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https://theedgemalaysia.com/node/21867

Stocks to watch: Pelikan, F&N, EON Cap, O&G

English

KUALA LUMPUR: The overnight rally on Wall Street will sustain the upward momentum of key regional markets including Bursa Malaysia on Tuesday, Nov 10. The rise in crude oil prices, which gained 3% to US$80 per barrel after Tropical Storm Ida forced the shutting of some US oil and gas production facilities could also generate more interest in oil and gas companies. On Wall Street, a broad US stock rally sent the Dow Jones Industrial Average to a 13-month high on Monday, after the Group of 20 pledged to keep aid flowing to the world economy, strengthening investors' desire for risk. The Dow Jones Industrial Average jumped 203.52 points, or 2.03%, to 10,226.94. The Standard & Poor's 500 Index rose 23.78 points, or 2.22%, to 1,093.08. The Nasdaq Composite Index gained 41.62 points, or 1.97%, to 2,154.06. At Bursa Malaysia, key regional markets closed higher and expectations are that this upward momentum should carry through to today. However, the markets are still susceptible to volatile external events and news. Investors should be ready to sell into strength and waiting for fresh news. Pelikan resumes trading after raising expectations that it could increase its turnover to RM5 billion by 2012 by buying strategic companies. Pelikan's share price saw a 5% increase last Friday ahead of the announcement that it is acquiring a 66% stake in Frankfurt-listed Herlitz AG and Falkensee Logistics Centre and its related assets for RM227 million. With the purchase, its total combined revenue would hit the RM3 billion mark, Pelikan's president and CEO Loo Hooi Keat said. Fraser & Neave Holdings' net profit rose 75% to RM61.08 million in the fourth quarter ended Sept 30, from RM34.74 million a year ago due to recognition of deferred tax assets of RM12 million. Revenue slipped 1% to RM908.3 million from RM921 million. Earnings per share were 17.1 sen versus 9.8 sen.  It proposed a bonus tax-exempt dividend of five sen per share and a final dividend of 24 sen. For the full year, net profit rose 34.5% to RM224.43 million from RM166.84 million due to the strong performance of the dairies and soft-drinks divisions. Revenue was slightly higher at RM3.74 million versus RM3.67 million. EON Capital Bhd's net profit rose 9.3% to RM73.35 million in the third quarter ended Sept 30 from RM68.95 million a year ago, due to net interest income and from its Islamic banking operations. It said on Monday, Nov 9, that net profit fell to RM598.87 billion from RM611.04 billion a year ago. Earnings per share were 10.87 sen compared with 9.95 sen. EON Capital had also strengthened its capital adequacy ratio after issuing the first tranche of its innovative Tier-I securities last September. The risk-weighted capital adequacy ratio, now around the 13% mark, should provide greater comfort for investors, although banks in Malaysia have generally held up well during this economic crisis. TH Plantations, the plantation arm of Lembaga Tabung Haji is on track to meet its targeted return on equity (ROE) of 7.5% after posting its latest earnings results for its third quarter ended Sept 30. The planter said that its annualised ROE as at Sept 30 came up to 10%.

https://theedgemalaysia.com/node/9868

#Flash* Goh Ban Huat seeks alternative takeover offer

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KUALA LUMPUR: Goh Ban Huat Bhd’s board intends to seek an alternative person to make a take-over offer for the remaining ordinary shares in the company. GBH said on June 30 that it appointed AmInvestment Bank Bhd to act as the independent adviser in relation to the offer. The appointment is subject to the approval of the Securities Commission. “The board also wishes to announce that it intends to seek an alternative person to make a take-over offer for the remaining ordinary shares of RM1 each in GBH,” it said. On June 25, GBH’s single largest shareholder Tan Sri Tan Hua Choon or better known as Robert Tan had launched a takeover by offering to acquire the remaining 69.55% or 43.067 million shares. Tan then owned 30.45% or 18.85 million shares of GBH. Tan is a director of GBH. His business interests range from manufacturing, marketing, shipping, property development and trading. He is chairman of Keladi Maju Bhd, Malaysia Aica Bhd, FCW Holdings Bhd, Marco Holding Bhd, Jasa Kita Bhd. GPA Holdings Bhd and PDZ Holdings Bhd.

https://theedgemalaysia.com/node/49306

SapuraCrest creating two core divisions

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SapuraCrest Petroleum Bhd(May 19, RM3.81)Maintain buy at RM3.80 with fair value of RM4.75: We reiterate our “buy” call on SapuraCrest Petroleum (SapCrest) with an unchanged fair value of RM4.75 based on an unchanged FY12F price-earnings ratio (PER) of 22 times. We do not expect any change in direction or strategy from the realignment in SapCrest’s management as its major shareholder, executive vice-chairman and president Datuk Shahril Shamsuddin, remains in his executive role for the group. Following the award of the risk service contract for the Berantai marginal oilfield development on Jan 31, SapCrest’s management has been divided into two separate divisions, Energy Ventures & Operations and Oil & Gas Construction Services. SapCrest’s current group CEO Rohaizad Darus has been redesignated with immediate effect as the CEO for the Oil & Gas Construction Services Division while Reza Abdul Rahim is the CEO for Energy Ventures & Operations. Rohaizad has been involved in the oil and gas industry for the past 22 years, beginning his career with Petronas Gas Bhd and later with Esso Production Malaysia Inc. He has been with the Sapura Group for the past nine years and has been its chief operating officer from mid-2008 until his appointment as CEO on Feb 1, 2010.SapCrest’s outstanding orders are currently worth RM8.6 billion, which will last for another three years. But the group’s Pan-Malaysian transport and installation project has the option for two annual renewals. Hence, the group’s net order book could be added to by another RM3 billion to RM12 billion — which remains by far the largest order book in Malaysia’s O&G industry. Given SapCrest’s dominance in the installation of pipeline and facilities (IPF) services in Malaysia, we maintain our view that SapCrest is likely to secure additional offshore installation jobs from Petroliam Nasional Bhd’s prolific captial expenditure rollout, potentially up to RM250 billion over the next five years. The recent turnaround in the group’s marine division adds further sizzle to the stock’s attractive valuations, reacceleration of order book accretion and improving earnings delivery. The stock currently trades at an attractive CY11F PER of only 17 times vis-à-vis over 20 times for Dialog Group Bhd, Malaysia Marine and Heavy Engineering Sdn Bhd and Kencana Petroleum Bhd. — AmResearch, May 19 This article appeared in The Edge Financial Daily, May 20, 2011.

https://theedgemalaysia.com/node/73952

SOP 3Q net profit slips 42.2% on sluggish CPO prices

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KUALA LUMPUR (Nov 27): Low crude palm oil (CPO) prices took its toll on Sarawak Oil Palms Bhd’s (SOP) earnings for the third quarter ended Sept 30 which declined 42.2% to RM47.35 million from RM81.9 million in the previous corresponding quarter. “The lower profit was mainly attributed to the softening of the CPO and palm kernel realised price and lower fresh fruit bunch ]FFB] yield per hectare across the group due to lower cropping cycle after the bumper crop in 2011,” it said in a filing today. Meanwhile, SOP’s revenue for the period rose 29% to RM420.78 million from RM326.05 million while earnings per share declined to 9.82 sen from 17.24 sen previously. For the nine months ended Sept 30, the group reported a 34.4% decline in net profit to RM145.36 million from RM221.74 million despite a 9.2% increase in revenue to RM931.6 million from RM852.7 million a year ago. Net asset per share as at Sept 30 stood at RM3.07 while earnings per share for the period declined to 30.86 sen from 46.26 sen previously. The group said it is expecting stiff challenges moving forward given sluggish palm product prices and expects lower profits in tandem with its peers within the industry. “Nevertheless, the group opines that the forthcoming palm oil export duty restructuring recently announced by Malaysian government and resilient oil demand in emerging market would ease the situation,” it added.

https://theedgemalaysia.com/node/56820

Hock Seng Lee secures RM90.28m Sarawak project

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KUALA LUMPUR (Oct 31): Hock Seng Lee has secured a RM90.28 million contract from the Sarawak Public Works Department for a water treatment plant. The company said on Monday it had received the letter of acceptance on Oct 28 from the department for the new water treatment plant, reservoir and associated facilities for the proposed Samalaju water supply in Bintulu. “The scope of works for the project includes mechanical and electrical works, earthworks, drainage and retaining structures, piling, piping and construction of the water treatment plant itself and associated works.  The works will be due to be completed by April 2013,” it said. Hock Seng Lee said the contract was expected to contribute positively to the earnings and net assets of the group for the financial years ending 2012 to 2013.

https://theedgemalaysia.com/node/96822

Malaysia faces formidable economic problem, says RBS

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KUALA LUMPUR: The Royal Bank of Scotland (RBS), in a hard-hitting research report released yesterday, said Malaysia faces a formidable economic problem as the country has exhausted its fiscal flexibility, and commodity prices are softening. The bank said it would be superfluous to dismiss the recent weakness of the ringgit as part of a broad-based sell-off in emerging market assets. "The country now faces a formidable problem — how can the economy grow when fiscal flexibility has been exhausted and commodity prices are softening. "Furthermore, the traditional cushion of a strong current account surplus has been eroded and the ability and desire of foreign investors to hold on to local-currency assets are no longer certain. The currency will feel the pressure, in our view." The bank noted that it has long held the view that Malaysia will struggle to grow once it exhausts its fiscal flexibility. "Fiscal flexibility has now been substantially eroded, with public debt reaching 54% in March 2013, only slightly short of the self-imposed limit of 55%. "Although much of the increase in public debt was a response to the global financial crisis, efforts to rein it in have been lacking for political considerations. The country's electoral cycle also played a role, with spending ramped up ahead of the 2013 parliamentary elections." RBS said a related development was that the first-half of 2013 budget deficit was roughly half of the full-year projected level. "In general, the deficit was smaller in the first half of the fiscal year. Now considering that the 2013 deficit forecast of 4% of GDP was part of a medium-term strategy to rein in fiscal imbalances, the authorities will have no incremental capacity to bolster the economy.  Breaching the full-year deficit target will be difficult as this risks a downward revision of the sovereign rating." RBS said another issue that needs to be borne in mind was that Malaysia's fiscal policy has historically been the basis for private sector investment in the non-tradables sector, either by joint participation or via guarantees on user charges in the infrastructure sector. "Consequently, private and public sector investment cycles tend to be synchronised. Therefore, any pull-back or slowdown in government development spending should have a knock-on impact on private investment as well." Malaysia's other avenues of growth are looking fatigued as well, said the bank. "As we have written in the past, consumer indebtedness has risen sharply to 80% of GDP (as at end-2012), an increase of 20% over the last five years. The debt servicing ratio or the proportion of household income used for interest and debt repayments is close to 44%. "Income growth will need to accelerate for consumption to maintain high growth. We think this is an unlikely scenario. As discussed above, fiscal support is unlikely to be increased. At the same time, exports and incomes in the tradables sector are also unlikely to remain supportive." Malaysia's exports, said RBS, have been contracting since February. Though global trade is weak, Malaysia is also suffering from declining competitiveness, particularly in the electronics sector. "In fact, the pace of decline between 2009 and mid-2012 was mitigated by elevated commodity prices. The more recent moderation in commodity prices has exposed the problem of competitiveness. "Also telling is that the country's non-commodities trade balance has turned into a deficit and the overall current account surplus is significantly narrower than in the past." The bank also highlighted the high foreign ownership of Malaysian government bonds, which  was around 30% in March 2013 although there was a lightening of positions in June. "Considering the weakness in the country's growth, tapering of bond purchases by the US Federal Reserve would have an impact on the ringgit. Overall, we remain bearish on the prospects of the ringgit," said the bank. This article first appeared in The Edge Financial Daily, on August 22, 2013.

https://theedgemalaysia.com/node/14158

DRB-Hicom shakes up Proton’s top management

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PETALING JAYA: DRB-Hicom Bhd stamped its mark over national carmaker Proton Holdings Bhd this week by shaking up the top management in a series of new appointments that analysts said could help tackle serious problems in the company’s bloated vendor system. According to an internal memo reviewed by The Edge Financial Daily, DRB-Hicom, which wrested control of Proton in mid-March, has appointed Datuk Lukman Ibrahim as the new deputy CEO of the company. He will lead a five-member team, which will work closely with Proton’s current management “in integrating and consolidating all relevant operational matters”. The memo on the new appointments, which took effect on May 1, made no mention about the role Proton’s group managing director Datuk Seri Syed Zainal Abidin Syed Tahir will play in the company and there is strong speculation that he is expected to leave the company in the coming months. Industry executives said Lukman is already playing a hands-on role in the daily operations of the group, and much of his clout stems from the strong backing he is getting from Proton’s executive chairman Datuk Seri Khamil Jamil, who is the chief lieutenant of DRB-Hicom’s controlling shareholder, industrialist Tan Sri Syed Mokhtar Albukhary. Industry executives said Khamil and Syed Zainal have differing views on how Proton should be managed, which is further fuelling speculation of the latter’s exit from the company. DRB-Hicom’s Abdul Rashid Musa will be heading the technical operations sector of Proton. Rashid, who was CEO of Hicom Automotive Manufacturing (M) Sdn Bhd, will be responsible for the group’s manufacturing, engineering, quality, health and safety, as well as vehicle cost reduction process. The manufacturing business of Proton is the pillar of the group’s operation and industry executives said that the DRB-Hicom must quickly deal with the excesses in the national carmaker’s vendor system. Proton has about 250 vendors and only 30 are classified as tier 1 vendors. “Proton has failed trying to trim down its vendors. For DRB-Hicom this [vendor rationalisation] is going to be the first and most important [item] on its agenda to turn around the national carmaker,” said one investment analyst who has been covering Proton. Kamarul Zaman Abdul Aziz, the former general manager of DRB-Hicom, will be heading the commercial operation of Proton, according to the internal memo. He will oversee the operations of Proton Edar Sdn Bhd, the distribution arm of the group, as well as its export operation. Former chief executive of Puspakom, Khairuddin Yusof, will be heading the group technical procurement sector, which will oversee Proton’s overall procurement function and process. The combination of putting Rashid as the head of technical operations, with Khairuddin heading the procurement section shows that DRB-Hicom is keen to rationalise Proton’s vendor system, industry executives said. Terence Soo Thean Hin, who was formerly chief operating officer of Hicom Teck See Sdn Bhd, has been appointed as Proton’s head of finance. “This is a process of assimilation between the top management of DRB-Hicom and Proton. Organisational structures are fluid; they can stay like that for a certain period or be changed further in the near future,” a Proton executive commented over telephone yesterday. In a reply to questions sent by The Edge through email, a Proton spokesman said the group is committed to the cost-cutting and value-adding measures that will involve all its vendors. Proton said it will continuously seek to optimise the sourcing for its production with many cost-reduction and value-adding initiatives. However, the burning question that industry observers as well as the public has regarding the acquisition of Proton by DRB-Hicom is whether the conglomerate can turn Proton around. One industry analyst acknowledged that DRB-Hicom, which is essentially an assembler of vehicles, may not be equipped to manage a carmaker. But she said the group’s tie-ups with international groups such as Volkswagen and Honda could be tapped to turn Proton around. This article appeared in The Edge Financial Daily, May 4, 2012.

https://theedgemalaysia.com/node/62894

RHB Group provides RM1.38bn loan for RM6b Tg Bin power plant

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KUALA LUMPUR (March 1): RHB Bank and RHB Investment Bank are providing RM1.38 billion to partly finance the construction of the RM6 billion coal-fired power plant in Tanjung Bin, Johor. The financing of the 1,000 MW plant is managed by Malakoff Corporation Bhd’s unit  Tanjung Bin Energy Issuer Bhd RHB Investment Bank is the mandated lead arranger whilst RHB Bank is the lender in the syndicated facilities.  RHB Investment Bank is also a joint lead manager in the Sukuk programme. According to a statement issued by RHB Group, Malaysia's energy demand is projected to grow at 3.4% annually, which is double the 2010 level with the rollout of the large scale infrastructure and construction projects under the 10th Malaysia Plan.

https://theedgemalaysia.com/node/54192

Opcom, Tambun Indah, Harrisons, LFIB

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KUALA LUMPUR: Investors are expected to stay on the sidelines in September, as they reel from the foreign selldown of key stocks in August. A total of RM97.44 billion was wiped out from Bursa Malaysia’s market capitalisation in August, reducing it to RM1.241 trillion. The 30-stock FBM KLCI fell 6.5% or 101.54 points to 1,447.27, but off the earlier lows, aided by some late buying of key heavyweights especially Petronas Chemicals Bhd which had been earlier sold down. As at Aug 29, the KLCI is down 4.72% year-to-date. The FTSE Bursa Malaysia 100 saw the index decline 7.32% to 9,692.8 but the broader EMAS Index fell the most, down 7.81% to 9,908.81. Corporate results also disappointed. Investors are also not expected to draw comfort from OSK Research’s cautious report that based on the 100 companies under its coverage that have released results as of Aug 25, the corporate results were “not pretty”. The research house said 13% outperformed and 33% underperformed for one of the poorest results since the fourth quarter of 2009. “While small caps had already experienced more earnings downgrades than upgrades since 2Q2010, Big Caps had only seen more downgrades since 1Q2011. However, that situation accelerated this quarter with high profile downgrades of CIMB, MAS and Axiata,” it said. Most importantly, OSK Research said the sell-off in the KLCI therefore reflects a closing of the fourth quarter gap between earnings (fundamentals) and the market (sentiment). “We had hoped that earnings would catch up with the KLCI. Unfortunately it seems that the KLCI is catching up with declining earnings.  Maintain NEUTRAL on the market with our 2012 KLCI fair value intact at 1,466,” it said. OSK Research advised investors that now was not the time for aggressive bottom fishing but preferred its defensive buys. “On another note, we note with distaste developments surrounding the Esso-San Miguel deal. We believe that rumoured ‘outside’ parties are generating an unhealthy newsflow for future investments in Msia. Objections over a brewery should also apply to Asahi’s takeover of Pemanis if that were truly the case,” it pointed out.   Meanwhile, stocks to watch on Friday, Sept 2 are fibre optic cables manufacturer Opcom Holdings Bhd, Tambun Indah Bhd, Harrisons Holdings (Malaysia) Bhd and Lion Forest Industries Bhd (LFIB). Opcom declared a special interim dividend of 22.50 sen per share and the dividend will go ex on Sept 14 and the entitlement date is Sept 19. Its largest shareholder is M Ocean Capital Sdn Bhd with a 26.94% stake or 34.75 million shares. Datuk Seri Mukhriz Mahathir owns 23.5% or 30.31 million shares while Rezeki Tegas Sdn Bhd holds 20.93% or 27 million shares Tambun Indah is acquiring property development company Premcourt Development Sdn Bhd for RM5.5 million which is slated to undertake a project with gross development value (GDV) of RM180 million in Bandar Jelutong on Penang island. Harrisons Holdings (Malaysia) Bhd has declared a special interim gross dividend of 50 sen per share for the financial year ending Dec 31, 2011. The ex-date was Sept 15 and the entitlement date was Sept 20. LFIB is acquiring 58,000 hectares under an economic land concession (ELC) in Cambodia for US$26.1 million (RM78.3 million) to cultivate oil palm and rubber trees. LFIB’s concession would not be less than 70 years under the master service agreement. Other companies which could see trading interest are Cymao Holdings Bhd and Mycron Steel Bhd. Cymao’s earnings surged to RM2.68 million in the second quarter ended June 30, 2011 from only RM179,000 a year ago, underpinned by an 18% increase in plywood prices. This was despite that revenue fell 21% to RM26.02 million from RM33.02 million. Earnings per share were 3.17 sen vs 0.24 sen. Mycron Steel sustained losses of RM3.29 million in the fourth quarter ended June 30, 2011, a contrast from a year ago’s earnings of RM3.34 million as it was impacted by decrease in sales volume and lower sales margin. Revenue fell  22.2% to RM104.85 million from RM134.89 million. Loss per share was 1.85 sen compared with earnings per share of 1.88 sen. Meanwhile, a local newspaper reports that six companies are in the running for the RM1.5 billion five-year contract to provide Internet access and a virtual learning module (VLM) platform for the 9,924 schools in the country under the 1Bestarinet project, sources said. The six are said to be Celcom Axiata Bhd, Jaring Communications, Maxis Bhd, YTL Communications, Multimedia Synergy Corp while Telekom Malaysia Bhd and Time dotCom Bhd submitted a joint bid. According to the news report, the access job comes with an option to extend the contract period for another five plus five years, totalling 15 years, and this would include installation, maintenance and provision of a VLM.

https://theedgemalaysia.com/node/45511

Asian stocks rise, but Mid-east crisis remains a concern

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KUALA LUMPUR:  The FBM KLCI gave up some of its gains from early morning trade on Friday, March 4 as indications of some mild profit taking emerged, with gains also slightly tapering off at key regional markets. At the mid-day break, the FBM KLCI was up 0.92% or 13.92 points to 1,520.80. It had earlier risen to its intra-morning high of 1,529.41. Gainers led losers by 541 to 148, while 246 counters traded unchanged. Volume was 515.22 million shares valued at RM840.75 million. The ringgit strengthened 0.07% to 3.0293 versus the US dollar; crude palm oil for the third month delivery rose RM16 per tonne to RM3,586, crude oil added 25 cents per barrel to US$102.16, while gold rose US$3.20 per troy ounce to US$1,419.20.     However, concerns of still high crude oil prices in the wake of the Middle-East and North African geopolitical tensions remain unabated. Libyan rebels prepared for further attacks by forces loyal to leader Muammar Gaddafi on Friday as both sides struggled for control of a strategic coast road and oil industry facilities, according to Reuters. Although economic data emerging from the US are encouraging, with expectations strong employment growth, investors still remain cautious with analysts advising them to liquidate on rallies and remain more in cash. On Bursa Malaysia, banking stocks were among the major gainers with AMMB up 13 sen to RM6.39, HLFG six sen to RM8.93, RHB Capital five sen to RM8, Public Bank four sen to RM13.14, Maybank three sen to RM8.79 and CIMB two sen to RM8.02. KLK rose 60 sen to RM21.10, DiGi 54 sen to RM27.64, BAT 46 sen to RM49.20, MISC 32 sen to RM8.08, Genting 24 sen RM10.26, Panasonic 22 sen to RM18.80, United Plantations 20 sen to RM17.50 and Petronas Dagangan 18 sen to RM14.20. Losers this morning included Proton which fell 21 sen to RM3.24, Fima Corp and Parkson 15 sen each to RM6.05 and RM5.21, Nakamichi 11.5 sen to 86 sen, Genome 7.5 sen to 72.5 sen and Paos 5.5 sen to 74.5 sen. Tanco was the most actively traded counter with 17.9 million shares done. The stock added one sen to 35 sen. Other actives included HWGB, Olympia, CIMB, KNM and SAAG.

https://theedgemalaysia.com/node/56782

#Global Markets* European shares slip on Fed jitters

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12/12/13 17:55:30 * European shares hit 2-month low, track overseas markets* Cut in Fed stimulus could come next week* Bund futures fall, crude oil steady* Euro near highs against dollar, yen LONDON (Dec 12): European shares slipped to a two-month low on Thursday, tracking losses on Wall Street and in Asia as markets positioned for data that could determine if the U.S. Federal Reserve starts trimming its stimulus next week. Investors lowered their exposure to riskier assets after a provisional budget deal in Washington this week eased some of the fiscal drag on the U.S. economy. That raised chances that the bond buying operations that have helped equities to multi-year highs this year could be cut at the Fed's Dec. 17-18 policy meeting. "We think there is a chance that Fed tapering will begin next week. However, whether it is December, January or March is less important than the fact that the Fed feels able to make a start on withdrawing QE," said Tim Gregory, chief investment officer at Psigma Investment Management, referring to the programme known as quantitative easing. "Recent GDP data, ISM manufacturing data and the jobs report all lend support to tapering sooner rather than later." Thursday's data focus will be on U.S. weekly jobless claims numbers for the week ended Dec. 7 and U.S. retail sales data for November. "This is the final piece of the jigsaw ahead of the Fed meeting and could make the difference when it comes to the decision on tapering," Alpari analyst Craig Erlam said. A secondary note of caution was added after a source said ex-Bank of Israel governor Stanley Fischer had been asked to be the Fed's next vice chair. Fischer is seen as less dovish than Janet Yellen, the nominee to lead the U.S. bank. The pan-European FTSEurofirst 300 was down 0.3 percent at 1,252.55 points by 0914 GMT after falling as far as 1,249.84, the lowest since mid-October. The index has fallen about 5 percent after climbing to a five-year high last month, but is still up more than 10 percent so far this year. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.8 percent on Thursday and U.S. shares earlier closed 0.8 to 1.4 percent lower. Euro buoyant In the bond market, Bund futures fell 12 ticks to 140.18, with German 10-year yields 1 basis point up at 1.84 percent in a market increasingly jittery ahead of the Fed's meeting next week. Italian and Spanish bonds fell after a media report said the European Central Bank could make euro zone banks hold capital against sovereign bonds to stop weak lenders from using its cash to buy up debt from crisis-hit countries. In the currency market, the euro hovered near a two-year high against the dollar and a five-year peak against the yen, underpinned by higher short-term market rates which has seen yield differentials move in its favour. Among commodities, Brent futures held steady above $109 a barrel, while Gold inched up as some safe-haven bids emerged after equities dropped.

https://theedgemalaysia.com/node/20368

F&N to reap profit from PJ property development in 3 years

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KUALA LUMPUR (Jan 23): Fraser & Neave Holdings Bhd (F&N) will start registering profits from its planned RM1.6 billion mixed property development in Section 13, Petaling Jaya, Selangor within three years from the project's launch. Chief financial officer Soon Wing Chong said at a press conference today that the residential and commercial development is expected to be launched in the fourth quarter of this year. The project on a five ha (12.72-acre) leasehold site is a joint venture between FCL Centrepoint Pte Ltd and F&N. Soon said the project is expected to take "five to six years" to complete. "We can see the contribution more towards the latter part of the project," said Soon after F&N's annual general meeting today. The development site where the group's previous dairy manufacturing plant is located, has been earmarked for a mixed development. The project comprises apartments, a hotel, retail outlets and office lots. "We are planning to launch the residential portion of the development in the last quarter of this financial year...The conversion of the land (from industrial to commercial) has been approved," Soon said, Soon said the land's lease has been extended to 99 years from 46 years.

https://theedgemalaysia.com/node/39258

Perwaja, PLUS, Glomac, MTD Capital

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KUALA LUMPUR: Stocks on Bursa Malaysia are expected to climb on Tuesday, Oct 26, underpinned by the 5-1/2 month high closing on Wall Street overnight. Reuters reports US stocks climbed on Monday as a falling dollar, partly driven by expectations of further stimulus by the Federal Reserve, prompted investors to buy riskier assets. The Dow Jones industrial average gained 31.49 points, or 0.28 percent, to 11,164.05. The Standard & Poor's 500 Index added 2.54 points, or 0.21 percent, to 1,185.62. The Nasdaq Composite Index advanced 11.46 points, or 0.46 percent, to 2,490.85. The benchmark S&P 500 index ended at its highest since May 3. Goldman Sachs said the Federal Open Market Committee is almost certain to announce renewed monetary easing at its Nov. 2-3 meeting. At Bursa Malaysia, stocks to watch include Perwaja Holdings Bhd, PLUS Expressways Bhd, Glomac Bhd and MTD Capital Bhd. Perwaja is building the first concentration and pelletising plant to produce iron ore pellets in Malaysia at a cost of RM201.54 million in Kemaman, Terengganu. The proposed plant will be near Perwaja’s existing direct reduction plant is located, will have an annual production capacity of up to 1.2 million tonnes and is to strengthen its position as one of the leading upstream steel producer in Malaysia. UEM Group Bhd and the Employees Provident Fund (EPF) extend the acceptance deadline of the Offer Letter to acquire PLUS Expressways Bhd from 5pm on Oct 29, 2010 to 5pm on Nov 9 this year. PLUS said the offer would immediately lapse at 5pm on November 9 unless UEM and EPF agree in writing to extend the offer period. On Oct 15, PLUS received an offer from UEM and the EPF as joint offerors to acquire all its business and undertakings , including assets and liabilities for RM23 billion or RM4.60 per share cash. Glomac is acquiring 18 units of apartments at the Suria Stonor Condominium project for RM38.41 million. Glomac unit Berapit Pertiwi Sdn Bhd had agreed to the acquisition with Dekad Darat Sdn Bhd and Progressive Berg Sdn Bhd as it viewed the apartments had an excellent investment opportunity with strong potential for quick turnaround. MTD Capital resumes trading after it was suspended from 9.45am on Monday at the company’s request pending a material announcement. The company said the material announcement was on the official judgment from the Supreme Court of Philippines pertaining to the Temporary Restraining Order (TRO) on South Luzon Toll Expressway (SLEx).

https://theedgemalaysia.com/node/14466

One dead, two warded after fire at PetGas' Kerteh plant

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KUALALUMPUR (May 11): One person died and  two personnel have been warded following a fire at Petronas Gas Bhd's GPP Complex A in Kerteh, terengganu on Thurday. In a filing Friday, Petronas Gas (PGB) said the fire, which started at 3pm, was brought under control by the Complex's Emergency Response Team at 3.30pm.  The company said the incident happebed at GPP 3 which was under planned maintenance shutdown. It said there was minimal damage to plan equipment, adding that the incident had not affected the operations of the other gas processing plant units and there was no interruption to the gas suply to the Peninsular Gas Utilisation pipeline network. "Arising from this incident, there is minimal impact to PGB's earnings," it said. PGB said that a number of employees of Hyundai-PFCE Consortium (HPC), which is the contractor engaged to undertake the maintenance works at the GPP, were affected by the incident. "PGB is extending all necessary assistance to the affected personnel and their family members," it said.

