Datasets:

wanadzhar913

/

crawl-theedgemalaysia

like 0

https://theedgemalaysia.com/node/84583

#Global Markets* Euro on the ropes after dive in inflation

English

(01/11/13 17:48:28) * Euro remains under pressure, after biggest fall vs dollar in 6 months* European shares start lower, but head for 4th week of gains* Solid China manufacturing activity reports, limit Asian share losses* Dollar index hits two-week peak, after U.S. data suggests economy resilient LONDON (Nov 1): The euro tumbled to a two-week low on Friday, after a plunge in euro zone inflation left markets suddenly eyeing the outside chance of a cut in interest rates, by the European Central Bank next week. European shares saw a subdued end to what looked to be a fourth week of gains, but the combination of Thursday's surprise dive in inflation to just 0.7 percent, and a revitalised dollar, kept it on the ropes. After its biggest fall in six months in the previous session, the euro fell to $1.3530, on course for a fall over the course of the week of two percent. "It is clear that there has been a major sentiment change on the euro," said John Hardy, head of FX strategy at Saxo bank in Copenhagen. "The ECB's single mandate has always been on inflation, so this gives Draghi and co, further reason to do something at nextweek's meeting. We see considerable further downside. The likes of euro/dollar back into the old range, down towards $1.30." The move was amplified as dollar continued to kick away from a recent nine-month low, boosted by upbeat U.S. data overnight. Stock markets across the continent lost between 0.2 and 0.5 percent, pegged back by signs of third quarter weakness at some major European firms. At the same time, the return of bets on an ECB rate cut, saw euro zone government bonds extend this week's rise. China reassures Reassuring signals on China's factory activity offered support to Asian markets, though Tokyo's Nikkei finished at a one-week low, as the yen strengthened against the euro. Markets' focus remains heavily on U.S. monetary policy and how soon the Federal Reserve will begin tapering back its $85 billion a month support programme, having delayed a move in September. U.S. S&P E-mini futures edged up about 0.1 percent, after the S&P 500 Index closed down about 0.4 percent on Thursday, but still gained 4.5 percent for the month.    The ISM survey of manufacturing for October, will give investors the latest temperature reading on the state of the U.S. economy, after some upbeat PMI data on Thursday. "If the ISM report is better than expected, it could add to revived tapering expectations, and U.S. yields and the dollar could go up and stocks could go down," said Masashi Murata, senior currency strategist at Brown Brothers Harriman in Tokyo. Not all players are convinced that this week's U.S. newsflow heralds a shift in monetary policy expectations, given the disruption caused by last month's Federal shutdown. "The existence of noise in the October data, will likely make it difficult for the Fed to gather enough evidence to start tapering in December," strategists at Barclays wrote. In commodities trading, gold steadied but at $1,326.01 an ounce, was still close to its lowest in nearly two weeks, hurt by sharp losses in the previous session, from month-end profit-taking, the strong U.S. economic data and the higher dollar. Copper got a lift from the China data, rising to $7,281 a tonne and back toward a one-week peak of $7,300 hit on Thursday. Brent crude added 0.3 percent to $109.19 a barrel, as U.S. crude edged up 0.1 percent to $96.44.

https://theedgemalaysia.com/node/60648

Ovum: Majority of vendors provide limited solutions

English

KUALA LUMPUR (April 19): The proliferation of devices, the rise of bring-your-own-device (BYOD), and the targeted and persistent nature of malware threats were not being addressed by the majority of vendor solutions available today, according to Australia-based independent technology analyst firm Ovum. Ovum said enterprises do not possess a clear and comparable choice of endpoint protection solutions that completely meet today’s mobile working security requirements. In its report titled “Ovum Decision Matrix: Selecting an Endpoint Security Solution” released on April 18, Ovum said that endpoint protection had evolved far beyond the signature-based protection afforded by early-generation antivirus solutions. Ovum senior analyst Andrew Kellett said that at present, businesses needed vendors that could align services with the needs of each user and their devices, proportionate to the exposure to risk and role within the enterprise. “But for many organisations the first stumbling block will be trying to make direct comparisons between anti-malware vendors and their products,” he said. The report said that the laboratory reports unfortunately came up with inconsistent or irrelevant answers despite the overall vendors who claimed to provide the best available protection when attacks happen. This was due to differing test environments, composition of test data sets, different risk-profile requirements, and ever-changing operational environments, it said. In another report entitled “Ovum’s Endpoint Security Decision Matrix,” also released on April 18, Ovum approached this issue with its Decision Matrix (ODM) in which it provided direct assessments of the eight top players in the endpoint security market and categorise them into Leaders, Challengers and Followers. It said leaders represented the leading solutions with an established market position, challengers represents good market positioning which offers competitive functionality and good price-performance propositions. Meanwhile followers have solutions that were less broad in applicability, may have limited product functionality or vendor execution capability but suitable for specific requirements, said Ovum. Ovum said the ODM focuses on each vendor's functionality for detecting malware, taking feedback from organisations that have used or continue to use each solution, and reporting on their stated levels of satisfaction. Kellett said endpoint security solutions must combine core on-device malware protection with intelligence-based support services that detect new threats before a traditional signature is available. "These support services are now more likely to be cloud-based so the speed of service delivery and security updates can be maintained at a high level,” said Kellett. The ODM revealed that different levels of endpoint protection continue to be provided by the respective security vendors, but common themes were emerging, such as significant convergence between core anti-malware products and associated services such as web security, data loss prevention (DLP) and data encryption, according to Ovum. In its report, Ovum said each of the leaders were identified as playing to its own particular strengths, while also maintaining core malware protection services but there exist differences in the range of mobile platforms supported and the ability to provide data encryption services to the devices that were most at risk. The report also determined another key area which was the ability to deliver good-quality security management services, particularly relevant as it becomes increasingly important to control new mobile devices and ensure that each registered device was in an acceptable state when access to corporate applications was requested. A number of security vendors have also recognised the need to protect virtual client environments, it said. Kellett said that as the threat landscape continued to change, the increasing need for organisations to invest in integrated endpoint protection highlights the importance for a consistent and clear method of selecting security vendors that could deliver the right levels of protection.

https://theedgemalaysia.com/node/24287

#Global Markets* Stocks sluggish, dollar firms as G20 reaction muted

English

TOKYO (Feb 24): Asian stocks wobbled and the dollar firmed in early trade on Monday, as investors appeared to give no more than a passing nod to the Group of 20's latest commitment to spur faster global growth. MSCI's broadest index of Asia-Pacific shares outside Japan was struggling to turn positive, while Australian shares shed about 0.1 percent. On Wall Street on Friday, stocks were off slightly on options-related expirations. The final weekend communique from the two-day meeting of G20 finance ministers and central bankers in Sydney said they would increase investment and employment, generating more than $2 trillion in additional output over five years while creating tens of million of new jobs, signalling optimism that the worst of crisis-era austerity was past. The communique acknowledged emerging nations' concerns that the Federal Reserve consider the impact of its monetary stimulus withdrawal, which has led to bouts of capital flight from some of those markets. However, minutes released last week from the Fed's most recent meeting showed that policymakers generally "anticipated that the economy would expand at a moderate pace in coming quarters," suggesting the pace of stimulus-tapering will continue for now. "There was no realistic expectations that EM would get any relief but they may be more vulnerable to bad news in the aftermath." said Steven Englander, head of G10 currency FX strategy at CitiFX, in a note to clients. "Similarly the free pass to tapering may be mildly USD positive," Englander added. The dollar edged up against a basket of currencies after posting its first weekly gain in three weeks. The dollar index rose to 80.254, moving away from last week's low of 79.927 touched on Wednesday, which was its lowest since late last year The dollar rose about 0.1 percent to 102.58 yen, after rising to a three-week high of 102.82 yen on Friday. The euro also added about 0.1 percent on the day to 140.92 yen, after touching 141.26 yen on Friday, its loftiest level since Jan. 24. The yen is likely to remain under pressure on expectations of more easing steps from the Bank of Japan. A Reuters poll last week showed the BOJ is expected to ease monetary policy further by the summer, to give the economy a lift as the effects of the government's stimulus begins to wane. Economists surveyed remain sceptical that the central bank will achieve its 2 percent inflation target by early next year. The euro was nearly flat on the day at $1.3738, not far from a high of $1.3773 touched on Wednesday, its highest level since Jan. 2. Investors await euro zone inflation on Friday to gauge whether the European Central Bank has enough ammunition to ease monetary policy at its next meeting on March 6. "The weaker the data, the more the speculation will likely mount that the ECB will take additional action," Marc Chandler, chief global currency strategist with Brown Brothers Harriman, said in a research note. "The point is that between the data, ECB meeting and the US employment data on March 7, there is sufficient event risk to deter a strong euro gains from here," Chandler said.

https://theedgemalaysia.com/node/70292

#Opinion* A revolting sign of insensitivity

English

Last Updated: 7:05am, Nov 21, 2013 “LAST one up the stairs is a monkey”. This was the challenge that, as a kid, I used to lay down on my siblings, cousins or friends. It wasn’t always stairs of course. Sometimes, the race was to the dining table or the end of the road. It wasn’t always a monkey either. Whatever it was, the name would not be a morale-boosting one. It would be embarrassing to the point no one wanted to be last, for fear he or she would be for the next half an hour the person we ridiculed or laughed at. As an adult the dynamics of the game have changed, but the theme remains. One can be an “idiot”, “bigot” or other rude names for supporting or disagreeing with an idea, policy, political stand, etc. The men children in our parliament are award winning players in this game. Despite the idiocracy of a few elected reps, the name calling ends when the session is over and I doubt any of them harbour seething rage that they were labelled as such. Sticks and stones, as the saying goes. In such scenes, name calling and insults are meaningless. But the sign I saw at a local gym is not. It meant something mean. Neither was it funny. The sign reads: If NOT HANDICAPPED, please place equipment back after workout. Thank You. The message is revolting as it is sad, as it is stupid. Revolting because, it implies that only an able bodied person is responsible or capable. Revolting because, the management of the gym thinks lesser of the physically challenged. (The fact that the word “handicap” is considered politically incorrect these days shows that it is regarded as a slur of some sort.) Revolting also because the way the message is written, mocks the physically challenged, a crime that most of us, including myself , was at one time guilty of when we utter sentences like “you ‘cacat’ or what…”. Sad, because after all these years and despite the marvels achieved by the physically challenged, there are still those out there, like the management of this particular gym in Subang Jaya, who chose to belittle the community. Sad because the management feels it is alright to do so. Let’s face it, the sign above is not meant as a joke. Even off-colour jokes have their place. Jokes in Southpark episodes, movies by the Farrelly brothers and Ricky Gervais, where nothing is sacred, are made for laughs for those with a twisted sense of humour at a proper avenue, so to speak. Basically, one cannot complain of being offended when they decide to watch material by such entertainers. I, on the other hand, do not expect a gym (presumably managed by adults) to degrade people who want to be regarded as equal. Lastly, such declarations are stupid because name-calling has no effect on those who are irresponsible in the first place. If one is not bothered to keep the equipment back in place after using them, does the management really think calling the person “handicapped” would inspire such individuals to practise some gym etiquette? It won’t. The sign though, is bound to offend both the physically challenged and gym enthusiasts who know them. For more stories, go to www.fz.com, the website for freedom of expression and fairness in articulation.

https://theedgemalaysia.com/node/55749

CIMB Research has Buy on Sunway

English

KUALA LUMPUR: CIMB Equities Research has initiated coverage on Sunway Bhd with a Buy, pegging its target price to a 20% discount to its RNAV. The research house said on Wednesday, Oct 5 the merged Sunway group offers value, not just because of its share price decline but also the potential synergies from more in-house construction of its property projects. “We also like the growth prospects for its construction division, which could clinch more ETP/10MP jobs. Sunway offers exposure to Malaysia’s rising construction activities. It is also an integrated property group that enjoys recurring income from property investments and REITs,” it said.

https://theedgemalaysia.com/node/23743

Mohd Anuar is new Shell chairman

English

KUALA LUMPUR: Shell Malaysia has appointed Mohd Anuar Taib as its new chairman starting Jan 1, 2010, succeeding Datuk Saw Choo Boon who will continue serving the company as a senior adviser. Mohd Anuar is presently the vice-president Malaysia for Shell Upstream International Asia and managing director of Sarawak Shell Bhd and Sabah Shell Petroleum Company. In a statement yesterday, Shell said Mohd Anuar would lead Shell Malaysia's business council and would take charge of managing its potential growth as well as maintain and strengthen its relationship with stakeholders. Mohd Anuar joined the company in 1990 as a wellsite drilling engineer based in Miri. He then took on different roles in the fields of drilling and completion, deepwater projects, project accounting, commercial project evaluation, acquisition and divestment, and contracts and procurement in Miri, Kuala Lumpur and New Orleans. He was appointed regional wells manager for Shell Exploration and Production Asia Pacific in 2006. Three years later, he took on his present role. He will be the fourth Malaysian to be Shell Malaysia chairman.

https://theedgemalaysia.com/node/19132

HSBC: More M’sian traders see rise in need for trade finance

English

The survey found 28% of respondents see an increase in the need for trade financing, with only 17% predict- ing it will decrease. The remaining 56% expected it to remain the same, said HSBC trade and supply chain director Lawrence Yong. The “HSBC Trade Confidence Index” survey was conducted by research company TNS in August/September covering 12 markets ranging from Australia, mainland China, Indonesia, the US, Brazil and Malaysia, each with a sample of 300 participants from small- and medium-sized enterprises (SMEs) and mid-market enterprises (MMEs) that were asked about their three-month outlook concerning trade. “The survey shows that globally, traders expect better access to credit and hold a stable outlook on buyers and sellers risk,” Yong told reporters at a media briefing. The survey revealed 79% of Malaysian traders would access trade finance through banks followed by 8% of respondents choosing payments terms from supplier and through buyer support. HSBC hopes that the survey’s result will help the bank meet its target of trade finance — a core business — ahead of time. As HSBC’s managing director of commercial banking David Morton said: “We could handle another RM300 million of trade finance as we have the capability.” The respondents in Malaysia also picked the rest of Asia (30%), Southeast Asia (19%) and Greater China (18%) as the most promising regions for trade growth in the next three months, indicating vast opportunities for growth available in Asia itself. “In Asia, huge government stimulus packages are buoying sentiments leading to an increase in cross-border trading of commodities, construction materials and equipment,” Yong said. “Increased trade with other parts of Asia is an opportunity, not just for Malaysia, but other markets in the region as Asia slowly becomes a significant source of final demand,” he added. This may have led to 27% of Malaysian traders expecting trade volumes to increase from its current level, higher than the percentage of traders expecting to see a decrease (14%) over the next three months. Yong said the developments seen were in line with HSBC’s strategy of introducing the renminbi trade settlement scheme after the bank realised China would be a key engine of growth in Asia, preparing Malaysian businesses ahead of competitors. The scheme, which was introduced in mid-August, enabled customers to use the renminbi as the medium of exchange instead of the US dollar, sterling pound or yen, between Malaysia and China. Yong said the renminbi trade settlement scheme was only available to 12 countries including 10 in Asia as announced by China’s government and 400 mainland China enterprises. This article appeared in The Edge Financial Daily, October 1, 2009.

https://theedgemalaysia.com/node/91487

Stocks To Watch: Media Prima, Matrix Concepts, MAS, MMHE, Nestle, LBS and LPI

English

KUALA LUMPUR (July 8): Based on news flow and corporate announcements today, companies that may attract interest tomorrow could include Media Prima, Matrix Concepts, MAS, MMHE, Nestle, LBS and LPI. Media Prima Bhd said it is one of two companies in South East Asia that has made to J.P Morgan’s Global SMid Radar list of top stocks for 3Q 2013, with market capitalization of less than US$5 billion. The media group said in a statement J.P Morgan sees it as having dominant position with attractive yield, outpaced the industry growth and is on track with J.P. Morgan’s blended ADEX growth of 9% year-on-year for financial year 2013 (8% FY14E). The company is seen having upside prospects in ADEX after the May 5 general elections, having the ability to raise its dividends in FY14 and FY15 after its net dividend per share of 13 sen for FY12 came in ahead of estimates. Media Prima's group managing director Datuk Amrin Awaluddin said while the group is on track to achieve its financial targets for the year, it would continue to grow its market share through new service offerings in its online and outdoor advertising platforms. Matrix Concepts Holdings Bhd announced that it has acquired two pieces of land totalling 174 hectares next to its flapship development Bandar Sri Sendayan in Negri Sembilan for RM106.8 million. It added that the new land-bank is slated for mixed developments, with gross development value (GDV) of RM1.6 billion. The Seremban-based company said it is expanding its landbank in Bandar Sri Sendayan because the property project is attracting buyers from both Negeri Sembilan and the Klang Valley. “The lands are slated for mixed development of residential and commercial properties with estimated GDV of RM1.6 billion, and will enlarge the group’s remaining undeveloped landbank in Bandar Sri Sendayan to 1,350 acres,” said Matrix Concepts. With the increased landbank, pipeline projects yet to be launched now stand at a GDV of RM4.8 billion, which will sustain the group till 2022, said Matrix Concepts. Malaysian Airline System Bhd (MAS), which has been expanding its network, will be adding two destinations to its network beginning September 1. In a statement, the group said it will fly its passengers to Kochi, India and Darwin, Australia using its new 160-seater B737-800 aircraft. Earlier, MAS said it will reinstate flights to Dubai beginning August 5 using the B777-200 aircraft. MAS chief executive officer Ahmad Jauhari Yahya said: “Malaysia Airlines needs to grow in tandem with the growth of the region. This means investing in our fleet, in the quality of our product and services. “As the national carrier, we have decided to operate to Dubai, Kochi and Darwin to introduce Malaysia to new markets.” Malaysia Marine and Heavy Engineering Bhd (MMHE) has initiated a major transformation company-wide to ensure it becomes a high-performance organisation, Bernama reported. Managing Director and Chief Executive Officer Dominique de Soras said the transformation has a natural link to its yard optimisation programme launched a few years ago to improve asset base. "The intention is to increase our production capacity via optimism and upgrading," said de Soras during an oil and gas vendors' dialogue in Johor Bahru today. de Soras said the investment in transformation is comprehensive, encompassing hardware such as yard facilities and software such as process automation. "We are further investing on uplifting the capability of our people and our reputation through rebranding and corporate culture campaign," he added. Nestle (Malaysia) Bhd is investing RM150 million for the first phase of its new plant in Shah Alam, which will double the production capacity of its ready-to-drink (RTD) segment in Malaysia, Bernama reported.    The factory, to be built adjacent to the company's existing factory in Shah Alam, is expected to be fully operational by May 2014. "The facility will produce the company's RTD liquid beverages, such as Milo, Nescafe, Nestle Omega, Nestle Low Fat Milk and Nestle Full Cream," Region Head Nestle Malaysia/Singapore Alois Hofbauer told reporters after the ground-breaking ceremony today. "In the last four years, we have seen significant growth in Nestle RTD beverages…The strong surge in demand has encouraged us to invest and expand our manufacturing operations here in Malaysia," he said, adding the group has allocated RM250 million for capital expenditure this year.LBS Bina Group Bhd has inked a joint venture agreement (JV) with Hotel Rasa Sayang for a residential development project in Johor with a gross development value of RM500 million. The company said its wholly owned subsidiary, Sinaran Restu Sdn Bhd, had on July 6 entered into the JV to develop the land measuring 1.18 acres in the state. The company said the development site is located approximately 5 kilometers to the Custom, Immigration and Quarantine Complex (CIQ). “The development land is strategically located within the much sought-after prime commercial area along Jalan Dato’ Dalam in center of Johor Bahru City, the “Southern Gateway” of Malaysia, which lies under the Zone A of the Iskandar Malaysia,” it said. LBS Bina said the land is proposed to be transformed into a residential project comprises 579 units of services apartment over an estimated project period of 4 years. LPI Capital Bhd reported a 15% rise in second quarter net profit from a year earlier as the general insurer registered higher premiums. In a statement to the exchange today, LPI said net profit came to RM46.58 million in the second quarter ended June 30, 2013  (2QFY13) compared to RM40.43 million previously. Revenue rose to RM282.4 million from RM265.03 million. "The increase in gross earned premium is in line with the strategic planning and business efforts of the group in growing the profitable insurance business. "The revenue from the investment holding segment increased marginally to RM0.4 million as compared RM0.3 million in the previous corresponding quarter in 2012 due to higher interest income received during the current quarter," LPI said. Cumulative first-half net profit climbed to RM88.69 million from RM71.91 million previously while revenue increased to RM540.87 million from RM511.09 million. For 2QFY13, LPI plans to pay its first interim single-tier dividend of 18 sen a share. Looking ahead, LPI said it will expand its agency force and bancassurance channel.

https://theedgemalaysia.com/node/43174

Maybank IB: Market to remain buoyant

English

KUALA LUMPUR: Positive sentiment in the Malaysian equity market arising from the government’s Economic Transformation Programme (ETP) and expectations of an early 13th general election have supported the FBM KLCI uptrend, said a report. Maybank IB Research said in a Jan 14 report that the KLCI 30 component stocks gained 52.6 points in the first 10 trading days of 2011, making up 27.6% of the research house’s 191-point target climb for the whole of 2011. The research house said KLCI’s year-to-date gain of 3.5% was above that of other major Asean markets such as the Straits Times Index (STI) which added 2.1%, the SET Index which rose 0.2% and the Jakarta Composite Index (JCI) which contracted 3.7%. “We expect the market to remain buoyant, with profit taking ahead of the Chinese New Year,” Maybank IB noted in a report. It said the average daily volume and value at Bursa Malaysia over the Jan 3-12 period were 2.33 billion shares and RM3.0 billion respectively, stressing the figures were significantly above the December 2010 of 1.11 billion shares and RM1.8 billion in value. The research house noted that its fundamental views on the broader market remained unchanged, retaining its 1,710-point year-end target for the KLCI and maintaining its view of a stronger first half buoyed by the US’ second quantitative easing programme and the anticipation of an early general election in Malaysia. The KLCI shed 0.11% or 1.67 points to close at 1,569.89 last Friday, while the STI declined 0.3% or 9.91 points to 3,245.96. Maybank IB said it initiated coverage for the Jan 3-7 week with “buys” on two major oil & gas fabricators, namely Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE) and Kencana Petroleum Bhd, which since its coverage, had given above-market returns of 9% and 7%, respectively. The research house pointed out that SapuraCrest Petroleum Bhd, another of its “buy” call, had returned 17% year-to-date (YTD), adding that MMHE was trending close to its target price (TP: RM6.50) while SapuraCrest had surged above. “We are placing our calls and target prices under review. We remain positive on the fabricators being the first line of beneficiaries under one of our 2011 thematic plays on Petronas-driven capex,” said Maybank IB, adding that there was still upside to its other “buys” such as Kencana and Dialog Group Bhd with target prices of RM3.10 and RM2.60, respectively. Last Friday, MMHE fell six sen to RM6.37, while Kencana and Dialog dropped four sen and one sen respectively to close at RM2.71 and RM2.19. Similarly, SapuraCrest declined 11 sen to RM3.50. Of Maybank IB’s list of 11 top picks introduced in its 2011 Market Outlook (including MMHE and Kencana), the research house said three other stocks which had either trended close to or above their target prices were Genting Bhd (+7% YTD; TP: RM11.60), Gamuda Bhd (+8% YTD; TP: RM4.45) and S P Setia Bhd (+17% YTD; TP: RM6.90). “We are tactically placing our calls and target prices for Genting and S P Setia under review. Sime Darby, among our top picks, has been the sixth top performer of our Top 11, gaining 6% YTD, outperforming the KLCI,” it noted. This article appeared in The Edge Financial Daily, January 17, 2011.

https://theedgemalaysia.com/node/24607

Ireka buys KLCC land from Kuoks

English

The almost one-acre tract in Jalan Kia Peng that Ireka Corp Bhd is acquiring for RM87 million, or about RM2,000 psf, has been on the market for about two years. According to a party familiar with the freehold land on which the Top Hat Restaurant once stood, the vendors — Kuok Chiu Hoon Selina, Kim Kuok Strickland and Farah Azman — had initially put it up for sale at RM2,000 psf but later upped the tag to RM2,500. The vendors are related to Malaysia’s richest man, Tan Sri Robert Kuok. A Korean party is believed to have been interested but the deal fell through with the onset of the economic downturn early this year. The property was then put back on the market, this time at RM2,000 psf. Although Ireka Corp, through wholly-owned subsidiary World Trade Frontier Sdn Bhd, is the buyer, the land will be jointly owned and developed together with Aseana Properties Ltd (APL). Paving the way for this is a memorandum of understanding signed between Ireka Corp and APL on Dec 11, the same day the land deal was inked. Ireka Corp, controlled by the Lai Siew Wah family, together with the Lai family, owns about 40% of APL, a property development company listed on the London Stock Exchange since April 2007. The company was established to take advantage of upmarket property development opportunities in Vietnam and Malaysia. Ireka Corp and APL will co-develop the land on a 30:70 basis. The roundabout way in which the two companies are involved in the deal is to enable the vendors, represented by Zerin Properties, to avoid paying the 5% real property gains tax, which will kick in from Jan 1, 2010. Having a foreign party in the land deal would have meant a delay in signing the sale and purchase agreement as certain approvals would have to be first sought. The land, currently tenanted to and occupied by a car park operator, has a commercial title. Ireka Corp’s executive director Lai Voon Hon tells The Edge that several proposals for a building with sustainable features have already been completed. The plan is to kick-start the project as quickly as possible. Subject to planning and development approvals, one block of high-end serviced residences with an estimated gross development value of RM272 million will come up on the tract. The developer is confident the small to medium-sized upmarket ser­viced residences will appeal to urban Malaysians and foreigners who want to live near the famed KLCC Park and Petronas Twin Towers. The latest land deal in the KLCC area comes on the heels of the acquisition last month of Bok House — within a stone’s throw of the Petronas Twin Towers — by Dijaya Corp Bhd, which is paying about RM2,200 psf. In May last year, Sunrise Bhd acquired the 24-storey Wisma Angkasa Raya — which separates the Bok House land in Jalan Ampang from the Petronas Twin Towers — for RM2,588 psf. A month before that, in April 2008, YTL Group had acquired a one-acre tract in Jalan Stonor, also in the KLCC area but further away from the Twin Towers, for RM2,000 psf. The Top Hat land sits across the road from the Trader’s Hotel and is close to the Kuala Lumpur Convention Centre. Depending on what buildings eventually take shape between the site and the Twin Towers, Ireka Corp’s planned serviced residences could find the view of the Twin Towers partially blocked. Still, the land carries the prized KLCC address, one that the Ireka group is believed to have been eyeing for the last five years. This article appeared in Corporate page of The Edge Malaysia, Issue 785, Dec 14 – 20, 2009.

https://theedgemalaysia.com/node/86412

#Stocks To Watch* Allianz, Gabungan AQRS, George Kent, Ingress, Pintaras Jaya, PPB

English

KUALA LUMPUR (May 17): Based on news flow and Bursa Malaysia announcements today, stocks to watch on Monday (May 20) may include the following companies : Allianz Malaysia Bhd reported a 1% rise in first quarter net profit from a year earlier as the composite insurer registered higher gross premiums and investment income. A rise in contract liabilities besides fee and commission expenses, however, curbed  bottom line growth. Allianz said net profit came to RM53.72 million in the quarter ended March 31, 2013 versus RM53.04 million previously. Revenue rose 17% to RM862.08 million from RM739.49 million. Gabungan AQRS Bhd may attract market interest after the builder and property developer said it plans to buy back its own shares amounting to a maximum of 10% of its issued share base. The firm has proposed to seek its shareholders' approval for the share buyback. George Kent (M) Bhd will be closely watched after the firm said the termination of its water concession in Papua New Guinea has been reversed. Papua New Guinea government-owned firm Eda Ranu has withdrawn its termination notice to George Kent's 19% associate PNG Water Ltd for the 22-year concession which ends on June 22, 2019. George Kent did not specify reasons  for the termination notice withdrawal. Ingress Corp Bhd’s major shareholders' offer to acquire the remaining shares of the automotive parts manufacturer is seen as fair and reasonable, independent adviser Affin Investment Bank said. Affin said the RM1.85 a share offer is a premium of 16.35%, 83.17% and 51.64% respectively over the highest, lowest and average closing prices of Ingress shares for the full year up to April 15, 2013. Pintaras Jaya Bhd’s third quarter net profit grew 54% year-on-year as the builder realised profits from completed projects. Pintaras Jaya said net profit for the three months ended March 31, 2013 (3QFY13) grew to RM13.81 million from RM8.95 million. Revenue, however, fell 5.84% to RM42.43 million from 45.06 million. Cumulative net profit for 9MFY13 was higher at RM36.16 million against RM34.12 million a year earlier. Revenue fell to RM122.14 million from RM136.11 million. The firm declared an interim dividend of 10 sen a share for the quarter in review. PPB Group Bhd reported a 32% rise in first quarter net profit from a year earlier. The rise came mainly on higher contribution from its plantation-based associate Wilmar International Ltd which is listed in Singapore. PPB said net profit came to RM236.34 million in the quarter ended March 31, 2013 compared to RM178.5 million previously. Revenue was up 10% to RM763.85 million from RM696.96 million.

