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https://theedgemalaysia.com/node/33730

Corporate: Tough times ahead for steel players

English

Higher raw material costs and uncertainties over demand could hurt the margins of steel products and erode the earnings of steel millers, say industry observers. In 1Q2010, bottlenecks in the supply chain and input cost pressure kept average selling prices at a high level. The prices of products such as steel bars, billets and wire rods, and raw materials such as scrap, iron ore and coking coal also recovered from a slump in 2008. Globally, 1Q2010 saw the replacement of  a decades-old annual benchmark pricing system for steel input products such as iron ore and coking coal with a new mechanism of quarterly price adjustment. This, coupled with strong demand for steel products, saw the contract prices of iron ore and coking coal soar 90% and 55% respectively in 2Q2010. OSK Research analyst Ng Sem Guan says one of the uncertainties for the sector is the new price mechanism for iron ore and coking coal — the main raw materials in the production of steel. “With the upside of steel prices expected to be capped in the coming months — since the market is not ready for high selling prices — the mismatch between high material costs and low average selling prices looks set to squeeze the margins of steel millers in 2H2010,” says Ng. According to the Brussels-based International Iron and Steel Institute, global steel consumption increased by more than 10.5% in 2009, driven by demand from Brazil, Russia, India and China. But most analysts believe this trend is unlikely to be repeated this year as Europe’s debt crisis and China’s curbs on an overheating property market create concerns about the global economic recovery, leading to an accelerated drop in steel prices. For the most of 1Q2010, the selling price of billets (mostly used in the manufacturing industry) was US$600 per tonne while long steel bars (mainly used in the construction industry) hovered at around US$700 per tonne. The Baltic Dry Index, an indicator of global economic activity as ships move commodities such as iron ore and steel around the world, has been declining from its 2010 peak of 4,209 on May 26. Last Thursday, it reached 2,893. Its all-time high was registered at 11,700 in May 2008. “We think the market may see a difficult 3Q2010, during which time iron ore and coking coal prices are likely to go up at least 15%. Local players will try to hold the prices of steel bars at above RM2,400 per tonne. But unlike the habitual reaction to price escalation, whereby traders normally rush to buy more in the hope of selling at much higher prices later, most traders have been adopting a wait and see attitude since April,” says Ng. The proposal by the government to hike the tariff for natural gas for industrial use poses another challenge for iron and steel producers in Peninsular Malaysia, particularly producers of direct reduced iron (DRI). Some 10 million to 11 million British thermal units (mmBtu) of natural gas are needed to produce one tonne of DRI. The initial recommendation to increase the price of natural gas by RM2.52 per mmBtu for industrial users may lead to the conversion cost for DRI rising to US$87 from the current US$79 per tonne, or a steep increase of 10.2%. Among the major steel millers in the peninsula that are expected to feel the pinch from this measure are Perwaja Holdings Bhd’s plant in Kemaman, Terengganu, and Lion Diversified Holdings Bhd’s plant in Banting, Selangor, says OSK Research in a June 17 report on the steel sector. Since the beginning of the year, industry players such as Ann Joo Resources Bhd — one of the country’s largest steel stockists — have anticipated a recovery in demand for long products due to the expected rollout of infrastructure and development projects following the end-2008 announcement of major stimulus measures.  Ann Joo’s group managing director Datuk Lim Hong Thye says demand for long products is going to be strong over the next three years, given the time lag of more than a year from the announcement in 2008, the planning and land clearance (for infrastructure projects) to the commencement of actual construction work. “While we are not aggressive about selling, given that market demand is still soft, the years 2011 and 2012 will be very strong for long products if there is no hiccup in the path of global economic recovery,” he says. But industry observers have been disappointed with the pace of construction activity that is supposed to take place under the various stimulus packages. In the first six months of the year, the value of projects that was awarded to local listed companies totalled only RM4.58 billion. OSK, in its report, cautions against getting over-excited about the 52 high-impact projects worth RM62.7 billion announced in the 10th Malaysia Plan (10MP). It says doubts remain over the number of projects that may eventually kick off during the period, especially those under the new public-private partnerships, based on the patchy execution of past plans.  “We are calling a ‘neutral’ on the sector as there are a lot of uncertainties regarding demand, cost structure and how the industry will adjust to the new pricing mechanism for commodities set by the global mining cartel,” says Ng of OSK. The major steel counters have fared quite badly year to date. Among them, Kinsteel Bhd dropped 8.79%, its associate company Perwaja Holdings Bhd 12.4%, Ann Joo 16.4%, Southern Steel Bhd 3% and Lion Corp 11.11%. Lion Industries bucked the trend by gaining 13.87%. This article appeared in Corporate page of The Edge Malaysia, Issue 811, June 21-27, 2010 

https://theedgemalaysia.com/node/71781

IIA urges mandatory adoption of internal auditing standards

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KUALA LUMPUR: The Institute of Internal Auditors Malaysia (IIA Malaysia) is urging public listed companies (plc) to adopt the International Professional Practices Framework (IPPF) as a mandatory framework for their internal audit work. “We believe the mere setting up of a mandatory internal audit function will not warrant the effectiveness of the internal audit function unless internal audits are performed by competent internal audit professionals and in accordance with professional standards and rules of conduct,” IIA Malaysia president Josephine Low said after the launch of the 2012 National Conference on Internal Auditing yesterday. In 2007, the Malaysian Code of Corporate Governance was amended, requiring all companies to establish an internal audit function. However, no regulatory standard was recommended, leaving companies to decide for themselves on the rules to be governed by. IIA Malaysia has since 2010 made two submissions to the Securities Commission (SC) to enforce regulations in which the internal audit functions of companies were made to undergo quality assurance reviews, or at the very least, have a set of standards to comply with, said Low. The IPPF being proposed by IIA was developed in 2002 based on IIA standards for professional practices of internal auditing. Currently, it is only mandatory for IIA members. IIA Malaysia has conducted quality assurance reviews on 10 companies, of which 70% are found to be reasonably compliant with IPPF standards. “Enhancing corporate governance is beyond imposing rules and laws but developing and promoting an ethical and healthy corporate culture,” said Low. “As we progress towards what seems to be a period of growth and greater complexity, the internal audit profession should take on an expanded mandate and position itself in the forefront to face these challenges,” she added. However, the rising need for internal auditors to uphold corporate governance is likely to result in a shortage of qualified internal auditors as the legislation becomes more stringent in future. There are 640 internal auditors qualified under IIA’s certification programme, Certified Internal Auditor (CIA). “There are about 1,000 plcs [on the Malaysian market]. If you assign one CIA to one plc, there just aren’t enough,” said IIA Malaysia vice-president Nickson Choo.

https://theedgemalaysia.com/node/20831

Privatisation 2.0

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ONE of the policy objectives desired to be achieved in pushing Malaysia into a high-income economy is by intensifying private sector investment which slowed down significantly after the 1997 Asian financial crisis to below 10% of the gross domestic product compared to almost 30% prior to that. Among the measures announced in Budget 2010 by the minister of finance is the gradual reduction of the government's involvement in economic activities through privatisation of viable companies under the ministry of finance and other agencies. Yes, the "P" word is mentioned again! It was also mentioned in the budget speech that this second wave of privatisation is aimed at enabling the companies and agencies to expand their activities more efficiently, ultimately reducing their financial dependence on the government. This shift of position by the government from being a player to being the facilitator of business is indeed commendable. By focusing on the primary role of providing a level playing field to entrepreneurs to take risk and prosper, the government is allowing the fundamental principle of business, generating profit through real risk-taking, to be further nurtured in the mind of Malaysians. Being a second wave, we could certainly look back at how privatisation was conceptualised and executed earlier and improve the processes this time around. The famous Einstein was quoted as saying that insanity is doing the same thing over and over again and expecting a different result! Given the rakyat-centric approach of the present administration, perhaps new measures could be introduced in the privatisation process so that the ultimate beneficiary would be the rakyat at large and not limited to the rakyat that are awarded the privatisation rights. Since the government is technically the trustee to the rakyat, managing the assets and resources on their behalf, the first step to be considered is to make public government companies and agencies with high potential to be privatised. This will allow more people to participate and come up with business models and structures which not only are sustainable in the long term but offer the best value to the rakyat in terms of services, pricing and immediate cash flow to the government. This will certainly send a strong message that the government is serious in providing equal opportunity to all the rakyat who are innovative and have the capabilities to execute the project successfully. Second, is the way the proposed business models and structures are evaluated. If we refer to the reports of the auditor-general, we have to accept that many things that we did in the past did not result in desired outcomes. In many cases, the government had to come in and rescue some of the projects resulting in significant moral hazards. Lately, the private sector has been brought in to assist the government in turning around failed projects. The PKFZ high-level committee is an example. Why not bring these experts in evaluating future privatisation initiatives? It is better to get their input at the design stage so that robust business models could be developed and reduce the risk of public money being used later if any of the project fails. This will also make the process more transparent and a good deterrent from abuse. When the financial institutions in the US and Europe failed during the recent financial crisis, one of the measures used was the clawback on executive salaries. Perhaps we could use this as part of the new way of privatisation. If the parties fail to perform as promised, there should be ways for the government to come in and put things straight. In this case the operators or owners should be punished, not the rakyat. One of the reasons why the government has to come in with the rakyat's money when certain initiatives fail is due to the guarantee provided by the government. Since the second wave of privatisation is about increasing efficiency, a deal should only be struck if the proponents are willing to take the risk from the deals and not to be given the comfort of any government guarantee. If the proponents do not have the financial standing, then either they should not be considered or another party is brought in to address the financial aspects. Without exposing them to the risk of failure, there would not be much at stake for the proponents to put everything that they should in seeing the privatisation deals achieve their objectives. We should stop people from going in, investing in huge and bloated capital expenditure and then moving out without being accountable. The measures proposed reflect the desire to see improved performance in privatisation deals and putting the interest of the rakyat first. A viable project could be compromised by weak governance. It is hope that this second wave of privatisation would make our economy more competitive and robust and every sector of the society is accountable for their performance, good or otherwise. The rakyat will be watching how Privatisation 2.0 is executed and will judge whether it works.   Nik Hasyudeen is the CEO and thought leader of Inovastra Sdn Bhd. He is the former president of the Malaysian Institute of Accountants (MIA). He can be contacted at [email protected].

https://theedgemalaysia.com/node/61272

IATA: Improved demands, but outlook remains fragile

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KUALA LUMPUR (April 3): Global traffic results for February 2012 has shown that passenger demand improved by 8.6% while cargo demand grew to 5.2% compared to the same month of the previous year, according to the International Air Transport Association (IATA). In a statement on Tuesday, IATA said weaker traffic during the Arab Spring a year ago and the occurrence of Brazil's 2011 Carnival in February which was a month earlier contributed to the inflated February 2012 results and distorted comparisons with the year-ago period. According to IATA, the occurrence of Chinese New Year in January which pushed deliveries into February helped to give positive distortion in cargo demand. Compared to January 2012 levels, the scenario seems reasonable with passenger demand increasing by 0.4% and cargo demand decreasing by 1.2%, it said. The global passenger capacity has also grown by 7.4% compared to previous-year levels giving a positive impact on load factors in which airlines have maintained at 75.3%, slightly better than 74.4% of February 2011 The trend of continued relative stability of freight demand that developed in September 2011 was consistent with improvements in business confidence. IATA director-general and chief executive officer Tony Tyler said that the outlook was fragile and that improvements in business confidence has slowed in February, limiting the potential for business class travel growth which implied that an uptick for cargo was not imminent. He also stated that airlines trying to recoup rising fuel costs could risk reduced volumes on price sensitive market segments. "Weak economic conditions and rising fuel costs are a double-whammy that an industry anticipating a 0.5% margin can ill-afford," he said.

https://theedgemalaysia.com/node/2684

There are still jobs to be had in GCC

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Three years ago, Dubai Investment Group (DIG) was seen as a Middle Eastern company to be reckoned with when it forked out RM828 million cash to acquire a 40% stake in Bank Islam. Bank Islam was not DIG’s only target at the time. It also snapped up stakes in public listed companies on Bursa Malaysia, such as construction outfit PECD Bhd, Scicom (MSC) Bhd, Bolton Bhd, glove maker APLI Industries Bhd, plantation firm Kurnia Setia Bhd and Kannaltec Bhd. Its presence in PECD made sense as the latter secured a RM295 million contract for the construction of the Dubai International Financial Centre in early 2004. But other Malaysian companies without any investors from the Middle East bagged bigger jobs in the region. They include IJM Corp Bhd, WCT Bhd, LCL Corp Bhd, Sunway Holdings Bhd, Gamuda Bhd and Zelan Bhd. WCT, especially, is known for its knack of securing jobs in the Middle East and completing them with good margins. It built the New Doha International Airport, Abu Dhabi F1 Circuit and Bahrain City Centre. However, investors started having second thoughts about the prospects of construction companies in the Middle East when WCT’s contract to build Dubai’s Meydan Racecourse project was cancelled. The move was largely interpreted as a sign of bad times in Dubai, which has not failed to achieve at least 10% GDP growth since 2000. The cancellation of the Meydan project certainly did not leave a good impression on local construction companies. Nonetheless, looking beyond the global financial crisis, some quarters believe the business prospects of the Middle East remain bright. KFH Research Ltd’s managing director Baljeet Kaur Grewal believes the Middle East will be a growth engine for the world economy, besides China and India. “There will be a shift in economic power. The Middle East will be one of the strong growth areas,” she says. While agreeing that the governments in the Gulf region will prioritise domestic projects, which will result in certain jobs being deferred, Baljeet points out that except for Dubai, the other countries will continue to spend to stimulate their economies. “There will be projects and construction jobs for Malaysian companies but these are unlikely to be in Dubai,” she says. DIG is not the only big name from the Middle East to make the headlines for investing in Malaysia’s equity market. Flush with oil money, Kuwait’s KIA Investment Corp and Abu Dhabi’s ADIA Investment Corp have also come under the spotlight for their investment forays into Malaysia. KIA and ADIA were in the news when they established a consortium — Abu Dhabi-Kuwait-Investment Corp — with several Malaysian and Middle Eastern individuals to buy into two construction and property development outfits — Loh & Loh Corp Bhd and Putrajaya Perdana Bhd (PPB). Both listed companies were later injected into UBG Bhd which had no core business but was cash-rich after selling its stake in RHB Capital Bhd to the Employees Provident Fund (EPF). This whole exercise only came about because UBG sold its 32.8% stake in RHB Capital to the EPF for RM2.2 billion cash. After settling its debts, the company, which is linked to Sarawak Chief Minister Tan Sri Taib Mahmud, had some RM800 million cash. Also to be noted is that last year, the EPF completed the sale of a 25% stake in RHB Capital to Abu Dhabi Commercial Bank for RM3.9 billion cash. The EPF timed it perfectly, completing the deal before the global equity market collapsed. It sold its shares in RHB Capital at RM7.20 each. RHB Capital closed at RM3.64 last Friday, at nearly half the transacted price. Coming back to UBG, it subsequently privatised PPB and Loh & Loh. In that exercise, the Middle Eastern consortium swapped its equity stakes in the two companies for about 53% interest in UBG. The restructuring exercise effectively paved the way for UBG and its Middle Eastern investors to enter the construction and property development sector. The plan was to turn UBG into a mammoth construction company that could bid for mega projects locally and in the Middle East. UBG is also cash-rich and plans to enlarge its coffers by divesting 30% stakes in PPB and Loh & Loh to investors. But for UBG to work, it needs a steady stream of construction jobs to come its way. The global credit crunch has drained liquidity worldwide and economic uncertainties have killed the appetite for investing. Meanwhile, the meltdown in asset prices has eroded the net worth of sovereign wealth funds. As a result, the cash-rich big-time investors have become cautious about making fresh investments. Even if there are new investments, they are focused on driving domestic economic growth. “Investments in GCC economies will be inwards. And projects will have to be prioritised now. Some are deferred but not cancelled,” says Baljeet. While the Middle Eastern investors in UBG are now ready to pounce on new jobs, DIG seems to be winding down its positions in Malaysia. Since the beginning of the year, it has disposed of all its shareholding in Bolton and Scicom. “The financial crisis has caused us to revisit our strategies and concentrate on our competitive advantages,” a DIG spokesman tells The Edge. “Although Asia is still of interest to us, our current long-term natural competitive advantage continues to be close to home, namely the GCC and greater Middle East.” This article appeared in the Cover Story page, The Edge Malaysia, Issue 745, March 9-15, 2009  

https://theedgemalaysia.com/node/89156

Against all odds

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ACROSS many professional trades in Malaysia, the percentage of women in entry-level jobs seems to be equal with or higher than that of men. In tracing the gender ratio of employees up the career ladder, however, it widens in favour of the masculine sex. "The majority of employees at the entry level are women, even in terms of pupils," legal practitioner and partner Faizah Jamaludin observes of her law firm, Skrine, one of the largest in the nation. "But once you go up the ranks to equity partners [firm shareholders], there aren't many women." Based on the gender breakdown of The Malaysian Bar, which stands today at about 15,000 members, the same trend is seen in the legal profession at the macro level as well. "The gender ratio of the Bar, which all lawyers in Peninsula Malaysia are members of, is almost equal, as the lawyers that come in are primarily female," says Bar Council deputy CEO Chin Oy Sim. "But if you look at the older [age] group, it's predominantly male. This means that women don't face significant obstacles entering the profession, but rising up to positions of decision-making [is another thing]." The bigger percentage of women in entry-level jobs reflects the higher number of female university graduates, which means that although women have come to equal measure with their male counterparts in tertiary education, they still face problems in rising up the ranks. "Law in itself isn't male-dominated because we are producing either equal or more law female graduates," opines Faizah, who says it isn't uncommon for her to be the lone female in a meeting room. "But I agree that it is male-dominated in the upper echelons of the industry." Faizah is one who has successfully breached the male-dominated world, having been named as a leading competition lawyer in Malaysia by the International Who's Who of Business Lawyers 2013, and as a leading oil and gas lawyer in Malaysia by the International Financial Law Review 2013. She currently heads Skrine's oil and gas practice, which in itself is mostly male-dominated compared to the law industry as a whole. "In this sector, I've had foreign reporters who interview me or people writing to me often assuming I'm male," she shares. "They address me as 'Mr Jamaludin' and I've got articles quoting me as 'he'. I've also had people call me Faizal, which is the male version of my given name." In the medical line, Dr Mary Cardosa has faced similar assumptions made against her gender. She currently serves at Hospital Selayang as a consultant anaesthesiologist and pain-management specialist, and was president of the Malaysian Medical Association (MMA) from 2011 to 2012. "The MMA is historically predominantly male in leadership. I was its first female president," says Cardosa, who remembers hearing unfavourable comments at her installation. "I also recall being interested in obstetrics and gynaecology as a student, so I told my professor I was interested in this specialty," she reminisces. "This was in the early 1980s, where most obstetricians were male. His first response to me was: 'Do you want to get married and have children?' I was really angry, because I knew that if a male colleague had asked my question, he would never have gotten that response." Cardosa believes times have changed since the low 30%-rate of female students in her medical school class. "In my generation, women weren't as career-oriented but I believe there are more women than men in medical school now." Despite this shift towards career development though, women are still expected to effectively juggle work and family simultaneously, says Bar Council Chin. "The reality is there is still that expectation that women bear the brunt of childcare and running a household in addition to whatever job she may hold outside," she opines. "I'm definitely supportive of flexi hours and measures to help women stay in the workforce to achieve the careers they want, but a problem with this is that they don't exactly address the root cause. "These initiatives do help, but it still doesn't change the balance of gender division of labour," Chin continues. "It's saying to the women, 'You're still responsible, we'll just make it easier for you,' but we're not tackling the root cause. We need to look at the bigger question of how we can change the gender division of labour in the domestic sphere." These expectations have led women to pursue less demanding careers or take some time off for family commitments. Faizah has done both throughout her career; she switched from private practice at Skrine to become ExxonMobil's in-house counsel for eight years before taking a year or so off. "The trend is that many female lawyers would choose to be in-house counsels, and from my experience it was more manageable as the hours were more 9 to 5, compared to the trials you'd have to attend and the odd hours and weekends you'd have to work as a litigation lawyer," she explains. "I'm not saying it's an easier option, but it's one that many people choose due to the demands of raising a family. When I came back to private practice, my children were older, so it was more manageable for me." Likewise, Cardosa explains that there are also certain specialties in the medical line that are favoured more by either gender. "There is a perception that [anaesthesiology] is less demanding and offers more flexibility than if you were a surgeon," she says, estimating that there are about three women for every man in her specialty. "Anaesthesiology is seen more as a supportive role [where you work in the] background, behind the scenes, while surgeons get all the glamour," Cardosa reckons. "People think that being a surgeon demands more hours than anaesthesiologists, but that's not true. We have to be there before and after the surgery, so it's actually more demanding… as the patient's lifeline." Apart from having to make alternative career choices, Chin laments how female progression in the legal profession is hindered by family obligations. "There are women who try to work part time but are then told they can't become partners; they can only become consultants because they can't commit to what is needed as a partner." "Partners are expected to socialise and take clients out for dinner and drinks, or cultivate relationships with potential clients. So, if you aren't able to do that, it becomes an issue." For Faizah, she attributes her integration of work and family life to the support she receives from home and her mentors at work. During her time off, it was her mentors who advocated for her return to Skrine as a salaried partner. "I was very lucky because I had two mentors who pushed for me to come back. They held the door open for me, and once I got in I had to prove myself but if it weren't for them I wouldn't be here today." "It wasn't a conscious decision on my part, it was all these people in my life who encouraged me to come back, so that's what I did," Faizah continues. "So, as a woman, I think it's important to have a female mentor who understands the demands of being a mother and lawyer while leading a practice at the same time." As over a third of Skrine's current partners are female, part-time work is now implemented for the firm's lawyers. "The implementation was pushed by a female partner, and I think we are very progressive in that," Faizah says. "Women leadership has a positive impact on the company, because if you don't implement these changes, you lose talent. You've got to be understanding and be in a position to influence company policies for the better." While there are external constraints that keep women from reaching high-level positions in the workforce, there may also be internal reasons that are holding women back. Chin, for example, notes that the Bar Council committee members are predominantly male. "You have to put yourself forward as a candidate and run for a position to be on the council, and the candidates who put themselves forward are predominantly male," she observes. "So what is stopping women from contesting?" Based on Cardosa's opinion, women don't fight for leadership positions because they don't feel compelled to be thrust in the limelight. "Women push for their agendas by getting things done rather than by being in the forefront. It doesn't worry us that we don't get the recognition," she says. "But another question is, do women have to embody such [specific] characteristics to be perceived as successful? It's a bit of a double-edged sword, for if you are loud and authoritative, they may call you derogatory names." When it comes to including more women in leadership positions, both Chin and Cardosa opine that efforts shouldn't be in place as a permanent measure or solely for diversity and quota's sake. "For me, these are only temporary affirmative action to address historical discrimination. When you set quotas, the criticism often levied is that the women who get into these positions are not as good as the men who would have suceeded in the absence of the quotas," says Chin. "However, we must bear in mind that women have historically faced a great deal of discrimination, and as a result there is clear inequality between men and women," she continues. "A temporary preferential treatment is necessary to level the playing field, but once equal opportunity is achieved, the quotas should be discontinued," she says. "We shouldn't be there [in leadership positions] just to bring diversity, we should be there because we form half the population," adds Cardosa. "[As a woman] you can't expect a free ride or think you can't do something either just because you're female. Ultimately, you have to take gender out of the equation in whatever work you do." This story first appeared in The Edge weekly edition of Apr 22 - 28, 2013.