https://theedgemalaysia.com/node/66746

F&N up in early trade

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KUALA LUMPUR (Aug 2): Fraser & Neave Holdings Bhd (F&N) shares rose on Thursday after shares of Fraser and Neave  Ltd(F&N) and Asia Pacific Breweries (APB) were suspended on the Singapore Stock Exchange from trading from 8.30am there. At 9.45am, F&N gained 28 sen to RM19.40 with 59.500 shares traded. Reuters reported that the trade halt was due to F&N is pressing for a better offer for its stake in APB than the $4.1 billion offered by its partner Heineken NV, citing sources. It said the Dutch brewer and F&N are embroiled in a tussle over APB, the producer of Tiger Beer. Heineken moved to protect its interests in APB by offering F&N $4.1 billion to take effective control of APB. It will then have to offer another $2 billion in a public tender for minority stakes in the company, said Reuters.

https://theedgemalaysia.com/node/11619

Thai deputy PM proposes UN involvement in solving crisis

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BANGKOK (Feb 26): Thai caretaker Deputy Prime Minister and Foreign Minister, Surapong Tovichakchaikul, on Wednesday proposed inviting the United Nations (UN) to help Thailand resolve the current political conflict, China's Xinhua news agency reported. "If we could bring the UN in, to initiate talks, a solution to the conflict in Thailand might be reached," Surapong was quoted by Bangkok Post, as saying. Surapong said that he had a phone conversation with UN Secretary-General Ban Ki-moon in the morning, to discuss ways out of the crisis. He would bring forward the proposal to the government-run Centre for Maintaining Peace and Order, he said. The United Nations might be most suitable to mediate peaceful talks between the opposing sides in Thailand, Surapong added. "Today, the Thai people must be open-minded. Do not think that this would be an intervention. If a civil war breaks out in Thailand, the UN would have to step in, anyway, to solve problems and build reconciliation," Surapong said. On Wednesday, anti-government protesters from various rally sites, gathered in front of the Royal Thai Police office here, urging national police chief Adul Saengsingkaew, to appoint neutral police officers to investigate recent violent attacks at rally sites, that have caused deaths and injuries of protesters. Protesters called on the police to quickly solve the cases, and bring the culprits to justice.

https://theedgemalaysia.com/node/28867

Axiata plans 20% offering of XL

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KUALA LUMPUR: Axiata Group Bhd is proposing to offer up to 20% equity interest in its 86.5%-owned Indonesian subsidiary PT XL Axiata Tbk (XL) via a book-building exercise to enable investors to participate in its growth directly. In a statement yesterday, Axiata said the exercise would be carried out via an international private placement of secondary shares by Axiata for up to 20% of XL’s issued share capital. Axiata holds its stake in XL via Indocel Holding Sdn Bhd, while the remaining interests are held by Emirates Telecommunications Corporation (Etisalat) International Indonesia Ltd, a wholly owned subsidiary of Etisalat at 13.3% and the public at 0.2%. The final offering price and size would be determined after the completion of the book-building exercise, it said. The offering is expected to be completed by April. Axiata said Goldman Sachs had been appointed as sole global coordinator and along with CIMB Investment Bank Bhd are acting as joint bookrunners. Goldman Sachs, CIMB Investment Bank, PT Mandiri Sekuritas are the joint lead managers. “In the financial year ended 2009, XL made tremendous progress both operationally and financially through strong execution of a focused and well-developed strategy. “On the back of this momentum, and with the continued macro recovery driving capital markets, we believe that this is the right time to conduct this offering, enabling investors to participate in XL’s growth story,” said Axiata president and group CEO Datuk Seri Jamaludin Ibrahim. “As the majority shareholder of XL, Axiata believes an increase in the free float is positive for XL’s long term corporate development as one of Indonesia’s flagship companies,” he said. XL president director Hasnul Suhaimi said the exercise would provide further support to XL to grow as one of Indonesia’s largest listed companies. Axiata is currently evaluating how the proceeds raised from the offering would be used in the group’s businesses and general corporate purposes. This article appeared in The Edge Financial Daily, March 12, 2010.

https://theedgemalaysia.com/node/15789

McKinsey, Google: Internet contributed RM30 bn of Malaysia’s GDP in 2010

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KUALA LUMPUR (Feb 1): The Internet contributed 4.1% or US$9.75 billion (RM30 billion) of Malaysia’s gross domestic product in 2010, but the vast potential has yet to be tapped by the small and medium-sized enterprises (SMEs), according to a joint report issued by McKinsey & Company and Google. In the report “Online and Upcoming: The Internet’s impact on aspiring companies” issued on Jan 31, Malaysia was among the highest of the 30 fast-growing countries crucial to the future of the Internet. McKinsey and Co. used the expenditure method of GDP when it estimated that the Internet contributed 4.1% of Malaysia’s GDP. This represented money spent by the governments, consumers and businesses (as well as money spent by people overseas) on Internet-related goods and services produced in Malaysia. The McKinsey-Google report said Malaysia derives a lot of money from exporting equipment that allows people to use and connect to the Internet. “However, McKinsey believes that over the next three year Malaysia will see significant growth in the value that domestic activity on the Internet delivers to the nation’s economy,” the report said. The report said Malaysia’s Internet had a lot of untapped potential. While Malaysian businesses sell more things online than many other countries with similar wealth, they had yet to invest in Internet advertising to the same extent other countries did/ “Only 1% of Malaysia businesses advertise online, placing the country in the bottom 10% of the 57 countries we ranked for the index,” the report said. The findings of the report and the methodology used were explained by McKinsey principal Nimal Manuel during a briefing. Also present were Deputy Minister for Information Communication and Culture, Datuk Joseph Salang Gandum, Malaysian Communications and Multimedia Commission (MCMC)  chairman Datuk Shahril Tarmizi and Google Malaysia country manager Sajith Sivanandan. Explaining the findings of the report, Nimal said: “If policies are put in place to support financial and human capital development, including raising venture capital and R&D spending and lowering the cost of starting a business, the future of Malaysia’s Internet ecosystem looks strong”. Google’s Sajith Sivanandan said the Internet economy held the key to future growth for Malaysia. “To continue on this trajectory, SMEs that do business online are crucial, along with the continued development of domestic Internet consumption,” he said. However, the report said out of the 700,000 SMEs in Malaysia, only 100,000 SMEs were leveraging on the Internet to get their businesses online despite the encouragement given by the government to exploit the potential of the worldwide web. But this could be improving, said MCMC’s Shahril, following a move by Google and the Malaysian Communications and Multimedia Commission, domain name registrar .my DOMAIN REGISTRY and regional training provider Itrain, to get 50,000 Malaysian businesses online. Shahril said the “Get Malaysian Business Online” (GMBO) programme launched in December 2011, has seen 10,000 businesses registered so far. Meanwhile, Salang said business with an online presence would them to reach out to not just the 17.5 million Malaysian users but also the two billion people globally. As only 100,000 Malaysian SMEs had websites out of the 700,000 doing business, he said the Internet was the most cost-efficient way to test local products on the world stage and reach new markets. “It is something the SMEs should capitalise on," he said. The key findings of the report, which focused on the survey of SMEs, showed that costs of doing business should be reduced in order for entrepreneurship to flourish. * Internet accessibility is low for Malaysian SMEs due to the high bandwidth and domain registration costs. In 2010, it cost US$143 to register a domain in Malaysia compared with US$24 in the US. * While online payment is enabled in Malaysia and parcel delivery does not hinder e-commerce, the high cost of access and lack of Internet readiness make it difficult to reach consumers using the Internet. * Contracts are difficult and costly to enforce – it takes 585 days on average to enforce a contract in Malaysia but only 295 days in regional counterpart Vietnam. * Malaysian SMEs spend significantly less on online advertising than SMEs in other countries. * SMEs throughout Malaysia have yet to leverage on the full benefit of the Internet. Only 20% of Malaysian SMEs use IT extensively in their daily operations. In 201, broadbanf penetration among businesses was only 33%, almost the same levels as Vietnam. Despite significant differences in per capita GDP. Even within those businesses with broadband, the average Malaysian SME provided 69% of its employees with broadband while counterparts in Vietnam provide similar access to 76% of employees.

https://theedgemalaysia.com/node/50645

GLC Open Day to create awareness

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KUALA LUMPUR: The GLC Open Day 2011, which opens this Friday at the Kuala Lumpur Convention Centre, is aimed at creating awareness of the roles played by government-linked entities. Five government-linked investment companies (GLICs) and 18 government-linked companies (GLCs) will take part in the three-day event. “The open day is aptly themed  ‘Nation-Building, Touching Lives’ to reflect the transformation journey as well as demonstrating their contributions to society, especially as GLCs are responsible for delivering various public goods and services,” said the Putrajaya Committee on GLC High Performance (PCG) in a statement yesterday. The GLC Open Day will focus on five clusters which will show how GLCs interact with Malaysians daily, the procurement process and partnership models established for GLCs, and how GLCs provide for the environment in their efforts to win profit. “The current phase of the programme coincides with an exciting period in Malaysia’s economic landscape as the nation charges towards Vision 2020, via implementation of the New Economic Model (NEM). GLICs and GLCs are playing a significant role in contributing to the success of the two pillars of the NEM, the Government Transformation Programme (GTP) and the Economic Transformation Programme (ETP),” the committee said. PCG consists of representatives from the Minister of Finance Inc and the Prime Minister’s Office with participation from the heads of GLICs — Khazanah Nasional Bhd, Permodalan Nasional Bhd, Employees Provident Fund, Lembaga Tabung Angkatan Tentera and Lembaga Tabung Haji. This article appeared in The Edge Financial Daily, June 21, 2011.

https://theedgemalaysia.com/node/2080

Kenanga Research downgrades HPI Resources to hold

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KUALA LUMPUR: Kenanga Research has downgraded HPI Resources to a hold from buy at RM1.65 with a lower target price of RM1.60, and said the company's 3Q10 results were disappointing due to margin compression. It said while the ninth-month revenue of RM271 million was 73% of its forecast, net profit of RM15.6 million merely accounted for 68% of full year's forecast. The sudden crimping of its margins on higher input prices especially paper was to blame, it said. The research house said that quarter-on-quarter, HPI's revenue was up 7% on higher contribution including both its Malaysian operation (+6.5%) as well as Cambodia (+11.3%). "Margins however took a beating with group gross margin easing to 13.6% from 18.9% previously. Malaysian pretax margin eased to 4.2% (2Q10: 7.6%) while Cambodia collapsed to a mere 1.2% (2Q10: 14.8%). "Year-on-year, revenue rose 22% with net profit jumping 110%. Higher revenue driven mainly by a general improvement in the global economic conditions while net was up by a bigger quantum to a combination of higher turnover and lower effective taxes," it said. Kenanga Research said the company's outlook was becoming slightly more uncertain in the near term especially margins given volatile commodity and currency markets. While global economic conditions continue to improve, profitability however could pose a near term risk given recent volatility in input prices and currencies, it said. Paper prices have continued to firm on growing demand from China while supply for pulp was crimped due to the recent quake in Chile which supplies some 8% of global pulp, it said. "While maintaining our topline forecast, margins are lowered as we factor in a tougher environment going forth. Re-pricing of its end products could lag the commodity and currency cycles in the near term. Lowering our net forecast by 22% to RM18 million for FY10 and another 32% for FY11 to RM16.2 million," it said.

https://theedgemalaysia.com/node/47715

Quiet 1Q in the Klang Valley

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KUALA LUMPUR: The Klang Valley property market has been quiet in the first quarter of 2011 (1Q11). Though it has picked up, property consultancy PPC International Sdn Bhd does not expect the market to be vibrant in the coming months. According to PPC, school and festive holidays in January and February — the New Year, Thaipusam and Chinese New Year — contributed to the slowdown which began at the tail end of 2010. “However, there have been sporadic new launches of development schemes, residential deals, and retail and commercial transactions,” said PPC managing director Siders Sittampalam. He added that 2Q would see some improvement over 1Q as there are more transactions of commercial and residential properties this month. “We do not anticipate a very vibrant market in the following months given the current rise in prices of fuel and essential items and local and international events — such as the impending general election in Malaysia and natural disasters like the earthquake and tsunami in Japan, which may dampen the global economy. “As the property market works within the framework of the economy, it is bound to be affected,” Siders said. Other factors such as the reduction of the loan-to-value ratio to 70% for third-house buyers and the probability of further rises in interest rates could have an impact on the property market. In its market review for 1Q11, Siders said the residential segment saw some new property launches in Shah Alam, Puchong, Damansara and Kajang with selling prices ranging from RM260,000 to RM5.4 million. For landed properties, low-density developments were more popular with terraced and semi-detached houses in preferred locations within the Kuala Lumpur city fringes. “Kajang, Puchong, Klang, Cheras and Sungai Buloh have been the popular locations for new launches,” the report said. PPC said stratified properties such as condominiums and apartments are well sought after in the secondary market in locations within the Klang Valley as evidenced by the volume of transactions in late 2010. “House buyers look for unique features and proximity to the city centre with good accessibility via highways,” said Siders. The report noted that in 1Q, there were not many new launches of high-end residential properties, which could imply that demand for this segment had stabilised. In the commercial/office sector, the report said that last year there were several new Grade A offices within KL City and its fringes, including Petaling Jaya. They are Hampshire Place, Menara Worldwide and HSBC’s new headquarters which add to the existing 59 million sq ft of office space. “The asking rents ranged between RM5.50 and RM7.50 psf a month with the occupancy rate from 55% to 70%,” it added. There are new office buildings due for completion from April 2011 to 2013 within Petaling Jaya, indicating an increasing supply of premises with better facilities. These include Plaza 33 in Section 13 that will have a net lettable area (NLA) of 500,000 sq ft and Point 92 in Damansara Perdana with 158,112 sq ft. Both are scheduled for completion next year. In the retail sector, there is a rising trend of neighbourhood malls. These medium-sized shopping complexes have emerged largely to cater to residents who prefer to shop close to their homes to avoid traffic congestion and have more time for family-oriented activities.      Last year, there were new entries of medium-sized malls such as One Mont’Kiara, Empire Shopping Gallery (Subang) and SS Two Mall. Some new shopping malls to be launched this year and in early 2012 are Citta Mall, Ara Damansara and the Festive Mall in Danau Kota, Setapak. This article appeared on the Property page, The Edge Financial Daily, April 15, 2011.

https://theedgemalaysia.com/node/8513

#Preview* China's official PMI seen hitting 8-month low, barely showing expansion

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BEIJING (Feb 26): China's factory activity likely expanded only slightly in February, a Reuters poll showed, dropping to an eight-month low that would indicate a modest slowdown is continuing. China's official manufacturing purchasing managers' index (PMI) may slip to 50.1, down from January's 50.5, according to the median forecast of 12 economists in the poll. A reading above 50 indicates expanding activity while one below that level points to a contraction. If February's reading is below 50.5, it will be the third straight month of decline since November's 51.4. The last time the index was below 50 was in September 2012, when it was 49.8. A preliminary survey released last week by HSBC and Markit Economics showed that the factory sector activity hit a seven-month low of 48.3, from 49.5 in January. The index for new orders dropped below 50, and employment reached its lowest point since the global financial crisis. "Usually we observe if the HSBC PMI has seen such a big decline, then the official one will also see a similar downward trend, but not as bad," said Wei Yao, China economist at Societe Generale in Hong Kong. The official PMI is weighted more towards bigger and state-owned enterprises and tends to paint a rosier picture than the HSBC/Markit private survey, which focuses more on smaller firms and those in the private sector. "When the economy slows down, usually the private sector feels the squeeze first," Yao said. Analysts cautioned against reading too much into this month's preliminary Markit/HSBC numbers, given the smaller-than-usual number of work days. The Lunar New Year festival, which began on Jan. 31 and covered early February, likely affected factory output as manufacturers shut for China's biggest annual holiday. China's economic indicators have been mixed of late - weak investment and declining PMI readings have been countered by surprisingly buoyant exports and bank lending. This makes it hard to draw firm conclusions about the economy's direction. The government has been trying to reduce the economy's dependence on exports and enhance the role of domestic consumption, but it is unclear how much growth it might be willing to sacrifice for its goal. In 2013, China grew 7.7 percent, steady from the previous year and fractionally above market expectations of 7.6 percent, which would have been the slowest since 1999. Economic growth targets for 2014 have yet to be made public. Government economists have said the official target could again be 7.5 percent, the same as the 2013 target. The official PMI figures will be released on Saturday, March 1 at 9:00 am (0100 GMT). The final HSBC/Markit PMI is due on March 3 at 9:45 am (0145 GMT).

https://theedgemalaysia.com/node/26721

Dutaland turns around to post 2Q profit

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KUALA LUMPUR: Dutaland Bhd managed to turn around to register a net profit of RM598,000 for the second quarter ended Dec 31, 2009 (2QFY10) versus a net loss of RM12.77 million a year earlier, thanks to a higher profit contributed by the property division and plantation division of RM3.8 million and RM2.8 million, respectively. Dutaland said today the stronger profit was also due to higher forex gain of RM1.7 million and lower impairment loss on investments of RM1.8 million. It posted a net loss of RM4.80 million on a revenue of RM12.48 million in 1QFY10. 2QFY10 revenue rose 7% to RM18.24 million from RM17.05 million a year earlier, while basic earnings per share (EPS) stood at 0.1 sen versus basic loss per share of 2.26 sen previously. For the six months ended Dec 31, 2009, the company posted a net loss of RM4.20 million versus a net loss of RM16.60 million a year earlier.

https://theedgemalaysia.com/node/97064

China's FDI soars 24% in July

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BEIJING (Aug 23): China's foreign direct investment (FDI) surged 24.13 per cent year-on-year to US$9.41 billion in July, posting its sixth consecutive monthly increase since February, and the largest expansion since March 2011, according to the Ministry of Commerce (MOC). In the first seven months of the year, the FDI volume increased 7.09 per cent year-on-year to US$71.39 billion, MOC spokesman, Shen Danyang told a press conference here, Friday. However, the number of companies established by foreign investors dropped 7.68 per cent year-on-year to 12,626 from January to July this year, he said. Shen said for the same period, investments from the United States was up 11.44 per cent to US$2.18 billion, while spending from the European Union (EU) surged 16.72 per cent to US$4.64 billion. From January to July, the FDI inflow from Asean countries rose to US$61.73 billion, up 7.74 per cent year-on-year, he added. He said investments from Japan rose 9.57 per cent year-on-year to US$5.18 billion during this time. In terms of overseas direct investment (ODI),  China recorded US$50.6 billion in the first seven months of the year, up 20 per cent year-on- year. Shen said spending by China in seven major economies, including Hong Kong, Asean countries, the EU, Australia, the US, Russia and Japan, hit US$35.7 billion. It accounted for 71 per cent of its total spending in the first seven months of 2013. He said investment to the US surged 278 per cent, followed by Australia (78 per cent), the EU (74 per cent), Asean countries (33 per cent) and Russia (21 per cent). However, direct investment in Hong Kong and Japan, slowed by 5.3 per cent and 11.5 per cent respectively, Shen added.

https://theedgemalaysia.com/node/8619

Update: Telekom 4Q profit falls 5% y-o-y to RM344m

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KUALA LUMPUR (Feb 27): Telekom Malaysia Bhd’s net profit fell 5% year-on-year (y-o-y) to RM344 million in the fourth quarter ended Dec 31, 2013, from RM363 million. But revenue rose 6% y-o-y to RM2.98 billion from RM2.81 billion. In a statement to Bursa Malaysia, the telecommunications giant declared a final dividend of 16.3 sen per share, taking total dividend payout to 26.1 sen per share for the full year of 2013. For the full-year period, net profit fell to RM1.01 billion from RM1.26 billion in the previous year, while revenue recorded was higher at RM10.63 billion from RM9.99 billion a year ago. more to come

https://theedgemalaysia.com/node/11412

IQ Group in JV with Taiwan LED company

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SemiLEDs is principally involved in the business of developing and manufacturing LED chips and LED light engines. It has a paid up capital of NT$1.53 billion (RM164.33 million). IQ Group said the shareholding of the joint venture (JV) company, SILQ (M) Sdn Bhd, which is to be located in Penang, would be equally divided between the company and SemiLEDs as a part of the non-binding portion of the MoU. The announcement further stated that the definitive JV agreement would be executed by both parties within three months from the date of the MoU, unless both parties agree to an extension.

https://theedgemalaysia.com/node/71325

Astro Malaysia is priced to perfection

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Astro Malaysia Holdings Bhd Listing date: Oct 19IPO price: RM3 Initiate coverage with add rating and target price of RM3.12: At its IPO price of RM3, Astro does not come cheap at 32 times calendar year 2013 earnings per share and an enterprise value-to-earnings before interest, tax, depreciation and amortisation  of 13 times, double its industry peers. But the value proposition is not only a piece of the largest pay TV operator in Malaysia, but the best operator that is second to none. Astro has an unrivalled 99% residential market share in the pay TV segment and a leading market share in the radio segment — a 53% share of radio advertising expenditure (adex). Its strong branding and consumer awareness also mean that Astro is not merely a household name but one that is synonymous with pay TV. We initiate coverage with an “add” rating and target price of RM3.12 based on a 10-year discounted cash flow valuation (weighted average cost of capital of 8.7% and terminal growth of 1%). We believe Astro will be able to maintain its market leadership position in the near to mid term, penetrating new market segments in the pay TV space, as it maintains a tight rein over its premium content. While competition is likely to intensify, and as subscriber growth penetrates the mass market pressuring average revenue per user (ARPUs), this would likely be mitigated by higher high-definition take-up going forward. Product re-bundling, price reviews and introduction of premium services should continue to aid ARPU enhancement, hence profitability. ARPU has increased from RM82 in financial year 2010 (FY10) to RM92 for the first half of FY13. In addition, there is scope to grow its share of adex in the broadcast segment as rising pay TV penetration will make advertising on Astro more compelling. Since Astro began swapping out its subscribers’ set top boxes with the new B.yond boxes, profitability has been dampened by higher customer acquisition cost and depreciation charges for the boxes. We forecast FY13 net earnings to decline by a further 24% year-on-year (y-o-y) to RM476 million, after a 24% fall in FY12, despite a 9% growth in revenue. Earnings will recover by FY15 (+34% y-o-y to RM653 million) once the majority of subscribers have migrated to the new B.yond box. Piracy, rapidly changing technologies and increasing competition are the key challenges faced by Astro. However, its improving quality of delivery (through fibre technology) will mitigate some of this risk. Furthermore, with a still moderate pay TV penetration rate of 50%, there is sufficient room for growth. Regulatory risk, including the loss of key operating licences and Astro’s dependence on satellite transponder capacity, are also areas of risk. There is a material litigation suit by a satellite equipment vendor as well, which has submitted claims for RM1.3 billion due to loss of commercialisation. This matter will proceed to arbitration. — Affin IB Research, Oct 15 This article first appeared in The Edge Financial Daily, on Oct 16, 2012.  

https://theedgemalaysia.com/node/57012

Former residents of Highland Towers have moved on, but painful memories remain

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KUALA LUMPUR: Twenty years ago yesterday, Dr PG George’s life fell apart when his wife and two young daughters perished in the Highland Towers tragedy. Wearing the same shirt he last wore when the building collapsed, he recalled leaving office that day at 1.15pm to find no home or family waiting for his return. “This shirt is the only thing I have left from that house,” he said. Looking at the now dilapidated, bush-covered site where two other blocks still stand today, George, for a moment, could not bring himself to talk of the pain of his loss. He was one of many who visited the site yesterday to pay their respects, although there was no official memorial service planned. “I was hoping against hope that at least one would survive. Losing one family member was bad enough … can you imagine losing all of them?” George continued. The 72-year-old consultant obstetrician and gynecologist said Highland Towers was one of the best apartments available in Kuala Lumpur at the time. It had four rooms and a maid’s room with separate toilet and facilities included  a tennis court, swimming pool and badminton court. A total of 48 people died in the collapse and survivors who shared that tragic memory supported each other for eight to nine years. Now, George said, everyone has moved on. He has since remarried and now has a 14-year-old daughter. “I still visit this place because the ‘touch’ is still there ... the memory of my family,” he said. The site is now fenced up and padlocked. According to former residents, there was a memorial plaque with the names of fallen neighbours erected six months after the tragedy, but it went missing later. TV host Sasha Bashir was among the luckier ones as her mother and younger sister escaped from the rubble. “A plain miracle”, she called it. The 33-year-old said she lived there until the building collapsed. She was 13 then. “Having gone through such an experience, there is a silent understanding among us [former residents]. When we meet, we talk about our current lives and the future,” she said. Earlier, a classmate of  Douglas Ong Tee Meng, who was among those killed in the tragedy, also came to pay his respects. “The incident still haunts me to this day, I could have saved him. He [Douglas] was a very dear friend and I was on the phone with him about 24 hours before the incident. I remember that I had invited him over to my place but he declined because he needed to babysit his cousins,” he said. Douglas, who was 17 then, and his three cousins did not make it out of the tower that day. “For a well-to-do guy like him, he was very down to earth,” he said, adding that he is even considering migrating soon as the tragedy was too much for him to bear. The classmate, who declined to be identified, also brought old newspaper clippings, photographs of them in school uniforms and a postcard to the site. “Look at this stamp, it says Dec 13, meaning he must have sent me this card days before the collapse.” he said. The secretary of the Highland Towers Residents Committee, Chan Keng Fook, who lived in Block 2, still carries vivid images in this mind of the chaos that broke out in 1993. “I was at work and my dad called me screaming at the top of his lungs: Come back! Get help! Block 1 collapsed! The moment I drove up to the apartment, the building was gone and I saw an Indian lady covered in white dust running away from it,” he said. Pointing at the poster of victims’ names and photographs, Chan spoke fondly about his neighbours and how some had lost their way in life while grieving for their loved ones back then. “Six-week-old baby girl, Quah Li-Jun’s death devastated the mother because the family had tried very hard to have a child,” he recalled. The land occupied by Highland Towers is to be sold via a tender exercise by Ambank. The property includes 50 freehold bungalow lots surrounding the site. 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 December 12, 2013.

https://theedgemalaysia.com/node/67492

#Flash* EPF 3Q investment income jumps 44% yoy to RM10.11b

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Flash: EPF 3Q investment income jumps 44% yoy to RM10.11b

https://theedgemalaysia.com/node/2679

Will Middle East collapse affect Iskandar?