https://theedgemalaysia.com/node/82689

MIDF Research: China bigger culprit in conflict within Asia

English

KUALA LUMPUR (April 8): China is the bigger culprit in the conflict within Asia, and not North Korea, according to MIDF Research chief economist Anthony Dass. In a note Monday, Dass said in 2012, Japan and China came close to trading blows over disputed Senkaku/Diaoyu islands in the East China Sea. Tension simmered over China’s claim to the entire South China Sea, and in Southeast Asia, he said. “A Chinese naval task force appeared less than 100 kilometres off the coast of Malaysia, its crew pledging to maintain national sovereignty. “Historical boundary disputes are coming to the boil between Thailand and Cambodia as well as Malaysia and the Philippines,” said Dass. He said that from the looks of it, Asia could be gearing up for a conflict, and that this was not surprising. Dass said Asia was spending a huge sum on military, greater than the whole European continent, adding it had raised eyebrows as to whether the plates of military power are shifting to Asia. “Over the last five years, the biggest arms importers are all in Asia, namely India, China, Pakistan, South Korea and Singapore. “Even arms deliveries to Malaysia jumped eightfold in the second half of the last decade,” he said. Dass said China doubled its military spending every five years and it was making other countries in the region nervous. “Rise of China has forced smaller neighbours to realign their loyalties and look for protectors. “Meanwhile, they are adequately equipping themselves with war kits, which they can now afford to use to defend themselves — just in case. This is worrying because Asia has not tried to resolve its past conflicts the way Europe has,” he said. Dass said that at the moment, the big powers were trading accusations about who is to be blamed for all the rattling. “The US accuses China of asserting its claims too aggressively. Meanwhile, China accuses the US of provocative behaviour that has forced China to assert its claims,” he wrote. He said each Asian country is playing a war game, adding that the underlying questions are: what would happen if China’s ascent turned out to be less peaceful than expected; and what happens if there are conflicts in the Indian Ocean or the South China Sea. However, Dass said there was another interpretation. Arms races tend to assure the peace rather than induce war, he said. “The Cold War, and its accompanying nuclear arms race, ended without a red button being pressed. “This was because the stakes were high. In the case of Asian countries, what looks like a military splurge can be viewed as acquiring normal-sized armed forces. While one looks at peace, the focus of conflict could shift to East and not the West,” he said.  

https://theedgemalaysia.com/node/96978

KLCI futures contract open higher on positive cash market

English

KUALA LUMPUR (Aug 23): The FTSE Bursa Malaysia KLCI (FBM KLCI) futures contract on Bursa Malaysia Derivatives opened higher in line with the positive underlying cash market, dealers said.      At 9.41 am, spot month August 2013 was eight points better at 1,721, September 2013 rose seven points to 1,715 and December 2013 added 7.5 points to 1,717 but March 2014 was flat at 1,711.5.             Turnover stood at 2,004 lots while open interest totalled 38,802 contracts. The underlying FBM KLCI was 6.05 points higher at 1,726.42 after 41 minutes of trading.      

https://theedgemalaysia.com/node/26511

Jakarta plans protest park to ease traffic mayhem

English

JAKARTA: Fed up with protests snarling Jakarta's already chaotic traffic, the authorities in one of the world's most congested cities plan to build a park dedicated to keeping public demonstrations off the streets. The park is also a sign that democracy has taken hold in Indonesia, when demonstrations were almost out of the question during the 32-year rule of autocratic former President Suharto until public frustration with his leadership led to mass protests in the late 1990s that eventually drove him from power. Since then, colourful and noisy demonstrations have become a common occurrence in Indonesia. While they are seldom violent, these protests can sometimes make the capital's already bad traffic even worse, especially when activists march around a landmark roundabout near Hotel Indonesia. Jakarta Governor Fauzi Bowo now wants to build a speaker's corner, with room for 10,000 people, near Indonesia's National Monument, spokesman Cucu Ahmad Kurnia told Reuters on Tuesday. "We want to make it so everybody has a place to speak their mind, and so they know the right place to do that," said Kurnia. The Presidential Palace, the Vice President's office and the Governor's office are within close range of the monument, in the centre of Merdeka Square. The protests make getting around Indonesia's sprawling capital and suburbs, home to some 14 million people, even more time-consuming and arduous as they add to the traffic jams caused by rising motorcycle and car ownership, as well as heavy flooding during the rainy season. Bowo last year banned rallies around the Hotel Indonesia after clashes between opposing demonstrators. The park, which Kurnia said will be completed some time next year, would also be equipped with a stage for concerts. The mayor of Jakarta, Sylviana Murni, said it was the government's responsibility to allocate an area for people to criticise those in power. "We must do that for our people to be satisfied," she told Reuters, adding that the inspiration had come from the famous Speaker's Corner in Hyde Park, London. — Reuters

https://theedgemalaysia.com/node/96351

Five hired killers slain, including mastermind

English

GEORGE TOWN:  Police yesterday shot dead five key members, including the mastermind, of a gang that was directly related to a recent string of murders and attempted murders. The dramatic pre-dawn shoot-out was part of a special nationwide operation launched by the police last Saturday that has resulted in more than 200 people related to dangerous gangs and secret societies being arrested. At about 4.30am, a special police team that staked out an apartment in Sungai Nibong where the five — the youngest aged 23 — were hiding, were greeted with gunfire from the gang members. In an earlier report, Bernama said Penang police chief Datuk Abdul Rahim Hanafi named the five as J Gobinath, 31, R Ramesh, 27, A Vinut, 23, M Suresh, 25 and M Gobinath, 21.  The team, comprising officers from Penang and Bukit Aman, retaliated and killed all five. None of the policemen was injured. Abdul Rahim said police recovered three guns from the men, a silver Norinco, a silver .38 revolver and a black Walther PPK. Inspector-General of Police Tan Sri Khalid Abu Bakar said police are now on a nationwide manhunt for several remaining members of the gang which has been active in contract and revenge killings. “With today’s shoot-out, we have solved seven killings and two attempted killings in Penang, two killings in Kedah and one in Negeri Sembilan,” Khalid told a press conference at the state police headquarters. He declined to say if the gang was involved in the Aug 8 murder of Veerappan Kanapathi, who had three criminal convictions under the Dangerous Drugs Act, and was killed in his car, after being shot 17 times by assailants on a motorcycle at the Anson Road-Macalister Road traffic lights junction here. 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 August 20, 2013.

https://theedgemalaysia.com/node/57710

JCY shares climb as Thai floods impact competitors

English

KUALA LUMPUR (Nov 17): Shares of JCY rose in active trade on Thursday as the hard disk drive maker stands to benefit from the shortage as its competitors are impacted by the severe Thai floods. At 3.29pm, JCY was up 4.5 sen to 73 sen. There were 14.8 million shares done at prices ranging from 66 sen to 73 sen. Reuters reported that hard drive production will remain very low for the next six months and store prices for PCs could rise as soon as the Thanksgiving holiday in late November. It also said HP, which reports earnings on Nov. 21, has said it expects to secure the hard drives it needs but there are signs that the shortage may become painful in the coming months. In late October, The Edge FinancialDaily said that component makers, which supply mainly to Seagate Technology plc, could well take pole position in the hard-disk drive (HDD) industry after rival Western Digital Corp was beaten out by the flooding in Thailand. The companies are JCY and Dufu.

https://theedgemalaysia.com/node/4065

#Stocks to watch:* Axiata, Maybank, Tenaga, Public Bank

English

KUALA LUMPUR: Blue chips closed at 941.38, highest since October last year, as investors were positive about the new Cabinet line-up while sentiment was also reinforced by the recovery in the US and Asian markets. For the week, the KLCI rose 34.37 points and the market capitalization rose RM31.6 billion to end the week at RM716.43 billion, the highest in six months also. The firm crude palm oil (CPO) futures also boosted plantation stocks. Analysts said the new Cabinet line-up resulted in changes to the Energy, Water and Communications portfolio as well as Works, Agriculture, Domestic and International Trade and Finance Ministries. However, they said the changes may cause some concern especially with regards to the water, power and telecom sectors. But overall, they believed the new administration would likely have a “renewed” sense of urgency to push forward, and in particular relook at underperforming government-linked companies. Stocks to watch this week include Esso Malaysia, Axiata, Malayan Banking Bhd-OR, Tenaga Nasional Bank and Public Bank Bhd. Esso Malaysia has proposed final gross dividend of 12 sen per share to be paid on June 22, 2009. The entitlement to Axiata’s renounceable rights issue of about 4.69 billion new shares at RM1.12 per rights shares will start trading on April 15 and cease quotation on April 22. As for Maybank-OR, the entitlement to the rights, will cease trading on April 14. Maybank’s corporate exercise involved the renounceable rights issue of 2.12 billion new rights shares at an issue price of RM2.74. Tenaga’s second quarter results are expected to be released on April 15.  Analysts said excluding forex losses of about RM140 million, they expect 2Q core net profit to stay relatively flat quarter-on-quarter (1QFY09: RM494 million; 2QFY08: RM772 million), which would bring 1H core net profit up to around 43%-45% and 45%-47% of its and consensus FY09 net profit estimates respectively. CIMB Equities Research expects Public Bank to release its earnings for the first quarter ended March 31 early this week. It estimated the bank would report net profit of RM570 million to RM580 million for the quarter, on par with the level a year ago if there was an exclusion of 1Q08’s one-off goodwill payment of RM200 million.

https://theedgemalaysia.com/node/20277

Top Glove eyeing acquisition targets in Malaysia

English

They will be financed via internal funds, helped by its net cash position of some RM176 million. “It’s good to keep it (cash) handy in case the oppportunity of possible M&As comes our way,” Lee told The Edge Financial Daily in an interview. Organic growth and M&As are expected to be key highlights of Top Glove’s intention to retain its supremacy in the international glove manufacturing sector. It aims to increase its present global market share of 22% to 30% by 2012. Top Glove had in 2007 finalised the acquisition of a controlling stake in Singapore-listed rival Medi-Flex Ltd for some S$21 million (RM50.86 million). The purchase of Medi-Flex, which owns two glove manufacturing plants in Klang and Banting in Selangor, was intended to help Top Glove expand its product range to include medical and cleanroom gloves.   Going forward, Lee said Top Glove was forecasting a conservative 10% annual revenue growth for the current and next financial year as the company builds more factories and expands its domestic production capacity.For now, a larger output for Top Glove is deemed crucial to fulfil rising global demand for disposable gloves, due to the Influenza A(H1N1) outbreak. Lee said these factories, to cost some RM35 million each, would be built on company-owned industrial land in Klang. “Capacity expansion is the one (factor) that will see us moving forward in the long term. It’s quite traditional for us to build one to two factories every year. “A lot also depends on how the A(H1N1) unfolds in the coming winter months (in the northern hemisphere),” he said. Top Glove’s latest set of financials has improved. Net profit more than doubled to RM56.83 million in the fourth quarter ended Aug 31, 2009 from RM25.11 million a year earlier, helped by cost efficiency and higher demand for disposable gloves due to the A(H1N1) outbreak. Revenue rose 17.2% to RM427.35 million from RM364.53 million. Full-year net profit rose 53.6% to RM169.15 million from RM110.1 million, while revenue increased by 10.9% to RM1.53 billion from RM1.38 billion. Globally, Top Glove owns 19 factories, of which 17 are glove production facilities while the remaining two are latex concentrate plants in Thailand. The company has 13 glove factories in Malaysia, and two each in Thailand and China. Together, they produce up to 31.5 billion pieces of gloves a year. The company may also build more factories in Thailand and China to meet rising global demand for gloves. Top Glove has allocated some RM70 million for capital expenditure (capex) in the current financial year ending Aug 31, 2010, to finance the construction of two factories in Malaysia with a combined annual capacity of three  billion pieces of gloves. This article appeared in The Edge Financial Daily, October 19, 2009.

https://theedgemalaysia.com/node/57214

The Edge Billion Ringgit Club - Kuala Lumpur Kepong Bhd

English

Kuala Lumpur Kepong Bhd (KLK) traces its origins back to 1906 when the Kuala Lumpur Rubber Co Ltd was set up in London to oversee 600ha of rubber plantations in Malaysia. In 1960, the company changed its name to Kuala Lumpur Kepong Amalgamated Ltd (KLKA), and through various acquisitions, its landbank had then increased to 29,843ha. KLK was incorporated in 1973 and under a scheme of reconstruction took over the assets and liabilities of KLKA. The move to bring its domicile back to Malaysia was initiated by KLK’s founder, the late Tan Sri Lee Loy Seng. Today, KLK is a large multinational in plantation, manufacturing, property development and retailing. The group has a landbank in excess of 250,000ha. While plantations remain its core business, KLK has expanded downstream into resource-based manufacturing, in particular oleochemicals and rubber processing. It also owns premium toiletries brand Crabtree & Evelyn, which is retailed in 28 countries.     KLK CEO Tan Sri Lee Oi Hian shares with The Edge Financial Daily his strategies and dreams for the company.   TEFD: What are the company’s strengths and advantages? Lee: We are one of the pre-eminent plantation companies because of our established regional footprint in both Malaysia and Indonesia. Currently, our plantation landbank is located in Peninsular Malaysia (71,692ha), Sabah (40,359ha) and Indonesia (139,126ha). We have a strong and experienced management team with core competencies required by our various business segments. Our plantation division is a beneficiary of the excellent agriculture research undertaken by KLK’s agronomic team that has been instrumental in developing our agricultural best practices and improving our productivity through high-yielding planting materials and tissue culture. KLK is one of the largest producers of basic oleochemical and derivative products ranging from fatty acids, glycerine, fatty alcohols, methyl esters and methyl ester sulphonates. The oleochemical plants are located in Malaysia, Europe and China with industry-leading operating efficiencies and are highly cost competitive. We have also developed a strong distribution network which has a good customer base covering key markets. Our successful vertical integration of our upstream oil palm plantation operations with our downstream oleochemical operations has created significant and sustainable synergies for the KLK group.What have been the major achievements of the company in the past four years? We have been able to increase our annual fresh fruit bunch production to 3.2 million tonnes (FY10) from 2.4 million tones (FY07) through a concerted replanting programme in Malaysia and the expansion of our landbank in Indonesia. Our plantation landbank increased to 251,196ha in FY10 from 203,322ha in FY07 and our yield per mature ha over the past four years has been consistently higher than the industry average. Coupled with rising crude palm oil prices spurred by strong demand, plantation revenue increased to RM3.5 billion in FY10 from RM2 billion in FY07. We are pleased to have secured RSPO certification for our entire operations in Sabah, making available close to 180,000 tonnes of certified sustainable palm oil in the market. We are now pursuing the same certification for all our operating centres in Malaysia and Indonesia. We have significantly increased our oleochemical footprint during this period. The oleochemicals division has been able to increase its production capacities organically through acquisitions, plant expansion and de-bottlenecking of existing operations. With these measures, manufacturing revenue has grown to RM3.3 billion in FY10 from RM2 billion in FY07. Net profit for the KLK group has grown to RM1.012 billion in FY10 from RM694 million in FY07. This is an impressive compounded annual growth rate of 13% per annum over the period. What are the major challenges your company faced over the years and how did you overcome them? Is there anything else you would have done differently?One of the major challenges facing KLK over the years is the need to increase its plantation landbank and address the issue of the shortage of labour. With the shortage of suitable plantation land in Malaysia, KLK decided to expand its landbank in Indonesia due to its vast agriculture potential, proximity and cultural similarity. KLK benefited from being one of the first movers in Indonesia and has since grown its Indonesian operations to achieve its objective of increasing yields and productivity.    The lack of skilled plantation labour is a problem faced by the entire plantation industry. To meet this challenge, KLK has developed a programme to upgrade housing and amenities for its plantation employees, and skills through training. In line with this, we have our corporate social responsibilities to ensure that the local community benefits in tandem with the growth of the group.   Rising cost driven by inflation is another challenge faced by the plantation industry. Efficiency and improved productivity mitigate rising costs. We have improved oil palm cultivation by investing significantly in agriculture research which has resulted in the use of tissue culture technology to produce better clonal planting materials. We have also improved our yields through responsible best agricultural practices. The challenges faced by our oleochemicals division are improving its market share and profitability. In pursuit of becoming a global leader in oleochemicals, KLK has increased its production capacity and efficiency to achieve better economies of scale and at the same time, increasing its distribution network. Significant investment has been made to have the entire infrastructure in place to achieve these targets. How is the company positioning itself within the industry? What are your strategies to grow market share and your plans for the future?Being a responsible global player in the palm oil industry, KLK aims to secure sustainability of its upstream and downstream plantation operations. Currently, KLK ranks among the top three plantation companies in Malaysia. Our short-term target is to grow our total plantation landbank to 300,000ha. The KLK group targets new oil palm plantings of 10,000ha per annum to ensure future production growth is sustainable. KLK aims to establish its oleochemicals operations as a major global player. We have a considerable advantage, in terms of competitiveness and cost efficiency, over our competitors as we are a vertically integrated manufacturer with the supply chain sourced from our plantation operations. Our oleochemicals operation has a strong in-house team which is able to leverage on future opportunities. We will continue to enhance our production value chain for our plantation and oleochemicals businesses. Further land acquisitions in Indonesia and other parts of the world are being explored to increase the group’s plantation landbank. Selective and complementary oleochemicals acquisitions will further help consolidate our position as a global leading oleochemicals producer. What is your dream for your company? How would you like to see it in 10 years’ time? The fact that KLK has been operating successfully for more than a century is a culmination of the vision of its founders, the sustainable policies and practices implemented by the management and the good working relationship between shareholders and all stakeholders. We therefore believe in continuing with these principles which have guided us all these years. We will strive to be the preferred producer and supplier of sustainable and innovative oil palm and rubber products, as well as palm-based oleochemical products and derivatives. In addition, we shall explore all opportunities to expand our landbank beyond its current geographic reach. We will also increase our oleochemical product portfolio where there are synergies. Leveraging on the strategic location of our landbank in Peninsular Malaysia, we will  take further steps to enhance our property development business so that it will be a major contributor to the KLK group’s profits in time to come. This article appeared in The Edge Financial Daily, November 8, 2011.

https://theedgemalaysia.com/node/19364

TSH falls after 1-for-1 bonus, OSK Research FV RM2.21

English

KUALA LUMPUR (Dec 2): Shares of TSH Resources Bhd fell to a low of RM1.90 on Friday after its bonus shares, which were issued on a one-for-one basis, went ex. At 12.08pm, it was down eight sen to RM1.91. There were 513,100 shares done at prices ranging from RM1.90 to RM2.01. OSK Research said that following its calendar year 2012 crude palm oil (CPO) price assumption upgrade to RM3,000 per tonne, it was raising its FY12 earnings forecast for TSH by 10.4% and revising upwards its fair value to RM2.21. “The company possesses one of the youngest tree age profiles among planters under our coverage, but its valuations are starting to appear a little rich following its recent strong price appreciation. Still a BUY at the moment with a potential 10.8% upside,” it said.  

https://theedgemalaysia.com/node/73854

Social business to serve world’s marginalised groups

English

KUALA LUMPUR: Social business is said to be the key factor in capitalising core strengths to better serve the world’s marginalised groups. Speaking at the Global Social Business Summit 2013 yesterday, Professor Muhammad Yunus said in his keynote speech that the current business system is only focused on profit-making, which has led to problems mounting up to the financial crisis in 2008. “Social business became important because of the frustrating economic system that we have in the world which has created various problems. We are trapped into it [capitalist system],” he said. Yunus, who was awarded the Nobel Prize in Peace, has taken the experience and expertise gained from the success of Grameen Bank to introduce a new business model — Social Business. Social business, which is a non-dividend company, aims to solve social problems. Yunus is of the view that like a non-government organisation, social business has a social mission to generate its own revenue to cover costs. “Social business will see investors recouping their investments as all profits are reinvested for growth and innovation or to seed new social business ventures.” Yunus said businesses could become better than serving a single purpose. Instead, he is of the view that businesses can be a “multitasking machine” by using it to solve social problems such as poverty, unemployment and youth issues. “The business system is recognised as a money-making machine. Social business was brought in as the power of business can be used in many different ways and not in just one direction — profit-making,” he said. Yunus said social business also acts as a means to solve environment issues such as the reforestation project in Haiti and Brazil. “Instead of money-centric business we can have multitasking businesses. We bring in the other tasks and use this machine to solve social problems,” he said. One of the notable milestones that social business has seen in the past year was the involvement of African Development Bank in supporting the social business initiative in the African region. He said the collaboration between Yunus Social Business and the US Agency for International Development to promote social business in vulnerable and underserved communities around the world also served as a notable achievement. Yunus highlighted another example where a social business in Albania raised funds through crowd-funding that had significantly opened doors for social business ventures. The marketing business required a total cost of US$25,000 (RM79,425). Through a non-profit, crowd-funding platform called Kiva.org, the social business managed to raise the fund in less than 24 hours, according to Yunus. He reasoned that the success of the fundraising exercise has brought much excitement to the social business circles in the way they go about raising funds for their projects.   Malaysia hosted the first ever research conference in the Global Social Business Summit. This enabled academics to present their findings on social business and other related areas. Previously, the past four summits had only seen academic meetings and pre-conference academia meetings being held prior to the summit. The summit also saw university representatives from all over the world participating in discussions on findings about social business and the viability of offering courses and seminars on the subject. Yunus said the government’s RM1 million allocation to Universiti Kebangsaan Malaysia (UKM) to support the social business initiatives is a notable contribution. “UKM has created a social business centre. They have a whole apparatus to offer facilities for funding and also for research,” he said, adding that the mass number of participants would enable social business to move to the next step. This article first appeared in The Edge Financial Daily, on November 8, 2013.

https://theedgemalaysia.com/node/59700

Volvo aims for 62.5% increase in sales for 2012

English

SHAH ALAM: Volvo Car Malaysia Sdn Bhd is aiming for a 62.5% increase in sales this year as it now has a complete product range after introducing the V60 “sportswagon” into the Malaysian market yesterday. According to regional product manager Akhtar Sulaiman, Volvo’s 2011 sales were affected by late launches of new models. But with the introduction of the V60 early this year, the company hopes to increase its sales by more than 60%. “Last year we sold 800 cars, 14% higher than the previous year and we hope to sell about 1,300 units this year,” he said. Akhtar expects 120 units of the V60 to be sold this year, which would make up about 10% of the total number of Volvo cars expected to be sold in Malaysia in 2012. The V60 is classified under the C-D premium segment and has a niche of its own. According to Akhtar, other car makers have traditionally been reluctant to bring station wagons into the Malaysian market as it is a rather unpopular option. Thus the introduction of the V60 sportswagon is mainly to test the market. The locally-assembled V60 sportswagon will be available in two variants — the T4 and T5 — which are priced at RM230,000 and RM269,000 on the road without insurance. This article appeared in The Edge Financial Daily, January 12, 2012.

https://theedgemalaysia.com/node/56490

SILK unit gets RM23.5m contract extension from Carigali

English

KUALA LUMPUR: SILK Holdings Bhd’s unit Jasa Merin (Malaysia) Sdn Bhd has been awarded a contract extension worth RM23.5 million by Petronas Carigali Sdn Bhd to provide one Anchor Handling Tug Supply Vessel. In a filing on Friday, Oct 21, SILK said the primary three-year contract had been extended for a further period of 12 months commencing 4 October 2011. It said the contract extension was expected to contribute positively to its earnings for the financial year ending July 31, 2012.

https://theedgemalaysia.com/node/56023

Industrial production index up 3% year-on-year in August

English

KUALA LUMPUR: The Industrial Production Index (IPI) in August increased 3% year-on-year (y-o-y) to 110.6, due mainly to increases in the manufacturing and electricity indices. Month-on-month (m-o-m), the IPI rose 2.6%. In a statement Tuesday, Oct 11, the Department of Statistics Malaysia said the  cumulative index for the period of January-August 2011 increased 0.6% as compared with the same period last year. Meanwhile, the sales value of the manufacturing sector in August posted a y-o-y double-digit growth of 10.8% (RM4.8 billion) to record RM49.8 billion as compared to RM45 billion a year earlier, it said. M-o-m, the sales value also increased by 0.2% or RM80.3 million as compared with the preceding month, said the department. The sales value in July 2011 was a revised positive 9.5% y-o-y to record RM49.7 billion, it said. The year-on-year increase in the sales value during the current month as compared with the corresponding month of the previous year was generated by the growth in the sales value of 79 industries (68.7%) out of 115 industries covered in the survey.

https://theedgemalaysia.com/node/72375

Growing voter indifference spells trouble for MCA

English

Following the poor performance of the MCA in the 12th general election in 2008, the political party’s future has been the subject of heated debates among members of the Chinese community. Now, over four years later, political analysts believe the party is in even more dire straits as it grapples with the community’s indifference to the message it is conveying to them. Last year, MCA’s presidential council passed a resolution not to take up any government post if the party fails to improve its performance in the next general election.  In the last general election, it won just 15 parliamentary and 32 state seats, less than half its previous total. The resolution was meant to be a threat to the Chinese, especially the business community. But that move seems to have backfired as the feeling on the ground can be summed up in two words: Who cares? Author-cum-politician Liew Chin Tong said this indifference stems from the fact that over the last 20 years, Chinese voters did not vote for or against the party; rather, they cast their votes in accordance with the  prime minister’s performance. Liew, who is DAP MP for Bukit Bendera and has written extensively about Malaysian politics, explained that in the 1990 general election (GE), the community voted against then PM Tun Dr Mahathir Mohamad, while in the 1995 GE, the community voted for Mahathir and Vision 2020 which gave hope to the Chinese. In the 1999 GE, the Chinese voted against PAS because they were worried about the prospect of Hudud law being introduced and Malaysia becoming an Islamic state. They voted for the BN because of fears that another racial riot would occur following reports of assaults against the Chinese in Indonesia, Liew told fz.com. In the 2004 GE, the people voted for then PM Tun Abdullah Ahmad Badawi, and against Mahathir’s legacy.  Abdullah won by a landslide majority because he was portrayed as being different from Mahathir. “Where does MCA stand [in all this]? They were just the bystander,” Liew pointed out. A threat to the ChinesePolitical analyst Wong Chin Huat said MCA’s “no-government post” resolution echoed a decision former president Tun Tan Siew Sin had made in 1969 when, after losing Penang and winning only 13 out of 33 parliamentary seats it contested in the general election, he despondently announced that the party would withdraw from the Cabinet. Wong pointed out that Tan’s decision allegedly affirmed the Chinese’s perceived rejection of power sharing with the Malays, hence heightening the tension that would eventually lead to the May 13 riots. (Tan was persuaded to return to the Cabinet after the riots.) He said by adopting the no-government post resolution, MCA was hoping to remind the Chinese, with the same historical reference, that they cannot afford not to have MCA in power. However, Wong said, it is not having any impact on the community, or influencing the way they will vote. He cited the example of the Sarawak state election last year and the poor performance of the Sarawak United People’s Party (SUPP) — a BN component party — as a reflection of the Chinese’s mentality. The Sarawak Chinese felt that having SUPP in power would not make a difference to them. “Four years after March 8, the sense of MCA’s irrelevance is only getting stronger,” Wong warned. MCA is being realisticTo be fair to the MCA, Wong said, the party was being realistic by adopting the resolution, because if it faces another setback in the next election, it may lose more than half of the seats it won in 2008, and BN itself may lose power. But he reckoned that if the MCA does badly but BN manages to stay in power, then party president Datuk Seri Dr Chua Soi Lek would have to go. In that scenario, the new party leadership would likely accept an offer to join the government, “for the sake of the Chinese and the nation”, he said. Lim Hong Siang, former editor of the Bahasa Malaysia version of Merdeka Review.com, shares Wong’s view that a new leadership within the MCA would have no obligation to honour Chua’s promise. But what are the options available to the prime minister if the MCA gets mauled and honours its pledge to stay out of the Cabinet? According to Bridget Welsh, associate professor in political science at Singapore Management University, Datuk Seri Najib Razak is likely to go to the other BN parties with a strong Chinese membership, notably Gerakan, or appoint non-party members as Senators and appoint them to the Cabinet. “Another scenario is that Chua will be replaced as president and the new party president will allow the party to be represented in the Cabinet,” Welsh told fz.com.She also felt that there is a real possibility that the PM would appoint professionals as ministers. If that is the case, Welsh felt that MCA’s position will become untenable. “They are already marginalised and this decision spits in their own face and makes them even more marginalised. The decision will hurt them unnecessarily.” Chinese won’t be the biggest losers Of course, there are those who may have concerns about the community’s lack of representation in the government, but Wong said history has shown that whenever BN loses the support of the Chinese, the community gets more in return. He cites the example of the 1990 GE, when BN lost 30% of the Chinese support. Within four months, Mahathir came up with Vision 2020 to woo the community.However, he added, if the BN government chooses to be irrational and punishes the Chinese, it will invite more trouble. In order for the Chinese to feel the pain, the BN would have to use outright discriminative measures, and this could result in a backlash strong enough to break  the alliance, with component parties and/or their representatives pulling out. “This will invite trouble and create a lot of instability, the market will crash and as such, I think this scenario is very unlikely,” Wong said. He also pointed out that the MCA is in a weaker position now than it was in 1969. “(The then MCA president) Tan was able to call for Chinese unity; however, if Chua were to call for Chinese unity today, people would just laugh at him. “The move by the MCA actually sums up the entire BN mentality; they refuse to accept that we have a united opposition front now. If you accept this, your strategy will be different. The MCA will then have to plan for the long run, and not resort to desperate strategies,” he added. This article first appeared in The Edge Financial Daily, on Nov 1, 2012.