https://theedgemalaysia.com/node/54145

Seoul shares snap 5 days of losses before Fed meeting

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SEOUL (Dec 17): Seoul shares ended slightly higher on Tuesday, fuelled by robust data from the United States and Europe, but paring gains ahead of a key two-day policy meeting by the Federal Reserve. The Korea Composite Stock Price Index (KOSPI) closed up 0.2 percent at 1,965.74 points, after hitting an intraday high of 1,979.62. The KOSPI has retreated nearly 2 percent over the past five sessions. Foreign investors bought a net 17.4 billion won ($16.55 million) worth of local shares, ending a 5-day net selling streak. Mobile carriers and shipbuilders outperformed the broader market, with SK Telecom Co Ltd and Samsung Heavy Industries Co Ltd advancing 2.9 percent and 4.6 percent, respectively. - Reuters

https://theedgemalaysia.com/node/80154

#Flash* Dorab Mistry sees CPO price in RM2,300-2,500 range in the next 3 mths

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Flash: Dorab Mistry sees CPO price in RM2,300-2,500 range in the next 3 mths

https://theedgemalaysia.com/node/4699

Deloitte opens forensic practice in KL

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In a statement released before a media briefing here today, the accounting firm said with the forensic practice here, it was now well-positioned to assist companies to better deal with issues such as fraud and corruption. It would also be able to offer advice on how to minimise the risk of such events from occurring, it said. "A very important consideration in making the decision to build a greater forensic capability here in Malaysia at this time is the financial turmoil the world is currently experiencing. "History shows that in times of economic turmoil and financial decline, the incidence of fraud and corruption increases," it said. It also said a recent survey showed that preparation was needed for an oncoming wave of increased fraud activity. Deloitte also held a seminar here today on the practice for more than 150 of its clients.

https://theedgemalaysia.com/node/83191

#Update* Kamdar shareholders withdraw EGM notice

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KUALA LUMPUR (April 12): Kamdar Group (M) Bhd’s two major shareholders who had earlier planned to remove three existing board members, have withdrawn the extraordinary general meeting (EGM) called earlier to seek shareholders' consent for the proposal. The textile manufacturer and retailer which announced this to the exchange today, did not give any reason for the changes. Bipinchandra Balvantrai who holds a 28.91% stake in Kamdar, and son Gautam Kamdar Bipinchandra who has 3.98%, had previously called for the EGM to remove Kamal Kumar Kishorchandra Kamdar, Rajesh Kumar Gejinder Nath, and Liang Ah Wah. The EGM notice was filed on March 29. In the notice, Bipinchandra and Gautam said the rationale for the removal of the directors was they were “not satisfied with the business performance of the company in respect of the two departments presently managed by Kamal”. The father-son duo added that Kamdar’s overall business performance for the ladies and children departments have not been satisfactory for the past two years. In a separate filing today, Kamdar announced the redesignation of Bipinchandra as non-executive director from his executive board membership previously.

https://theedgemalaysia.com/node/55906

E&O’s Seri Tanjung Pinang progressing well

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Eastern & Oriental Bhd(Dec 16, RM1.95)Maintain buy at RM1.95 with a fair value of RM3: We reaffirm our “buy” recommendation on E&O with an unchanged fair value of RM3, based on a 35% discount to our net asset value (NAV) of RM4.61 per share, including the significant accretion from Seri Tanjung Pinang 2 (STP2). Excluding STP2, our NAV stands at RM1.36 per share. E&O’s near-term catalyst, the planned reclamation of 760 acres (307.56ha) of land for STP2 is coming along well. The detailed environmental impact assessment (DEIA) report was submitted to the Department of Environment last Monday for approval. The next hurdle for the crystallisation of STP2 is the regulatory approval of the DEIA before land reclamation can commence. Looking at the timeline (including the 45 days public display of the DEIA report), management highlighted that the regulatory approval is likely to be granted in the second quarter of 2014 (2QCY14). Reclamation works for STP2 are still on track to begin in the second half of the year, following the regulatory approval and tendering process. We do not expect any equity fundraising exercise for the STP2 reclamation, given E&O’s: (i) strong balance sheet with sufficient debt headroom. Net gearing stood at 30% as at 2Q financial year 2014 ending March (FY14). With a 100% debt funding assumption, gearing is estimated to increase to 0.7 times in FY15F, from 0.5 times in FY14F; and (ii) pre-sale land or development of the landbank through joint ventures. Overall, we are positive on E&O’s upcoming launches. Maiden launches worth RM1.4 billion are earmarked after Chinese New Year, including Andaman Edition 18 East seafront condominiums in Penang, Avira Wellness Resort at Medini in Iskandar Malaysia, Johor, and Princess House in London. The maiden 208 terraced units at Avira Wellness are likely to be priced just under RM1.5 million, given that the first landed homes at Medini are fully fitted units. The indicative selling price of Princess House is £1,800 (RM9,734) per sq ft in our estimate, due to its prime location. Negotiations over the acquisition price for Elmina West in Sungai Buloh, Selangor, (135 acres) with Sime Darby are still ongoing. The launch is envisaged to happen in 2017 at the earliest, upon completion of the new DASH highway in 2016. E&O is still in the early stages of a robust earnings upswing, as development profit from STP2 is not captured yet. — AmResearch, Jan 16 This article first appeared in The Edge Financial Daily, on January 20, 2014.

https://theedgemalaysia.com/node/34717

Off-Market Trades

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For the week ended July 6, some 157 million shares worth RM235 million were done off market in blocks of at least 450,000 shares. Pipe maker Hiap Teck Venture Bhd saw 34 million shares, or 10.38% equity interest, cross in a direct deal at RM1.46 a share for a total value of RM49.64 million on July 5. According to a filing, the block of shares was sold by Hiap Teck’s founder and managing director Kua Hock Lai to substantial shareholder Datuk Law Tien Seng. Law paid a 16% premium to the prevailing market price to acquire the stake. Law bought into the company in April, with the purchase of a 17.08% stake from Kua in a direct deal worth RM88 million, or RM1.60 apiece. Kua now holds a 7.9% stake in Hiap Teck after the divestment. Kenmark Industrial Co (M) Bhd, which has been plagued with a corporate scandal, saw five million shares or 2.75% equity interest transacted off market at 11.5 sen apiece on June 30 and July 6. The identities of the buyer and seller of the shares were not known at press time. Formis Resources Bhd saw 9.2 million shares, or a 5% stake, cross off market, of which 7.6 million were done at RM1.02 apiece. During the week, 14 million Genting Malaysia (GenM) shares were transacted off market at RM2.70 per share and one million at RM2.61 apiece. The transactions, which took place on July 2 and 6 respectively, were cross trades worth RM40.41 million. On July 1, GenM told Bursa Malaysia that it had plans to acquire casinos in the UK from its sister company Genting Singapore plc for £340 million (RM1.67 billion) cash. With a total of 44 properties, Genting UK has the largest number of casinos in the country. GenM’s share price took a beating after a proposed related party transaction which some analysts say is too pricey, although GenM can afford it. There are also worries that the UK operations may drain GenM’s cash pile in the future. GenM clarified that as at June 30, the total outstanding advances owed by its UK business to the parent company stood at £336,457 and will be settled or waived prior to the completion of the proposed acquisition. Meanwhile, according to The Wall Street Journal, GenM was the only bidder left for a licence to operate a video lottery facility at New York City’s Aqueduct racetrack after two rival bids were disqualified. Some 2.95 million shares in Lafarge Malayan Cement Bhd were transacted in cross trades worth RM19.51 million on July 2. Of this, 950,000 shares were done at RM6.58 apiece while the remaining shares were done at RM6.63 each. The cement producer had announced on July 3 that its parent Lafarge SA had plans to sell up to 11.2% equity interest in the company as part of its divestment programme. However, the French company intends to maintain a 51% stake and management control of its Malaysian unit. More off-market transactions took place in Berjaya Corp Bhd (BCorp) last week, with 5.38 million shares done in cross trades on July 2 for a total value of RM6.46 million or RM1.20 each. Sarawak-based shipping company Hubline Bhd saw 13 million warrants done off market in a direct disposal at eight sen apiece, resulting in a change in substantial shareholder Billion Power Sdn Bhd’s interest. With the disposal, Billion Power now has 70.64 million shares. Malayan Banking Bhd saw four million shares done in cross trades from July 1 to 5 at RM7.55 and RM7.56 per share. The transactions were worth RM30.23 million. AMMB Holdings Bhd saw 4.5 million shares worth RM22.49 million transacted off market in cross trades. On July 1, some 3.5 million shares were done at RM5 apiece, while one million shares were done at RM4.99 each on July 6.   This article appeared in Capital page, The Edge Malaysia, Issue 814, Jul 12-18, 2010

https://theedgemalaysia.com/node/4595

OSK sees strong growth in Mudajaya

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OSK Research has reiterated its buy call on Mudajaya Group Bhd at RM1.39 with a higher target price of RM1.90 versus RM1.57 previously to reflect the construction company’s strong earnings prospects. “To better capture Mudajaya’s strong earnings prospects, we now value the company at eight times average two-year forward earnings. Mudajaya is our top small-cap construction pick given its sizeable order book balance of RM5.46 billion and strong earnings growth prospects (FY09-FY11 compound annual growth rate of 46.9%). The research house also liked Mudajaya for its potential lucrative returns and contributions from its India independent power producer (IPP) venture and strong earnings track record of a three-year historical CAGR of 54.1%. It said gross margins for the entire job were attractive at 20%. It added that further upside to its target price would be driven by new jobs flow and the net present value of its IPP venture once it fully commences in 2012. Mudajaya is the engineering and procurement contractor for phase two of the Chhattisgarh IPP project worth RM2.64 billion, awarded in February this year. Phase one is 14% complete while works on phase two are set to commence in 3QFY09. A power purchase agreement (PPA) has been inked between Mudajaya’s 26%-owned RKM Powergen Pte Ltd (RKM) and the Chhattisgarh State Electricity Board (CESB) in 2006, whereby the latter would purchase electricity from phase one at 2.3 rupees (16.7 sen) per kWh for 20 years. “Although no PPA has been signed for phase two, we understand that RKM has received many offers to purchase its electricity. Management indicated the PPA for phase 2 could likely be signed with power trading companies at a rate of 3.5 rupees per kWh. We understand that RKM is in the midst of a negotiation with India-listed Power Trading Corp,” OSK said. Apart from India, the research house said Mudajaya was also confident of bagging two jobs this year comprising road works and buildings worth RM500 million. “Given its track record, we reckon that Mudajaya could potentially participate in jobs such as the LRT extension and ERL for the second low-cost carrier terminal. We continue to like Mudajaya’s strong replenishment track record,” OSK said. Mudajaya was unchanged at RM1.39 yesterday. This article appeared in The Edge Financial Daily, April 23, 2009.

https://theedgemalaysia.com/node/59834

Australia shares slip to 8-week lows, QBE plummets on profit warning

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SYDNEY (Dec 9): Australian shares skidded to eight-week lows on Monday morning, as QBE Insurance plummeted after a shock profit warning, putting the financial sector on the backfoot. QBE Insurance Group Ltd dived 19.2 percent to a 9-1/2-month low of A$12.48 after the company said it expected to report a net loss for the 2013 fiscal year, hurt by claims increase and goodwill writedowns in its North American operations. "QBE is impacting sentiment on the rest of the financials," said Martin Lakos, division director at Macquarie Private Wealth, noting that shares in the insurance company alone pulled the index down by 13 points. The unexpected profit warning from QBE trickled down to the financial sector, which reversed early gains. Top lender the Commonwealth Bank of Australia was flat while Westpac Banking Corp fell 0.4 percent. National Australia Bank lost 0.8 percent. "It's disappointing given the overseas lead, definitely," Lakos said. U.S. stocks soared on Friday, with the Dow and the S&P 500 ending a five-day losing streak after a robust jobs report gave traders confidence the economic recovery was gaining strength. The S&P/ASX 200 index fell 31.7 points to 5,154.3 by 0109 GMT, hovering at its lowest point since October 11. The market has struggled to stay in the black so far in December. The benchmark slid 0.2 percent on Friday, pulling further away from a five-and-a-half year high of 5,457.3 hit on October 28. Uncertainty over when the U.S. Federal Reserve would start tapering its massive stimulus has been a major drag on the market in recent months. Energy Resources of Australia was the other big loser on the day. The stock slumped 11.5 percent to A$1.15, its lowest point since late June, after a radioactive acid leak halted processing operations at its Ranger uranium facility in the Northern Territory. "Having endured a somewhat nervy period in recent weeks, the increasingly rosy growth picture in the world's largest economies has proved insufficient to stop the recent rot in the local share market," said Niall King, sales trader at CMC Markets in a note to clients. Resources stocks helped to limit the broader market losses as copper rose on Friday, underpinned by tightening near-term supply. BHP Billiton Ltd was marginally higher while rival Rio Tinto Ltd added 0.3 percent. Shares in Australia's TPG Telecom Ltd rallied 15 percent to A$4.72, a 1-1/2 month high. Telecom New Zealand will sell AAPT, the wholesale arm of its Australian telecommunications infrastructure unit to TPG for A$450 million enabling the struggling company to pay its debts. New Zealand's benchmark NZX 50 index was flat at 4,713.0 points. - Reuters

https://theedgemalaysia.com/node/34159

Corporate: Navis Capital gains control of Eng Kong

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Shares in Eng Kong Holdings could fall significantly by the end of next month, unless private-equity firm Navis Capital Partners secures the more than 90% shareholding it needs to take the container services provider private. In the longer term, however, Eng Kong could end up being much more valuable if Navis Capital’s plans to expand its business come to fruition. On June 2, Navis Capital said it would pay 29.5 Singapore cents (69 sen) per share for Eng Kong through investment holding company NEK Container Group. Navis Capital’s offer has since been accepted by Eng Kong’s three major shareholders — deputy chairman Eddie Li, managing director Paul Ng and executive director Godfrey Leung — who own a combined stake of 66.39% in the company. That makes a competing offer for Eng Kong unlikely now. Navis Capital’s offer for Eng Kong closes on July 28. Shares in Eng Kong jumped nearly 35% a day after Navis Capital made its offer. The 29.5-cent offer price values Eng Kong at S$77.4 million — that’s about 8.96 times its FY2009 earnings and 14.7% higher than its net asset value of 25.7 cents per share. By comparison, CWT is trading at about 15 times earnings, while Cogent Holdings is trading at 2.7 times. Shares in Eng Kong are currently trading at 29 cents. Resilient and attractive niche“[Eng Kong] has a strong business in what we believe is quite a resilient and attractive niche inside the shipping industry,” says Rodney Muse, managing partner at Navis Capital. “Eng Kong is in services. Typically, service businesses have a more attractive financial matrix than, say, a big shipping company. Shipping lines are very large and, typically, a very capital-intensive business. That wouldn’t meet our mid-market criteria, ranging from US$50 million [S$69 million] to US$150 million in equity value.” Indeed, although the container shipping industry remained weak for most of last year, Eng Kong performed relatively well. For the financial year ended Dec 31, 2009, revenues were up 6.5% to S$86.9 million as higher demand for storage of empty containers helped to offset lower container sales and warehousing services. However, earnings dropped 7.2% to S$8.6 million owing to higher forex losses and the absence of a S$3.6 million gain on the disposal of a property in the previous year. Li and Ng co-founded Eng Kong in 1978. The company started out as a warehouse and container services operator before branching out into the container depot business in 1981. The container depot business now accounts for more than 80% of the company’s revenues, with contributions from 13 cities in Asia. According to the offer document, Kuala Lumpur-based Navis Capital plans to retain the key management and offer them the opportunity to subscribe for shares equivalent to 15% of the issued capital of NEK Container Group. So, the three major shareholders, who will receive S$51.4 million from the sale of their shares in Eng Kong to Navis Capital, could still be indirect owners of the business they built up. “We want managers who think and behave like owners,” Muse says. “That is fundamental to every investment that Navis makes. Our experience shows that when managers become owners in businesses, the alignment typically leads to a better outcome for financial investors.” Should minority investors in Eng Kong accept the offer from Navis Capital? Or will holding on through the inevitable post-offer slump in Eng Kong’s share price prove worthwhile in the longer term? Navis Capital says it intends to de-list Eng Kong if it obtains at least 90% of the latter’s shares. This will allow Eng Kong to save on expenses related to the maintenance of its listing status and focus resources on its business operations. Navis Capital also plans to tap cash flow generated by Eng Kong to grow the company’s business, enter new lines of service and develop and pursue investment opportunities (including acquisitions) across various geographical regions. “As such, growth initiatives and potential acquisitions may be funded by equity or debt financing,” Muse says. “This may limit and/or reduce the company’s ability to pay out dividends or may have a dilutive effect on shareholders.” In FY2009, Eng Kong paid out 3.9 cents in dividends, which included 2.7 cents in special dividend. And in FY2008, a total of 1.2 cents in dividends were paid out, including 0.6 cents in special dividend. With a more aggressive growth profile over the next few years, Eng Kong might not be able to pay out as much in dividends. Growing the business furtherNavis focuses on promising companies in South and Southeast Asia. It is perhaps best known for its purchase of Drypers Asia, a leading diaper manufacturer in Southeast Asia. Eng Kong is Navis’ third offer for a Singapore-listed company after Mentor Media in 2006 and King’s Safetywear in 2008, according to a June 2 press release. Navis manages almost US$3 billion (RM9.7 billion) in capital. “We could hold the investment in excess of five years,” Muse says of Navis Capital’s purchase of Eng Kong. “We have quite a bit of time to effect change inside the business and to grow the business further.” Ultimately, Navis says it is looking to realise the growth potential of the firm and exit at an attractive return. But that doesn’t mean that Eng Kong will find its way back to public markets. “We have never typically set in stone any exit path,” Muse says. “But most of our exits, historically, have been sales to larger companies as opposed to exits via IPOs,” says Navis. NRA Capital, the appointed independent financial adviser, will give its recommendation on Navis Capital’s offer to Eng Kong’s shareholders by June 30. Angeline Cheong is a staff writer at The Edge Singapore This article appeared in Corporate page of The Edge Malaysia, Issue 812, June 28-July 4, 2010  

https://theedgemalaysia.com/node/98226

PM in cameo role in BR24 special merdeka drama

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KUALA LUMPUR (Aug 30): For the second year running, Bernama Radio24 (BR24) has produced a special Merdeka drama with a cameo appearance by none other than Prime Minister Datuk Seri Najib Razak. While Najib delivered the National Day speech at the end of the drama in last year's 'Memoir 57’, this year the prime minister is acting in the 'Ikrar Perwira' drama, the recording of his conversation having been made at his office in Putrajaya. “We were touched by the willingness of the prime minister to appear in the special drama despite his busy schedule," said BR24 Head of Programmes Hakimi Zain who was present at the recording session. "I am amazed at the professionalism displayed by the prime minister, who was able to complete the recording without much coaching despite not having acted before," he said. 'Ikrar Perwira’ will go on air tonight after the National Day speech by the prime minister in conjunction with the country's 56th anniversary of independence. The drama, based on the bloody tragedy in Kampung Tanduo, Lahad Datu, Sabah, was written by Nizuan Hanaffi and stars Man Raja Lawak in the main role with the other characters played by BR24 staff themselves. They comprise managing editor Letfee Ahmad; producer Khairil Bashar; anchors Gerard Ratnam and Shuhadah Armawan as well as Nizuan, who is also the producer for the drama.  

