession agreements and awards for the RM5 billion to RM6 billion West Coast Coast Expressway (WCE) as well as the extension of the RM1 billion New Pantai Expressway (NPE). As for the MRT, it pointed out that two of the total 18 packages for MRT SBK line first stage were launched recently. The packages also include tenders for the segmental box girders (SBG). “This is positive and meets Prasarana’s targeted timeline for the calling of tenders. We had earlier estimated that all the 18 packages would cost RM3.1 billion to RM3.3 billion or 15%-17% of the RM20 billion total projected value of the SBK line. Awards are expected in December 2011 at the earliest,” it said. To recap, Syarikat Prasarana Negara had in August revealed the 28 companies which have been shortlisted for the construction of the first phase of the Klang Valley MRT project. Under the first stage, stretching 10.6km, it would comprise of the comprise of the 5.4km stretch from Taman Bukit Ria to Plaza Phoenix in Cheras, and  the 5.2km stretch from Taman Suntex to Bandar Tun Hussein Onn. Eighteen packages would be involved of which eight packages are for elevated civil works, eight for elevated station works and two for depots. “Tender evaluation takes two to three months and we expect the first series of awards to take place in Dec-11 at the earliest,” it said. CIMB Research said of the 28 shortlisted candidates, 14 are listed contractors. The scope of works up for grabs are the elevated portion, stations, and depots. It said that it had earlier estimated that all the 18 packages would cost RM3.1 billion to RM3.3 billion or 15%-17% of the RM20 billion total projected value of the SBK line. This is based on the indicative cost of RM12 billion to RM13 billion for the 41.5 km elevated portion, which implies an average cost/km of RM289 million to RM313 million. However, some specialised packages could be worth up to RM800 million. Assuming that 60% of the cost of the first stage goes to the elevated civil works (eight packages), contractors could be vying for RM230 million to RM250 million in project value per package. For the station works, each of the eight packages could be worth RM150 million to RM170 million. Depot works are likely to be RM30 million to RM80 million per package. “Key potential winners with track record and expertise. We believe that IJM Corp, MRCB, Muhibbah, Mudajaya and WCT have a good chance of bagging the elevated civil works portions. “These contractors have an edge in the form of (i) experience in rail jobs (IJM, Mudajaya and Muhibbah), (ii) a GLC advantage and expertise in transportation hubs (MRCB), and (iii) track record and experience in undertaking large-scale infrastructure and building works (WCT). All the companies have the size and scale to undertake large projects and assume turnkey contractor roles,” it said.

https://theedgemalaysia.com/node/67810

In Briefs

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Fair value gains boost UOA’s profitKUALA LUMPUR: UOA Development Bhd’s net profit for the second quarter (2Q) ended June 30 rose 75.6% to RM104.97 million from a year ago due to fair value gains on investment properties and higher sales from on-going projects. Revenue grew 13.9% to RM197.46 million from RM173.33 million. In a filing with Bursa Malaysia yesterday, UOA attributed the improved earnings partly to the recognition of fair value gains on investment properties of RM53 million. For the six months ended June 30, UOA’s net profit slid 23% to RM145.9 million from RM189.8 million a year ago although revenue rose 8.29% to RM345.53 million. “New sales for the quarter under review remained robust, bringing the total new sales for the first half of 2012 to about RM900.2 million. “With projects such as Kencana Square, Desa Green and Kiara IV slated to commence in the second half of the year, we expect the new sales will continue to remain healthy in tandem with the targeted new launches,” said UOA. Scomi wins RM130m jobKUALA LUMPUR: Scomi Group Bhd’s unit Scomi Oiltools (Cayman) Ltd has bagged a RM130 million three-year contract from Qatar Petroleum in Qatar. The contract requires Scomi Oiltools to formulate solutions for onshore drilling activities and provide drilling fluids services for an initial four rigs with more rigs anticipated towards year-end. Scomi Oiltools market units president Wan Ruzlan Iskandar Wan Salaidin said: “The Eastern Hemisphere is a major growth region for us with the Middle East having great potential for expansion.” Tiong Nam’s earnings spikeKUALA LUMPUR: Tiong Nam Logistics Holdings Bhd’s earnings rose more than 18 times during its first quarter ended June 30 to RM1.83 million from RM99,000 a year ago on higher transportation charges and rental income from a new warehouse. Revenue rose 6% to RM79.64 million during the same period. Improvements in transportation charge rates boosted revenue at its logistic services to RM66.4 million while revenue at its property letting segment grew 30% to RM11.8 million with higher occupancy rates at its existing warehouses. Furthermore, there was income from new warehouses, the company said. On its prospects, Tiong Nam said the logistics business is expected to remain challenging due to competition and rising operating costs.  It said property development business “is expected to start contributing positively to the group from the financial year 2013 onwards”. Tiong Nam has contracted RM43.8 million worth of capital expenditure in respect of its property, plant and equipment as at end-June, the notes showed. Innity profit up on higher online ad spendKUALA LUMPUR: Innity Corp Bhd registered a net profit of RM1.12 million for its second quarter ended June 30, an increase of 66.66% from RM675,000 a year ago, boosted by higher online advertising spend. Revenue rose by 47.33% to RM11.98 million from RM8.13 million. In its filing with Bursa Malaysia yesterday, Innity said the better performance for the quarter was attributed to higher revenue and profit from the Malaysia, Singapore and Indonesia segments. For its first half ended June 30, Innity’s revenue rose to RM20.18 million from RM14.63 million while net profit grew five folds to RM1.29 million from RM209,000 a year ago. Media Shoppe sinks deeper into the red KUALA LUMPUR: Despite a record revenue of RM18.7 million for its second quarter (2Q) ended June 30, software company The Media Shoppe Bhd went deeper into the red with a loss after tax of RM1.5 million. “The increase in revenue is mainly due to the trading business by Kinetic Forward Sdn Bhd which amounted to RM17 million for the quarter,” the group said in its filing with Bursa Malaysia. However, no reason was given for the widening losses. The company fell back into the red with a net loss of RM307,000 in 1Q after registering a net profit of RM1.3 million in the preceding quarter. For the six months ended June 30, The Media Shoppe posted a net loss of RM1.81 million compared with RM2.69 million a year ago. This is despite a higher revenue of RM30.58 million against RM1.56 million. This article appeared in The Edge Financial Daily on 24 August, 2012.

https://theedgemalaysia.com/node/68241

Global housing markets fell in 1Q2012, survey shows

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KUALA LUMPUR (Sept 4):  Global housing markets fell in 1Q2012, according to the Global Property Guide's (GPG) latest house price indices survey. Asia is weakening, and house price falls in the worst-hit European crisis countries are dramatically accelerating. “There were alarming price-falls year-on-year in Q2 2012 in Ireland, Spain, Greece, Portugal and the Netherlands (each down more than 10% after inflation).  Poland and Cyprus seem also to be slipping into the abyss. “In the worst-affected European countries, house price declines were significantly greater this year, than during the same period last year.  House prices fell in 15 of the 22 European countries for which house price data is available,” said GPG. According to the survey released Tuesday, house prices fell in 24 countries, of the 36 countries for which quarterly house price statistics are available, and rose in only 12 countries. GPG said that during the latest quarter the downturn appeared to have accelerated, with house price falls in 26 countries and house price gains in only 10. It said that in Singapore, house prices dropped 3.28% year-on-year in Q2 2012, and by 0.77% during the latest quarter, after a 5.27% increase during the same period last year.  The turnaround was due to government housing market curbs, exacerbated by the worldwide economic downturn. In Indonesia, the residential property price index dropped 0.78% year-on-year in Q2, it said. “In Hong Kong, house prices rose by 3.01% year-on-year in Q2 2012, but this was a sharp slowdown from the 20.64% annual increase during the same period last year. “Housing prices in India rose 6.23% year-on-year in Q2 2012.  This was also a sharp slowdown from the 22.7% annual rise during the same period last year. Housing prices fell 1.09% during the latest quarter. The slowdown in the Indian housing market is partly due to its slowing economy,” it said. In nominal terms only 16 countries experienced house price falls during the year, while 20 countries recorded house price rises. “But the Global Property Guide's statistical presentation uses price changes after inflation, giving a more realistic picture than the more upbeat nominal figures usually preferred by real estate agents,” it said. Asia is weakening, and house price falls in the worst-hit European crisis countries are dramatically accelerating. “There were alarming price-falls year-on-year in Q2 2012 in Ireland, Spain, Greece, Portugal and the Netherlands (each down more than 10% after inflation).  Poland and Cyprus seem also to be slipping into the abyss. “In the worst-affected European countries, house price declines were significantly greater this year, than during the same period last year.  House prices fell in 15 of the 22 European countries for which house price data is available,” said GPG. According to the survey released Tuesday, house prices fell in 24 countries, of the 36 countries for which quarterly house price statistics are available, and rose in only 12 countries. GPG said that during the latest quarter the downturn appeared to have accelerated, with house price falls in 26 countries and house price gains in only 10. It said that in Singapore, house prices dropped 3.28% year-on-year in Q2 2012, and by 0.77% during the latest quarter, after a 5.27% increase during the same period last year.  The turnaround was due to government housing market curbs, exacerbated by the worldwide economic downturn. In Indonesia, the residential property price index dropped 0.78% year-on-year in Q2, it said. “In Hong Kong, house prices rose by 3.01% year-on-year in Q2 2012, but this was a sharp slowdown from the 20.64% annual increase during the same period last year. “Housing prices in India rose 6.23% year-on-year in Q2 2012.  This was also a sharp slowdown from the 22.7% annual rise during the same period last year. Housing prices fell 1.09% during the latest quarter. The slowdown in the Indian housing market is partly due to its slowing economy,” it said. In nominal terms only 16 countries experienced house price falls during the year, while 20 countries recorded house price rises. “But the Global Property Guide's statistical presentation uses price changes after inflation, giving a more realistic picture than the more upbeat nominal figures usually preferred by real estate agents,” it said.