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It is well documented that the first few phases of Iskandar Malaysia will see some significant participation from the Middle East. Investors and developers from Abu Dhabi, Dubai and Kuwait have committed to building the initial phases in the country’s landmark development project such as the financial centre. But figures on how much exactly these Middle East companies have sunk so far in the project and what exactly are their investment schedule are difficult to determine. Despite efforts by The Edge to contact the various parties, the estimates and commitments fulfilled so far cannot be determined. What can be determined is a compilation of commitments and preliminary investments, based on public records. UEM Land Bhd, which is the owner of a large tract in Iskandar Malaysia, has said that it would be disclosing more details after negotiations firmed up and regulatory approval granted. When The Edge contacted Iskandar Investment Bhd (IIB), the landowner of Medini, one of the key development zones in Nusajaya which has received plenty of Middle Eastern interest, the company declined to reveal how much has been paid up so far, save that it has received up-to-date payments until the first quarter of 2009. As for UEM Land, the developer of Nusajaya, it says it is waiting for regulatory approval for one of its partnerships with Dubai-based Limitless LLC, and still firming up an agreement with Damac Properties, another Dubai company. As the economies of the Middle East start to crumble under the weight of the global economic crisis, the elephant in the room no one is talking about is how likely they are to pull out of the multi-billion-ringgit Iskandar project. With Iskandar Malaysia’s reported total committed investments running at around the RM40 billion mark, some have questioned whether the RM5 billion or so committed by Middle Eastern investors will be missed should they decide to pull out. In fact, UEM Land’s managing director Wan Abdullah Wan Ibrahim told The Edge that there were other investors waiting in the wings should Dubai investors in Nusajaya get cold feet. However, the catch is that unlike the other billions of ringgit being spent to develop infrastructure and industrial zones, the Middle East money is going towards high-profile and high-end signature projects to raise the standing of Iskandar Malaysia. Described as “catalytic projects,” these jobs are being built on greenfields in a bid to attract further investments as a form of pump priming. Middle Eastern interests are concentrated in two pockets of development —  Medini, formerly known as Node 1, and Puteri Harbour. In Medini, the commitments amount to about US$1.2 billion (RM4.8 billion), while the amount committed in Puteri Harbour has yet to be finalised. Middle Eastern interests in Medini, however, are different from that in Puteri Harbour because IIB, the landowner, does not sell the land but leases it on a long-term basis. IIB is 60% owned by government investment arm Khazanah Nasional Bhd, and 20% each by the Employees Provident Fund and Kumpulan Prasarana Rakyat Johor, the  state investment arm. Medini is divided into three “clusters” of development — a lifestyle and leisure cluster, a cultural cluster and a financial cluster also known as the Iskandar Financial Zone. In August 2007, IIB had entered into conditional agreements with three consortiums led by Mubadala Development Company from Abu Dhabi, Kuwait Finance House (KFH) and Dubai-based Millenium Group. Their commitments, respectively, were US$520 million to develop the leisure and lifestyle cluster, US$330 million to develop the cultural cluster and US$325 million to develop the financial cluster. At that time, IIB also said it had entered into a memorandum of understanding with Aldar Properties PJSC from Abu Dhabi to act as its master developer for Medini, although it is not clear whether that agreement is still valid. The agreements were later firmed up in 2008, with Aldar taking up a stake in Mubadala’s consortium, Global Capital Sdn Bhd, to develop the leisure and lifestyle cluster. The definitive agreement between Global Capital and Rim City Sdn Bhd, IIB’s subsidiary and project development vehicle, was struck in May 2008. IIB owns 70% of Rim City while Dubai’s Jumeirah Capital Group holds the other 30%. Mubadala-led special purpose vehicle, Iskandar Holdings (Company) Ltd, is the primary shareholder of Global Capital with a 60% share, while IIB holds 30% and the other 10% stake is owned by Alpha Five, a subsidiary of UWI Holdings. Aldar has a 19% interest in Iskandar Holdings, which is incorporated in the Cayman Islands. The Millennium Group, which also has an agreement with IIB to develop the Iskandar Financial Zone, also has a stake in Iskandar Holdings. It is believed that Global Capital has made an initial investment of US$52.2 million, or 10%, of the total investment for the first phase of development, which is expected to be completed in 2014. KFH’s deal with IIB was also mooted in 2008 after Rim City signed a definitive agreement with Cultural Cluster Sdn Bhd, which is KFH’s SPV. Like the Mubadala arrangement, IIB is also a 30% partner in Cultural Cluster, with the remaining 10% stake taken up by Alpha Four Ltd. IIB has committed to take up a 30% shareholding in all developments in Medini to provide direction to the development. Based on a company report on Cultural Cluster obtained from the Companies Commission of Malaysia, Cultural Cluster has “charges” amounting to RM1.5 billion with CIMB Islamic Bank Bhd, which is slightly more than the RM1.23 billion projected investment cost of the development. As for the deal with Millenium Group, IIB says the deal has been firmed up but details on the definitive agreement could not be determined as at press time. Calls to Richard Polkinghorne, Millennium’s country manager for Malaysia, were unsuccessful. Aside from the US$52 million invested by Global Capital, it is not known how much has already been invested in Medini. Over at Puteri Harbour,  Middle Eastern commitments include a plan to develop a 111-acre high-end housing project by Limitless, which is wholly owned by Dubai World. Limitless has embarked on a joint venture with UEM Land in a 40:60 partnership to develop what is tentatively being called Residential North Puteri Harbour. A special development vehicle, Haute Properties Sdn Bhd, has been created to develop the project. When The Edge spoke to  UEM Land managing director Wan Abdullah last month, he said the development plan for Residential North has been submitted. According to the terms of the conditional agreement, UEM Land will receive RM241.7 million from Haute Properties in exchange for development rights. This means that Limitless will be on the hook for RM96.68 million, although this payment is just for development rights. The development cost of the project, however, is still unknown, pending approval by regulatory authorities. Elsewhere in Puteri Harbour,  Damac Properties is in the process of concluding a sale and purchase agreement with UEM Land to buy three parcels of land on the western side of Puteri Harbour spreading over 17.4ha for RM396.44 million. According to Wan Abdullah, discussions between UEM Land and Damac are in their final stages, although there were some one or two conditions yet to be fulfilled by UEM Land. The scope and scale of Damac’s development have not been made public, although Wan Abdullah had said the Dubai firm is considering scaling down its plans for Puteri Harbour. Damac has come under increasing pressure since the new year after the property market in Dubai, which has been superheated over the last several years, took a drastic 180 degree turn. As a result, the company has started paring down its operations overseas. For instance, international news agencies reported that Damac had sold 60% of its housing interests in New Cairo, Egypt, to the Housing and Development Bank of Egypt after weeks of speculation and flat-out denial by Damac’s management. Wan Abdullah had said earlier last month there was no indication that Damac was looking to back out of Nusajaya. When contacted, UEM Land said in an email reply that there have been no updates to either deals, although it said that Limitless has set up an office in the region, and continues to be committed to Puteri Harbour. In summary, the total committed in Nusajaya by Middle Eastern investors is at least RM5.2 billion. However,  the figure should rise substantially beyond that, but it’s a gamble these days to think that everything will go according to plan. Coming back to the first question: just how dependent is Iskandar Malaysia on Middle Eastern money? Based on the amount of negotiations and the world-class plans for the city, it defies the imagination how Middle Eastern money could be replaced at this time and juncture. However, both IIB and UEM Land have given their assurances that the Middle Eastern partners are not pulling out anytime soon, the reasoning being that Iskandar Malaysia represents much better value for money for them than any­where else during these trying times. But if economic conditions continue to spiral downwards in their home countries, it becomes increasingly difficult to see them continue their expansion, regardless of how good a bargain Iskandar Malaysia sounds. As one property analyst tells The Edge, “You just can’t get blood from a stone.” This article appeared in the Cover Story page, The Edge Malaysia, Issue 745, March 9-15, 2009  

https://theedgemalaysia.com/node/45992

Asian markets dip on Japan quake aftermath

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KUALA LUMPUR: The FBM KLCI extended its losses at mid-morning on Monday, March 14 in line with the weaker trade at key regional markets in the aftermath of the devastating earthquake last Friday in Japan. Japanese stocks were down more than five percent in early trade while the yen rose in volatile trade as the country battled to prevent a nuclear catastrophe after the earthquake and tsunami feared to have killed more than 10,000 people, according to Reuters. The FBM KLCI fell for the third consecutive day, and was down 4.14 points to 1,491.48 at mid-morning.  However, the index managed to pare down its losses after having fallen to a low of 1,480.53 in early trade. Losers led gainers by 297 to 133, while 174 counters traded unchanged. Volume was 185 million shares valued at RM170.91 million. At the regional markets, Japan’s Nikkei 225 fell 4.53% to 9,789.55, Hong Kong’s Hang Seng Index was down 0.62% to 23,105.49, Singapore’s Straits Times Index fell 0.42% to 3,030.83, Taiwan’s Taiex lost 0.43% to 8,530.84, the Shanghai Composite Index shed 0.29% to 2,925.26 while South Korea’s Kospi edged up 0.07% to 1,956.98. Maybank Investment Bank Bhd Research ‘s Wong Chew Hann in a note March 14 said the FBM KLCI would remain weak as it awaits the assessment of last Friday’s deadly earthquake and tsunami, and its impact on the Japanese economy. The possibility of a nuclear disaster that could push crude oil and commodity prices up to new highs pose new downside risks, she said. “Amidst the gloom, Malaysia’s fundamentals stay intact, being a net oil exporter and with the ETP in full force to drive growth. We reiterate our domestic focused strategy. “Timber stocks may receive a lift in anticipation of Japan’s rebuilding efforts for housing,” said Wong. Among the losers on Bursa Malaysia in early trade, Nestle fell 78 sen to RM45; BAT lost 44 sen to RM45.16, Genting Plantations 27 sen to RM7.60, PPB  and F&N lost 22 sen each to RM16.50 and RM15.48, Panasonic 20 sen to RM19.30, Aeon 13 sen to RM5.87 while Atlan, MAHB and KLK fell 12 sen each to RM3.26, RM5.95 and RM20.54 respectively. Berjaya Retail Bhd shares were actively trade after Pemier Merchandise Sdn Bhd (PMSB), which controls 58.71% of the company issued notice to take it private at 65 sen per share. The stock added 21 sen to 63.5 sen with 20.7 million shares done. Meanwhile, timber-related stocks also advanced on expectation of an increase of demand for timber products following the earthquake in Japan. Jaya Tiasa was up 20 sen to RM5.05, Ta Ann added 15 sen to RM4.91 while WTK was up nine sen to RM1.35. Other gainers included Petronas Chemicals, HPI, Coastal Contracts and Mutiara.

https://theedgemalaysia.com/node/94488

#Market Close* KLCI rises 0.3% on bargain hunting; US, China data

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KUALA LUMPUR (August 1): The KLCI erased losses to end 5.2 points or 0.3% higher at 1,777.82. Analysts said the gains came on bargain hunting for beaten-down stocks following a substantial decline in the index yesterday. They said the absence of indication on the timing of the US Federal Reserve's planned reduction of its bond-buying, apart from news on China’s manufacturing sector growth, had also helped the KLCI advance. This came amid regional market gains.  "The US Federal Reserve's statement could have had a bigger impact on world stock markets today," an analyst told theedgemalaysia.com over telephone today. The KLCI's rise came on gains in stocks like Genting Malaysia Bhd and Public Bank Bhd. Yesterday, the KLCI fell 22.46 points or 1.25% to close at 1,772.62 points. Reuters reported that the Federal Reserve on Wednesday said the U.S. economy continues to recover but is still in need of support, offering no indication that it is planning to reduce its bond-buying stimulus at its next meeting in September. Wrapping up a two-day gathering, the central bank said it would keep buying $85 billion in mortgage and Treasury securities per month in an effort to strengthen an economy that it said was still challenged by federal budget-tightening. Growth in China's manufacturing sector picked up slightly last month, an official survey showed, exceeding market expectations. But a separate HSBC PMI (Purchasing Managers' Index) survey showed China's factory activity shrank for a third straight month in July, matching a preliminary reading published last week. Today, Bursa Malaysia saw 1.46 billion shares worth RM2.13 billion changed hands. There were 537 gainers versus 233 decliners. The top gainer was British American Tobacco (M) Bhd while Petronas Gas Bhd led decliners. Most active was Daya Materials Bhd. Abroad, Japan’s Nikkei 225 climbed 2.47%. Within China, Hong Kong's Hang Seng rose 0.94% while the mainland's Shanghai and Shenzen Composite increased 1.77% and 3.05% respectively. Nearer to home, Singapore's Straits Times rose 0.58%.

https://theedgemalaysia.com/node/97243

#Update* PBA doubles Penang water conservation surcharge

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KUALA LUMPUR (August 26): Penang state-controlled water operator PBA Holdings Bhd will  double its water-conservation surcharge (WCS) to 48 sen per 1,000 litres for monthly consumption of above 35,000 litres in the state. This compares to the current 24 sen. In a statement to Bursa Malaysia, PBA said the higher WCS will be implemented beginning this September 1. According to Jaseni Maidinsa who is general manager of Perbadanan Bekalan Air Pulau Pinang Sdn Bhd, which in turn is wholly-owned by PBA, the group "had no choice but to introduce a higher WCS to promote water conservation immediately". He said PBA can no longer afford the RM65.4 million water subsidy a year in Penang. This takes into account the company's operating profit of RM28.9 million in 2012 and expected capital expenditure of RM99.9 million in 2013. "We cannot afford an even higher subsidy in 2013 without compromising water-supply services," Jaseni said. The proposed higher WCS comes at a time when water usage in Penang has increased above the national average. Jaseni said Penang's daily per capita water consumption had reached an all-time high of 302 litres as at June 30, 2013 from 294 litres in 2012. The 2012 figure compares to the national average of 210 litres, he said, quoting the Malaysia Water Industry Guide 2012. During the year, Jaseni said the WCS had not affected 72% of Penang's population who used less than 35,000 litres of water a month.

https://theedgemalaysia.com/node/86894

Cahya Mata Sarawak 1Q profit falls 8% to RM29 mil

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KUALA LUMPUR (May 22): Cahya Mata Sarawak Bhd’s (CMSB) first quarter net profit declined 8.35% year-on-year on lower share of profit from its listed associates. In a statement to the exchange, the diversified firm with undertakes construction, property develoment and financial services, said net profit for the first quarter ended March 31, 2013 (1QFY13) was RM28.73 million against RM31.35 million. Revenue stood at RM310.36 million, up 34.74% from RM230.34 million. CMSB said its associate K&N Kenanga Holdings Bhd had  recorded a loss during 1QFY13. “However, the decline was mitigated by higher profits from KKB Engineering Bhd. OM Materials (Sarawak) Sdn Bhd which has yet to commence operations, recorded a marginal profit from interest income,” said CMSB. On its prospects, CMSB group managing director Datuk Richard Curtis said the group remains confident of its sustainable growth in the medium and long term. "Sarawak is expected to remain relatively insulated from global uncertainties thanks to the many projects taking off in the Sarawak Corridor of Renewable Energy  which are set to propel the state’s economy and gross domestic product to new heights.” Curtis said.

https://theedgemalaysia.com/node/51707

E&O to sell Penang property

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KUALA LUMPUR: Eastern & Oriental Bhd (E&O) has proposed to dispose of a property on Penang Island that will result in a gain of RM66.26 million for the group. In an announcement to Bursa Malaysia yesterday, the group said its indirect wholly-owned subsidiary E&O-Pie Sdn Bhd had entered into a sale and purchase agreement with Soaring Profit Sdn Bhd to sell a piece of freehold land measuring 27,743.7 sq m in Bandar Tanjong Pinang section 1, together with the building erected thereon for RM134 million in cash. E&O’s original cost of investment in the land in May 2004 was RM13.57 million while the construction cost of the building from March 2009 to May 2011 amounted to RM54.17 million. The property, which is situated on the east side of Jalan Tanjong Tokong, forms part of the mixed development known as Phase 1 of E&O’s Seri Tanjung Pinang project. Construction of the property was completed on May 23 this year. The building consists of approximately 269,418 sq ft in gross floor area and 1,042 parking bays. The property has been leased to a hypermarket operator since May 26 for 20 years. “The proposed disposal is in line with the group’s strategy of preserving capital value and strengthening the balance sheet through realising cash resources which can then be deployed in other projects and investments to maximise the returns of the E&O group and/or for repayment of borrowings,” said E&O. This article appeared in The Edge Financial Daily, July 12, 2011.

https://theedgemalaysia.com/node/24591

KLCI, Asian markets down on euro worries

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KUALA LUMPUR: The FBM KLCI remained below the 1,500 level at midday on Tuesday, Nov 23 as investors stayed cautious after key regional markets tumbled, while the euro and commodities declined, as a bailout for debt-soaked Ireland failed to allay fears of a wider euro zone crisis. At 12.20pm, the 30-stock FBM KLCI fell 0.32% or 4.76 points to 1,498.44. Losers thumped gainers by 537 to 137, while 247 counters traded unchanged. Volume was 506.38 million shares valued at RM797.23 million. The Shanghai Composite Index tumbled 2.49% to 2,812.55, Hong Kong’s Hang Seng Index fell 1.81% to 23,097.28, the South Korean Kospi down 1.14% to 1,922.13, Singapore’s Straits Times Index down 1.04% to 3,157.78 and Taiwan’s Taiex fell 0.35% to 8,345.68. Japan’s stock market was closed for the Labor Thanksgiving holiday. The euro had initially spiked on Monday on news of a European Union and International Monetary Fund bailout for Ireland, where a property bust has pushed the nation's banks to the brink of collapse and blown a hole in the public finances, according to Reuters. Also, moves by the authorities to cool the property market continued to weigh in Hong Kong, where the property sub-index fell 2.6%, it said. The ringgit weakened 0.39% to 3.1155 versus the US dollar; gold fell US$8.45 an ounce to US$1,358 and crude oil shed 46 cents per barrel to US$81.28. Meanwhile, crude palm oil futures for the third month delivery gained RM8 per tonne to RM3,192. At Bursa Malaysia, the top losers included DiGi that fell 42 sen to RM24.38, BAT down 28 sen to RM44.88, Kulim down 18 sen to RM12.48 while PetGas and PetDag lost 14 sen each to RM11.12 and RM10.98. PPB fell 38 sen to a month’s low of RM18.42, after it reported a set of weaker earnings and was downgraded to fully valued. Gainers included Nestle, Hap Seng, SEG International, S P Setia and AirAsia. Nestle rose 44 sen to RM43.84 with 100 shares done, Hap Seng added 12 sen to RM4.76 while Air Asia gained eight sen to RM2.56 while Air Asia-JA added nine sen to 77 sen. Axiata was the most actively traded counter with 17.1 million shares done. The stock was unchanged at RM4.49.

https://theedgemalaysia.com/node/46432

Shimmer & Shine

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After the slumber of winter comes spring, a time where the earth awakens, and the world is once again awash with colours. As it is in nature, so it is in the world of fashion and makeup. Bid goodbye to sombre and muted shades of the past season, and say hello to the vibrant and enthusiastic colours of spring. Even as you update your wardrobe with the season’s choicest picks, be sure to update your makeup, too. Inject freshness into your look with spring colours that run the gamut from dreamy pastels to bold, dramatic shades. Purple in all its different variations is one of the hottest colours this season. Purple is one of the most versatile colours, and you can create a sweet and demure look, or a sultry, glamorous one with the colours from Bobbi Brown, Lancôme or Estée Lauder, all of which offer their own interpretation of this very chic colour. Bobbi Brown’s Peony & Python palette is inspired by lush peonies and the casual chic sensibility of world-renowned fashion label Tibi. Soft pink lilacs merge with sumptuous greys to create a distinctive eye look that’s equal parts lovely and edgy. At Lancôme, creative director Aaron De Mey evokes the spirit of the 1970s with a colour collection that’s all about lavender hues. The colour harmonies are fresh, ethereal and natural, as they are intense and sophisticated. Warm and cool tones are contrasted with gold or silver shimmer for a hint of disco glamour. The new colours for Estée Lauder by creative makeup director Tom Pecheux pulsates with energy and enthusiastic colour. In this collection, lips delight in shades of electric orange, brazen cherry and violet plum, and eyes are brightened with a subtle mix of warm, smokey ember and neutral shades with shimmering deep plum for maximum depth and attention. If you’re not afraid to experiment with bold, vibrant colours, Shu Uemura is the brand for you. This season, Shu Uemura artistic director Kakuyasu Uchiide, inspired by the extraordinary blue morpho butterfly, created a collection of breathtakingly luxuriant tones in dramatic polychromatic shimmers and dynamic colours of astounding hues and dazzling iridescence. The eye and cheek palette combines vivid blue and rich purple with fresh green and pure pink, and another has sunset tones in bronze and brown, and peach and rosy hues with a touch of shimmering white. The brand’s first and new “metamorphose pearls” of loose powder-type eye colour comes in shades like aqua green, ivy gold and khaki silver. And let’s not forget the false eyelashes — this time, there are partial lashes in forest green and deep purple. But if you prefer to play with softer colours, look no further than RMK. This season’s collection delivers a spectrum of fresh, playful spring hues. A star product is the double-ended crayon for the eyes that comes with a shimmer powder applicator tip on the other end. The crayon provides a creamy texture to your eyelids, and the fine polarised powder adds a soft shimmer to the finish. Seven colours are available: coral beige, light green, light blue, gray, bronze, gold and silver. Chanel’s Les Perles de Chanel makeup collection is inspired by Coco Chanel’s belief that “the light-reflecting property of pearls enhanced a woman’s natural beauty bringing a delicate luminosity to her skin.” Global creative director of Chanel makeup Peter Philips incorporates beauty, elegance and refinement of pearls into the collection that is filled with pearly shades of green, grey and plum, and accents of pink and coral. A key product is the eye palette, the Ombres Perlees De Chanel. The rectangular black case contains five iridescent shades in a rich cream texture that glides smoothly over the skin. They can be used to enliven not the just the eyelids, but also the cheekbones. All the spring makeup collections are on sale in counters at major department stores or at its standalone stores. This article appeared on the Live it! page, The Edge Financial Daily, March 22, 2011.

https://theedgemalaysia.com/node/81293

Market Open: KLCI down, on course for weekly loss

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KUALA LUMPUR (March 22): The FBM KLCI opened lower on Friday, in line with the tepid regional sentiment and weighed by losses including at Petronas-linked counters. At 9.05am, the FBM KLCI fell 3.74 points to 1,627.01. Losers led gainers by 67 to 63, while 111 counters traded unchanged. Volume was 37.93 million shares valued at RM33.63 million. Among the early losers on Bursa Malaysia were Petronas Gas, KLK, HLFG, Petronas Dagangan, Hong Leong Bank, PPB, UMW, Media Prima, Top Glove and Mah Sing. BIMB Securities Research in a market preview Friday said global equities took a breather on Thursday as investors were weighing on the latest economic data coupled with Cyprus ongoing negotiations for bailout funds. It said the Dow Jones Industrial Average lost 90 points to 14,421 whilst European markets were also broadly lower further exacerbated by recent decline in Germany’s manufacturing index. The research house said that in Asia, stocks were rather mixed taking cue from the weak performance of European markets as well as from profit taking activities of late. It said domestically, trading has been directionless in a tug-o-war between buyers and sellers with the FBM KLCI ended flat at 1,630.75 (-0.79). “We reckon uncertainty began to creep into the local bourse as we inched nearer towards the election whirlpool. “For today we expect there to be some weaknesses as wary investors may be sidelined ahead of developments in Cyprus over the weekend. We expect the FBM KLCI to test the immediate support level at 1,625.” it said. Asian shares and the euro were pressured on Friday by fears Cyprus may default on its debt, while deteriorating euro zone economic activity further underscored the troubles ailing the region, according to Reuters. The MSCI's broadest index of Asia-Pacific shares outside Japan, inched down 0.1 percent, weighed by a 0.3 percent drop in Australian shares with worries about the stability of the Australian government after a leadership crisis hurting sentiment, it said.

https://theedgemalaysia.com/node/70359

GST will be used to absorb cost of Budget sweeteners, say Pakatan MPs

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Kuala Lumpur (Oct 2): The government will recoup the funds allocated for the basket of goodies announced in Budget 2013 by implementing the goods and services tax, three Pakatan Rakyat MPs claimed on Wednesday. "We challenge the prime minister and the finance ministry to deny that the government will not implement GST after the general election and in 2014," said Liew Chin Tong, the DAP MP for Bukit Bendera. At a joint press conference with Nurul Izzah Anwar (PKR-Lembah Pantai) and Dzulkefly Ahmad (PAS-Kuala Selangor), Liew said sweeteners such as the second round of RM500 Bantuan Rakyat 1Malaysia (BR1M) cash handouts "will be taken back" in the form of GST. "Whatever that is being handed out now will be recouped through GST, including the 1% tax cut for those in the income bracket of RM2,500 to RM50,000. "The tax break given is actually being done in the context of implementation of GST," he claimed. Nurul Izzah said that where GST was concerned, the government has "turned lying into an art form". If studied closely, she said, Budget 2013 was embedded "coded signals to the financial sector of the imminent implementation of the GST". “On the one hand, the Finance Minister (Datuk Seri Najib Razak) desires to assure the financial sector that the federal government has the means to continue to finance wastages and corruption without having to reform the crony-infested economic structure. “On the other hand, he is fully aware that imposing a new and blanket consumption tax on a relatively poor population is a path full of challenge," said Nurul Izzah. She noted that the “flip flop in the policy” was apparent last April when the Domestic Trade, Co-operatives and Consumerism Ministry denied that the Small Retailer Transformation Programme (Tukar) had anything to do with GST. This was despite the brief on the ministry’s website stating that the objectives of Tukar included preparing retailers for the implementation of GST. "Such double-speak borders on lying and is a clear case of misleading Parliament and hence the people it represents," she added. Dzulkefly said that the government "has no moral right" to impose GST without addressing “corruption and cronyism plaguing the administration”. "The immediate imperative of the next government is not to tax the squeezed middle class and the poor more, but to grow their income and disposable income so as to ensure dignified lives for them and also for them to have more cash in hand to contribute as consumers to drive the domestic economy," he said. He claimed that it was evident from the BR1M handouts that almost 60% of the middle-income and poor population would be affected by the new taxation system.

https://theedgemalaysia.com/node/12876

Rocky road to recovery for Asia-Pac equity, credit markets

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Its Asia-Pacific chief economist Subir Gokarn, in his assessment of macroeconomic factors which help boost regional growth forecasts, said domestic policy responses—monetary and fiscal—appear to have played a significant role in shoring up domestic demand in an environment in which exports were performing disastrously. "Further, the strength of the turnaround in China appears to be spilling over into the region as other economies see increases in their exports to China," he said in a report "The Outlook For Recovery In Asia-Pacific: The Drivers And Pitfalls" issued on Aug 20. Gokarn forecasted positive GDP growth across the region for 2010. China is expected to exceed 8% GDP growth, closely followed by India, Vietnam, and Indonesia. However, this positive story could be derailed, by potential threats such as a surge in inflation, higher interest rates—which would hinder private-sector activity—and persistent global sluggishness. Its Asia-Pacific chief credit officer Ian Thompson was cautiously optimistic about the prospects for the region's creditworthiness in the article, "In Asia-Pacific The Road To Recovery Could Be Long For Some." "In 2009, defaults are expected to exceed the levels experienced during the late 1990s and there have already been more defaults than in 2008," he said. Thompson, however said, the improving economic outlook wass expected to translate to a lift in corporate earnings and cash flows in 2010, ameliorating some pressure on credit quality." In equities markets, the two key risks to second-half 2009 performance are unexpectedly higher inflation and weaker-than-expected global recovery. In the article, "Asia-Pacific Equity Markets Kept In Check By Key Concerns," its Equity Research vice president and head of Asia research, Lorraine Tan shared outlooks and recommendations for what she described as a fairly-priced market. "The easy-money gains in 2009 from the equity markets may be over," she said. "But we continue to favour the financials sector and we also see mid-term strength for the energy and materials sectors. Broadly, our expectations are based on a gradual global economic recovery taking root in fourth-quarter 2009, but with US economic growth in 2010 likely to be anemic."

https://theedgemalaysia.com/node/69120

Exercising delayed gratification

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WE are near the end of corporate Raya open houses. With all that wonderful food and festivity, those of us who lost weight during Ramadan have gained it back with a vengeance. This provides a revealing insight into the Malaysian way of eating to excess not only at open houses, but also at buka puasa buffets. I would, however, contend that there is merit in the exercise of temporary restraint with extra rewards (or extra good food as the case may be) coming later. In other words, the exercise of delayed gratification. Interestingly, a study on delaying extra good food was conducted by psychologist Walter Mischel in the 1970s, now referred to as the Stanford Marshmallow Experiment. It involved four-year-olds who were told by a researcher that they could either eat one marshmallow immediately or two if they waited while the researcher stepped out for a few minutes. Years later, the researchers tracked down the test subjects and found that those children who waited were psychologically better adjusted, scored significantly higher grades in the SAT and achieved more success in their careers than those who did not. The work by Mischel and his team argues that intelligence and success are at the mercy of self-control. "It's not just about marshmallows," says Mischel. If one could deal with temptation — delayed gratification — "then you could study for the SAT instead of watching television and you could save more money for retirement". Therefore, the challenge is to acquaint our children with delayed gratification and teach them self-control in the context of investing today towards a longer-term goal. A common complaint of employers about Gen Y is that they change jobs frequently, often moving on for just a small increment in salary (equivalent to one marshmallow). If only our young talent would take a longer-term view, and invest, say, three to five years in a job to gain experience before considering moving on. This would build their capabilities while employers could run their business without disruptive staff turnover. I see a similar situation in terms of engaging Malaysians studying overseas. Some just don't want to come back, often attracted by the higher starting pay abroad than in Malaysia. However, it is critical to lay strong foundations early in one's career. Hence, I believe a young talent's prospects are better if he starts his career with a Malaysian company that is an emerging regional champion or a multinational corporation based here than working for a small firm in a developed country for the sake of higher initial income (which I think is equivalent to one marshmallow). Again, it is a win-win situation in that young talent gets developed while Corporate Malaysia grows by leveraging such talent. Inculcating a sense of delayed gratification in young Malaysians is therefore important for their success and that of the country. Cultural practices like Raya open houses and buka puasa, perhaps, offer a means to introduce the idea of self-control and delayed gratification (through delayed feasting). Routines introduced by parents, such as no snacking before dinner, doing chores to earn rewards or saving one's allowance, also help reinforce these two elements. However, given its importance, a case should also be made for teaching delayed gratification. This seems timely with the recent release of the national Education Development Master Plan. In the course of reviewing the planned curriculum, perhaps due consideration could be given to the possible incorporation of discounted cash flow (DCF) analysis into the framework to promote delayed gratification. Why DCF, you may ask. We Asians like our numbers. If given a choice between one kueh Raya (to culturally adjust for marshmallows) now versus two kueh Raya an hour later, an Asian would seek a logical and mathematical framework to assess such a choice or any other, such as whether to work in Malaysia. This can be provided to all young Malaysians through DCF by introducing the concept of time value of money. DCF would make it possible to compare present-day cash (or food) with future cash flow (or food flow). By using a net present value (NPV) calculation and proving that having two kueh Raya later is better than having one now, there is conviction to choose a better future (even if it involves a sacrifice today). DCF can then act as a potential tool for self-control. However, being informed readers of The Edge, you would have spotted the potential flaw in this argument. Having two kueh Raya later is not necessarily better than having one now. Nor is building a career in Malaysia necessarily better than a lower quality job overseas, using an NPV calculation. It depends on the discount rate used or the individual's internal rate of return. Determinants of the discount rate not only include prevailing interest rates, but also a risk assessment of the future, particularly Malaysia's. In this respect, assessments and views differ among Malaysians. We will only delay gratification and invest in ourselves here if we have faith in the future. As we celebrate Malaysia Day, one hopes that Malaysians young and old will continue to believe in a future here and work towards a better Malaysia. Our success relies on delaying gratification, a willingness to not only forego short-term gains, but also to work for a better future, ideally to the extent of being selfless. It is perhaps a little ironic but a Greek proverb suggests that a nation grows great when old men plant trees, in the shade of which they know they will never sit. Presumably, Malaysia will grow great with the ultimate form of delayed gratification — that being where Malaysians act for the benefit of future generations. This starts with education. Johan Mahmood Merican is the CEO of Talent Corp Malaysia Bhd. This story appeared in The Edge on Sept 17, 2012.

https://theedgemalaysia.com/node/55129

CIMB Research has technical sell on ECM Libra

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KUALA LUMPUR: CIMB Equities Research has a technical sell on ECM Libra Financial Group at 76.5 sen at which it is trading at a price-to-book value of 0.6 times. It said on Thursday, Sept 22 that ECM violated its medium term support trend line early this week. “We think there is still risk to the downside and investors should continue to stay on the sideline. The breakdown is a reflection of the bears’ dominance,” it said. CIMB Research said the technical landscape is weak. MACD signal line is falling deeper into the negative territory while RSI has also slipped below the 30pts mark. The following support levels are 72 sen and 64 sen. “As long as prices stay below its 200-day SMA, any rebound is an opportunity to take profits. Put a buy stop at 83.5 sen, just in case,” it said.