https://theedgemalaysia.com/node/73762

Greece heads for debt cliff-hanger

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IF cliffhangers are needed to keep financial markets on edge, Greece is doing its best to help. A deal on releasing €44 billion (RM175 billion) in long-overdue international aid was shelved last week after eurozone finance ministers fell out again over how to reduce the country’s debt mountain. Athens, meanwhile, is filling budget holes by issuing four-week Treasury bills, a short-term instrument not previously used in the decade since it joined Europe’s monetary union. The scope for an accident that would tip Greece over the precipice looks high. But were financial markets bothered? Hardly. The FTSE Eurofirst 300 index ended the week up 4%. Greek equities rose 7%. Greek government bonds have also rallied on hopes Athens might try to buy back debt held by private investors. Rather than sounding the alarm, markets appear confident that eurozone leaders have at least the Greek problem under control. “They are just not looking in that direction,” says Graham Secker, equity analyst at Morgan Stanley. “Markets now have the confidence that, when push comes to shove, European politicians will find a solution. That was not the case a year ago.” Elsewhere in the eurozone periphery, sentiment has also shown signs of improvement, with Spanish and Italian bond yields falling amid confidence that the European Central Bank will act as a backstop and signs that the worst of the eurozone recession may be over. “We have put our feet back into the Mediterranean,” says Andrew Bosomworth, Germany-based portfolio manager at Pimco. “We’re not swimming but we have put our feet back.” Eurozone talks on Greece’s funding needs and its public debt profile over the next decade resume today. The consensus market view is that immediate relief for Greece will not be held up much longer. “Between now and 2020, anything could happen. So why are we so fixated on something that is going to be affected by so many variables?” says one banker close to the talks. “If there was a prospect of money running out for Greece in the next few months, markets would have something to talk about, but that is not the question for the moment.” Greece’s finances remain perilous. Greek banks are being propped up by about €100 billion in emergency liquidity assistance provided by its central bank, under licence from the ECB in Frankfurt. Longer term, markets see as inevitable a writedown on international public sector creditors, maybe after Germany’s elections next year. Even if Greece avoids disaster scenarios, it is still far from attracting mainstream investors. “Greece is insolvent,” warns Bosomworth at Pimco. For much of the past three years, global investors have worried about Greece’s public finances. Still, not everyone is convinced that stability has improved dramatically. -- FT   This article first appeared in The Edge Financial Daily, on Nov 26, 2012.

https://theedgemalaysia.com/node/46707

PDZ’s asset acquisition is off

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KUALA LUMPUR: PDZ Holdings Bhd’s corporate exercise recently involving the takeover of private company Efogen Sdn Bhd has hit a brick wall, according to sources familiar with the matter. It is understood that a meeting and subsequently an announcement to Bursa Malaysia pertaining to PDZ’s acquisition was to have been made last Friday, but this was not done as talks had fallen through. An executive familiar with the deal confirmed that the talks had stalled, but said this was just one party and that there were other interested parties eyeing PDZ as well. “This deal has been aborted ... it’s not fair for me to talk about it or give you the details,” the executive said, adding that given PDZ’s clean balance sheet, there are still other suitors, but declined to elaborate. Officials close to PDZ’s controlling shareholder, Tan Sri Robert Tan Hua Choon, were not willing to comment. One of the tycoon’s associates merely said, “Maybe … It is possible” when asked if the talks had fallen through. When news of the acquisition hit the streets a few weeks ago, the share price of the hardly-traded PDZ doubled from eight sen (from the beginning of the year) to 15.5 sen last Friday, buoyed by heavy trading volume. According to market observers, it is odd that the talks stalled as both parties are linked to former finance minister Tun Daim Zainuddin. Tan is a known associate of Daim, while Efogen’s shareholders include Tan Sri Abdul Rashid Abdul Manaf, who was Daim’sformer lawyer. Abdul Rashid has almost 21% of Efogen. Other shareholders of Efogen, which is involved in oil and gas, include GMV-Efogen Sdn Bhd that owns about 65%. The balance of 14% is held by Johany Jaafar. GMV-Efogen is wholly owned by Global Maritime Ventures Bhd, a shipping fund under Bank Pembangunan Bhd. For its financial year ended April 30, 2012, Efogen posted a net profit of RM3.77 million on a revenue of RM53.69 million. Being a shipping firm, PDZ has a healthy balance sheet with net cash of RM17.8 million after deducting its long-term debt commitments of RM5.18 million and current liabilities of RM1.2 million. That makes it an ideal candidate for asset injection. However, the company has accumulated losses of RM22.08 million. For its first quarter ended Sept 30, 2013, PDZ posted a net profit of RM778,000 compared to a net loss of RM265,000 a year ago. This is not the first failed corporate takeover for PDZ. In August 2007, a plan to take over PDZ by the KIC group of companies, which controls Asia Petroleum Hub, fell through. The talks commenced more than three years ago, in February 2004. Tan has a large stable of companies dealing in various businesses. Some of the companies under his control, other than PDZ, include Jasa Kita Bhd, Keladi Maju Bhd, FCW Holdings Bhd, GPA Holdings Bhd, Marco Holdings Bhd and Goh Ban Huat Bhd. Tan recently sold one of his companies door frame manufacturer, Malaysia Aica Bhd, which was taken over by Datuk Ter Leong Yap of the Sunsuria property development group. This article first appeared in The Edge Financial Daily, on February 17, 2014.

https://theedgemalaysia.com/node/85777

Terengganu’s move to axe officers draws flak

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PETALING JAYA: The new Terengganu government’s decision to discontinue the services of state and parliamentary development officers in areas won by the opposition has drawn criticism. Kuala Terengganu member of parliament (MP) Datuk Raja Kamarul Bahrin Shah Raja Ahmad, of PAS, said the announcement by the menteri besar had “astonished” the youth and also showed BN’s true colours. “It’s childish. It also shows that they are only interested in serving themselves and not the rakyat,” he told fz.com. Terengganu Menteri Besar Datuk Seri Ahmad Said said yesterday that the people in parliamentary and state constituencies won by the opposition need to get assistance from the elected representatives they had chosen. He also said that affordable houses will only be built in state constituencies won by the BN. Raja Kamarul said the decision was also unfair to loyal BN supporters who are staying in areas won by the opposition. It was also a disservice to the image of a knowledgeable city it is trying to project for Kuala Terengganu. “He must be an MB for all. I’m disappointed with what he said, though not surprised,” Raja Kamarul said, adding that Ahmad was practising vengeful politics. Echoing Raja Kamarul’s sentiments was a voter who only wanted to be known as Mohd Abu Bakar. He claimed many of his colleagues had said the statement was unwise. BN supporters in areas where the opposition had won, he said, would now feel abandoned. “If he continues to help those in need irrespective of where they are from, those who voted against his party before could change their votes in the next election,” Abu said. Marketing executive Siti Hajjar Musa was more forthcoming with her criticisms. “It’s stupid. The MB must have the ‘rakyat’ in mind,” she said. Siti Hajjar said Ahmad should know how to differentiate between a government’s responsibility and that of a political party, adding that the BN was still in charge of the state’s administration. She also said her parents were shocked to hear the statement, as it was the first to be uttered by a menteri besar. BN maintained its mandate to rule Terengganu in the 13th general election on May 5 when it won 17 seats in the state legislative assembly while PAS won 14 and PKR, one. Of the eight parliamentary seats, BN won in Besut, Setiu, Kemaman and Hulu Terengganu while PAS won the Dungun, Kuala Nerus, Marang and Kuala Terengganu. 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 13 May, 2013.

https://theedgemalaysia.com/node/80430

O&G capex rollout re-ignition gaining pace

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Oil and gas sector: Maintain overweight: Petroliam Nasional Bhd’s (Petronas) 2012 financial year (FY12) net profit decreased 17% year-on-year (y-o-y) to RM49 billion despite relatively flat revenue due to higher operating costs and impairment losses on property, plant and equipment, largely in Egypt. Excluding the RM1.5 billion gains on the listing of Gas Malaysia Bhd the disposal of equity stakes in Centrica plc and Australia’s APA Group, Petronas’ FY12 core net profit still contracted 16% y-o-y to RM48 billion. The group’s fourth quarter (4Q) FY12 revenue increased 12% to RM77 billion on higher sales volumes of crude oil and liquefied natural gas, but net profit was halved quarter-on-quarter (q-o-q) to RM6 billion largely due to higher operating costs and impairment losses in Egypt. Petronas’ 4QFY12 total daily output of crude oil and gas in Malaysia rose 9% q-o-q to 2.1 million barrels of oil, which was a continued positive reversal of an overall declining trend from 4QFY11 to 2QFY12 due to natural field depletion, lower reservoir performance, maintenance of the group’s Bintulu plant and operational challenges in the group’s overseas operations. On a y-o-y comparison, domestic crude oil production was down 10%. Petronas’ 4QFY12 capital expenditure (capex) rose by 18% to RM14 billion, which caused 2012 capex to rise 11% y-o-y to RM46 billion. But this was still far short of the expected average RM60 billion annually for 2011 to 2015, for Petronas to remain on track for projected spending of RM300 billion within the next three years. For the group to achieve its earlier capex targets, Petronas would need to ramp up its spending by 56% this year to RM71 billion annually over the next three years. Hence, we expect the pace of contract rollouts to reignite this year, underpinned by an affirmation by Petronas president and CEO Tan Sri Shamsul Azhar Abbas that the group will focus on ramping up domestic production this year. Since the beginning of the year, the total contracts awarded to industry players have already reached RM4.2 billion, a 4.4 times rebound from RM972 million in 4QFY12. These include the RM2.4 billion Malikai tension leg platform production facility for the joint-venture between Malaysia Marine and Heavy Engineering Holdings Bhd and Technip Geoproduction (M) Sdn Bhd and over RM1 billion of marine charter contracts awarded to Alam Maritim Resources Bhd and Perdana Petroleum Bhd. In the first half (1H) of 2013, we expect the award of the three blocks of RM8 billion to RM10 billion umbrella tender for hook-up, construction and commissioning works, which were supposed to have been awarded in 4Q 2012. In 2H13, the rollout of the second phase of the North Malay basin gas cluster project, involving a large central processing platform at the Bergading field and multiple satellite well-head platforms, should sustain the re-rating momentum. The news flow momentum will be further supported by contract awards emanating from the RM60 billion refinery and petrochemical integrated development project in Pengerang and tank terminal projects in southern Johor, together with the massive gas cluster projects off Sabah and Sarawak, which are tied in to the completion of the Bintulu LNG complex expansion in 2015. In view of the multiple flows of contracts this year, we maintain our “overweight” call on the sector with “buy” calls for SapuraKencana Petroleum Bhd, Bumi Armada Bhd, Dialog Group Bhd and Alam Maritim Resources. — AmResearch, March 8 This article first appeared in The Edge Financial Daily, on March 11, 2013.

https://theedgemalaysia.com/node/98392

Govt enforces amended Safeguard Act effective Sept 1

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KUALA LUMPUR  (Sept 3): The government has enforced the Safeguard Act (Amendment) 2012 effective Sept 1, 2013, which is an amendment to the current Safeguard Act 2006 (Act 657). In a statement today, the Ministry of International Trade and Industry (MITI) said the amended act empowered Malaysia to invoke safeguard measures based on the provisions in its bilateral or regional Free Trade Agreements. "Currently, the Safeguard Act 2006 only allows Malaysia to initiate an investigation and impose safeguard duty on a global basis, that is, on all imports of an affected product, irrespective of the source and without discrimination," it added. The Safeguard Act 2006 (Act 657) allows the government to take safeguard actions to prevent or remedy serious injuries caused by a surge in imports of certain products and facilitate the adjustment of affected local industries, in accordance with the World Trade Organisation Agreement on Safeguards.

https://theedgemalaysia.com/node/3981

Kelantan police confident of solving theft of cash from ATM

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BACHOK (Feb 07): Kelantan police are confident of solving the theft of money from automated teller mahcines (ATMs) in the state, in the near future. State deputy police chief, Datuk Mazlan Lazim, said that the police had identified the suspects concerned and the method used in committing the crime. "We are waiting for the right time to act and the police are working hard in preventing the theft of money, involving the ATMs," he told reporters, after launching the programme, Patrolling Together With Kelantan Deputy Police Chief, in the Kampung Kubang Badak Rukun Tetangga Sector (KRT), near here last night. Mazlan also went on a patrol with the KRT chairman of the area, Datuk Ibrahim Ismail, members of the Malaysian Volunteer Corps Department (Rela) and members of the Voluntary Patrolling Scheme (SRS). Last Wednesday, three criminals pulled out an ATM machine, using a four-wheel-drive vehicle, before escaping with RM84,000 in cash, opposite the Politeknik Kota Baharu, Kok Lanas, Kota Baharu. Mazlan said, for security reasons, the bank should cooperate with the police, by carrying out patrols in locations which are possible targets for theft.

https://theedgemalaysia.com/node/32328

Gamuda rises to 8-month high

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KUALA LUMPUR: Gamuda Bhd’s share price rose to RM3.20 in active trade yesterday, the highest in eight months, after it was reported as one of the 15 construction companies called for a tender briefing on the scope of work for the extensions to the light-rail transit (LRT) systems. Gamuda rose 10 sen to RM3.20 with 21.88 million shares done while its warrants, Gamuda-WD, jumped 14 sen to RM1.18 with 23.26 million units transacted. Hwang DBS Vickers Research (HDBSVR) has a buy call on Gamuda with a target price of RM4.35 as it expected Gamuda to be among the top contenders for the Kelana Jaya and Ampang LRT line extension projects estimated at RM9 billion. Affin Securities Research has a buy recommendation with a target price of RM4. HDBSVR said in a research note the deadline to buy the tender documents is today and Syarikat Prasarana Negara Bhd (SPNB) may call for tenders for infrastructure works first. It added there would be eight packages which would be tendered in stages. The other packages are to nominate sub-contractors for fabrication and delivery of segmental box girders for both the Ampang and Kelana Jaya LRT lines. “The project size of RM9 billion appears larger than the initial estimate of RM7 billion to RM8 billion but there is no clear breakdown on what the infrastructure portion will be,” it said. SPNB is scheduled to call a media briefing today on updates for the LRT Line extension projects. On April 28, SPNB said the applicants had pre-qualified as main contractors as they had demonstrated their technical and financial capacity and capability with the relevant infrastructure works experience. They were Sunway Construction Sdn Bhd, Fajarbaru Builder Sdn Bhd-Signatium Construction Sdn Bhd JV,  WCT-Sinohydro JV,  IJM Construction Sdn Bhd, Ranhill-CCCC JV, Muhibbah Engineering Sdn Bhd, Gamuda, UEM Builders Bhd-Intria Bina Sdn Bhd JV, MMC- Zelan JV and MRCB Engineering Sdn. Bhd. The others were Trans Resources Corporation Sdn Bhd, BPHB-Tim Sekata JV, Zabima-Leighton JV, Mudajaya Corporation Bhd, MTDC-Persys JV, Loh & Loh Constructions Sdn Bhd and Ahmad Zaki Sdn Bhd. This article appeared in The Edge Financial Daily, June 24, 2010.

https://theedgemalaysia.com/node/87701

Benalec posts more poor results

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Benalec Holdings Bhd(May 30, RM1.41) Downgrade to neutral at RM1.38 with a revised target price of RM1.25: Benalec’s results for the first nine months of the 2013 financial year ending June (9MFY13) results came in below our and consensus expectations, accounting for only 54% and 55% of total earnings projection. Net profit of RM54.4 million dropped by 24.4% year-to-date (YTD) from RM72 million in 9MFY12, despite revenue increasing by about 41% YTD to RM183.9 million (9MFY12: RM130.4 million). Pre-tax profit for the quarter dropped 36.5% and net profit 50.2% quarter-on-quarter in tandem with a 10% drop in revenue to RM59.8 million from RM66.4 million. This is mainly attributed to the 75% higher cost of sales (COS) compared with 42%  in the first quarter (1Q) and 58.1% in 2Q, leading to a 46.3% drop in gross profit. Reflecting the higher COS, profit margins in 3Q declined markedly to 17% to 25% against 40% to 60% in 1Q and 32% to 42% in 2Q, despite the improved in year-on-year top line numbers. Net profit margin was compressed to 17.6% compared with 39.5% and 31.8% for the previous two quarters. The outlook for the domestic construction and oil and gas sectors is expected to remain strong as outlined in the 10th Malaysia Plan and the Economic Transformation Programme in relation to the proposed petroleum and petrochemical hubs and maritime industrial parks, located on the Tanjung Piai and Pengerang coasts. We reckon this will augur well for Benalec’s land reclamation and should provide the group with a sustainable order book for the next 10 to 15 years. However, we expect the slower recognition of earnings will continue for the next few quarters, thus the less than sanguine prospective earnings forecasts. — BIMB Securities, May 30 This article first appeared in The Edge Financial Daily, on May 31, 2013.

https://theedgemalaysia.com/node/53791

MAS 1H net loss widens to RM769m on higher fuel cost

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KUALA LUMPUR: Malaysian Airline System Bhd’s (MAS) net loss for the second quarter ended June 30, 2011 narrowed to RM526.68 million compared with net loss of RM534.73 million a year ago as it continued to be impacted by the high fuel prices. Reviewing its performance, MAS said on Tuesday, Aug 23 its revenue was RM3.485 billion compared with RM3.213 billion a year ago. Loss per share was 15.76 sen compared with 16 sen. Its derivatives loss was lower at RM56.08 million, a sharp decline from the RM217.16 million a year ago. However, for the six months ended June 30, MAS’ net loss widened substantially to RM769.02 million from net loss RM224.68 million in 2010, despite posting higher revenue of RM6.68 billion, impacted adversely by higher fuel costs. MAS recorded an operating loss of RM413 million year-on-year in 2Q ended June 30 compared to RM286 million loss a year earlier, due mainly to higher fuel cost. On its revenue growth for the quarter under review, MAS said this was due to a 12% growth in passenger load (in terms of passenger revenue kilometers) at the back of 10% capacity growth, improved seat factor by 1.5 percentage point to 75.5% and 1% improvement in passenger yield (average revenue per passenger kilometer). Total expenditure, however increased by 11.4% or RM399 million to RM3.89 billion mainly due to increase in fuel cost by RM448 million as the total fuel cost increased by 41% over the same period last year, it said. Meanwhile, non-fuel cost was lower by 2% or RM48 million than the same quarter last year, it said. On its current year prospects, MAS said that in response to the tough operating environment, the carrier is moderating its short-term capacity growth. The airline said its management team will have a serious review of its current network moving forward, and  adjust deployed capacity accordingly, adding that it was currently executing the return of two B747-200 freighters, one B747-400 and three B737-400s by end September 2011. MAS said it would also continue to enhance its yield performance through successful front cabin initiatives, implementation of fuel surcharges and improvement of its yield/revenue management. “These measures are expected to yield some benefits in the second half 2011 but would not be adequate to offset the impact of high jet fuel price. “We do not expect to make a profit for the second half of 2011 but given the above mentioned initiatives, we anticipate that the extent of losses would be less severe than the first half of 2011,” it said.

https://theedgemalaysia.com/node/88331

Kinrara Residence’ final phase 30% taken up

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UALA LUMPUR: Ambrosia@Kinrara Residence in Puchong, Selangor, has achieved a 30% take-up ahead of its relaunch on Oct 26, said a Mah Sing Group Bhd spokesman. The final phase of Mah Sing’s development comprises 145 homes on a 27.54-acre (11ha) leasehold parcel within the 139-acre mixed residential development Kinrara Residence, which is situated next to the 3,084-acre Ayer Hitam Forest Reserve. Ambrosia is a low density development with a ratio of five units to an acre. It comprises 79 executive 3-storey bungalows and 66 super 3-storey semi-detached homes. The bungalows have land areas of 60ft x 90ft to 60ft x 120ft and built-ups of 5,658 sq ft to 5,908 sq ft, while the semidees are 40ft x 80ft and built-ups of 4,468 sq ft. Indicative prices of the homes are between RM2.44 million and RM3.44 million.   The gated and guarded homes are surrounded by steel wire fencing and there is an infrared CCTV system with fibre optic motion sensors and round-the-clock guard patrols. From Oct 26 to Dec 31, Mah Sing will be holding a campaign, Ultimate Upgrade, to promote the new homes, offering household goods and furnishings worth up to RM150,000. This campaign is targeted at new Ambrosia homebuyers, and existing Kinrara Residences buyers, and Mahsing Mclub members may also enjoy discounts on merchandise by participating vendors. This article first appeared in The Edge Financial Daily, on October 18, 2013.