https://theedgemalaysia.com/node/79341

#Interview* Anwar says PR to honour Fed Govt projects

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KUALA LUMPUR (Feb 25): Datuk Seri Anwar Ibrahim said Pakatan Rakyat (PR) will honour contracts awarded by the current Federal Government, if the opposition coalition takes over Putrajaya in the coming general election. He told theedgemalaysia.com in an interview over the weekend that major projects in Iskandar Malaysia, MRT rail projects and other major developments will continue under the new Federal Government. “Unless if there is a basis to re-evaluate them on the grounds of deceit and fraud, we can’t simply call off current on-going projects and developments. The country would lose a lot of money,” he told this writer who followed him on a campaign to Sungai Petani, Kedah. The Parti Keadilan Rakyat (PKR) de facto leader, current opposition leader who was Finance Minister during the 1990s, added: “We won’t discontinue the projects, but we will manage it differently”. Last Friday, Selangor Mentri Besar Tan Sri Khalid Ibrahim  caused a stir when he said Selangor state was considering reviewing or putting a stop to Federal Government projects in Selangor following a court ruling that was made not in favour of the state. His statement had caused strong reactions from many quarters, including the Prime Minister and the media. A major newspaper has warned that breaking contracts on current projects not only will cause losses to the people but also force the government to pay compensation.   In the interview, Anwar said he had earlier called for a re-negotiation of agreements with independent power producers because of “exorbitant cost” to the people and “unjust transactions” that have benefited companies. “We can save a lot if we practice proper tender systems, additional cost could be cut out through proper tender competition whereby other people has a chance to compete for a project without pulling favors,” said Anwar. On a separate interview, Tian Chua, vice-president of PKR, said although PR would still proceed with Datuk Seri Najib’s projects, some may be reviewed in accordance to its cost and proficiency. “We will get participation from experts and re-evaluate everything when we do that,” he said. With the general elections (GE13) getting closer, many foreign and private sector investors are adopting a wait-and-see attitude. Many investment funds are not taking fresh positions in the stock market.

https://theedgemalaysia.com/node/2099

Affin in planning stage of JV in China

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KUALA LUMPUR: Affin Holdings Bhd (AHB) is still in the internal planning stage of setting up a joint venture in China with its major shareholder Bank of East Asia Ltd (BEA). In a statement yesterday, its chairman Tan Sri Mohd Zahidi Zainuddin said “any kind of business development opportunities in China is purely in planning stage internally and has not been discussed in depth between BEA and AHB”. “We have yet to seek approval from any regulators both domestic and foreign given that our plans are not conclusive regarding this possibility. We will make the necessary announcement in compliance with disclosure requirements to relevant regulators once our plans are certain,” he said. Earlier, BEA chairman and chief executive David Li, who is also an AHB director, said the two parties were in talks to set up a JV Islamic banking unit in China within “the next year or two”. Saying that talks were at the preliminary stage, he said the JV could initially set up a presence in areas with a big Muslim population such as Urumqi, the capital of Xinjiang province. Li said the BEA branch, which was set up in Urumqi about six months ago, was doing “extremely well” and hence he saw huge potential for an Islamic bank there. “BEA has been assisting Affin in applying for a licence to start an Islamic banking operation in Urumqi. “There is no regulation in China being imposed (on Islamic finance), and we are urging the authority to give us the guidelines. Basically, what they said is that they would like to have a Chinese bank to work with an Islamic bank before they accepted it,” Li told reporters after the Malaysian company’s AGM here yesterday. AHB is most likely to hold a 80% stake in the JV and the remaining by BEA. However, Li said the ratio had not been fixed as the JV’s shareholding structure was not yet formalised. BEA, Hong Kong’s third-biggest publicly traded bank, owns a 21% stake in AHB. BEA’s entry into AHB brought in nearly RM500 million cash into the group, Mohd Zahidi said. On another matter, Mohd Zahidi said AHB did not require any additional capital at the group level, but it would inject another RM60 million into the group’s Islamic banking unit Affin Islamic Bank Bhd by year-end. The fund injection would increase the Islamic banking unit’s core capital ratio to 15% from 11.5%. The group had injected a total of RM40 million, as at end-March, into the unit to cater to growth of its Islamic business. Kamarul Arifin Mohd Jamil, the chief executive of Affin Islamic, said the Islamic banking unit had been growing rapidly, with earnings growing 41% last year. Also, Affin Investment Bank Bhd’s risk-weighted capital ratio (RWCR) was at an “adequate” level of 24%, its managing director Maimoonah Hussain said, adding that a fund raising exercise was not needed. Affin Bank Bhd’s core capital ratio was at 11.3% and RWCR at about 13.8%. Zulkiflee Abbas Abdul Hamid, its managing director and chief executive, said the figures were more than sufficient to help the bank to grow, while capital injection was not necessary in the near future. He was positive about the bank’s first quarter result. He said its net non-performing loan (NPL) ratio for the quarter was expected to be maintained at last year’s level of 3.2%. “Looking at the delinquent account, no doubt it shows uptrend, but it is still within our control. We certainly would like to see our NPL going down to 2.3% by year-end, as we set in our KPIs (key performance indicators),” he added. LTAT has a 35.59% stake in AHB, while Boustead Holdings Bhd owns 20.69%. Boustead, which has business activities in plantation, heavy industries, property, finance and investment, trading as well as manufacturing and services, is a majority-owned conglomerate of LTAT. On AHB’s proposed acquisition of Felda Holdings Bhd’s 20% stake in BH Insurance (M) Bhd (BHI), AHB deputy chairman Tan Sri Lodin Wok Kamaruddin said the deal could be concluded by year-end. The remaining 80% in BHI is controlled by Boustead.