https://theedgemalaysia.com/node/643

Umno: Perak speaker attempts to paralyse state administration

English

Meanwhile, Umno Youth chief Datuk Hishammuddin Hussein said the speaker’s decision was inappropriate and would only stir up the anger of the various quarters in Perak, adding that there would uncertainty in the state administration. He said the decision was short-sighted and did not place the people’s well-being first, noting that Perakians, irrespective of race, religion and status, would end up as victims should Pakatan Rakyat (PR) continue to fight that it is the legitimate government.  “The decision by the speaker shows there was total disregard for the Sultan. It has also tarnished the credibility and position of the institution of Malay Rulers,” Hishammuddin pointed out.   On the next course of action by Barisan Nasional (BN), he replied: “We will discuss the various options with our counterparts in the BN Youth soon.” However, Parti Keadilan Rakyat (PKR) information chief Tian Chua disagreed that the speaker had acted with malice but stressed that Sivakumar made the decision within the powers conferred to him by the state constitution and the standing orders. He said that in the spirit of parliamentary democracy, it was the duty of the state legislators to obey the instruction of the speaker, adding that the reasoning and motive of the speaker might not necessarily be agreeable to some. “This is a constitutional crisis where the legislature and the executive are at a stalemate. The only way is to dissolve the assembly and return the power back to the people,” Chua, who is also Batu MP, said.  He also said Perakians would be in the best position to judge the credibility of the speaker and the legitimacy of the state government under Zambry by way of a snap election as requested by PR.  “The state government is paralysed because BN has seized power illegally by not following the constitutional procedure,” he added.

https://theedgemalaysia.com/node/34661

Ann Joo up on higher revenue

English

KUALA LUMPUR: Ann Joo Resources Bhd's share price rose on Wednesday, Aug 4 after its net profit surged over 30 times to RM70.9 million in its second quarter ended June 30, 2010 (2QFY10) from RM2.2 million a year earlier due to a continuous improvement in productivity coupled with higher export tonnage. At 9.25am, Ann Joo was up 14 sen to RM2.69 with 207,100 shares done. The company's 2QFY10 revenue rose 40% to RM595.4 million from RM424.30 million, while basic earnings per share (EPS) rose to 14.11 sen from 0.44 sen. For the six month period ended June 30, 2010, Ann Joo registered a net profit of RM112.4 million compared to a net loss of RM36.7 million a year ago. Its revenue ballooned to 66% to RM 1.07 billion compared to the revenue of RM 644.43 million for the first half of year 2009.

https://theedgemalaysia.com/node/59616

Kulim gets DPMM letter to buy QSR shares at RM6.90

English

KUALA LUMPUR (Jan 10): Kulim (Malaysia) Bhd has received an offer letter from Kumpulan Syarikat Pelaburan DPMM on behalf of the Malay Chamber of Commerce Malaysia (MCCM) seeking to acquire all the QSR Brands Bhd shares it owns for RM6.90 per share. Kulim said on Tuesday the offer letter from the deputy president cum chairman of Kumpulan Syarikat Pelaburan DPMM, dated Dec 30, 2011, was unsolicited. At RM6.90, this was 10 sen above the offer made by Massive Equity Sdn Bhd (MESB) to acquire QSR’s business and undertakings, including substantially all the assets and liabilities of QSR for RM6.80 per share. Kulim said following the latest development and offer from Kumpulan Syarikat Pelaburan DPMM, it would convene a board meeting to deliberate on the offer. It also noted that on Dec 21, QSR’s independent directors had agreed to accept the offer from MESB to acquire QSR’s business and undertakings, including substantially all the assets and liabilities of QSR for RM6.80 per share and RM3.79 per warrant. To recap, the boards of QSR and KFC Holdings (M) Bhd (KFCH), which accepted the joint takeover offer by Johor Corp (JCorp) and CVC Capital Partners Asia III Ltd, said on Dec 21, they were not seeking any alternative bids for the sale of their assets and liabilities. Both companies had stated they would not invite alternative bids will put to rest speculations on possible counter bids for the fast food chain assets. However, both companies noted that the takeover offers are subjected to “further negotiations and mutual agreement on terms and conditions to be incorporated into the definitive sale and purchase agreement”. MESB is a special purpose vehicle created to undertake the take-over exercise to acquire all assets and liabilities in QSR and KFCH.  The shareholders of MESB are Triple Platform Sdn Bhd, a wholly-owned subsidiary of JCorp, with a 51% stake and Melati Asia Holdings Ltd, a wholly-owned unit of CVC Capital Partners, with 49%. Currently, JCorp owns a 57.05% stake in Kulim (M) Bhd, which in turn holds 58.68% of QSR. QSR is the major shareholder of KFCH with a 50.64% equity stake. MESB is offering RM6.80 cash per share for QSR Brands, and RM3.79 for the company’s warrants. Meanwhile, the SPV offered to buy the assets in KFCH at RM4 per share and RM1 for all its outstanding warrants. Upon completion of the takeover exercise, both QSR and KFCH will become empty shell companies, and the two companies intend to return the bulk of the sale proceeds to shareholders through capital repayment exercises.

https://theedgemalaysia.com/node/39274

Hong Leong Bank Bhd

English

Hong Leong Bank Bhd is Malaysia’s sixth largest bank in terms of assets. The bank had its roots as Sarawak-based Kwong Lee Bank and later, MUI Bank, before it was acquired by the Hong Leong group in 1994. In 2001, it acquired Wah Tat Bank, and in 2004 merged with sister company Hong Leong Finance to form an integrated financial group. More recently, Hong Leong Bank has been making headlines for its proposed acquisition of EON Capital Bhd, which is being opposed by certain shareholders of the latter. In the following email interview, group managing director and CEO Yvonne Chia shares her views on the banking group’s business, strategies and growth outlook. TEFD: What are the group’s competitive strengths and advantages? Chia: Hong Leong Bank is a quality bank with a strong market position, a well-recognised and transformed business franchise with a full range of banking experience, an established history and good, entrenched relationships with communities. We have a large share of the consumer segment, with over 70% gross loans to retail customers. We are entrenched with mass affluent customers, with a 21% share of the bankable population, and as well as with the middle market business community. Our non-performing loan ratios are among the lowest in the sector, underscoring our superior asset quality. We are well trusted and embedded in the communities we serve. These core franchise strengths are evident through our position among the top four banks for individual deposit size. The bank also holds the No 3 position in institutional unit trust agent assets-under-management market share. Hong Leong Bank has an extensive integrated multi-channel sales and distribution capability that allows the bank to reach out to the communities we serve. These include 186 branches in Malaysia, two overseas branches (in Singapore and Hong Kong) and a subsidiary in Vietnam. The bank is also the main distribution franchise for the wider Hong Leong Financial Group. What have been the achievements of the group since 2006? Despite the financial crisis, our financial performance in FY09 ended June was steady. Pre-tax profit increased to RM1.132 billion from RM1.01 billion in FY08. In the three years from FY06 to FY09, our pre-tax profit has increased by 1.5 times. Between 2005 and 2009, we completed the first phase of our business transformation programme, in which we focused on strengthening and scaling up the business, risk and technology infrastructure to grow profitably and sustainably. We also expanded the reach of the bank via alternate and electronic channels. Regional embedment has been one of the main goals of our strategy since 2006. We were the first Malaysian bank to make a strategic investment in the Chinese banking sector through a 20% stake in the Bank of Chengdu in 2007. In 2010, the bank established Sichuan Jincheng Consumer Finance Ltd Co, a joint venture with the Bank of Chengdu to start consumer finance operations in central and western China. Hong Leong Bank was the first Malaysian and southeast Asian bank to be awarded a 100% wholly owned foreign bank licence in Vietnam in late 2008. In October 2009, Hong Leong Bank Vietnam opened for business in Ho Chi Minh City. Plans are underway for a new branch in Hanoi and additional transaction offices in Ho Chi Minh City. How is the group positioning itself within your industry? A fundamental differentiator for our bank is our focus on embedment in the communities we serve. We aim to be close to our customers on the ground, understanding their needs and wants, and ensuring our brand values of integrity, trust and service are represented well in everything we do. Our position within the industry is also guided by our philosophy of getting the basics of banking right, such as having a well-capitalised balance sheet, strong liquidity and deposit franchise, strategic asset-liability management and prudent risk management. We are set apart by our focus on prime value, which is the intrinsic value placed by the market on a business based on various factors, including its scalability, resilience, sustainability, brand recognition, transformational growth and global competitiveness. Did the financial crisis in late 2008/2009 have any impact on the group? Our objectives for the Hong Leong Bank brand at the outset of the crisis were simple — sustaining the long-term franchise and shareholder value of the bank. We also maintained the discipline of abstaining from excessive risk-taking in the short term and avoiding the sacrifice of tomorrow’s credit, liquidity and franchise reputation for today’s profits. The effect of the global financial crisis on the bank was limited to the knock-on effects that the crisis had on the Malaysian economy. We were well prepared and delivered a resilient performance throughout the crisis. What are the group’s plans for the future, both short and long-term? How is the group planning to compete in an increasingly globalised environment? We aim to strengthen our domestic core businesses by growing, strengthening and embedding our domestic core positions in the country. We plan to transform branch banking to drive further embedment into our communities. We also plan to broaden the local and regional franchise of Hong Leong Islamic Bank. We are becoming a regional player. We see much potential in the Chinese market and will be helping to transfer our skill sets and knowledge base to transform Bank of Chengdu into a market-oriented regional bank in China. We will also be broadening the Singapore and Hong Kong branches and building our wholly owned subsidiary bank in Vietnam from a greenfield state into a recognisable franchise in Vietnam. Where would you like to see the group in 10 years? Hong Leong Bank is on a balance position of strength today. We have always maintained high standards of enterprise risk management and strategic franchise liquidity. We have built to this level of capacity, and we will remain focused on long-term prime value creation and economic sustainability for all stakeholders. Over the next few years, we will future-proof our competitive viability with scale efficiency, build compelling branch prime value and an embedded brand presence, build new businesses and new segments for earnings and fee income, and secure regional options by building new banks in new markets. This article appeared in The Edge Financial Daily, October 26, 2010.

https://theedgemalaysia.com/node/3992

HLBB reviving offer for EONCap

English

Hong Leong Bank Bhd (HLBB) (March 31, RM8.64)Maintain buy at RM8.64 with fair value of RM8.90: HLBB announced it had extended a new offer to buy EON Capital (EONCap). The offer is broadly the same as the previous offer, as in HLBB is offering to acquire the entire assets and liabilities of EONCap at an aggregate purchase price of RM4.9 billion, or RM7.10 per share, to be satisfied fully in cash. This works out to a price-to-book value (P/BV) of 1.4 times based on EONCap’s latest book value of RM5.13 per share as at end-December 2009. The new offer from HLBB is not entirely a surprise to us. HLBB said the board of EONCap is to confirm to HLBB on or before April 5 if EONCap is agreeable. If agreeable, EON Cap will have to despatch the notice of general meeting and shareholders’ circular on or before April 28 and the general meeting is to be held not later than 14 days from the date of despatch. EONCap said its board will review the terms of such proposal and will make such further announcements as and when it has comprehensively reviewed the proposal. The new board of EONCap was just approved by Bank Negara on March 26. EONCap’s board now comprises 10 board members. The seven new board members are Tengku Ahmad Faisal Tengku Ibrahim, Tengku Azman Almarhum Sultan Abu Bakar, Datuk Haron Siraj, Dr Zaha Rina Zahari, Nicholas John Lough @ Sharif Lough Abdullah, Ahmad Riza Basir; and Wee Hoe Soon @ Gooi Hoe Soon. Existing board members are Rin Kei Mei, Datuk Sri Tiong Ik King and Ng Wing Fai. We believe there is a chance that EONCap’s new board may consider tabling the offer to shareholders for consideration. Our fair value for HLBB has not included a scenario for its takeover of EONCap going through. Based on our sensitivity analysis earlier, we estimate that HLBB’s fair value will be uplifted to RM9.90 per share. This is based on the average of various funding options, including hybrid capital issuance, sub-debt issuance or rights issue.  — AmResearch, March 31 This article appeared in The Edge Financial Daily, April 1, 2010.

https://theedgemalaysia.com/node/51510

Nationwide crackdown on profiteers launched

English

SEREMBAN: The 2014 Price Ops, aimed at clamping down on traders violating the Price Control and Anti-Profiteering Act, was launched nationwide yesterday. Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Hasan Malek said the operation focused on pricing, enforcement of Section 21 of the Price Control and Anti-Profiteering Act, and checks on weights and measures. He said about 1,800 enforcement officers and 1,100 monitoring officers will carry out spot checks at wet markets, grocery stores and restaurants during the operation. Speaking to reporters after the launch of 2014 Price Ops at the Seremban Main Market yesterday, he urged all quarters to make the operation a success and asked consumers to lodge complaints against errant traders to the ministry. Hasan said the ministry had set up a committee comprising consumer organisation representatives, economists and lawyers to review existing Acts in an effort to streamline and strengthen them. In Alor Setar, Deputy Minister of Domestic Trade, Cooperatives and Consumerism Datuk Seri Ahmad Bashah Md Hanipah said some traders had resorted to charging excessive prices as they were prompted by issues blown out of proportion by certain quarters through various media channels. “Irresponsible quarters have taken an easy way out to blame the government when the prices go up even though the increases could be due to inclement weather or supply and demand. Consumers should use their discretion before making purchases by comparing prices,” he told reporters after inspecting prices at the Alor Setar Main Market. He said not all complaints about price hikes relayed to the state’s 2,000-strong Consumer Squad were true as the inspection carried out by him at the market showed that chicken was sold at between RM6.80 and RM7.30 per kg while beef was sold at between RM25 and RM27 per kg. In Kuantan, Pahang Cooperative, Entrepreneurship and Consumerism Committee chairman Datuk Shahiruddin Ab Moin said that unlike before, traders violating the Price Control and Anti-Profiteering Act 2011 in the state will no longer be issued with compounds, instead they will be charged in court. “We will not compromise with errant traders who violate regulations, such as not displaying price tags, selling goods at exorbitant prices, and cheating on weights and measures,” he told reporters after inspecting the prices of goods at the Kuantan Main Market. Shahiruddin said if the inspection was anything to go by, most of the traders obeyed the rules. “Errant traders will have their goods confiscated before being served notices, pending a decision whether they will be charged in court,” he added. — Bernama This article first appeared in The Edge Financial Daily, on January 21, 2014.

https://theedgemalaysia.com/node/38150

Maybulk to gain from dry bulk shipping upturn in 2014, says MIDF Research

English

KUALA LUMPUR (Jan 7): MIDF Research expects Malaysian Bulk Carriers Bhd (Maybulk) will gain from the upturn in dry bulk shipping cycle in 2014 due to the ramp up in iron ore stockpiling activities from China in the second half of last year (2HFY13). In a note today, MIDF Research said the upturn will further narrow Maybulk’s operating losses in its dry bulk segment. “We favour Maybulk due to its net cash position and healthy delivery pipeline of vessels which will boost its earnings prospect during the recovery cycle of dry bulk sector. “Nonetheless, we view that its share price has already priced-in the positive factors as it is now traded at 24x FY14 P/E as compared to its peers’ average of 18.5x. “Hence, we maintain our Neutral stance on Maybulk with an unchanged target price of RM1.90,” said the research house. The research house also noted that there is no announcement on the IPO listing of Maybulk’s Singapore-based associate, PACC Offshore Services Holdings Pte Ltd’s (POSH) on the Singapore Exchange. “If Maybulk opts to sell its entire position in POSH group, it can expect to realise 25% gain over its original purchase price based on the original listing agreement,” said the research house. The research house said the Baltic Dry Index (BDI) posted a gain of circa 327% in 2013 and closed at 2,277 at the end of 2013, which maintained its recovery momentum. BDI represents the weighted average of chartering rates for four different sizes of dry bulk carriers. The improvement was primarily attributable to the ramp up in iron ore stockpiling activities from China in 2HFY13 that resulted in the tightening supply of available vessels. “In the long term, we expect the recovery of dry bulk rates to be sustainable due to China’s urbanisation and infrastructure projects which remain the main drivers for the demand growth of dry bulk commodities,” it said. The research house noted that China’s monthly iron ore and coal imports has maintained its upward trajectory with a record import of 77.8mmt in Nov 2013. “We expect the ramping up of steel production in China to support the import demand of iron ore and thus spur the global dry bulk shipping volume higher. As at end 2013, the total inventories of imported iron ore in China’s ports stood at 81.3mmt has expanded by +9.8mmt or 13.7% as compared to the first half of the year. Currently, China’s global steel production accounts for circa 50% of global output with the production level of steel in China is likely to have a profound impact on the world’s iron ore seaborne trade.

https://theedgemalaysia.com/node/65839

Telekom, Axiata lift KLCI at mid-morning

English

KUALA LUMPUR (July 17): The FBM KLCI shrugged off initial jitters at mid-morning and climbed to a fresh high, powered by gains including at Telekom Malaysia Bhd and Axiata Group Bhd. The FBM KLCI gained 0.90 of a point to 1,636.86. Volume was 234.27 million shares valued at RM172.35 million. Asian shares paused on Tuesday as investors awaited Federal Reserve Chairman Ben Bernanke's view on the U.S. economy later in the day, after weak U.S. retail sales and a lower International Monetary Fund global growth forecast raised hopes of more stimulus from the Fed, according to Reuters. Bernanke, set to appear at the semi-annual congressional testimony on Tuesday and Wednesday, is expected to reiterate the bank's stance that it will take further action only if economic conditions worsen, said Reuters. Meanwhile, the International Monetary Fund on Monday cut its forecast for global economic growth and warned that the outlook could dim further if policymakers in the euro zone do not act with enough force and speed to quell their region's debt crisis. In a mid-year health check of the world economy, the IMF said emerging market nations, long a global bright spot, were being dragged down by the economic turmoil in Europe. It said a drop in exports in these countries would combine with earlier policies meant to prevent overheating and slow growth more sharply than hoped. The IMF shaved its 2013 forecast for global growth to 3.9 percent from the 4.1 percent it projected in April, trimming projections for most advanced and emerging economies. It left its 2012 forecast unchanged at 3.5 percent. At the regional markets, the Shanghai Composite Index added 0.37% to 2,155.86, Hong Kong’s Hang Seng Index was up 1.42% to 19,392.73, Japan’s Nikkei 225 was up 0.455 to 8,764.88, Singapore’s Straits Times Index gained 0.66% to 3,018.57, South Korea’s Kospi gained 0.70% to 1,830.57 and Taiwan’s Taiex added 0.345 to 7,114.04. BIMB Securities Research in a market preview on Tuesday said that global economic slowdown was now the main concern as investors and traders alike reinstated their flight to safety back to treasuries especially the US 10-year Treasury with yields now at all time low. It said that judging by the funds flowing into treasuries, there were widespread expectations that more stimulus measures should be in the offing all round to reignite the ailing economies. The latest US retail sales figures which came in 0.5% weaker prompted some selling on Wall Street thus the 50 point decline on the Dow Jones Industrial Average to 12,727, it said. It said European stocks were mixed as anxiety on the region’s financial crisis is not subsiding. Regionally, most markets were higher possibly due to the buying momentum from last week and also foreign funds, it said. “Locally the FBM KLCI charted another all time high at 1,635.96 (+9.58) but we expect the uptrend to be curtailed by the global uneasiness. “One bright spark would be China’s stimulus spending which is expected to be effected in the 2H this year to spur its slowing economic activity. We detected some inflow of foreign funds and this may continue to prop the index possibly to the 1,640 mark soon,” it said. Among the gainers on Bursa Malaysia, Oriental jumped 32 sen to RM7.21, F&N 30 sen to RM18.30, MCIL 20 sen to RM1.55, Telekom 12 sen to RM6.14, Axiata 11 sen to RM5.95, tasek 10 sen to RM9.96 and Maxis seven sen to RM6.72. ACE Market debutant OCK Group was the most actively traded counter with 27.19 million shares done. The stock rose nine sen to 45 sen. Other actives included MCIL, Astral Supreme, Luster, Palette and Utopia. Meanwhile, the decliners at mid-morning included Panasonic, Hong Leong Bank, Kluang, Carlsberg, Chin Teck, Tan Chong, Ta Ann, Hong Leong Industries, GAB and Parkson.

https://theedgemalaysia.com/node/52728

Asian markets extend losses amid concerns over global economy

English

KUALA LUMPUR: The FBM KLCI remained rooted below the 1,550-level yesterday, in line with the slump at key regional markets as investors remained worried by the fragile recovery in the US and the deepening European debt woes. However, the fall on the FBM KLCI was smaller than on other regional bourses. The FBM KLCI fell to a low of 1,538.9 points, losing nearly 16 points from the previous closing. The benchmark index finished at 1,545.1 points — the lowest since June 13, down 9.75 points or 0.63% yesterday. The overnight losses on Wall Street on Tuesday continued to dampen sentiment in Asia. Most markets dipped further amid concerns over the global economy. The US Congress’ approval to raise the debt ceiling did not help to boost market sentiment, said a dealer, adding that the market had already factored in that the country would not be in a national default. There was an absence of positive news to drive the market in the region, he said, adding the eight consecutive days of losses on the Dow Jones Industrial Average did not help either. Nonetheless, there seemed to be interest in second liners, some of which have chalked up substantial gains, for instance Catcha Media Bhd, Hirotako Holdings Bhd and Malaysia Building Society Bhd, despite the cautious sentiment. On Bursa Malaysia, losers beat gainers by 514 to 259, while 280 counters traded unchanged. Volume came in at 1.17 billion shares valued at RM1.75 billion. At the regional markets, Japan’s Nikkei 225 lost 2.11% to 9,637.14, South Korea’s Kospi fell 2.59% to 2,066.26, Hong Kong’s Hang Seng Index lost 1.91% to 21, 992.72 and Taiwan’s Taiex was down 1.49% to 8,456.86, Singapore’s Straits Times Index fell 1.47% to 3,130.34 while the Shanghai Composite Index shed 0.03% to 2,678.48. OSK Research director Chris Eng said given the uncertain global situation, the local bourse might remain volatile for now. “But it is still early days in August and we remain hopeful for a positive month, given that we had already underperformed the region in July. “For now, Malaysia is still outperforming and our call to buy the bombed-out stocks is still largely correct thus far in August,” he said. The FBM KLCI has been on a downward trend since mid-July. The benchmark index has declined almost 60 points from the peak of 1,594.7 points. The saving grace is that Bursa Malaysia is among the few Asian markets still in positive territory year-to-date. MIDF Research acting head of equity Syed Muhammed Kifni Syed Kamaruddin said despite recent weakness, the local market remains on an uptrend. The main immediate support for the KLCI was at the 1,530 level, which equalled the technically important 200-day moving average, he said. “Barring further negative surprises either locally or abroad (such as the recent worse-than-expected US ISM number), we reckon the local market is expected to continue on its upward trajectory driven and supported by robust underlying economic fundamentals in the region despite some inflationary pressures. We maintain our 2011 target for the KLCI at 1,650,” he said. Plantation stocks mostly headed south. Genting Plantations Bhd fell nine sen to RM7.81, PPB Group Bhd and KL Kepong Bhd lost eight sen each to RM17.20 and RM21.66. Sime Darby Bhd dropped seven sen to RM9.07 and IOI Corp Bhd six sen to RM5.09. Sanichi Technology Bhd was the most actively traded counter with 58.3 million shares done. The stock added two sen to 9.5 sen. Other actives included Ingenuity Solutions Bhd, Ramunia Holdings Bhd, and KNM Group Bhd. Gainers included Tasek Corp Bhd, MNRB Holdings Bhd, Hong Leong Bank Bhd and Dutch Lady Milk Industries Bhd. This article appeared in The Edge Financial Daily, August 4, 2011.

https://theedgemalaysia.com/node/68684

We're coming into financial hurricane season

English

THE North Atlantic hurricane season runs from mid-August to October, with a strong peak in storm activity around the middle of September. A less familiar but even more destructive pattern of disturbances is the financial hurricane season, which coincides with the meteorological one almost to the day. Most of the great financial crises of modern history have occurred in the two months from mid-August: the Wall Street crashes of Oct 22, 1907, Oct 24, 1929, and Oct 19, 1987; Britain's abandonment of the gold standard on Sept. 19, 1931; the postwar sterling devaluation on Sept 19, 1949; the collapse of the Bretton Woods global monetary system on Aug 15, 1971; the Mexican default that triggered the Third World debt crisis on Aug 20, 1982; the breakup of the European exchange-rate mechanism on Sept 16, 1992; the Russian default on Aug 17, 1998, the bankruptcy of Lehman Brothers on Sept 15. 2008 — and this list could go on. The coincidence between financial and meteorological hurricanes may not be entirely fortuitous. The global economy, like the world's atmosphere, is a finely balanced complex system. In such systems, small perturbations can accumulate to trigger big effects. And just as the meteorological tipping points tend to occur when autumn air circulation starts to disrupt the humid air accumulated in the summer doldrums, something similar seems to happen to financial markets when trading becalmed by the summer holidays returns to normal. The result can be sudden and violent reaction to events accumulated over the summer that markets had seemed to ignore. The world economy does not, of course, experience hurricanes with the same regularity as the Caribbean. But when big events happen over the summer, financial disturbances become quite probable in the fall. This is probably the reason why September has historically been the worst month of the year for stock market performance. In fact, September is the only month in which Wall Street prices have, on average, declined since the 1920s. The question now is whether the world economy has already adjusted to the potentially disruptive and disappointing economic events of the summer, or whether the summer doldrums in financial trading were merely a calm before the storm. The testing period began last week with last Thursday's European Central Bank (ECB) meeting and last Friday's US job figures. Further challenges to financial confidence are likely from the German constitutional court verdict on euro bailouts on Wednesday and the Federal Reserve decision on quantitative easing the following day. But rather than focusing again on these familiar issues, it is worth considering some worrying developments recently in other parts of the world. In China, economic activity has failed to accelerate as expected, despite repeated attempts at monetary and fiscal stimulus. This could mean simply that the government and the central bank have not yet done enough. It is possible, however, that the Chinese economy has become too complex to be managed and fine-tuned as effectively as in the past. Or perhaps the disappointing results of Chinese stimulus thus far reflect a broader failure of monetary policy, which is becoming evident around the world. Recent disappointments in Britain support the latter interpretation. The British economy has enjoyed no growth for two years now, since David Cameron's government decided on a radical experiment in fiscal belt-tightening, hoping that monetary expansion would offset the deflationary effects. This week Cameron responded to the failure of this experiment by sacking many of his ministers and announcing a new "pro-growth" strategy. On closer inspection, however, this "new" policy was simply doubling down on the one that failed. The growth measures consist mainly of promises to build unpopular new airports and railways from 2015 onwards. Meanwhile, the government will continue to cut spending and raise taxes, hoping that further monetary handouts to banks and bond investors will revive growth. The experience of the past four years suggests this is unlikely. But if Britain cannot revive its economy with monetary easing, why should better results be expected from the Fed? Ben Bernanke, in his Jackson Hole speech the week before last, effectively promised to keep pumping money into the US bond markets until he achieved a strong economic recovery. But given that QE has failed to deliver full employment in 2010-12, why should it work any better in 2013? Pumping money into the banks was a very effective emergency measure to prevent the collapse of the US and British financial systems — and it could be equally effective in preventing the breakup of the euro, if only the German government would permit it. But financial stability and economic growth are different problems, and they may require different solutions. Unfortunately policymakers do not seem to understand this distinction. In the US and Britain they refuse to acknowledge that printing money can ever be counterproductive. In Germany, by contrast, they refuse to accept that printing money can ever work. Which brings us finally to the most important source of instability that threatens a financial hurricane this autumn — the impending clash between the ECB, Germany and the rest of the eurozone. This conflict, to which I will return next week, is certain to intensify between now and the next European summit on Oct 19 — a date still well within the financial hurricane season. — Reuters Anatole Kaletsky is a journalist and economist based in the United Kingdom. He has written since 1976 for The Economist, The Financial Times and The Times of London before joining Reuters and The International Herald Tribune in 2012.

https://theedgemalaysia.com/node/92791

Ahmad Zahid: New law to replace EO need not curb police authority

English

KAJANG (July 18): Legislative transformation carried out by the Attorney-General's Chambers to replace the Emergency Ordinance (EO) need not burden the police in their effort to reduce the crime rate in the country, said Home Minister Datuk Seri Ahmad Zahid Hamidi. He said the new legislation needs to be similar to the EO which equips the police with the power to fight crimes, especially serious crimes. "We (Home Ministry) do not want to contradict what is being done by the Attorney-General to carry out legislative transformation. But we must understand the police are toothless when there is no EO. "Do not see only from the legal perspective but from all aspects to fight crime," he told reporters after attending a breaking of fast event of the National Anti-Drug Agency here yesterday. According to him, since the EO was repealed, incidents of organised or serious crimes increased by 90% which were carried out by former criminals. Recently, Ahmad Zahid was reported as saying following the repeal of the EO, 2,600 detainees at the Simpang Renggam Detention Centre in Johor were released and that many of them returned to lead a life of crime. He also requested Malaysians to understand the position of police which were losing their powers such as the power to record statements of witnesses and witnesses need not appear in the court. Therefore, he said, the community should not blame police when the crime rate increased. "We are not seeking the people's sympathy but understanding on the police's duty in arresting criminals but having to release them for lack of evidence. "Prior to this, Inspector-General of Police Tan Sri Khalid Abu Bakar had also requested for a new law similar to the EO to curb serious crimes like shooting," he said. According to Khalid, without EO and no witnesses coming forward to assist in investigations, criminals were getting bolder to carry out radical and aggressive crimes such as shootings.