https://theedgemalaysia.com/node/44488

Abu Dhabi energy firm files suit against Sime Engineering

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Sime Darby Bhd(Feb 16, RM9.28)Maintain outperform at RM9.28 with fair value RM11.10: According to a news report, Abu Dhabi-based energy firm, Emirates International Energy Services (EMAS), has filed a US$200 million (RM610 million) lawsuit against Sime Engineering Sdn Bhd,  stemming from a dispute over tender bids. The media report stated that Sime had backed out of seven large-scale projects “to help other unnamed foreign companies win tenders”. Sime has clarified in a press statement that it did sign an exclusive agency agreement with EMAS in Sept 2006, where EMAS was to identify suitable O&G projects for Sime to participate in, but that Sime is under no obligation to accept EMAS’ recommendations and that there is no time bound requirement in the agreement to decline their recommendations. Management further noted that while EMAS did bring several projects to its attention, Sime did not tender for these projects, after deeming them unsuitable. EMAS wrote a letter to Sime in August 2010, claiming losses for not accepting those projects, but after seeking legal advice, Sime replied to EMAS that there was no basis for the claims according to the agreement, and that such a claim is grounds to treat the agreement as being repudiated and a ground for termination. As at the time of the press release, Sime had yet to receive any official lawsuit from EMAS. We understand the agreement stated that payment to the agent would only be made if Sime were to tender for the projects and that payment was to be based on a certain percentage of the project cost. Given that Sime did not actually tender for any of the projects brought to them by EMAS, there shouldn’t be any basis for the lawsuit, and we are not too worried about it, unless it turns out to be for a different claim. Our forecasts remain unchanged. The risks include: (i) A convincing reversal in crude oil price trends resulting in the reversal of CPO and other vegetable oils price trends; (ii) Weather abnormalities resulting in an over or under-supply of vegetable oils; (iv) Increased emphasis on implementing global biofuel mandates and trans-fat policies; and (v) a slower than expected global economic recovery resulting in lower than expected demand for vegetable oils. We make no change to our target price of RM11.10 and our “outperform” recommendation. — RHB Research, Feb 16 This article appeared in The Edge Financial Daily, February 17, 2011.

https://theedgemalaysia.com/node/80739

Federal govt maintains no local govt election

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PUTRAJAYA (March 13): The federal government will stand firm in its position against the conduct of local government elections amid Penang's bid to restore the "third vote". Minister of Housing and Local Government Datuk Seri Chor Chee Heung today said his ministry will discuss the matter with the Attorney-General's Chambers once they receive legal notice of Penang state government's petition. "We will maintain our position, unless there is a repeal of certain provisions under the Local Government Act," Chor told reporters after witnessing the signing of a Corporate Integrity Pledge (CIP) by the Solid Waste and Public Cleanliness Body. Chor was asked to comment on Penang's and voter P. Ramakrishnan's recent filing of a petition for the Federal Court to compel the federal government and the Election Commission (EC) to restore local government elections in Penang. The EC has yet to make arrangements to conduct polls for the Penang Island Municipal Council (MPPP) and Seberang Perai Municipal Council (MPSP) despite the state legislature passing the Local Government Elections Enactment 2012 last May. Earlier, Chor urged civil servants to steer clear of wastage, abuse of power and misuse of state funds. "As public officers tasked with managing the government's finances, we have to carry out our duty with full integrity and transparency to comply with all administrative guidelines that have been set," Chor said, in his speech. Chor noted that government spending was a large catalyst for the domestic economy with a large multiplier effect. "Government spending is a boon to the private sector which uses profits to pay its employees. But wastages due to corruption will reduce the economic multiplier effects and impact the country's economic growth," he said. Chor also warned that countries with rampant corruption will affect the image of the country globally and be given negative ratings in international corruption surveys. This will then cause problems such as reducing foreign direct investments which will in turn lead to weak economic growth, Chor added.

https://theedgemalaysia.com/node/25312

Green Packet aims for market leadership in 2010

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PETALING JAYA: The solutions division of Green Packet Bhd is aiming to become the world’s market leader for WiMAX modems, which would require more than double its present 14% market share to 30%. Green Packet’s senior general manager Kelvin Lee told a media briefing yesterday that 2010 was expected to be a year that would see the group take a “quantum leap” ahead, after laying down its groundwork last year. Green Packet also launched its 2010 branding campaign, New Horizons, yesterday. “2009 was the year where we established our credibility internationally in the WiMAX and 3G market,” Lee said. “Today, we are the third-largest player globally, supplying WiMAX modems to over 30 operators in six continents.” He added that the target this year was to overtake modem manufacturers Motorola and Samsung, which are presently ahead of Green Packet in terms of market share. Lee reckoned that Green Packet would have to increase its 2009 shipment volume of 235,000 units by at least three times in 2010 to hit the 30% market share target. Already an established player in the Asia-Pacific region, Green Packet will be looking to the US and European markets to drive its growth as well. At present, Asia Pacific and the Middle East contribute about 85% of its modem revenue while the US and Europe account for the other 15%. Lee said he was hoping to balance the contributions to about 65:35. “We are protecting our market share in AsiaPac, but we see a lot of opportunities in Europe and the US. In the US alone, there are over a hundred WiMAX service providers and we need to establish a presence there to reach these potential customers,” he said. Green Packet has also come up with several innovative hardware designs, such as the world’s first wideband WiMAX USB modem. The UH235, or “Shuttle” modem, operates on several WiMAX frequencies from 2.3Ghz to 2.7Ghz. The wideband feature means that modem users will be able to roam with their modems in different countries that operate on a different frequency. A Green Packet representative said the modems would be available to P1 WiMAX customers “very soon”. As for the software arm of its solutions business, Lee said the aim was to raise Green Packet’s market position to No 2 worldwide. It was presently the No 1 in Asia Pacific, he added. Green Packet’s software solutions cater for both end-users and operators, providing connectivity solutions at both ends. Its clients include Hong Kong-based PCCW Ltd and Tatung InfoComm Corporation of Taiwan. Lee said his target for 2010 was to more than triple the number of software licences to about a million from 300,000 in 2009. Meanwhle, the Green Packet group was expected to be operationally profitable by its 3Q10 ending in September. The group’s managing director and CEO CC Puan had told The Edge that the company was expected to be Ebitda- (earnings before interest, tax, depreciation and amortisation) positive despite anticipating another capex-intensive year. Puan anticipated an additional RM350 million in capex for 2010 as the company seeks to expand its WiMAX network and to increase capacity in its existing areas of coverage. This article appeared in The Edge Financial Daily, January 15, 2010.

https://theedgemalaysia.com/node/36115

#Today's Diary* What to expect on Aug 30, 2010

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The launch of UTAR New Village Community Project Webpage and UTAR Student Services Webpage and presentation of UTAR Soft Skills Development Certificate at UTAR, Perak Campus, Kampar, Perak at 9.30am. Prime Minister Datuk Seri Najib Razak attends ground-breaking ceremony of the new Low-Cost Carrier Terminal (LCCT), Sepang at 2pm. Maxis Bhd to announce its financial results for the second quarter 2010 at Hotspot, Level 24, Menara Maxis, KLCC at 6.30pm.

https://theedgemalaysia.com/node/62299

Interview: Carlsberg optimistic despite dip in sales

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HAVING recently completed his first 100 days as the new managing director of Carlsberg Brewery (M) Bhd, Henrik Juel Andersen is looking at the growth prospects of the company with “bright and optimistic eyes”. He says Carlsberg is in a good position to grow faster than the market despite the overall cautious mood in the fast-moving consumer goods (FMCG) sector in Malaysia. “There’s still very healthy growth in the beer industry in Malaysia. The lower consumption level is nothing to be pessimistic about and we expect to continue to grow our market share. There are growth opportunities in every segment of the market,” he tells The Edge, but declines to reveal Carlsberg’s market share. In FY2012 ended Dec 31, the brewer’s profit after tax grew 15.8% to RM193.8 million on the back of a 6.4% increase in revenue. Andersen expects growth over the next year to continue to be driven by the company’s business model of offering value-added products and services to the retailers as well as a “unique” drinking experience to its consumers. “Our strategy is to have a multi-brand portfolio that is cost-competitive without compromising on quality. We have invested significantly in brand building and boosting brand equity. While there is a lot of growth potential in the portfolio we already have, we are always looking to expand what we can offer our consumers,” he says. However, analysts are not so bullish on the beer manufacturer’s prospects. Sales contracted 6.5% year on year in the nine months ended Sept 30 to RM116.74 billion. Net profit declined 20.69% to RM119.88 million. In a recent note, TA Securities says due to the dip in the company’s latest quarterly results, it is revising down Carlsberg’s market share by 1.5 percentage points (ppts) in FY2013/FY2014 and has a “sell” recommendation on it. Commenting on the outlook for the company, the research house says, “Though Carlsberg Green Label remains its key driver,  other premium brands, such as Asahi Super Dry and Kronenberg, which are already being manufactured locally, and Somersby Apple Cider, are also expected to drive sales for the group.” RHB Research analyst Chan Jit Hoong says Carlsberg’s dividend yield is losing its appeal while its steep price-to-earnings valuation is unwarranted. It maintains a “sell” call on the stock. According to Bloomberg data, Carlsberg’s indicative gross yield is 5.34%. “Our assumption of malt liquor volume growth stays at 1% with the company’s target market share at 40%. Furthermore, the outlook for the industry does not look very promising,” says Chan. In the third quarter ended Sept 30, Carlsberg posted a lower net profit of RM38.43 million compared with RM61.05 million a year ago. Revenue was RM352.12 million compared with RM410.84 million previously. The dip in the quarterly results is linked to the timing of the announcement of Budget 2014. “Usually, a month before the announcement, retailers stock-load in anticipation of price hikes. In 2012, the announcement was made in September, whereas this year, it came a month later. So really, when you adjust for 2012’s stock-loading, our third-quarter revenue would show  comparable growth,” says Andersen. He commends the government’s decision to not raise excise duties on liquor for the eighth consecutive year as a hike would have impacted the retail, food and beverage, and tourism sectors as well. Nevertheless, RHB’s Chan says the government’s other subsidy rationalisation measures may dampen beer sales. “In fact, demand for beer declined in 2Q2013 and 3Q2013. That said, the tourism sector may still support the weak domestic beer market come Visit Malaysia 2014,” he says. Carlsberg also saw lower contributions from its Singapore division due to softer consumer demand, stock rationalisation that started in the second quarter and competition from  cheaper imported foreign beer. However, Anderson says he expects an uplift in the fourth quarter and a strong finish to the year due to seasonal year-end demand.  Commenting on Carlsberg’s expansion plans outside Malaysia, Andersen says the company has already acquired Sri Lanka’s Lion Brewery (Ceylon) plc and local distributor Luen Heng F&B Sdn Bhd. He adds that there are always other opportunities to explore. Carlsberg owns 24.6% of Lion Brewery and 70% of Luen Heng,  acquired in 1996 and 2008 respectively. Andersen says the company aims to deliver revenue and profit growth y-o-y and to continue to deliver attractive returns to shareholders. “In every country that we operate, we are focused on growing our business faster than the market and becoming more efficient and effective in the way we operate.” This article first appeared in The Edge Malaysia Weekly, on November 25, 2013.

https://theedgemalaysia.com/node/63445

Kian Joo alleges ‘plagiarism’ in judgment

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KUALA LUMPUR: The lengthy legal battle between Kian Joo Can Factory Bhd and Can-One Bhd has taken another twist, with the See family seeking a review of the Federal Court decision on grounds that the court had “plagiarised” its grounds of judgment. The See family’s latest application was filed by their solicitor Messrs VK Lingam and Co on Feb 13. Copies of the documents were distributed to reporters yesterday. The review application was supported by an affidavit affirmed by former Kian Joo managing director Datuk See Teow Chuan, who said the bid was filed because the Federal Court’s grounds of judgment dated Jan 5 “consisted very largely and substantially the reproduction, without any attribution, of the respondents’ first written submission”. See also charged that the Federal Court did not conduct an independent and impartial review of the evidence and law or engage in their own analysis. Accompanying See’s review application was a 61-page document setting out the Federal Court’s grounds of judgment in comparison to the respondents’ first written submissions dated July 4, 2011. This comes after the Federal Court on Jan 5 ruled that the liquidator, KPMG Corporate Services Sdn Bhd, can proceed with the sale of the block of shares in Kian Joo. The saga began in 1994 when the See family, who were then the major shareholders of Kian Joo via Kian Joo Holdings Sdn Bhd (KJHSB), filed a winding-up petition to liquidate the company amid a family feud. KJHSB was then the holder of the 32.9% block of shares in Kian Joo. After a tender process by the liquidators, Can-One unit, Can-One International Sdn Bhd, succeeded in its bid for the block of shares and had apparently given a higher offer than that of See’s private vehicle, Gold Pomelo Sdn Bhd. Shortly after that, members of the See family objected to the share sale and wanted the liquidation to be done in specie (a pro-rated distribution among the existing contributories). This then sparked a lengthy court battle in which the See family filed a suit against the liquidators and Can-One International. The High Court had ruled that the liquidator can proceed with the share sale to Can-One but the See family then launched appeals to the Court of Appeal and Federal Court, which ultimately upheld the High Court’s decision. With his latest application for a review, See is asking that the Federal Court reconvene a different panel of judges to re-hear the appeals. See has also asked that the liquidators be restrained from distributing the proceeds from the sale of Kian Joo’s shares, amounting to RM241.11 million, pending the disposal of the appeal. Additionally, the See family is also seeking to restrain Can-One from selling the shares and from exercising its rights arising from the purchase of the Kian Joo shares pending the appeal. For now, See will still have to obtain leave, or permission, from the Federal Court in his application to review the apex court’s earlier ruling. The review proceedings will only take place if the Federal Court grants See leave to pursue the review. What is certain is that the Kian Joo and Can-One saga is not over yet. This article appeared in The Edge Financial Daily, February 21, 2012.

https://theedgemalaysia.com/node/34407

Scomi submits proposal to supply trains for LRT extension

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RAWANG: Scomi Group Bhd’s subsidiary Scomi Engineering Bhd, has submitted proposals, to upgrade the trains from the existing two-car to four, and is waiting for a decision for the extension of the current KL Monorail line. “We have submitted our proposals for line expansion and the upgrading of coaches, but it is up to the government to decide,” Scomi Engineering’s chief operating officer, Azmi Abdul Aziz said on Thursday, July 29  after a tour of its facilities here. The Edge weekly had on July 19 reported that the Scomi Engineering is poised to be awarded with a RM600 million contract in a bid by the government to fast track the upgrade of public transportation system in the city. “The government public transport master plan for Klang Valley is centered around a hub and spook concept, and monorail is the best system to serve as a complement for the LRT and MRT lines,” said Azmi. He added that the group is banking on its good delivery time and track record in the construction of monorails projects to spur its international ambitions, as monorail is increasingly the preferred mode of transport.

https://theedgemalaysia.com/node/84497

#Market Open* KLCI falls 0.08%, cautious trading seen ahead of elections

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KUALA LUMPUR (April 26): The FBM KLCI fell in early trade amid cautious trading ahead of Malaysia's general election on May 5 this year. At 9.05am, the KLCI was down 1.38 points or 0.08% to 1,704.96 on losses in blue chip stocks like British American Tobacco (M) Bhd and Petronas Gas Bhd. Across Bursa Malaysia, some 17 million shares worth RM12.58 billion changed hands. There were 70 gainers versus 45 decliners. The top gainer was Petronas Dagangan Bhd while United Plantations Bhd led decliners. The most-active stock was Sino Hua-An International Bhd. HwangDBS Vickers Research Sdn Bhd wrote in a note that the KLCI may close near 1,706 points today, similar to last Friday' level. "With no fresh market developments in sight, trading activity will likely remain slow in the run-up to the 13th General Election. "This comes in spite of an overnight rebound on Wall Street. Major US equity barometers ended up between 0.2% and 0.6% as corporate earnings beat expectations while jobless claims were down," HwangDBS said. Across Asia, Japan's Nikkei fell 0.06%, South Korea's Kospi declined 0.33% while Singapore's Straits Times rose 0.36%. Reuters reported that Asian shares steadied on Friday, tracking global equities higher after upbeat U.S. labour market data, with investors turning their attention toward corporate earnings to assess the outlook for growth after a recent run of soft global data undermined sentiment. MSCI's broadest index of Asia-Pacific shares outside Japan was little changed, after reaching its highest since mid-March on Thursday.

https://theedgemalaysia.com/node/6114

Mudajaya gets another PPA in India

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In a statement yesterday, it said phase two of the IPP project consisted of 3x360MW (1,080MW) and was expected to commence commercial operations by September 2011. The PPA entered into by its associated company RKM Powergen Private Ltd (RKM) was for a period of 12 years from the commercial operation date of phase two of the IPP. “Pursuant to the PPA, PTC shall pay RKM a yearly average tariff rate of three rupees (RM0.214) per kilowatt hour (kWh) for the aforesaid power supply on a ‘take or pay’ basis. “In the event PTC sells the contracted power at a tariff higher than the tariff rate plus the trading margin set by the Central Electricity Regulatory Commission of India, presently 0.04 rupees, or RM0.0029 per kWh, the surplus after deducting the tariff rate and the trading margin shall be shared between RKM and PTC in the ratio of 90:10,” Mudajaya said. It added the balance of the nominal capacity of phase two of the IPP project, amounting to 380MW, would be sold through a tariff bidding process to capture the short-term market tariff rates. In a separate statement to Bursa Malaysia yesterday, the company reported its net profit for the first quarter ended March 31, 2009 rose 7.34% to RM14.04 million from a year earlier, on the back of a 56% surge in revenue to RM125.38 million. Earnings per share rose to 3.77 sen from 3.5 sen. It declared a first interim dividend of 3% for the financial year ending Dec 31, 2009, payable on July 23. Meanwhile, in a disclosure of its joint venture agreements (JVA), Mudajaya said its development order and revised earthworks plan for the development project under its JVA with Datuk Abd Rahman Abdullah and Integrated Heights Sdn Bhd, received Dewan Bandaraya Kuala Lumpur’s approval. It added the proposed development, comprising eight bungalows and two duplex penthouses in Bukit Damansara, was currently pending approval by DBKL. This article appeared in The Edge Financial Daily, May 14, 2009.