https://theedgemalaysia.com/node/90688

FSA and IFSA take force

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KUALA LUMPUR: The new Financial Services Act 2013 (FSA) and Islamic Financial Services Act 2013 (IFSA) came into force yesterday, said Bank Negara Malaysia (BNM), ushering in a new era for the regulatory and supervisory framework of the country's financial institutions. According to a BNM statement, the acts are especially important during and beyond the next decade with the changing demographics of the country's population and the rising integration of the economy with the region and the world. Furthermore, they provide it with the necessary regulatory and supervisory oversight powers to fulfil its mandate within a more complex and interconnected environment. This includes an increased focus on preemptive measures within financial institutions that may affect the interests of depositors and policyholders, and the effective and efficient functioning of financial intermediation. "The FSA and IFSA are the culmination of efforts to modernise the laws that govern the conduct and supervision of financial institutions in Malaysia to ensure that these laws continue to be relevant and effective to maintain financial stability, support inclusive growth in the financial system and the economy, as well as to provide adequate protection for consumers," BNM said. The central bank said one of the key features of the two Acts is greater transparency in the implementation and administration of the law with clearly defined regulatory objectives and accountability for BNM as it pursues its principal objective of safeguarding financial stability. The acts, which have received royal assent and were gazetted in March, will also see transparent assessment criteria for authorising institutions to carry on regulated financial business, and for shareholder suitability. In particular, IFSA provides a comprehensive legal framework that is fully consistent with syariah in all aspects of regulation and supervision, from licensing to the winding up of an institution. In addition, the Acts encompass provisions to regulate financial holding companies and non-regulated entities to take into account systemic risks that can emerge from the interaction between regulated and unregulated institutions, activities and markets. BNM said, “The minister of finance may subject an institution that engages in financial intermediation activities to ongoing regulation and supervision by BNM if it poses or is likely to pose a risk to overall financial stability." The FSA and IFSA combine several separate laws to govern the financial sector under a single legislative framework for the conventional and Islamic financial sectors — the Banking and Financial Institutions Act 1989, Islamic Banking Act 1983, Insurance Act 1996, Takaful Act 1984, Payment Systems Act 2003 and Exchange Control Act 1953 which were repealed yesterday. BNM has retained some of the requirements or restrictions in the repealed laws. These include the requirement for written approval by BNM for property or liability to be insured with an insurer outside Malaysia. This requirement has also been extended to the takaful sector. "Accepting deposits without a licence granted under the FSA/IFSA remains prohibited," said BNM, adding that foreign exchange administration rules still remain in effect. The FSA provides that no person shall hold 5% or more interest in shares of a licensed person without the prior approval of BNM. This includes direct and effective interest. "It is im   portant that Malaysias regulatory and supervisory system is adequately equipped to respond effectively to new and emerging risks so that confidence in the financial system is preserved and that the critical financial intermediation activities which are vital to the economy are not disrupted," BNM said. This article first appeared in The Edge Financial Daily, on July 02, 2013.

https://theedgemalaysia.com/node/66027

#Stocks To Watch* Kian Joo, IHH, E&O, IJM Group, Hong Leong Bank, Dayang, Hap Seng, Barakah, Fima

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KUALA LUMPUR (Nov 26): Based on corporate announcements today, the stocks to watch on Wednesday (Nov 27) could include the following: Kian Joo Can Factory Bhd announced that it has received an offer from Aspire Insight Sdn Bhd to buy over its entire business, assets and liabilities for RM1.465 billion or RM3.30 per share. The RM3.30 offer is higher than the net asset per share of Kian Joo, at RM2.29 as at end-September 2013. The offer, displayed by Kian Joo, states that Aspire Insight’s shareholders are Equiti Merdu Sdn Bhd and Alleyways Sdn Bhd. Alleyways is majority-owned by Chee Khay Leong, who resigned yesterday as chief operating officer of Can-One Bhd. Can-One owns 32.9% of shares in Kian Joo, its competitor in the can making business. The Edge Financial Daily, quoting sources, reported today that the EPF and Can-One are joining hands to take over assets of Kian Joo and Box Pak (Malaysia) Bhd. Kian Joo owns 54.83% of Box-Pak, a maker of corrugated boxes. IHH Healthcare Bhd reported a 61% increase in third quarter net profit from a year earlier. This came on revenue growth at its existing hospitals globally. IHH told Bursa Malaysia today that net profit rose to RM117.03 million in the third quarter ended September 30, 2013 (3QFY13) from RM72.62 million. Revenue rose to RM1.67 billion from RM1.48 billion. Cumulative nine-month net profit however fell to RM401.06 million from RM594.29 million a year earlier. Revenue was lower at RM4.98 billion versus RM5.43 billion. Looking ahead, IHH expects higher staff and operating cost, besides costlier rentals to curb the group's profitability. IHH is also mindful of foreign exchange risk, as it operates hospitals globally. Eastern & Oriental Bhd posted net profit of RM16.5 million for its second quarter ended 30 September 2013, a sharp fall from RM34.9 million in the previous corresponding quarter. Revenue had also decreased to RM74.7 million in 2QFY13 from RM156.7 million in 2QFY12. For the nine months to September 2013, net profit fell to RM44 million from RM65 million in the previous corresponding quarter. Revenue for 9MFY13 fell to RM170 million from RM296 million in 9MFY12. IJM Corporation Bhd reported a slightly higher net profit for the second quarter ended Sept 30, 2013 (2QFY13), rising 2.2% year on year. The group’s net profit for the second quarter increased to RM140.30 million, from RM137.26 million in the second quarter of the previous financial year. But its revenue rose strongly to RM1.41 billion from RM1.14 billion. The company declared a single-tier first interim dividend of four sen for the quarter under review. IJM Land Bhd’s profit for the second quarter ended Sept 30 (2QFY13) soared 103.5% year on year due to higher property sales and increase in profit margin from its on-going projects. The property developer reported a net profit of RM91.6 million for 2QFY13 as compared to RM45 million a year ago. Revenue also jumped to RM426.2 million from RM267.6 million in previous similar quarter. For the six months to September, the group’s profit jumped to RM173.3 million from RM96.1 million year-on-year (y-o-y). Its revenue rose 886.2 million from RM518.9 million previously. IJM Land said it has unbilled property sales in hand of about RM1.3 billion. IJM Plantations Bhd’s net profit plunged 93% year-on-year (y-o-y) to RM3 million in the second quarter ended Sept 30, 2013, from RM41 million a year ago. But revenue rose 13% y-o-y to RM149 million from RM131 million. The oil palm agribusiness company said the plunge in profit was due to the reduction in closing inventories and the strengthening of the US dollar against the rupiah in Q2 FY14. For the half-year period to September 2013, profit earned was RM6 million while revenue generated was RM284 million. IJM Plantations said its financial performance was severely impacted by the unrealised foreign exchange losses, in addition to the start-up yields in the Indonesian operations. Hong Leong Financial Group Berhad (HLFG) announced it had achieved a net profit of RM430.2 million for the first quarter in the current financial year (1Q14), up by 24% year on year (y-o-y). The major financial group announced its first interim dividend of 13 sen per share, similar to a year ago. Revenue for the quarter to September 2013 rose to RM1.17 billion from RM1.08 billion in similar quarter of the previous financial year. “The growth in earnings was contributed by all of our three core businesses of commercial banking, insurance and investment banking,” said the group. Hong Leong Bank Bhd reported a 14% rise in first quarter net profit from a year earlier. Growth came on higher interest income, lower allowance for bad loans, and write-back of securities' impairment losses. Hong Leong Bank said net profit rose to RM544.49 million in the first quarter ended September 30, 2013 (1QFY14) from RM477.63 million. Revenue was higher at RM1.03 billion versus RM1 billion. Looking ahead, the group said it will expand its regional operations while "seeking organic transformational growth opportunities". Hong Leong Bank's 1QFY14 financial results were above consensus, according to Alliance Research. Hong Leong Capital Berhad’s net profit for the first quarter ended September 30, 2013, rose 198% year on year to RM24.3 million, from RM8.2 million in similar quarter of the last financial year. The company attributed this to higher contribution from its major operating segments in investment banking and stockbroking segments. Revenue for the quarter rose to RM56.2 million, from RM 54.2 million in similar quarter a year ago. Dayang Enterprise Holdings Bhd’s net profit fell 23% year-on-year (y-o-y) to RM32 million in the third quarter ended Sept 30, 2013, from RM41 million a year ago. But revenue rose 35% y-o-y to RM171 million. The oil and gas service provider said the lower profit was due to mobilisation costs incurred in the execution of the PAN HUC contracts as compared to the previous corresponding quarter. For the nine-month period, profit chalked up RM126 million while revenue raked in was RM371 million. “The directors remain positive of the group’s prospects for the remaining quarter of the year as we have on-going contracts of above RM4 billion to last at least until 2018,” said Dayang. Hap Seng Plantations Holdings Bhd posted a net profit of RM30 million for the third quarter, down 15% year on year. Revenue fell to RM115 million from RM149 million in 3QFY12. The net profit for the nine months to September 2013 plunged to RM58 million from RM110 million in the previous corresponding period. Revenue for 9MFY13 also fell to RM301 million from RM391 million in 9MFY12. The group cited the lower average selling price of crude palm oil (CPO) and palm kernel (PK) as reasons for the decrease in revenue for the third quarter. Looking forward, the group expects its performance to be “satisfactory” for the balance of FY2013. Barakah Offshore Petroleum Bhd reported lower 4Q profit, which declined by 24% year on year for the fourth quarter ended Sept 30 (4QFY13). The group’s profit fell to RM10.6 million for the quarter under review. But its revenue jumped to RM87.1 million from RM51.2 million previously. For the full-year, the group’s profit rose to RM41.1 million from RM33.2 million a year ago. The group’s revenue rose to RM299 million from RM202 million. Looking forward, the group is optimistic that it will enjoy positive growth as its order book valued at RM756 million will last for the next five years. Fima Corporation Berhad’s net profit for the second quarter ended September 2013 rose to RM19.1 million, from RM17.6 million in previous similar quarter. But revenue for the quarter under review fell to RM82.5 million, from RM83.7 million. The company has declared a dividend of 15 sen per share. For the cumulative 6 months, profits fell to RM33.1 million from RM35.2 million in similar period of the last financial year. Cumulative revenue for six months rose to RM158.6 million from RM156.6 million.