https://theedgemalaysia.com/node/49211

Tan Chong Motor 1Q net profit up 14.5% to RM74.08m

English

KUALA LUMPUR: Tan Chong Motor Holdings Bhd’s net profit rose 14.5% to RM74.08 million in 1QFY11 ended March 31, from RM64.67 million a year ago, boosted by the sale of its Nissan Teana. It said yesterday that revenue increased by 29.8% to RM1.13 billion from RM870.36 million. Earnings per share was 11.35 sen from 9.91 sen a year ago. It described the revenue as a record compared with the previous peak of RM1 billion in 3QFY08 before the global financial crisis. “Net income stood at RM74 million and this included a non-cash flow translation loss of RM5.4 million arising from a devaluation in the Vietnam dong against the US dollar and US dollar against a stronger ringgit,” it said. Tan Chong said the 1Q financial statement also consolidated the results of its 74%-owned subsidiary, Nissan Vietnam Ltd (NVL), which achieved earnings before interest, tax, depreciation and amortisation (Ebitda) break-even in 1Q after it was taken over by Tan Chong last November. Group operating margins fell slightly to 9.6% in 1Q from 10.8% a year ago, as the group continued to invest in its regional markets expansion and new products. When compared with 4QFY10, Tan Chong said the all-new Nissan Teana drove performance in 1QFY11 because it was launched on Nov 23, and the bulk of sales was recognised at the start of 2011 instead of 2010. “Due to a higher value-added product offering, operating profit margins grew from 8.5% in 4QFY10 to 9.6% in 1QFY11 despite the drag in forex and NVL. Inventories stood at RM878.8 million as at March 31 compared with over RM1 billion as at Dec 31,” it said. On the current year prospects, Tan Chong said although booking levels remain elevated, it “started to pace production” as a response to mitigate risks in the auto supply chain (since the earthquake in Japan on March 11). “Sales momentum may slow in 2Q but pick up again in 2H. Nissan is focusing all efforts to ensure swift restoration of its production operations,” it said. This article appeared in The Edge Financial Daily, May 19, 2011.

https://theedgemalaysia.com/node/52636

KPJ’s expansion plans on course

English

KPJ Healthcare Bhd(Aug 2, RM4.64)Maintain outperform at RM4.63 with revised fair value of RM5.30 (from RM5.62): KPJ plans to develop its existing network of hospitals into sub-specialist hospitals (or centres of excellence) which will be equipped with specialised equipment and house medical specialists. We view this positively as KPJ will only need to equip the identified hospitals with the required medical equipment/facilities. New hospitals in the pipeline include a 200-bed hospital in Bandar Baru Klang, Selangor, the 250-bed new Sabah Medical Centre, a 120-bed hospital in Muar and a 120-bed hospital in Pasir Gudang, Johor, a 200-bed hospital in Tanjung Lumpur, Pahang, and the KPJ Perlis Specialist Hospital. The National Health Insurance Scheme is not expected to have a significant impact on KPJ. Longer-term growth will be driven by the opening or acquisition of new hospitals and government initiatives in growing healthcare tourism. KPJ REIT complements KPJ’s growth plans. Having completed three tranches of asset injection into KPJ REIT, the company’s fourth asset injection is on course. We are positive on KPJ’s growth strategies, as we believe the asset injection strategy will support the company’s expansion plans. We have tweaked our FY11 to FY13 earnings forecasts to adjust for: (i) changes in revenue mix assumptions to account for a higher number of in patients; and (ii) increase in our depreciation assumptions of 37.1% to 64.4% for FY11 to FY13 for the construction of new hospitals. All in, our earnings forecasts are reduced by 5.6% to 10.4% per year for FY11 to FY13. The risks include lower than expected patient numbers if there is slower than expected economic recovery or a serious disease outbreak (such as SARS or swine flu) in Malaysia. A slower than expected turnaround in loss-making hospitals would also be a drag on earnings growth. Given our lowered earnings forecasts, our fair value is reduced to RM5.30 (from RM5.62 previously) based on an unchanged target FY12 price-earnings ratio of 19 times, after imputing a 10% discount to the regional peers’ average of 21.5 times. Moving forward, however, we believe the stock is still attractive amid the current market volatility given the defensive qualities of the healthcare industry as well as the decent dividend yields. We therefore reiterate our “outperform” call on the stock. — RHB Research, Aug 2 This article appeared in The Edge Financial Daily, August 3, 2011.

https://theedgemalaysia.com/node/35294

Profiling through Eight Characters

English

Personality profiling or performance profiling through tests like Jung-Myers-Briggs, DISC profile and the Keirsey Temperament Sorter, to name a few, is today de rigueur in many large corporations and multinationals. The idea behind such profiling tests is simple: Find out what the person is good at and get them into a job or position that capitalises on their strength. But these tests may come with certain disadvantages. First, they require the candidate to actually sit for them. Second, the reliability of the tests in accurately profiling a person has been called into question, since there has been evidence to suggest that such tests can be “tricked”, because the candidate can choose not to answer honestly. Given how important these tests are towards getting a job in a multinational company, it wouldn’t be surprising that some people would be tempted to “Rob Wealth” their way (in plain speak, manipulate or bluff) through them. There is also the question of access. The tests are extremely expensive to implement, so small and medium-size businesses, businesses with headcounts under 250 and start-ups have little or no means to utilise them. Which brings me to BaZi Profiling, a system of personality profiling that offers a number of clear advantages (obviously I’m a bit biased, but hear me out). The most obvious advantage is that it doesn’t require cooperation from the candidates. Just ask them to fill in their Date of Birth (the time isn’t really required for a basic profiling), punch it into a BaZi calculator, get the chart, and with some simple BaZi knowledge, you can read their profile. It has a high accuracy level in terms of ascertaining a person’s basic and inherent personality. You can’t cheat on a BaZi profile, and interpretation errors are virtually nil at the basic profiling level, which can actually be done using a computer program. The five profilesThere are Five Basic Profile types in BaZi Profiling: Wealth Profile, Output Profile, Companion Profile, Influence Profile and Resource Profile. Here are the traits of each. The Wealth Profile person is: independent, self-confident, responsible, results-driven, hard-working, bottom-line centric. They are exceedingly practical, supremely grounded and horribly efficient. These no-nonsense, frequently authoritative types do not mince their words, have low tolerance for excuses or foolishness and believe it is entirely possible to achieve efficiency + efficacy. They are control-driven and tend to micro-manage. The Output Profile person is: creative, a big-picture person, a visionary, a dreamer, an evangelist, a daredevil, a rebel with a cause, hyper-confident, innovative, energetic, reform-driven. They are performance-driven people who thrive under the spotlight. They love presenting, pitching, brain-storming, getting on a soapbox and making something from zero to hero. They get a thrill from coming up with unique, over-the-top concepts and ideas. They tend to be stubborn, argumentative, demanding, tempestuous and sometimes suffer illusions of grandeur. The Companion Profile person is: persuasive, sociable, chatty, a smooth operator, a networker extraordinaire, competitive, strong-willed, egotistical, hyper-confident, fly-by-the-seat of their pants, teamwork centric, a natural salesperson, outgoing, altruistic. Their motivation in life comes from seeing everything as a race. There is a tendency to be disorganised, last-minute, lack a systematic approach and make decisions spontaneously. This profile is also very susceptible to peer pressure. The Influence Profile person is: likeable, pleasing, consensus-driven, pliant, anti-conflict, sensitive, precise, cooperative, thorough, measured, execution-driven, a peacemaker, a middle manager, diplomatic, tactful. They are the consummate follower, they never step out of line and always knows their place in life. They are never extreme and always rock-steady in everything they do. This profile tends, however, to shy away from taking the lead and prefers not to upset the apple cart in any way. The Resource Profile person is: questioning, analysis-driven, thinkers rather than doers, methodical, thorough, knowledgeable, well-read, a micro-picture person, cautious, precise, systematic, structured, orderly, balanced, patient, reliable, steady. They are the consummate adviser; always armed with all the facts and figures, dissected six ways. This profile, however, does not operate well under pressure and has a tendency to procrastinate. Most people will fall into one of these five profiles, or one of the profiles will dominate their personality. In some instances, the person’s profile is very clear and evident even without the benefit of plotting their BaZi chart. Joey Yap is an expert in Chinese astrology services and audits, Classical Feng Shui, BaZi, Mian Xiang and other Chinese metaphysics subjects. He can be reached via Facebook: www.facebook.com/JoeyYapFB This article appeared in The Edge Financial Daily, August 16, 2010.

https://theedgemalaysia.com/node/50392

United U-Li mulls distributing part of RM200m to shareholders

English

KUALA LUMPUR: United U-Li Corporation Bhd may distribute part of the RM200 million cash proceeds from the proposed disposal of three units to shareholders. In a reply to a Bursa Malaysia Securities’ query on Tuesday, June 14, it said the intended utilisation of cash proceeds arising from the proposed disposal has not been finalised at this juncture. “But may amongst others, be utilised for the working capital of the remaining subsidiaries post completion of the proposed disposal, the acquisitions of new businesses, as well as a portion of the cash proceeds being distributed back to the entitled shareholders,” it said. It is selling three units United U-Li (M) Sdn Bhd, United U-Li Steel Service Centre Sdn Bhd and Cabletray Industries (M) Sdn Bhd for RM200 million to Legrand France, SA. The units manufacture cable support systems and light fittings. The audited total net assets of the companies are RM102.25 million, it said. It added the indicative disposal consideration of RM200 million was based on the three companies’ historical financial performance; current market conditions; and audited net assets as at Dec 31, 2010.

https://theedgemalaysia.com/node/19715

Corporate: PPB’s value overlooked by investors

English

It has been over two years since PPB Group Bhd hived off its palm oil-related businesses, leaving it with a 18% stake in the world’s largest palm oil trader, Wilmar International Ltd, and a few staple food businesses that include sugar and flour. The Wilmar stake is precious to PPB as about 78% of its net profit for 1HFY2009 ended June 30, came from this investment. The contribution has even surpassed analysts’ yearly expectations. To investors, holding a share in the Kuok-owned PPB is a luxury as the counter acts as a good proxy to Wilmar, and what is more, it is cheaper too. However, given the performance of the two counters of late, some investment houses call a preference over Wilmar’s shares to PPB’s because of the former’s better upside. HwangDBS Vickers Research, for example, has a “buy” call on Wilmar at a target price of S$7.25 (RM17.40) per share but a “hold” call on PPB. “We prefer direct exposure to Wilmar as we expect better upside in Wilmar compared to PPB,” says HwangDBS in a report on Aug 24. HwangDBS’ target price for Wilmar is based on discounted cash flow valuation while its RM15.30 target price for PPB is based on sum-of-parts valuation. In its Aug 24 report, there was 19% and 4% upside left to HwangDBS’ target prices for Wilmar and PPB respectively. Note that Wilmar’s shares have gained 132.62% YTD while PPB’s, 64.09%. For sure, Wilmar’s plan to float its shares in Hong Kong, which is estimated to raise some US$4 billion (RM14 billion), has given its shares a boost. HwangDBS’ recommendation is understandable because unlike PPB’s investment in Wilmar, its core divisions’ prospects appear unclear given the fluctuation of raw material prices, ocean freight charter rates and weakening consumer consumption. PPB’s sugar division is the largest revenue and profit earner, accounting for 60.15% or RM82 million of operating profit. Total operating profit for the first six months was RM131.78 million. The segment contributes 38%, or RM613 million, to the company’s revenue in 1H2009. The sugar division is the only business that saw growth in operating profits in 1H2009 while the rest posted double-digit declines. The livestock farming division recorded losses. In terms of profit contribution, PPB’s core division accounted for about 20% of its net profit, which is tiny compared to the contribution from Wilmar. However, some analysts say this should not be the reason for investors to overlook the value of PPB’s core business. “There are a few ways of looking at this. While some prefer direct exposure to Wilmar, you can’t discount the fact that PPB offers a cheaper entry into the Wilmar group. There is a lot of value within the PPB business itself,” says an analyst. Based on PPB’s closing share price of RM15.80 last Thursday, PPB’s market capitalisation stood at some RM18.73 billion. Stripping out the value of a 18% stake in Wilmar of RM17.88 billion, the market pegs a value of RM849 million on PPB’s other businesses. However, an analyst says this undervalues PPB’s core activities, as he believes the businesses should be valued at not less than RM2.4 billion, almost triple the pegged value of RM849 million. He says the RM2.4 billion is based on the enterprise value and cash position of the respective divisions. When including PPB’s other investments, such as Malaysian Bulk Carriers Bhd, the analyst says the figure will jump to RM2.8 billion. “The market has hugely discounted PPB’s core activities. As the company is in the business of producing staple food, it is hard to explain why the market gives the stock a very low valuation. Even at a time when Wilmar’s value nearly exceeded PPB’s market capitalisation, the business was valued at zero. This does not make sense, does it?” he adds. The analyst’s argument is fair enough. Furthermore, PPB’s 50% share of the sugar and 40% of the flour market here should warrant a commendable valuation, at least on its sugar and flour businesses.The analyst values PPB at RM17.80. PPB Group managing director Tan Gee Sooi assures that the group’s diversified businesses will remain relevant, and this should appeal to investors. “By owning a PPB share, I will own a share in Wilmar, plus other business that are generating income,” he tells The Edge. At present, Tan says PPB is expanding its core businesses despite the economic slowdown. He adds that another RM150 million will be spent on flourmill expansions this year, besides the RM77 million spent on a flour and feed milling facility in Indonesia earlier this year. It is understood that the mill in Cilegon is its first in Indonesia, with a production capacity of 1,000 tonnes per day. PPB expects the mill to start contributing in the next four months. Given Indonesia’s promising outlook, PPB has plans to set up a second mill there. The company has also spent RM28.7 million to upgrade its sugar refinery. A notable development is that PPB has, for the first time, received government subsidy of 60 sen per kg to produce the price-controlled item. The local retail price for coarse sugar is RM1.45 per kg and RM1.55 per kg for refined sugar. Furthermore, PPB has a long-term contract with the government to supply 70% of its requirement for raw sugar at 17.5 US cents per lb, 27% lower than the market price. Note that margins at its sugar division have improved in 1H2009 compared with 1H2008. Although fluctuations in prices of raw material and ocean freight rates lingers, analysts say prices will eventually come back to the previous levels and the company’s diversified business will prosper again. PPB has hinted that it will eventually increase its stake in Wilmar and did not rule out participating in Wilmar’s recently proposed Chinese IPO. Regardless, investors should not overlook the value of the core businesses within PPB’s stable. This article appeared in The Edge Malaysia, Issue 772, Sep 14-20, 2009.

https://theedgemalaysia.com/node/66894

#Olympics* Field of dreams

English

AS children, we watch the Olympic Games with awe. There is nothing more moving than seeing an athlete vindicated after years of training, finally taking his place on the winner's podium, looking to the skies in grateful thanks as his country's national anthem blares on the speakers for all the world to hear. Could I do that? It is a question we may ask and sometimes even conjure dreams of attempting it. But many of us have realised, somewhere along the way, that we are not made for sports. It's not a life for everyone, just some. Yet, it does not stop us from channelling our hope and faith into that Olympic hopeful from our country. Whoever you are today takes a back seat for a moment as you watch him take his place at the starting blocks and you pray, "Almighty God, let him do it, let him win or, better yet, let him set a new world record." The Olympic Games are, after all, the greatest field of dreams. Each country delivers its Olympians along with dreams of victory, each of them marching into the Games' arena with a fiery desire to go down in history as one of mankind's greatest athletes. It is an amazing 16 days of hope and belief in ourselves. Man versus man, without politics, money or machine. Over the years, we have seen some of the most amazing feats man is able to accomplish through sheer strength and spirit. We have proved ourselves "evolved" over the years, fulfilling the Olympic motto of "Citius, Altius, Fortius" — "Faster, Higher, Stronger". The fastest man in the world today, Usain Bolt of Jamaica, has clocked 9.58 seconds on the 100m dash, 1.02 seconds faster than the fastest man in the world in 1912, Donald Lippincott of the US. The highest a man can jump is 2.45m, a record set by Cuba's Javier Sotomayer in 1993, the longest-standing record in the history of the men's high jump. Meanwhile, Iran's Hossein Reza Zadeh showed us at the Sydney 2000 Olympics that a man is capable of lifting up to 472.5kg with his bare hands — that is five to six times the weight of an average man. Of course, not all Olympic victories are physical feats. Since the days of Pierre de Coubertin, French historian, educationalist and "father of the modern Olympic Games", the goal of the Games has been "to contribute to building a peaceful and better world by educating youth through sport". Take some time to read the Olympic Charter, available online for anyone who cares to read it. The goals set in 1894, the dreams of those before us, show that the Games, if anything, are more about celebrating humanity than about pitting us against each other. "The Olympic Games are competitions between athletes in individual or team events and not between countries …" "The goal of Olympism is to place sport at the service of the harmonious development of humankind, with a view to promoting a peaceful society concerned with the preservation of human dignity …" "The practice of sport is a human right. Every individual must have the possibility of practising sport, without discrimination of any kind and in the Olympic spirit, which requires mutual understanding with a spirit of friendship, solidarity and fair play …" The world witnessed sportsmanship triumph over Nazi ideology at the 1936 Games in Berlin when African-American athlete Jesse Owens broke several world records and made his victory lap for his long jump win with his German competitor Luz Long. And when we saw North and South Korea march together for the first time at the opening ceremony of the Sydney 2000 Olympics, it was indeed a beautiful, albeit short-lived, moment. The world cheered as they joined hands, wore identical uniforms and waved a unification flag featuring a blue map of Korea. Moments like these really depict the power of sportsmanship. The Olympic Games are as much about sport as they are a celebration of the human race. Malaysia has been a part of the Olympic movement since 1956. A year shy of our independence, a 33-strong team made its debut at the Melbourne Olympic Games, comprising six athletes, two swimmers, 18 hockey players, three weightlifters and four shooters, including Annie Choong (athletics), the only female athlete in the contingent, Koh Eng Tong (featherweight weightlifting) and Herman Marie de Souza (hockey), who happened to be the Chef de Mission that year. Since then, the country has participated in all the Olympic Games except the 1980 Moscow Olympic Games when we joined the US in a boycott to protest the Soviet invasion of Afghanistan. The largest contingent we ever sent was to the 1964 Tokyo Olympic Games. Malaysia was formed that very year and the team included athletes from Sabah, Sarawak and Singapore, with a presence in at least 10 different events. As a nation, we are still harbouring gold medal dreams. It seemed an impossible dream until badminton was introduced at the 1992 Olympic Games in Barcelona. We won our first medal — bronze — that year, thanks to Sidek brothers Razif and Jalani. At the 1996 Atlanta Olympics, our golden dreams felt even closer when Cheah Soon Kit and Yap Kim Hock took the silver in the men's doubles. That same year, Rashid Sidek scored a bronze in the men's singles. The fact that we came back with two medals in a single year was celebration enough. Unfortunately, our winning streak ended, that is until the 2008 Beijing Olympics when Datuk Lee Chong Wei came back with a silver medal. It is no secret that the burden is on him to bring back our first gold from the 2012 London Olympics, yet many are wondering what his chances are with his injured ankle only "70%" recovered, as reported by Reuters [at press time]. He remains our best bet, although he is not our only hope. He is, after all, but one of 30 amazing Malaysians who qualified as among the best in the world to compete in sport's sacred arena. The Malaysian squad looks pretty promising. Among them is the biggest diving team we have ever sent to the Games and they have been tasked with a two-medal target. How's that for pressure? This team of eight are strong divers — thanks to them, Malaysia qualified for synchronised diving for the first time in the Olympics. The focus is on Pandelela Rinong Pamg and Leong Mun Yee, who have shown a strong partnership in the women's 10m platform synchro event — they took the bronze medal at the World Championships in Rome in 2009. Bryan Nickson Lomas and Huang Qiang are two other divers looking to break into the top 12 finals. Overall, there is no question about their dedication to or skill in their individual sport — that they have made it to the Games is testament to that. Now it boils down to performance under pressure and we wish them well. One cannot help but feel the feverish excitement of our 2012 Olympic hopefuls, their determined faces flashing before us on that inspiring TV commercial by Astro. Treated in a hue of gold, the video is more than an accurate depiction of how these young men and women are now carrying to London with them Malaysia's dreams of a gold medal. Most of them have already proved themselves in regional meets. Now it is time they showed the world what they can do. This story appeared in The Edge on July 30, 2012.

https://theedgemalaysia.com/node/85981

Freight Management 3Q profit rises 5%

English

KUALA LUMPUR (May 14): Freight Management Holdings Bhd’s (FMH) net profit for its third quarter ended March 31, 2013 (3QFY13) rose 5.2% to RM4.63 million from RM4.4 a year earlier. In a filing with Bursa Malaysia, the logistics company reported that its revenue also grew to RM91.83 million, from RM76.64 million. “Landfreight (division) registered the highest growth (AT 109%) due to increased volume from cross-border trucking between Thailand and Malaysia,” said FMH in the filing. Its seafreight division was the biggest revenue contributor, registering a RM7.1 million increase year-on-year to RM49 million. FMH said it incurred a higher taxation in 3QFY13 due to increase provision of deferred taxation. On its prospects, the company said it is hopeful its growth will continue in the fourth quarter of its financial year ending June 30, 2013. “However, global uncertainties persist and may impact the group’s short term prospect. Nevertheless, the group will leverage on its integrated network of agents and its own overseas offices to grow international freight services.” FMH added there will be ongoing efforts to improve yields and to preserve margins through operational efficiency and cost control.

https://theedgemalaysia.com/node/28549

Axis Inc suspended

English

KUALA LUMPUR: Bursa Malaysia Securities Bhd has imposed a trading suspension on Axis Incorporated Bhd's securities after the company failed to submit its regularisation plan within the timeframe stipulated. The trading suspension on the PN17 company would take effect from March 16, 2010, Bursa Securities said in a filing. Axis Inc had sought a further extension of time up to April 23, 2010 to submit its regularisation plan but was rejected. It said yesterday it would be submitting another appeal to Bursa Securities to reconsider its request for an extension of time.

https://theedgemalaysia.com/node/88474

#Update* Malaysia May palm oil stocks fall 5%; exports down

English

KUALA LUMPUR (June 10): Malaysia's palm oil stocks in May 2013 fell by 97,983 tonnes or 5.12% to 1,816,380 tonnes, from April's 1,914,363 tonnes, according to the Malaysian Palm Oil Board (MPOB). The easing of end-May stocks put the vegetable oil stocks at close to its lowest level in a year. Exports for the commodity also fell 44,054 tonnes or 3.03% to 1,411,729 tonnes in May from 1,455,783 tonnes  in April, the industry regulator said on its website. For the monthly production, May saw a 1.3% rise in output to 1,384,312 tonnes from 1,366,562 tonnes in April. In recent weeks, palm oil prices have been climbing ahead of Ramadan (in August), despite weaker demand from the world's second biggest buyer China. Prices of the edible oil have also been supported by a steady decline in stocks, from a record high of 2.63 million tonnes in December 2012.

https://theedgemalaysia.com/node/63633

Amway, Prestariang, Can-One, Mulpha Intl

English

KUALA LUMPUR (Feb 15): Stocks on Bursa Malaysia could see cautious trade after the FBM KLCI snapped its two-days of gains despite the firmer broader market. However, lending support could come from the better-than-expected economic numbers where the fourth quarter 2011 GDP expanded at 5.2%. Economists had expected the 4Q2011 GDP to have expanded 4.5% on-year, driven by upbeat domestic demand. Among the stocks to watch are Amway (Malaysia) Holdings Bhd, Prestariang Bhd, Can-One Bhd and Mulpha International following the latest corporate developments. Amway’s net profit for the fourth quarter ended Dec 31, 2011 rose 36.1% to RM24.93 million from RM18.31 million a year earlier, due mainly to improved gross margin arising from the lower cost of products and lower operating expense. Amway declared a fourth interim single tier dividend of nine sen net per share for the financial year ended Dec 31, 2011, to be paid on March 30, 2012. The company was adopting a dividend payout ratio of no less than 80% of the company’s current year net earnings from the financial year 2012. For the financial year ended Dec 31, Amway’s net profit was up 14.9% to RM89.99 million from RM78.32 million in 2010, while revenue rose to RM735.81 million from RM719.41 million. Prestariang posted net profit of RM10.55 million in the fourth quarter ended Dec 31, 2011, underpinned by strong demand for its information communications technology (ICT) training. Its revenue was RM32.63 million. Its earnings per share were 4.80 sen. It proposed a final single-tier dividend of 4.0 sen per share. For the financial year ended Dec 31, 2011, it reported net profit of RM33.61 million on the back of RM111.75 million in revenue. The legal tussle between Can-One Bhd and Kian Joo Holdings Sdn Bhd resumed. The former managing director of Kian Joo Can Factory Bhd (KJCF) Datuk See Teow Chuan  and 13 others have filed an application seeking the review of the Federal Court ruling that gave the nod for Can-One to buy the 32.9 pct stake of KJCF. Mulpha expects to record a one-off gain of about RM57.35 million from the sale of its 75% stake in Hong Kong listed Manta Holdings Company Ltd for HK$285 million (RM111.15 million). Mulpha said its unit Jumbo Hill Group Ltd had on Tuesday entered into a sale and purchase agreement with Eagle Legend International Holdings Ltd to dispose of the stake, comprising of 150 million shares, at HK$1.90 a share. Meanwhile, Denko Industrial Corporation Bhd saw Green Power Resources Ltd increasing its stake in the company.  Green Power, which is based in Singapore, acquired 9.0 million shares in Denko on Feb 9 and increased its shareholding to 13.14% or 13.72 million shares. The shares were disposed of by Yong Boon Cheong at 30 sen each. GD Express Carrier Bhd's net profit for the second quarter ended Dec 31, 2011 rose 30% to RM2.11 million from RM1.62 million a year earlier, due mainly to growth in customer base and increase in business from existing customers.

https://theedgemalaysia.com/node/35893

FBM KLCI declines in early trade

English

KUALA LUMPUR:  The FBM KLCI opened lower on Wednesday, Aug 25, in line with the decline at regional markets following the overnight drop at Wall Street. At 9.05am, the benchmark index was 0.79 of a point lower at 1,404.98. Losers beat gainers by 105 to 63, while 102 counters traded unchanged. Volume was 21.73 million shares valued at RM27.91 million. Among the major losers in early trade, BAT fell 54 sen to RM44.08, Lay Hong lost 22 sen to RM1.50, Supermax fell 14 sen to RM5.09, DiGi shed 10 sen to RM24.64 and Bursa fell six sen to RM7.06. Meanwhile, Maybulk and Jerneh fell five sen each to RM2.82 and RM3.22, while Hong Leong Bank fell four sen to RM8.82.

https://theedgemalaysia.com/node/32389

OSK Research: Proton’s mid-term outlook bullish

English

KUALA LUMPUR: Proton Holdings Bhd's mid-term outlook is bullish as it continues to trend higher along the uptrend line, says OSK Research. It said on Friday, June 25 that a breakout from the RM5 tough resistance level would see the stock continue to stretch its uptrend. "However, there is still initial resistance at the RM4.77 level. To the downside, there is immediate support at the RM4.39 level, followed by the RM4.17 level," it said. OSK Research said the daily RSI closed at the 52.1 pt-level on Thursday, which means that the stock is currently not overbought and the door is open for additional gains.

https://theedgemalaysia.com/node/43890

Highlight: PKNS declines Gamuda’s offer

English

KUALA LUMPUR: Gamuda Bhd received acceptance as at closing date yesterday from only Permodalan Nasional Bhd (PNB) for its revised offer to buy out Kesas Holdings Bhd. In an announcement to Bursa Malaysia yesterday, Gamuda only said acceptance was received from PNB but did not specify whether Perbadanan Kemajuan Negeri Selangor (PKNS) had accepted the offer. PKNS owns 30% of Kesas, the largest stake among the three parties Gamuda extended offers to. PNB owns 20% and the third party, Amcorp Properties Bhd, owns 20%. Amcorp accepted Gamuda’s previous offer on Dec 18. PNB had earlier given Gamuda an approval-in-principle for the revised offer. With PNB’s acceptance, Gamuda will own 70% of Kesas. Gamuda, which owned 30% of the highway prior to the offer, said no further extension had been granted. Selangor Menteri Besar Tan Sri Abdul Khalid Ibrahim could not be reached for comments at press time. Gamuda also could not be reached for confirmation. However, it is worth noting that the Selangor government had previously said that it would use its stakes in various toll concessionaires to block any attempts at hiking toll rates in the state. Nevertheless, Khalid had said PKNS would not be able to stop the hikes given its minority shareholding in the three concessionaires it owns, including Kesas. Kesas announced two weeks ago that it was not one of the highways listed for toll increases next year. Because of the possible political motivations for PKNS’ rejection, it is uncertain if Gamuda would increase its offers to all three parties again. Last week, Gamuda raised its offers to PKNS and PNB by 12% following their rejection of the original offers. The revision raised the offer to PKNS from RM375 million to RM420 million, and that to PNB from RM250 million to RM280 million. Amcorp’s accepted offer was also increased by the same amount. The new offer effectively values Kesas at RM1.4 billion, which is closer to many analysts’ valuations for the highway. JF Apex Securities and Kenanga Research said Gamuda’s original valuation of RM1.25 billion was 24% to 25% lower than their valuations. Alliance Research said the new offer is in line with its valuation of RM1.38 billion. The Kesas Highway stretches for 34.5km and has a concession until August 2023. Gamuda, the largest intra-urban expressway concessionaire, has not revealed its business plans for the highway. Group managing director Datuk Lin Yun Ling earlier this month said there are multiple options for the group. Observers believe that the group intends to form a business trust from its highway concession assets. A 100% shareholding in Kesas would make the business trust more attractive.  A possible option now for Gamuda to increase the yield of any such trust would be to package it with its other concession assets. Gamuda currently controls Litrak Bhd that has the concessions to the Damansara-Puchong Highway and the Sprint Highway. It also has a 50% stake in the Smart tunnel. This article first appeared in The Edge Financial Daily, on December 31, 2013.

https://theedgemalaysia.com/node/90376

Law Choo Kiang to be named Penang Speaker

English

GEORGE TOWN: The uncertainty and confusion over the appointment of the Penang State Assembly Speaker for the new term may soon be resolved. Chief Minister Lim Guan Eng yesterday said he will be proposing Bukit Tambun assembly member Law Choo Kiang, 43, as the speaker and Sungai Bakap assembly member Maktar Shapee, 64, as deputy speaker. Both are second-term state assembly members from PKR. Lim will put forth the motion at the opening of the state assembly meeting today, with Deputy Chief Minister I Rashid Hasnon, who is from PKR, expected to second it. The move appears to counter the state executive council’s (exco) earlier proposal, which had agreed unanimously, for state PKR chairman Datuk Mansor Othman to be named as the speaker. Lim yesterday explained that the exco had chosen Mansor, who was Deputy Chief Minister I in the previous term, based on feedback from both within and without the state government. Mansor, presently the member for parliament for Nibong Tebal, did not contest a state seat in the last election. Lim added that the exco’s proposal favouring Mansor had been actively supported by PKR’s own exco members. “However, after consultation with PKR de facto leader and Parliamentary Opposition Leader Datuk Seri Anwar Ibrahim, Law was agreed as the state assembly speaker with Maktar as the deputy,” he said in a statement. “Anwar will meet all relevant parties later to explain this decision.” Incidentally, it was Mansor himself who had on May 9, soon after the election, told reporters that Law would be the speaker. Law was an executive councillor in the previous state term, but has reportedly been disappointed at being dropped from the new exco line-up. The choice of Law as the speaker may have been made mainly to help settle the racial balance in PKR’s representation in the state government. It would help appease party members who are disgruntled that the PKR does not have any non-Malay in the state exco. Because DAP does not have any Malay state assembly members at all, PKR has had to contribute three of its Malay assembly members to the state exco, possibly at the expense of non-Malay reps like Law. The latest announcement also puts paid to widespread speculation that PKR’s Datuk Abdul Halim Hussain, the speaker since March 2008, would be retained. 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 June 28, 2013.

https://theedgemalaysia.com/node/36478

HDD downturn – cyclical or structural? A rebound for HDD makers?