https://theedgemalaysia.com/node/36674

Corporate: Investors shrug off Japanese debt fears

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Not even a year ago, amid widespread concerns over Greece’s debt crisis, any mention of Japanese government bonds would spur a discussion on whether the market was destined eventually to collapse under the weight of government debt.Today, that debate has petered out — at least for now — even though Tokyo’s fiscal woes have not changed in the meantime. Amid heavy investor buying of sovereign debt, benchmark 10-year yields are now trading below 1% for just the third time ever, following periods in 1998 and 2002/03.Back in 2003, 10-year yields edged down to 0.4%. But JGBs spiked 118 basis points between mid-June and early September in that year as banks tried to dump their holdings.That spike in yields caused enough pain to linger in the memories of Japanese banks, having a negative impact on their earnings.“Japanese market participants suffered the trauma of below 1% yields in 1998 and 2003, so they remain wary of interest-rate risk,” says Hajime Takata, a strategist at Mizuho.These concerns remain but analysts point to several reasons why there may not be a bubble this time.Loan demand in Japan continues to decline, giving banks increasing amounts in which to invest in JGBs, given that they have few other options for liquid yen investments.There is also plenty of domestic demand from life assurance companies, which still have some way to go in buying JGBs to match their liabilities.This domestic demand is also being augmented by some additional demand from overseas, as investors buy short- and longer-term JGBs, attracted by a strengthening yen. Initial weekly data from the Ministry of Finance shows net purchases of Japanese money market securities by foreign buyers between the beginning of May and last week of ¥5.7 trillion .One of the most notable foreign buyers of late is China. It is not clear how much the Chinese have bought this year as Japanese data only tracks where the transactions were carried out, rather than who owns the bonds.Even so, in the first six months of the year, direct purchases from China reached a record ¥1.7 trillion (RM63.6 billion) of Japanese bonds, with the majority of these funds invested in short-dated bills of a year or less.Analysts say China’s pres­ence is being felt in the market, adding to domestic bank demand for bills.Moreover, the finance ministry has been issuing fewer bills than have been maturing, reducing the outstanding supply. Société Générale estimates that between April and September, there will be net negative bill issuance of about ¥6 trillion. This has resulted in banks buying longer-dated bonds when they cannot get enough of the shorter maturities, analysts say.“It’s [purchases of JGBs by China] a big deal because ... it makes an imbalance that exists in the money market worse,” says Christian Carrillo, head of Asia-Pacific interest rate strategy at Société Générale. “It puts them in direct competition with banks that need to buy bills.”Even so, there is space for 10-year yields to rise temporarily, argue some analysts.“Sentiment is becoming more vulnerable,” says Naomi Hasegawa, a strategist at Mitsubishi UFJ Morgan Stanley. “[There is] a feeling that maybe the rally is nearing an end.”Hasegawa expects yields to reach 1.1% by end-September from current levels of 0.924% amid profit-taking. “But we don’t expect a huge increase in yields given the recent GDP data that was below expectations and everyone is worried about a [global] double dip,” she says. — Financial Times   This article appeared in Corporate page, The Edge Malaysia, Issue 820, Aug 23-29, 2010

https://theedgemalaysia.com/node/74074

Stocks to watch: IJM Corp, MISC, Parkson, Tan Chong, Maxis, Protasco, DRB-Hicom

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KUALA LUMPUR (Nov 28): The FBM KLCI could sustain some of its gains on Thursday as buying is expected to return as valuation for some highly desired stocks is seen as increasing. The local index snapped its losing streak on Wednesday and clawed back to close above the important 1,600-point level, lifted by some late buying into select blue chips, bucking the trend at most regional markets. European shares edged lower on Wednesday as fresh worries over the US economy's "fiscal cliff", a combination of looming spending cuts and tax hikes, impacted the region's stock markets, according to Reuters. AmResearch in a market strategy report on Wednesday said the potential upside was about 10% from current the index level of 1,600, adding that corporate earnings were projected to expand by 11.5% in 2013 (2012: 10%). “Under our base case scenario, we set our end-2013 fair value for the FBM KLCI at 1,770 – based on an unchanged trend-average PE of 15 times but with earnings rolled over into 2013,” it said. “The eventual removal of election overhang post GE13 should precipitate a market recovery as risk aversion eases to drive equity reweighting of domestic portfolios,” said AmResearch. Among the stocks that could be in focus on Thursday are IJM Corporation Bhd, MISC Bhd, Parkson Holdings Bhd, Tan Chong Motor Holdings Bhd, Maxis Bhd, Protasco Bhd and DRB-Hicom Bhd. IJM Corporation Bhd's net profit for the second quarter ended Sept 30, 2012 jumped 83.56% year-on-year (y-o-y) to RM137.25 million versus RM74.77 million, due mainly to significant growth in its construction and infrastructure divisions The company said on Wednesday that its revenue for the quarter increased to RM1.14 billion from RM1.09 billion a year earlier. Earnings per share was 9.93 sen compared with 5.45 sen in 2011, while net assets per share was RM3.91. IJM Corp declared a first interim dividend of four sen per share (single tier) for financial year ending March 31, 2013 to be paid on Dec 21, 2012. MISC Bhd's net profit for the third quarter ended Sept 30, 2012 slipped 2.36% to RM139.75 million from RM143.13 million a year earlier, due mainly to lower operating profit arising from provision for higher than expected expenses for an ion-going conversion project in its heavy engineering business. The company said on Wednesday that its revenue for the quarter rose to RM2.29 billion from RM2.20 billion in 2011. Earnings per share remained flat at 3.20 sen y-o-y, while net assets per share was RM4.84. For the nine months ended Sept 30, MISC posted a net profit of RM55.62 million compared with a net loss of RM41.62 million in 2012, on the back of revenue RM7.08 billion versus RM7.31 billion. Reviewing its performance, MISC said lower revenue in petroleum and chemical businesses from softer freight rates, lower earning days and lower number of operating vessels were the main causes in the decline in its revenue. On its prospects, MISC said the shipping industry landscape continued to remain challenging amidst cautious economic sentiments globally. “Optimising cost efficiency will be a priority in the current low shipping freight rates and tonnage oversupply environment,” it said. Parkson reported a lower net profit of RM59.04 million for the first quarter to end-September 2012 in the current financial year, compared with RM90.29 million achieved in similar quarter in the last financial year. The plunge of 34.6% y-o-y in net profit was due mainly to initial losses of new stores and decline in business in China and Vietnam. Its revenue for the quarter, however, rose 5% to RM836.94 million, from RM791.63, according to Parkson’s filing with Bursa Malaysia. Tan Chong’s net profit for the third quarter ended Sept 30, 2012 fell 40.1% y-o-y to RM32.69 million from RM54.56 million on the back of revenue RM937.68 million versus RM905.35 million in 2011. Reviewing its results, Tan Chong said its performance had been affected by the global uncertainty, natural disasters, tighter credit requirements by Bank Negara Malaysia and consumer expectations for reduction in car prices. Maxis' net profit for the third quarter ended Sept 30, 2012 fell 17.69% y-o-y to RM442 million versus RM537 million, on revenue of RM2.22 billion versus RM2.24 billion in 2011. Maxis declared an interim single-tier tax exempt dividend of eight sen per share to be paid on Dec 28. Protasco Bhd’s third quarter net profit tripled from a year earlier as the diversified entity’s construction, education and property development units registered higher turnover during the period. Protasco told Bursa Malaysia on Wednesday net profit came to RM17.99 million in the quarter ended Sept 30 against RM6.12 million previously as revenue added 18% to RM206.67 million from RM175.53 million. “During the period under review, the road maintenance division had received additional work orders from the public sector. The additional works is expected to be completed by early 2013,” Protasco said. Meanwhile, DRB-Hicom has said it is not considering the sale of Lotus, which is owned by its unit Proton Holdings Bhd. Clarifying on a report in The Edge Financial Daily on Wednesday, the company’s chairman Datuk Syed Mohamad Syed Murtaza said his statement “we are looking at the company seriously” was referring to looking at how to improve Lotus’ performance by improving its operations and growing its business and not disposing of the group’s stake in the company.

https://theedgemalaysia.com/node/58751

YTL Corp extends share exchange offer to YTL Cement shareholders

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KUALA LUMPUR (Dec 19): YTL Corporation Bhd has extended a voluntary share exchange offer to the holders of YTL Cement Bhd shares and its loan stocks to maximise the value of their investments. It said on Monday the offer was RM4.50 for each YTL Cement share, or 3.17 shares of 10 sen each in YTL Corp for every one ordinary share of 50 sen each held in YTL Cement. For the irredeemable convertible unsecured loan stocks (ICULS) holders, the offer was RM2.21 for every RM1 in ICULS held, or 1.56 YTL Corp shares for each ICULS. YTL group managing director Tan Sri Francis Yeoh Sock Ping described the transaction as a “homecoming opportunity” for YTL Cement shareholders as they could better maximise the value of their investments by exchanging their shares into the diversified business of YTL Corp. Yeoh said the bulk of YTL Corp’s earnings was underpinned by its regulated water and utilities concessions, as well as its cement, construction, property and hospitality businesses. “YTL Corp, as a major shareholder of YTL Cement, recognises that the liquidity of YTL Cement’s shares has continued to remain at relatively low levels, which presents a challenge to YTL Cement’s shareholders looking to adjust their investment strategies or portfolios,” he said. He added the exchange plan would also enable YTL Corp’s shareholders to increase the stake in a highly efficient and profitable business and consolidate a greater proportion of its earnings and performance for the benefit of the wider group.  

https://theedgemalaysia.com/node/6857

Envair revises terms of MLM acquisition

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KUALA LUMPUR: Envair Holding Bhd will now issue 90 million new shares of 10 sen each, with 36 million free detachable warrants, at an issue price of 10 sen per share for its proposed acquisition of a 45% stake in multi-level marketing (MLM) company Guan Fang International Marketing (M) Sdn Bhd (GFIM). It had earlier proposed to satisfy the RM9 million acquisition via RM2 million cash and the issuance of 70 million shares of 10 sen each, with 35 million free detachable warrants. Envair said yesterday it had terminated the earlier share sale agreement dated March 1, 2010 with vendors Ahmad Nasri Abdul Rahim and Winnie Ho and had entered into the new agreement with them for the acquisition of the 45% stake comprising 225,000 shares in GFIM. It said the new payment term would be on the basis of two warrants for every five consideration shares. Nasri will receive 50 million shares and 20 million warrants, while Ho will get 40 million shares and 16 million warrants. Upon completion of the exercise and assuming no prior exercise of the warrants, Nasri and Ho will own 23.97% and 19.18% of Envair. Envair makes air and water filters, install cleanroom and water treatment system and provides technical and management services. Envair said due to the competitive environment, the group’s performance had deteriorated and it had incurred losses since its year ended Dec 31, 2007. GFIM started operations with an MLM programme known as GFI on June 1, 2009 and had launched several products such as the Amooréa brand of beauty products and toxin and fat removal patchs, the HYDRO K+ water filtration system and health food supplements, namely DECODED. This article appeared in The Edge Financial Daily, April 13, 2010.

https://theedgemalaysia.com/node/87798

Iris Corp profit dips 6.9% to RM5.9m

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KUALA LUMPUR (May 31): Iris Corp Bhd’s net profit for the fourth quarter ended March 31, 2013 (4QFY13) dipped by 6.9% year-on-year to RM5.91 million from RM6.35 million a year earlier. In a filing with Bursa Malaysia, the technology firm reported its revenue however ballooned by 144.41% to RM187.26 million from the previous corresponding period’s RM76.62 million. Iris’s full-year (FY13) net profit also fell to RM21.07 million. This was 43.38% lower than the previous financial year’s net profit of RM37.22 million. Its cumulative revenue increased to RM537.07 million, up 30.76% from FY12’s RM410.73 million. Explaining its full-year net profit dip, Iris said in the filing: “The higher expenses incurred in setting up new operation units for new businesses and charging out of research and development expenditures in the Food and Agro Technology division during the current financial year and the completion of certain higher margin projects in the previous comparable period resulted in the lower profit.” Iris said its current financial year’s (FY14) looks bright. “The core business of Trusted Identification division and Payment & Transportation division’s revenue is expected to be derived mainly from the trusted identification’s projects, namely Malaysia e-Passport inlays, Nigeria e-Passport inlays, Tanzania e-ID cards project and Bangladesh MRP Passport project. The Automatic Fare Collection Project and banking cards will contribute positively to the Payment and Transportation’s performance,” it said.

https://theedgemalaysia.com/node/79441

Oil dips below $105 on ample supply, Iran nuclear talks

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* West seeks first-step deal with Iran in Geneva talks* Iran says deal possible "if everybody tries their best"* Euro zone recovery lost momentum in Oct, Germany shines LONDON/SINGAPORE (Nov 7): Brent crude fell below $105 a barrel on Thursday, to its lowest since early July, as plentiful supplies and continued progress in talks between Iran and the West, over Tehran's disputed nuclear programme, weighed on prices. Investors are also awaiting the outcome of the European Central Bank's policy meeting and U.S. third-quarter GDP numbers, to gauge the developed nations' oil demand outlook. Brent was down 76 cents at $104.48 a barrel, by 0943 GMT. U.S. oil lost 5 cents at $94.75 a barrel. "A combination of bearish factors is pressuring the price: most importantly, there is overwhelming global supply, with additional OPEC capacity expected before the end of the year," Andrey Kryuchenkov of VTB Capital said. "A stronger dollar isn't helping either." Gains in the U.S. currency make dollar-denominated crude more expensive for buyers outside the United States, and are negative for oil demand. World powers will seek to hammer out a breakthrough deal with Iran, to start resolving a decade-old dispute over its nuclear programme, in two-day talks that begin on Thursday. Although both sides say an agreement is far from certain, Iran's Foreign Minister Mohammad Javad Zarif said a deal is possible, "if everybody tries their best". Investors are also awaiting U.S. nonfarm payrolls data on Friday, to gauge when the Federal Reserve might begin winding down its $85 billion-a-month bond-buying programme. A roll-back would boost the dollar, making dollar-denominated assets more expensive for holders of other currencies. Before that, markets will look to the first reading of U.S. third-quarter GDP, later on Thursday. Economists in a Reuters survey forecast a 2.0 percent annualised rate of growth, compared with 2.5 percent in the second quarter. Data on Wednesday showed that the euro zone's economic recovery lost a little momentum last month, making the U.S. numbers all the more crucial, to gauge the demand outlook.

https://theedgemalaysia.com/node/86905

Cuepacs chief rapped for 'boycott AirAsia' call

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PETALING JAYA (May 22): Penang chief minister Lim Guan Eng today rapped Congress of Unions of Employees in the Public and Civil Services (Cuepacs) president Datuk Omar Osman for calling civil servants to boycott  AirAsia and its sister company AirAsia X. Lim said Omar should "behave like a Cuepacs president" and not condone racially-charged acts perpetrated by certain quarters such as Umno organ Utusan Malaysia. "Cuepacs president Datuk Omar Osman should behave like a Ceupacs president for all and not participate in Utusan Malaysia or Umno's racist acts," said Lim in a statement. "Clearly Datuk Omar forgets that there are Malay civil servants who are not racists and that there are non-Malays serving civil servants too. "Cuepacs is gravely mistaken to join Utusan Malaysia's suggestion for a boycott of Air Asia and Air Asia X, as Cuepacs should not be a racist organisation but serve all Malaysian civil servants regardless of race and religion," he added. In the Malay daily today, Omar had called civil servants to boycott the services of the two airline companies due to "complaints from the public about the unsatisfactory services of AirAsia," saying civil servants should choose Malaysia Airlines and Firefly instead. "The consumer power of 1.4 million civil servants can affect AirAsia, so I ask all civil servants to prove it especially in the approaching school holidays," he was quoted saying. Utusan Malaysia has been publishing stories centered on complaints from AirAsia customers about the airlines' alleged poor services after AirAsia X chief executive officer Azran Osman Rani had criticised the daily via Twitter for fanning racial sentiments through its highly-charged racial headlines after the May 5 polls.   Utusan Malaysia had resorted to quoting several Malay rights groups which criticised Azran for apparently forgetting his Malay roots and for being "arrogant". Lim said the actions of all these quarters had only proven that Prime Minister Datuk Seri Najib Abdul Razak's call for reconciliation was a farce. "Such racist acts by Utusan Malaysia follow a campaign by BN supporters to boycott consumer products by Chinese businesses to punish the Chinese community for supporting Pakatan Rakyat," he said. "Such a racist campaign frames the Chinese as scapegoats as it hides the fact that BN lost Malay support causing Pakatan to win the popular vote at 51%. "In Peninsular Malaysia, where there are more Malay voters, Pakatan's popular vote is higher at 53%," he added. Thus, Lim called on the federal government to heed the call of the Malay and Chinese Chambers of Commerce to immediately stem the boycott campaign which it described as 'unhealthy, childish and racist' and for Domestic Trade and Consumer Affairs Minister Datuk Hasan Malek to act on such product boycotts. "These racist organisations have done enough damage not only to national unity and Malaysia's image. "By allowing such racist boycott of products to continue, Malaysia will not only be seen as no different from other racist regimes like the South African apartheid regime but it may also negatively impact our economy," he added.

https://theedgemalaysia.com/node/1688

Gerakan claiming 5 'angpow' mega projects

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Penang Gerakan state liaison committee chairman Datuk Dr Teng Hock Nan said in view of the large amount allocated for the second stimulus package, the projects promised to Penang should be immediately implemented. "We appeal to the federal government to immediately implement all the five 'angpow' mega projects promised by Abdullah in Penang in 2006. "The projects which he said were angpows to Penang are the Penang Second Bridge, Penang Outer Ring Road (PORR), monorail, expansion of the Penang International Airport and the building of Penang Sentral. "The PORR is a necessity, and so is the monorail project. These projects will not only stimulate the construction sector, but provide the much needed jobs to consultants, suppliers, architects, engineers, contractors, construction workers and many others. "The multiplier effect will also be considerable and it will be direct. It will also be relatively cheaper if mega infrastructure projects like these are implemented during times of economic slowdown," Teng said in a statement yesterday. He stressed that the construction of Penang Sentral in Butterworth and the second bridge should be accelerated, and must be monitored closely so that they were completed in time. In welcoming the RM60 billion stimulus package as a bold and courageous step, Teng said it was the antidote needed to counter the effects of the global economic meltdown. "We are grateful for the RM250 million allocated for the expansion of the Penang International Airport. The introduction of the initiative, though delayed, will definitely spur the construction sector in Penang and create a much needed multiplier effect," he said. Teng added that the second stimulus package's plan to create over 163,000 jobs and reduce the level of unemployment would greatly benefit the people of Penang since more than 280,000 Penangites worked in the manufacturing sector, especially in the electrical and electronics industry which had been severely hit by a drop in global demand.

https://theedgemalaysia.com/node/74429

Brent keeps above $108; on track for biggest weekly gain since July

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SINGAPORE (Nov 15): Brent oil futures held above $108 a barrel on Friday, heading for its biggest week since early July on expectations the Federal Reserve will stick with its easy money policy for now. Janet Yellen, likely to be the next Fed chief, on Thursday defended the U.S. central bank's commodity-friendly stimulus measures, suggesting that tapering would not be imminent if she takes up the job. "The market has turned a little more optimistic about the economy, and most people now think quantitative easing will be continued until next year," said Ken Hasegawa, a commodity sales manager at Newedge in Tokyo. Brent crude for January delivery was 19 cents higher at $108.47 a barrel at 0350 GMT, and looked set for a weekly gain of more than 3 percent. The December contract, which expired on Thursday, settled $1.42 higher. U.S. crude was up 38 cents at $94.14. While the comments from Yellen provided a boost to risk appetite with most commodities and equities scaling higher, U.S. crude stayed on course for its fifth weekly drop in six, weighed by bloating stockpiles. The contract dipped as low as $92.51 a barrel on Thursday, the lowest since early June, after data from the U.S. Energy Information Administration showed crude inventories rose last week for the eighth straight week. U.S. crude stocks rose 2.6 million barrels in the week ended Nov. 8, far more than the 1 million barrels analysts surveyed by Reuters had expected. Brent's premium to U.S. oil futures stood near $13.75 per barrel, after hitting an eight-month high of $15.87 on Thursday. CALM IN IRAQ The International Energy Agency said that while oil markets look well supplied in the short term, prices could rise in the next few months due to a seasonal increase in demand and output disruptions in some OPEC producers such as Libya and Iraq. "The recent easing of prices may be relatively short-lived," the IEA said in its monthly report. "End-user demand is on the verge of a seasonal ramp-up while refinery throughputs look set for a steep rebound in November and December." Continued unrest in Libya has supported oil prices, with output down to a fraction of production capacity of 1.25 million barrels a day. Protests at oil ports have cost Libya more than $6 billion and started hitting power supplies in the North African country. In Iraq, the government has moved swiftly to restore calm at its giant southern oilfields following violent protests. Schlumberger Ltd, the world's top oil services company, is expected to return to work next week at Iraq's biggest field, Rumaila. Dozens of angry Shi'ite Muslim workers and tribesmen stormed the Schlumberger camp in North Rumaila early on Monday, wrecking offices after accusing a foreign security adviser of insulting their religion. Rumaila pumps about 1.4 million bpd, more than a third of Iraq's total output of over 3 million bpd. Iraq, OPEC's second biggest oil producer, expects a robust return to growth next year as foreign companies working in its southern oilfields push output towards the highest level ever. - Reuters

https://theedgemalaysia.com/node/40828

AWC eyes green projects, reduce dependency on Mid-east contracts

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PETALING JAYA: AWC Bhd is eyeing green economy-related projects and is looking at reducing its dependency on Middle-east contract under its three-year growth plan. AWC chairman Datuk Nik Mod Amin Nik Majid said on Monday, Nov 29 it was seeking opportunities in renewable energy, expand overseas and also management of airports or ports. It recently set up AWC Solamas Sdn Bhd, to pursue solar photovoltaic related projects in Malaysia. CEO and managing director Azmir Merican said its order book was over RM200 million, of which RM80 million would be realised this financial year. At the shareholders meeting, AWC received the go-ahead to undertake a 40% share capital reduction to pare down accumulated losses and restructure the balance sheet.

https://theedgemalaysia.com/node/75254

S’gor seeks full report on altar demolition

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SHAH ALAM: The Selangor government said it has requested a “detailed report” on the  demolition of an altar in a private compound by the Sepang Municipal Council last  month. Menteri Besar Tan Sri Khalid Ibrahim, commenting on the controversy for the  first time on Tuesday, said the report would help determine if the local authority  had complied with procedures before taking action. “We can’t interfere with the workings of the local authority  ... so we’ve asked for  a report and will make an announcement on the findings soon,” he told a news  conference after chairing a meeting of the state executive council. Enforcement officers from the Sepang council demolished the Hindu altar in the  compound of M Gobikumar’s home in  Taman Seroja, Bandar Salak Tinggi. Prior to the  demolition, the council was reported to have sent a notice to the homeowner that the  structure violated the local authority by-laws, followed by another letter warning  that he could be fined RM250 per day if he did not tear it down. 'Gobikumar said enforcement officers then went ahead with the demolition while he was  still negotiating with the council. Barisan Nasional has accused the Pakatan Rakyat state government of going back on  its promise that no shrines in Selangor would be torn down.   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 Dec 13, 2012.