https://theedgemalaysia.com/node/49096

FBM KLCI pares down gains

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KUALA LUMPUR: The FBM KLCI pared down its gains at the mid-day break on Monday, May 16 in line with the generally tepid sentiment at key regional, markets as well as a holiday-shortened trading week in Malaysia due to Wesak Day on Tuesday. At 12.30pm, the FBM KLCI was up 0.03 point to 1,540.77, down from its intra-morning high of 1,545.34. Volume was 458.20 million shares valued at RM578.25 million. Market breadth was negative with 415 losers, 228 gainers and 282 counters unchanged. The ringgit fell 1.23% to 3.0394 per US dollar; crude palm oil for the third month delivery rose RM9 per tonne to RM3,258, crude oil shed 88 cents per barrel to US$98.77 while gold lost US$3.07 an ounce to US$1,491.95.     On Bursa Malaysia, Tradewinds was the top gainer this morning and rose 59 sen to RM9.40; Dutch Lady rose 30 sen to RM17.58, Media Prkma 21 sen to RM2.88, F&N 18 sen to RM19.10, Tradewinds Plantations 16 sen to RM3.42, Tasek 15 sen to RM8.95, Batu Kawan and KLK 12 sen each to RM16.32 and RM21.14, S P Setia 11 sen to RM4.19 and C.I. Holdings 10 sen to RM2.86. Latexx was the top loser and fell 26 sen to RM2.40 after the RM852.03 million buyout plan by Navis Asia VI Management Company Ltd (Navis) being aborted after the exclusivity period granted to Navis expired on May 15. Tahps fell 22 sen to RM4.98, United Plantations and Genting fell 20 sen each to RM17.60 and RM11.20, Hap Seng 13 sen to RM5.32, Hong Leong Bank and HLFG 13 sen each to RM12.32 and RM11.58, while Lafarge Malayan Cement and Cypark fell 11 sen each to RM7.19 and RM2.59. Ingenuity Solutions was the most actively traded counter with 18.3 million shares done. The stock fell one sen to 21.5 sen. Other actives included CME, Digistar, MLab, ConnectCounty, ECM Libra, PJI, Axiata and Malton.

https://theedgemalaysia.com/node/95841

Nazri's paternal instinct kicks in

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PETALING JAYA (Aug 15): He's the quintessential problem child; allegedly getting involved in fights, having pictures of him surrounded by sexy girls posted on the internet. One picture shows him holding beverages, while another with a cigar in his mouth. Last year, he was pictured driving a Hummer registered to businessman Michael Chia who was accused of being a Sabah Umno bagman. Chia and several Sabah Umno leaders were later cleared of graft involving RM40 million. He was also present when his bodyguards allegedly assaulted a condominium security guard. But anyone who has met Muhammad Nedim bin Datuk Seri Mohammad Nazri Aziz, 28, will swear that he is a charmer – an affable and respectful young man who addresses elders by calling them "Sir" or "Uncle". But truth be told, perception does not paint Nedim in a positive light, hence the son of the Tourism and Culture Minister is a hot political potato. So when his name appeared on the ministry’s website as a "special officer" to his father, the knives were out for the Padang Rengas MP who is attempting to retain his Umno supreme council seat. Under pressure by both the public and his political enemies from within and outside the Barisan National (BN), Nazri finally lost it. Perhaps it was also paternal instinct to defend his son when he retorted to reporters’ queries early today: "I don't give a damn and I do not need to appease anyone by removing my son's name." "I'm a trained lawyer and I know what I am doing," Nazri was quoted as telling the media at a press conference in Shah Alam today. He was further quoted as saying: "I am still elected and I am still the minister... I don’t care what you people think... He is my son and I am happy that I made him my special officer." Nazri had said that his son is not on government payroll and is helping him with youth programmes in Nazri’s constituency. "I needed him to engage with the Gen Y voters.  Since he is young, I engaged his help. But he is not a salaried worker," Nazri told a news portal earlier. Nazri has yet to return calls or respond to messages from fz.com but some of his close aides and friends are gobsmacked. "He shouldn’t have done that, especially when Azalina did the same thing," said one close acquaintance. He was referring to Datuk Seri Azalina Othman Said who, as minister had appointed 22 staff under her office when the Public Services Commission only allows eight staff for a cabinet minister. Like Nazri, his predecessor Datuk Seri Dr Ng Yen Yen was also accused of nepotism, with critics linking her son Julian Chin to companies that deal with the ministry. "This ministry is a hotbed for allegations of corruption, nepotism and cronyism. It was hoped that  Nazri’s appointment will clear this perception once and for all but now we have to put out another fire," said an aide, adding that there was no reason for Nedim’s name to appear on the ministry’s website as his work had nothing to do with the ministry.

https://theedgemalaysia.com/node/66145

KLCI slips below 1,640-level at mid-day break

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KUALA LUMPUR (July 23): The FBM KLCI slipped to below the 1,640-point level at the mid-day break on Monday, in line with the weaker sentiment at Asian markets. At 12.30pm, the FBM KLCI fell 3.57 points to 1,639.43. There were 452 losers and 177 gainers, while 282 counters traded unchanged. Volume was 456.99 million shares valued at RM407.42 million. The ringgit fell 0.735 to 3,1722 versus the US dollar; crude palm oil futures for the third month delivery fell RM60 per tonne to RM2,982, crude oil lost US$1.49 per barrel to US$90.34 while gold fell US$6.40 an ounce to US$1,578.10. Asian shares slid and the euro hovered near multi-year lows hit in early trade on Monday, as Spain sparked concerns about its ability to stave off a sovereign bailout after two indebted regions sought financial assistance from the central government, according to Reuters. Fears the euro zone's fourth largest economy will be forced to follow Greece, Portugal and Ireland - which were thrown lifelines by international lenders after their borrowing costs shot above sustainable levels - intensified a flight to the safety of U.S. Treasuries, pushing their benchmark 10-year yield to a record low early in Asia, it said. Oil fell more than $1, with Brent at $105.51 a barrel and U.S. crude at 90.51 a barrel, hit by Spanish fiscal woes, while corn and soybean prices eased from record highs scaled on Friday, said Reuters. At the regional markets, Japan’s Nikkei 225 lost 1.29% to 8,557,84, Hong Kong’s Hang Seng Index fell 2.63% to 19,125.00, the Shanghai Composite Index was down 1.15% to 2,143.65, Taiwan’s Taiex fell 2.10% to 7,014.22, South Korea’s Kospi lost 2.12% to 1,784.26 and Singapore’s Straits Times Index shed 0.85% to 2,989.83. Among the losers in the morning session, F&N fell 20 sen to RM18.20, Hing Yap down 18 sen to RM2.50, MMHE 17 sen to RM5.33, Fima Corp 16 sen to RM6.34, Pharmaniaga 12 sen to RM9.78, Ipmuda and KLCCP down 11 sen each to 68 sen and RM4.79, while MAHB and LPI Capital lost 10 sen each to RM5.50 and RM13.44. DBE Gurney was the most actively traded counter with 34.78 million shares done. The stock was unchanged at 8 sen. Other actives included Harvest Court, Ariantec, Naim Indah Corp, Metronic, MK Land, Century Software and Cybertowers. Gainers included Allianz, Bintulu Port, Malaysia Smelting Corp, KLK, CMSB, Glenealy, Sungei Bagan and MNC.