English

KUALA LUMPUR: The past few months have been a rough ride for hard-disk drive (HDD) players as consumer confidence in the industry shook on numerous occasions, prompted by dour projections from two of the largest HDD giants, weaker results of the local players and as some may argue, the emergence of Apple Inc’s iPad, which once again sparked the great solid-state drive (SSD) versus HDD debate. The result is that two of Malaysia’s three listed HDD component makers, JCY International Bhd and Notion VTec Bhd, have seen their September share prices more than halved from their 52-week highs, which were achieved merely five months ago. Shares of the third player, Dufu Technology Corp Bhd, fell by a smaller margin of 47%. Company officials and a handful of research houses insist that the selldown has been overdone, but so far they have been a lone voice, as there seems to be little reflection in the share prices thus far, which have rebounded somewhat but still remain 41% to 51% below the 52-week highs. Last Friday, JCY closed at RM1.13 (52-week high of RM1.98), while Notion ended at RM1.72 (high of RM3.52) and Dufu was last traded at 43 sen (high of 73 sen). Nonetheless, there was some light at the end of the tunnel last Thursday and Friday, when the share prices of the three players rebounded strongly, after the earlier steep falls. This also coincided with a rally in the two US-listed HDD players, Seagate Technology and Western Digital, as some analysts deem their stocks to be oversold. An analyst said the selldown, which started in April, was triggered by overstocking from Seagate Technology and Western Digital Corp, which led to weakening demand and prices. This in turn fed down to the component suppliers, which also saw slower orders and more price declines. However, it is expected that demand would bounce back in the next few quarters, as the HDD industry is seeing a relatively resilient demand — apart from the occasional bouts of overstocking — due to the need for storage. When it rains, it pours The HDD industry’s road bumps were exacerbated by a number of other issues, including the strong ringgit which rose to a 13-year high versus the US dollar last month. The soaring ringgit resulted in foreign exchange-related losses for the players as sales are priced in US dollars and almost all goods are exported. In addition, company-specific problems also pushed share prices lower. Notion incurred massive set-up losses for a new product line, its 2.5-inch HDD project, which saw high reject rates and cost-overruns. JCY saw massive employee protests in its Johor plant, as 5,000 foreign employees demonstrated over the death of a worker and demanded better pay and medical benefits. The demonstrations made international headlines, sending the company’s shares plummeting. Despite the negativity surrounding the HDD makers, is it possible that a rebound is on the horizon? Although the extent of the damage to Seagate and Western Digital for the current quarter are not yet known, all three locally listed HDD makers maintain that the industry demand for HDD was expected to rise by 10% to 15% per annum in the absence of a double-dip recession. Notably, they expect strong results for the final three months of this year, which is the traditionally the best period due to pre-Christmas season orders. From a survey of recently issued research reports on the local HDD component companies, a rebound may be on the cards, as nine research houses have either buy or hold calls on the stocks, while five houses have released sell calls. “Our recent discussions with the management and other HDD component suppliers suggest that HDD shipments in the September quarter are likely to be marginally higher than in the June quarter, tracking the muted guidance by major HDD original equipment manufacturers (OEMs). “This is not surprising given the weak monthly numbers reported by the major notebook original design manufacturers (ODMs) as well as recent downward revenue guidance by Intel, which cited weaker-than-expected consumer demand from mature markets,” said CIMB Research in a report dated Sept 2. Moreover, although the latest quarterly results have not been promising, the HDD makers still fare better than they did last year, on a year-to-date basis. In financial results for the quarter ended June 2010, both Notion and Dufu registered net profit reductions of over 70% year-on-year. Notion’s net profit plunged from RM11.09 million to RM2.97 million though revenue rose 36% from RM44.71 million to RM60.81 million. Dufu’s performance fell from RM2.04 million to RM605,000 as revenues remained constant at RM29 million. JCY was alone in recording a small improvement in performance. It registered a net profit of RM55.6 million on the back of revenue of RM480.79 million. Both revenue and profit were stable over the prior year’s corresponding quarter. However, when compared with the cumulative year-to-date period, all three listed HDD makers have actually posted improvements in net profit and revenue. JCY’s net profit for the nine months ended June 2010 rose 49% to RM198.94 million from RM133.78 million a year earlier. Revenue rose 24% to RM1.56 million from RM1.26 billion.   Notion’s net profit grew 28% on-year to RM29.36 million from RM22.94 million for the nine months ended June 2010, on the back of a 47% growth in revenue to RM173.85 million from RM118.23 million. Dufu posted a 36% rise in net profit to RM4.5 million for the six months ended June 2010 from RM3.31 million a year earlier. Revenue climbed 22% to RM62.98 million from RM51.47 million. Will SSDs replace HDDs?Solid-state drives (SSDs), like HDDs used for data storage, can often be used to replace traditional disks in storage arrays or in a server’s internal disk bays. Most SSDs use NAND-based flash memory, which retains memory even without power. SSDs are also known to be more resilient, suitable for mobile applications and require less processing time than a HDD. With all these benefits, is it possible that SSDs will replace HDDs and thereby, their makers as well? “With the HDD’s ever-expanding capacity storage and area of usage, cost is still a major concern for SSD to break into the market,” Yong Pow Yow, CEO of Dufu told The Edge Financial Daily. Generally, 1.8-inch and 2.5-inch SSDs are still twice as expensive as their corresponding HDD components. Citing research house International Data Corp, Yong said from 2002 to 2007, NAND prices dropped by an average of 50% a year, thereby driving demand and new applications. In 2010, NAND prices are expected to fall by only 20% or less, which bodes well for HDD players. Thoo Chow Fah, executive chairman of Notion, concurred with this statement. “SSDs will only serve as a complement to HDDs due to insufficient capacity to replace the HDD. Where you need cheap, reliable bulk storage, then HDD is the natural choice,” Thoo told The Edge Financial Daily. Further reinforcing the resilient long-term outlook for the industry, Seagate’s chief financial officer Patrick O’Malley estimated that flash storage was expected to make up only 5%-15% of enterprise systems in the next three years. There has certainly been no let-up in bad news for the sector in recent months, as well as company-specific problems for the major players. But with so much negativity and share prices already halved, are they already priced in? Investors will be looking at the performance of Western Digital and Seagate Technology, and their outlook for the sector. The next two quarters will be crucial, as investors will need to see if the HDD downturn in the second quarter was cyclical or structural. To some extent, the recovery in the share prices of HDD-related companies, both in the US and Malaysia, in the latter part of last week bodes well for them. The question is, can it last? This article appeared in The Edge Financial Daily, September 6 2010. HDD downturn – cyclical or structural?JCY has size advantage, but sentiment hit by labour protests HDD downturn – cyclical or structural? Notion VTec works towards regaining investor confidence HDD downturn – cyclical or structural? Dufu sees less volatility due to conservatism

https://theedgemalaysia.com/node/68272

Strong inflows boost Asia bond ETF's assets to US$3b

English

WITH developed economies going through periods of uncertainty, global investors have started shifting their interest to Asia, leading to steady inflows into its bond markets recently. "Investors have been attracted to the Asian bond markets because of the strong growth fundamentals. Currency returns are improving over time and this offers diversification to their existing portfolios because many of them do not have exposure to Asian bonds," says Ng Kheng-Siang, head of fixed income at institutional fund house State Street Global Advisors (SSGA). As a result of the inflows, the total assets under management of the ABF Pan Asia Bond Index Fund (PAIF) — an Asia bond exchange traded fund (ETF) managed by SSGA — have swelled to more than US$3 billion of late. Ng believes this increase reflects a growing demand for Asian fixed income as an asset class via the use of ETFs. "With the ongoing volatility in global markets, investors have been looking to invest in an asset class that tracks Asian growth and provides investment diversification," he says. The Singapore-registered ETF was launched in 2005 and tracks the Markit iBoxx ABF Pan-Asia Index. It trades on the Hong Kong and Tokyo stock exchanges and invests in the local government bonds of China, Hong Kong, Indonesia, South Korea, Malaysia, the Philippines, Singapore and Thailand. As at June 30, PAIF's annualised total return since inception was 7.52% while the total return for the last 12 months was 4.68%. According to Ng, PAIF appeals to investors as it is the only fund that invests in Chinese bank bonds. In terms of market exposure, China is the highest for the fund at nearly 21%, followed by Hong Kong (19.25%) and South Korea (15.23%). Investors in PAIF are mainly institutions from North Asia. However, Ng has also observed inflows from European institutional investors who want to put their money outside Europe and the US. "Any time there is a weakness in Asian currencies over a short period, we may see investors coming back again and investors are more optimistic towards Asia." Investors, however, should consider Asian bonds as a strategic longer-term asset class because of the improving fundamentals in Asia, he states. Ng recommends that investors allocate part of their investment to Asia as part of a long-term investment strategy rather than using Asian bonds as a kind of trading instrument. In the near term, Ng believes the Asian bond market will deliver positive total returns because of the low interest rates. "Quite a number of Asian central banks have already embarked on interest rate cuts and that has pushed bond yields to near-record lows." Asian currencies may also provide investors with moderately positive returns. How­ever, Ng points out that the returns may not be significant as Asian authorities may implement measures to ensure that the currencies do not strengthen too much. Investing in PAIF is not without risk. Ng points out that as with any bond, investors are exposed to interest rate risk. Currency risk is also embedded in this investment but because the fund is exposed to eight different markets, this risk is diversified. "If you look at the historical return of this bond fund over the last 10, 11 years, close to a third of the returns come from currency and two-thirds from bonds. Looking at the Asian bond market, currency risk is dominating because of volatility." While investors are drawn to fixed income as it is a safe haven, Ng cautions them to be aware of the challenges. "In the past, people typically said sovereign bonds were very safe. I think in these times, it depends on which countries the bonds are from." Asian sovereigns are safer than European sovereigns, he says. "Corporate bonds could still be attractive in some areas, whereby there is interesting yield pick-up." — The Edge Singapore This story appeared in The Edge Singapore on Sept 3, 2012.

https://theedgemalaysia.com/node/72431

#Hot stock* SapuraKencana rises 2% on new contracts

English

KUALA LUMPUR (Nov 2): SapuraKencana Petroleum Bhd rose 2% in early trade among leading gainers after the oil and gas (O&G) support services provider said it clinched two contracts with a combined value of RM835.8 million. Analysts are optimistic on the latest developments in SapuraKencana as the latest contracts will further grow its orderbook to support earnings.  In a note on Friday, Hong Leong Investment Bank analyst Samsukri Glanville Mohamad said the collective value of the contracts accounts for 6% of SapuraKencana's estimated orderbook of RM14 billion. "We view the contract awards positively and reaffirms our view that SapuraKencana is a proxy to global growth in offshore O&G production growth and that O&G contract flow will pick up in the second half," Samsukri said. At 9.36am,SapuraKencana was traded at RM2.64 with  some three million shares done after rising as much as five sen to RM2.66. The stock closed at RM2.61 on Thursday. Hong Leong is keeping its "Buy" call and fair value of RM2.77 for SapuraKencana on unchanged earnings forecast for the company. "Although potential upside is now less than 10%, we believe contracts news flow and positive sentiment towards the sector and this stock in particular is likely to underpin share price performance," Samsukri said. In separate statements to the exchange, SapuraKencana said it has clinched two contracts with a combined value of RM835.8 million in Malaysia. SapuraKencana said it secured an estimated RM700 million job from Petronas Carigali Sdn Bhd to provide support services for the national oil company's offshore operations in the country. The three-and-a half year contract which started in October this year will expire in April 2016, after which,  SapuraKencana and its client may choose to extend the contract for another year, according to SapuraKencana. Meanwhile, SapuraKencana said it also secured an estimated RM135.8 million job from Hess Exploration and Production Malaysia B.V. Under the deal, SapuraKencana will offer engineering, procurement, construction and commissioning services for Hess' offshore integrated gas development project. The job is due for completion by the first quarter of 2013, according to SapuraKencana.

https://theedgemalaysia.com/node/32887

New home pricing benchmark in Mont’Kiara

English

SHANGHAI: A new home pricing benchmark has been set in the exclusive Kuala Lumpur enclave of Mont’Kiara — the fourth and final block of Bukit Kiara Properties’ Verve Suites is being snapped up at up to RM1,580 psf. Within two weeks of a preview on June 4, the 250-unit block called Vox Tower has netted close to 70% sales, a strong market response flooring even the pleasantly surprised developer. Sales have since climbed further to 76%. “This overwhelming response has caught us all by surprise,” said Bukit Kiara Properties (BKP) group managing director N K Tong at the signing of a memorandum of agreement with BSH Home Appliances at Hamburg House at EXPO 2010 here on Tuesday. Vox Tower units are pegged at an average of RM1,250 psf. Themed after what the developer has dubbed as the Versilica living concept, the units come in sizes of 462 sq ft (one-bedroom suite), 926 sq ft (two bedrooms) and 1,395 sq ft (three bedrooms). In all, Verve Suites comprises four towers with units totalling 933. All air-conditioned, these are sold fully furnished, down to Bosch home appliances, soft furnishings and furniture. With BKP estimating the furnishing cost at RM300 psf for the Vox Tower, the price of a bare Vox unit therefore works out to as high as RM1,256 psf — a record for the Mont’Kiara housing market. Prices of Verve Suite units have gone up significantly since the launch of the first block, Viva Tower, back in 2006. Sold at RM570 psf then, the units — handed over late last year — are now changing hands at about RM800 psf on the secondary market. Viva Tower and Block B (Vibe Tower) are 100% sold while block C (Vogue Tower) is 96% taken up. Clearly, the strong response to BKP’s latest launch in the Vox Tower has brought a breath of fresh air to the Mont’Kiara high-rise housing market whose popularity had been sluggish from the impact of the global financial crisis last year. The improved sentiment has also come on the heels of recent strong sales registered in certain new launches as well as those on the secondary market with sought-after addresses in the Klang Valley. BKP’s Tong attributed the success of Verve Suites, which has a gross development value of RM592 million, to the developer’s selling of themed and innovative living concepts rather than conventional real estate. As it has panned out, the developer’s bold bid to convert prime penthouse floors in all the four blocks into themed common areas is paying handsome dividends. For the Vox Tower, the key attraction lies in the Versilica Sky Beach. At 37 storey-high, this “beach” in the sky has been positioned as a resort getaway for residents who will get to enjoy beach activities, sunbathing or swimming under the sky, accompanied by a vista of the Kuala Lumpur skyline. Similar to the three earlier blocks in the project, the maintenance charge cum contribution to sinking fund is 33 sen. Another component of the Verve Suites is a retail area of 60,000 sq ft. This will be for lease only. Meanwhile, Dr Dirk Hoffmann, senior vice-president for international sales and CEO of BSH Home Appliances, said the company had already furnished 428 units of the 933 Verve Suite units with Bosch home appliances that ranged from microwave oven cum oven, slim line hood, electric ceramic hob to specially designed refrigerators exclusively for BKP. Under the just-signed MoU with BKP, BSH will supply the Vox Tower units with energy-saving washer-cum-dryers. This appliance would also be made available, at a cost, to owners of Blocks B and C of Verve Suites. The total Bosch retail contract in the Verve Suites works might be just about RM10 million but, Hoffmann said, it was not just about money for BSH. “We see in BKP a reliable partner; a role model for other markets. BKP is way ahead (of other developers),” Hoffman added. Going forward, BKP targets the launch by the first half of next year probably fully furnished high-rise units on its 39,000 sq ft tract in Jalan Tun Razak. Plans for this “innovative” project comprising a retail component beneath a 20-level block with 170 units of about 1,000 sq ft were being finalised, added Tong. The developer is also scouting for a 50 to 100-acre tract in greater Kuala Lumpur for a strata-titled gated and guarded landed home project. This article appeared in The Edge Financial Daily, July 2, 2010.

https://theedgemalaysia.com/node/20868

PJD to spin off OCB

English

The flotation of OCB involves a public issue of 21.95 million new shares or 15.14% of the enlarged paid-up share capital. Of the 21.95 million shares, 7.25 million units are for the public while 10 million are allocated for application by shareholders. A total of 4.7 million shares are reserved for directors, employees and associates of OCB and PJD. The flotation will also see PJD offering for sale 18.13 million OCB shares to bumiputera investors approved by the authorities. This article appeared in The Edge Financial Daily, October 27, 2009.

https://theedgemalaysia.com/node/57939

QL sees 2QFY12 earnings improve by 15%

English

KUALA LUMPUR: QL Resources Bhd saw net profit for 2QFY12 ending March 31 increase by 15.2% year-on-year (y-o-y) to RM38 million or 4.57 sen a share from RM33 million on the back of higher earnings by its integrated livestock farming division and palm oil activities. Pre-tax profit for QL’s livestock and palm oil division saw an increase of 32% and 235% respectively for 2Q. Revenue likewise grew from RM438.7 million to RM495.2 million, which is equivalent to a y-o-y increase of 12.9%. Sales for the livestock division rose by 18% to RM293.1 million from RM247.9 million previously. According to the notes accompanying the announcement, QL saw an improvement in its livestock segment as a result of higher unit price of raw feed material as well as partly from the recognition of investment in associate Lay Hong Bhd.   “Our palm oil segment saw an improvement mainly due to improved crude palm oil prices, which stood at RM3,090 per tonne for 2Q compared with RM2,590 for the previous corresponding quarter as well as a new contribution for associate Boilermech Bhd,” QL said. However, QL’s marine product farming division did not perform as well, with pre-tax profit falling 22% y-o-y to RM15.6 million in 2Q and revenue dropping 3% to RM114 million. According to QL, the drop was the result of lower fish landing. On a cumulative basis, for the first six months of FY12, QL’s net profit rose to RM65.8 million or 7.91 sen a share, from RM59.8 million, while revenue grew 15.4% to RM949.8 million. However, once again QL said that its earnings were impacted by its marine product farming segment. “Performance for our 1HFY12 results was adversely affected by poor fish landing, especially in Sabah water as well as keen competition in raw material trade. The operating environment was also challenging due to volatile commodity prices, fluctuating currency exchange and uncertainties in the world economy,” said QL. While QL is expecting the second half of the year to be challenging, it noted that it has seen some improvement in fish landing for 3QFY12. “We are also expecting to see some contribution from our fishery, poultry and palm oil operation in Indonesia in the fourth quarter. Thus, we are cautiously optimistic on the group’s performance for the second half,” said QL. This article appeared in The Edge Financial Daily, November 22, 2011.

https://theedgemalaysia.com/node/16027

Bursa Malaysia changes upper limit for Naim Indah

English

KUALA LUMPUR (Feb 8): Bursa Malaysia had increased the upper limit price for Naim Indah Corporation Bhd, which had hit limit-up in the morning session, to 48.5 sen from 48 sen. “The upper limit price of the following stock has been modified in order to open the reserved stock,” said the stock exchange. Bursa Malaysia said this change was in accordance to its trading manual which stated that iIn opening a securities under “reserved” status, market operations would at times be required to change the upper or lower price limit of the securities up to two bids. “This can happen when there is a limit order entered by POs at either the upper or the lower price limits with a market order," it said. The share price had hit limit-up, surging 30 sen to 48 sen at midday. At 4.40pm, it was up 30.5 sen to 48.5 sen with 266.28 million shares done.

https://theedgemalaysia.com/node/15080

Blue chips lift KLCI, but below 1,540 mark

English

KUALA LUMPUR (May 21): The FBM KLCI closed higher on Monday in line with the gains at regional markets on Monday, after having lost about 56 points during the torrid week ended May 18. The benchmark index closed 6.45 points higher 1,538.91, lifted by gains at select blue chips. Gainers beat losers by 385 to 306, while 301 counters traded unchanged. Volume shrank to 780.03 million shares valued at RM1.08 billion, compared with 1.06 billion shares valued at RM1.5 billion last Friday. At the regional markets, South Korea's Kospi rose 0.94% to 1,799.13, Taiwan gained 0.57% to7,192.23, Japan's Nikkei 225 was up 0.26% to 8,633.89, the Shanghai Composite Index edged up 0.16% to 2,348.30, while the Singapore Straits Times Index rose 0.42% to 2,793.29. The Hong Kong Hang Seng Indes declined 0.16% to 18,922.32. Meanwhile, European shares took a breather from last week's sell-off and the single currency steadied on Monday, but investors were wary after a weekend meeting of Group of Eight (G8) leaders failed to ease concerns about the risk of Greece exiting the euro, according to Reuters. On Bursa Malaysia, Kulim was the top gainer, rising 34 sen to RM4.60. PPB added 26 sen to RM15.60, Panasonic was up 22 sen to RM22, Timecom up 19 sen to RM2.90, BLD Plantations up 18 sen to RM8.18, Jaya Tiasa up 17 sen to RM8.25, Petronas Dagangan, Tradewinds Plantation and Sime Daby rose 16 sen each to RM19.48, RM5.26 and RM9.40 respectively, while Batu Kawan gained 12 sen to RM17.68. SMI was the most actively-traded counter, with 44.68 million shares done. The stock rose seven sen to 26.5 sen. Other actives included SapuraKencana, Ariantec, Asia EP, JCY, Astral Supreme, Naim Indah Corp, YTL Corp and CIMB. Decliners on Monday included BAT, MBM Resources, Aeon, Tahps, F&N, Bintulu Port, Takaful, Orient and Gamuda.

https://theedgemalaysia.com/node/94828

#Market Close* KLCI pares gains at eleventh hour, up 0.1 %

English

KUALA LUMPUR (August 5): The FBM KLCI pared gains by some three points within the last 10 minutes of trade to settle for a 2.63-point or 0.1% advance. At 5pm, the KLCI ended at 1,785.14 on gains in stocks like AMMB Holdings Bhd and Petronas Dagangan Bhd. Earlier, the KLCI had risen to an intraday high of 1,788.93 as investors bargain hunted for beaten-down index-linked stocks, fund managers said. This followed a substantial decline in the benchmark last week. "Investors had taken positions today," a fund manager told theedgemalaysia.com over telephone. Last Friday, the KLCI settled at 1,782.51 for a week-on-week loss of 25.10 points, or 1.39%. The loss came on Fitch Ratings’ move to downgrade its credit outlook for Malaysia to negative from stable. Today, Bursa Malaysia saw 1.59 billion shares worth RM1.57 billion changed hands. There were 402 gainers versus 346 decliners. The top gainers included Petronas Dagangan Bhd and Dutch Lady Milk Industries Bhd. Leading decliner was Nestle (M) Bhd while the most most-active entities included Sona Petroleum Bhd warrants and Iris Corp Bhd. Abroad, Japan’s Nikkei 225 fell 1.44% while Hong Kong's Hang Seng rose 0.14%. Nearer to home, Singapore's Straits Times fell 0.51% Reuters reported that Asian shares were tepid and the U.S. dollar was on the defensive on Monday after data showed U.S. employers slowed their pace of hiring, while the New Zealand dollar tumbled after a food-safety scare affected dairy exports of the country's largest company. Japan's Nikkei share average fell 1.2 percent while shares in South Korea, Australia and Singapore all slipped, underperforming Wall Street, which ended at record highs on Friday in part helped by expectations the U.S. Federal Reserve may delay scaling back its stimulus. Asian shares ex-Japan eked out small gains, however, helped by Chinese stocks, which benefited from report by China's official Xinhua news agency that China may relax its one-child policy.

https://theedgemalaysia.com/node/42346

KYM to place out shares

English

KUALA LUMPUR: KYM Holdings Bhd will undertake the private placement of five million shares, representing 5% of its existing issued and paid-up capital, at RM2.55 per share to raise RM12.75 million. In an announcement to Bursa Malaysia, KYM said about RM12.75 million would be raised from the placement, and RM12.65 million would be utilised for working capital. The placement price of RM2.55 represents a discount of about 27 sen or 9.57% to the five-days weighted average market price of KYM shares up to Dec 28 of RM2.82. As at July 28, KYM’s issued and paid-up capital stood at RM44.65 million. In its statement KYM also said the placement shares are proposed to be placed out to an independent third party at a later date. The exercise is expected to be completed by the first quarter of 2011. This article appeared in The Edge Financial Daily, December 30, 2010.

https://theedgemalaysia.com/node/35535

OSK Research maintains Sell on TMC Life Sciences

English

KUALA LUMPUR: OSK Research is maintaining its Sell call on TMC Life Sciences and earnings forecast but revise higher its fair value (FV) to 30 sen based on about 2.0 times FY10 P/NTA. It said on Thursday, Aug 19 that it was revising higher its FV because it did not dismiss the possibility of the currently buoyant stock market sentiment. Underpinning its higher FV and expectations of future corporate actions from the new shareholder Peter Lim Eng Hock, OSK Research said these factors would help to sustain TMC’s share price at around the 52 sen transacted price. Therefore TMC is unlikely to retrace much lower towards its previous 21 sen price target, it said. “We had earlier speculated that the new shareholder could be a reputable industry player which could turn around the medical centre faster. However, we are uncertain of the expertise of Lim in the medical industry,” it said.

https://theedgemalaysia.com/node/95679

Black ninjas slip past charges for 'raiding' Istana

English

KUALA LUMPUR (Aug 14): The black ninjas who tried to “raid” Istana Negara to dethrone the Yang Di-Pertuan Agong has slipped past the clutches of the law. According to police, the group that calls itself 'Kumpulan Panji Hitam dari Timur Empayar Langkasuka Nusantara' did not pose a threat and are "a bit lost". Hence, City CID chief Datuk Ku Chin Wah said the force will not press charges against them. "They are a non-violent group that is a bit lost," Ku was reported to have said today. Instead of charging them, he said, they will be referred to religious authorities. Last week, KL police chief Datuk Mohmad Salleh said the group was also being investigated by the Philippine authorities. At 4.10am on Aug 5, the group gathered in front of the Istana Negara. Dressed in black, they were unarmed but were waving flags, claiming to be the rightful heir to the throne. Ten people were arrested including an 11-year-old girl and a 52-year-old woman, said to be her mother. They were later released. The remaining eight men are being remanded until Saturday.