https://theedgemalaysia.com/node/38308

Jerneh Asia inks deal to sell Jerneh Insurance to ACE for RM532.3m

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Kuala Lumpur: After ten months of bidding process, Jerneh Asia Bhd (JAB) has finally inked the deal to sell off their 80% stake in Jerneh Insurance Bhd (JIB) for RM532.3 million to ACE INA International Holdings. The sum was arrived on a willing-buyer-willing seller bass through a bidding process that also saw other potential buyers eyeing the lucrative general insurance business. "ACE had simply offered the better price," said JAB chairman Datuk Lim Chee Wah in a media briefing on Thursday, Oct 7. However, he declined to reveal the other bidders. The total price of the disposal is RM654 million, with JAB receiving RM523.3 million for its 80% stake. The remaining 20% stake is held by Paramount Global Assets Sdn Bhd, which would receive RM130.8 million from the sale. Lim said that shareholders would enjoy parts of the proceeds in the form of a special dividend. "As to the quantum, we would need to balance out how much is to be paid out as special dividends and how much is required to be kept so the company is in a good cash position to explore new core businesses," he said. As for the potential new core businesses, he said JAB would not rush, and instead take its time to evaluate any proposals.

https://theedgemalaysia.com/node/91141

Market Close: KLCI gains 0.1%, Europe, US sentiment curbs advance

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KUALA LUMPUR (July 4): The FBM KLCI rose 2.13 points or 0.1% as most Asian markets advanced. This followed a better overnight performance across US markets. At 5pm today, the KLCI settled at 1,771.34 on gains in stocks like Public Bank Bhd and CIMB Group Holdings Bhd. Fund managers said political concerns in Europe and anticipation of the US reversing its monetary easing had curbed gains across Asian equities. "Political concerns in Europe and anticipation of  the US reversing its monetary easing had dictated markets today," a fund manager told theedgemalaysia.com over telephone. Reuters reported that Asian stocks clawed higher on Thursday but gains were tempered by concerns over political turmoil in Portugal and investor caution ahead of key events including Friday's U.S. jobs data. The U.S. nonfarm payrolls data on Friday could offer fresh clues on when the Federal Reserve will start scaling back its $85-billion-per-month bond buying programme. According to the fund manager, anticipation of a reversal in US policymakers' bond-buying scheme had a greater impact on global equities. "The scheme has been providing liquidity to global markets," he said. Across Bursa Malaysia, 1.18 billion shares worth RM1.58 billion changed hands. There were 487  gainers versus 221 decliners. The top gainer was Panasonic Manufacturing Malaysia Bhd while Petronas Dagangan Bhd led decliners. The most-active stock was Luster Industries Bhd. Across Asia, Japan’s Nikkei 225 fell 0.26%, while Hong Kong's Hang Seng added 1.6%. Singapore's Straits Times rose 0.56%. US markets will be closed on July 4 in conjunction with the nation's Independence Day.

https://theedgemalaysia.com/node/55191

CIMB Research has Technical Sell on Genting

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KUALA LUMPUR: CIMB Equities Research has a Technical Sell on Genting Bhd at RM8.80, at which it is trading at a FY12 price-to-earnings of 10.4 times and price-to-book value of 1.9 times. It said on Friday, Sept 23 that Genting’s share price broke below its triangle support early this week and this has drawn investors into selling mode on Thursday. “As the candles deviate further away from its key moving averages, we think the near term trend is firmly down. The following support levels are RM8.50 and RM8.20,” it said. CIMB Research said the MACD histogram bars have turned negative while RSI has also hooked downward. Beware of the next downleg as it could be sharp. “Any rebound is an opportunity to take profit. The gap at RM9.23-RM9.28 would likely keep the bulls at bay for now. Put a buy stop at RM9.39, just in case,” it said.

https://theedgemalaysia.com/node/84756

Highlight: CPO futures fall

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KUALA LUMPUR: Crude palm oil (CPO) futures on the Bursa Malaysia Derivatives Exchange (BMD) dropped further yesterday on news that Indonesia would be cutting its export tax on CPO next month. The contract for delivery in July dropped 2.2% to RM2,294 a tonne here, closing for the first time below the RM2,300 level this year. This came about following news that CPO exports from Malaysia would fall after news emerged that Indonesia will be lowering CPO export tax to 9% next month from 10.5%. According to Ker Chung Yang, an analyst at Phillip Futures Pte in Singapore, Malaysia is expected to keep the export tax rate unchanged. “Malaysia is facing the general election on Sunday and I do not believe there will be any change in the export tax rates at least until the general election is over. “There could be a change maybe sometime after May or June,” he said when contacted. This will give Indonesia the ammunition on the tax front, he added, noting that the export numbers may not be impressive over the next couple of months. This will result in a “high stockpile” in the future, Ker warned. Malaysia, the world’s second largest palm oil producer after Indonesia, announced in October last year it would slash CPO export taxes from 23% to within a range of 4.5% to 8.5%, depending on market prices. This tax structure took effect from January this year and was subject to a threshold of RM2,250 a tonne.Below the threshold, there is no export tax on CPO. The move was intended to reduce the high stockpile of CPO and help refiners grab back market share from competitors in Indonesia, which implemented a new export tax structure on palm products in 2011. The tax structure gave a boost to refiners there as their margins expanded many times over, which caused Malaysian refiners to lose their competitiveness. Malaysia derived the May export tax rate from a reference price of RM2,347.26 (US$775) a tonne for CPO. This amount is in the minimum band for a levy to be applied, according to a Customs Department statement on the Malaysian Palm Oil Board website. According to a futures broker, the BMD coming down below the RM2,300 mark has forced some liquidation. “BMD has failed the violation of the psychological support at the RM2,300 levels that has prompted some liquidation and selling interest to emerge in the market,” said the futures broker, who works with RHB Investment Bank Bhd. It was reported that exports from Malaysia fell 4% to 648,275 tonnes in the first 15 days of this month. The contract for July has dropped as much as 1% to RM2,293 per tonne on the BMD. Earlier this month, the Malaysian Palm Oil Board said total palm oil exports increased 10% to 1.54 million tonnes in March, the first monthly gain in five months, but inventories declined to a seven-month low of 2.17 million tonnes. This article first appeared in The Edge Financial Daily, on April 30, 2013.

https://theedgemalaysia.com/node/18901

CIMB Research has technical buy on AMMB at RM5.92

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KUALA LUMPUR (Nov 30): CIMB Equities Research has a technical buy on AMMB Holdings Bhd at RM5.92 at which it is trading at a price-to-book value of 0.5 times. It said on Wednesday AMMB broke out of its medium term downtrend channel on Tuesday on strong volume. Prices also pushed above its 30-day and 50-day SMAs along the way. This could be seen as a prelude to more upside ahead. “MACD signal line has staged a positive crossover while RSI has also hooked upward. The bulls will have the upper hand here as long as prices stay above the RM5.66 level. “Traders with higher risk appetite may start to nibble now. The next resistance levels are RM6.22 and RM6.55. However, to avoid being caught in a dead cat bounce, traders should be put a stop at below RM5.80-RM5.66,” said CIMB Research.

https://theedgemalaysia.com/node/5285

Roddick snaps first-round losing run

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The American sixth seed had not made it past the first round since 2005 and with only one win on red dirt this season, few would have been surprised if Roddick had already booked his flight out of Paris. But he made sure he would have a chance of prolonging his stay at Roland Garros, where his highlight has been one third-round showing in seven visits, by eclipsing the 305th-ranked Jouan. "I'm just glad I finally won a match out there," Roddick, who won the last of his five claycourt titles in 2005, told a news conference. The 26-year-old's biggest weapon has always been his thunderbolt serve but the American is first to admit that on clay it fails to do much damage. Under the guidance of coach Larry Stefanki, Roddick has made some adjustments to his delivery on clay and hopes it will pay dividends this year. "On most courts, if I hit my spots with my good serves, I feel pretty good about where I'm standing in the point or I've already won it. On clay it's not the case," said Roddick, who interrupted his preparation to marry model Brooklyn Decker last month. "Something Larry wants me to do is show the kick a little bit more, and he thinks that will make my bigger serve a little bit more effective. Today it was coming off. It was warm out today so the kick was jumping around pretty good." Despite overcoming the first-round hurdle on Monday, Roddick was realistic about his chances of ending the American men's six-year grand slam drought in Paris. "I know there is more of a ceiling at this event for me probably than any other event," said the 2003 US Open champion. "That being said, it is one of my goals to make a second week here. I feel that's a feasible goal and something that I'm surprised I haven't done to this point in my career." "I feel like if you take this tournament out of the equation, my record on clay has actually been better than a lot of specialists. So I would like to progress further here." Roddick will next face Ivo Minar of the Czech Republic. — Reuters

https://theedgemalaysia.com/node/96631

Update: Boustead 2Q profit up, declares 7.5 sen dividend

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KUALA LUMPUR (Aug 21): Boustead Holdings Bhd announced that it recorded a profit after tax (PAT) of RM75 million for its second quarter ended June 30, a 33% year-on-year increase. Net profit was RM61.2 million, up 40% from RM43.7 million. This was achieved on the back of a flattish revenue of RM2.4 billion. Consequently, its board of directors have declared a single-tier dividend of 7.5 sen per share for the year ending Dec 31, 2013, whose entitlement date fall on Sept 13 and payable on Sept 30. In a press statement, Boustead said for the six month period, the group’s PAT stood at RM209 million, on the back of a revenue of RM4.9 billion. For the second quarter under review, earnings per share (EPS) were 5.9 sen while net assets per share stood at RM4.52. Reviewing its half year results, the company said its property division was the biggest contributor to the group, delivering a profit before tax (PBT) of RM77 million for the six month period, marking a 38% increase compared with last year’s RM56 million. Its heavy industries division was able to record a PBT of RM29 million for the cumulative period compared with a loss of RM33 million last year. The pharmaceutical division reported a PBT of RM32 million in the first half of the financial year, a drop compared with last year’s corresponding period mainly due to reduced sales from concession business, provision for doubtful debts and drop in production. Its plantation division recorded a lower PBT of RM16 million for the six month period as it was once more affected by falling crude palm oil (CPO) prices. At the same time, lower fresh fruit bunches crop production also had an impact on the division. Boustead’s finance & investment division posted a PBT of RM49 million for the half year period consistent with the same period last year, due to contributions from the Affin Group and Cadbury Confectionary Malaysia.   The trading and industrial division delivered a profit of RM64 million in the first half of the financial year, an improvement compared with RM63 million for the same period last year. The company said it is “cautiously optimistic” that the remaining half of the financial year will be positive.

https://theedgemalaysia.com/node/53838

Excess capacity to weaken steel prices

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Steel sectorMaintain underweight: Domestic demand for steel products will continue to be fuelled by existing as well as planned infrastructure works. Based on an average growth scenario, the Malaysian Iron and Steel Industry Federation (Misif) expects steel consumption to grow by 3% in 2013 followed by a stronger 4% in 2014 to 9.1 million tonnes. On the export front, in anticipation of improving global economic outlook, we expect export demand for steel products to improve. Based on the International Monetary Fund’s outlook, global output is estimated to grow by a higher 3.6% in 2014 from 2.9% in 2013. Given the ample capacity globally as well as locally, coupled with moderate recovery in global growth, we expect steel prices to remain soft entering into 2014. Locally, domestic steel prices will continue to closely track the international prices as imports can be easily acquired should the price differential widen. As such, we maintain our view that in 2014, both steel rebar and billet prices will continue to be capped at prevailing low levels. The continuous growth in steel production will usually translate into higher demand for iron ore (the main input for steel making). The average price of iron ore fines (63.5% iron content) from China in 2013 remained elevated at about US$137 (RM444) per tonne, about 3% higher than the 2012 average price of US$132 per tonne. Given the softening prices coupled with elevated material costs, we expect steel millers’ margins to continue to be under pressure. Although we expect external demand to improve in 2014, the existing excess capacity will continue to cap any potential meaningful recovery in steel prices. Due to the elevated raw material costs, we believe millers’ operating margins will continue to be under pressure in 2014. As such, we maintain our “underweight” call on the sector. Risks to our view include a stronger than expected demand from both domestic and export markets, which is a function of the global economic recovery process as well as significant pick-up in steel prices. Across the board, we continue to watch with caution on the steel companies under our coverage. Although share prices have fallen to low levels, we do not see any potential catalysts in the near term for a rerating. For exposure to the Economic Transformation Programme theme, we prefer direct construction and infrastructure as well as water related stocks. Maintain “sell” on Ann Joo Resources Bhd (target price [TP]:RM1.10). We have a “buy” on Choo Bee Metal Industries Bhd (TP: RM1.68) and “add” on Tong Herr Resources Bhd (TP: RM2.25) on the anticipated pick-up in external demand. We also like Engtex Group Bhd (non-rated: fair value of RM2.04) on the potential capital expenditure cycle for replacement of water pipes. — Affin IB Research, Dec 17 This article first appeared in The Edge Financial Daily, on December 18, 2013.

https://theedgemalaysia.com/node/1708

PAAB seals largest water deal

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KUALA LUMPUR: Ranhill Bhd’s unit SAJ Holdings Sdn Bhd (SAJH) and the Johor state government are disposing of the state’s water assets to the federal government’s Pengurusan Aset Air Bhd (PAAB) at one times book value for a total of RM4.03 billion and the assumption of liabilities totalling RM3.18 billion. SAJH will then lease the water assets from PAAB at an initial annual charge of about RM240 million. SAJH will operate and maintain the assets for 30 years. All new assets would be funded and developed by PAAB. This is the largest water restructuring deal so far following the RM889 million paid by PAAB for Melaka’s water assets and RM1.2 billion for Negri Sembilan’s under the national water services industry restructuring initiative. SAJH, which is fully owned byRanhill’s 70% subsidiary Ranhill Uti-lities Bhd, sealed the deal yesterday, together with state-owned Syarikat Air Johor Sdn Bhd. PAAB will also assume the assets’ corresponding liabilities of RM3.18 billion, including SAJH’s RM2 billion Islamic bonds and bank loans. The water assets and the liabilities will be transferred to PAAB at a no-gain-no-loss position to SAJH, at an amount equal to the net surplus value of the water assets and liabilities. As at Dec 31, 2008, SAJH’s net asset surplus was about RM521.4 million. For the last audited financial year ended June 30, 2008, SAJH registered a profit after taxation of RM191.8 million. SAJH will pay to PAAB 6% lease rental based on PAAB’s investment cost in the water assets, escalating at 2.5% per annum. PAAB has agreed to give a discount to SAJH for the rental payable in the first three years. “We believe that paying book value is fair, as we are only purchasing selected assets. The sellers get offered what is in their books and they don’t lose nor gain,” PAAB chief executive officer Suhaimi Kamaralzaman said after the signing ceremony here yesterday. As part of the restructuring initiative, the Johor state government would be entitled to a 20% stake in SAJH. With the latest acquisition, PAAB will have RM6.1 billion worth of water assets in its books. “The most crucial achievement of this deal is getting SAJH, a private concessionaire to migrate to the new licensing regime and rescind the concession agreement. “When the concession no longer exists, the scheduled tariff hike in the concession agreement will not apply anymore, hence there will be no tariff hike for Johor this year,” said Suhaimi. This is the first private water concessionaire to give up its concession. SAJH chief executive officer Ahmad Zahdi said: “We value our partnership with the state government to jointly provide water services to the consumers in Johor and the eventual potential of sewerage service to SAJH.” The other two water concessionaires in the state - Southern Water Corporation and Equiventures Sdn Bhd - will remain as concessionaires until their concessions end in 2012 and 2014, respectively. From 2015 onwards, SAJH will be the sole water distributor and operator in the state. PAAB is targeted to conclude acquisition deals with Pahang and Kelantan next. PAAB is also expediting its negotiations with Selangor’s private concessionaires. Deputy Prime Minister and Finance Minister Datuk Seri Najib Razak, who witnessed the signing ceremony, said the restructuring of the water assets would help state governments to clear debts with the Federal Government, which had reached RM10.5 billion in total as at end-2007. He added that the inability of states to repay the debts hampered them from improving and developing the water assets in their respective states, which in turn had increased the non-revenue water rate in all states. For instance, the non-revenue water rate in Kelantan stood at 44.4% in 2006, while Pahang’s and Kedah’s were more than 45%, according to Najib. With the restructuring, he said Johor would also be able to avoid the increase in water tariff by 19% this year. Najib said PAAB was expected to spend up to RM3.5 billion over a 30-year period to improve the water distribution system in Johor.  

https://theedgemalaysia.com/node/51789

Affin IB Research downgrades UMW Oil & Gas to Sell

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KUALA LUMPUR (Dec 20): Affin IB Research has downgraded UMW Oil & Gas Corporation Bhd to Sell (from Reduce) at RM4.12 with an unchanged target price of RM3.10 and said UMW-OG’s share price had done exceedingly well, surging by 21% in December (+47% from its IPO price of RM2.80). In a note Friday, the research house said that the strong share price performance may be attributable to the recently secured US$26 million worth of drilling contracts and stronger investors’ appetite for Malaysia O&G stocks. It said UMW-OG was now valued at 34x CY14 EPS / 24x CY15 EPS, making the group the world’s most expensive rigs operator (average valuation for global peers are 11x CY14 PER / 8x CY15 PER). “Besides, UMW-OG is also the most expensive Malaysia O&G stocks under our coverage (averaging 20x CY14 PER / 16x CY15 PER). We are downgrading UMW-OG to Sell (from Reduce) with an unchanged target price of RM3.10 based on 18x CY15 EPS. “While we like the group’s management and the good prospects of Malaysia’s jack-up rigs market, we opine that UMW-OG’s valuation is stretched with limited upside potential,” it said.

https://theedgemalaysia.com/node/51439

Time Engineering-OS rights shares dn 27.5% on first day

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KUALA LUMPUR: Time Engineering Bhd rights shares fell 27.5% to 14.5 sen in very active trade in the morning session on the first trading day on Wednesday, July 6. At 12.30pm, it was down 5.5 sen to 14.5 sen wtih 56.23 million units done. The FBM KLCI rose 3.65 points to 1,585.50. Turnover was 528.67 million shares valued at RM769.30 million. There were 331 gainers, 285 losers and 307 counters unchanged. The rights shares started will cease trading on July 13. The rights shares were issued under the Time Engineering’s corporate exercise. It involved a renounceable offer for sale of up all its 626.18 million shares of Time dotCom Bhd at 53 sen per offer share. This was a 33.75% discount to the five–day volume weighted average market price up to June 17, being the day prior to the price-fixing date. This was on the basis of eight offer shares for every 10 ordinary shares of Time Engineering held as at 5pm on Tuesday.

https://theedgemalaysia.com/node/97147

Rohani unperturbed by Shahrizat's appointment as special adviser

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KUCHING (Aug 23): Women, Family and Community Development Minister Datuk Rohani Abdul Karim wants ongoing argument over the appointment of Datuk Seri Shahrizat Abdul Jalil as the prime minister’s special adviser to oversee women welfare to stop. Reiterating that she has no "adviser", and that other cabinet colleagues are entitled to their opinion, the newly-appointed minister said she just wants to focus on doing her work and the real issues affecting Malaysians. "Just enough for me to say I don’t have an adviser. He (Nazri) is entitled to his opinion and that is his opinion," she said today when asked on Tourism and Culture Minister Datuk Seri Nazri Aziz’s opinion that Shahrizat, who was the former women’s minister,  was appointed to "help Rohani, the new minister". Instead, Rohani said there were more other pressing issues that require the ministry’s attention. "One of the serious issues since I took over the ministry is the heightening of serious crime involving children, those under the age of 18," she told reporters after the PBB Padungan branch annual general meeting. Rohani was elected as the branch chairman for another term uncontested. These serious crimes, referred by the Welfare Department, include murders, robberies, rape, drugs-related cases and possession of dangerous weapons. For the period Jan-June this year, Johor recorded the highest number cases at 420, followed by Kedah with 414 cases, Selangor (356 cases), while no cases were reported in Sarawak. There were 6,018 cases recorded last year. A majority of juvenile delinquents are male with Malays living in big metropolitan cities topping the list. "The main cause is parenting, parents who always busy at work, don’t come home or having 'divorce' background. We have two programmes, other than Rehabilitation Institute, we focus on prevention programme within the community," said Rohani. Rohani added that the Welfare Department also introduces programmes and courses for parents and teenagers to participate together, and activity centres throughout Malaysia. These activity centres, called café 18, serve as recreation places for teenagers that also has a library with free Wi-fi. Doctors and/or consultants will also be available to answer the teenagers’ queries.