https://theedgemalaysia.com/node/3169

TM offers weekly, monthly prizes worth RM60k

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KUALA LUMPUR: Telekom Malaysia Bhd (TM) is offering various weekly and monthly prizes worth a total of RM60,000 for customers who pay their monthly TM bills with Visa credit or debit cards under the TM Autopay with Visa promotion which runs until Sept 30, 2010. In a statement on Tuesday, April 13, TM group vice-president for marketing Sharene Azura Azli said: "Customers can now enjoy the convenience of easy autopay facility using their Visa card, while benefiting from the opportunity to win exciting weekly prizes up for grabs and enjoy RM2 monthly rebate on their TM bill." Visa Malaysia country manager Stuart Tomlinson said, "With this arrangement, Visa cardholders save time, money and gain convenience since there is no need to queue or worry about penalties when they forget to pay their bills on time." To participate, all eligible customers need to do is to register for TM's Autopay facility using their Visa credit or debit cards within the promotion period. Once the auto-payment is completed, TM will contact the participants randomly and they will be asked eight questions about TM's products and services. Weekly prizes up for grabs include a MacBook Pro, Coach bags, PSP Go, iPod Touch, Nintendo Wii and a 32" LCD TV.

https://theedgemalaysia.com/node/71195

Shifting to private sector jobs

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Construction sector Maintain overweight: Medium term sector drivers will shift to projects beyond the Klang Valley mass rapid transit (MRT). Details from Budget 2014 support our view and should address the risks associated with project sequencing. Private sector-type contracts should fill the gap before larger public sector-type jobs return. This angle should be positive for the laggards and undervalued stocks within our coverage, which should benefit from the build-out of highways, power plants and oil and gas-related infrastructure. We highlight IJM Corp Bhd, Muhibbah Engineering (M) Bhd and Mudajaya Group Bhd. We keep Gamuda Bhd as our top pick in view of its asset monetisation, rail jobs and potential special dividends. The sector remains an “overweight”. We do not believe that there will be a medium term vacuum in the rollout of domestic projects as the risk of delays from project sequencing is balanced by private sector-type projects in 2014. We expect private sector-type projects to fill the gap before larger government funded projects take off. A recent update by MRT Corp Sdn Bhd confirmed that the execution process for MRT 2 will pick up in 2014 but it also said that the tender process will only commence towards the later part of 2014. MRT job awards can only begin in early 2015. This gives way to an estimated RM36 billion worth of private sector-led contracts in 2014. Apart from rail upgrades, Budget 2014 also shone a spotlight on private-public partnership (PPP) projects backed by a RM2.7 billion allocation for 2014. This should drive the execution of major highways, power plants, and oil and gas-related infrastructure. Key projects include the RM6 billion West Coast Expressway (WCE), RM3 billion expansion of Kuantan Port, power plant extensions and other new highways. In the medium term, we expect IJM Corp (WCE and Kuantan Port), Muhibbah Engineering (best performer year-to-date; undervalued) and Mudajaya (laggard; power plant and highways) to rerate on the back of these themes. — CIMB Research, Nov 18 This article first appeared in The Edge Financial Daily, on November 20, 2013.

https://theedgemalaysia.com/node/44441

Capital: Market Outlook

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Market SummaryMalaysia’s benchmark index saw a mild correction early last week as investors took profit after a strong rally the previous week. The FBM KLCI regained its momentum to close higher last Thursday, lifted by improving investor sentiment in the US and European markets. But the index gave up its gains on Friday to close at 1,569.89 points, down 0.1% from 1,572.21 a week earlier. A total of 2.14 billion shares worth RM2.54 billion changed hands last Friday, resulting in losers leading gainers by 552 to 317. Analysts say the Malaysian stock market is experiencing a strong bull phase with minimal near-term risks from inflation due to rising commodity prices. “It is most likely that the market has priced in potential interest rate hikes in Malaysia this year,” JF Apex Securities analyst Ng Keat Yung tells The Edge. JF Apex has a fair value of 1,750 for the FBM KLCI, valuing the index at a PER of 16.7 times 2011 earnings. This is still below the 18 times peak seen in 2008. Asian markets ended mostly lower last Friday, on the back of disappointing jobless claims data from the US. Jobless claims rose unexpectedly to a seasonally adjusted level of 445,000 from 410,00 the previous week. Potential rate hikes in India and China, coupled with a strong yen, also weighed down regional markets. Indeed, inflation fears prompted central banks in the region to raise interest rates last week. Thailand raised its one-day bond repurchase rate by 25bps to 2.25%, while South Korea increased its lending cost by a similar quantum to 2.75%. The market expects Bank Negara Malaysia to resume raising the overnight policy rate in 2H2011. But for now, the central bank is expected to adopt administrative credit controls to combat rising prices. TA Securities says rotational plays on lower liners should remain active, with keen interest still on the oil and gas, construction and property-related sectors. It foresees a correction in the FBM KLCI in the final week of this month as investors take profit ahead of the Chinese New Year holidays. This week, key economic indicators to watch out for include Malaysia’s inflation numbers, due for release on Jan 19. Rising commodity prices are also worth keeping an eye on as plantation stocks make up almost 20% of the FBM KLCI.     This article appeared in Capital page, The Edge Malaysia, Issue 841, Jan 17-23, 2011

https://theedgemalaysia.com/node/40092

Pikom ICT Leadership winners 2010

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Last Thursday Pikom announced the winners for its 2010 ICT Leadership Awards. Started in 2008, Pikom introduced the special Pikom ICT Leadership Awards to recognise outstanding leaders each year in the ICT industry and user community. Awards were given in four categories:•     Technopreneur Excellence Award•     Member Excellence Award•     CIO Excellence Award•     ICT Personality of The Year The panel of judges comprised:•     Datuk Mohamad Zabidi Zainal, director-general of Mampu•     Datuk Badlisham Ghazali, chief executive officer of MDeC•     Datuk Hafsah Hashim, chief executive officer of SME Corp Malaysia•     Zaky Moh, ICT Director of SME Corp Malaysia•     Andy Tan, head of ICT of EPF & Pikom CIO Chapter Chair•     Professor Dr Zaharin bin Yusoff, president of MMUPikom said it is confident that the award will spur the individuals and organisations to greater heights of excellence. Technopreneur Excellence Award(presented to an outstandingICT entrepreneur)Andrew Tiang, N2N Connect Bhd Within a short span, he literally transformed the company from an unknown small private limited company in 2000 into a public limited company in 2004. That very same year, the company was granted the Multimedia Super Corridor (MSC) status by the Multimedia Development Corporation. His innovation and vision have helped developed a business model where stockbroking companies do not have to incur initial capital outlay to acquire a quality online and mobile trading system and helped the company to successfully capture a large market segment of investors through a suite of user-friendly solutions and services. Member Excellence Award(presented to a Pikom member for achievements or breakthroughs made by the organisation in the  past 12 months that include growth in revenue, profit, market access or technological innovation, and/or clearly demonstrated its contribution to the development of the ICT industry in Malaysia)IBM Malaysia Sdn Bhd IBM is playing a key role in contributing towards helping Malaysia achieve its vision to be a high income society and move towards producing talents and knowledge workers for the country and the ICT industry. To date, it has established 19 Centres of Excellence (COEs) in Malaysia, in turn creating thousands of new jobs. Over the last 12 months, it has invested in its worldwide Human Resource Integrated Service Team in Cyberjaya, Malaysia, and embarked on skills training and talent development on these new employees to assume the new jobs that were created in the 19 COEs in Malaysia. While the country was going through a recession, IBM was aggressively hiring resources and is still hiring. It also rolled out a company-wide talent development programme last year to skill-up its employees. Talent development collaboration between the organisation and local universities the last 12 months is equally significant. CIO Excellence Award(presented to an outstanding head of ICT in a user organisation that has been instrumental in the adoption of ICT in the organisation. This award is open to government, private sector and non-governmental organisations). Joint winners — Datuk Dr Nor Aliah Mohd Zahri of Mampu; and Cheah Kok Hoong of Sunway Nor Aliah has dedicated more than 30 years of her life to the development of ICT in Malaysia. She is very well regarded not only within government circles, but also the ICT fraternity. Aligning to the government’s commitment and agenda in adopting ICT as a key enabler to move up the economic value chain, she was appointed the first Malaysian government Chief Information Officer (GCIO) based on her excellent and successful performance especially in driving a fundamental shift in how government approaches ICT from being bureaucracy centered to citizen centric. Cheah has in-depth knowledge and experience in business process re-engineering, strategic planning, IT direction and policy, system integration, operational processes and supporting regional manufacturing and IT operations. His main responsibility when joining Sunway was to complete the consolidation, standardisation and optimisation of common and some specific IT systems supporting the group’s various entities both locally and globally. He aims to replicate the success of the IT and Finance shared services model with its varied business processes. The ultimate goal is in transforming the shared services entity into an independent third-party services provider spanning both technology and business process capabilities and create a new revenue stream for the Sunway group. ICT Personality of The Year Award(presented to a creator of the greatest impact on the entire ICT industry in Malaysia) Lt Col (R) Husin Haji Jazri, CEO of CyberSecurity Malaysia He is a key player in the formation and maturity of the nation’s premier organisation to preserve and protect the integrity of Internet content and usage. For his servicesand many achievements, he has been nominated for numerous awards in the past and was a recipient of the prestigious (ISC)2 Information Security Leadership Achievements (ISLA) Award 2009 for Exemplary Leadership and Dedication in Enhancing the IT Security Workforce as well as the Harold F Tipton Lifetime Achievement Award this year in recognition of his distinguished information security career. He spearheaded the establishment of the Malaysia Computer Emergency Response Team (MyCERT), which is today a model for other member nations of the OIC and whose services are now offered the Cyber999 Help Centre. He was the driving force behind the development of Digital Forensics (CyberCSI™), the cyber version of the crime scene investigator, and Data Recovery Services. He was also at the forefront of efforts to create the framework for the Malaysia Common Criteria Evaluation leading to the establishment of MyCC.