https://theedgemalaysia.com/node/98990

Telekom Malaysia to issue $907.7 million sukuk

English

KUALA LUMPUR (Sept 6): Telekom Malaysia Bhd , the country's largest fixed-line and broadband operator, will issue an Islamic bond, or sukuk, of up to 3 billion ringgit ($907.72 million) in nominal value to fund its working capital, according to a statement by RAM Ratings on Friday. Telekom, in which the Malaysian government owns a 68.6 percent stake, is supported by its dominance in the fixed-lined telephone sector and the nation's low penetration rate of 30 percent for household broadband services, said RAM Ratings. - Reuters

https://theedgemalaysia.com/node/27358

The Book Edge 5: SPIN Selling by Neil Rackham

English

This week, John Lim and Alvin Tay discuss the merits of Neil Rackham’s SPIN Selling, McGraw Hill’s best-selling business book that details the strategy of closing the big deals. Download this episode (right click and save) or stream below:

https://theedgemalaysia.com/node/97342

#US Stocks* Wall St dips after Kerry blasts Syria over chemical weapons

English

NEW YORK (Aug 27): U.S. stocks turned negative on Monday after U.S. Secretary of State John Kerry said all nations must stand up for accountability on the use of chemical weapons in Syria. Wall Street had been trading higher until Kerry's comment in midafternoon. Adding to the market's geopolitical nervousness, the White House said evidence of Syria's use of chemical weapons was undeniable. Stocks rose for most of the session, as sharply weaker orders for long-lasting manufactured goods eased investors' worries of a cutback in economic stimulus. "The turnaround (in stocks) is probably a reaction to the Secretary of State Kerry's comments. We are seeing signs of escalation here and geopolitical concerns are trumping," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York. The Dow Jones industrial average was down 53.84 points, or 0.36 percent, at 14,956.67. The Standard & Poor's 500 Index was down 6.38 points, or 0.38 percent, at 1,657.12. The Nasdaq Composite Index was down 2.98 points, or 0.08 percent, at 3,654.82. Amgen Inc was the biggest boost to both the S&P 500 and Nasdaq 100 indexes after it struck a deal to buy cancer drug maker Onyx Pharmaceuticals Inc for about $10.4 billion, sweetening its original offer made in June. Onyx shares rose 5.6 percent to $123.48 and Amgen jumped 8 percent to $113.93. The NYSEArca biotech index climbed 2.4 percent. Earlier, data showed durable goods orders dropped 7.3 percent in July, the biggest decline in nearly a year. In addition, a gauge of planned business spending on capital goods tumbled, casting a shadow over the economy early in the third quarter. - Reuters

https://theedgemalaysia.com/node/62128

Affin raises Eversendai TP to RM2.33

English

KUALA LUMPUR (March 16) : Affin Investment Bank Bhd has raised its target price for construction firm Eversendai Corp Bhd from RM2.30 to RM2.33. This follows an upward revision of between 1.2%, and 3.7%, in Affin’s net profit forecast  for Eversendai  in the FY12 to FY14 period,  the research firm said in a note on Friday. Affin believes Eversendai shares are under-valued . Despite steady margin and profits, Affin said the stock is still trading at a price-to-earnings ratio of 10.1 times 2012 earnings versus the sector ‘s average of 13.5 times. Eversendai shares traded unchanged at RM1.67

https://theedgemalaysia.com/node/62408

High-end automakers resilient

English

KUALA LUMPUR: High-end automakers have been resilient to the tighter lending guidelines that came into effect in January, based on their sales performance figures for the month. The Malaysian Automotive Association (MAA) recently announced that year-on-year vehicle sales declined by 13,833 units or 25% in January, and expects zero growth for February. Other than the more stringent lending measures, MAA attributed the lower sales to the shorter working month due to the Chinese New Year festivities and the carry-on impact from the Thai floods. In a written response to The Edge Financial Daily, Mercedes-Benz said sales rose 3.8% or 14 units to 382 in January from 368 the month before. The company said preliminary figures for February have already shown a month-on-month improvement. BMW said its sales rose 15% to 471 units in January from 413 a year ago. “Despite overall January car sales in the country falling year-on-year, BMW has managed to buck the trend,” said BMW Group Malaysia managing director Geoffrey Briscoe earlier this month. The two foreign marques have performed well in contrast to their local counterparts, which appeal to a different market segment. “The national car players such as Proton and Perodua should be more vulnerable to credit tightening due to their customer profile,” CIMB Research said in a report last month. According to CIMB, Proton’s sales fell 28% to 11,459 units in January from 15,806 in the corresponding period last year. Sales of new Perodua cars dropped 11% to 13,684 units from 18,212 a year ago. According to the new lending guidelines announced by Bank Negara Malaysia (BNM) last November, loans are calculated based on net income rather than gross income. The tenure for vehicle financing is capped at nine years. Additionally, the debt service ratio for buyers of second-hand cars is limited to 65%. These measures were designed to curtail borrowing as the country’s household debt to GDP ratio reached 77.6% in the third quarter of 2011. Though high-end players were spared, Perusahaan Otomobil Kedua Sdn Bhd and Proton Holdings Bhd lamented the new guidelines. Proton Edar Dealers Association Malaysia (Peda) indicated that sales took a toll as the loan approval rate for buyers of new Proton cars fell to 30% in January, from a previous low of 48% in the second half of 2011. The typical rate achieved was 60% to 70% previously. “If these guidelines are not reviewed, our automotive industry will slowly collapse as the average Malaysian will not be able to pass the guidelines to buy a car. The growth of the industry is totally dependent on the customer’s ability to secure financing. “BNM’s guidelines not only curb and halt the industry’s growth, but they affect the whole ecosystem from the vendors to distributors, dealers and sales advisers,” Peda president Armin Baniaz Pahamin said in a statement last month. Perodua said the implementation of the new guidelines should be done gradually to allow automakers and buyers to adapt. The company saw its loan approval rate decrease to 55% in January from 70% the month before. “We are committed to support the government’s initiatives, particularly in addressing rising household debt, but we would also appreciate it if the government and regulatory bodies would consult the players to better understand the impact on the industry prior to the implementation of any new initiatives or measures,” said Perodua managing director Datuk Aminar Rashid Salleh last month. Though Proton and Perodua have been hit hard, the two still lead the industry with a combined market share of about 57%. A number of companies saw sales decline in January mainly due to the Thai floods which affected the supply chain. CIMB said Honda sales in Malaysia fell 89% in January, the biggest loss for the month. The carmaker sold only 484 units from 4,484 in January 2011, while market share fell to 1.2% from 8.2% previously. The company’s production plant in Ayyuthaya, Thailand, is only set to restart operations this month. Its competitors Toyota and Nissan resumed production last year. However, the two companies still experienced a major decline in sales in January. Toyota sales dropped 23% to 5,117 units from 5,614s last year, while Nissan sales fell 28% to 2,418 units from 2,343. CIMB cautioned that though the supply shocks from the Thai floods and inventory levels are expected to normalise in the second quarter, the rising cost pressures and tighter credit still pose negative factors to the industry’s growth. Most research houses expect a minimal growth for Malaysia’s total industry volume (TIV) this year. CIMB expects the TIV to grow 4.7% to 628,022 units in 2012 from 600,123 last year. OSK Research maintained its bearish stance on the auto sector and forecast a TIV growth of 1.1%. OSK noted that though BNM’s new measures are not positive for auto sales, a policy u-turn is not entirely impossible. “While the degree of leniency on the denominator [net income rather than gross income] is unlikely to be reversed, banks are still flexible when it comes to the cap on the debt service ratio,” OSK said in an earlier report. AmResearch expects TIV in the second half to recover with improving supply, adding that low loan approval rates remain “a key downside risk” to vehicle sales. Based on figures by MAA, the TIV fell 0.8% last year due to supply disruptions following disasters in Japan in March and Thailand last year. This article appeared in The Edge Financial Daily, March 12, 2012.

https://theedgemalaysia.com/node/67082

Sarawak Plantation: Production recovery shifted to FY13

English

Sarawak Plantation Bhd (Aug 7, RM2.85) Maintain buy at RM2.84 with revised target price of RM3.35 (from RM3.44): Sarawak Plantation’s fresh fruit bunch (FFB) production for the first half of the financial year ending Dec 31, 2012 (1HFY12) declined by 16% year-on-year (y-o-y) to 123,147 tonnes due to the lagged impact of the 2009 to 2011 El Niño weather phenomenon, as well as significantly higher production (+15.3% y-o-y) in 1HFY11. Compared with 2HFY11, 1HFY12 production declined by a steeper 26.8%. The state’s entire 1HFY12 crude palm oil (CPO) production increased by a marginal 1.4% after a sharp 28.8% y-o-y surge in 1HFY11 and in spite of a 30.2% increase in total mature area. It is obvious that the earlier management target of 23% growth in production in FY12 cannot be achieved. Based on the latest bunch surveys and taking into account the rebound in yields in 2H, the management projects FFB production to decline by about 5% to 300,500 tonnes in FY12. The management is addressing past issues, such as labour shortages for harvesting and fruit collection and poor plantation management practices. Barring a recurrence of extreme weather conditions, the expected upsurge in FFB yields is now projected to defer to FY13. Based on projected yield increase to 17.3 tonnes per hectare in FY13 and 17.4 tonnes per hectare in FY14 from 13 tonnes in FY11 and an estimated 13.1 tonnes in FY12, management now forecasts FFB production growth of about 28% in FY13 and about 6% in FY14. Production growth from FY15 is expected to benefit from active replanting of old trees (about 21% of planted areas of 29,574ha) and new developments (5,826ha currently under clearing). Plans to develop not less than 10,000ha within these two years and undeveloped native customary rights (NCR) landbank of 10,786ha are still in place. Based on our revised FY12 to FY14 FFB production growth assumption of -4.6%, +28.7% and +6.2% (previously +23%, +14% and 8%), we are cutting our net profit forecasts for Sarawak Plantation by 12% to 20% in FY12 to FY14. Disposal of land is pending completion and estimated gain of RM5.7 million has not been imputed in our forecasts. Our target price is now pegged at RM3.35 based on calendar year 2013 price-earnings ratio of 10 times (previously RM3.44 based on 9 times). Key risks to our forecasts include: (i) ongoing US Midwest drought and prospects of a recurrence of El Niño sending CPO average selling price (ASP) significantly above our assumed RM3,000 per tonne; and (ii) occurrence of extreme weather conditions capping assumed yield and FFB production improvements. — Affin IB Research, Aug 7 This article appeared in The Edge Financial Daily on August 8, 2012.

https://theedgemalaysia.com/node/56695

#Stocks to watch:* Ramunia, Hirotako, Faber, Samudra

English

KUALA LUMPUR: Stocks could give up some of the gains on Friday, Oct 28, ahead of the weekend after chalking up strong gains in the holiday-shortened week. However, a firmer overnight Wall Street could help continue to underpin investors’ confidence after the deal struck by euro zone leaders on Greece's debt burden. On Wall Street, stocks surged 3 percent on Thursday as an agreement by European leaders to help contain the region's two-year debt crisis lifted a cloud hovering over markets. Optimism that a deal would be struck to prevent widespread financial distress fueled the market's rebound in October. The S&P 500 is up more than 13 percent this month, on pace for its biggest monthly gain since October 1974. But some traders said implementing the agreement will present major challenges, observing that the devil is in the details. The Dow Jones industrial average was up 339.51 points, or 2.86 percent, at 12,208.55. The Standard & Poor's 500 Index was up 42.59 points, or 3.43 percent, at 1,284.59. The Nasdaq Composite Index was up 87.96 points, or 3.32 percent, at 2,738.63. Optimism that a deal would be struck to prevent widespread financial distress fueled the market's rebound in October. The S&P 500 is up more than 13 percent this month, on pace for its biggest monthly gain since October 1974. But some traders said implementing the agreement will present major challenges, observing that the devil is in the details. The Dow Jones industrial average was up 339.51 points, or 2.86 percent, at 12,208.55. The Standard & Poor's 500 Index was up 42.59 points, or 3.43 percent, at 1,284.59. The Nasdaq Composite Index was up 87.96 points, or 3.32 percent, at 2,738.63. Fund buying pushed the FBM KLCI towards a near two-month high, as the 30-stock index closed up 13.13 points or 0.90% to 1,470.93 – the best performance since Sept 2. The euro and European stocks rallied after European leaders struck a deal to provide debt relief for Greece, but analysts warned the plan would fail to halt the euro zone's two-year-old debt crisis unless crucial details were resolved soon, Reuters reported. The firmer crude palm oil prices could underpin sentiment in plantation stocks while the surge in oil could support rising interest in oil and gas stocks. Glove manufacturers including Supermax Bhd could see continued interest as it benefits from the falling latex prices. IOI Corp and Dutaland could also see heavy trading interest following the on-going dispute over IOI’s decision to terminate the agreement to acquire plantation land from Dutaland for RM830 million. Among the other stocks to watch are Ramunia after its unit was awarded a contract from Petrofac (Malaysia PM-304) Ltd to supply driven piles for the Cendor phase 2 development project. The contract value is RM13.13 million and the duration of the contract is 23 weeks. Ramunia expects the contract to contribute positively towards the earnings for the financial period 2011-2012. Auto parts manufacturer MBM Resources Bhd has made a takeover offer for Hirotako Holdings Bhd, which makes car safety restraint equipment, offering 97 per share, which is nine sen above the pre-suspension price of 88 sen. Hirotako said it had received a notice of conditional take-over offer from AmInvestment Bank Bhd on behalf of MBM Resources. MBM Resources was offering 97 per share for all the voting shares of 25 sen each in Hirotako and 5.0 sen per warrant. The federal government has extended Faber Group Bhd’s hospital support services concession for an interim period of six months, starting Friday, Oct 28. Its unit Faber Medi-Servce Sdn Bhd had received a letter from the Public Private Partnership Unit of the Prime Minister's Department about the extension of the contract. Faber said the extension was subject to the prevailing terms and conditions of the concession or until the signing of a new concession agreement for the privatisation of services with the Health Ministry, whichever is the earlier. Bursa Malaysia Securities Bhd rejected Kejuruteraan Samudra Timur Bhd’s application for more time to submit its audited statements for the financial year ended June 30, 2011. The company said Bursa had informed it of the rejection in a letter on dated Thursday, Oct 27.

https://theedgemalaysia.com/node/13728

Highlight: Net selling continued in Jan 2014, RM3.68b exits Malaysian equity

English

KUALA LUMPUR (Feb 4): Foreign funds offloaded RM880.1 million net of Malaysian stocks in the open market (i.e excluding off-market transactions), marking the 16th week out of the last 17 that foreign investors had been net sellers, according to MIDF Research. In its fund flow report Tuesday, the research house said that so far in 2014, a total of RM3.68b had exited Malaysian equity. It said that in 2013, there was a net inflow amounting to RM3 billion. “In the last 17 weeks, a total of RM9.36 billion of foreign money had exited Malaysian equity, or an average of RM550 million a week. The research house said most of the selling took place last Monday, in the aftermath of the selloff on Wall Street and in Europe the preceding Friday. MIDF Research said a total of RM336.4 million of foreign portfolio money left Bursa on the Monday, the second highest this year and the fourth time it exceeded RM300 million in 2014. It said there was some follow-through selling on Tuesday, but calmness returned to the market on Wednesday and Thursday. “In terms of intensity, the selldown on Monday was still in the “moderate” zone, despite the upheavals in the emerging markets,” it said. MIDF Research said average daily foreign participation rate exceeded RM1 billion for the third consecutive week. “Participation rate (average daily gross purchase and sale) was RM1,109 million last week. In 2013, the daily average participation rate was RM991 million. “Interestingly, retailers were net buyers during the selldown last week, implying that many are seeing opportunities in the current volatility. For the week, retailers bought RM71.5 million, on low participation rate of RM624 million. As expected, local institutions supported the market aggressively last week,” it said. MIDF Research said it expects the FBM KLCI to show significant weakness when the market re-opens for trading on Tuesday for a few reasons: “The KLCI was artificially supported last Thursday, with a few stocks, notably Tenaga, propping up the index at the close of trading. Otherwise, the index would not have closed above the 1,800 points. “Sentiment towards equity remained weak. The decline in the Asian markets that were open on Monday, such as Japan, Korea, Singapore and Indonesia is ominous in this regard. The Dow Jones lost 326 points or 2.1% on Monday. That could not be more ominous for the market this week,” it said.

https://theedgemalaysia.com/node/94297

Crucial support at 1,780 points

English

The market finally took a breather after three consecutive weeks of increase. The benchmark FBMKLCI broke above 1,800 points last week but managed to stay above it for a few days. The index went below this level on Monday and continued to decline yesterday. However, the index is still above the 1,780-point immediate support level. Markets are getting more concerned about the likelihood of the US Federal Reserve gradually cutting its bond-buying programme. Market players were taking profits and staying in the sidelines ahead of the US Federal Reserve Open Market Committee meeting in the next two days, and the Federal Reserve, European Central Bank and the Bank of England meeting later this week.   On a week-to-week basis, the KLCI declined only 10.2 points or 0.5% to 1,795.08 points. The index recorded the highest close on July 24 at 1,810 points before pulling back to current level. Trading range in the past one week was between 1,792.77 points and 1,811.65 points. The close near the range low preliminary indicates a bearish market sentiment. Trading volume was slightly lower at 1.5 billion shares traded on average daily for the past one week  compared with 1.6 billion shares two weeks ago. Markets performances in the region were generally weak in the past one week led by Japan. The Nikkei 225 index declined 6.1% in a week to 13,869.82 points yesterday. However, the index rebounded from a low of 13,613.80 points and the pattern indicates a reversal. China’s Shanghai Stock Exchange Composite Index declined 2.6% in a week to 1,990.06 points while Hong Kong’s Hang Seng Index remained flat at 21,953.96 points. Singapore’s Straits Times Index was also almost unchanged since last week at 3,251.44 points yesterday. The US Dow Jones Industrial Average remained flat in the past one week at 15,521.97 points last Monday. The index rebounded strongly last Friday from a low of 15,404 points and this indicates that the market is still being well supported. Markets in Europe pulled back as well ahead of the three central banks’ meeting later this week. UK’s FTSE100 Index declined 0.9% in a week to 6,560.25 points last Monday and Germany’s DAX also declined 0.9% to 8,259.03 points. Prices of commodities started to pull back after a rally for the past three weeks. COMEX gold pulled back slightly, declining 0.6% in a week to US$1,326.50 (RM4,284.60) an ounce on Monday. Crude oil in NYMEX fell 2.2% in a week to US$104.51 a barrel. The US Dollar index declined from 82.37 points a week ago to 81.76 points, the lowest level in slightly more than a month. The ringgit is even weaker. It is now at its lowest level in three years against the US dollar. The ringgit is now at 3.24 to the US dollar compared with 3.18 a week ago. The price of crude palm oil fell 1.9% in a week to RM2,215 per tonne. The price rebounded from a low of RM2,137 yesterday as the weakening ringgit may make price of crude palm oil more attractive. Technically, the local market is still bullish as the KLCI is able to stay above the immediate support level at 1,780 points. However, market confidence was not as strong in the past two weeks as it was unable to hold above 1,800 points. Nevertheless, the pullback did not affect the trend indicators much. The short- to long-term 30- to 90-day moving averages are still increasing. The 30- and 60-day moving averages are currently at 1,780 points and this makes the 1,780-point support level a crucial level. The momentum of the uptrend, however, is getting weaker. Momentum indicators like RSI, MACD and Momentum Oscillator are pulling back to their middle levels. The MACD indicator is close to crossing below its nine-day moving average or trigger line. Furthermore, the KLCI is currently on a thin Ichimoku Cloud which indicates that the market can be fragile. The KLCI is still expected to climb higher with a technical target at 1,830 points as long as it is able to stay above the immediate support level at 1,780 points. A break below this support level would change the characteristics of the uptrend and further correction is expected. In the meantime, real estate investment trusts (REITs) seem to be at a discount after falling out of favour in the past one month. Most fell between 15% and 20% and this may be a good time to add some REITs in your investment portfolio. Benny Lee is chief market strategist for Jupiter Securities Sdn Bhd. Jupiter Securities is a participating broker in Bursa Malaysia committed to offering the best services to a wide range of customers. He can be contacted at [email protected]. The views expressed in the article are the opinions of the writer and should not be construed as investment advice. Please exercise your own judgment or seek professional advice for your investment decisions. This article first appeared in The Edge Financial Daily, on July 31, 2013.

https://theedgemalaysia.com/node/91068

AELB must terminate Lynas TOL

English

KUALA LUMPUR: The Atomic Energy Licensing Board (AELB) must terminate the temporary operating licence (TOL) given to Lynas Corp as the mining company has yet to submit its plans for a permanent disposal facility (PDF). Kuantan PKR MP Fuziah Salleh said the 10-month deadline stated in the TOL given to the Australian miner ended yesterday. "All this while, Lynas has managed to highlight issues of radiation while avoiding the issues of environment and public health due to the carcinogenic nature of the radioactive waste, namely thorium which has a half-life of 14 billion years. "Lynas has continued to pull wool over the eyes of the Malaysian public," she said. She told reporters at the Parliament lobby that the PDF is a legally binding condition of the TOL issued to Lynas. "The TOL was issued on Sept 3 last year, today [yesterday] marks the 10th month, so cancel it," she stressed. — By Pathma Subramaniam This article first appeared in The Edge Financial Daily, on July 04, 2013.

https://theedgemalaysia.com/node/33247

LPI top gainer on earnings growth, bonus issue plan

English

KUALA LUMPUR: Shares of LPI Capital Bhd advanced in early trade on Friday, July 9 after it reported a stronger set of earnings and proposed a corporate exercise. At 9.13am, it was up 22 sen to RM16.50 with 48,700 shares done. The FBM KLCI rose 0.46 of a point to 1,316.49. Turnover was 23.3 million shares done valued at RM15 million. Gainers led losers 68 to 34 while 81 stocks were unchanged. LPI posted net profit of RM26.44 million in the second quarter ended June 30 versus RM22.74 million a year ago. It also declared an interim dividend of 10 sen per share. The company proposed a bonus issue of up to 69.36 million new shares on a one for two basis  and also a proposed renounceable rights issue of up to 13.87 million  new rights shares at an issue price of RM7 per rights share. The rights shares will be on the basis of one rights share for every 10 existing LPI shares held.

https://theedgemalaysia.com/node/1978

EPF declares 4.5% dividend for 2008

English

KUALA LUMPUR: The Employees Provident Fund (EPF) yesterday declared a lower dividend of 4.5%  for last year compared with 5.8% in 2007 despite earning its highest ever gross income of RM20 billion, but was affected by an increase in investment provisioning. The higher provisioning was the result of the sharp decline in global equity prices brought about by the worldwide financial crisis but the EPF remains confident the provisions will be written back once the equity markets recovered. For 2008, the EPF required RM3.18 billion to pay a 1% dividend compared with only RM2.89 billion in 2007, due to the larger membership base. This means that the EPF needed to earn 9.71% more in order to declare 1% dividend in 2008 compared to the previous year. Dividends will be credited to members’ accounts on March 23, 2009. EPF expects 2009 to be a very challenging year, and the expected dividend will not be more than that in 2008. “We are bracing ourselves for a tough year ahead as the effects of the global financial crisis continue to be felt. However, we believe that in every crisis, there is opportunity to be seized. “The key is to remain vigilant and continue delivering results for the benefit of our members through our prudent investment strategy,”  EPF chairman Tan Sri Samsudin Osman said in a statement yesterday. EPF said despite the financial meltdown, it recorded the highest ever earnings of RM20 billion in gross income for 2008. This represented an increase of 9.36% over the previous year’s gross income of RM18.29 billion. “While the year 2008 was challenging due to the unprecedented global financial crisis that has impacted economies worldwide, EPF’s investment portfolio for the year performed better at the gross income level compared to 2007. “However, due to the sharp decline in equity markets, a large provision had to be made resulting in a marked reduction in net income,” Samsudin said. Net income fell 15.47% to RM14.26 billion from RM16.87 billion in 2007, after deducting allowances for diminution in value of equities and doubtful debts, dividends for withdrawals, investment expenses, operational expenses, and death and incapacitation benefit payments. Equities remained as one of the major contributors to EPF returns in 2008, representing 34.82% of EPF’s total gross investment income. The EPF earned RM6.67 billion from equities which was the second largest contributor to income in 2008, compared with RM5.37 billion in 2007. “Up until September last year, the EPF was doing well in equities. However, following the effect of the global financial meltdown, our performance in equity investments recorded a drop of less than 20%, which impacted our dividend payout. This, however, compares better with that of the KLCI which was down approximately 40% from end of December 2007 to December 2008,” said Samsudin. As a result of the sharp fall in global equity prices and following a conservative provisioning policy in accordance with accounting best practices, EPF said it made allowances of RM4.69 billion for diminution in value of both overseas and local equities, compared to only RM0.52 billion in 2007. Out of the 2008 provision, RM3.2 billion was allocated for overseas equities. “The fundamentals of the companies we have invested in remain strong and we are confident that this provision will be written back once recovery takes place,” said Samsudin. EPF said loans and bonds were the biggest contributor to gross income in 2008, recording a return of RM6.78 billion compared with RM5.91 billion in the previous year, while Malaysian Government Securities, the third biggest income contributor, brought in RM4.94 billion compared with RM4.88 billion in 2007. As at Dec 31, 2008, EPF’s total investment funds grew by RM28.99 billion to RM342 billion compared with RM313.01 billion a year earlier. In a Q&A release, EPF said: “Our dividend rate compares favourably with fixed deposit rates offered by Malaysian banks. For instance, the current 12-month fixed deposit rate for Malaysian banks is 2.5%.” EPF said it compared better than many other funds around the world. For example, it said the Government Pension Fund of Norway suffered a US$92 billion (RM340 billion) loss on its investments in 2008, while Temasek Holdings of Singapore suffered S$58 billion (RM140 billion) paper loss in eight months. “Government of Singapore Investment Corporation Private Limited (GIC) asset value fell 25% from its peak. California Public Employees’ Retirement System (CalPERS) suffered a US$68 billion (RM248.2 billion) loss in assets since October 2007 and a 41% slide in its stock portfolio. “Khazanah Nasional Bhd suffered a loss of one fifth of its investment portfolio and its realisable asset value of RM88.2 billion as of May 31 was reduced to RM70.4 billion at the end of 2008,” it said. EPF also said it was able to offer 8% dividends in the 80s as its investments then were focused on interest-based instruments such as Malaysian Government Securities and interest rates then were high with average base lending rates hitting a peak of 12.25% in 1984. order to declare 1% dividend in 2008 compared to the previous year. Dividends will be credited to members’ accounts on March 23, 2009. EPF expects the dividend for this year to be not more than that in 2008. “We are bracing ourselves for a tough year ahead as the effects of the global financial crisis continue to be felt. However, we believe that in every crisis, there is opportunity to be seized. “The key is to remain vigilant and continue delivering results for the benefit of our members through our prudent investment strategy,”  EPF chairman Tan Sri Samsudin Osman said in a statement yesterday. Despite the financial meltdown, EPF recorded its highest ever gross income of RM20 billion for 2008. This represented an increase of 9.36% over the previous year’s gross income of RM18.29 billion. “While the year 2008 was challenging due to the unprecedented global financial crisis that has impacted economies worldwide, EPF’s investment portfolio for the year performed better at the gross income level compared to 2007. “However, due to the sharp decline in equity markets, a large provision had to be made resulting in a marked reduction in net income,” Samsudin said. Net income fell 15.47% to RM14.26 billion from RM16.87 billion in 2007, after deducting allowances for diminution in value of equities and doubtful debts, dividends for withdrawals, investment expenses, operational expenses, and death and incapacitation benefit payments. Equities remained as one of the major contributors to EPF returns in 2008, representing 34.82% of EPF’s total gross investment income. The EPF earned RM6.67 billion from equities which was the second largest contributor to income in 2008, compared with RM5.37 billion in 2007. “Up until September last year, the EPF was doing well in equities. However, following the effect of the global financial meltdown, our performance in equity investments recorded a drop of less than 20%, which impacted our dividend payout. This, however, compares better with that of the KLCI which was down approximately 40% from end of December 2007 to December 2008,” said Samsudin. As a result of the sharp fall in global equity prices and following a conservative provisioning policy in accordance with accounting best practices, EPF said it made allowances of RM4.69 billion for diminution in value of both overseas and local equities, compared to only RM0.52 billion in 2007. Out of the 2008 provision, RM3.2 billion was allocated for overseas equities. “The fundamentals of the companies we have invested in remain strong and we are confident that this provision will be written back once recovery takes place,” said Samsudin. Loans and bonds were the biggest contributor to gross income in 2008, recording a return of RM6.78 billion compared with RM5.91 billion in the previous year, while Malaysian Government Securities, the third biggest income contributor, brought in RM4.94 billion compared with RM4.88 billion in 2007. As at Dec 31, 2008, EPF’s total investment funds grew by RM28.99 billion to RM342 billion compared with RM313.01 billion a year earlier. In a Q&A release, EPF said: “Our dividend rate compares favourably with fixed deposit rates offered by Malaysian banks. For instance, the current 12-month fixed deposit rate for Malaysian banks is 2.5%.” EPF said it compared better than many other funds around the world. For example, it said the Government Pension Fund of Norway suffered a US$92 billion (RM340 billion) loss on its investments in 2008, while Temasek Holdings of Singapore suffered S$58 billion (RM140 billion) paper loss in eight months. “Government of Singapore Investment Corporation Private Limited (GIC) asset value fell 25% from its peak. California Public Employees’ Retirement System (CalPERS) suffered a US$68 billion (RM248.2 billion) loss in assets since October 2007 and a 41% slide in its stock portfolio. “Khazanah Nasional Bhd suffered a loss of one fifth of its investment portfolio and its realisable asset value of RM88.2 billion as of May 31 was reduced to RM70.4 billion at the end of 2008,” it said. EPF said it was able to offer 8% dividends in the 80s as its investments then were focused on interest-based instruments such as Malaysian Government Securities and interest rates then were high with average base lending rates hitting a peak of 12.25% in 1984.   This article appeared in The Edge Financial Daily, March 17, 2009. 