https://theedgemalaysia.com/node/75829

Market Close: KLCI ends week on a whimper as global markets fall

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KUALA LUMPUR (Dec 21): The FBM KLCI fell sharply on Friday, in line with the weaker performance at most global markets. The local index fell 11.75 points to close at 1,658.85. Losers beat gainers by 380 to 266, while 328 counters traded unchanged. Volume was 699.96 million shares valued at RM1.20 billion. European and Asian shares weakened, while the euro and gold slipped, as a new setback in talks to avert the US fiscal crisis stoked investor nerves, according to Reuters. A proposal from Republican leader John Boehner to avoid the so-called fiscal cliff failed to get support from his party on Thursday, casting fresh uncertainty over talks to avoid across-the-board tax hikes and spending cuts that could push the US economy into recession in 2013, it said. At the regional markets, Japan’s Nikkei 225 fell 0.99% to 9,940.06, the Shanghai Composite Index lost 0.69% to 2,153.31, Hong Kong’s Hang Seng Index was down 0.68% to 22,506.29, Taiwan’s Taiex lost 0.99% to 7,519.93, South Korea’s Kospi was down 0.95% to 1,980.42 and Singapore’s Straits Times Index shed 0.38% to 3,163.56. Among the losers on Bursa Malaysia, Nestlé lost RM3.20 to RM60.10, BAT fell RM2.48 to RM58.02, United Plantations RM1.50 to RM24.60, Genting Plantations 67 sen to RM8.33, Lafarge Malayan Cement 34 sen to RM9.30, F&N 30 sen to RM18, KLK 28 sen to RM21.52, Aeon Credit 20 sen to RM12.44 and DiGi 15 sen to RM5.21. XOX was the most actively traded counter with 44.32 million shares done. The stock rose three sen to 21.5 sen. The other actives included DSC Solutions, AirAsia, Tiger Synergy, Scomi, Oversea, Tenaga, FGV and Fastrak. The gainers included Dutch Lady, Tradewinds, Bright Packaging, Quality Concrete, Amway, Keck Seng, KLCCP, BTM, Malpac and Nadayu.

https://theedgemalaysia.com/node/1075

RHB sees JAKS powering up

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JAKS Resources Bhd (April 14, 89.5 sen)Not rated, fair value of RM2: We note that JAKS has primarily been identified with the water sector, including the construction of water infrastructure projects and the manufacture of steel pipes and steel hollow sections. Although the water business is still important, we believe JAKS has been very busy over the last year spreading its wings to property and power. We believe JAKS’ outlook is about to change for the better, given three major positive developments since March, which in our view will improve its financial position from FY10/2010. These include the joint development agreement by 51%-subsidiary Jaks Island Circle (JIC) and Star Publications to develop a piece of land in Petaling Jaya, the letter of award for construction of the Paya Peda Dam in Besut, Terengganu for a total contract sum of RM333 million and memoranda of agreement with various Vietnam authorities for a 2x600 MW coal-fired power plant in Hai Duong province near Hanoi. We believe the power purchase agreement (PPA) has also been confirmed with Electricity of Viet Nam (EVN), which is Vietnam’s national power utility. As the first foreign-owned independent power producer (IPP) in Vietnam, and upon the successful completion of this power plant in FY15, we believe JAKS will be in the running for other IPP projects there. From this first IPP, we estimate an incremental net profit of around RM52.7 million in FY16, or five times of our projected FY10/2010 net profit of RM11.1 million.We believe the market has yet to fully reflect JAKS’ power plant venture in Vietnam, which alone is worth RM676.8 million or RM1.54/share based on discounted cash flow (DCF). We thus estimate a sum-of-parts (SOP) fair value for JAKS of RM2, which implies a huge upside of 141% from current levels. Our SOP valuation includes JAKS’ construction, manufacturing and trading businesses at 10 times FY10/10 price-earnings ratio (PER), rental income from UTAR at DCF, land development in Section 13, Petaling Jaya at revised net asset value (RNAV) and power plant venture in Vietnam at DCF.— RHB Research Institute, April 14 This article appeared in The Edge Financial Daily, April 15, 2010.

https://theedgemalaysia.com/node/80135

James Fry: CPO price to hit RM2,625 mid-year if crude oil at $105

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KUALA LUMPUR (March 6): Crude Palm Oil (CPO) prices will rise to RM2,625 per tonne on the Bursa Malaysia Derivatives exchange by mid-year if brent crude oil is at US$105 per barrel at that point, according to leading analyst Dr James Fry. Fry, chairman of LMC International Ltd told a palm oil conference: "Free-on-board CPO prices would then be near RM2,775 per tonne in June/July, taking EU prices within reach of US$950". "By June/July, CPO stocks should be down to 1.8 million or 1.9 million tonnes in Malaysia," said Fry in his presentation at the palm oil conference here today. As of end-January, Malaysia's CPO inventory stood at 2.58 million tonnes, off a 2.63 million tonne high in December 2012. Without export taxes in Southeast Asia, it would be difficult for stocks to be driven below the two million tonne mark, said Fry. He added that the increasing use of palm oil in the biofuels sector and palm methyl esther as a fuel source will help pare down CPO inventory.

https://theedgemalaysia.com/node/13774

Destini Prima gets RM7.9m MinDef contract

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KUALA LUMPUR (April 21): Destini Prima Bhd, which was formerly known as Satang Holdings Bhd) has secured a two-year contract worth RM7.90 million from the Ministry of Defence Malaysia. The company said on April 20 that its wholly owned unit  Destini Prima Sdn Bhd (formerly known as Satang Jaya Sdn Bhd) had entered into a contract with MinDef  to supply Anti-Tank Ammunition 40mm Rocket Propelled Grenade (RPG) for the arm. It said the contract was for a period of two (2) years commencing from 30 April 2012 to 31 March 2013.

https://theedgemalaysia.com/node/33238

Bursa Securities takes enforcement action against Kenmark, 2 EDs

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KUALA LUMPUR: Bursa Malaysia Securities Berhad has commenced enforcement proceedings against Kenmark Industrial Co. (M) Bhd, its managing director, Hwang Ding Kuo @ James Hwang and executive director, Chang Chin-Chuan for various breaches of disclosure requirements under the Listing Requirements. It said on Thursday, July 8 that Kenmark and the two directors have been served with a notice to show cause by Bursa Securities to make representations to Bursa Securities in respect of various alleged breaches of the LR. The breaches included various disclosures made by Kenmark including the announcements on May 31, and June 1 and 4. “Due process is therefore accorded to Kenmark and the directors prior to making a decision on the alleged breaches and Bursa Securities will impose appropriate sanctions should a finding of breach be made,” it said. Bursa Securities said it also in the midst of various stages of investigations of other possible contraventions of the LR and upon completion of and subject to the outcome of these investigations, Bursa Securities may initiate other enforcement proceedings against the relevant parties.

https://theedgemalaysia.com/node/2137

Nazir: Education debate on ‘wrong plain’

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KUALA LUMPUR: A top banker says the current debate on the country’s education policy is on the “wrong plain” and that the emphasis should be on the quality of teaching rather than the medium of instruction. CIMB Group chief executive Datuk Seri Nazir Razak said new strategies should be continuously explored to both mitigate and take advantage of the current economic crisis, citing the education sector as an example where Malaysia can take advantage of the depressed job markets overseas to attract human capital. “The education sector is crying out for bold action. We need to worry less about the medium of instruction and focus more on the quality of teaching and, by extension, the quality of teachers. “Just imagine if we use, say, 1% of the RM60 billion stimulus package — or RM600 million — over two years to employ the best teachers and lecturers from top international schools and universities in Cambridge... to teach at Malaysian schools and universities, I daresay the economic capacity enhancement would be enormous and far greater than a RM600 million high-tech teaching facility,” Nazir said. Two weeks ago, there were massive protests by certain groups who wanted the teaching of Maths and Science in schools reverted back to Bahasa Malaysia. The issue is expected to be hotly debated in the Umno general assembly next week and speculation is rife that the use of English to teach Science and Maths would be scrapped in primary schools but retained for secondary schools. This is not the first time that Nazir, brother of incoming Prime Minister Datuk Seri Najib Razak, has come out with views that are largely seen as pertinent to chart the way forward for Malaysia in the wake of the global economic  crisis. Last month, he offered five initiatives to improve Malaysia’s competitiveness, including a relook at the New Economic Policy (NEP). “I was pleasantly surprised at the positive reactions it drew, especially on the need to review the NEP,” he said at an investment banking conference organised by CIMB Private Banking here yesterday. Nazir did not discount the possibility of the global economic downturn morphing into a global currency crisis or political crisis. He said there had not been enough humility and open-mindedness in trying to resolve the crisis and felt that the  Group of 20 meeting next month was absolutely crucial. “Why is the US studying the Swedish bad-bank model when Asean’s Danaharta and IBRA (Indonesian Bank Restructuring Agency) are the more recent success stories? “And why is there such hesitation in looking to Islamic finance as a model for the new global financial architecture? Why aren’t they inviting (former Prime Minister) Tun Dr Mahathir Mohamad and (Bank Negara Governor)  Tan Sri Zeti (Aziz) to advise them,” he said. “Until we see more humility and willingness to absorb all ideas and views,  the antidotes for the crisis will remain sub-optimal. And sadly, the brutality of the crisis is such that it isn’t difficult to imagine it morphing into a global currency or a political crisis,” said Nazir. Leading Malaysia’s fastest-growing financial group, Nazir said change was inevitable and there was opportunity in every crisis, not just for nations but also for companies. “Why not look at the glass as half-full,” he suggested. On investment strategies, Nazir said although there was widespread pessimism, the risk-reward equation was greatly amplified if investments were done in companies that had astute leadership well-aligned with shareholder value creation. “The right managers can make hugely transformative acquisitions and diversifications. I would argue that management dictates daily action and in a crisis, in volatile markets, it is the sum of those daily decisions that ultimately separates the companies which fail and survive,” he said.  

https://theedgemalaysia.com/node/18377

CIMB bullish on QSR’sgrowth potential

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QSR’s target price was pegged to a forward price-earnings ratio (PER) of 16 times, which factored in a 10% discount to the average valuation of bigger food and beverage producers, the research house said. It added that the market was undervaluing QSR’s Pizza Hut business. Investors were paying RM161 million or an “undeservedly low PER of 5.4 times for the Pizza Hut business” when it deserved to “trade at a premium given its growth potential”, CIMB said. “In our view, QSR’s main strength is its leading position in a defensive business,” the research outfit said in a note yesterday. “The group commands 70% of Malaysia’s pizza market and 11% of the Western quick-service restaurant market. Pizza Hut is the biggest pizzeria chain on both sides of the causeway. “Kentucky Fried Chicken (KFC), with 531 outlets in Malaysia, Singapore, Brunei and Cambodia, is the region’s No 1 Western quick-service restaurant chain. We understand that the group’s growth has surprised even the franchise holder Yum! as many quarters thought that the local market had almost reached saturation point.”CIMB said QSR, which holds a 50.3% in KFC Holdings Bhd (KFCH) was a cheaper entry into the KFC business, outperforming the latter in year-to-date (YTD) comparisons. QSR’s stock has risen 32% YTD, outperforming KFCH by 31%. On Tuesday, QSR rose to an intra-day and a fresh 52-week high of RM3.25. Two factors contributed to the rise in QSR’s share price, CIMB said. First, the ceasing of Giganite Ltd as a major shareholder in QSR, which was the outcome of a shareholding tussle between Kulim Bhd and Tan Sri Nik Ibrahim Kamil in 2005/2006. Giganite, which owned a 12.5% stake in QSR, has pared down its stake after Kulim emerged as QSR’s controlling shareholder through a series of legal disputes. The positive from this was that boardroom tussles might be a thing of the past, CIMB said. Second, active share buyback by QSR’s management has also contributed to the increase in the share price. “This suggests that management considers QSR to be undervalued even though it offers growth potential, not only in Malaysia but also in Cambodia and India,” CIMB said. “Since April 2008, the company has bought back 10.6 million QSR shares at an average cost of RM2.54 per share.” CIMB said that higher prices and success in new markets were the potential catalysts for future growth. Yesterday, QSR fell one sen to close at RM3.20. This article appeared in The Edge Financial Daily, September 17, 2009.

https://theedgemalaysia.com/node/50943

Supermax sees pick up in 2H

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KUALA LUMPUR: Supermax Corporation Bhd expects the second half of 2011 to see a pick-up in demand for latex gloves. However, its executive chairman and group managing director Datuk Seri Stanley Thai said on Monday, June 27 that the cost differential with nitrile gloves was expected to narrow. In the immediate term, he still expected the second quarter numbers to be weak due to cost pressures.

https://theedgemalaysia.com/node/19007

The Digital Edge 12: The Vapourware Wars

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John Lim, Lim YH, Mike Foong, and David Lian discuss 1 What went down at the Social Media World Forum Asia in Singapore, Sept 22 and 23. Is Friendster taking a wrong step? Will Facebook rule all? What's the next big thing? Find out here. 2 84% of social media programmes don't use ROI to measure their campaign's effectiveness -- why not? 3 Facebook enables application developers to peek into your inbox. Should you be concerned? Not really, say the people at Facebook. 4 Microsoft's secret projects, Courier and Pink, emerge on Gizmodo. We harp on the yet-to-be-realised Courier and how it could change the Tablet PC segment. Download this episode (right click and save) or stream below: Copyright © 1999-2023 The Edge Communications Sdn. Bhd. 199301012242 (266980-X). All rights reserved

https://theedgemalaysia.com/node/6124

Marketing Malaysia’s first national MPV

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“People who buy an MPV do so to fit all their family members in. It’s not a car for me but a car for everybody, so a lot of other triggers come into play,” said advertising agency McCann Erickson group creative director Huang Ean Hwa in a phone interview at the end of last month. Launched on April 16, the Exora is national automaker Proton’s first MPV, after 14 years of making sedans. Proton’s “You will be amazed” campaign highlights three categories of the Exora’s features — safety, performance and space — in consumer-friendly terms, said Huang. According to industry sources, the campaign is worth RM6 million. It is being executed across TV, radio, press, online and outdoor media. Huang said the idea for the campaign originated from a product briefing he had with Proton managing director Datuk Syed Zainal Abidin Syed Mohamed Tahir in August last year, where “Datuk was spewing out Proton’s amazing features”. Among these were the hydroforming technology used to create the vehicle’s lightweight frame and the Lotus engineering technology for improved vehicle handling. “Proton is a love-hate story among Malaysians, so we needed to try harder on the rational angle, as we can’t sell on looks alone. We had to give them reason to believe in the brand and the car,” Huang added. As Malaysia’s first automaker, the Proton brand is the pride of the nation, but with this comes very high expectations, Huang explained. When expectations are not met, disillusionment sets in. Proton became the national car market leader with the launch of its first model, the Proton Saga, in 1985 but was overtaken by Malaysia’s second automaker, Perodua, in April 2006, when Perodua gained 44% market share against Proton’s 30.35%, according to figures from the Malaysian Automotive Association. Perodua was established in 1993. Today, Proton has a 30% market share against Perodua’s 33% to 35%, according to industry sources. “It takes time for a brand to grow. Like growing up, everyone makes mistakes when he is young, but there must be room for mistakes. I think deep down, everyone wants to love Proton, but it’s probably a case of being toughest with the ones we love,” Huang said. He added that Proton has made big strides over the years, such as the development of its own engine and vast improvement in product engineering quality and design. The carmaker’s latest offering, the Exora, has safety and practicality features targeted at women, as well as technical capabilities to appeal to men. As of May 7, around 9,000 units of the Exora have been booked. Of these, 2,500 were booked prior to the official launch. “The fact that there were so many bookings prior to the launch, without people seeing the car or test-driving it, shows that people do believe in the company and brand. And 9,000 units sold within a month is pretty amazing, considering the current economic downturn,” Huang noted. Asked if the creative campaign would be implemented in the Exora’s export markets, he said the decision lay with Proton and would depend on the different markets. Proton chairman Datuk Mohd Nadzmi Mohd Salleh announced in February that Proton planned to export the Exora to Thailand and Indonesia as early as July. This article appeared on the Media & Advertising page, The Edge Financial Daily, May 14, 2009.

https://theedgemalaysia.com/node/29145

Mild technical rebound

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KUALA LUMPUR: Blue chips staged a mild technical rebound in the morning session on Wednesday, March 17 while the broader was mixed, supported by gains in CIMB, Genting and Top Glove. The market lagged behind the key regional markets including Hong Kong, Singapore and Japan. At 12.30pm, the FBM KLCI rose 3.14 points or 0.24% to 1,302. There were 354.85 million shares transacted at RM485.76 million. There were 294 gainers, 250 losers and 275 stocks unchanged. Hong Kong's Hang Seng Index rose 1.57% to 21,353.62, Japan's Nikkei 225 added 0.74% to 10,801.13 while Shanghai's Composite Index added 0.8% to 3,016.71  and Singapore's Straits Times Index advanced 0.62% to 2,914.41. Light crude oil rose 39 cents to US$82.09 while US spot gold added 40 sents to US$1,128.1 and crude palm oil futures gained RM25 to RM2,594. Among the index-linked stocks, CIMB rose 14 sen to RM13.70, pushing up the index up by 1.6 points while Genting Bhd's gains of five sen to RM6.65, nudged the index up by 0.44 of a point. DiGi added 10 sen to RM22.60 and Axiata two sen to RM3.87. Top Glove rose 26 sen to RM12.56, HaiO 21 sen to RM4.89, Measat 16 sen to RM2.42 and Jobstreet 11 sen to RM2. KKB continued to rise, advancing 21 sen to RM5.66, riding on Tuesday's recovery. Time dotcom was the most active with 23.2 million shares done, rising 1.5 sen to 43.5 sen. Telekom fell four sen to RM3.18 in active trade. KFCH fell the most, down 15 sen to RM7.68, TSM seven sen to RM2.92 and Public Bank foreign six sen lower at RM11.62.  Ho Hup, whose EGM is scheduled to be held this evening, fell 13 sen to 98 sen.

https://theedgemalaysia.com/node/61730

InsiderAsia’s model portfolio - 474

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The global equity market drifted lower in a somewhat directionless fashion last week with investors appearing undecided on the market’s next move. Stocks have done very well year-to-date (YTD). Bellwether indices in key Asian markets including Japan, Singapore, Hong Kong and South Korea have all chalked up double-digit gains. Although lagging, the FBM KLCI has also been trending higher over the last two months and is now up 3.6% YTD. It should not be surprising then that investors take a step back and reevaluate their positions. With no major developments last week to push stock prices either way markets were in consolidation mode. Investors are waiting for some fresh leads to decide their next move. But overall market sentiment appears to be still biased towards the upside. Upbeat economic data out of the US is still the key driver for global markets. Over the last week, the clutch of housing market data remains supportive of a nascent recovery, albeit a slow one. The sector has been a drag on the overall economy for some time now, since the subprime mortgage and global financial crises. A recovery would be quite a boost at a time when improved employment prospects are giving consumers reason to loosen their purse strings. This is particularly important if the manufacturing sector, which has performed strongly thus far, starts to slow on the back of weaker global demand. Indeed, one of the major dampeners last week was China’s economic slowdown. A preliminary snapshot suggests that industrial output declined for the fifth consecutive month in March. While widely seen as a positive development in terms of achieving sustainable longer-term growth, the slowdown will hurt in the short term, especially with Europe already in recession. The Chinese central bank is treading very cautiously with respect to any immediate loosening. The government has lowered its GDP growth target to just 7.5% for this year. The rising cost of energy is another key concern. Oil prices have risen over the past weeks as geopolitical tension in the Middle East raised the risk of supply disruption. Sanctions against Iran over its nuclear programme are slated to take effect in July. The US and UK are said to be considering the release of their strategic petroleum reserves to cool speculation in the market while Saudi Arabia has given its commitment to make up for any supply shortfall. Nevertheless, crude oil futures traded on the New York Mercantile Exchange are still hovering around US$106 (RM326.48) per barrel, above the average of about US$95 per barrel last year and less than US$80 per barrel in 2010. On the home front, Bank Negara Malaysia estimates GDP growth for this year at about 4% to 5%, down from 5.1% in 2011, with strengthening domestic consumption offsetting weakness in the export-oriented manufacturing sector. The central bank has kept interest rates on hold since May 2011 while undertaking measures to tighten lending guidelines amid rising household indebtedness. The KLCI inched higher through the week to close at 1,585.8 points last Friday, up a total of 14 points for the week. There was, however, little in terms of fresh leads. Much of the trading activity was centred on a handful of lower liner stocks. This resulted in a sharp spike in the daily on-market volume on Bursa Malaysia, to 2.48 billion shares, on average, up from the daily average of less than 1.5 billion shares in the previous week. Market volume hit a high of nearly 3.6 billion shares last Wednesday. Trading on the local bourse will likely continue to take the lead from global markets. Investors are also expected to keep a wary eye on news of the next general election, now widely speculated to be held sometime in the middle of this year. Portfolio reviewStocks in our model portfolio underperformed the benchmark index last week. Total market value for our basket of 23 stocks was down by 0.54% to RM467,900, compared with the KLCI’s 0.92% gain. Fourteen stocks in our portfolio closed in the red while six ended higher and three traded unchanged. Some of our notable gainers include Sunway REIT (+0.8%), Magna Prima Bhd (+3%), Al-’Aqar Healthcare REIT (+0.4%) and Axiata Group Bhd (+0.2%). At the other end, Benalec Holdings Bhd (-2.4%), Bonia Corp Bhd (-2.7%), Malaysia Steel Works KL Bhd (-1.9%) and TSH Resources Bhd (-1.3%) were among the notable losers for the week. Including our cash holdings, for which no interest income is imputed, our total portfolio value was down by 0.36% to RM697,184. Our total profit remains substantial at RM537,184, of which RM404,690 has already been realised from share sales. Last week’s losses pared our model portfolio’s cumulative returns since inception to 335.7% on our initial capital of just RM160,000. Nevertheless, we continue to outperform the KLCI, which was up by about 145.2% over the same period, by some distance. We adjusted our portfolio for 2.52 sen per unit income distribution from Al-’Aqar Healthcare REIT, increasing our cash holdings to RM229,284, accounting for 33% of our total portfolio value. The relatively high percentage is, primarily, for prudence sake. We are comfortable with our current holdings and are keeping the portfolio unchanged, for now. Note: This report is brought to you by Asia Analytica Sdn Bhd, a licensed investment adviser. Please exercise your own judgment or seek professional advice for your specific investment needs. We are not responsible for your investment decisions. Our shareholders, directors and employees may have positions in any of the stocks mentioned. This article appeared in The Edge Financial Daily, March 26, 2012.

https://theedgemalaysia.com/node/33484

#Precious* Gold inches up on softer dollar; US jobs report in focus

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SINGAPORE (Jan 10): Gold edged up on Friday as the dollar came off seven-week highs, while investors looked ahead to U.S. nonfarm payroll numbers for clues on the health of the world's largest economy and what that means for the Federal Reserve's monetary policy. Markets fear a strong jobs report could prompt the Fed to further reduce its bond-buying stimulus. The U.S. central bank last month announced a $10 billion cut to its $85 billion in monthly asset purchases. Gold lost nearly 30 percent of its value in 2013, ending a 12-year bull run, as worries over a stimulus cut prompted investors to shift money to equities. "We are seeing some position-squaring ahead of the nonfarm payrolls report, which really is the main driver for gold right now," said one Hong Kong-based precious metals trader. "The Fed has been looking a lot at employment data to take decisions on the stimulus." Other economic data earlier this week, including weekly jobless claims, has already suggested that the U.S. economy is gaining steam.     Spot gold rose 0.4 percent to $1,232.74 an ounce by 0736 GMT. The dollar eased from its seven-week high as investors booked profits ahead of the U.S. jobs report. A weaker greenback makes dollar-denominated gold less expensive for holders of other currencies. "If (nonfarm payrolls data) comes in higher than forecast, as we suspect will be the case, we should see another spurt higher in the dollar," INTL FCStone analyst Edward Meir said. "Gold will then likely have to dodge another potential hit that could come its way." Several analysts have forecast another drop in gold prices this year. Bank of America Merrill Lynch cut its 2014 average price forecast to $1,150, citing an uncertain macro-economic environment and lack of investment demand.     Barclays said it expects gold prices to average $1,205 and test 2010 lows this year. Gold-backed exchange-traded products saw outflows of $40 billion last year, according to data from asset manager BlackRock. In the physical markets, Chinese buying picked up on Friday. Trading volumes for 99.99 percent purity gold contract on the Shanghai Gold Exchange rose to over 16 tonnes from Thursday's 13 tonnes, while premiums climbed to $19 from $17. Friday's volumes were the highest since Monday, when they hit an eight-month high. PRICES AT 0736 GMT     Metal             Last       Change    Pct chg Spot gold           1232.74       5.2     0.42 Spot silver           19.69      0.15     0.77 Spot platinum       1418.99      5.74     0.41 Spot palladium        735.4      2.29     0.31 Comex gold           1232.5       3.1     0.25 Comex silver         19.695      0.01     0.06 Euro                 1.3609                    DXY                  80.931                    COMEX gold and silver contracts show the most active months.

https://theedgemalaysia.com/node/87557

Bury racial politics or be left behind

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THE divisive outcome of the 13th general election has produced powerful forces on the national stage that will shape Malaysia’s future in unknown new ways. Old political institutions are losing their hold over the country’s imagination as demographic changes and evolving mindsets are pushing the people to adopt new ideas about national politics. As a nation, we must face the challenge of engaging with these developments so that this youthful energy is channelled in positive directions. Our goal should be to put Malaysia on the next stage of its evolution as a democratic nation, where different political movements compete for the people’s support on the strength of the policies they formulate to address specific socio-economic and political issues. For the race-based parties that form the backbone of the Barisan Nasional (BN) coalition, the results of the last two general elections unmistakably show that racial politics is going out of fashion. But before a new political culture that transcends race can be established, our political parties first need to break the mould that was created at the time of the country’s independence over five decades ago. That may be harder for the BN component parties to do, since they have to move out of their comfort zone to embrace change. In comparison, the Pakatan Rakyat parties, which are riding on a popular mood for reform, would be more attuned to new approaches to mobilise support. So, for the BN to hold sway among the new generation of voters, it must do much better than to champion with increasing stridency the rights of the respective communities their member parties represent. Indeed, this may be their most urgent challenge if they hope to remain relevant to an electorate that is becoming impatient about the constant barrage of racial and religious rhetoric that is being cranked up by a political establishment that is under siege. The writing on the wall is that questions about the governance of national resources, equitable economic growth, corruption and abuse of power will not go away no matter how much noise is created by beating the racial drums. The national leadership must find the political will to plunge headlong into genuine reform as the 13th general election has proven that the changes which were introduced have not gone deep enough to sway a significant segment of voters. Plainly put, trial balloons about creating a single BN party to win the support of the youth and urban electorate do not articulate the core concerns about race-based institutions, political patronage and lack of accountability that have eroded public confidence in the establishment. The changing times require the powers-that-be to bury racial politics and begin anew, or risk being left by the wayside. 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 May 30, 2013.

https://theedgemalaysia.com/node/81615

Nazri: I think the election is in May

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KUALA LUMPUR (March 26): Law de facto Minister Datuk Seri Nazri Aziz said today that the much-awaited 13th general election may be held in May after Parliament automatically dissolves on April 28. Nazri also refuted allegations by the opposition that the federal government was jittery in facing the election. “I mean we say that we are sticking to five years, we mean five years. The term has not expired, it will expire on April 28... It is the prime minister’s prerogative, it is within his power to call and not to call for an election. “Why should we be jittery? We cannot be jittery because 28th of April will still come, we cannot run away. We are not scared. They are jittery and that is why they want to have an early election,” he told reporters after witnessing the signing of the Host Country Agreement between the Malaysian Government and Asian-African Legal Consultative Organisation (AALCO). “I think the election is in May but we have until 28th of April so please tell the Opposition to not be jittery. We are not scared of them,” he added. He said the government was confident of winning but there were “certain things which we have not done” before Prime Minister Datuk Seri Najib Razak calls for an election.