https://theedgemalaysia.com/node/43296

Jetson buys land in Penang for RM14m

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KUALA LUMPUR: Kumpulan Jetson Bhd is breaking into the property development scene in Penang with the acquisition of three parcels of land on the island for RM14 million. According to an announcement yesterday, the company is acquiring the three pieces of freehold land from Malaysia Building Society Bhd (MBSB). Kumpulan Jetson’s venture into Penang comes more than a month after the departure of two of the Naza brothers, Sheikh Mohd Nasarudin and Sheikh Mohd Faliq, from the company in December. It is also the first corporate exercise for the company since the re-emergence of Datuk Teh Kian An as a major shareholder. The company told Bursa Malaysia yesterday that the tracts of land, purchased via its 51% subsidiary Jetson Development Sdn Bhd, collectively measures 48,290 sq ft or slightly over one acre and are located in George Town. MBSB’s office in Penang is located at one of the parcels of the land. It said the purchase consideration was arrived at on a “willing buyer and willing seller” basis and free from encumbrances on an “as-is-where-is” basis. It added that the land was planned for the high-end property development with an estimated gross development value of RM93 million. The company said the proposed acquisition fits well with its strategy in carrying out the concept of boutique developments. It added that Penang’s property market is second to Kuala Lumpur, and the outlook there remains vibrant despite signals of slowing down in other sectors. Kumpulan Jetson said the high-end properties market is more resilient. With the strategic location of the land, coupled with the proposed innovative design and concept, it said the properties would be appealing to prospective purchasers. It believes the concept will appeal to local and overseas niche prospective purchasers, including top executives or expatriates who demand luxury and secluded prestigious addresses. When the Naza brothers first emerged in Kumpulan Jetson in October 2009 with a stake of more than 33%, the construction company was slated for big things as it was identified as the construction arm for the various property projects under the Naza group. Among the projects under the group are the Platinum Park at the vicinity of KLCC and the Matrade Centre in Jalan Duta. Kumpulan Jetson had then entered into a tie-up with China State Construction Engineering (Hong Kong) Ltd for the proposed development of one of the office towers at Platinum Park in May last year. The joint venture was terminated four months later. This is because things did not pan out as expected and the Naza brothers started reducing their interest in Kumpulan Jetson. From more than 33%, the Naza brothers now have 21.66% of Kumpulan Jetson, based on the latest available filings with Bursa. This article appeared in The Edge Financial Daily, January 19, 2011.

https://theedgemalaysia.com/node/19078

Selected property stocks up

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At 3.34pm, Berjaya Land was up 13 sen to RM3.92 with 100,600 shares done. Magna Prima added eight sen to RM2.24 while IJM Land gained seven sen to RM2.16 and IJM Land-WA rose 5.5 sen to RM1.02. However, the 30-stock FBM KLCI fell 2.83 points to 1,205.38, in line with the cautious regional markets. Turnover was 460 million shares valued at RM522 million.

https://theedgemalaysia.com/node/73841

BHIC awarded defence contract

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KUALA LUMPUR (Nov 11): Boustead Heavy Industries Corporation Bhd (BHIC) announced it has secured a "Contract for the Second Generation Patrol Vessels/ Littoral Combat Ships" (LCS Programme) from the government. In a statement to Bursa Malaysia, the maritime and defence solutions provider said it had today via its unit Contraves Advanced Devices Sdn Bhd (CAD) received a Letter of Award (LOA) from Boustead Naval Shipyard Sdn Bhd (BNS). “The LOA awards to CAD contracts is to supply the Torpedo Launching System for the LCS Programme,” said BHIC, adding that other details are classified. “These contracts are not expected to have a material impact on the earnings for the financial year ending Dec 31, 2013, but will contribute positively to future years’ earnings as its tenure is for the long term.” The statement noted BNS was given the Letter of Acceptance by the government. BNS is an associate company of BHIC and a subsidiary of Boustead Holding Bhd, it added.

https://theedgemalaysia.com/node/22503

Bumi Armada, EnQuest expect more collaborations in FPSO market

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KUALA LUMPUR (Jan 22): Bumi Armada Bhd is confident of future collaborations with EnQuest PLC in the floating production, storage and offloading (FPSO) market, said Hassan Basma who is CEO and executive director of Bumi Armada. At the contract signing ceremony with EnQuest PLC today, the Bumi Armada head said he hoped Bumi Armada’s relationship with EnQuest would grow from strength to strength. “We are working with them on other things and hopefully this will produce a strong partnership over time,” said Hassan. Hassan's view was echoed by EnQuest’s Head of Major Projects Richard Hall, who said: “I sincerely hope so. Bumi Armada’s foray into the UK market is very important.” Hall, meanwhile, said EnQuest is looking to increase its foothold in Malaysia, noting that the British oil & gas firm has a small portfolio in Malaysia with a 42% interest in the oil & gas fields, Blocks SP 308 and 307 in Sabah. “We are hoping to establish a firmer base in Malaysia in the area of risk service contracts. “We might venture into ground field assets in Malaysia and perhaps ‘assist’ Petronas in the ground field market,” said Hall.