https://theedgemalaysia.com/node/65314

DRB-Hicom still digesting Proton and Lotus

English

DRB-Hicom Bhd (July 4, RM2.62)Maintain outperform at target price of RM3.35: We met the management of DRB-Hicom recently, and the key takeaway was that it is still in the process of reformulating a long-term strategy to rehabilitate both Proton and Lotus. It will not be finalised for another six to 12 months. DRB-Hicom reiterated at the outset that it will not dispose of Group Lotus plc, which would have been regarded as a “quick win”, removing at a stroke the drag on earnings (running at about RM250 million per year) in addition to associated debt of about RM1 billion. The management clearly sees long-term value in the brand and we expect a much tighter lid on costs. The forthcoming revised Lotus revitalisation plan will likely be much more realistic and could trim the new Lotus line-up to three new models that will keep the marque closer to its roots. Proton has received over 13,000 bookings for the Preve, with deliveries of over 3,000 units to date since the official launch in mid-April. We see a lull in new models from Proton until end-2013 when the Perdana replacement is scheduled for launch. Other initiatives to improve Proton’s profitability include a reassessment of its procurement practices, the rationalisation of the Edaran Otomobil Nasional Bhd (EON) and Proton Edar Sdn Bhd dealership network and strategies to raise economies of scale. Trimming debt will be a priority. We estimate interest costs alone on Proton-related borrowings will exceed RM150 million per year with gearing at 0.58 times (as the end of the 2013 financial year [FY13]). We believe there is now a greater urgency for DRB-Hicom to raise some cash and de-gear its balance sheet. Fundraising options include the sale of Uni. Asia Capital Sdn Bhd and divestment of its 70% stake in Bank Muamalat Malaysia Bhd to 40%. Other fundraising options include the sale of some land parcels at its 614ha Glenmarie Heights development in Johor and even the re-listing of EON. We make no change to our forecasts for DRB-Hicom, which imply 54.6% year-on-year (y-o-y) growth in recurring net profit in FY13, driven by: (i) full-year contributions from Pos Malaysia; (ii) the recovery in production at Honda Malaysia; (iii) tighter control of costs at Lotus; (iv) absence of non-recurring impairment charges at Bank Muamalat (about RM30 million in FY12 relating to IT); (v) ongoing cost rationalisation efforts at Proton; and (vi) stronger property earnings. Risks include: (i) weaker economy affecting car sales; (ii) unfavourable forex trends; (iii) heightened price competition; and (iv) rising fuel costs. We reiterate our “outperform” call on DRB-Hicom. Our conservative sum-of-parts-derived fair value is unchanged at RM3.35. We believe the conglomerate has multi-year growth potential although some time will be needed to implement new initiatives. Based on recent experience with Pos Malaysia, some degree of patience from investors will be needed with news flow likely staying relatively thin as DRB-Hicom digests its recent acquisitions. — RHB Research Institute, July 4

https://theedgemalaysia.com/node/49285

Malton active, up

English

KUALA LUMPUR: Malton Bhd shares were actively traded on Friday, May 20 after its earnings surged 620% to RM26.28 million from RM3.64 million a year ago, underpinned by higher billings from the property development division. At 9.15am, Malton rose 2.5 sen to 79 sen with 3.79 million shares traded. Its revenue increased by 79.4% to RM116.38 million from RM64.89 million while pre-tax profit increased by 512.7% to RM38.6 million from RM6.3 million. Earnings per share were 7.55 sen compared with 1.05 sen.

https://theedgemalaysia.com/node/79632

Dijaya posts 111% jump in FY12 earnings

English

KUALA LUMPUR: Dijaya Corp Bhd’s net profit for the fourth quarter of financial year 2012 ended Dec 31 (4QFY12) increased 18.14% to RM60.21 million from a year ago, while revenue jumped 48.42% to RM234.06 million. A year ago, net profit came in at RM50.96 million against revenue of RM157.7 million. On a full year basis, its revenue surged 68% to RM630 million from RM375.3 million in the previous year while net profit leaped 111.23% to RM178.7 million. The group attributed its record sales to its flagship project Tropez Residences in Johor Baru, together with Tropicana Avenue and Tropicana Gardens in the Klang Valley. According to Dijaya group CEO Datuk Yau Kok Seng, the property developer currently holds some 364ha of landbank in prime locations such as the Klang Valley, Kuala Lumpur City Centre, Iskandar Malaysia, Johor, Penang and Sabah. The total gross development value amounts to RM50 billion and is expected to help the group in its growth and sustainability in those areas for the next 10 years, said Yau. “Under the Economic Transformation Programme and National Key Economic Areas, Iskandar Malaysia has recalibrated the potential of Johor Baru and its property landscape ... We are happy that we have a sizable landbank in Johor, especially in Danga Bay, and we anticipate promising returns which will have a positive impact on our financial results in 2013 and beyond,” said Yau. This article first appeared in The Edge Financial Daily, on February 28, 2013.

https://theedgemalaysia.com/node/32072

Asian markets up on China yuan reform signal

English

KUALA LUMPUR: Asian stock markets traded higher on Monday, June 21 after China said it would make the yuan more flexible, boosting confidence in its economic growth. China's central bank said during the weekend it would resume making the yuan more flexible, signalling it would de-peg the country's currency from the US dollar, in effect resuming the floating exchange rate arrangement before the financial crisis, according to Reuters. At mid-morning, Japan's Nikkei 225 rose 1.77% to 10,172.20, Taiwan's TAIEX Index up 1.4% to 7,597.99, Singapore's Straits Times Index 1.11% to 2,864.16, South Korea's Kospi Index up 1.06% to 1,730.10 while Hong Kong's Hang Seng Index opened 1.9% higher at 20,662.88. However, the Shanghai Composite Index declined 0.23% to 2,507.50. At 10am on Bursa Malaysia, the FBM KLCI was up 10.58 points to 1,328.27, lifted by gains including at DiGi, KLK, Hong Leong Bank and Public Bank. Gainers thumped losers 302 to 68, while 144 counters traded unchanged. Volume was 138.72 million shares valued at RM199.3 million. Hong Leong Financial Group surged 42 sen to RM8.80 after the company last week said it was selling a 30% stake in Hong Leong Assurance Bhd (HLA) to Japanese insurer Mitsui Sumitomo Insurance Co Ltd (MSI) for RM940 million cash. Meanwhile, Pos Malaysia added 28 sen to RM3.14, DiGi up 20 sen to RM23.32, Top Glove and KLK 18 sen each to RM13.10 and RM16.28, while Hong Leong Bank and BAT were up RM8.68 and RM44.32. Meanwhile, Public Bank rose 14 sen to RM11.78 and KFCH 12 sen to RM8.72. Tenaga was the top loser and shed 20 sen to RM8.60; Shell and Nestle lost 10 sen each to RM10.60 and RM34.40, while Batu Kawan lost eight sen to RM10.80. Kenmark was the most actively traded counter with 8.6 million shares done. The counter added one sen to 10.5 sen. Other actives included Transmile, KNM, Scomi, KKB Engineering and MyEG.

https://theedgemalaysia.com/node/70435

Star Publications’ 3Q profit up 28.4%

English

KUALA LUMPUR: Star Publications (M) Bhd achieved a 28.4% increase in net profit to RM44.05 million for its third quarter ended Sept 30, compared with RM34.3 million in the previous corresponding period. Revenue increased a marginal 3.1% to RM264.22 million from RM256.38 million. The higher revenue was mainly due to projects secured by Cityneon, a subsidiary providing event and exhibition services, for the Asian Youth Games 2013 and contributions from Perfect Livin’, a home renovation and lifestyle exhibition organiser, which gained RM6.54 million from the two exhibitions held in the quarter. Net profit was further lifted by better cost control. Print revenue declined 2.8% or RM5.39 million to RM183.89 million on lower advertising revenue. However, revenue from the New Media segment increased 21.1% to RM6.51 million in the quarter. Net profit for the nine months ended Sept 30 fell 11.1% to RM98.67 million from RM110.99 million a year ago. Revenue fell 6.3% to RM736.16 million from RM785.8 million, mainly due to lower advertising revenue and fewer projects in the period by Cityneon. Star Publications expects the business environment in the media industry to “remain highly challenging”, and it sees advertising expenditure to gradually pick up in the last quarter as sentiment improves with the seasonality effect. Yesterday, the group announced that Tan Sri Tony Fernandes, 49, had resigned as a non-executive director in Star due to his many commitments. Fernandes is AirAsia Bhd group CEO, a position he has held since 2001. He also oversees AirAsia X Bhd and is the founder of Tune Group. Star also announced the appointment of Datuk Seri Wong Chun Wai, 52, as its managing director and CEO. Wong previously held the position of group chief editor and acting group CEO. He was appointed acting group CEO on Aug 1 and was confirmed to the position following a board of directors’ meeting yesterday. Meanwhile, June HL Wong will take on the position as Star’s group chief editor. She had served as executive editor for six years before being appointed managing editor three years ago. She has played a major role in building up the features and lifestyle sections in The Star newspaper. This article first appeared in The Edge Financial Daily, on November 21, 2013.

https://theedgemalaysia.com/node/23950

Vancouver 2010 organizers to help with ticket resales

English

VANCOUVER, British Columbia: Organizers of next year's Winter Olympics in Canada will support a free market system of reselling tickets, a move aimed at avoiding a problem in past Games when "sold out" events still had empty seats. The Vancouver Organizing Committee (VANOC) had once warned it would punish people who tried to "scalp" or resell tickets at more than their face value. But it has since decided to use its own ticket system to resell tickets in a way that will also protect consumers. The primary purpose of setting up a resale system "is getting a body in every seat," and VANOC recognized there would be a secondary ticket market whether it liked it or not, said Executive Vice-President Dave Cobb. "Given that market is out there, we wanted to provide an alternative. We felt that if we didn't allow ticket sellers to post tickets at whatever price they wanted to, they simply wouldn't use it," Cobb said. About 1.6 million tickets are being distributed for the 2010 Games in Vancouver. About 70% are being sold in Canada by VANOC with the rest sold internationally by national Olympic committees or bought by sponsors. Only Canadians can resell tickets via VANOC's website (www.Vancouver2010.com), but anyone will be able to buy them. VANOC will charge a fee to both buyers and sellers, but does not expect to make a profit from the system. VANOC says using its site will ensure buyers that the ticket they're getting are not counterfeit, a problem that often plagues major sports events. "You'll have to ask yourself if you see a ticket being sold on Craig's List why is it being sold there and not on this legitimate site," said Caley Denton, VANOC's vice-president of ticketing. Ticket scalping is illegal in parts of Canada, but not in the province of British Columbia.Pressuring olympic committeesCobb said VANOC officials were worried about a repeat of past Olympics where some lower-profile events had empty seats, because tickets sold through national Olympic committees and given to sponsors went unused. VANOC was required to sell a percentage of the tickets to Olympic committees in different countries and sponsors, but it also pressured members of "the Olympic family" not to order more than they actually needed. "We wanted them to know tickets are a privilege not a right," Cobb said. That pressure has resulted in more tickets being available to the general public. VANOC's goal is to have up to 75% of all tickets available to the general public, and at least 30% for major events such as hockey, which would both be higher levels than at past Winter Olympics. There have been complaints in the United States that it did not get enough tickets, especially in the Seattle area which is near Vancouver. VANOC says the US got more tickets than Canada received in the 2002 Salt Lake City Winter Games. — Reuters

https://theedgemalaysia.com/node/65206

#Comment* New wave of US mortgage trouble looming

English

US borrowers are increasingly missing payments on home equity lines of credit they took out during the housing bubble, a trend that could deal another blow to the country’s biggest banks. The loans are a problem now because an increasing number are hitting their 10-year anniversary, at which point borrowers usually must start paying down the principal on the loans as well as the interest they had been paying all along. More than US$221 billion (RM711 billion) of these loans at the largest banks will hit this mark over the next four years, about 40% of the home equity lines of credit now outstanding. For a typical consumer, that shift can translate into their monthly payment more than tripling, a particular burden for the subprime borrowers that often took out these loans. And payments will rise further when the US Federal Reserve starts to hike rates, because the loans usually carry floating interest rates. The number of borrowers missing payments around the 10-year point can double in their eleventh year, data from consumer credit agency Equifax shows. When the loans go bad, banks can lose an eye-popping 90 cents on the dollar, because a home equity line of credit is usually the second mortgage a borrower has. If the bank forecloses, most of the proceeds of the sale pay off the main mortgage, leaving little for the home equity lender. There are scenarios where everything works out fine. For example, if economic growth picks up, and home prices rise, borrowers may be able to refinance their main mortgage and their home equity lines of credit into a single new fixed-rate loan. Some borrowers would also be able to repay their loans by selling their homes into a strengthening market. But some regulators, rating agencies, and analysts are alarmed. The US Office of the Comptroller of the Currency, a regulator overseeing national banks, has been warning banks about the risk of home equity lines since the spring of 2012. It is pressing banks to quantify their risks and minimise them where possible. At a conference last month in Washington, DC, Amy Crews Cutts, the chief economist at consumer credit agency Equifax, told mortgage bankers that an increase in tens of thousands of homeowners’ monthly payments on these home equity lines is a pending “wave of disaster.” Banks marketed home equity lines of credit aggressively before the housing bubble burst, and consumers were all too happy to use these loans like a cheaper version of credit card debt, paying for vacations and cars. The big banks, including Bank of America Corp, Wells Fargo & Co, Citigroup Inc, and JPMorgan Chase & Co have more than US$10 billion of these home equity lines of credit on their books each, and in some cases much more than that. How bad home equity lines of credit end up being for banks will hinge on the percentage of loans that default. Analysts struggle to forecast that number. In the best case scenario, losses will edge higher from current levels, and will be entirely manageable. But the worst case scenario for some banks could be bad, eating deeply into their earnings and potentially cutting into their equity levels at a time when banks are under pressure to boost capital levels. “We just don’t know how close people are until they ultimately do hit delinquencies,” said Darrin Benhart, the deputy comptroller for credit and market risk at the Office of the Comptroller of the Currency. Banks can get some idea from updated credit scores, but “it’s difficult to ferret that risk out,” he said. What is happening with home equity lines of credit illustrates how the mortgage bubble that formed in the years before the financial crisis is still hurting banks, even seven years after it burst. By many measures the mortgage market has yet to recover: The federal government still backs nine out of every 10 home loans, 4.6 million foreclosures have been completed, and borrowers with excellent credit scores are still being denied loans. Banks have some options for reducing their losses. They can encourage borrowers to sign up for a work-out programme if they will not be able to make their payments. In some cases, they can change the terms of the lines of credit to allow borrowers to pay only interest on their loans for a longer period, or to take longer to repay principal. A Bank of America spokesman said in a statement that the bank is reaching out to customers more than a year before they have to start repaying principal on their loans, to explain options for refinancing or modifying their loans. But these measures will only help so much, said Crews Cutts. Between the end of 2003 and the end of 2007, outstanding debt on banks’ home equity lines of credit jumped by 77%, to US$611.4 billion from US$346.1 billion, according to FDIC data, and while not every loan requires borrowers to start repaying principal after 10 years, most do. These loans were attractive to banks during the housing boom, in part because lenders thought they could rely on the collateral value of the home to keep rising. “These are very profitable at the beginning. People will take out these lines and make the early payments that are due,” said Anthony Sanders, a professor of real estate finance at George Mason University who used to be a mortgage bond analyst at Deutsche Bank. But after 10 years, a consumer with a US$30,000 home equity line of credit and an initial interest rate of 3.25% would see their required payment jumping to US$293.16 from US$81.25, analysts from Fitch Ratings calculate. That’s why the loans are starting to look problematic: For home equity lines of credit made in 2003, missed payments have already started jumping. Borrowers are delinquent on about 5.6% of loans made in 2003 that have hit their 10-year mark, Equifax data show, a figure that the agency estimates could rise to around 6% this year. That’s a big jump from 2012, when delinquencies for loans from 2003 were closer to 3%. This scenario will be increasingly common in the coming years: in 2014, borrowers on US$29 billion of these loans at the biggest banks will see their monthly payment jump, followed by US$53 billion in 2015, US$66 billion in 2016, and US$73 billion in 2017. The Fed could start raising rates as soon as July 2015, interest-rate futures markets show, which would also lift borrowers’ monthly payments. The rising payments that consumers face “is the single largest risk that impacts the home equity book in Citi Holdings,” Citigroup finance chief John Gerspach said on an Oct 16 conference call with analysts. — Reuters This article first appeared in The Edge Financial Daily, on November 27, 2013.

https://theedgemalaysia.com/node/34534

IPOs spur interest with sheer choice and numbers

English

KUALA LUMPUR: Contrary to earlier fears that they could drain liquidity from investors, the large number of initial public offerings (IPOs) this year may also have generated investor interest. One reason for this could be the sheer diversity of companies being listed, which gives investors a better choice to diversify their portfolios. This year’s IPOs have ranged from two REITs and a hard-disk drive component manufacturer to a Penang property player and a nursing education operator, among others. Year-to-date, the local bourse has welcomed 17 new companies, compared to 14 for the whole of last year. This excludes the recently deferred listing of Focus Point Holdings Bhd. Among the 17 were three mega IPOs — JCY International Bhd, Masterskill Education Group Bhd and Sunway Real Estate Investment Trust (SunREIT) (see table). But this is still nowhere near the end yet. Another three companies are scheduled to list by mid-August, namely SCC Holdings Bhd, SIG Gases Bhd and tycoon Tan Sri Vincent Tan’s Berjaya Retail Bhd. After that, a report by Hwang-DBS Vickers Research estimates another 14 companies could be listed before the year is out (see table). This means 2010 could well end up with up to 34 new IPOs. On the list of upcoming IPOs is another company owned by Tan, Berjaya Food Bhd, and Malaysia Marine Heavy Engineering Bhd, a subsidiary of MISC Bhd, which is likely to garner large institutional attention. Ironically, Bumi Armada, an oil and gas company owned byT Ananda Krishnan, which was privatised back in 2003, is also scheduled to make a comeback after a seven-year absence. He is privatising three companies this year and relisting two. After a fairly dismal start to the year, investor appetite for IPOs appears to be returning. The three most recent IPOs closed above their IPO prices on their first day of trading. Including these three, only 10 of the 17 IPOs chalked up first-day gains. The recent improved sentiment could be attributed to the better quality of some of the newer companies. Take for example, the most recent debutant, Ivory Properties Group Bhd. The stock listed last Wednesday, ending its debut at RM1.30, with a 30% gain over its IPO price of RM1. It chalked up further gains and ended Friday at RM1.37, giving investors a total return of 37%. Ivory Properties, established in 1999, offers investors exposure to Penang’s buoyant property market. It has undertaken projects with a gross development value (GDV) of RM675.6 million, has RM834.1 million of ongoing projects and estimates GDV of its future projects at RM1.9 billion. It is noteworthy that Ivory Properties was very competitively priced to start with, which gives more upside to IPO investors. This was unlike some of the earlier large offerings, especially Masterskill Education Group and JCY International, which were priced at a large premium to their smaller peers then.   AmResearch notes that Ivory Properties’ IPO is attractively priced — at just 3.4 times FY11F’s earnings, and at a steep 63% discount to “our net asset value (NAV) of RM2.70 per share.” It is also trading at a steep discount to its small-cap peers, despite Ivory’s stronger earnings growth. This article appeared in The Edge Financial Daily, August 2, 2010.

https://theedgemalaysia.com/node/5551

LG Malaysia expects 15% sales growth

English

Its chief executive and managing director Ko Tae Yeon said he was confident of seeing a turnaround in the electronic goods market although buyers still appeared hesitant to spend. “We have many new products including several high-end appliances to be launched this year; we launch a new mobile phone almost once every month,” Ko told The Edge Financial Daily here at the launch of the LG LH50 LCD TV and LG HB964TZ home theatre system. It also launched the sponsorship of Transformers: Revenge of the Fallen and a promotion offering prizes, including tickets and the Hollywood movie franchise merchandise, with the purchase of LG products. Ko said high-definition televisions and home appliances such as refrigerators and washing machines made up 30%-40% of total sales last year, while mobile phones sales accounted for 30%. Last year, LG Electronics Inc achieved global sales of US$44.7 billion. “There are no limitations to business growth,” he said. This article appeared in The Edge Financial Daily, May 21, 2009.

https://theedgemalaysia.com/node/29686

Sweet escape

English

The world of entertainment is not just about glitzy parties, fabulous clothes, looking like a million ringgit all the time and crazy fans screaming your name. Celebrities as well as those familiar with the celebrity world will have plenty of stories to trade on being victims of jealousy and gossip, and diva-ish moments, the type that will make anyone gape. Being a celebrity couldn’t be all rosy, like how it is portrayed on the box or in interviews in the print media. Still, all these challenges have not diminished Zainal Alam Kadir’s love for the industry. This entertainer, who is more popularly known as Alam, is not your run-of-the-mill celebrity. He started off as a full-time writer, first on finance then entertainment, for a good 16 years before switching to the other side of the interview table. In his new career, Alam wears many hats. He is an accomplished singer, TV host, emcee, actor, music producer, songwriter and scriptwriter. Fluent in Malay and English, Alam is known for his witty repartee and melodious voice. Besides singing and hosting, he also produces music through his company Alamorphosis. His schedule may be always full but the affable Alam still managed to set aside a few hours to chat with the haven team in his cosy home in Bandar Sri Permaisuri, Cheras. “I decorated my home myself,” Alam says proudly. “I believe a home is where the heart is and it should reflect what you are. And I like history; I like old stuff; I like anything that evokes certain memories. I would choose things that I like first and try to work around them.” An example is the daybed in the living room. It’s regal looking, with mosquito netting draped over it to look like a throne from some Middle-Eastern kingdom, with the Moroccan lantern hanging near it adding to the effect. Alam recalls the day he brought home the daybed only to find that it was huge and did not quite fit in with the existing knick-knacks in the living room. No problem there; he just moved some of the other furniture pieces away to accommodate his latest acquisition. The bed is now the focal point of the room, further brought to life by the bold red wall at the other end of the rectangular room. The tiled floors of the home are sans carpets — for fear of them being ripped to pieces by Alam’s pet cat. As it turns out, the cool tiles are a brilliant move as they offer a welcome respite from the hot weather in Kuala Lumpur of late. Adjacent to the living room is the dining area, charming and fuss-free. Here, a marble kopitiam table takes centre stage, paired with wooden chairs to bring back the nostalgic old world charm. The calm is accentuated by the presence of a wooden cabinet with intricate carvings — it is here that Alam stores his photo albums and other knick-knacks to keep the living area clutter-free. Interestingly, from this rustic mix rises a dash of modernity; this is in the form of a funky-looking stand lamp. Again, Alam confesses, this was an impulsive buy on one of his window-shopping trips. Since he does not drive, the 5ft-tall lamp had to be creatively manoeuvred into a taxi that delivered it home.       The red hue is also dominant in Alam’s kitchen, one of his favourite spots in the three-level townhouse. “I have always wanted a red kitchen,” he declares. “And I like to cook.” Since moving into his 1,800 sq ft four-bedroom three-bathroom home in 2000, Alam has played host to both family members — he has 10 siblings! — and friends alike. All the bedrooms are located on the uppermost floor. The two guest rooms each boast four-poster beds that are complimented by restored wooden cupboards while the master bedroom is a harmony of the modern and the old. It has a black wooden shelf that not only holds Alam’s collection of Marvel graphic novels and books, but also separates the bed area from the rest of the room. In the attached bathroom, the mirror framed by intricately carved wood blends pleasingly with the modern rectangular wash basin. Alam may be happy with his home; but it is still a work in progress for him. “When I have the time and the money, I plan to redo all the bathrooms to give each a unique personality,” says Alam with a wide smile. For now, he is happy to have his own space. “My home is an escape,” he says. “It is where I can be myself, be with myself and do what I like.” Unconventional yet comfortable and full of character — this pretty much sums up the house and its owner. This article appeared in haven, Issue #42, April + May 2010, the deco and garden publication of The Edge Malaysia

https://theedgemalaysia.com/node/3801

#Update* Nizar vs Zambry suit fixed on May 5

English

Judge Datuk Abdul Aziz Abdul Rahim, at the Special Appeallate and Powers division, also set aside May 6 should the need arise for an extra day to hear the suit's substantial matters. Nizar filed the suit here on Feb 13 seeking a judicial review to declare himself the rightful menteri besar of Perak and an interpretation of Article 16(6) of the Perak state constitution on the manner in which the menteri besar's post can be vacated. Nizar, who just won the Bukit Gantang parliamentary seat, is also challenging Zambry to show the authority on which Zambry was menteri besar of Perak and is seeking an injunction to prevent Zambry or his agents from carrying out the duties of the menteri besar. Prior to the proceedings proper, Abdul Aziz will hear an application by the Attorney-General's (AG) Chambers on April 23 to intervene in the suit. Deputy Public Prosecutor Datuk Kamaludin Mohd Said told the court that the AG’s Chambers was seeking to be made party to the matter as the suit brought by Nizar involved constitutional interpretations and was of public interest. Nizar's lead counsel Sulaiman Abdullah said he needed more time to study the AG's application and would likely object to it while Zambry's counsel Datuk Cecil Abraham did not have any objections. Abdul Aziz also ordered Zambry to reply all the affidavits filed in court by April 13 and set April 20 for Nizar to answer all affidavits filed by Zambry as well as to respond to the AG's application to intervene.

https://theedgemalaysia.com/node/66403

#Global Markets* Asia stocks rise for 3rd day, oil prices stabilise after Iran deal

English

TOKYO (Nov 26): Asian shares rose for the third straight day on Tuesday, while oil prices regained some semblance of stability after the previous session's slide as traders questioned how quickly the Iranian nuclear accord could turn into higher supplies. The yen came off a 4-year trough against the euro, and inched up against the dollar as traders repositioned after several days of sharp moves. Thailand was in the spotlight again as political instability threatened to undermine the economy. The baht bounced from a 11-week low on suspected intervention by the Thai central bank, but intensifying political uncertainty as anti-government protesters stepped up their bid to oust Prime Minister Yingluck Shinawatra has triggered heavy outflows of foreign money, keeping pressure on the currency. The baht was flat at 31.97 per dollar, off its low of 32.09, while Thai shares advanced 0.7 percent after hitting an 11-week closing low on Monday. "The baht will weaken further depending on the sustainability and intensity of the protests as they will hurt the still fragile economy," said Saktiandi Supaat, head of FX research for Maybank in Singapore. Financial bookmakers expected major European indexes to open steady to slightly softer. U.S. crude prices added 0.5 percent to $94.5 a barrel, recouping some of the previous session's 0.8 percent decline following a weekend deal between the West and Tehran to halt Iran's most sensitive nuclear activities in exchange for some relief from sanctions. Brent crude prices weakened 0.1 percent after ending almost flat on Monday from a slide of as much as 2.7 percent. "The interim six-month 'freeze' agreement just reached on Iran's nuclear programme should not have any impact on oil prices, aside from short-term sentiment, because core sanctions on oil and banking have not been touched," Societe Generale said in a note. "We see a greater than 50 percent chance that a comprehensive agreement will be successfully reached within six months. "If and when that happens, it could take Iran three to nine months to recover the one million barrels per day in production lost since 2011." MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.3 percent, building on a 0.3 percent rise in the previous session and breaking above its 50-day moving average. Tokyo's Nikkei benchmark bucked the region and eased 0.4 percent on the back of the yen's modest recovery. The benchmark climbed 1.5 percent on Monday to within sight of a 5-1/2 year peak reached in May. Jakarta stocks shed 1 percent, while the Indonesian rupiah dropped 0.4 percent to 11,785 to a dollar, its lowest since March 2009, with traders citing dollar demand for month-end debt payments and repatriation. YEN BOUNCE OFF LOWS The Japanese currency, which typically falls when share prices rise, was up 0.2 percent at 101.495 yen to the dollar and up 0.1 percent at 137.31 to the euro, edging further away from a four-year trough of 137.98 touched on Monday. Minutes of the Bank of Japan's Oct. 31 meeting showed some board members said they saw economic growth and prices at risk of declining, underscoring lingering pessimism within the board on the outlook for meeting its inflation target. Against a basket of major currencies, the dollar slipped 0.1 percent. "We remain bullish on the dollar heading into 2014 but remain tactically cautious on establishing longs, with a number of U.S. dollar pairs already trading at the high end of their ranges and data unlikely to be consistent enough to support expectations for an early tapering," analysts at BNP Paribas wrote in a note. Data showed on Monday that contracts to buy previously-owned U.S. homes fell for a fifth straight month in October, hitting a 10-month low and adding to signs of cooling in the housing market. U.S. stocks ended mixed overnight, with the Dow Jones industrial average posting a slim gain to end at another record high, while the S&P 500 eased 0.1 percent. S&P 500 E-mini futures edged up 0.1 percent in Asian trade. - Reuters

https://theedgemalaysia.com/node/62653

Envair says no plan to inject O&G project into company

English

KUALA LUMPUR (March 7):  Envair Holdings Bhd has denied a news article that a major shareholder in the company was expected to inject an oil and gas project worth as much as US$600 million (RM1.51 billion) into the company. Envair had on Tuesday clarified that it had enquired its directors and major shareholder, and that that there was no proposal to date from the major shareholder to inject the project purportedly located in Eastern Europe into the company. “The company also wishes to clarify that the article was published without seeking the due reference or consent from the company as the directors are not aware of the source of information,” it said. The article was published in  a local daily on March 6.