https://theedgemalaysia.com/node/98398

Highlight: Liew, Wahid, DiGi bag top BRC awards

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KUALA LUMPUR: In addition to naming DiGi.Com Bhd as Company of The Year, The Edge Billion Ringgit Club (BRC) this year also named Tan Sri Liew Kee Sin, president and CEO of S P Setia Bhd, and Datuk Seri Wahid Omar, former CEO of Malayan Banking Bhd (Maybank), as Malaysia’s two outstanding CEOs who have shown exemplary leadership in building businesses and creating value. Prime Minister Datuk Seri Najib Razak, who launched the BRC in 2010, presented the awards at a gala dinner last night to honour the best performing Bursa Malaysia-listed companies. Apart from the top three awards, 19 other companies were also recognised in their respective sectors for financial performance while three companies bagged top awards for corporate social responsibility (CSR). “I am truly honored to be receiving this award and hopefully this award goes to the 47,000 Maybank-ers who were with me in the journey for the past five years when I was there and it’s a great thing to receive this award,” said Wahid at the event last night. “Well, first I would like to share it with the Maybank-ers. Second my parents who have been with me for the past 59 years and third my wife, for unconditional love and support for the past 25 years,” he added.  DiGi.Com CEO Hendrik Clausen, who was also there to receive the award, said, “We feel honoured that the company’s contribution to the industry and Malaysia is being recognised. We will certainly continue to be hungry and work harder to deliver more.” “It’s an honour to get this award but the main winner of this award should be the people behind the company, who have put so much effort in what they do.  Liew said: “I dedicate this award to my team, S P Setia, my wife and my kids. This is for all of them.” Under Liew’s leadership, S P Setia built up the Setia Alam township and expanded abroad in 2007, starting with EcoLakes in My Phuoc Vietnam (30km from Ho Chi Minh City) and thereafter to Singapore, Australia and China. In September 2012, it joined Sime Darby Bhd and the EPF in acquiring the iconic London Battersea Power Station redevelopment. Liew, 54 — who started as a banker but at 29, decided to take the riskier entrepreneurship route — was also named The Edge Malaysia’s Outstanding Property Personality Award 2012 for his achievement in raising the profile of his company locally and abroad. Forty-nine-year old Wahid, who now oversees the Economic Planning Unit as Minister in the Prime Minister’s Department, oversaw several large-scale restructuring in Corporate Malaysia — starting as far back as in September 2001 at the age of 37 when the accountant was asked to head the Renong-UEM group restructuring. From there, his “national service” continued at Telekom Malaysia Bhd in 2004 and thereafter at Maybank from May 2008 before taking up his current appointment from June 5 this year. During his tenure with Maybank, the bank managed to turn the heavily criticised US$1.5 billion (RM4.92 billion) acquisition of a 56% stake in Indonesia’s sixth largest banking group, Bank Internasional Indonesia (BII), by the previous management into a highly profitable investment for the group. Maybank’s regional aspirations were further expanded with the acquisition of Kim Eng Securities in 2011. Maybank’s net profit of RM5.74 billion in the financial year ended Dec 31, 2012 (FY12) was almost double the RM2.93 billion net profit Maybank made in FY08 ended June 30 — a month after Wahid came on board. DiGi, a regular of The Edge BRC Corporate Awards, has since FY07 returned more than 100% of its earnings to shareholders without relying on borrowings. The amount of cash DiGi was able to unlock and return to shareholders in the past five years has surprised many seasoned investors and analysts. Beyond profits, DiGi’s CSR initiatives also won favour from The Edge’s panel of judges, making the company a well-rounded recipient of the Company of the Year award. Clausen received the award. Last year, Genting Bhd was named Company of the Year, while Supermax Corp Bhd and QL Resources Bhd were the award recipients in 2010 and 2011 respectively. This year 144 companies were qualified to be BRC members, the same as 2012. Their combined market capitalisation of RM1.32 trillion as at end-March was 90% of Bursa Malaysia’s total market capitalisation. Their combined revenue and pre-tax profit were RM645 billion and RM118 billion, respectively.   CIMB Group Holdings Bhd, Nestle (M) Bhd and United Plantations Bhd won the top three CSR awards this year. OCBC Bank (M) Bhd was the main sponsor for The Edge BRC Corporate Awards, while BMW Group Malaysia (official car) and Audemars Piguet were co-sponsors. The results were audited by Deloitte Malaysia. Image Gallery - The Edge Billion Ringgit Club 2013 {slimbox images/stories/FinancialDaily/2013/September/brc_gallery/001.jpg,images/stories/FinancialDaily/2013/September/brc_gallery/t001.jpg,BMW ActiveHybrid 7 (Official Car Sponsor); images/stories/FinancialDaily/2013/September/brc_gallery/002.jpg,images/stories/FinancialDaily/2013/September/brc_gallery/t002.jpg,Cocktail Area; images/stories/FinancialDaily/2013/September/brc_gallery/003.jpg,images/stories/FinancialDaily/2013/September/brc_gallery/t003.jpg,Guests welcoming the Prime Minister of Malaysia; images/stories/FinancialDaily/2013/September/brc_gallery/004.jpg,images/stories/FinancialDaily/2013/September/brc_gallery/t004a.jpg,Datuk Tong (Executive Chairman of The Edge Media Group) giving his heartfelt welcome speech; images/stories/FinancialDaily/2013/September/brc_gallery/005.jpg,images/stories/FinancialDaily/2013/September/brc_gallery/t005.jpg,YAB Datuk Seri Mohd Najib Tun Abdul Razak's Keynote Address; images/stories/FinancialDaily/2013/September/brc_gallery/006.jpg,images/stories/FinancialDaily/2013/September/brc_gallery/t006.jpg,Datuk Tong together with YAB Datuk Seri Mohd Najib Tun Abdul Razak and Mr Jeffrey Chew presenting the awards; images/stories/FinancialDaily/2013/September/brc_gallery/007.jpg,images/stories/FinancialDaily/2013/September/brc_gallery/t007.jpg,YB Senator Datuk Seri Abdul Wahid Omar walking away with the Value Creator: Malaysia Outstanding CEO Award; images/stories/FinancialDaily/2013/September/brc_gallery/008.jpg,images/stories/FinancialDaily/2013/September/brc_gallery/t008.jpg,YBhg Tan Sri Datuk Sri Liew Kee Sin bags the other Value Creator: Malaysia’s Outstanding CEO Award; images/stories/FinancialDaily/2013/September/brc_gallery/009.jpg,images/stories/FinancialDaily/2013/September/brc_gallery/t009.jpg,British American Tobacco Malaysia Bhd receiving the Most Profitable Company (Big Caps Companies Award); images/stories/FinancialDaily/2013/September/brc_gallery/010.jpg,images/stories/FinancialDaily/2013/September/brc_gallery/t010.jpg,Highest Profit Growth Company (Big Caps Companies Award) goes to Malayan Banking Bhd; images/stories/FinancialDaily/2013/September/brc_gallery/011.jpg,images/stories/FinancialDaily/2013/September/brc_gallery/t011.jpg,DiGi.com Bhd walking away with the Best Performing Stock (Big Caps Companies Award); images/stories/FinancialDaily/2013/September/brc_gallery/012.jpg,images/stories/FinancialDaily/2013/September/brc_gallery/t012.jpg,United Plantations Bhd comes in 3rd for the Best CSR Initiatives Award 2013; images/stories/FinancialDaily/2013/September/brc_gallery/013.jpg,images/stories/FinancialDaily/2013/September/brc_gallery/t013.jpg,2nd place for the Best CSR Initiatives goes to Nestle (Malaysia) Bhd; images/stories/FinancialDaily/2013/September/brc_gallery/014.jpg,images/stories/FinancialDaily/2013/September/brc_gallery/t014.jpg,YBhg Datuk Robert Cheim Dau Meng accepting 1st place for the Best CSR Initiatives; images/stories/FinancialDaily/2013/September/brc_gallery/015.jpg,images/stories/FinancialDaily/2013/September/brc_gallery/t015.jpg,Mr Henrik Clausen (CEO of DiGi.com Bhd) accepting the Company of the Year Award; images/stories/FinancialDaily/2013/September/brc_gallery/016.jpg,images/stories/FinancialDaily/2013/September/brc_gallery/t016.jpg,Performer Atilia serenading our guests; images/stories/FinancialDaily/2013/September/brc_gallery/017.jpg,images/stories/FinancialDaily/2013/September/brc_gallery/t017.jpg,The Edge BRC 2013 Award winners together with YAB Datuk Seri Mohd Najib Tun Abdul Razak and YABhg Datin Seri Rosmah Mansor} This article first appeared in The Edge Financial Daily, on September 03, 2013.

https://theedgemalaysia.com/node/65746

Eswaran’s Allgrow acquires ABN Media

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KUALA LUMPUR (July 13): Businessman Datuk K. K. Eswaran has emerged via his family company, Allgrow Capital as a controlling shareholder of ABN Media group (ABN), Malaysia's latest media group. ABN Media owns and operates, among others, Malaysia’s first digital cable TV (CATV) network ABN Media Group’s digital CATV services are provided by Asian Broadcasting Network (M) Sdn Bhd that has already established its operations in its broadcast centre in Puchong Gateway. In a statement Friday, ABN Media said it planned to create an integrated media group with a diversified portfolio of investments in various media platforms. “These platforms will be a combination of traditional and new media. “With this acquisition, the ABN Media Group will now be able to leverage on the strengths and opportunities within each platform to create a holistic media offering to businesses and consumers, and meet its vision in building world-wise Asian communities by empowering each individual with better access to education, information and entertainment,” it said. Eswaran, who has been appointed ABN Media’s executive chairman, said the company had sought to empower the rakyat, the industry and the nation through the integration of innovative and future-ready technology products and services. “The acquiring of The ABN Media Group drives this vision further,” he said. Asian Broadcasting Network Chairman retired Admiral Tan Sri Mohd Anwar Mohd Nor said the acquisition further strengthened the expansion of the ABNxcess service which was being rolled out in selected areas within the Klang Valley and other parts of the country. Mohd Anwar said Eswaran was known in the business circle to be passionate in the economic transformation initiatives for the country   and would add value to ABN's vision and mission." ABN Media said that with the completion of the takeover, it was expected that it would push for the first phase roll-out of the ABNxcess service, which will cover the Klang Valley, Penang and Johor with 1.2 million houses expected to be “passed” by mid-2013. The cable TV provider said it had targeted 17 prime locations in the next 24 months throughout Malaysia to deliver its digital CATV services and subsequently, high-speed broadband internet and voice services, making it a true triple-play provider. “With the tagline “Access for All”, ABNxcess will initially offer over 100 channels to inform, educate and entertain Malaysians at affordable rates,” said ABN Media. The superior technology of the CATV network ensures uninterrupted service in any weather and room for more upgrades and expansions to be done and enjoyed by its customers, it said.    

https://theedgemalaysia.com/node/60209

Insider Moves

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NOTABLE filings The emergence of three new substantial shareholders at Destini Bhd, formerly known as Satang Holdings Bhd, were among the notable filings from Oct 14 to 18. Destini supplies and maintains defence and commercial aviation equipment. Lim Nyuk Sang @ Freddy Lim emerged as a substantial shareholder on Oct 9, after buying 17.38 million shares or a 3.52% stake via a married deal, at undisclosed prices. Stock market data showed that the same number of shares changed hands in two blocks, at 30 sen apiece, 9.1% below the prevailing open market price of 33 sen. Lim is also deemed interested in another 16.5 million shares (3.34%). Filings also showed that Datuk Rozabil @ Rozamujib Abdul Rahman and Mohd Aqliff Shane Abdullah became substantial shareholders, following a proposed bonus issue of free warrants. Rozabil has a 0.11% stake, but is deemed interested in 24.52%, held via BPH Capital Sdn Bhd. On Oct 16, Rozabil, through R Capital Sdn Bhd, bought 150,000 shares at 32 sen each. Meanwhile, Mohd Aqliff is deemed interested in the 13.3% stake held by Pascal Resources Sdn Bhd. Ramasamy Ramesh, on the other hand, sold 22.59 million Destini shares on the open market, on Oct 11, cutting his holdings to 53.7 million shares or 10.88% equity interest, a filing dated Oct 14 shows. The sale took place less than a fortnight after Ramasamy emerged as a substantial shareholder with a 15.46% stake, on Oct 3, pursuant to Destini’s acquisition of Techno Fibre Australia Pty Ltd, Techno Fibre Middle East Marine Services FZE and Techno Fibre (S) Pte Ltd, using new Destini shares. At press time, the disposal seems to have had a greater impact on Destini’s stock price, which eased 28% from a recent high of 45 sen in late September, to close at 32.5 sen on Oct 22. Over at Tan Chong Motor Holdings Bhd, filings showed continued open market purchases by its major shareholder Datuk Tan Heng Chew. At the time of writing, his latest purchase was 48,000 shares at RM6.59 apiece, on Oct 14. This raised his direct interest to 26.14 million shares, or just above 4%, while he is deemed interested in a 48% block. As at end-2012, Tan’s direct stake was 3.76%, with a deemed interest of 45.93%. Tan Chong closed at RM6.64 on Oct 22. Hong Kong-based Wang Tak Co Ltd, a substantial shareholder of Goldis Bhd, also made open market purchases. Wang Tak had 12.78% or 75.4 million Goldis shares, after acquiring 523,900 shares on the open market from Oct 8 to 14, at undisclosed prices. A year ago, Wang Tak had 72.7 million shares or a 12.13% stake in Goldis, which has about 3.37% of its share base in treasury, following buybacks. Notable movements It would seem that the Employees Provident Fund Board took the opportunity to accumulate shares of Top Glove Corp Bhd, which have in the past six weeks prior to Oct 28, shed just over 10% of their value from the RM6.50 levels seen in mid-September, to close at RM5.81 on Oct 22. Latest stock exchange filings showed the EPF emerging as a new substantial shareholder of the latex glove maker, with a 5.24% stake, after acquiring 2.23 million shares on Oct 16. Elsewhere, Cypark Resources Bhd shares touched a new 52-week high. Closing at RM2.17 on Oct 22, the stock gained 21%, from a recent low of RM1.79 in late August. Filings dated Oct 16 showed chairman Tan Sri Razali Ismail and group CEO Daud Ahmad, raising their holdings. Razali bought 1.9 million shares or a 1.07% stake at RM2.03 apiece, on Oct 10, raising his interest to 48.2 million shares or 27.27%. Likewise, Daud raised his direct stake by 1.5 million shares or 0.84%, through the exercise of his employee share options at RM1.10 and RM1.34 apiece, raising his total holdings to 14.2%. Cypark, which reported a net asset per share of RM1.16 as at July 31, placed out 16.07 million shares at RM1.90 apiece in July. This story first appeared in The Edge weekly edition of Oct 28-Nov 3, 2013.

https://theedgemalaysia.com/node/95424

#SE Asia Stocks* Philippine at 2-week highs; regional large caps strong

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BANGKOK (Aug 13): Southeast Asian stocks rose on Tuesday amid gains in broader Asia, with Philippine benchmark hitting a week-high and Malaysia climbing to the highest in two weeks as market players sought large caps with better values in a reporting season. The Philippine index gained 1.5 percent to 6,541.58, the highest since Aug. 5, with shares in Metropolitan Bank & Trust, the most actively traded, up 1 percent at 106 pesos after strong quarterly results and a brokerage upgrade. Citi upgraded its rating on the stock to 'buy' and raised the price target to 127 pesos, citing strong second-quarter earnings. Malaysia's key index was up 0.5 percent at 1,794.26, the highest since July 30, with shares in CIMB Group, the third biggest firm by value, rising 1.4 percent ahead of its quarterly results due later in the month. Thai SET index rose 1.2 percent to 1,449.75, led by a rally in shares in coal miner Banpu Pcl and strong gains in dividend-yielding stocks including banking shares . Strategists at Maybank Kim Eng Securities expected the index to move in a range of 1,425-1,450, with the first-half dividend announcement of banks in the next 1-2 weeks supportive to shares in the sector. Trading volume on the Thai exchange was relatively thin as investors waited to see further signs of growth, including the government's 2 trillion baht ($64.05 billion) borrowing bill that will be debated in parliament on Aug 21-22. "We estimate foreign investors will continue reducing weight in the Thai market ... Although political tensions are easing, investors should also be aware of the consideration of the 2 trillion baht infrastructure loan on Aug. 21-22," Maybank Kim Eng said. Indonesian stocks rose 0.5 percent, with shares in PT Bank Panin Tbk surging due to stake takeover hopes, while Singapore edged up 0.4 percent, with top firm Singapore Telecommunications Ltd higher ahead of quarterly results due later in the week. Vietnam rose 0.3 percent, reversing losses in the previous session, with support coming from the energy and food sectors as well as several banks. - Reuters

https://theedgemalaysia.com/node/51644

InsiderAsia’s model portfolio - 437

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Positive momentum in global equity markets that started towards the later part of June continued to gather traction into the early days of July. Trading sentiment in Asia, though still cautious, was upbeat last week on the back of more encouraging economic data in the US. The health of the world’s largest economy holds significant sway over investors. Last week, the data was largely positive on several fronts, including manufacturing, retail sales and even the moribund job market. Better-than-expected job additions within the private sector bode well for the wider report from the US Labour Department last Friday — after Asian trading hours — offering investors hope that the disappointing numbers for May were more of a blip than the beginning of a declining trend. Lower-than-expected initial claims for unemployment benefits last week further supported this view. The closely watched Dow Jones Industrial Average rose to a fresh high for the year during the week. That boosted investor appetite for stocks worldwide and offset lingering concerns over the eurozone sovereign debt crisis. Bellwether indices in key Asian markets closed mostly higher for the week. European governments are still trying to cobble together a second rescue package for Greece, one that looks likely to include participation from the private sector. However, proposed plans for a rollover of near-term maturing debts held by banks and insurers are being met with stiff opposition from the European Central Bank. The ECB remains publicly opposed to any form of restructuring that it considers would constitute a default. Some believe that this can be attributed, at least in part, to the central bank’s rising direct exposure to debt-laden countries such as Greece and Portugal, through loans to their banks and the purchase of government bonds from the market to keep yields from soaring. The evolving debt crisis in the EU will continue to affect sentiment in the coming months.On the home front, the headline FBM KLCI closed at yet another new all-time high of 1,594.7 points last Friday despite some profit taking. Overall trading volume picked up slightly last week, boosted by increased activity on Wednesday and Thursday. Daily on-market trading volume stood at more than 931 million shares, on average, up from the daily average of less than 904 million shares in the immediate preceding week. Bank Negara Malaysia kept its overnight policy rate unchanged at 3% at its latest policy meeting but raised the statutory reserve requirement for banks from 3% to 4%. The hike in SRR was designed to mop up excess liquidity in the economy. Given the slowdown in global economic activities in 2Q11, the move to keep interest rates unchanged, for now, was not all that surprising. Our open economy is susceptible to the slowdown in global demand. The central bank is likely to monitor the pace of growth over the next few months before deciding on its next course of action. The current consolidation in commodity prices — although still at elevated levels — should temper somewhat the immediate threat of runaway inflation. Crude oil futures traded on the New York Mercantile Exchange are currently hovering around US$96.50 (RM288.54) per barrel, rebounding from the recent low of about US$91 per barrel following the announcement by the International Energy Agency that it will release some 60 million barrels of government-held strategic oil reserves. Nonetheless, prices remain below the high of about US$114 per barrel in late-April. We expect external developments will continue to influence sentiment but local stock prices appear likely to stay relatively resilient. This morning, stocks may open weaker. Despite the positive lead-in from private sector hiring, the US Labour Department’s report out last Friday turned out to be a big disappointment. New jobs created came in at just 18,000 — with downward revisions to the April and May numbers — just a fraction of what the market was expecting. Government job losses offset much of the gains from the private sector. Unemployment inched higher to 9.2%. Portfolio reviewOur model portfolio just marginally underperformed the benchmark index last week. Total market value for our basket of 17 stocks was up 0.7% at RM579,925, compared with the FBM KLCI’s 0.75% gain. Eight stocks in our portfolio closed higher for the week, four ended in the red and five traded unchanged. Including our large cash reserves totalling RM147,653, for which no interest income is imputed, our total portfolio value was up by a lesser 0.55% at RM727,578. This included some RM270 dividends received for our 20,000 shares in Malaysia Steelworks (KL) Bhd (Masteel at 1.35 sen per share). Our cash holding is fairly substantial, accounting for roughly 20% of our total portfolio value, primarily for prudence’s sake. Some of the notable gainers last week were DiGi.Com Bhd (+2.7%), Masteel (+3.5%) and Masterskill Education Group Bhd (+4.1%). At the other end, HELP International Corp (-0.8%), Al-Aqar KPJ REIT (-0.9%) and Quill Capita Trust (-0.9%) were among the bigger losers for the week. Last week’s gains lifted our model portfolio’s cumulative returns since inception to 354.7% on our initial capital of just RM160,000. We continue to outperform the FBM KLCI, which was up by about 146.6% over the same period, by some distance. Our total profits are very substantial at RM567,578, of which RM359,558 has already been realised from previous sales of shares. We kept our model portfolio unchanged. Note: This report is brought to you by Asia Analytica Sdn Bhd, a licensed investment adviser. Please exercise your own judgment or seek professional advice for your specific investment needs. We are not responsible for your investment decisions. Our shareholders, directors and employees may have positions in any of the stocks mentioned. This article appeared in The Edge Financial Daily, July 11, 2011.

https://theedgemalaysia.com/node/8180

Penang Gerakan applauds council appointments

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Surprisingly, the nod for the two new heads, Tan Cheng Chui for the MPPP and Mokhtar Mohd Jait for the MPSP came from Penang Gerakan chairman Datuk Dr Teng Hock Nan, who once headed the MPPP for a few years. Before 1999, both municipal councils were headed by political appointees, MPPP by a Gerakan state assemblyman while MPSP was headed by an Umno state assemblyman. After 1999, both councils have been headed by civil servants. Teng said he believed both MPPP president Tan Cheng Chui and MPSP president Mokhtar Mohd Jait would "do a good job". "They will do a good job and I hope Tan and Mokhtar would carry out their duties well to benefit the people," he said in a statement. Congratulating them on their appointment, Teng said it was important for the two to further improve the quality of services provided by the councils. He said the two councils’ jurisdiction were wide and it was a challenging task to handle all the problems brought forth by ratepayers. "However, I hope they will work harder to serve the people well," he added. Mokhtar, the former Seberang Perai Utara district officer, was chosen to replace Farizan Darus as the MPSP president after the latter was promoted to become the state financial officer. His appointment drew flak from Parti Keadilan Rakyat's (PKR) MPSP municipal councillors who threatened to resign and also alleged that Chief Minister Lim Guan Eng ran the state government as though it was his own backyard, without consulting PKR or PAS. Tan, meanwhile was the MPPP secretary, and acting president when then MPPP president Datuk Zainal Rahim Seman was made Penang state secretary. Tan was appointed as the MPPP president on Monday.

https://theedgemalaysia.com/node/30503

Corporate: Klang development the clincher for KSL

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Ku: Everybody was surprised that Templeton bought into us... It took the market by surprise. He (Mobius) found us very attractive. Since global investor and fund manager Templeton Emerging Markets Group acquired 5% in KSL Holdings Bhd, the property counter has been in the crosshairs of investors. In mid-January, KSL announced a private placement of up to 10% of its paid-up capital or up to 35.5 million new shares, which was followed by an announcement in late February that it was looking to issue 35.1 million shares at RM1.18 each. But there was no inkling that a big name such as Templeton would be involved in taking up a portion of the shares. On March 17, Templeton Emerging Markets emerged as a substantial shareholder in KSL. In a phone conversation with The Edge, KSL’s executive director Ku Tien Sek says, “Everybody was surprised that Templeton bought into us … it took the market by surprise. He (Mark Mobius, Templeton’s executive chairman) found us very attractive. I can safely say that we (KSL) are undervalued by the market. “We have tremendous potential for growth … you can see why we are attractive in our numbers and by gauging our prospects,” Ku says without elaborating. The emergence of Templeton also comes at a time when many market watchers were questioning KSL’s lack of institutional shareholding. Apart from Templeton, KSL’s only other institutional shareholder is pilgrim fund Lembaga Tabung Haji, the second largest shareholder with a 9.7% stake. Mobius had merely said that he was “impressed with KSL’s diversified property projects and business model,” and that Templeton’s “investment will provide support for the company’s continued growth and presence in the fast-growing Malaysian market.” On paper, it looks as though Templeton and Mobius have struck a good deal in acquiring a 5.1% stake in KSL at RM1.18 a share, which was a 6.3% discount to KSL’s five-day volume weighted average market price at that time. Since the announcement of the placement, KSL’s stock has gained, trading in the RM1.27 to RM1.54 band. Despite the gains, the trading price is nowhere near KSL’s net assets per share, which stood at RM2.06 as at end-December last year. KSL’s margins are also understood to have enticed Templeton to buy into the company. For FY2009 ended December, KSL posted a net profit of RM85.3 million on the back of RM184.8 million in revenue, which gives the company a net margin of 46.2%. For FY2008, KSL posted a net profit of RM90.5 million from RM216.2 million in sales, working out to a net margin of 41.9%. Net margins in 2006 meanwhile were 25.4% and 42.6% in 2007. Not many property counters show such strong margins. According to a fund manager familiar with KSL, the company’s advantage lies in its landbank, which was acquired many years ago at low cost. According to KSL’s latest annual report, for FY2008, the bulk of its landbank is located in Johor. But it also has a large parcel of 446.4 acres, which is part of the Blackwater Estate located in Klang, Selangor. The tract in Klang is understood to have been one of the reasons Templetonbought into KSL.  The land was acquired in July last year for RM156.5 million, valuing it at approximately RM8 psf. The acquisition was mooted in November 2007. According to people familiar with KSL, the land is now worth about RM20 to RM25 psf, making it worth possibly three times more than KSL paid for it, or between RM400 million and  RM500 million.  KSL has plans to monetise its investments in Klang. Plans are afoot to build a township with a gross development value of RM2 billion. The township project was supposed to take off early this year.  However,   according to analyst reports, KSL has deferred the launch date to June. The company’s total landbank is in excess of 2,160 acres. KSL’s other properties, mostly in Johor), have a total net book value of RM440.7 million, with valuations done between 2000 and 2008. It is also noteworthy that 45% of KSL’s landbank is located in the Iskandar Development region, which is positioned as Malaysia’s fastest-growing region outside the Klang Valley. Considering the value of the land in its books, KSL’s market capitalisation of RM570.2 million last Thursday could seem low to most investors. The company is also developing KSL City in the vicinity of Johor Baru. The mixed development comprises retail shops, departmental stores, cinemas, car parks, hotels and condominiums. It is strategically located near the new Custom, Immigration and Quarantine Complex. Other offerings in KSL City include high-end condominiums, called D’Esplanade Residence, launched in 3Q2008. KSL City is expected to be completed next year. The three brokerages that cover KSL — TA Securities, Standard & Poors and Affin Securities — have target prices ranging from RM1.55 to RM1.59, which is a slight premium to KSL’s close last Thursday of RM1.46.  This is largely due to KSL’s strong balance sheet. As at end-December, the company had shareholders’ funds of about RM723.8 million while its non-current borrowings amounted to RM116.8 million, giving it a low gearing of 16%. In a report released late February, Standard & Poor’s upgraded its call from a “buy” to a “strong buy”, and upgraded the target price of the stock from RM1.30 to RM1.55, “premised mainly on a brighter outlook for the property market”. TA Securities meanwhile remains upbeat on KSL’s future outlook, which is underpinned by increasing demand for properties in Johor. “We continue to like KSL, given its ability to garner above-average development margins of more than 40% underpinned by its centralised procurement units that help in reducing development cost and strong financial standing with net cash position,” TA says in a research report. TA has a “buy” call and pegs a target price of RM1.59 on KSL’s stock. This article appeared in Corporate page of The Edge Malaysia, Issue 803, April 26-May 2, 2010 

https://theedgemalaysia.com/node/44756

Cover Story: Ensuring the well-being of settlers’ descendants

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Running a complex organisation such as the Federal Land Development Authority (FELDA) and its related business entities is truly a matter of striking a fine balance between the competing forces of economics and politics. It is also about negotiating and managing the expectations of the original settlers and their descendants while ensuring the financial returns of the stakeholders are not compromised. Felda was conceived as a scheme to distribute land to settlers and encourage them to make a living out of cultivating rubber and oil palm. It started some 54 years ago and most families are now into their second and third generation of settlers. The raging issue at the moment is that while the early settlers own the land and homes, the second and third-generation settlers are finding life in the settlements less appealing due to the lack of economic activity and housing. The shortage of these opportunities and facilities has endeared some of these settlers to the opposition, something that has not gone unnoticed by the Barisan Nasional ruling coalition. Spurring economic activity and improving housing are two issues at the heart of newly appointed chairman Tan Sri Mohd Isa Abdul Samad. In an interview with The Edge, Isa says the plan is to establish another cooperative for the second-generation Felda settlers. Koperasi Permodalan Felda, which counts Felda staff and settlers along with their families as its members, owns 51% of Felda Holdings Bhd. Felda Holdings is the commercial arm for Felda’s domestic multicrop agro-based enterprises and is 49%-owned by Felda Global Ventures Holdings Sdn Bhd, a wholly-owned subsidiary of the federal authority. Additionally, Isa says Koperasi Permodalan Felda has been paying out healthy annual dividends of between 10% and 16% to its members. Isa says this equity structure ensures that Felda’s commercial profits are returned to the federal authority and shared with the settlers. “The socio-economic agenda was built into Felda’s structure from the time the land scheme was established in 1956,” says Isa. Thus, says Isa, his vision and mandate is to ensure that Felda continues to be a profitable venture. Another immediate concern is to solve the housing issues faced by the second and third generations, particularly those who have chosen to remain in the Felda land schemes. “Some might migrate to other places but some of the second generation prefer to stay in Felda because they are used to it. So our immediate step is to build houses for the second generation,” Isa says. There is no blanket solution for solving the housing concerns of Felda settlers, with some given housing lots in the  schemes and others provided with a home in the housing estates. Felda is also spending millions of ringgit on providing assistance and opportunities in education via various programmes for the Felda youth, says Isa. Political observers have noted that the Felda schemes have become intense battlegrounds, with the opposition Pakatan Rakyat striving to sway the settlers, who are traditionally BN supporters, to its side. Indeed, Isa is no stranger to politics, having been menteri besar of Negri Sembilan for two decades before he became Minister of the Federal Territories from 2004 to 2008. Isa made his comeback to mainstream politics in October 2009 when he was elected Bagan Pinang assemblyman. Commenting on the politics surrounding Felda, Isa says: “Criticism is normal. The opposition has never praised Felda. I am confident that the Felda people will not be confused by these tactics.” PKR chief strategist Rafizi Ramli says there must be a solution in place to ensure that the descendants of the original Felda settlers enjoy social mobility and opportunities. Felda’s biggest dilemma is that many of the second and third-generation Felda settlers feel displaced. Some of them feel they cannot compete outside the schemes, says Rafizi. Still, many have ventured into the town and city areas. As for those who remain in the Felda schemes, their chief complaint is the dearth of infrastructure and opportunities, comments Rafizi. “If you go to the Felda areas, things have not changed for 20, 30 years. The onus is on the government to ensure the Felda schemes boom with economic activity. There can be a lot of spin-offs. There’s no vibrancy there.” Both sides of the political divide have been doing their groundwork in the Felda areas, which remain a considerable political force in the country’s landscape.  About 54 parliamentary and 92 state constituencies encompass Felda land schemes. There are almost 113,000 settlers across the country in over 400 Felda land schemes, which are mostly located in Johor, Negri Sembilan and Pahang. And crucial to the battle will be winning the hearts and minds of the second, third and possibly fourth generations of Felda settlers born on the land schemes their predecessors pioneered. This article appeared in Corporate, The Edge Malaysia, Issue 842, Jan 24-30, 2011 

https://theedgemalaysia.com/node/61163

#Highlight* Snag in Selangor water deals

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KUALA LUMPUR: The Selangor water consolidation exercise that was expected to be completed by the end of this month appears to have hit a snag. Gamuda Bhd, which controls Syarikat Pengeluar Air Selangor Sdn Bhd (Splash), has rejected the latest offer on the grounds that it excludes certain key components that effectively ascribe a lower value to the assets. Puncak Niaga Holdings Bhd, which also stated that the latest offer from Kumpulan Darul Ehsan Bhd (KDEB) valued its assets at a lower price, agreed in principle to the revised offer but imposed several conditions. This latest development is a dampener on the Pakatan Rakyat run-Selangor government because the offer is conditional upon the state acquiring the assets of the three water treatment operators and Syabas. The troubles were evident two weeks ago. The Edge Financial Daily had reported that Puncak Niaga was seeking a 15% return on equity (ROE) for its water concessionaires and was unlikely to settle with the 12% offered by the Selangor government. Among the conditions sought by Puncak Niaga are: i) That the total equity contribution to be paid to Puncak should include a compound return of 15% per annum for the loss of future earnings as a result of the sale of its water concession business to KDEB; ii) The debts due and outstanding from Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) to Puncak Niaga in relation to the supply and sale of water should be paid  as the services had already been rendered; iii) Waiver of the requirement for the acquisition of the water assets by Pengurusan Aset Air Bhd (PAAB) to be undertaken concurrently with the acquisition of the stake by KDEB. This is because KDEB is acquiring the equity interest in the water concessionaires, the concession holders should be paid first and KDEB can separately settle its arrangement with PAAB to take over the water assets and borrowings and; iv) Removal of the requirement of due diligence post-acceptance of the offer in order for the exercise to be completed as quickly as possible. Puncak Niaga said details of KDEB’s offer found that the actual proceeds payable to all water concession holders are far below the RM9.65 billion announced by the Selangor government. “For instance, the amount offered to Puncak for its stakes in PNSB [Permodalan Negeri Selangor Bhd] and Syabas is only RM1.555 billion and not RM5.594 billion as informed by the Selangor state government,” it said in a statement. PNSB and Syabas are controlled by Puncak Niaga Holdings, whose executive chairman is former Selangor Umno treasurer Tan Sri Rozali Ismail. Gamuda said its associate Splash was unable to consider the offer due to a key component in the previous offer in February being omitted in the latest offer. It said the latest offer omitted the payment of Splash’s surplus book value of assets over liabilities (including receivables). “This has resulted in an approximately 90% reduction in the offer consideration for Splash compared to the earlier offer,” it said. Gamuda said the valuation methodology of using the ROE of 12% per annum for Splash was not fair as it did not take into account the remaining tenure of the concession. Also, KDEB had not indicated in its offer if it would retain the current maintenance operators of Splash on existing terms after the completion of the proposed purchase. However, the company said it would continue to seek further clarification on issues raised with all parties involved to reach mutually agreed terms and conditions. In a separate announcement, Puncak Niaga said it had conveyed its general acceptance of the offer in principle from KDEB, subject to several terms and conditions. Puncak Niaga said it was of the view that the manner in which the offer was presented by the Selangor government was misleading and detrimental to all shareholders. It observed that the several offers which the Selangor government has made to date, seem to be ambiguous and need to be clarified and confirmed. Moreover, concession holders are expected to respond within a very short time. This could have been avoided if discussions had been held earlier and concession holders could have quickly responded without the need to seek clarifications and confirmations, Puncak Niaga added. Gamuda and Puncak Niaga were given until today to review KDEB’s revised offer made two weeks ago. The other shareholders of Splash are Kumpulan Perangsang Selangor Bhd and Tan Sri Wan Azmi Wan Hamzah, with 30% each. This article first appeared in The Edge Financial Daily, on December 5, 2013.