https://theedgemalaysia.com/node/84336

#Stocks To Watch* MBSB, KLK, Maxis, Puncak, Astro, MHB and Public Bank

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KUALA LUMPUR (Oct 22): Based on news flow and corporate announcements, the stocks that deserve some attention tomorrow could include MBSB, KLK, Maxis, Puncak, Astro, MHB and Public Bank. Malaysia Building Society Bhd (MBSB) announced that for the nine months period ended Sept 30, 2013, it achieved a pre-tax profit of RM680.934 million, an increase of 65.9% or RM270.454 million from RM410.480 million for the same period last year. On a quarterly basis, the group achieved a pre-tax profit of RM196.235 million, a decline of 20.7% from the 2nd quarter pre-tax profit of RM247.589 million. The decline in pre-tax profit was mainly due to higher collective impairment allowance following increase in collective allowance made for personal financing and mortgage portfolios, the company said. Datuk Ahmad Zaini Othman, MBSB’s President and Chief Executive Officer, commented, “The financial results remain contributed mainly by retail business although the retail portfolio registered slower growth, which reflected the measures announced by Bank Negara Malaysia in early July this year to further promote a sound and sustainable household sector. The non-bank financial institution has declared an interim dividend of 5 sen per share. Kuala Lumpur Kepong Bhd (KLK), which is in talks with London-listed Equatorial Palm Oil Plc (EPO), announced that if there is a takeover offer for EPO it will be a cash offer. EPO had revealed earlier this month that it was in discussions with KLK regarding the funding of its joint venture, Liberian Palm Developments (LPD), and said these discussions may or may not include an offer for all or part of EPO. In a statement to the London Stock Exchange, KLK confirmed discussions are on-going but said “there can be no certainty that any offer for EPO will be made, nor as to any other terms…as a results of these discussions.”   Equatorial Palm Oil PLC, listed on the AIM market, is a loss-making palm oil development company with operations in Liberia. Maxis Bhd is eyeing to capture at least 50 per cent of Malaysia's prepaid mobile Internet market through its #Hotlink plan, said Consumer Business Head Dushyan Vaithiyanathan. He said the target was set based on the projected development of their infrastructure to accommodate the plan, the first of its kind in Malaysia, to offer customers with continuous free basic Internet, Bernama reported. "We see a huge momentum in growth coming from people who are going to start using mobile Internet (in Malaysia) in the near future," he said at a media presentation on #Hotlink here today. He said mobile Internet penetration in the country was only between 20 per cent and 25 per cent. With the #Hotlink plan, he said customers could now enjoy free basic Internet at 64 Kilobytes per second which can be upgraded to high-speed Internet for just RM1 per day. Puncak Niaga Holdings Bhd has secured RM151 milion worth of loans from the Finance Ministry. The loans will finance the replacement of water pipes, and maintenance of water facilities in the Klang Valley. Puncak, which owns local water concessions, said the loans secured by its 70%-owned subsidiary Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), come in portions of RM75 million and RM76 million respectively. "The government loans will enable Syabas to finance and undertake the implementation of critical projects for old pipes and critical pipes replacement projects, and reduce non-revenue water losses in Selangor, Kuala Lumpur and Putrajaya," Puncak said. The 20-year loans come with an annual 3% interest. Astro Malaysia Holdings Bhd may attract some interest after JP Morgan has upgraded its rating for Astro to “overweight” from “neutral”, and raised its June 2014 price target to RM3.70 from RM3.00 a share. The research house, in a report today, said Astro’s near-term earnings growth will drive the stock up. The stock has been flat since listing as significant increase in opex related to STB swaps pared earnings growth. At market close, Astro ended at RM2.97, up 3 sen. “Near-term earnings acceleration to drive stock performance…Earnings acceleration post conclusion of HD STB swaps should reverse stock underperformance,” said JP Morgan. The research house noted Astro has strong breadth of content, backed by in-house channels. Of the 171 channels offered by Astro, 69 are its own. “In our view, breadth of content as well as access to exclusive content have been key drivers for Asian pay TV operators,” said JP Morgan. JP Morgan also sees potential upside to ARPU (average revenue per user). It said Astro has been successfully driving subscriber uptake of HD content and it estimates subscribers for HD content to increase from 1.5 million currently to 2.4 million by FY16E. Malaysia Marine and Heavy Engineering Holdings Bhd (MHB) reported a 352% jump in third quarter net profit from a year earlier as revenue fell substantially. The profit rise came on higher income from its offshore oil and gas structure construction unit. MHB said net profit rose to RM36.43 million from RM8.06 million. Revenue fell substantially to RM449.67 million from RM841.78 million. "The group produced a higher profit before tax of RM41.1 million for the current quarter against RM10.2 million in the corresponding quarter resulted from higher operating profit from offshore segment as mentioned above. "Revenue for offshore is lower as projects in hand, except for those awarded in the current year, are nearing completion with relatively lower value of progress claims remaining," MHB said. MHB's cumulative nine-month net profit declined to RM134.58 million from RM141.65 million. Revenue dropped to RM2.16 billion from RM2.47 billion. Looking ahead, MHB said it may encounter "major change orders" which could have a substantial positive impact on its financials. Public Bank Bhd posted a net profit of RM1.047 billion for the third quarter to end-Sept 2013, up 7.7% year on year. Its revenue for the quarter also rose to RM3.870 billion, from RM3.589 billion in the third quarter of 2012. For the cumulative nine months to September 2013, net profit totalled RM3.039 billion, compared with RM2.845 billion in 2012’s nine-month period. Revenue for the nine months rose to RM11.346 billion, from RM10.428 billion. Reviewing its results, the major financial group said: “For the 3rd quarter, the improved earnings was mainly due to higher net interest income, higher net fee and commission income and higher investment income, partially offset by higher loan impairment allowances.” Public Bank recorded a healthy growth in both loans and deposits at an annualised rate of 12.0% and 13.2% respectively in the nine months ended September 2013. On outlook, the bank said the group is expected to sustain its strong market position in the domestic retail operations segment, supported by continuing growth in consumer credit and SMEs lending. “For the remaining months of 2013, the Public Bank Group is expected to maintain its earnings momentum and record satisfactory performance,” it said.

https://theedgemalaysia.com/node/85775

Loans growth still lagging

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Hong Leong Bank Bhd(May 10, RM14.42)Maintain neutral with unchanged target price of RM14.90: HLBB’s nine months of 2013 financial year (9MFY13) net earnings of RM1,439.8 million came within our and consensus expectations. With gross loans growth lagging behind industry at just 7.7% year-on-year (y-o-y) and net interest margin (NIM) continues to compress, earnings growth of 7.6% y-o-y was mainly driven by higher treasury income and cost synergies. We see no excitement for HLBB given potential downside risk from slower loans growth. As such, we maintain our call at “neutral” with unchanged target price of RM14.90. HLBB’s 9MFY13 net earnings rose by 7.6% y-o-y to RM1,439.8 million. This accounts for 73.5% and 75.9% of our estimates and market consensus, respectively. The earnings growth was mainly driven by: (i) 29.7% jump in non-interest income, supported mainly by higher treasury income; and (ii) significant cost synergies. On a quarterly perspective, HLBB’s 3QFY13 earnings dropped by 22.9%, mainly due to the absence of net reversal of RM140.5 million loan loss provisions (LLP) recorded in 2QFY12, which was one-off in nature. Gross loans grew by 7.7% y-o-y 9MFY13 to RM93.0 billion. The below industry loans growth was mainly due to moderation in trade financing, although loans to small- and medium-entreprises have picked up during the period. Management does see downside risks to their 10% to 12% full year guidance for gross loan growth but expect the loan growth to at least hit a high single digit for this financial year. We are maintaining our gross loan growth target for FY13 at 10%, although we acknowledge the downside risk to our loan growth target. Customer deposits were rather flattish y-o-y and quarter-on-quarter (q-o-q) at RM123.5 billion. The stronger growth rate in gross loans compared to customer deposits has increased its loan-to deposit ratio (LDR) from 73.6% in 4QFY12 to 76.5% in 1HFY13. The below 80% LDR implies that the group continues to have room to expand its loan book without over leveraging its balance sheet. Although NIM for 3QFY13 dropped 10bps y-o-y to 2.14%, it has picked up marginally q-o-q (+2bps versus 2.12% in 2QFY13) supported by the higher LDR. This brings the nine months NIM to 2.15% (-19bps y-o-y). Management expects NIM to stabilise or even improve marginally q-o-q in 4QFY13. Nonetheless, we understand that the group continues to see downward pressure in NIM over the longer term due to loan replacement cycle. Cost-to-income ratio improved from 50.5% in 9MFY12 to 44.6% in 9MFY13. Management maintained that the group is on track to achieve its guided synergistic benefits of about RM120 million in FY13. Overall asset quality continues to improve as gross impaired loans ratio declined from 1.69% in FY12 to 1.41% in 3QFY13. The full adoption of Financial Reporting Standard 139 has resulted in the group’s loan loss coverage declining from 158.0% in FY12 to 141.1% in 3QFY13, which remains strong and is the highest among banks under our coverage. Capital adequacy ratios remain strong with common tier 1 (CET1), Tier 1 capital and risk-weighted capital ratios at 10.1% (3QFY12: 8.9%), 11.8% (3QFY12: 10.9%) and 14.9% (3QFY12: 13.1%), respectively. We maintain our “neutral” call for the group with an unchanged target price of RM14.90. Our current target price implies a 1.8 times FY14 price-to-book and 15.7% return on equity based on our Gordon Growth Model. — Alliance Research, May 10 This article first appeared in The Edge Financial Daily, on 13 May, 2013.

https://theedgemalaysia.com/node/85208

Banks sitting ducks with withdrawal of licence?

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PETALING JAYA: Has the home ministry inadvertently made financial institutions which engaged the services of Kawalan Prima Sdn Bhd sitting ducks by withdrawing the security firm’s licence? This is the question following the announcement by Deputy Home Minister Datuk Wan Junaidi Tuanku Jaafar on Wednesday morning that the firm had to surrender its firearms and stop operating with immediate effect. Its Oct 25 show cause letter expired on Wednesday. So the question now is, will Kawalan Prima’s clients face a security risk now that no one is guarding the coop? AmBank, is certainly worried. What more with Minister of Home Affairs Datuk Seri Ahmad Zahid Hamidi announcing Wednesday afternoon that those who continue to engage Kawalan Prima risk breaching the law. “They just cannot pull the plug like that. Doing so will compromise our security as we need to make contingency plans to hire replacements,” said a bank spokesman. He said while Kawalan Prima had breached its duty to the bank by providing an unvetted security guard who was not even licensed to carry a gun, its services are still needed for now. On Oct 23, bank officer Norazita Abu Talib was shot dead by a bank guard, after she opened the strongroom at the AmBank branch in USJ Sentral 2, Subang Jaya. The guard escaped with about RM450,000 from the vault. Police have launched a hunt for the guard. Eleven suspects, including the guard’s wife, have been detained. A spokesman at another bank said banks usually do not engage the services of just one security firm. “It is part of our SOP [standard operating procedures] to hire more than one firm,” he said. Security Services Association Malaysia (SSAM) president Datuk Shaheen Mirza Habib agreed. “It’s unlikely that banks hire guards from the same security firms; so only branches that have contracts with Kawalan Prima will need to hire another firm.” He suggested that banks hire multiple security firms because a single firm might not have enough gun licences to cover so many branches. “The banks will not have problem in quickly engaging with the other 124 security companies with gun licences, if they are willing to pay the price.” Of the 751 licensed private security firms in the country, 125 have firearms licences. Again, he urged financial institutions not to compromise on security due to budget limits. Shaheen also reminded security firms and their clients that under the Private Agency Act 1971, only Malaysians and Nepalese can be hired as security guards. The suspect in the AmBank heist is believed to be an Indonesian with a fake MyKad that says he is from Tawau, Sabah. 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 1, 2013.

https://theedgemalaysia.com/node/35049

Highlight: Red alert at Sg Buloh Hospital as operating theatres closed

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Last Updated: 7:05am, Jan 10, 2014 KUALA LUMPUR (Jan 10): In the midst of putting up with uncollected litter following cleaning contractor Radicare’s shortcomings in staffing, the Sungai Buloh Hospital has also had to deal with non-functioning operating theatres (OTs). All of the nine-year-old hospital’s 12 OTs have been shut down following a fire last Friday that short circuited the internal circuitry and cause malfunctions to the air-conditioning system. The contractors for the RM1.3 billion, 620-bed hospital are Tunas Selatan Sdn Bhd, the same ones who built the University Teknologi MARA (UiTM) Teaching Hospital nearby, which had also experienced air-conditioning issues when it started accepting students in 2012. Due to the shut-down, all elective surgeries have been postponed by a month. Meanwhile, in a comedy of errors, Radicare staff it is learnt, inadvertently severed some wires while doing maintenance work on the six daycare OTs on Wednesday which have been conducting emergency surgeries for the past week. This has resulted in only two of the daycare OTs functioning. “This is a disaster, hundreds of operations will have to be postponed,” said a source. When contacted, Hospital director Dr Khalid Ibrahim (pic) told FZ.com that the problem may take two weeks to resolve as the UPS batteries were damaged by the fire. “We had already moved to our daycare OT yesterday (Wednesday),” he said, confirming that the air-conditioning was not functioning. “We also prepared the emergency department OT on standby, so (there are) not much problems to the patients,” Dr Khalid said. However, today, director-general of health Datuk Dr Noor Hisham Abdullah ordered all cases to be referred to the Kuala Lumpur Hospital. However bureaucracy has set in. Due to an absence of black of black and white, HKL is rejecting all patients from Sungai Buloh. The Sungai Buloh Hospital conducts an average of 50 elective surgeries a day and emergency operations that can reach up to a hundred a day. It is also the only centre for spine and neuro-surgery in Selangor and receives many accident cases daily. “The air-conditioning problem is posing a danger to patients as those undergoing surgery are prone to clinical infection if the temperature is not controlled. “Temperatures in OT should be maintained at 18 degrees Celsius but surgeries are being done in sauna-like conditions with temperatures reaching 26 degrees,” added another source. For more stories, go to www.fz.com, the website for freedom of expression and fairness in articulation.

https://theedgemalaysia.com/node/35758

Corporate: A possible reprieve for Carotech

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Barely a month after announcing that it had defaulted on RM213.6 million worth of debt obligations, things seem to be looking up for Carotech Bhd. It is learnt that Carotech’s lenders had two meetings in July to discuss the company’s proposed debt restructuring scheme and will likely give it the green light. “No objections were raised by the lenders on the proposed debt restructuring scheme during the last two meetings and they are seeking the approval of their respective managements. “The proposed scheme entails lengthening the tenure of current outstanding loans to match the projected cash flow profile of Carotech and standardising the key terms of the various lenders with added collateral provided,” chairman and managing director David Ho tells The Edge in an email reply to questions. The company notes that the significant increase in commodity prices in late 2008, particularly palm oil, and the subsequent global economic turmoil has curtailed underlying demand for its products, thereby reducing Carotech’s ability to clear stock and generate excess cash flow to meet its debt obligations. Carotech extracts and sells palm oil phytonutrients and oleochemical products. Additionally, there was a significant rise in Carotech’s working capital owing to its expansion plans. To recap, between 2006 and 2008, the company had invested more than RM300 million to increase its capacity to 120,000 tonnes from 18,000 tonnes per annum to cater for what seemed like a promising increase in demand for its products. However, the local biodiesel industry failed to take off and many of the other downstream players have been struggling to keep afloat. Furthermore, strict guidelines on sustainable biofuels in the European Union (EU)  have thumped exports of palm oil-based biofuel to the region. Although some 91 biofuel production licences have been granted since mid-2009, there have been more failures than success stories. Today, most of the smaller players are loss-making entities while the larger ones, especially plantation companies, rely on other sources of income such as their upstream businesses. Carotech’s debt as at end-June stands at RM213.6 million, of which 72% constitutes US dollar-denominated term loans amounting to US$47.78 million (RM154.48 million) taken to finance the building of its Lumut facility. The rest are ringgit-based term and trade facilities worth RM59.12 million. In its announcement on July 1, Carotech said it intended to embark on a long-term solution to its debt obligations and sought the assistance of the Corporate Debt Restructuring Committee to mediate its debt restructuring exercise. Carotech has five months to complete the exercise. Its creditors include Malayan Banking Bhd, Malaysian Industrial Development Finance Bhd, OCBC Bank Bhd, RHB Bank Bhd, Hong Leong Bank Bhd, and Kuwait Finance House (M) Bhd. None of the lenders have initiated legal action against Carotech. The company’s share price tanked following the announcement, losing as much as 4.5 sen or 33% the day after. YTD the counter has lost some 54% as it closed at 8.5 sen last Friday. Apart from Carotech, its parent company Hovid Bhd, which holds a 58.19% stake in the company, also saw some selling pressure. Hovid’s share price fell 17% but has since rebounded to 18 sen last Friday. OSK Research downgraded Hovid to “sell” from “trading buy” on concerns that Carotech’s default may trigger a cross default with Hovid’s other lenders. Nonetheless, improving economic conditions may aid Carotech in its bid to set its house in order. “With the return of consumer confidence in the US and EU, the sales of our phytonutrients have improved by more than 50% compared with the previous year, from RM25 million to RM37.9 million,” Ho notes. For 3QFY2010 ended March 31, Carotech’s net profit quadrupled to RM9.3 million from RM1.8 million a year earlier due to forex gains of RM7.2 million. Its revenue rose 43% to RM75.9 million as deferment of biodiesel shipments in December 2009 materialised early this year. From the looks of it, Carotech may have a shot at turning the corner this year as it posted a net profit of RM11.1 million for the first nine months of FY2010, compared to a net loss of RM13.5 million in the previous corresponding period. The company posted a net loss of RM17.5 million for FY2009. Ho says the cause of low demand for biodiesel since early this year is due to the delay in the legislation of biodiesel subsidy extension in the US.  “This delay has reduced the demand for biodiesel from the US. We anticipate the biodiesel subsidy extension to be legislated before the end of this year and demand for biodiesel should pick up after it is in place,” he says. However, the future remains grey as crude palm oil (CPO) prices have been climbing of late along with other commodities due to weather concerns. Ho notes that the outlook for CPO at present is bullish and expects prices of the commodity to increase. “Although we are able to pass on the price increase of CPO (to our customers), the rising prices of commodities would increase our working capital requirements,” Ho says.  The challenge for Carotech now is to increase the demand for its phytonutrients. If external factors play to its tune, the higher demand would be able to reduce Carotech’s inventory and increase the utilisation of its plant capacity. This article appeared in Corporate  page, The Edge Malaysia, Issue 817, Aug 2-8, 2010

https://theedgemalaysia.com/node/15170

BNM international reserves up US$200m

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KUALA LUMPUR (May 22): Bank Negara Malaysia's (BNM) international reserves rose US$200 million (RM624 million) to US$136.1 billion as at May 15, 2012, from US$135.9 billion as at April 30. In a statement Tuesday, the central bank said the reserves position was sufficient to finance 9.3 months of retained imports and is 4.1 times the short-term external debt.

https://theedgemalaysia.com/node/80913

#Hot Stock* Luster gains on PN17 uplift appeal

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KUALA LUMPUR (Mar 15): Investors chased Luster Industries Bhd shares,  pushing the Practice Note (PN17) stock up as much as 10% in morning trade. Interest in the precision plastic component manufacturer follows an update by the firm that it had  appealed to regulators to lift the firm out of its current status. This follows the completion of a corporate revamp which has put the company on a stronger footing. At 10.52am, Luster was traded at 10.5 sen with some 21 million shares done after rising as much as one sen to 11 sen earlier. The stock was the third most-active entity across the bourse. Bloomberg data show that over the last one year, Luster had traded at an intraday high of 24 sen on May 16, 2012 before falling to a low of seven the following month Luster said yesterday (March 14) that it had submitted its application to Bursa Malaysia for the removal of the firm from the PN17 list. Luster which had completed its revised regularisation plan on June 12 last year, had indicated that it would make the PN17 uplift appeal upon registering net profit for two consecutive quarters immediately after the completion and implementation of the regularisation scheme. The company had reported a net profit of RM628,000 in the third quarter ended September 30, 2012 (3QFY12) against a net loss of RM1.23 million a year earlier. In 4QFY12, Luster posted a net profit of RM753,000 against a net loss of RM1.99 million previously. Full-year FY12 net profit came to RM30.24 million against a net loss of RM6.5 million a year earlier. Income from newly-acquired subsidiaries, and waiver of Luster’s debts and interests by lenders had helped the company’s bottom line during the year. Bursa Malaysia had in May 2008 placed Luster under the PN17 category after the company’s losses widened, and taking into account that its shareholders’ equity on a consolidated basis amounting to RM25.19 million was less than half of the group’s issued and paid-up share capital of RM61.18 million as at December 31, 2007, according to Luster’s filings to the bourse then. During the year, the company said its net loss widened to RM44.64 million from a net loss of RM5.4  million a year earlier. Luster had in July 2009 come out with a regularisation plan which included a capital reduction, share split, rights issue, private placement and repayment of bank loans to rejuvenate its financials.

https://theedgemalaysia.com/node/37221

Bursa Securities queries Versatile over unusual market activity

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KUALA LUMPUR (Nov 30): Bursa Malaysia Securities Bhd has issued an unusual market activity over the trading of Versatile Creative Bhd’s shares recently. The regulator said on Wednesday the query was over the sharp rise in price and high volume in the shares. At 4.22pm, its share price was up 8.5 sen to 38 sen with 49.73 million units done. The FBM KLCI was up 13.56 points to 1,458.28. Turnover was 1.24 billion shares valued at RM1.33 billion. There were 356 gainers, 378 losers and 285 stocks unchanged.