https://theedgemalaysia.com/node/76314

First World Trade Center tower makes debut 12 years after 9/11

English

NEW YORK (Nov 13): The first office tower at Ground Zero since the Sept. 11, 2001 attacks that destroyed the World Trade Center will open on Wednesday, marking a comeback for the Lower Manhattan site. Sheathed in glass, 4 World Trade Center is the smallest of the four main towers on the site where 2,700 people died when hijacked airplanes crashed into the towers. It stands 977 feet (298 meters) tall - a shorter, simpler version of One World Trade Center, which will not be completed until early 2014. The 72-story building stands empty at the moment, although two government agencies have signed leases for half of the building's space. Both the Port Authority of New York and New Jersey, which owns the site, and the city of New York committed to the space years ago to help jump start rebuilding efforts. Since the attacks, disagreements among New York City, the state, the federal government, developers, insurers, victims' families and others have slowed construction on the 16-acre site. Developer Larry Silverstein, who held the lease to the site when it was attacked in 2001, has played a key role in shaping the project's design, security and cost. "The world is recognizing that we've moved from 12 years of controversy and construction to having a real place that is coming back to life as a part of New York City," said Janno Lieber, who oversees planning, design and rebuilding for Silverstein Properties. Silverstein spokesman Dara McQuillan said the developer was not troubled that the 2.3 million-square-foot building is only half leased. In 2006, Silverstein opened 7 World Trade Center, just north of Ground Zero, and the company was the only tenant in the building. But by 2011, it was fully leased with such tenants as Moody's Corp and Mansueto Ventures, which publishes Fast Company and Inc. magazines. "We learned at 7 World Trade Center that when you build state-of-the-art, green, high-tech office buildings, they lease quickly," McQuillan said. Commercial real estate in downtown Manhattan rents for about $47 per square foot, about 35 percent less than rents in midtown Manhattan, according to commercial real estate services firm CBRE Group. The skyscraper cost about $2 billion to build, including land lease costs, and was financed with $1.2 billion of tax-free Liberty Bonds and hard-won insurance proceeds. On Monday, a council of urban designers decided that One World Trade Center, which is being built by Douglas Durst and the Port Authority, would be the tallest building in the United States. They voted to count its spire in the total height of the building, which will reach 1,776 feet, a number chosen for the year the U.S. Declaration of Independence was signed. The spire on the original twin towers reached 1,727 feet and the Empire State Building's antenna spire reaches 1,454 feet. A 9/11 museum is expected to open at the site in the next year. A transportation hub, designed by Spanish architect Santiago Calatrava, is scheduled to open in 2015. The site will include two more office towers and some 550,000 square feet of retail space. Architect Frank Gehry, most famous for designing the contemporary Guggenheim Museum in Spain, has planned a performing arts center for the building.

https://theedgemalaysia.com/node/88339

Bashir stays for another year

English

KUALA LUMPUR: Malaysia Airports Holdings Bhd’s (MAHB) MD, Tan Sri Bashir Ahmad, will be staying on for another year in the group, which has been under fire for the delay in completing klia2. In a statement yesterday, MAHB announced that the Ministry of Finance (MoF) had extended Bashir’s services as managing director for another year effective June 7. “The MAHB board welcomes this extension as they would like Bashir to continue to lead the management and guide the company towards continued success and performance,” MAHB said. Bashir, who had said at the MAHB AGM in March that he would like to make way for a successor, has agreed to stay on to continue to support the board, according to the statement. “The MAHB board, in due course, will put in place a succession plan to ensure a smooth transition for this important post,” MAHB said. Bashir, 64, has been at the helm of MAHB for 10 years. He was appointed MD on June 7, 2003. Investment analysts said MAHB is currently in fire-fighting mode over the delay in completing klia2. With the airport operator facing a public outcry over the issue, it is not hard to fathom why MoF has extended Bashir’s services. “Who wants to take over the post, which is equivalent to inheriting problems that have yet to be resolved at this moment?” said an analyst. MAHB has made the newspaper headlines of late for the wrong reason owing to the delay in completing klia2. The group has yet to announce a new date for opening klia2 as it needs to conduct a detailed scrutiny on the work programme and resource planning of contractors behind schedule. The airport operator has announced that it would penalise contractors who have failed to meet the deadline and has said it will not be granting further extensions. Parties involved in the project seem to be pointing fingers at each other. MAHB, which took over the project from KLIACS (a former unit of MoF) in September 2011, has highlighted that contractors have failed to meet deadlines, while contractors have defended themselves by saying that the delay had been mainly because of changes to designs and additional amenities at the new terminal as requested by MAHB and AirAsia Bhd. This article first appeared in The Edge Financial Daily, on June 7, 2013.

https://theedgemalaysia.com/node/55043

Tech trends set stage for mobile, playful 2014

English

TWITTER'S triumphant market debut, the rise of smart fashion and a new generation of game consoles highlighted the tech world this year, portending more mobile and social trends in 2014. Meanwhile Apple regained some lost momentum and Microsoft sought to reboot by announcing it was seeking a new chief executive.Twitter The one-to-many messaging service made the most hotly-anticipated stock market debut of the year in early November. The San Francisco company, which has yet to make a profit, saw its shares leap out of the gate and is credited with helping to fuel a stock market rally along with fears of a new Internet bubble. Netflix Faith that the online streaming television and film service showed in digital content is paying off, along with its investment in original shows such as hit "House of Cards" starring Kevin Spacey. "House of Cards" became the first exclusive online production to win an Emmy Award, the highest prize given to US television. Netflix competes with HBO and its share price more than tripled in 2013, but growing competition includes a streaming video service by Amazon.com.Video Games "Grand Theft Auto V" set new records in production cost as well as speedy sales. The title published by Take Two Interactive cost as much to make as a Hollywood blockbuster, but racked up more than $1 billion in sales in the three days after its release. In November, Microsoft and Sony released new-generation Xbox One and PlayStation 4 video game consoles, respectively, each selling more than a million units in the first 24 hours on the market and getting status on holiday gift wish lists. BitcoinThis digital currency weathered a mini-crash and rebounded by year's end, at one point soaring above $1,000. Popular with geek treasure hunters who "mine" bitcoins online, the Internet version of cash is also tempting to criminals. It was used for payments at online drug black market Silk Road, which was shut down by US police in October. GoogleGoogle's Android software has come to dominate a smartphone and tablet market once ruled by Apple gadgets. But spins put on Android devices by ranks of device makers frustrate "app" developers, and titan Samsung has started to pull away from the California company by emphasizing its own platform. Google is also getting attention for innovations such as Internet-linked eye wear, robotics, and high-speed cable lines. Google shares broke the $1,000 mark. Phablets Big screens on smartphones have become big hits with users, with handsets growing nearly as large as tablets. Personal Computers Global PC sales continued to slump as smartphones and tablets became more central to accessing the Internet. Microsoft, which built its technology empire on packaged software for PCs, is under pressure from the trend and its Windows 8 operating system overhauled with mobile and cloud computing in mind received a mixed reception. Microsoft chief Steve Ballmer announced plans for an early departure to give the helm to someone better able to navigate the tides of change. Apple The culture-changing California company rolled out slick new iPhones, iPads, and Macintosh computers while an arguably spoiled marketplace watched in vain for "the next big thing," such as an iWatch or revolutionary iTV box. If Apple sticks to its pattern, the time to wow the world will be in 2014. Meanwhile, iPhone remains a bestseller and appeared poised to debut on the colossal China Mobile network. BlackBerry The smartphone that pioneered the market, and once ruled workplaces, missed with a new BB10 platform seen as crucial to its revival, if not its survival. Between job losses, an aborted sale of the company and departure of the boss and other leaders, the group is at the brink. Wearable computing Bracelets, pendants, eyeglass frames and other accessories infused with sensors, computing power, and connections to the Internet through smartphones or other means kicked off a "quantified self" movement. The merging of fashion, wardrobe and computing is likely to accelerate in 2014, with devices promising to help people stay fit, informed, comfortable, and more. Startups Tumblr was bought for more than $1 billion by aging Internet pioneer Yahoo and Snapchat reportedly turned down a multi-billion-dollar offer from Facebook as established Internet giants seek to stay young and hip by snapping up promising new technology enterprises.

https://theedgemalaysia.com/node/59880

AAX route cuts may impact positioning

English

KUALA LUMPUR: With the withdrawal of AirAsia X Sdn Bhd (AAX) from Europe and India, the company’s positioning as a long-haul carrier may be put into question. “AAX was originally established as the long-haul sister airline of AirAsia, and with Europe and India out of the mix, what remains are locations that are not too far, or of minimal distance to AirAsia’s present ones,” said an industry observer. The company announced last week that it was cancelling services connecting KL to Mumbai, Delhi, Paris and London to improve operating cost efficiencies and realign its focus to a smaller network. Speaking to The Edge Financial Daily last Friday, CEO Azran Osman-Rani did not disclose the losses accounted by the four routes, though he acknowledged that they played a “material” role in the company’s profitability. Based on a report by the Centre for Aviation (CAPA), an independent market researcher, the four route cancellations comprise about 27% of AAX’s total weekly available seat kilometres (ASK) and 22% of its available seats in the past week. With Europe and India out of the picture, the company’s focus will move to North Asia and Australia where it may introduce more routes and add frequencies to existing routes. “This is a market choice for us. We want to focus on places such as Australia and China where we possess a stronger brand and more scalable markets for us to grow in,” said Azran. He said that difficulty in obtaining route approvals resulted in the company having to subscale in several markets. Weak consumer demand and high infrastructure costs were cited as reasons for the recent cancellations. “It is not a matter of physical distance for us, plus we still have an exclusive right for routes exceeding four hours while those below four hours are travelled by AirAsia,” he said. When asked if there were more route cancellations in the immediate future, he said the company would be in a “pretty stable” position after omitting the four routes. As AAX restructures its routes and aims for stronger profitability, this may bode well for state-controlled investment arm Khazanah Nasional Bhd, which holds 10% of the long-haul carrier, following last year’s share swap. While the company prepares for its impending floatation exercise, (believed to take place this year after Morgan Stanley was selected as an adviser for the exercise), another AirAsia affiliate is on track to list soon. Thai AirAsia (TAA), in which AirAsia has a 49% stake, said it was prepared to submit an application for its initial public offering (IPO) this quarter following a delay caused by the floods in Thailand last year. “TAA is preparing to submit a filing with the SEC this month and our target is to be listed on the bourse in the first quarter,” chief executive Tassapon Bijleveld was quoted saying in an interview with Reuters. The IPO, which may raise up to US$200 million (RM626 million) for the company, may provide AirAsia with part of the funding required to purchase new A320 aircraft, which is part of the latter’s plan to expand market share. However, the bulk of the proceeds could to go towards building cash reserves and repaying debt for TAA. This article appeared in The Edge Financial Daily, January 16, 2012.

https://theedgemalaysia.com/node/39503

Positive surprises in store from Dayang

English

Dayang Enterprise Holdings Bhd(Oct 28, RM2.39)Maintain buy at RM2.35 with target price of RM3: The RM2 billion hook-up and commissioning contract (four packages) might be awarded as early as next month. Dayang has a solid track record in this segment, and has secured 57% of the jobs awarded in 2010. We believe Dayang’s strong footing places it among the favourites to secure at least one of the packages. Assuming the packages are of equal value, Dayang could add RM500 million into its backlog, bringing its total order book to a record high RM1.5 billion or book-to-bill ratio of five times. We estimate net profit at RM20 million to RM23 million, underpinned by contribution from the Shell contract and hook-up and commissioning jobs. Dayang has secured about RM600 million worth of jobs in 2010, within our expectation. But there could be positive surprises to our 2011 new wins assumption if Dayang succeeds in its bid for one of the packages of the above contract. Every RM100 million increase to our contract win assumption would raise FY11/FY12F earnings by 6% or 7% each. We reiterate our “buy” call on this growth story in the making. We like Dayang for its growth story (FY09/FY11F net profit CAGR of 46.2%), underpinned by a strong order book and superior margins. Dayang is also expected to be among the beneficiaries of potential new contracts. It is our high conviction call for the sector, and our RM3 target price is pegged to 11 times FY11F EPS. Dayang is trading at an attractive FY11F PER of 8.6 times against the sector’s 10.3 times. — HwangDBS Vickers Research, Oct 28 This article appeared in The Edge Financial Daily, October 29, 2010.

https://theedgemalaysia.com/node/37442

Brokers' Digest: Local equities Sep 13-19, 2010

English

Chemical Company of Malaysia BhdSept 7, RM2 MERCURY SECURITIES (SEPT 3) HOLD: The Chemical Company of Malaysia Bhd’s (CCM) annualised 1HFY2010 revenue came in well within our earlier estimates. However, CCM’s 2QFY2010 net profit after tax and minority interest were once again below our earlier expectations. CCM’s group revenue for the period had increased very marginally by RM67,000 compared with 2QFY2009 as its chemicals and pharmaceuticals segments reported higher sales. CCM’s group profit before tax for 2QFY2010 was higher by around RM14 million than 2QFY2009. The improvement in pre-tax profit was primarily due to better metals raw material pricing, lower overheads, lower provision for doubtful debts and higher share of associated company results of its chemicals segment. With the anticipated improvement in the domestic and regional economies, we expect CCM to have a more favourable performance for the remainder of its FY2010. Currently, we are maintaining our “hold” call on CCM with a target price of RM2.11. This is on the basis that while its earnings growth prospects still appears weak, any further stock price downside is limited by its trading volume illiquidity. CCM’s stock price has not retreated below RM2 since August 2004. Hirotako Holdings BhdSept 7, RM1.23 OSK RESEARCH (SEPT6) NOT RATED: Hirotako is the only domestic manufacturer of safety restraint system (SRS) products comprising seat belts, airbags, steering wheels, and damper products such as noise dampers, sound insulation and interior trims. The company is backed by two strong technical partners — Autoliv, a leading global airbag supplier, and Rieter Automotive International, a leader in acoustic systems. Being the only airbag and seat belt manufacturer, Hirotako has been a supplier to Proton since its inception and stands to benefit should Proton be successful in penetrating the export market. The group recently secured a new airbag contract from Perodua for its upcoming Myvi replacement, which is expected to hit the roads sometime in 2H2011. We expect Hirotako’s revenue and earnings growing at a buoyant CAGR of 30.5% and 42.3% over the next three years. Given the potentially higher revenue from the Myvi airbag contract as well as the positive tone of the overall industry given its monopoly in the safety equipment space, we ascribe a target price of RM1.63 to the stock. We also like the stock’s superior margins (relative to other autopart makers) and its net cash position in the absence of any borrowings. The stock also comes with an attractive net dividend yield of 5.1%. Parkson Holdings BhdSept 7, RM5.73 AMREASEARCH (SEPT 6) BUY: Parkson Holdings Bhd (Parkson), through its wholly owned subsidiary Parkson Properties NDT (Emperor) Co Ltd, has terminated its contract with C&T Corp (C&T) to buy a 55% stake in proposed joint-stock company C T Phuong Nam (CTPN) owing to setbacks in acquiring the land use right for a proposed development. CTPN was formed in December 2007 to develop and operate a commercial complex comprising retail floors, office and hotel with total floor area of 51,887 sq m  on a piece of land in District 3, Ho Chi Minh City, Vietnam. Under the mutual termination, C&T will refund Parkson the full deposit amounting to US$9.41 million (RM29.38) paid together with 8% per year interest. Management remains committed to its long-term vision in Vietnam, being on the lookout for potential sites for store expansion. Earnings contribution from Vietnam, though small at circa 3% to 5% to group EBIT, will grow as the group adds one or two stores in Vietnam per year. We maintain our “buy” recommendation on Parkson with unchanged sum-of-parts fair value of RM6.60 per share. Hartalega Holdings Bhd Sept 7, RM4.91 RHB RESEARCH INSTITUTE (SEPT 6) OUTPERFORM: The expansion of Plant 5 is currently ongoing. Recall that four lines in Plant 5 were commissioned in 1HCY2010, while the remaining six lines (+0.9 billion pieces) are expected to be commissioned and installed by end-CY2010. The company also plans to decommission all 10 of its lines in Plant 1 in October and replace them with six new high-capacity lines. The six new lines are expected to be progressively installed and commissioned from July 2011 to Febuary 2012. Moving forward, Hartalega’s growth strategy includes: (i) growing organically by building new production capacity; (ii) leveraging on its technical know-how; (iii) expanding its nitrile glove exports to more developed nations; and (iv) developing human capital as well as improving its processes to enhance its competitiveness against its peers. We have left our earnings forecasts unchanged for now. We continue to like Hartalega for its niche position as the largest nitrile glove producer in Malaysia and technological capabilities that are well ahead of its competitors. No change to our “outperform” call on the stock. Sunway Holdings BhdSept 7, RM1.71 MAYBANK INVESTMENT BANK (SEPT 6) BUY: Singapore’s Housing and Development Board (HDB) has awarded the tender for the lease of state land Parcel Yishun S5b at Miltonia Close to Hoi Hup-Sunway JV for S$165 million (RM384 million). Sunway has a 30% stake in the JV. The proposed development should be completed within 72 months from Sept 2. This is Sunway’s fourth property development in Singapore, all in partnership with Hoi Hup Realty Pte Ltd. Hoi Hup-Sunway’s bid was the highest of seven bids, according to Singapore HDB. Its bid was 31% higher than the second highest of S$126 million, while the remaining bids ranged between S$98 million and S$125 million. The JV’s bid thus translates into S$406 psf per plot ratio. According to CBRE, the breakeven cost is S$700 to S$750 psf for a low-rise condominium development, and the units could sell above S$800 psf. At S$850 psf, we estimate S$345 million gross sales value. We estimate RM36 million net profit (six sen EPS) contribution to Sunway over the development period. We maintain our “buy” recommendation with a target price of RM2.35. JF Technology BhdSept 7, 16.5 sen STANDARD 7 POOR’S (SEPT 2) HOLD: JF Technology Bhd’s 4QFY2010 earnings were below our expectations mainly due to larger tax expense. Excluding this, the results would have been in line with our forecast. Driven by stronger demand for test probes, quarterly revenue grew 24.3% q-o-q to RM3 million, culminating in FY2010 revenue of RM8.7 million. Going forward, management expects its business outlook to stay positive. Key drivers include robust demand for customised test probes, particularly with its customers investing in test handlers and capacity expansion in recent months, and sales recovery after its customer’s win of legal action against a third party for patent infringement. For our FY2011 and FY2012 projections, we have reduced our revenue forecast, and Ebitda margin. We are now projecting net profit of RM2.2 million from RM3 million for FY2011 and RM3.1 million from RM4.4 million for FY2011. We maintain our “hold” recommendation, but lower our 12-month target price to 23 sen from 32 sen amid our earnings downgrade. This article appeared in Capital page of The Edge Malaysia, Issue 823, Sep 13-19, 2010

https://theedgemalaysia.com/node/21887

#Media Monday*: Volvo's vampiric slant, MPH goes social, and Dewmocracy lets the crowd decide

English

This week, Volvo takes a walk on the dark side, MPH steps into the social media stage, and a soft drink brand goes all out to prove its "democratic" values. Of vampires and Volvos Throughout fictional history, vampires have seen little need for cars – much less a safety-focused Volvo – until recently. In conjunction with the popular teenage-vampire movie franchise Twilight, the car manufacturer is promoting their XC60 model via product placements. Hey, if it's good enough to keep lead vampire Edward Cullen safely cocooned in comfort, it's good enough for mom and dad to drive their teenagers around. In an interview with BrandWeek, president and CEO of Volvo Cars of North America Doug Speck said that Volvo's appearance goes beyond a cameo role in the movie, adding that it is “central to Edward’s character in the Twilight saga." To emphasise this point, Volvo launched a website that ties into Twilight, bearing the caption “What Drives Edward.” (a stake?), where visitors can view trailers to the upcoming New Moon film, win movie premiere tickets, and enter to win a Volvo XC60. “Considering that most of Twilight's die-hard fans lack driver's licenses, Volvo is sure to be targeting the mothers and fathers shuttling carpools to and from movie theaters,” wrote Stephanie Startz of Brand Channel. “The brand known best for safety and reliability may be attempting to lighten their stodgy image with the sexy cast of Twilight.” Volvo. It's so goth. Dewmocracy goes all out to crowd-sourcing Soft-drink company PepsiCo, which produces Mountain Dew, has taken crowd-sourcing to a whole new level by letting the public decide the marketing agencies that would head three product launches. In a contest starting this month, Mountain Dew would hand off a lucrative $100 million marketing contract to any agency, independent film company or individual who can win the votes of consumers through a 12-second pitch posted on www.12seconds.tv.The chosen winner would be tasked to produce 15-second spots for each of the new Mountain Dew line extensions – Distortion, Whiteout and Typhoon – which themselves are the latest “crowd-sourced” results of Dewmocracy, an initiative designed to open up product development to consumers. Launched in 2007, Dewmocracy allows the public via Facebook, Twitter, and its own Dew Labs Community to determine the flavour, colour, packaging and names of the new products. Not only has it been a successful brand-building campaign, but it has played a significant part in the Mountain Dew's sales figures. John Sicher, editor and publisher of Beverage Digest, told AdAge that Dewmocracy brands accounted for 25 million cases. In comparison, Coke Zero, a major contributor to the Coca-cola brand, accounted for 96 million cases. "It really is a good piece of business for a line extension, even in this big a category," Mr. Sicher said to AdAge. MPH hops onto Twitter Local book publisher and retailer MPH is among the latest to jump onto the social media world with the launch of its official Facebook fan page, a well as Twitter. Through these two channels, visitors can receive the latest updates of events happening at MPH, including book readings, sales, and competitions. These two additional sites run complementary to the company's blog at www.mphclick.com, which details the events more extensively.

https://theedgemalaysia.com/node/53478

CIMB Research has Technical Sell on OSK Holdings

English

KUALA LUMPUR: CIMB Equities Research has a Technical Sell on OSK Holdings Bhd at RM1.46 at which it is trading at a price-to-book value of 1.3 times. In its technical outlook for the stock on Thursday, Aug 18, it said that despite the  recent rebound, OSK is still trapped in a downtrend channel. “As the candles are also trading below its key moving averages, we think any rebound would likely to be short-lived, possibly capped at RM1.50-RM1.53,” it said. CIMB Research said the MACD is slowly rising but its signal line remains deep in the negative territory. RSI too is below the 50pts mark. Support is at RM1.36 and RM1.27. “Unless prices can remain above its 50-day SMA, we think the odds still favour the bears. Hence, selling into strength looks like a good option here. Only a push above RM1.62 would prompt us to review our call,” it said.

https://theedgemalaysia.com/node/25508

Grand-Flo to buy Labels Network

English

KUALA LUMPUR: Grand-Flo Solution Bhd, which is making a rights issue of warrants, has acquired the remaining 45% stake of barcode and adhesive labels manufacturer, Labels Network Sdn Bhd, from two individuals Wan Kok Weng and Chan Pik Khew for RM3.6 million to be satisfied via the issuance of shares. In a statement yesterday, Grand-Flo said the vendors would receive 9.231 million new Grand-Flo shares at 39 sen apiece. It said for the nine months ended Sept 30, 2009, the labels manufacturing business recorded sales and net profit of RM13 million and RM1.7 million, respectively. It said with the acquisition, the group would see a financial impact of RM800,000 improvement in the net profit. Besides two production facilities in Malaysia, Labels Network has also expanded its production infrastructure to the region, with two new sales-cum-manufacturing plants in Thailand and Vietnam. “At present, our labels manufacturing facilities cater to demand in the five countries where we have direct presence, namely Malaysia, Singapore, Vietnam, Hong Kong, and China. We are currently setting up another production facility in Hong Kong to cater to the growing demand there,” its group president and managing director Derrick Tan said. “Our long-term strategy for the labels segment is to increase the range of products to include higher-end barcode labels as well as expand geographically to more countries in the region.” In a separate statement, Grand-Flo proposed a renounceable rights issue of up to 67.93 million five-year warrants 2010/2015 on the basis of one new warrant for every two shares held at an issue price of two sen per warrant. This article appeared in The Edge Financial Daily, January 19, 2010.

https://theedgemalaysia.com/node/68077

AES trials a success, says minister

English

KUALA LUMPUR (Aug 30): The trial run for the Automated Enforcement System (AES), which involves the installation of digital cameras to nab speedsters, has been a success, Transport Minister Datuk Seri Kong Cho Ha said on Thursday. Kong said the trial cameras installed in several locations were running and measures were being taken to ensure that "everything is certified and calibrated as needed". "The system has not been enforced yet, but we are doing some trials, shooting and all that, as well as the process of installing the cameras," he told reporters at the launch of the Pasar Seni city bus hub. He gave no indication as to when the system would be enforced except to say that it would start when "everything is in order." AES, which cost the government close to RM800 million, will see 1,000 cameras installed at more than 800 accident-prone areas and junctions to help the Road Transport Department (RTD) monitor traffic round the clock for motorists who speed or jump the red light. Summonses will be issued within two weeks. "What we want is for the people to be aware that they have to comply with the rules and regulations of the road and also to reduce accidents and number of deaths," said Kong. He said AES had been successfully installed and used in 90 countries. "The system that we are going to use in Malaysia is exactly the same system that is in use in Saudi Arabia," he said. The project was mooted in 2004 after the RTD assessed various systems available in other countries.

https://theedgemalaysia.com/node/1208

Mier forecasts 6% fiscal budget deficit in 2009

English

KUALA LUMPUR: The government’s much anticipated second stimulus package could stretch its fiscal deficit to over 6% of gross domestic product (GDP) this year, said the Malaysian Instiute of Economic Research (Mier). This is based on an estimated RM30 billion mini-budget which will be unveiled on March 10. In the long run, the economic package would translate into higher debts for the government, hence, possibly, higher taxes for the man on-the-street as the the government would need to boost its income to repay its loans. “The government can actually borrow domestically to finance (the stimulus package) as there is a lot of liquidity in the system at the moment. “The fiscal stimulus may only cushion the impact of the economic slowdown, not neutralise it. Transparency of the stimulus package is absolutely critical,” Mier executive director Professor Datuk Dr Mohamed Ariff said. He was speaking to reporters here on March 3 on the sidelines of a real estate seminar organised by real estate consultant Rahim & Co Chartered Surveyors Sdn Bhd. MIER’s RM30 billion estimate, according to Mohamed Ariff, is deemed reasonable as the figure translates into 4% of the country’s GDP, a fraction needed to reinvigorate the nation’s slowing economy. Deputy Finance Minister Datuk Kong Cho Ha recently said the second package could be worth RM30 billion to safeguard the local economy against the backdrop of falling exports and slowing domestic demand. The scheme comes on top of the RM7 billion initial package announced last November. The country had registered less than impressive economic data in recent months. The local economy grew a mere 0.1%  in the fourth quarter of 2008 from a year earlier amid falling exports, which in turn led to a contraction in the local manufacturing sector. The 0.1% expansion is a sharp contrast from the preceding third quarter’s 4.7% growth.  On the whole, in 2008, Malaysia’s economy expanded at a slower annual pace of 4.6% compared with the 6.3% posted in 2007. The nation’s December 2008 exports tumbled 14.9% to RM46.09 billion from RM54.2 billion a year earlier due to lower demand for electrical and electronic products, besides palm oil, and liquefied natural gas. Imports fell 23.1% to RM34.4 billion from RM44.8 billion a year earlier. For the whole of 2008, exports grew 9.6% to RM663.5 billion while imports expanded 3.3% to RM521.5 billion. This translates into a trade surplus of RM142 billion.

https://theedgemalaysia.com/node/53564

HDBSVR: Bears are back

English

KUALA LUMPUR: Hwang DBS Vickers Research said the bears are back, causing Wall Street to tumble again overnight on Thursday, Aug 18. Key U.S. equity indices slumped between 3.7% and 5.2% at the closing bell on mounting concerns that the global economic recovery would stall while European banks could face capital constraints. HDBSVR said on Friday, Aug 19 the negative vibes will surely be felt across the region. “Back home, we expect the benchmark FBM KLCI to slip below its immediate support level of 1,495, possibly falling towards the next support mark of 1,465,” it said. In terms of corporate development, we may see interest from investors in: (a) Dialog Group, which has proposed a rights issue with warrants (on the basis of 2 rights shares and 1 warrant for every 10 shares held); and (b) Petra Energy, following The Edge FinancialDaily report that its parent Perdana Petroleum is looking to sell its 29.6% stake in the company.

https://theedgemalaysia.com/node/85121

#Flash* Najib asks opposition to accept people's choice with open heart, pledges to implement promises in BN manifesto

English

Flash: Najib asks opposition to accept people's choice with open heart, pledges to implement promises in BN manifesto