https://theedgemalaysia.com/node/83802

Asean leaders begin their biannual meeting

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BANDAR SERI BEGAWAN (Oct 9): Asean leaders begin their biannual gathering at the capital of Brunei Darussalam today to discuss the progress towards the realisation of the Asean Community by 2015. Summit chairman Sultan Hassanal Bolkiah led leaders from nine other countries and Asean Secretary-General Le Luong Minh to a customary group photo before ushering them into the meeting room at the International Convention Centre in Berakas. Prime Minister Datuk Seri Najib Tun Razak is leading the Malaysian delegation to the 23rd Asean Summit and other related summits that take place today and tomorrow. Asean leaders attending the Summit include Indonesian President Susilo Bambang Yudhoyono, Singapore Prime Minster Lee Hsien Loong, Philippine President Benigno S.Aquino, Thai Prime Minister Yingluck Shinawatra and Myanmar President U Thein Sein. Brunei, which hosted the first of the two summits in April, has chosen the theme, "Our People, Our Future Together". The leaders are expected to adopt several key documents during the Summit, which includes the Bandar Seri Begawan Statement on the Asean Community's Post-2015 Vision that was initiated by Malaysia and aimed at launching the grouping's efforts to evolve and elaborate its post-2015 vision. Le said the 23rd Asean Summit marked a very productive year of Asean Community building. "For 2014, we will remain focused on expediting the implementation of the remaining 2015 targets and ensuring greater convergence of the three community pillars - peace, stability and development - and at the same time, each other's conditions and driving force," he said.    In the afternoon, the Asean leaders will hold their annual summits with China, Japan and South Korea, before converging for the first Asean-United States Summit. However, the Summit will miss its biggest attraction as US President Barack Obama had skipped his visit to the region due to the US government shutdown and will be represented by Secretary of State John Kerry. Asean, comprising Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Vietnam and Thailand, has a total population of some 617 million, which is about 8.8 per cent of the world's population.

https://theedgemalaysia.com/node/97387

#Analysis* CPO price gains unsustainable

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KUALA LUMPUR (August 27): The rise in crude palm oil (CPO) futures prices to RM2,434 a tonne, the highest since early-June, may not be sustainable, analysts said. In a note today, Hong Leong Investment Bank Bhd analyst Chye Wen Fei said recent positive news flow including expectation of a lower harvest of rival crop soybean, and weakening ringgit versus the US dollar, are unlikely to push CPO prices higher. This is due to seasonally-high CPO production since last month and weakening of India's rupee against the ringgit and Indonesia's rupiah. The depreciation of the rupee may curb India CPO imports from major producers Malaysia and Indonesia. Meanwhile, the analyst also expects a reduction in China’s CPO consumption in the absence of seasonal demand post mid-autumn festival. "We are still keeping our average CPO price projections unchanged, at RM2,500/tonne and RM2,600/tonne for 2013 and 2014 respectively, pending further review but with downward bias for 2013," Chye said. With the subdued CPO price outlook, the analyst believes earnings growth of plantation companies will come from CPO output expansion and their downstream expansion in Indonesia which will complement their upstream operations there. Firms with significant property land bank are also closely watched. This is because real estate earnings will mitigate the impact of low CPO prices, the analyst said. Hong Leong's top plantation sector picks are CB Industrial Holding Bhd and Genting Plantations Bhd.

https://theedgemalaysia.com/node/68898

Glenealy dividend narrows offer price-expectations gap

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KUALA LUMPUR: The Minority Shareholder Watchdog Group (MSWG) found the special dividend by Gleanealy Plantations (Malaya) Bhd has narrowed the value gap between offer price and minority shareholders expectation. “After taking into consideration the proposed 52.75 sen special dividend, the value of the offer is effectively in the region of RM8 per share [RM25,000 per hectare at book value versus RM50,000 per hectare as at current] which has narrowed the value gap between the offer price and the expectation by the minority shareholders,” said MSWG CEO Rita Benoy Bushon in her feedback on the special dividend. She added that the minority shareholders should make their decision based on the new value of RM8 taking into consideration the dividend payment and also their return objectives. On issues that should be highlighted at today’s EGM, Bushon said there should be revaluation of the plantation assets so that the value accorded would be more transparent to minority shareholders when they make a decision. “Though the law is silent on the revaluation of land in cases of privatisation, we urged companies to embrace transparency by undertaking such revaluations especially when most of the assets are land-based,” she said. Another issue she highlighted was that regulators should compel new valuations to be carried out in future privatisations, where the companies’ assets are land-based. It also should be done within a six-month period prior to the privatisation exercise in order to ensure validity of such valuations. Glenealy minority shareholders will meet today to vote on the proposed privatisation by Samling Strategic Corp Sdn Bhd. The proposal needs 75% shareholder support in a resolution that the Samling group cannot vote. Glenealy’s counter closed at RM7.75, up 45 sen with 43,500 shares traded. This article is appeared in The Edge Financial Daily on 13 September, 2012.

https://theedgemalaysia.com/node/11133

#Vegoils* Palm oil climbs more than 3 pct on concerns over dry weather

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SINGAPORE (Feb 26): Malaysian palm oil futures rose more than 3 percent on Wednesday, recouping losses sustained in the previous two sessions, on concerns over dry weather hurting production in Southeast Asia. Dry weather over the past month in Indonesia and Malaysia is adding to global concerns over edible oil supplies with lack of rains taking a toll on soybean production in Brazil. Market participants said the unexpected dryness could threaten yields of fresh fruit bunches, curbing palm oil supply and tightening end-stocks to about 1.83 million tonnes from the current 1.93 million tonnes. "The big factor in the palm market is supply concerns, caused by the unforeseen dry weather which could persist until April," said a trader with a foreign commodities brokerage. "February's production looks bad, output could have dropped more than 12 percent," the trader added. The benchmark May contract on the Bursa Malaysia Derivatives Exchange rose more than 3 percent in late trade to 2,818 ringgit per tonne, hitting their highest since Sept. 20, 2012. Prices later settled to 2,803 ringgit ($857) by Wednesday's close. Total traded volume stood at 57,115 lots of 25 tonnes, much higher than the average 35,000 lots. Brazil's No. 2 soy growing state Parana lost some 2 million tonnes of soybeans to drought and hot weather in January and February, the state government said on Tuesday. Parana now expects a crop of 14.47 million tonnes, down from 16.5 million tonnes previously, a reduction that lessens Brazil's chance of surpassing the United States as the world's top soy grower this season.     Technicals pointed to a bullish trend. Malaysian palm oil third month contract is expected to revisit its Feb. 24 high of 2,777 ringgit per tonne, as it may have completed a correction from this level. But weaker-than-expected export data put a lid on gains, stoking worries over recovery in vegetable oil demand. Exports of Malaysian palm oil products from Feb. 1-25 rose 1.6 percent to 1,048,311 tonnes compared to the same period in January, cargo surveyor Intertek Testing Services said, slowing down from the rapid export growth seen earlier in the month. Another cargo surveyor, Societe Generale de Surveillance, reported that exports in the same period rose 3.4 percent, as bigger demand from India was offset by smaller shipments to China and Europe. "The rise in prices is mainly driven by expectations of tighter supplies, as exports have not been very impressive," said another trader with a foreign commodities brokerage in Kuala Lumpur. U.S. soyoil contract for May rose 1.2 percent in late Asian trade, while the most active May soybean oil contract on the Dalian Commodities Exchange eased 0.1 percent. In other news, ICE Futures U.S. on Tuesday raised initial margin requirements for trading arabica coffee, raw sugar and soybean oil effective with the opening of business on Feb. 26. The Atlanta-based exchange raised soybean oil margins by 36.4 percent to $750 per contract. Palm, soy and crude oil prices at 1023 GMT Contract        Month    Last   Change     Low    High  Volume MY PALM OIL      MAR4    2828   +78.00    2745    2840     293 MY PALM OIL      APR4    2822   +71.00    2735    2836    5113 MY PALM OIL      MAY4    2803   +69.00    2721    2818   32278 CHINA PALM OLEIN MAY4    6126   +12.00    6040    6130  326510 CHINA SOYOIL     MAY4    6780    -8.00    6716    6780  173904 CBOT SOY OIL     MAY4   41.35    +0.50   40.65   41.47   10864 NYMEX CRUDE      APR4  102.18    +0.35  101.58  102.26   14756 Palm oil prices in Malaysian ringgit per tonne CBOT soy oil in U.S. cents per pound Dalian soy oil and RBD palm olein in Chinese yuan per tonne Crude in U.S. dollars per barrel ($1 = 3.277 ringgit)

https://theedgemalaysia.com/node/54009

CIMB Research maintains Underperform on MTD-ACPI

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KUALA LUMPUR: CIMB Equities Research said MTD-ACPI Engineering disappointed yet again with a RM2.6 million loss in 1QFY3/12, dashing its hopes of a recovery that would put it on track to meet the research house's full-year net profit forecast of RM3.6 million. The research house said on Friday, Aug 26 that as MTD-ACPI’s construction order book was being run down and there were no still signs of a turnaround, “we now forecast a RM5 million loss for the full year while keeping our FY13-14 forecasts”. CIMB Research said the stock should continue to UNDERPERFORM as investors are likely to take these results as a sign that management is unable to staunch the red ink. “We maintain our target price of 53 sen, which is based on 1.0 times price to net tangible asset,” it said. Among the small-cap contractors, the research house’s pick is Muhibbah Engineering which it has a Trading Buy.

https://theedgemalaysia.com/node/74933

Cyclical interest to return to China

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POSITIVE indicators in China and the US, as well as signs of a resolution to the latter's fiscal cliff, will see global fund allocators turning to the China/Hong Kong market, which is now at a three to four-year low, says Raymond Kong. According to Kong, who is co-chief investment officer at Libra Invest Bhd, which manages about RM3 billion in assets, data such as China's Purchasing Managers' Index (PMI), retail sales, industrial production numbers and fixed asset investments (FAI) showed an upturn in September or October after hitting a trough. "Now, if people were to be extremely cynical about this, they would say it's because of the China leadership change. But if you look at the US' PMI, FAI and so on, Europe's FAI and so on… they all show upturns," he says. Kong believes China's economy has bottomed. Although its annual growth rate will moderate to about 7.5% or 8% going forward, from about 10% to 11% over the past five years, the growth mix will become increasingly "balanced" and "high quality". "China's growth 10 years ago was geared towards exports, but now the focus will be on domestic consumption growth and rural growth. This is high on the agenda for China's new top leaders," says Kong. On the US' fiscal cliff that is currently under the spotlight, Kong says he expects a resolution in the next few weeks, probably before Christmas. "I think it is just horse trading now with the Republicans. Obama's plan is to raise US$1.6 trillion in taxes over the next decade while the Republicans are looking at US$800 billion. They will try to bridge the gap. It's just a numbers game now." The term "fiscal cliff" describes the conundrum the US government faces at the end of this year, when certain tax breaks come to an end and new taxes related to healthcare begin. The spending cuts agreed upon as part of the debt ceiling deal in 2011 also goes into effect. Meanwhile, Kong believes that Europe's darkest hours are over. As the eurozone's troubles have been around for a while, he says investors understand the situation and are unlikely to face further shocks. He adds that it is now about how Europe moves forward. "Is it muddling through? Or is it going to go down? I don't think it's going to go down much more. I think Europe has already collapsed. But having said that, the euro is still strong." A lot of the bad news, Kong says, has already been factored in by the market. With the US and China "definitely growing", and Europe muddling through, it's not an "Armageddon situation". "At least you have two engines starting to crawl," he says. "It is not all hunky dory, it's not all over yet, but at least we are gaining some steam in the pick-up of the global economy. This will help drive interest in the China/Hong Kong market, which is seeing trough valuations." In China, apart from the stimulus package, the government has another weapon in the form of monetary policy. Kong says that right now, the reserve requirement for Chinese banks is still high at about 20%, which he believes can still come down and have the banks decrease rates. "However, they don't want to decrease the rate so fast because they have already done a lot of stimulus policy. The new leadership is not going to do any major financial policy changes. This reaffirms that they will continue the stimulative policy for the economy," says Kong. Nonetheless, he adds, the policy is seeing a shift from urbanisation to ruralisation, and from state-owned to private enterprises. Private-sector enterprises in China have been seeing an uptick in activities. This is reflected by the favourable reading in the HSBC Flash China PMI index. To take advantage of the resurgence of interest in China, Kong favours stocks that are going to benefit from the new stimulus packages that will be announced by the new leadership to drive the economy. Among those he likes are those related to China's financials, Macau's gaming industry and railway contracts. Libra Invest manages a unit trust fund called Libra Consumer and Leisure Asia Fund, which has investments in China/Hong Kong. "The financials are doing extremely well. Recent results show that the earnings are not just driven by loan write-backs, but also loan growth. They haven't had loan growth for a long time," says Kong. He notes that in the past one or two years, the banks have been extremely prudent when it came to their lending policy because they are required to have a high capital adequacy ratio. "Also, they didn't want to lend in an economy that was slowing down. But now, they see that the economy is definitely picking up." On Macau's gaming stocks, Kong believes they will benefit hugely from the stimulus in China, which will impact the masses there, including the affluent working population. There was a hiccup in Macau recently due to a drop in VIP gaming, which traditionally accounts for 70% of gaming revenue. But Kong says it is just a short-term phenomenon as China's central government, which is making the transition to the new leadership, says it is coming down on corruption and money laundering. "What is going to drive Macau's gaming over the long term is its huge mass market potential. VIP [market] is pretty big, but mass market is getting bigger," Kong says. But even for the VIP market, he believes the thing that will drive the upswing in this segment is the M2 growth in the mainland. The increase in M2 money supply means there will be more funding available for junket operators, who in turn will provide credit to VIP gamblers. "The mass market is always there. But now you will see the upswing coming from the VIP segment. So with the National Congress of the Communist Party of China over, and as the Bo Xi Lai affair withers away and new policies come in, plus monetary growth coming back up, I think the VIP market will return," says Kong. However, he is more selective when it comes to China retailers such as Parkson and Golden Eagle, as same-store-sales growth remains weak, having fallen from the mid-teens to 7% to 8% now. Also, the emergence of new competition will hurt margins. "We want to invest in companies with a huge market share and gaining market share, with big cash flow, reasonable valuations and all that. It's important to have strong market positioning. I would rather buy into a baby diaper company that has a huge market share than, say, a fashion retailer as consumer tastes change rapidly," he says. Sectors to keep an eye on, but not in the immediate term, are commodities and industrial, says Kong, adding that although the global economy is picking up, commodity prices remain flattish, meaning there is still an oversupply problem. "You look at thermal coal, iron ore prices and all that — they haven't moved. What I want to see is sustained growth in the Chinese economy to bring up the commodities. When the economy picks up, not all will fire; some sectors will fire, some not. It will take sustained growth for other industrial segments to fire up as well," he says. Overall, Kong sees cyclical interest coming back to the China/ Hong Kong market, which has seriously lagged the Asean equity market that has gone up 70% to 80% over the last three years. "I think funds are going to re-allocate, maybe some from Asean or maybe not… but there will be new funds coming to China/ Hong Kong," he says. "China is not totally out of the woods yet, but it definitely has bottomed. It is not heading for a hard landing; green shoots are coming. In fact, valuations are really low. The new leadership may announce new measures soon, which will give some impetus going into the Chinese New Year. I believe the market will be set for a pre-CNY rally. In fact, the rally just started a few weeks ago," he concludes. This story first appeared in The Edge weekly edition of Dec 10-16, 2012.

https://theedgemalaysia.com/node/72413

Sapurakencana awarded RM135.8m job in Kamelia Field

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KUALA LUMPUR (Nov 1): Sapurakencana Petroleum Bhd's wholly-owned unit has received a letter of award for an RM135.8 million contract in relation to an integrated gas project in the Kamelia Field in the North Malay Basin. The award for the engineering, procurement, construction and commissioning (EPCC) contract for the Kamelia-A Wellhead Platform from HESS Exploration and Production Malaysia BV is expected to boost its earnings for the financial year ending January 31, 2013, the company said in a statement to Bursa Malaysia today. Sapurakencana added 10 sen or 3.98% to RM2.61 today with over 20.2 million shares done. The stock traded between RM2.52 and RM2.63 for the day.

https://theedgemalaysia.com/node/81265

#MOF* Govt 2014 revenue at RM224b, expenditure at RM262b

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MOF: Govt 2014 revenue at RM224b, expenditure at RM262b

https://theedgemalaysia.com/node/28700

#Confessions of a manager* CHRIS YONG, country manager, Courts Mammoth Sdn Bhd

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You’ve previously worked for Microsoft, IBM and Oracle. Why did you join Courts?One reason I joined Courts was to be part of the turnaround team. I saw opportunity in its profitable and unique business model, being both an electronics retailer and furniture retailer offering instalment schemes. They also wanted fresh talent from outside and my marketing background in IT provided that. When I joined the company end-2006, the parent company Courts Plc in the UK went into receivership, which unfortunately caused a lot of disruption to the business in terms of management focus. I joined them as commercial director then and ran the retail business, and eventually, store operations as well so it was a natural progression for me to lead the company. What were some practices you applied at Courts drawing on your previous experience?One of the things I introduced to the business was ‘scrubs’. In Microsoft they have intense budget planning sessions where they review the business by ‘scrubbing’ the financial data from all angles. The hard questions the team asks one another are where great ideas come from. At IBM, where I spent six years, they have tremendous sales discipline. We did a lot of sales pipeline reviews there – running the sales based on numbers on a weekly basis, instead of a quarterly or yearly basis. You stare at the numbers, monitor the business and if things don’t look right you need to know why. If things go well, you have to find out why as well. Branch managers need to be able to explain the business this way. What was the first thing you addressed upon assuming  the role of Courts country manager in 2008? I focused my time on three things —  openness, urgency and accountability. Openness means it’s okay to challenge one another in meetings; it’s about the business idea, not the person. We removed all [office] doors as a physical reminder that we are serious about an open culture, and expect people to fall in line. I also expect a high sense of urgency. Twenty-three years ago, Courts was the only retailer of its kind. Today, there is a lot more competition so the pace of work needs to be fast to grow and grab market share. There also needs to be a sense of accountability. Our company is not small — about half a billion ringgit in turnover — so every person needs to be accountable for his actions. They cannot be waiting to be told exactly what to do but instead, they should take responsibility and push for an answer.The company underwent a restructuring process in 2007. What did it entail, and why was it necessary? Three years ago, the company was losing a lot of money because of two things. The credit process was not tight enough so we hired a top-notch person to handle the credit business, and set up controls to ensure a strong credit sanctioning and collection process. We also set up a 90-seat call centre with an IT solution to cue who needs to be reminded of payment due dates. Our credit costs have dropped by 47% since then. Our old store format was also very dated; our electrical and electronic products used to be on the top floor, which didn’t make sense since 70% of our business is from electronics. So we brought electronics down to prime space and changed the store format and product offering. Three years ago, we didn’t even carry flat panel TVs; today we lead the market and are growing our market share. Last year, the electronic and digital product market shrunk 4% but we grew our market share by 8%. What are your plans to bring Courts forward?We’ve brought in a lot of talent over the past few years. Our supply chain director is from Coca-Cola, our finance director from DHL and consumer credit head from American Express, so we have a lot of experienced people. In the past we focused on a lot of rank-and-file people, but I feel there is a gap in the middle-management segment. If we have internal talent, we need to groom them to such positions. This year we will be launching the sales and marketing training academy to systematically raise the level of store manager competency. We’re investing RM1 million in the programme, which is a licence to lead — employees will have to pass assignments and tests in order to become a branch manager. What are some of the toughest challenges you’ve faced as country manager?Having conversations with someone on his performance is not easy but it’s the right thing to do. It’s a tragedy if someone has been with the company for 23 years and never had anyone give him feedback. And when the new management team has to tell that person 23 years later that he is not performing… that is the most inhumane thing. If I could have done it differently, I would understand my team’s personal goals and their job fit. I give open feedback consistently to my team throughout the year — it’s only fair for the staff to give them a chance to work on it. If they still struggle even with feedback, then it’s time to have an open discussion to acknowledge that. What is your management style?Some of the feedback from my team is that I am fast and furious! [Laughs] I guess I do expect a high and intense pace, so anyone in the team who is of a slower nature… naturally, there would probably be some issue. But people are starting to understand why we need to work at such a speed; it’s market-driven. The recession last year was good for us as a company because it forced us to make hard decisions a lot faster and got people to understand things a lot quicker. What is the best management advice you’ve received and from whom? One thing I learnt from my ex-boss, former Microsoft Malaysia managing director Butt Wai Choon, is about challenging and stretching people to the extent that they are aligned to their strengths. Those who don’t make it will probably go on to take up things they are more aligned to, which is better for them and the company at the end of the day. You will feel liberated when you discover what you’re made to do in life and when that happens, you will really enjoy your job. One of the things I love doing is selling a vision internally or externally; as part of business turnaround I get to do that a lot with staff, suppliers, bankers, and the press. That’s why I love coming to work, and similarly, I hope to help my team understand the same thing about themselves. This article appeared in Manager@work, the monthly management pullout of The Edge Malaysia, Issue 794, Feb 22-28, 2010

https://theedgemalaysia.com/node/3296

PPB’s 4Q net profit falls 8% y-o-y to RM281m, declares 17 sen dividend

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KUALA LUMPUR (Feb 28): PPB Group Bhd’s net profit for the fourth quarter fell 8% year-on-year to RM280.7 million, from RM306.0 million previously. Despite the lower profit, revenue rose 15% to RM900.2 million in 4QFY13, from RM782.6 million in 4QFY12. The group declared a final single-tier dividend of 17 sen per share, payable on June 6, 2014. Net profit for the full year rose to RM994.2 million from RM842.2 million in the previous year, while revenue rose to RM3.31 billion from RM3.02 billion. The lower profit for the quarter was attributed to lesser contribution from its associate Wilmar International Ltd and lower profits from its flour and feed milling, and grains trading segment. On the other hand, revenue was higher as most of the group’s segments had registered higher earnings, with the exception of its environmental engineering segment. Looking forward, the group expects to continue to "perform positively" in 2014. “With the group’s strong core business presence in Malaysia together with expansion in the cinema, flour and bakery segments progressively coming on-stream, it is anticipated that the group’s businesses will continue to perform well in 2014,” said PPB. The group also mentioned that its overall consolidated financial results in 2014 would continue to be supported by Wilmar’s business performance.

https://theedgemalaysia.com/node/81311

No near-term catalyst for Ireka

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Ireka Corp  Bhd’s (65 sen) earnings will continue to be volatile due to its high dependence on Aseana Properties Ltd (ASPL), which in turn is affected by a property slowdown in its two key markets — Vietnam and Malaysia. With both ASPL and Ireka adopting the International Financial Reporting Interpretation Committee (IFRIC) 15: Agreement for the Construction of Real Estate, which recognises profits on completion of a project, the two companies will also see lumpy profit recognition going forward. Operationally, there will be few catalysts to drive ASPL’s profit in the next two years following the completion of the Seni Mont’Kiara project last year, which substantially boosted ASPL and Ireka’s earnings. With a lack of new launches in Vietnam, the next major catalyst will be the condominium and hotel residence project in Jalan Kia Peng, near the Kuala Lumpur City Centre (KLCC), called RuMa Hotel and Residences, which was launched in early March. However, the project will only be completed in mid-2016 and contribute to earnings then. In the meantime, the Sandakan Harbour complex will likely see continued high operational costs in the coming year until occupancy levels improve. Similarly, the newly opened Aloft Kuala Lumpur Sentral Hotel may also put a drag on profitability until break-even levels of occupancy are achieved. Vietnam market remains challengingThe Vietnam market remains challenging. Its economic problems have been lingering for the past five years since the bubble burst in 2007. However, the problems have been compounded in recent months by political issues, a crackdown on dissent and a rapid rise in nonperforming loans. Vietnam’s economic state — and the lack of launches — will affect ASPL’s performance. The company is currently constructing a hospital to anchor the International Hi-Tech Healthcare Park, a 37.5ha healthcare themed development with a potential gross development value (GDV) of US$770 million (RM2.41 billion) in Ho Chi Minh City. The hospital is expected to open in April 2013, after which ASPL hopes to start launching affordable apartments priced at US$50,000 to US$80,000. The launch of its maiden project in Ho Chi Minh City, called the Phuoc Long B Residential Development, has been further delayed to the third quarter of 2013 and will hinge on conditions, due to its high-end nature. It consists of 37 luxury villas and 450 apartments with total GDV of US$100 million. The low density project is located on the border between District 2 and 9 of Ho Chi Minh City and is being undertaken as a joint venture with Nam Long Investment Corp, with ASPL having a 55% interest. The first phase will involve the villas, with an estimated GDV of US$30 million. New projects in MalaysiaIn Malaysia, ASPL completed the construction of KL Sentral Office Towers & Hotel in December 2012 and will open the 482-room Aloft Kuala Lumpur Sentral Hotel in March 2013. This month, it is set to launch RuMa Hotel and Residences, comprising 200 condominium units and 253 hotel rooms on a one-acre site in Jalan Kia Peng. The project is a 70:30 joint venture between ASPL and Ireka. The project will have an estimated GDV of RM650 million, and should lift both Ireka and ASPL’s earnings when completed in mid-2016. Elsewhere, the fully completed Seni Mont’Kiara project saw cancellations by buyers of 45 units as they were unable to secure financing. Some 18 units were sold in the last quarter. The project is now 78% sold and the sale of the remaining completed units over time will help boost the bottom line. Ireka’s construction division continues to see high earnings volatility. Positively, its order book has almost doubled over the last three quarters to RM464 million at end 2012 from RM240 million, although down slightly from RM480 million at end-September. Unexciting earnings but downside risks limitedGiven the continued losses in third quarter of 2013 financial year (3QFY13), we have trimmed our forecast for FY13 from a net profit of RM2.1 million to a net loss of RM4.4 million. We are keeping our forecast unchanged for FY14, where we expect net profit to rebound to RM9.1 million, or eight sen per share with a price-earnings ratio of 7.8 times.     While earnings are unexciting, we note that downside risks are also low. The stock is trading well below its book value of RM1.89 and the stock offers consistently high dividends. Annual dividend payout has been fairly consistent at five sen per year, irrespective of the annual financial performance. This translates into a high yield of 8% at the current share price of 62 sen Ireka posted pre-tax and net loss of RM1.6 million and RM2.5 million respectively in 3QFY13, due to a lack of new property completions and sales at ASPL, and losses incurred by its construction arm. The company’s losses so far for the financial year are largely due to losses at ASPL, construction cost overruns at its Sandakan Harbour project, as well as high opening and operating costs associated with the newly opened Harbour Mall and Four Points by Sheraton Hotel in Sandakan,  which will take time to raise occupancy levels. The mall and hotel commenced operations in May and July 2012 respectively. The tenancy rate of the mall currently stands at 42%, while the occupancy rate at the hotel is about 42%. Note: This report is brought to you by Asia Analytica Sdn Bhd, a licensed investment adviser. Please exercise your own judgment or seek professional advice for your specific investment needs. We are not responsible for your investment decisions. Our shareholders, directors and employees may have positions in any of the stocks mentioned. This article first appeared in The Edge Financial Daily, on March 22, 2013.