https://theedgemalaysia.com/node/95161

Chinese Press: Umno VP posts to see six-cornered fights

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PETALING JAYA (Aug 7): Umno's three vice-president (VP) posts may see six-cornered fights between three incumbents and former Melaka chief minister Datuk Seri Mohd Ali Rustam, Sabah chief minister Datuk Musa Aman and former Negeri Sembilan chief minister Tan Sri Mohd Isa Samad. China Press reports the three incumbents are Home Minister Datuk Seri Ahmad Zahid Hamidi, Defence Minister Datuk Seri Hishammuddin Hussein and Datuk Seri Mohd Shafie Apdal. All of whom have declared their intention to defend their position in the party. The daily quoted a source from Umno president Datuk Seri Najib Razak's camp saying, the possibility is there that Umno veteran Tan Sri Tengku Razaleigh Tengku Hamzah will make his bid for the presidency. Also, the anonymous source did not rule out the possiblity that Mohd Ali, who confirmed he will contest in the upcoming party election, will join the race for the VP post. As for Musa, Sabah Umno had openly voiced their support for him to contest for the VP position. This pronouncement, more or less, would have an impact on Shafie who also comes from Sabah, China Press wrote. Even though Mohd Isa said he had not made up his mind, China Press cites an online article stating that the Felda chief may join the VP race for three. Chew Mei Fun hints Chua's camp controls PJU Former Wanita MCA chief Datin Paduka Chew Mei Fun who left her base – the Petaling Jaya Utara (PJU) division for Wangsa Maju has hinted that MCA president Datuk Seri Dr Chua Soi Lek's camp has gained control over PJU, Oriental Daily News reported. After launching her book yesterday, the former MP of PJU told reporters she chose to contest in a branch in Wangsa Maju instead of PJU because she wished to be elected as a central delegate in a friendlier environment. Asked why she left PJU where she had worked hard, Chew said, "if a place has long been controlled by some other people, why must (I) step in there and risk losing the central delegacy?" PJU is seen as a division under Chua's camp as it was among the MCA divisions that had openly backed Chua to stay until his term expired, Oriental Daily pointed out. Chew is Chua's strong opponent. She resigned as Wanita MCA chief after Chua was elected as MCA president in 2010 in keeping to her pledge to quit if Chua had won the position. Amid speculation that she is eyeing the party vice-president post, Chew said she had not made up her mind to compete for a top position. "I'm still observing (the situation before deciding to contest for a top post). After all, it is harder to decide on a comeback than making the decision to resign after a three-year hiatus." "In fact, many people stereotype that a person who runs for delegacy is going to contest for a top post. If I say I haven't made up my mind yet; I haven't made a decision, would you believe it?" Asked if she had consulted party veterans on participating in the party election, Chew answered in the affirmative adding young members, outsiders to her list of people whom she spoke to. Chew said the feedback varied in that some supported her to go for a top post while others thought it would be good for her to keep her 'study' mode and not to get into muddy waters again. In a separate article, Oriental Daily quoted her as saying MCA leaders who participated in the party election must reflect on if they had become a liability with their negative image. If so, they should just stay behind the scenes instead of contesting in the election.

https://theedgemalaysia.com/node/61380

Standard Chartered sees Malaysia 2014 GDP growth at 5.3%

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KUALA LUMPUR (Dec 4): Standard Chartered expects Malaysia's 2014 economic growth to come in at 5.3%. Growth is seen coming from an improvement in external trade. In a report, Standard Chartered said its 2014 gross domestic product (GDP) forecast is in line with the government's growth projection of 5%-5.5%. Standard Chartered's 2014 numbers compare with the bank's GDP growth forecast of 4.7% in 2013. "GDP growth was 4.5% in 9M-2013 and appears to be on track to meet our full-year forecast of 4.7%. We expect external demand to pick up in 2014, mitigating theexpected slowdown in domestic demand," Standard Chartered said. Domestic demand is expected to slow in anticipation that private consumption may moderate in 2014. This comes on higher inflation amid government subsidy cuts, besides high household debt, Standard Chartered said. The bank also expects investment growth to ease in 2014. Standard Chartered said the spotlight is on less government investment as the public sector "delays less urgent projects to improve the current account position and focuses on raising private investment. "The fact that large infrastructure projects such as KL International Airport 2 are nearing completion may also reduce investment activity. "We expect investments in the oil and gas sector to provide crucial support to overall investment in 2014," Standard Chartered said. On inflation, the bank expects the consumer price index (CPI) to rise 3.4% in 2014 from the projected 2.1% in 2013. The CPI rise comes on the country's fuel-price hike and subsidy reduction. "Even with inflation likely to trend higher in 2014, we think Bank Negara Malaysia may refrain from hiking policy rates until a firm growth trend is established. "The central bank may wait until demand-pull inflation emerges and starts to add to supply-driven inflation driven by subsidy cuts," Standard Chartered said. Commenting on market outlook, the bank said it has "neutral" short and medium-term foreign exchange weightings on the ringgit. Domestic factors are likely to be more supportive of the currency in 2014 and a rally for the ringgit is expected only in the 2H2014. "However, we expect the currency to underperform in H1-2014 due to heavy bond inflows in recent years. This is largely based on our view that the (US) Fed will start QE (quantitative easing) tapering in June 2014. "We expect the MYR to rally in H22014, once tapering is fully priced in and against a backdrop of continued Chinese yuan (CNY) appreciation. Standard Chartered has also offered its views on the global economy. The bank said it sees emerging economies outgrowing the group of seven developed economies by almost 4% in 2014. The group of seven economies comprise the US, and UK, France, Germany, Italy, Canada and Japan.   “External demand-driven economies with strong links to the global economic cycle, such as Singapore and Thailand are likely to benefit the most while domestically-driven economies such as India, Indonesia and Brazil will face headwinds,” Standard Chartered said. On the US' QE measures, Standard Chartered expects the Federal Reserve to start tapering its QE programme by June 2014 on broader global economic recovery. Standard Chartered expects the Federal Reserve to initiate its first interest rate hike in 2016.

https://theedgemalaysia.com/node/70257

Appeal Court upholds judgement in favour of IOI Corp

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PUTRAJAYA: The Court of Appeal on Monday upheld the Kuala Lumpur High Court’s 2011 decision in favour of IOI Corp, Tan Sri Lee Shin Cheng (pic) and his son Lee Yeow Chor over the purchase of Palmco Holdings Bhd (Palmco) shares in March 1997. The Appeal Court ruled against seven plaintiffs who had sought IOI, Lee and, his son to extend a mandatory general offer (MGO) for the rest of Palmco shares when the three defendants had breached the 33% threshold under Securities Commission’s (SC) code on takeovers. The court, in its judgement, said it was in agreement with the High Court’s decision that there was no cause of action in tort for breach of statutory duty against IOI Corp as claimed by the seven plaintiffs. The seven plaintiffs, who were then Palmco minority shareholders, were Zulkifli Hussain, Mohd Jamil Muhd Rashidi, Ariffin Mohamed Isa, Mohd Azham Hussain, Noridah Hussain, Shoptra Jaya (M) Sdn. Bhd, and Hui Choy Chin. Palmco has since changed its name to IOI Oleochemicals Industries Bhd. The seven plaintiffs were represented by Robert Lazar of Shearn Delamore & Co. In an immediate response, Lazar said he is in the course of taking instructions from his clients whether to appeal against the Court of Appeal’s decision. The high profile case first started in 2000 when Zulkifli sought an order of mandamus against SC to compel IOI Corp and Lee to carry out an MGO following the acquisition of some 52.46 million Palmco shares, equivalent to a 32.96% stake in Palmco, on March 24, 1997 at a price of RM4.35. The next day (March 2 ) IOI Corp acquired a further 38,000 shares or 0.024% of the issued share capital of Palmco while Lee, who was the managing director of IOI at the time, acquired another 77,000 shares or 0.048%. The plaintiffs contended that IOI Corp, acting in concert with Lee, had triggered the MGO as their shareholding had reached 33.032%, which was above the 33% threshold. But Lee then sold the 77,000 shares on April 8, 1997. Subsequently on June 23, 1998, Lee’s son, who was a Palmco director, acquired 20,000 Palmco shares and on Aug 12, 1998, a further 50,000 Palmco shares from the open market. The aggregate number of shares acquired totalled 70,000 or 0.046% of the issued share capital of Palmco. The SC had ruled on Feb 5, 1999 that IOI Corp and Lee had to undertake the MGO. IOI Corp and Lee then appealed against the SC’s decision in April 1999, but was rejected. They were also reprimanded by the SC. However, IOI Corp and Lee did not make the MGO as required as SC “could not exercise its powers under the then Securities Commission Act to ensure compliance with the Code”. The SC also did not take further action against Lee’s son. In July 2001, Sime Darby Bhd made a conditional voluntary offer to acquire Palmco’s shares at RM4.35 per share. IOI Corp then countered the offer, and raised the offer price to RM4.60 per share. It completed the MGO of Palmco at that offer price on Oct 18, 2001. The first plaintiff, Zulkifli, then sought to procure from the High Court an order of mandamus against SC, ordering it to direct IOI Corp and Lee to comply with the provisions of the 1998 Take Over Code and to make a mandatory offer to acquire the remaining shares and warrants in Palmco at a price of RM4.35 and RM2 respectively. IOI Corp and Lee’s lawyers intervened in the proceedings for the order of mandamus and successfully struck off the application. They had argued that there was no cause of action against them due to the fact that the minority shareholders had disposed of their shares at a higher price than the MGO price. The plaintiffs then pursued a private law remedy on a breach of statutory duty, commonly termed a breach tort, on the part of the three defendants for failing to comply with the provisions of the Take Over Code. The plaintiffs had sought compensation or damages. In May 2011, the High Court ruled against the plaintiffs. IOI was represented by Rutheran Sivagnanam, while Lee and his son were represented by Datuk M Pathmanathan and Joseph Ting respectively. This article first appeared in The Edge Financial Daily, on November 21, 2013.