https://theedgemalaysia.com/node/33175

PJI trading volume quadruples on asset sale

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KUALA LUMPUR: Mid-cap property developer PJI Holdings Bhd topped the stock market’s most active list with 37.8 million shares traded at the market close yesterday. Yesterday’s trading volume in the stock was a 311.31% spike from Tuesday’s volume. PJI’s share price ended the day two sen or 19.04% higher at 12.5 sen. Together with Monday’s one sen or 10.53% jump in share price, the counter has had an almost 30% price gain over two trading days. The surge in both volume and price of PJI shares follows the announcement by the company on Monday that it has entered into sale and purchase agreements to dispose of Wisma PJI to one Pan Pacific Enterprise Sdn Bhd for RM8.8 million cash. Wisma PJI consists of two adjoining three-storey semi-detached factories in Bukit Jelutong, Shah Alam, measuring 2,215 sq ft and 1,575 sq ft. A senior chartist at a local broking house said that PJI shares looked overbought. “It’s quite a sharp rally. I would say it is overbought and the counter could now be prone to profit taking,” he said.The counter’s Relative Strength Index (RSI), a trading momentum indicator, was at 84.36, he said adding that an RSI above 80 signals “the tail end of a rally”. The company said in the Monday announcement that the Wisma PJI properties were acquired for RM5.98 million in 1999, while their audited net book values as at June 30, 2009 were RM9.4 million. The proposed sale was expected to give a net gain on disposal of RM3.51 million. The disposal price is about RM600,000 below a recent market valuation of RM9.4 million by Henry Butcher Malaysia Sdn Bhd. The RM3.51 million net gain from the sale of the properties covers about 92% of the RM3.8 million net loss posted over PJI’s first three fiscal quarters of financial year 2010. The company’s financial year-end is June 30. PJI has recently been engaged in asset disposals and capital restructuring. The latest proposed sale is expected to put total funds raised since March to RM73 million. The company had on March 29 proposed a capital reduction scheme that would reduce PJI’s paid-up capital by half. It is also raising additional funds through a rights issue with free detachable warrants as part of the proposal. The estimated timeframe for completion of the proposal is within the third quarter of this year. Proceeds of the rights issue are estimated to be RM22.3 million with RM17.4 million allocated for working capital in the group, RM4.47 million to repay borrowings and RM500,000 for expenses of the exercise. The company turned around in FY09 with a net profit of RM2.86 million against a net loss of RM3.67 million in FY08. However, the improved result was mainly attributed to the sale of a wholly owned subsidiary company that contributed a net gain of about RM18 million to the group. For its nine months ended March 31, 2010, PJI recorded a net loss of RM3.8 million on revenue of RM59.7 million compared to a net profit of RM846,000 in the same period a year earlier on revenue of RM72.9 million. This article appeared in The Edge Financial Daily, July 8, 2010.

https://theedgemalaysia.com/node/69246

Assessment hike gazetted without consultation

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KUALA LUMPUR: Was the assessment hike in Kuala Lumpur quietly gazetted even before consulting local MPs and stakeholders? As round one of negotiations between the 11 MPs, Federal Territories Minister Datuk Seri Tengku Adnan Tengku Mansor and city mayor Datuk Ahmad Phesal Talib fell through yesterday, it has appeared that there was some clandestine attempt to gazette the rate hike of between 11% and 300%. Batu MP Tian Chua told fz.com that during the meeting, the mayor's slip of tongue revealed that the hike had already been gazetted without prior consultation. This means, administratively, the new rates are already in force. "We were surprised by what he said and when we pressed for clarification, he [Ahmad Phesal] kept quiet," said Chua. The Barisan Nasional-led authorities also shot down Pakatan Rakyat MPs' demands to delay the hike for six months, in order for it to be debated and reassessed. Tengku Adnan stood firmly by the increase in assessment saying:"You want nice things, you got to pay for it." He told a press conference after the meeting that people shouldn't confuse re-evaluation of property prices with assessment level. "The re-evaluation will see property prices rise at average 95%, but the assessment level will remain the same." He said the hike is expected to raise RM400 million, mainly to build and refurbish infrastructure. "Infrastructure development alone is going to cost around RM3 billion, so we need to raise money and federal funding is too slow." Tengku Adnan also said the ministry will look at options to keep the hike at an acceptable level by lowering assessment percentage or give out discounts. But he was mum on the tax percentage cap. "KL is shared by everyone, so we hope people will understand the hike is [necessary] to build a more comfortable environment for them. "Besides, it is also fair that owners to have their property price re-evaluated. It's a win-win situation for the rakyat and DBKL." However, Chua slammed the shady evaluation method which DBKL has yet to spell out. The mayor said the new value is based on sales advertisements, input from real estate agents, and officers posing as potential tenants enquiring about rental rates, Chua noted. "There's no sufficient time to let people to disagree or dispute the new value, what can you do in three weeks?" Property owners have until Dec 17 to object, after which the new rates will come into force on Jan 1. Queried as to why in the previous budget speeches the mayor had bragged that its accounts were in good standing, and hence no tax increase was necessary, Ahmad Phesal said the budget was based on the financial situation at that time and "things have changed now". Lembah Pantai MP Nurul Izzah Anwar said she asked the mayor to explain his budget speech in which he had stated that the city's coffers are full. But she said she did not receive any reply. However, she said the mayor did admit that there are about RM3 million in reserves, enough to pay emoluments for the next three years. "They are not budging. We warned them that residents may not want to pay at all - to which he issued the ominous warning that they will be sued," she said. She said as a mayor, one needs to be accountable and transparent. "How can you ask KL-ites to part with their money when you lack credibility?" she said. Tengku Adnan told the press that although there are reserves, the city isn't supposed to spend them because the cash is considered as deposits. "We have been asking the federal government to fund our development but we try to be self-sufficient. "We are also going after arrears, which have now accumulated up to RM300 million since 15 years ago." Ahmad Phesal said that the arrears had already been taken into consideration when drawing up the budget. 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 November 22, 2013.

https://theedgemalaysia.com/node/80466

#Midday Market* KLCI remains weak on risk-off approach

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KUALA LUMPUR (March 11):  The FBM KLCI remained weak at the midday break on Monday, weighed by losses at select blue chips, including at BAT, KLK and UMW. At 12.30pm, the FBM KLCI fell 1.73 points to 1,652.23. Losers led gainers by 305 to 223, while 253 counters traded unchanged. Volume was 332.45 million shares valued at RM618.52 million. Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in a note to clients on Monday said that the obvious support areas for the FBM KLCI were in the 1,590 to 1,653 zone. The key resistance levels of 1,660 and 1,699 will see some heavy liquidation activities, he said. Lee said that as Malaysia prepares for GE13 over March- June this year, political uncertainty could cause investors to adopt a risk-off approach. He said the FBM KLCI was overbought and bearish divergent territory and the Elliot Wave count suggested a stalled uptrend at 1,699.68. “The Malaysian bourse will witness selling around its indicated resistance areas (62% retracement area of 1,660.46. “Price action over last month may still form the right part of the head and shoulder top pattern. As such, selling at the 1,660.46 level could cap the market’s rise initially,” he said. Among the top losers in the morning session on Monday, BAT fell 34 sen to RM64.66, Dana Infra down 17 sen to RM100.53, KLK and UMW lost 16 sen each to RM20.44 and RM13.72, Southern Acids, F&N and Pharmaniaga fell 14 sen each to RM2.35, RM18.06 and RM7.96, Carlsberg down 12 sen to RM13.36, Aeon Credit lost 10 sen to RM12.50 while SKB Shutters fell nine sen to 42 sen. DSC Solutions was the most actively traded counter with 25.65 million shares done. The stock added half a sen to 10 sen. The other actives included GPRO, Tebrau Teguh, China Automobiles, Maybank, Luster, AirAsia and Puncak Niaga. The gainers included GAB, HLFG, Keck Seng, Nestle, Oriental, Shell, Petronas Dagangan and United Malacca. Meanwhile, the dollar held near multi-year highs against the yen on Monday after surprisingly strong U.S. labour data, but demand for riskier assets was curbed by a mixed bag of economic data from China painted a patchy economic recovery in the world's second-largest economy, according to Reuters. Commodities prices were caught between growing optimism about more solid demand as the global economy improves and the strengthening dollar which makes dollar-denominated commodities expensive for non-dollar holders, it said.

https://theedgemalaysia.com/node/45451

‘Future-proofing’ OMG Asia-Pacific

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2011 is shaping up to be challenging year but OMG’s Asia-Pacific head is set on keeping momentum going It’s been just over four years since Barry Cupples was made CEO of Omnicom Media Group’s (OMG) Asia-Pacific region. Supervising 13 markets in varying stages of industry development is a challenge, but it is one he relishes.  “Asia is an energetic, dynamic and utterly positive region for OMG,” he said in an interview with The Edge Financial Daily last week. As the region moves forward at breakneck speed, Cupples is focused on readying OMG Asia-Pacific’s 26 offices for change. No stranger to developing markets, Cupples first joined Omnicom in 1995 as managing director for Hungary where he was tasked with setting up the media agency’s operations. During his six-year tenure, OMG became the top performing agency in the market. In 2001, he was promoted to CEO of OMD’s Central and Eastern European businesses, heading client operations across 14 territories. Since his appointment to head Asia-Pacific in October 2007, OMD has been awarded nine out of 10 for four consecutive years, from 2007 to 2010, in the annual Campaign Asia Agency Report Card ranking. PHD Asia-Pacific was awarded the media agency of the year award by Campaign Asia in 2010. Was 2010 a year of recovery for OMG Asia? Surprisingly, although 2009 was a meltdown year for the economy, we (OMG) did brilliantly in the Asia-Pacific region and 2010, while also a good year, showed slower growth in the region. We accomplished this by acting fast, identifying challenges and working very closely with our clients and invested their budgets as strategically as we knew how. The result was a significant double-digit revenue increase. For 2010, we were focused on consolidating what we had gained and building on it so while growth slowed, profitability (which I cannot disclose) was high. However, one market in which we have grown significantly last year is China where we won US$500 million (RM1.52 billion) in new business, resulting in a headcount growth of 250. How is 2011 looking?It’s shaping up to be a challenging year. Partly because we’re benchmarking against our performance in 2009 and 2010 and partly because there’s still an after-effect from the downturn in corporate marketing budgets. As a whole, the industry has not seen organic growth like that of India and China across all markets. But while it will be difficult to keep the momentum going, I’m fairly optimistic. Asia is an incredibly positive and energetic region for us and there’s not a single market that hasn’t been extremely positive for us — even Japan. What trends have you identified moving forward, and how are you making OMG ‘future-proof’? One area that surprised me when I first joined OMG Asia-Pacific about four years ago, is how far behind Asian campaigns are in terms of search optimisation. Since then, the region has caught up dramatically but there are still a significant number of campaigns that go out without a search component. It’s strange. If you’ve created a successful campaign which garners attention and gets your customers looking online for you, don’t you want them to find you? Or if they’re looking for a solution which your product provides, don’t you want them to find you? Today, when a customer looks for a recommendation, the first place they turn is online — looking for peer group recommendations and for reviews. Any campaign launched today that doesn’t have a search capability is a flawed campaign. It’s an area that cannot be ignored and OMG is working to build a strong search capability into our services. We’re also looking to increase our ability in the owned-media space, particularly with regard to the mobile space. It’s filling fast. In just five years it’ll be positively swamped. The apps market, for all smartphones, is an attractive revenue stream providing marketers have robust offerings of tangible value to consumers. And more than that, the mobile device is one that connects everything in a consumer’s life, from the personal computer to the car — it’s an area of great potential and one we will mine thoroughly. How will you be building these capabilities into OMG? By hiring, partnership or acquisition? As our disciplines grow more varied, bringing with it more challenges, we have to ask ourselves do we have the skills needed? Or must we teach or buy them? If we opt to teach our talent, that will take at least a few years before we’re fully capable. If we claim to have these skills, we’d better be able to deliver and buying brings with it its own set of problems. The balance, I feel, is to create a pragmatic ecosystem of creativity — by bringing in white label services to add to the resources we already have. If the partnership works well, we may look at buying the firm. This method, I feel, is the least risky for the company. How about the talent factor? Are you able to hire the talent needed in the region to support this growth in capabilities and size?Talent has been and still is an issue in the region. One means around it is for us to be ingenious about where we look for talent, not just in universities where we often acquire people with the right paper (qualifications) but without the necessary personality traits, but also in the service industries that are accustomed to dealing with often difficult clients. For example, I was highly impressed with the waitress serving my table last night. She was efficient, professional and wasn’t intimidated by the customer — all traits I look for in the people I hire. We also need to be rigorous about what skills we need. Schematic skills? Numeric? Articulate? Often it’s a mixture of all the above. But once the basic personality traits are in place, a lot can be accomplished with training. OMG has the OMD university and PHD training arm — it’s a big area of what we do. Last year, OMG launched a data resource centre in Singapore, have you been able to leverage on its findings? What are some key insights gained?As the industry moves towards measures of performance linked to results-based data, there is a genuine need for trackable and measurable information. Furthermore, the increase in chatter between consumers has resulted in an opportunity and, at the same time, a challenge to glean real-time insights from their feedback. One of the tools we’ve created, called Antenna, is a social monitoring tool for positive and negative statements online. A finding that I find quite surprising is that as we grow our consumer database, we’re increasingly finding that there is genuine value not only in positive statements, but also in the negative opinions which can help shape and protect a user from negative experiences with a brand.  Also, as we find out more about why people buy what they buy, we’ve uncovered basic human tenets that may indicate better ways for driving advertising measurement and efficiency. Discovering a path to new currencies so to speak. What do you mean when you say ‘new currencies’?Traditionally, the currency of advertising is cost-per-eyeball or cost-per-click, but we’re learning that these measures may not necessarily tie to the true effectiveness of a campaign. The reasons why we buy are tied to softer rather than harder measures of influence. As the industry moves towards value-based compensation, this understanding is increasingly crucial to the way we do business. Are consumer insights then the key to a great campaign for you? Absolutely. A great campaign for me is based on fantastically strong insight into the mind of the consumer. Can you give an example of such a campaign?Anyone who knows me, knows that my absolute favourite campaign for the last 18 months has been the OMD Intel-Dell Swarm campaign, launched in April 2009. It was based on the insight, gleaned from online monitoring of Intel-Dell’s target audience in Singapore, that customers believed that brick-and-mortar retailers enabled a customer to negotiate a better deal than online purchases. The result was a campaign that used online group buying — it encouraged a ‘swarm’ of customers to buy an Intel-Dell product a month before the Singapore PC Fair with a higher number of customers equating to a lower price. It was a phenomenal success, the PCs sold out before the PC fair and the campaign has won quite a few awards.     This article appeared on the Media & Advertising page, The Edge Financial Daily, Mar 3, 2011

https://theedgemalaysia.com/node/4836

Apple removes bitcoin programme Blockchain from App Store

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WASHINGTON DC: Apple Inc removed Blockchain, an application for iPhones used to send and receive bitcoins, from its App Store, the developer of the programme said. Blockchain.info, the developer of the software, received an email from Apple saying that the app was withdrawn “due to an unresolved issue”, Nicolas Cary, chief executive officer of the London-based company, said. As a virtual currency, bitcoins exist only as software and transactions are completed via computing devices. With merchants from car dealers and Web stores accepting the digital money, mobile apps have become a popular commerce tool. At the same time, some governments including China and India have questioned bitcoin’s legal status. Since Apple requires apps to be legal in all territories that they’re offered, many bitcoin-related programmes for Apple’s iOS mobile software don’t offer the ability to send money. “We’ve been there two years,” Cary said in an interview. “What did they just discover that is now unresolved?” Blockchain, which lets holders view their bitcoin balance in online wallets the company maintains, has been downloaded by 120,000 users, Cary said. — Bloomberg This article first appeared in The Edge Financial Daily, on February 7, 2014.

https://theedgemalaysia.com/node/12441

City & Country: The flip side of guaranteed rental returns

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In 2000, Amy (not her real name) and her relatives invested their hard-earned savings to acquire nine serviced condominium units in Nilai, Negri Sembilan, for RM130,000 each. They were enticed by the developer’s offer of a guaranteed rental return (GRR) scheme of between 8% and 10% for 15 years. The developer told her and the other buyers that the units would be rented to students studying in higher learning institutes nearby. The scheme would be managed by another property management company. Six years later, in May 2006, Amy received a letter from the property management company which stated that the GRR scheme would be terminated two months from then. She found out that the students had been provided with hostels and that renting out the units was an uphill task. The value of the apartments has since plummeted by almost half. Over the years, there have been instances of unscrupulous developers failing to honour their GRR schemes, leading to a hefty depreciation in the value of the affected properties. This issue has come to the attention of the National House Buyers’ Association (HBA) but the association admits that homebuyers will be left holding the baby whenever a GRR scheme fails. HBA’s secretary-general Chang Kim Loong views such GRR schemes as a gimmick and says they sometimes guarantee nothing but “trouble and nightmares”. “If the GRR is so good, why don’t the developers keep it for themselves? Why should they market a product when the GRR is better than [getting] bank interest?” he questions. Too good to be true?GRR schemes sound attractive, with guaranteed returns and capital appreciation envisaged later down the road. Developers may describe these schemes as “buy-to-let”, “cash back” or “own-for-free” to enhance their appeal and boost sales. In essence, a GRR scheme is one where developers promise a guaranteed sum for a specific period to investors, who have to pass the units back to the developer or the appointed property management company to be managed. Some property consultants describe the scheme as a “laidback” property investment option — developers sell the real estate as “hardware” and offer a guaranteed package as “software” to entice investors to buy.Research and consultancy director of JS Valuers Property Consultants Sdn Bhd, Chan Wai Seen, says GRRs currently being offered range from 5% to 8% gross or net returns of the purchase price. “Compared with the prevailing borrowing cost of about 3.5% [based on BLR-2%], GRRs are deemed attractive. To a certain extent, they are able to improve sales,” he adds. Many projects have worked well with such schemes, executive director of Regroup Associates Sdn Bhd Paul Khong tells City & Country. These are usually projects in good locations in cities or resorts, undertaken by big players with a reputation to maintain. However, he adds, many have also gone bad, with developers unable to honour their obligations because of poor take-up or rent for their products. In a few isolated cases, developers even closed down the companies and absconded. Is it legal?Are GRR schemes even legal? That would depend on the terms and conditions of the agreement, says lawyer Richard Kok. “Generally, the concept of guaranteed rental return, which essentially means a developer agrees to pay a purchaser for the use of his premises after its completion for a certain period of time, is not illegal. “Like any other contract, the aggrieved party can initiate legal action against the party in breach for specific performance and/or for damages,” he says. If affected homebuyers think the government will come in and save them from their predicament, they are in for a disappointment. Property consultants say a GRR scheme is essentially a contractual arrangement between investors and developers and does not come under the purview of existing regulations governing property developers. HBA’s Chang says there are hidden escape clauses in GRR agreements — such as “provided always” and “subjects to” — that allow developers or property management companies to terminate the agreement at any time. The buyers discover later that the guarantee comes from a different company, perhaps a subsidiary of the developer. “When you check, the paid-up capital of this company might be only RM2 and it means nothing. You can’t sue the developer because it is only selling the product to you. In the event a GRR scheme fails, you sue the other company and you have no case against the developer. “And when you sue, you waste your legal fees because it is just a shell company. The worst is if it goes bankrupt and buyers can’t get anything, having wasted legal fees on suing a shell company. It is not worthwhile to sue. On the bright side, you still have a property, [even though] the GRR is worth nothing,” Chang says. Similar to a deed of covenant, documents signed under a GRR scheme are side contracts and are not regulated by the housing ministry. No recourseSo what recourse do affected homebuyers have? “It would be ideal if buyers lodge reports with the housing [and local government] minister in cases like this. Give the ministry a wake-up call and let’s do something about that,” Chang says. He adds that property values will surely slump if a GRR scheme fails as the scheme would already have been factored into the initial selling price. “Buyers should carefully check local market conditions and competitiveness [of the product] as well as whether the offer is realistic. As an example, a condo in a certain area may be priced at RM150,000, but developers may sell it at RM190,000 with a GRR scheme. The scheme has been factored into the selling price,” he says. Property consultants generally advise home buyers to be aware of what they are buying into. They must understand clearly how the GRR agreement and its mechanism really work and how the parties are bound legally, as there is no standard template. The credibility and reputation of the developer must definitely be the first thing that investors must consider. Property consultants add that genuine GRR schemes will be backed by insurance policies, financial institutions, big corporations or trust funds. For example, some developers in Australia offer GRR schemes backed by insurance. Besides the selling price, buyers should also check if the returns are really offered at “reasonable market rates”. Regroup’s Khong says guaranteed returns should be offered at reasonable market rental rates that are comparable to those in the vicinity and not figures that cannot be justified. This is crucial for the guarantee to survive the agreed period. “The worst-case scenario is when the developer does not pay at all and the company that extends the guarantee goes bust. Then there is virtually no recourse,” he adds. Tang Chee Meng, the COO of Henry Butcher Malaysia Sdn Bhd, tells City & Country that investors should check whether developers are financially sound and capable of meeting their obligations under a GRR scheme. “Make sure that the company operating the rental management scheme is experienced and capable of undertaking such operations profitably. The investor should also check whether the guaranteed return is calculated on a gross or net basis, that is, after deducting all operating costs, and what are the expenses he has to bear on his own. “He should also find out when the payments will be made to him, whether it will be on a monthly, quarterly or annual basis. The investor should also not ignore fundamental issues like whether the project is situated in a good location and is priced fairly,” he says. Sustainable schemesGRR schemes can be a plus point if they work well. JS Valuers’ Chan says the properties must be investment-grade and be able to generate attractive rental returns as GRR schemes based on non-investment-grade real estate are frequently not sustainable. He adds that the properties must be in strategic locations, be attractive and boast competitive building designs and layouts. “Before buying a property with a GRR scheme, it is imperative for the purchasers to plan for the future use of the properties in the event the scheme is discontinued. Purchasers must then be prepared to take over and manage it. Failing which, the property’s condition or the project as a whole will deteriorate, contributing to depreciation in its value,” he says. Henry Butcher’s Tang says it is normally compulsory for the investor to take up the standard furnishing package offered by the developer on signing up for the GRR scheme if the unit is not already furnished.In most cases, homebuyers must buy furniture of a certain amount from a particular company. An industry observer says a standard furnishing package is necessary so as to offer the same package to the tenants. Opportunity for buyersNot all developers fail to honour their GRR agreements. TA Properties Sdn Bhd is among the developers that offer GRR schemes for their properties. Its senior manager of marketing and customer care, Roshan Menon, says the GRR scheme is a marketing strategy that gives homebuyers an opportunity to make money. “The property market is a bit sluggish and bank interest is low. We created this opportunity [offering GRR schemes] to bring in investments from foreign prospects as well as Malaysians. Property is always a good hedge against inflation. “Some people are against GRR schemes because some small developers have been taking advantage of it and cannot pay the homebuyers when things go wrong. On the other hand, some developers with financial muscle have executed the scheme well. For TA Properties, we allow buyers to use the first-year income to offset part of the 10% downpayment. If we are not sincere, we wouldn’t do that,” he adds.Early this year, in an effort to boost sales, TA Properties offered a 7% GRR for two years on its 15 unsold units in Idaman Residences in the KLCC area. As at May, there were nine units left. Homebuyers are reminded not to rush headlong into GRR schemes without doing their homework. Citing those who have been in the predicament before, HBA’s Chang says: “Learn from their mistake and remind others not to repeat it.” This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 765, July 27-Aug 2, 2009  

https://theedgemalaysia.com/node/5409

My Say: Mark to market vs mark to model

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Here is a simple illustration to understand the thrust of this article: Last year, Ah Chong bought an apartment for RM900,000 in downtown Kuala Lumpur. His real estate agent says it is worth RM800,000 today. Banks are not lending, so no one is offering to buy Ah Chong’s apartment. A drunk that Ah Chong met at the bar said he would pay Ah Chong RM50,000 for the apartment. The mark to model amount is RM800,000, while RM50,000 is mark to market. How much is Ah Chong’s apartment worth? If he used it as collateral for a loan, how much would you lend him? Many of us would take the real estate agent’s valuation with a pinch of salt and try to substitute it with our own perception of its value, depending on whether we are the buyer or the seller. But most of us would definitely reject the valuation of the drunk as being totally crazy! Therein lies the dilemma for the banking world as it attempts to tackle the financial crisis and set things right. After much wrangling and grilling by the US Congress, the Financial Accounting Standards Board (FASB) —an independent US organisation that sets the rules for accounting practices — voted on April 2 to change a key rule that could help restart credit markets, which have mostly ceased to function since the onset of the financial crisis. The rule is commonly referred to as “mark to market”, and forms the accepted basis on which most assets are valued. The change from the mark-to-market accounting rule to one that will give more leeway to banks in determining how to value some of their most troubled assets will definitely improve credit flow. Mark to market is an accounting principle under internationally recognised generally accepted accounting principles (GAAP) that says an asset should be measured by the price it would fetch if sold at the prevailing market price. It is considered a component of so-called “fair value” accounting, which maintains that the marketplace should measure the worth of an asset, not the entity holding the asset. Although the concept of marking asset values to market prices is generally considered one of the more positive aspects of a financially sound country, the financial crisis has shown that the rule can trigger some harmful effects. As companies in weak financial positions are forced to raise capital, they engage in distress sales that drive asset prices down. Unfortunately for their financially healthier peers, these asset declines are then reflected in their books as well under the mark-to-market principle, regardless of whether or not they themselves intend to sell. Since banks are required to prove that they have a substantial portion of their total assets in liquid form — that is, readily convertible to cash — this can make banks turn technically insolvent through no fault of theirs. Lending grinds to a halt as a result as these healthier institutions have to raise cash, yet dare not lend any out. However, asset managers have a real problem valuing illiquid assets in their portfolios even though many of these assets are perfectly sound and the asset manager has no intention of selling them. Mark to market prices should not be used in isolation in my view, but rather should be compared to model prices to test their validity. Models should be improved to take into account the greater amount of market data available. The rule change by FASB means that banks and other financial institutions can now use a great deal more judgment and foresight in expressing the value of previously distressed assets. Securities backed by real collateral, like mortgage-backed securities, can be held on balance sheets closer to what the company expects to earn on them in the long run. This should help to unclog credit markets by improving capital ratios of firms that adopt the new rules. More capital means more credit flow by enhancing both investor confidence in the firms and freeing the firms to write more loans. Proponents of the mark-to-market rule would point to the fact that Warren Buffett decried the traders of Wall Street for “marking to myth” their assets as they sold untold trillions of those to the ill-informed. But it must be noted that the traders were using or abusing models to price these assets where miraculously, the models always seemed to offer high valuations. This has given the process of mark to model a bad reputation. What Buffett was really criticising was the bubble in valuations caused by the systematic underpricing of risk. This was exactly what happened during the dotcom bubble where analysts extrapolated forecast profits into multi-billions for companies that had not even made a single dollar of revenue, and then sold overpriced junk stock to unwary investors. As illustrated by our example at the beginning of this article, just because there are no buyers for your asset does not mean that the asset is worthless if (and this is a big if) you are not a forced seller. The core issue is whether you need to sell your asset to raise cash. If you are not in a rush, over time the market price will recover. Many fixed income assets are bought and held to term (with no leverage). Provided the issuer does not default on interest or capital, the asset has the value of its cash flows and principle. So if you have such assets and a long-term investment horizon and no liquidity issues, how should you value these assets? What happens if you are put in a perverse position where you have to mark the value of your assets down to a level where your terms of reference force you to sell them? Mark to market is good for transparency, but where there is no liquidity, does this approach still work? In the housing market, the forced sellers are the people who have defaulted on their mortgages, are divorcing or have inherited a property and want to get cash quickly. These are the asset sales that, at the margin, define the market price. Until this overhang of supply works its way through the system, there will be no motivation for buyers to pay more. I am not arguing that one should ignore the market but rather that blind faith in it does not make sense and that the law of unintended consequences can play havoc as a result. Rules that enforce one approach can have perverse results. Even when Buffett buys an asset, he uses his own model for determining whether the asset is good value or not. Sometimes, he will pay more than others for a given asset. He works out the price he will pay and then he sticks to it. This is a good example of making the market come to the model price. Buffett’s model is based on a fundamental approach to valuations that stays consistent irrespective of the market pricing and he maintains the discipline of sticking to his model for valuation even if he has to wait several years to buy. It must be remembered that a valuation is not the same as a transaction and in times of stress, a dogmatic application of rules can cause more harm than good. There is no harm in challenging “market” prices if they seem skewed, and the best way to do that is to have alternative opinions in the form of independent model prices. New methods and new data are available to help improve models and these should be used. In the end, all prices start off from a model. Jason Leong is executive director at Paddy Schubert Consultants Sdn Bhd This article appeared in The Edge Malaysia, Issue 753, May 4-10, 2009

https://theedgemalaysia.com/node/87834

Business leader mulls action over ‘unfounded’ report

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PETALING JAYA: Pua Khein Seng, CEO of Phison Electronics Corp, will not hesitate to take action against a Malay daily for a report implying he had funded a group of “cyber troopers” allegedly affiliated to the DAP. Pua said the Utusan Malaysia article is fabricated, baseless and malicious. “I honestly do not know how I should respond since it is an unfounded accusation,” Phua said in a statement issued to the media last Saturday. Pua urged the authorities who are investigating the allegation to contact him as soon as possible for the truth to be revealed. “I will fully cooperate with the authorities,” he said. Further, he said that when the investigations are completed by the authorities he will not hesitate to take legal action against Utusan Malaysia. On June 1, the Malay daily reported in an article entitled “Involvement of Taiwan electronic company under investigation” that a company established by a Malaysian in Taiwan is believed to have close relations with the DAP-led Penang government because it set up a branch factory in the state a few years ago. The report cited a source as saying the authorities will investigate the background of the so-called Red Bean Army which is believed to have received funding from the company. The source also said there is a photo of Pua and Penang chief minister Lim Guan Eng on the stage together during the campaign period in the recent general election. After the general election, several social activists who had asked the people to take to the streets have been arrested. So far, five of them have been charged under the Sedition Act. The Home Ministry is now working with the Malaysian Communications and Multimedia Commission and the Malaysian Cyber Security Agency to check the channelling of contents which violate social media laws. On May 25, Home Minister Datuk Seri Ahmad Zahid Hamidi said there were complaints on the contents of social websites and blogs, including by the “Red Bean Army”,  which could be seditious concerning racial sensitivities as well as slanderous content. Various groups have reportedly urged the government to take stern action against undesirable elements in cyber space which jeopardise harmony among the people of various races in the country. — By Chen Shaua Fui This article first appeared in The Edge Financial Daily, on June 3, 2013.

https://theedgemalaysia.com/node/54685

HDBSVR maintains Buy on YTL Land, lower target price

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KUALA LUMPUR: Hwang DBS Vickers Research is maintaining its Buy call on YTL Land Bhd at 99 sen but at a lower target price of RM1.80 from RM2.40. It said on Tuesday, Sept 12 YTL Land is transforming into a regional developer post-asset injection while the shares are more attractive now. “Subscribe for ICULS only for long-term,” it said. HDBSVR said Sentul is looking increasingly appealing as the future Northern KL transport hub, with new land price benchmark of RM600 psf. “Maintain BUY, cut TP to RM1.80 (from RM2.40) based on 30% discount to RNAV of RM2.57, factoring in higher market risk premium,” it added.

https://theedgemalaysia.com/node/53312

Timber: Japanese plywood importers halt new orders

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Timber sectorMaintain neutral: Japanese plywood importers, which had aggressively purchased panel products from Sarawak after the earthquake and tsunami in March, have temporarily halted new orders due to high inventories, The Star newspaper reported yesterday, citing the Sarawak timber Association (STA). This confirms the International Tropical Timber Organisation’s (ITTO) recent observation that there had been an easing of demand for plywood in Japan on the back of high inventories — as we had noted last week. We do not expect the situation to last for long as inventory rundown could happen just as quickly as the build-up of supply. In line with our view, STA panel products committee chairman Wong Kai Song said the market will be better towards the end of the year, and 2012 will see a stable market. Buying by Japanese companies had slowed down in late May as plywood warehouses were full. Wong said the actual demand for the reconstruction of Sendai, one of the badly hit areas, was not as strong as anticipated due to the longer time taken to clear up the debris. Japan’s housing starts in June rose about 10% to 7,200 units compared with the normal monthly figures of 6,200 to 6,400 units. Wong said global plywood prices are still trading above US$600 (RM1,788) per cu m compared with US$400 per cu m in March and April this year. He said with the supply of logs returning to normal, production had been boosted to an average of 70% now compared with up to 50% early this year when there was an acute shortage. Sarawak Timber Industry Development Corp (STIDC) statistics show that Japan’s plywood imports from Sarawak from April to June soared to 499,435 cu m worth over RM926 million, up from 296,162 cu m valued at RM475.7 million. It is noteworthy that Sarawak’s plywood exports to South Korea dropped to 39,143 cu m worth RM55 million during 2Q11, down from over 125,000 cu m at RM137.2 million in the previous corresponding period. This too was expected, given the imposition of anti-dumping duties ranging from 5% to 38% on Malaysian plywood exporters for three years starting from March. During 1H11, Sarawak exported nearly 1.3 million cu m of panel products worth nearly RM2.1 billion compared with 1.46 million cu m at RM1.95 billion a year earlier. We maintain our “neutral” stance on the timber sector, with a “buy” for Jaya Tiasa Holdings Bhd (fair value: RM8.51 per share) on the back of its oil palm division’s rapid growth and more geographically diversified timber markets. Ta Ann Holdings Bhd, which is scheduled to announce its 2QFY11 results on Aug 22, continues to be a “hold” (FV: RM5.83). — AmResearch, Aug 15 This article appeared in The Edge Financial Daily, August 16, 2011.

https://theedgemalaysia.com/node/17621

PM: Ekuinas activities will benefit all Malaysians, economy

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KUALA LUMPUR: The Prime Minister said Ekuiti Nasional Berhad (Ekuinas), which unveiled its operational details and investment framework on Sept 4, would undertake activities which will benefit all Malaysians and the Malaysian economy. Datuk Seri Najib Razak said through its investments, Ekuinas would play a major role in strengthening Bumiputera participation and at the same time, will forge genuine partnerships with non-Bumiputeras. "Thus, as a result, Ekuinas activities will benefit all Malaysians and the Malaysian economy,” he said in a statement after Ekuinas's board of directors announced the operational details and investment framework. At a press briefing, Ekuinas chairman Raja Tan Sri Arshad Raja Tun Uda said the organisation would be a Government-linked private equity fund management company that aims to create Malaysia’s next generation of leading companies, while promoting equitable and sustainable Bumiputera economic participation. Ekuinas has been established as a wholly owned subsidiary of Yayasan Ekuiti Nasional, a Bumiputera trust. Najib also announced Yayasan Ekuiti Nasional’s members of the board of trustees, of which he is the chairman. The other members are Deputy Prime Minister Tan Sri Muhyiddin Mohd. Yassin; Minister in the Prime Minister’s Department Tan Sri Nor Mohamed Yakcop; Minister of International Trade and Industry Datuk Mustapa Mohamed; Second Finance Minister Datuk Seri Ahmad Husni Mohamad Hanadzlah; Secretary General of the Treasury Tan Sri Dr. Wan Abdul Aziz Wan Abdullah and Director General of the Economic Planning Unit Datuk Noriyah Ahmad. At the press briefing, it was highlighted that Ekuinas would be commercially driven, utilising both public as well as private capital to invest in meaningful stakes in entities with strong potential for growth. Ekuinas would invest in medium to large sized companies and would take an active investment role in growing its investee companies as well as enhance the quality of management. The investment decisions and selection of management by Ekuinas will be based on merit. It would build on success, supporting entrepreneurs with a proven track record. Ekuinas would also build up companies through putting in place professional management with performance based compensation, including equity based incentives. “We have a good number of highly talented Bumiputera professionals and we will enlarge the entrepreneur pool by making some of them professional-owner-managers,” said Najib. The Prime Minister added Ekuinas would manage its own portfolio of investments as well as outsource some of its funds to capable private equity investment firms. Najib also said a high level committee for Bumiputera Entrepreneurial Development will be formed to specifically focus on strengthening Bumiputera entrepreneurship within the start up and development phase. This committee will report to him and will be chaired by Nor Mohamed. The committee will be based on the successful model of the Putrajaya Committee for GLC High Performance and is aimed at enhancing the effectiveness of entrepreneur development programmes undertaken by relevant Government-linked institutions. Najib said the establishment of Ekuinas and the Putrajaya Committee reflects the Government’s approach of using multiple instruments to comprehensively address the challenges in developing Bumiputera and Malaysian entrepreneurs.

https://theedgemalaysia.com/node/67658

Supermax 2Q after-tax profit up 32.5% on low latex prices

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KUALA LUMPUR (Aug 17): Supermax Corporation Bhd’s after-tax profit rose 32.5% year-on-year to RM30.00 million on the back of a slightly lower revenue of RM232.10 million for the second financial quarter ended June 30, 2012. In its results filing to Bursa Malaysia Friday noon, the company said  the improved profitability was largely due to lower raw material costs as a result of natural rubber latex prices falling by 27% during the quarter and higher operating efficiency at its factories. During the reported quarter, although the group sold about 18% more rubber gloves it recorded a 2.4% decrease in revenue. This was because average selling prices were lower by about 20% in tandem with lower raw material prices which had fallen 27% in the past one year, it added in its explanatory notes. Compared to the previous quarter, Supermax’s revenue was also lower by 6.6% for the similar reason. However, after-tax profit rose 7.1% as the group gained from lower raw material costs and close monitoring of manufacturing operations to ensure operational efficiency, Supermax said. “In view of the high volatility of natural rubber latex prices, anticipation of lower manufacturing margins on Nitrile gloves and high foreign exchange volatility, Supermax said for the financial year 2012, “we aim to achieve a 20% earnings growth from the previous year.” This earnings guidance is based on the assumption that Nitrile & NR Gloves prices, the material prices and foreign exchange rates remain highly volatile, it added.

https://theedgemalaysia.com/node/3454

#Today's diary* What to expect on April 6, 2009

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1.  Prime Minister Datuk Seri Najib Tun Razak attends welcoming ceremony by officers of the Prime Minister's Department at Lobby, 1st Floor, Prime Minister's Office at Putrajaya at 8.30am 2.  Dewan Negara sitting at 10am.  3.  Prime Minister Datuk Seri Najib Tun Razak attends MPI-Petronas Malaysian Journalism Awards 2008/Malaysian Media Nite 2009 at Hotel Istana, Jalan Raja Chulan, KL at 7.30pm

https://theedgemalaysia.com/node/51864

#Global Markets* Asian shares tiptoe up, U.S. bonds fall after Fed taper

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TOKYO (Dec 20): Asian shares got off to a cautious start on Friday tracking a more circumspect session on Wall Street overnight, as investors reassessed the Federal Reserve's policy outlook following its decision this week to start tapering its massive stimulus. U.S. government bond prices fell on emerging doubts about the Fed's commitment to rock-bottom interest rates. Gold tumbled to a near six-month low, extending months of weakness after the U.S. central bank finally scaled back its stimulus that has pushed the precious metal to record territory in recent years. Gold is on track for its worst yearly decline since 1981. MSCI's broadest index of Asia-Pacific shares outside Japan added 0.1 percent after ending a touch softer in the previous session. In Tokyo, Nikkei futures were up slightly, indicating a modest gain for the benchmark Nikkei ahead of the outcome of a two-day Bank of Japan policy meeting. The Nikkei rallied 1.7 percent to its highest closing level in six years on Thursday as the yen slid after the Fed's taper decision. Analysts said the Fed's smooth start in trimming its stimulus by $10 billion to $75 billion a month without disrupting markets removed one uncertainty for the BOJ, giving it more time to decide whether further monetary expansion will be needed next year. The yen was steady at 104.24 yen to the dollar in early Asian trade, hovering near a more than five-year trough for a second day after having fallen 1.6 percent on Wednesday following the Fed announcement. The euro languished near a two-week low at $1.3657. "With the Fed now having begun the tapering process, the burden of proof now seems to be on the side of the data to weaken sufficiently to force a halt," analysts at BNP Paribas wrote in a note. Thursday's data showed U.S. home resales hit a near one-year low in November and new filings for unemployment benefits unexpectedly rose last week, dulling an otherwise brightening economic picture. Overnight, U.S. stocks finished mostly flat as investors paused after a rally in the previous session, though the Dow Jones industrial average closed at its second record high in a row. U.S. S&P 500 E-mini futures inched up 0.1 percent in early Asian trade on Friday. The 10-year U.S. Treasury yield jumped as high as 2.9512 percent on Thursday, hitting a three-month peak. Deutsche Bank analysts said they expected the U.S. unemployment rate to fall faster then the Fed projections and the risk was that inflation pressures would start to mount earlier than the U.S. central bank anticipated. "They will not be able to follow the very gradual path of rate hikes the market expects," they said in a report. In a move likely meant to pre-empt any sharp market reaction that could undercut the recovery, the Fed also said in its tapering announcement that it "likely will be appropriate" to keep overnight rates near zero "well past the time" that the U.S. jobless rate falls below 6.5 percent. Among commodities, U.S. crude prices edged down 0.1 percent to $98.68 a barrel, pausing after Thursday's 1 percent rise on the back of U.S. refinery oil demand to meet robust distillate exports. Gold hit a near six-month low of $1,185.30 an ounce on Friday, extending a 2.3 percent slide overnight. The yellow metal is down 29 percent, heading for its worst annual decline since 1981. - Reuters

https://theedgemalaysia.com/node/54607

#Global Markets* Europe lifted by PMI data, China wobble hits Asia

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16/12/13 18:18:51 * German data helps European shares bounce off 2-month lows* Investors still no clearer on whether Fed will taper this week* Japan business confidence at 6-year high helped by low yen* Mild disappointment as China manufacturing index dips LONDON (Dec 16): Robust German PMIs helped Europe shrug off some mixed Asian data on Monday, though caution remained much in evidence just days away from what looks set to be a very close call on the fate of U.S. monetary stimulus. European stocks started the week in better form than they ended on Friday, as an upturn among Germany's export-oriented manufacturers offset an unexpected slowdown in France to help the euro zone end the year on a high. "It's really encouraging to see the increase in the overall rate of growth," said Chris Williamson, chief economist at Markit, which compiles the widely-watched purchasing managers index (PMI) surveys. "It's a reassuring signal that the recovery is still on track. We are not losing momentum." Britain's FTSE 100, Germany's DAX and France's CAC 40 all overcame early wobbles to settle 0.3, 0.4 and 0.5 percent higher respectively as they bounced away from two-month lows. Jan von Gerich, chief developed markets strategist at Nordea, said the PMI data painted an interesting picture but stressed they were likely to be little more than a diversion for investors with so much going on this week. The Federal Reserve meets on Tuesday and Wednesday to discuss tapering its $85 billion of monthly bond buying and opinion remains divided on whether it will move this week or wait until January - or even March. "Tomorrow we get inflation data from the U.S. which will probably shape the final expectations going into the meeting because that has been one of the things that has been holding the Fed back," said von Gerich. "Some of the recent data has suggested the weakest inflation is behind us, but it has not all been that way ... so (considering tapering expectations) a downside surprise will have a bigger impact than a upside surprise." Cautious mood The euro headed back in the direction of Friday's two-month high after the euro zone data, while the bloc's benchmark government bonds saw their yields rise. The euro fetched $1.3771 versus Friday's $1.3811, though BNP Paribas analysts said the failure to hold above $1.3800 suggested there was scope for a retreat back to $1.3695. The otherwise cautious mood in markets was encapsulated by MSCI's broadest index of Asia-Pacific shares outside Japan which was trading 0.4 percent lower. One of the standout moves was in Shanghai where stocks fell 1.6 percent after a measure of growth in China's vast factory sector slowed to a three-month low in December as reduced output offset a pickup in new orders. Japan's Nikkei also lost 1.6 percent despite a generally upbeat survey of the country's business sector. Confidence among big manufacturers improved to its highest level in six years, the survey from the Bank of Japan showed, boding well for Prime Minister Shinzo Abe's stimulus policies aimed at ending 15 years of grinding deflation. "Conditions had definitely improved, especially if you look at small firms," said Masamichi Adachi, a senior economist at JPMorgan in Tokyo. Oil edges up Part of the pick-up comes courtesy of the yen, which hit a five-year low against both the dollar and euro last week. On Monday, the Japanese currency regained just a little ground as dealers trimmed short positions into the Fed meeting. The dollar bought 102.99 yen, having briefly hit a peak just shy of 104.00 on Friday. The euro stood at 141.87 yen, against a top of 142.82, while the dollar index was 0.24 percent lower at 80.021. In commodity markets, spot gold was a shade lower at $1,228 an ounce, after gaining 1.2 percent on Friday. Brent futures rose towards $110 a barrel on Monday as supply concerns revived after Libya failed to reach a deal with tribal leaders to end the blockade of several oil-exporting ports. Brent crude for January was $1 higher at $109.84, after falling as far as $108.02 in the previous session, the lowest since Nov. 21. U.S. crude oil for January delivery edged up 25 cents to $96.84 per barrel.

https://theedgemalaysia.com/node/74608

Top US bankers warn against prioritizing interest payments - WSJ

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(Oct 8): Top U.S. bankers have warned the Obama administration and Republican lawmakers that any move to pay interest on debt before obligations such as Social Security and payments to veterans would pose severe risks to financial markets and the economy, the Wall Street Journal reported. Some lawmakers think prioritizing interest payments would placate bond investors if the government breaches its borrowing limit, the Journal said. However, heads of the nation's largest financial institutions told the officials in meetings that prioritizing some payments would create insurmountable uncertainty for investors, drive up borrowing costs and disrupt markets, the Journal said, citing people familiar with the meetings. As the U.S. government moved into the second week of a shutdown on Monday with no end in sight, a deadlocked Congress also faced an Oct. 17 deadline to increase the nation's borrowing power or risk defaulting on its debt. If no deal is reached, many outside observers including debt-ratings firms assume the government will begin prioritizing payments to bondholders over others, rather than risk defaulting on its debt, the Journal said. - Reuters

https://theedgemalaysia.com/node/54610

CIMB Research maintains Sell on Genting Malaysia

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KUALA LUMPUR: CIMB Equities Research said it is maintaining a Sell on Genting Malaysia ar RM3.48 at which it is trading at a FY12 price-to-earnings of 13.4 times and price-to-book value of 1.7 times. It said on Monday, Sept 12 that Genting Malaysia broke below its bearish wedge pattern back in August, and the recent rebound appears to be weak. It is also trading below its key moving averges, which is another negative. “However, the MACD has just confirmed its positive crossover, which could see prices push a tad higher. This is unlikely to be sustainable as the longer term charts have already turned negative. “Any rebound towards RM3.58-3.65 is a chance to sell. A break below RM3.35 would likely signal that prices are headed below RM3.32 towards RM3.19 and RM3.00 next. Anything above RM3.68 would trigger our stop,” said CIMB Research.

https://theedgemalaysia.com/node/65087

#Urbanscapes 2013* The best of two days in five minutes

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Last Updated: 7:05am, Nov 27, 2013 ALAS Malaysia's biggest arts and music festival is over. It was two days of mind-blowing performances by artists from within the country, region and across the continents too. Franz Ferdinand and Tegan and Sara were the biggest names to hit the stage, while local acts like Sona One + Arabyrd and Kyoto Protocol rocked the Urbanscapes stage too. Urbanscape 2013, which was held at the Malaysia Agro Exposition Park Serdang (MAEPS) and thousands flocked to immerse themselves in the creative spirit. FZ was also a part of the event, having to play host to one of the busiest booths at the festival. With the advantage of being the only marquee tent to provide air-conditioning throughout the two-very-hot-days, and ais-krim potong, our visitors were keeping themselves playing with a game of Giant Jenga and enjoying the music being spun by four DJs. FZ's theme was "Freedom of Expression" and by the end of Sunday, our graffiti wall was filled with painted palm-prints of those who put their hands up in support of the cause. Over the next few days, we will also put up five short videos of no longer than 30 seconds of participants who are trying to bag an iPad Mini and luxury hotel stays at The Majestic Hotel in Kuala Lumpur. The winner of the prize will have to get the most number of votes. So stay tuned to this space! In the meantime, FZ's video team presents to you a short video compiling the colours, scenes and acts of Urbanscapes 2013. Enjoy! For more stories, go to www.fz.com, the website for freedom of expression and fairness in articulation.

https://theedgemalaysia.com/node/20092

#Princess@work*English: To speak or not to speak, that is the question

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Language that is universally spoken evolves over time. French was the language that diplomats, rulers and leaders once spoke in Europe from the 17th century until its recent replacement by English. This is why we see United Nations dually written as Nations Unies in French. In the 20th century, after the World War II, German and Japanese were much favoured as “second languages” since Germany and Japan were the two emerging economic powerhouses at the time. Now, we see Mandarin as an important second language because of China’s ascendance as an economic power. According to Ethnologue, a widely cited source for languages around the world, the five most spoken languages in 2009 are:•    Chinese: Most widely spoken language with 1.15 billion people using it as their first language and 1.34 billion as their second language. Chinese is the official language in mainland China, Hong Kong, Macau, Singapore and Taiwan.•     Hindi: Spoken by 366 million people as their first language.•     English: The official language in 83 countries/regions, and spoken in 105 countries with 341 million as their first language and 508 million as a second language.•     Spanish: The official language in 21 countries, and spoken in 44 countries by 358 million people as their first language and by 417 million as a second language.•     French: The official language in 40 countries, and spoken in 54 countries with 77 million as their first language and by 128 million as a second language. So, why is English so important? Because from the statistics, English is undeniably the most widely used “second” and “learning” language in the world, used for international communication in various fields like aviation, business, Internet, science and technology, medicine, finance, and so on. It is spoken in the most number of countries, and also holds the record number as the official language. I, for one, can attest to this. I’m fluent in English, Malay, French and Spanish, having studied the latter two at university, and am a qualified English teacher with a Cambridge certificate (CELTA or Certificate in English Language Teaching to Adults). In Barcelona, an advertising agency hired me as it felt my added value lay in being able to write marketing reports in Spanish and English. In Paris, my added value for L’Oréal was my fluency in English and French, meaning that I could write press releases and develop communication tools in English, coordinate with the subsidiaries around the world in English, French or Spanish, while at the same time handle meetings and communicate daily with my colleagues in French. What I am trying to highlight is this: the need to be proficient in English makes you a strong candidate in any foreign country. For those who don’t speak English, it’s a disability. I know some people who can’t converse in English and feel terribly disadvantaged. I see their frustration in not being able to communicate or join in conversations. I once witnessed a director based in Paris who couldn’t speak French and had difficulty writing grammatically correct English, and that, in the end, damaged her credibility amongst her peers and staff. Bahasa Malaysia, Chinese and Tamil are what make our beautiful, diverse society. But we are also fortunate to have had the British teach us English, as we are one of the few countries able to welcome foreigners so easily into our countries. But being able to speak basic English and being proficient is not the same so we must not be deluded in this. If we look at the Swedes, their level of English and their ability to master a third language is impressive. They understand that few speak Swedish, so they learn to speak flawless English and most likely German or French fluently too. The reality is that we cannot do away with English. Companies, even if they are based in a non-English speaking country, all require a good level of English. This is what I experienced in France and Spain. This is the effect of globalisation. The world is so integrated economically, it would be an error to implement protectionist policies. Stepping back should not be a policy. We must drive forward instead and face the challenges. English is the universal medium of communication today. Many are fearful that we are not ready to teach in English. But as Eleanor Roosevelt once said: “You gain strength, courage and confidence by every experience in which you really stop to look fear in the face. You must do the things which you think you cannot do.” This article appeared in Manager@Work, the monthly management pullout of The Edge Malaysia, Issue 774, Sep 28-Oct 4,2009.

https://theedgemalaysia.com/node/23695

#Flash* Khazanah eyes more divestments

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KUALA LUMPUR: Government investment arm Khazanah Nasional Bhd will pare down more stakes in companies it is holding as it reviews its investment portfolio. Its managing director Tan Sri Azman Mokhtar said Khazanah would most likely divest more stakes in companies it is holding if there are good buyers around. "Yes, there will be further divestment gradually and orderly. We will continue to look at our portfolio whichever we feel is non-core or has reached certain maturity that we don't need to hold," he told the media at a press conference on collaboration between Khazanah and Pinewood Shepperton plc to develop a media production facility in Iskandar Malaysia. Khazanah will invest RM400 million to develop a production studio facility in Iskandar Malaysia, whereby Pinewood would be its technical, marketing and branding partner, Azman said.

https://theedgemalaysia.com/node/26489

OldTown kopitiam eyes Main Market listing

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KUALA LUMPUR: The home-grown OldTown restaurant chain, renowned for popularising the nostalgia of the good old days of kopitiam (old style coffeeshop) in an urban setting, is going for listing. OldTown Bhd, which owns and operates the OldTown White Coffee brand and café outlets, plans to issue 59.5 million new shares of RM1 each and offer for sale 30 million shares under its proposed initial public offering (IPO) pursuant to its listing on the Main Market of Bursa Malaysia Securities. According to its draft prospectus on the Securities Commission website, the group is offering 10 million of the new shares, representing 3.3% of its enlarged paid-up capital, for application by the general public and five million shares to directors, employees and business associates. A total of 12 million shares will be placed out to identified investors, while the remaining 32.5 million shares will be reserved for Ministry of International Trade and Industry-approved bumiputera investors. The offer for sale of 30 million shares will be placed out to identified investors. According to the draft prospectus, OldTown plans to use 32% of the gross proceeds from the IPO to acquire companies, 40% for capital expenditure, 15% for working capital, 7% for repayment of bank borrowings, and the balance 6% to cover listing expenses. OldTown aims to expand its OldTown café outlets locally and in Singapore. “We plan to establish an additional 37 OldTown White Coffee café outlets in Malaysia and four in Singapore by 2010 which would bring our total number of café outlets to 186 (for both Malaysia and Singapore) by then,” it said. The company also intends to extend its instant coffee, tea and roasted coffee powder products to cover new and expand existing exports markets such as Hong Kong, Canada and the United States. “It is our intention to export our coffee and tea beverages products to new market places like Australia and China,” it said, adding that it planned to relocate its food-processing operations and manufacturing of instant coffee and tea, roasting of coffee powder facilities into one central location. “We recently entered into an agreement to purchase a nine-acre piece of land in Ipoh with the intention to start commencing construction on the manufacturing plant by 2010 and completion next year,” it said. OldTown’s net profit doubled to RM20.57 million in its financial year ended Dec 31, 2008 from RM10.90 million a year earlier in terms of pro-forma consolidated earnings, while revenue rose 75% to RM138.44 million from RM79.19 million. This article appeared in The Edge Financial Daily, February 2, 2010.

https://theedgemalaysia.com/node/97619

Hartalega not benefiting from weakening ringgit

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KUALA LUMPUR: Hartalega Holdings Bhd, which exports the majority of its nitrile gloves to the US, will not benefit much from the current fall of the ringgit against the US dollar as it had already hedged its greenback six months earlier. “The recent exchange rate will not benefit the company because we have sold off our US dollar in advance. That is to ensure that we locked in our profit,” chairman Kuan Kam Hon told reporters after Hartalega’s AGM yesterday. Kuan said the largest synthetic glove maker’s normal practice is to hedge over its proceeds, and normally the hedges cover  the preceding six months. For the 2013 financial year ended March 31 (FY13), the US was the group’s largest market with 59% of its nitrile gloves exported to the country. Additionally, sales to the US market also grew to a record high of 5.4 billion pieces during the period, up 28% from FY12. “Maybe four months from now, we may derive some benefits from the strengthening of the US dollar (against the ringgit),” Kuan said, expressing doubts that the ringgit will continue to be battered down from the current level. The ringgit, along with other emerging markets’ currencies, has weakened after US Federal Reserve chairman Ben Bernanke said that the country’s central bank will eventually reduce its monthly purchase of bonds, which amount to US$85 billion (RM283 billion). Kuan’s son and Hartalega managing director, Kuan Mun Leong, said there might not be a substantial jump in the glove maker’s bottom line for FY14 compared with FY13’s net profit of RM233.36 million. Sales surpassed the RM1 billion-mark for the first time in FY13. He said Hartalega is embarking on an ambitious eight-year plan to complete its Next Generation Integrated Glove Manufacturing Complex (NGC) in Sepang, Selangor which will see an average growth of 15% annually in capacity. Once the complex is fully built by 2021, which will cost RM1.9 billion in total, Hartalega will be able to churn out an additional 28.5 billion pieces of gloves annually on top of its current total installed capacity of 14 billion gloves. Mun Leong said construction of the NGC will begin this September, which will see the construction  of 72 production lines in total. “By September 2014, we will see the first six production lines completed,” he added. He said Malaysia’s exports of nitrile gloves increased by about 25% last year. “We believe this trend will continue because the emerging markets have yet to fully embrace nitrile gloves.” Hartalega recently set up subsidiaries in China and India to capitalise on the potential growth in these two countries. “With China’s healthcare reform and a better awareness of personal hygiene in emerging markets, their consumption of nitrile gloves could increase,” he said. Mun Leong said the emerging markets’ average consumption of nitrile gloves is five pieces per capita against 140 pieces in the US and 100 pieces in Europe. There is ample growth opportunities in emerging markets, he added. This article first appeared in The Edge Financial Daily, on August 28, 2013.

https://theedgemalaysia.com/node/51270

JAKS clears hurdle for Vietnam power plant

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KUALA LUMPUR: JAKS Resources Bhd has unit has received the investment certificate from the Vietnamese government for its proposed 1,200MW coal-fired power plant in the province of Hai Duong. It said on Monday, July 4 that its unit JAKS Pacific Power Ltd (JPPL) had received the certificate from the Ministry of Planning and Investment of Vietnam on June 30. “Following the issuance of the investment certificate, JPPL will incorporate a project company in Vietnam with the registration name of JAKS Hai Duong Power Company Ltd to facilitate the signing of the project documents,” it said. The documents include the build-operate-transfer (BOT) contract with the Ministry of Industry and Trade of Vietnam and the power purchase agreement with Vietnam Electricity. Other documents include the coal supply agreement with Vietnam National Coal-Mineral Industries Group and the land lease agreement with the Department of Natural Resources and Environment of Hai Duong People’s Committee. “The board is currently reviewing various investments and funding options, including identifying strategic investors and other suitable parties to undertake the project,” it said.