https://theedgemalaysia.com/node/99582

#Global Markets* Share rally pauses, markets watching diplomacy on Syria

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* Week of stock market gains peters out, as prospect of Syria strike recedes* Sell-off in oil, core bonds eases* Wall Street expected to open -0.1 - +0.1* Sterling hits 7-mth highs vs dollar, euro after jobs data LONDON (Sept 11): A week of gains for world stocks petered out on Wednesday, and a sell-off in oil and core government debt eased, as talks began on trying to avert a U.S. military strike on Syria, against a broadly calm market backdrop. The safe-haven yen was at a seven-week low against the dollar, and stood near multi-year lows against the euro and sterling, while shares in Europe nudged higher, ahead of what was expected to be a mixed start for Wall Street.     U.S. President Barack Obama said late on Tuesday, that Russia's offer to push Syrian President Bashar al-Assad to put chemical weapons under international control, could potentially head off the type of limited military action he was considering. "Over the last few days, we've seen some encouraging signs," Obama said, in televised speech from the White House. Markets were largely in consolidation mode after the big moves of the two previous sessions, when what looked to be a rapid move towards U.S. action was halted by Russia's plan. Oil recovered some ground with Brent crude rising back above $112 a barrel, from a 2-1/2-week trough of $110.59. The steadier performance came after a 4-percent drop in the past two sessions — its largest two-day fall since June. Copper edged slightly higher to $7,198.25 a tonne, while gold inched back up, to 1,365.90, having slid to a three-week low of $1,356.85 an ounce. "The calmer market mood is largely because the geopolitical risks have diminished," said Vasileios Gkionakis, global head of FX Strategy for UniCredit in London. "At the same time, the market is still digesting all the data that we have had over the last 10-days or so, and with the exception of the downward revision of the U.S. payrolls ingeneral, that has painted a positive picture." Europe There was little in the way of major economic news out of Asia, on Wednesday. In Europe, Britain's unemployment rate bucked expectations of a steady reading, as it dipped to its lowest level since late 2012, in the latest sign its economy is picking up. Sterling rose to a seven-month high against both the dollar and the euro, and to a mammoth 4-year high against the weakened Japanese yen, as the surprise fed suspicions that the Bank of England may have to raise interest rates earlier than it is currently suggesting. The FTSEurofirst 300 pan-European share index shrugged off early lethargy, to inch up 0.15 percent by 1000 GMT, as a 0.3 percent rise on Germany's Dax balanced falls of 0.1 on London's FTSE and Paris's CAC 40. The region's core debt markets also saw a largely quiet session, this week's save-haven sell-off abated. Benchmark German government bonds tracked minor gains by U.S. Treasuries, while focus remained on Italy, after its benchmark yields were left above Spain's, for the first time in 18 months on Tuesday. Political instability and worries about Italy's banks, ahead of a major health check of all euro zone banks by the European Central Bank in the coming months, are driving the move. Rome sold 11.5 billion euros of treasury bills at its highest rate in over nine-months, ahead of a tripartite bond auction on Thursday, which aims to raise 7.5 billion. Italy was well ahead of the game, in terms of meeting its 2013 funding needs, but on Tuesday, the Treasury asked parliament to raise the ceiling on this year's net debt issuance, to 98 billion euros from 80 billion, given the struggle to rein in public finances. Analysts at Newedge said German elections on Sept 22 would be the near-term "pivot point" for euro zone debt markets, but that Italy had its own specific issues that made it a danger. "While Merkel should win (German elections), her coalition may not survive and force her into a coalition with center left. This could weaken the euro but benefit the periphery," they said in a note. "However, Italy may underperform, as the ECB prepares for new euro zone bank stress tests, that compel especially the poorly-capitalized Italian banks to raise more equity capital." Fed focus Stock futures pointed to a softer start on Wall Street, after the S&P 500 chalked up its sixth day of gains on Tuesday. Also helping risk currencies against the yen, which had seen some safe-haven buying in recent weeks, was stronger-than-expected industrial output, that reinforced signs that China's economy was stabilizing. The dollar backtracked to 100.27 yen, having scaled a seven-week peak of 100.55 yen, while the euro touched a 16-week high, around 133.37. Against the dollar, the common currency reached a two-week high of $1.3282, as it showed little interest in a warning from one of the ECB's policymakers, that Greece may need, not one, but two more aid packages. MSCI's broadest index of Asia-Pacific shares outside Japan, ended 0.1 percent lower but remained at a three-month high, having gained more than 8 percent in the last two weeks. Emerging market stocks dipped 0.3 percent. E-Trade Securities analyst Choi Kwang-hyeok said some investors were choosing to book profits ahead of next week's Federal Reserve meeting, that could see the U.S. central bank begin to scale back its massive stimulus campaign. "The week ahead contains cues that could change foreign capital flows," he said.

https://theedgemalaysia.com/node/27941

#Stocks to watch:* Genting, Maxis, AirAsia, AFG

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KUALA LUMPUR:  Blue chips on Bursa Malaysia are expected to start off the new month of March on a more optimistic outlook after the recent strong set of corporate earnings while upside would be underpinned by a stronger-than-expected economic recovery. On Wall Street, the Dow Jones industrial average edged up 4.23 points, or 0.04 percent, to end at 10,325.26. The Standard & Poor's 500 Index added 1.55 points, or 0.14 percent, to 1,104.49. The Nasdaq Composite Index gained 4.04 points, or 0.18 percent, to 2,238.26. The Dow and the S&P 500 saw their best monthly gains since November, while the Nasdaq locked in its best advance since December. At Bursa Malaysia, February was indeed a roller coaster month as sentiment was weighed down by external events including China's move to tighten liquidity and Greece's debts. However, the FBM KLCI managed to eke out some gains, closing up just 11 points to end at 1,270 while the market capitalisation rose RM14 billion to RM1,015 billion from RM1,001 billion at end January. Stocks to watch include Genting Bhd, AirAsia Bhd, Maxis Bhd following their strong earnings and upside. At the Alliance Financial Group Bhd, there should be some positive interest after the bank and its chief executive officer Datuk Bridget Lai reached an amicable settlement of their dispute. Genting Bhd reported earnings of RM245.4 million in the fourth quarter ended Dec 31, 2009, a turnaround from the net loss of RM120.78 million a year ago. Profit before tax was RM585.7 million in 4Q compared with a loss of RM108.9 million a year ago. The loss was due mainly to the Genting Malaysia group’s impairment loss of RM781.5 million on its investment in Genting Hong Kong. AirAsia posted net profit of RM76.65 million in the fourth quarter ended Dec 31, 2009, a turnaround from the net loss of RM201.73 million a year ago, expected it to benefited from passenger growth and ancillary income. Group CEO Datuk Seri Tony Fernandes iis upbeat about its prospects in 2010 following early signs the global economy is stabilising while the benefits are already visible in the aviation industry. He said it had identified nine new routes to be launched and this will support passenger growth of 11%-14% in 2010. Based on the forward booking trend, the underlying passenger demand in the first quarter 2010 is positive. Meanwhile, Maxis Bhd reported earnings of RM503 million in the fourth quarter ended Dec 31, 2009 on the back of RM2.21 billion in revenue, boosted by higher subscriptions. The telco giant’s earnings per share were nine sen and it declared both an interim dividend and proposed a final dividend of six sen and three sen, respectively – totaling RM675 million. In addition to the RM450 million paid in the third quarter, the total dividends for FYE 2009 post Maxis’ listing on Nov 19 last year was RM1.125 billion.For the financial year ended Dec 31, 2009, total earnings were RM1.578 billion on the back of RM7.611 billion in revenue.