https://theedgemalaysia.com/node/31238

Malaysian Trustees seeks to wind up Transmile Air

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KUALA LUMPUR: Malaysian Trustees Bhd has served a winding-up petition on Transmile Group Bhd's subsidiary Transmile Air Services Sdn Bhd after defaulting on the payment of its debt notes. Transmile said on Friday, June 4 the  petition was presented to the High Court, Kuala Lumpur on May 19 and the petition was served and received on Friday. The matter is fixed for hearing on July 29. Transmile Air had issued commercial papers/medium term notes with an aggregate face value of RM105 million. However, Transmile Air had defaulted in the payment of the notes due on Aug 29, 2008. "The amount claimed under the petition is for RM106.11 million, being the principal, coupon and default interest due and owing as at March 24, 2010," it said. Transmile Air had failed to pay the default outstanding amount owing under the notes within three weeks of the receipt of the aforesaid notice. "Transmile Air is a major subsidiary of Transmile. The total cost of investment in Transmile Air is RM982.13 million," it said. The company said the petition may on its own trigger or result in a termination or default on Transmile Air’s business contracts . If the contracts are terminated, the operations will have to cease and as the group will suffer adverse financial consequences.

https://theedgemalaysia.com/node/12258

Heidrick & Struggles names Tracy Wolstencroft as CEO

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KUALA LUMPUR (Feb 04): Chicago-based Heidrick & Struggles International, Inc. has named Tracy R. Wolstencroft as the president and chief executive officer. The premier professional services firm — focused on serving the leadership needs of top organisations globally — said in a statement issued here today, that he would also represent the company's board of directors. The statement added that Jory Marino, who has been serving as the interim CEO, would continue with the firm, in a leadership role. Wolstencroft, 55, joins Heidrick & Struggles, following a 25-year career at Goldman, Sachs & Co. During his career, he led a wide range of businesses in the United States and abroad — including in Asia, where among others, he was the president of GS Singapore and co-head of investment banking in Japan.

https://theedgemalaysia.com/node/17967

Matrade auto parts promotion generates RM33m sales

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Matrade deputy chief executive officer (promotion) Dr Wong Lai Sum said the programme which began in May had identified 345 prospective buyers of Malaysian automotive products as a result of the 100-odd business meetings it had all over the globe. "The programme has benefited 196 Malaysian companies that took part, and we managed to secure RM33.25 million in sales from 134 buyers. We are targeting RM70 million," Wong told a media briefing today. The automotive support sector comprises manufacturers of spare parts, components and accessories. Wong said Matrade had implemented 13 of the 23 events planned under the promotion, which was aimed at giving Malaysian companies an opportunity to generate sales abroad during an economic slowdown. The programme is expected to end in November. "Wherever we can, we try to bring along designers and OEM (original equipment manufacturer) manufacturers to give a market opening for them. We introduce them to major car manufacturers like Volkswagen and GM, for instance," Wong said. On why the support sector was given emphasis, Wong said in times of crisis, consumers were unwilling to buy new cars and would maintain their existing cars. "It's the same in many countries... during a financial crisis, everyone watches their purse and continues to maintain their cars, and in this respect we target the maintenance market," Wong said. Exports of automotive parts and components in the first half of 2009 contracted by 25.4% to RM1.24 billion from RM1.55 billion a year earlier. For the whole of 2008, exports of the products stood at RM2 billion. Wong said the target markets for the domestic automotive support sector were mainly greenfield markets, that is markets that have not been explored or have been ignored. "We target the greenfield markets, both developing and developed markets. Developing markets are the most affected and have a higher need for replacement products. We are targeting Pakistan, Bangladesh, Mexico, South Africa and Thailand. We are also moving into Vietnam and China." She said Matrade also planned to organise marketing missions to Germany, France and Russia. "Some of the industry players involved in the programme have exported before, some have not, but if they don't go out, they won't get anything or meet new clients," Wong said. Wong said Thailand was a big factory for Japanese carmakers but its automotive components and parts sector was not well developed. "We do not lose out because Malaysia has been supplying to Thailand." Asked on the feedback on Malaysian-made automotive parts, she said: "They were pleasantly surprised with the quality of the products." Commenting on a 23% year-on-year contraction in July exports, Wong said recovery was in sight as export figures were moving upwards on a monthly basis. July exports were up 8.4% from the preceding month.

https://theedgemalaysia.com/node/13832

RHB Research maintains Market Perform on S P Setia, ups fir value to RM4

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KUALA LUMPUR (April 24): RHB Research has raised its fair value for S P Setia Bhd to RM 4 and said the company’s recent venture into China made good sense. In a note Tuesday, the research house said (i) The G-to-G tie-up underpinned SP Setia’s venture in the Qinzhou Industrial Park (QIP) development should enhance the credibility and chances of success of the project; (ii) Tier-4 city as an entry point can avoid the high regulatory requirements in housing sales; (iii) Timely entry to the Chinese market in the temporary sector downcycle; and (iv) The QIP project can potentially be worth more than RM20 billion. If the  1st phase is proven successful, long-term value to SP Setia will be tremendous, it said. “The risk profile of the company is expected to change given the size of the QIP project (13,591 acres). We are biased on the positive side due to the above factors. Initial funding and future working capital will be funded via debt and equity, which will be within SP Setia’s capacity given its current net gearing of 8%. “Fair value is raised to RM4.00 as we impute only the DCF value from the Binhai project. Given minimal potential upside, we maintain our Market Perform call on the stock,” it said.

https://theedgemalaysia.com/node/4576

#Company Focus* VS Industry expands to meet market demand

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ELECTRONIC manufacturing services (EMS) provider VS Industry Bhd (VSI) is enjoying a growing market, thanks to international brands increasingly outsourcing to partners in Southeast Asia, although its profit margin has been rather thin. With their focus on marketing and branding, international brands continuously look for partners to undertake the manufacturing function, says VSI managing director Datuk Gan Sem Yam. “This trend provides opportunities for entrenched EMS players with a strong reputation and track record to enhance their market share,” he tells The Edge. Founded in 1979, VSI manufactures, among other things, in-processed products (printed circuit board assembly and plastic components) and finished products (vacuum cleaners and remote controllers) ready for shipment to the end-consumer markets. Over the years, the group has expanded its business operations to include products and services in the higher value-added chain, such as plastic finishes, PVC labelling, electronic assembly using advanced auto insertion and surface mounting technology. For a company that provides supply-chain services and fully integrated contract manufacturing services to companies such as Panasonic, Sony, Canon, Mitsubishi, Kenwood and Dyson, it is said that VSI has yet to reach its full potential. Kenanga Research, the only broking firm to track the counter, pegs the fair value of VSI at RM1.95, considering its solid earnings track record — a four-year net profit compound annual growth rate of 70%. “Coupled with its ongoing orders for finished products, we expect its FY2014 earnings to double from FY2013’s and its net profit to register at RM45.2 million.” From FY2010 to FY2013 ended July 31, the company’s revenue grew from RM800.17 million to RM1.16 billion while net profit increased from RM24.29 million or 13.5 sen per share to RM43.91 million or 24.2 sen per share. In 1QFY2014 ended Oct 31, VSI posted a net profit of RM9.6 million, up from RM7.7 million in the previous corresponding period. Revenue rose to RM437.3 million from RM327.8 million. Its shares rebounded in September last year, marching to a 2½-year high of RM1.55 on Jan 7. They retreated from their peak to close at RM1.42 last Tuesday. VSI, which was listed on Bursa Malaysia in June 1998, bought a 55.25% stake in Hong Kong-listed VS International Group Ltd for RM35.9 million in July last year. Despite a higher net gearing of 0.6 times (0.4 times in FY2013) as a result of the VSIG acquisition, Kenanga Research is positive that the group will be able to maintain its policy of paying out at least 40% of its net profit. In FY2012, the group paid out 70.6% of its net profit to shareholders. This amounted to 15 sen per share. In FY2011, its payout ratio was 58.9% or nine sen per share while in FY2010, it was 48% or 6.5 sen per share. “Although the company has been paying dividends since its listing, the policy to pay out 40% of net profit was formalised in 2011 to reward shareholders for their trust in the group,” says Gan. VSI’s major shareholders include its executive chairman Beh Kim Ling with a 17.44% stake, executive director Gan Chu Cheng (14.19%), Sem Yam (9.29%) and Inabata & Co Ltd (10.34%). Inabata is a specialised trading company based in Japan and a part of Sumitomo Chemical Co Ltd. The company’s main lines of business are electronic components, housing equipment, chemicals and plastics. Inabata has been a shareholder of VSI since 2006. Over the years, it has accumulated shares in the company, making it the third largest shareholder. Gan points out that Inabata’s investment in VSI demonstrates the former’s confidence in the company’s growth prospects. Inabata is VSI’s supplier of resin, a sticky organic substance that is used to make a wide range of products. “We will continue to work with Inabata in the supply of resin; we have no plan to set up any operations in Japan. However, we will work closely with our customers in their expansion into the Japan market,” says Gan. VSI’s integrated operations and experience have enabled it to climb the EMS value chain and operate in the niche areas of producing and assembling high-end consumer electronics. “We believe VSI’s growth prospects are intact,” says Gan, adding that the group has seen an increase in sales, primarily from new customers — evidence of the company’s business development efforts in recent years. He believes the group will be able to win more key customers and expand in tandem with their growth pace. “In the immediate future, we are preparing for higher sales orders that are expected to come into fruition in FY2014.” Gan, who has been with the group since 1982, thinks the main reason for VSI’s strong performance is its ability to ride the uptrend in the EMS segment in consumer electronics. “For more than 30 years, VSI has developed its core competence in this space, further evidenced by our ranking as one of the world’s top 50 EMS providers for six consecutive years — from 2007 to 2012,” he says.  VSI has manufacturing plants in key locations in the region — Malaysia, Indonesia and China — which are able to support the current and future needs of its clients and cater for different customer groups. “Our plants in Malaysia and Indonesia primarily serve customers from Europe and the US while our China operations fulfil the EMS requirements of our Japanese, European and American clients,” says Gan. The company’s diverse customer base mitigates any country-specific risk and plays a role in growing its business alongside that of its customers. “As an EMS provider serving an international clientele, almost all of our products are exported worldwide, for example to Singapore, Australia, Japan, Europe and the US. This will continue to be the case as long as we focus on securing international customers,” Gan explains. Recently, the group allocated a capital expenditure of RM20 million for FY2014 for plastic injection machines for new coffee machine models and new assembly lines. The expansion is to cater for bigger orders from world-renowned coffee brewing system makers. Although the group has a stable overseas contribution, Gan says VSI’s Malaysian operations will continue to account for the bulk of the group’s top line, followed by China and Indonesia. In 1QFY2014, the Malaysian operations recorded revenue of RM276.7 million while those in China and Indonesia posted RM143.6 million and RM16.7 million respectively. This article first appeared in The Edge Malaysia Weekly, on February 03, 2014.

https://theedgemalaysia.com/node/82489

Nextnation acquires 22.75 pct stake in R&A for RM10 mln

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KUALA LUMPUR (Nov 4): Nextnation Communication Bhd has acquired 200 million shares, or about 22.75 per cent stake, in R&A Telecommunication Group Bhd for RM10 million. In a filing to Bursa Malaysia today, Nextnation said the acquisition was in line with the company's objective to further expand its business activities within the telecommunications industry, and grow through synergistic acquisition. "The acquisition may also provide Nextnation and its units with the opportunity to leverage on R&A's strengths, to further develop its businesses, as well as position itself for long-term opportunities," it said. On prospect, it said R&A was expected to benefit from the positive outlook for telecommunications network services market in Malaysia, which was expected to grow in market size by 2015. It said R&A was also expected to benefit from the roll-out of the high-speed broadband and broadband for general population, under the on-going National Broadband initiatives.

https://theedgemalaysia.com/node/8957

The Right Timing: Overhead resistance at 1,050-1,085

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Technical readings Elliott Wave Daily chart: By using a short-term Elliott Wave count, the KLCI continues to unfold the various degrees of the impulsive A-B-C waves of its major corrective wave (B). The KLCI closed at 1,045.26 points last Friday.Weekly chart: The KLCI’s weekly wave counts were in line with that of its daily wave counts. Monthly chart: The renewed technical rally sent the KLCI’s monthly chart to its all-time historical high of 1.524.69 on Jan 14, 2008. Elliott OscillatorThe KLCI’s Elliott Trigger slipped below its zero region last week while its Elliott Oscillator continued to stay above its zero region. Other IndicatorsIts daily and weekly stochastics stayed in their respective overbought levels. Its monthly stochastics stayed in its neutral level. Moving Average Convergence/Divergence (MACD)The KLCI’s weekly fast MACD continued to stay above its weekly slow slow MACD. Its weekly and monthly fast MACDs continued to stay below their respective slow MACDs. Expert Trend IndexThe readings are “bullish”, “bullish” and “neutral” for short, medium and long term, respectively. Profit Taking Index (PTI)Using the original Elliott wave count, PTI displays high readings of 99 and 80 on its daily and monthly charts respectively. Displaced Moving Averages (DMA)The KLCI continued to stay below its daily, weekly and monthly DMA levels of 1,002, 902 and 1,182 levels respectively. DivergenceThere were positive divergences on its daily MACD, Stochastics and Relative Strength Index to KLCI’s daily chart. Make Or Break (MOB)The revised weekly MOB resistance is further revised lower to its overhead resistance of 1,100 to 1,200.SupportThe KLCI’s immediate downside support is now revised to 980-1,030 levels. ResistanceIts immediate overhead resistance is now revised to the 1,070 - 1,100 levels. Elliott WaveDaily chart: The FBM2BRD closed at 4,526.88 points on May 22. Weekly chart: The market is seen to unfold a technical rebound in the medium term. No significant sign of a REVERSAL from the downside. Monthly chart: Likewise, it has not completed the downside cycle in the long term yet. It is unfolding a technical corrective WAVE 4. Elliott OscillatorThe FBM2BRD’s Elliott Trigger and its Elliott Oscillator continued to stay above their respective zero regions. Other IndicatorsIts daily and weekly stochastics stayed in their respective oversold levels while its monthly stochastics stayed in its neutral level. MACDThe FBM2BRD’s daily and weekly fast MACDs stayed above their respective slow MACDs. Its monthly fast MACD stayed below its monthly slow MACD. Expert Trend IndexThe readings are “bullish”, “bullish” and “neutral” for short, medium and long term, respectively. PTIModerate readings are seen on the daily, weekly and monthly charts. DMAThe FBM2BRD stayed below its monthly DMA levels of 4,745. DivergenceThere was no negative divergence on its daily stochastics and Relative Strength Index to the FBM2BRD on its daily chart. MOBThe FBM2BRD’s MOB support is now revised to the 4,100-4,300 level. Technical readingsElliott WaveDaily chart: The FBM-MDQ’s recent impulsive wave was terminated in tandem with that of the KLCI. It closed at 3,947.92 points last Friday.Weekly chart: The FBM-MDQ has yet to complete the retracement of its corrective A-B-C waves of its major corrective wave (B). Monthly chart: Its wave retracement had completed the first leg of its intermediate-term correction. It is currently unfolding the second leg of its wave correction. Elliott OscillatorThe FBM-MDQ’s Elliott Trigger had since stayed below its zero region while its Elliott Oscillator continued to stay above its zero region. Other IndicatorsThe FBM-MDQ’s daily and weekly stochastics stayed in their respective overbought levels. Its monthly stochastics stayed in its neutral level. MACDThe FBM-MDQ’s weekly fast MACD stayed above its weekly slow MACD. Its daily and monthly fast MACDs stayed below their respective slow MACDs.Expert Trend Index“Bullish” and “neutral” readings continued to register for the medium and long-term perspective respectively. Its short- term reading has since turned “bullish”. PTIPTI had since rebounded to 73 on its daily chart while it dropped to 19 on its weekly chart. DMAThe FBM-MDQ continued to stay above its daily and weekly DMA levels of 3,362 and 3,246 respectively. DivergenceThere were significant negative divergences on its daily MACD and Relative Strength Index to the FBM-MDQ on its daily chart. MOBThe FBM-MDQ’s MOB support is now revised to the 2,800 -3,000 levels. It hit its intra-week low of 2,843.15 on March 12. ResistanceThe FBM-MDQ’s next resistance is now raised to the 7,400 level. SupportIts immediate downside support is revised to the 3,800–3,900 levels. ResistanceIts immediate upside resistance hovers at the 7,000 level. Market reviewShare prices on Bursa Malaysia resumed their technical rebounds last week. The KLCI closed at 1,045.26 points last Friday, rebounding from its intra-week low of 1,000.34 last Monday to its intra-week high of 1,050.45 last Thursday, giving an intra-week trading range of 50.11 points. The KLCI traced out a week-on-week gain of 31.05 points, or 3.06%, to 1,045.26. The FTSE Bursa Malaysia Mesdaq Index lost 46.13 points, or 1.15%, to 3,947.92 while the FTSE Bursa Malaysia Second Board Index added 0.46 points, or 0.01%, to 4,526.88. Market outlookKey heavyweight index-linked counters led the market recovery last week, sending the KLCI above its previous resistance high of 1,037.81 on May 7. Its weekly and monthly fast MACDs continued to stay below their respective slow MACDs last week. Last week, this column said the KLCI was likely to consolidate its recent gains and gyrate around its major psychological support of 1,000. It did, hitting its intra-week low of 1,000.34 last Monday before rebounding to its intra-week high of 1,050.45 last Thursday. As the trading focus has once again shifted towards key heavyweight index-linked counters, the KLCI is likely to scale higher. The KLCI’s overhead resistance remains at 1,050-1,085 while downside support is at 1,005-1,040. This article appeared in the Capital page of The Edge Malaysia, Issue 756, May 25-31, 2009.

https://theedgemalaysia.com/node/50598

Perils of investing in ACE Market

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The recent slew of listings on the ACE Market has dampened the already moderate sentiment for stocks listed in that category of Bursa Malaysia. Who would blame investors for shying away considering that the debuts of recent listings — XOX Bhd and MClean Technologies Bhd — were accompanied by announcements of losses and plunging share prices. In the case of MClean, a substantial shareholder exited the company by selling a 12.8% stake on the maiden trading day. But should it deter investors from the ACE Market? To recap, XOX pulled a stunner when it reported a loss of RM1.66 million for 1QFY11 just a day before its debut. The company forecast an annual net profit of RM19.8 million for the full year. The loss sent its share price downhill. As at last Friday, XOX slipped to 44 sen, down 45% from its offer price of 80 sen. MClean also raised more than a few eyebrows. Just three weeks after its listing, MClean announced a quarterly net loss of RM190,000 blaming the teething problems at its Chinese operations. While the company has since assured that it will be profitable for the year as a whole and could still exceed FY10’s net profit of RM5.9 million, investors are likely to remain cautious. Last Friday, the company’s share price closed at 23 sen, down 56% from its IPO price of 52 sen. These events make it no surprise that investors are becoming wary of getting caught with the wrong companies. To be fair, however, investors should be aware of the perils of investing in the ACE Market. The whole purpose of the ACE Market is to allow new start-ups and companies with growth potential but no track record to access the capital markets. While ACE Market-listed companies have less of a track record than their Main Market counterparts, investors are actually taking a higher risk on these companies.   And, as in any game of chance, there are bound to be winners and losers. Picking winners isn’t an easy feat. So, how can investors avoid being caught with a bad hand? The ACE Market is a high risk-high return game — but it still offers better odds than a game of pure chance at the casino. There are numerous things that investors can do. It is important for interested investors to do their due diligence and study the company’s prospectus before investing their money. The company would state its historical earnings (or losses) and its plans for the monies raised from the IPO. What was the financial track record like? Were there unusual swings in profitability or revenue, especially in the year just prior to listing? If there were, what were the reasons? Are most of the monies raised in the IPO meant for the company’s expansion, or do they accrue to a company’s major shareholders?   That alone should tell the intention of the IPO — whether it is a “cashing out” exercise, or a chance to tap capital for growth. For instance, the listing of JCY International Bhd last year saw all its proceeds accrue to the major shareholder. JCY’s shares have since slumped to 59.5 sen from an IPO price of RM1.60 last February, dampened by a slowdown in the hard disk drive industry. For cyclical industries, one should ask if the cycle has peaked, or is nearing a peak. Some companies, though not all, provide an earnings forecast for the year, as well as the strategies to be used to achieve it. For example, XOX has projected its revenue to rise to RM249.5 million this year, which is more than a 10-fold jump from RM20.1 million a year earlier. In addition, it plans to increase the number of subscribers from 391,000 to 1.5 million in just one year. Whether these goals are attainable remain to be seen.   It is interesting to note that XOX’s losses expanded from RM239,000 in FY07 to RM15.9 million in FY10. It expects a net profit of RM19.8 million for this year. XOX rides on Celcom Bhd’s network and has to pay the latter a “minimum commitment” amount annually for these services. If one peruses its prospectus, one would notice that the amount is set to more than triple this year to RM61.5 million from RM17.3 million last year. And this “minimum commitment” is set to escalate to RM109 million in FY12 unless there is a mutual agreement reached with Celcom to change it. However, it is important to remember that one or two examples should not represent all ACE Market-listed companies. Some loss-making companies could be going through a temporary rough patch, and these should be given a chance to prove themselves. ACE Market-listed companies that have proved successful include EA Holdings Bhd and Genetec Technology Bhd. EA Holdings had seen its net profit rise from RM200,000 in FY07 to RM4.1 million in FY10. Genetec’s net profit rose to RM12.4 million for FY11 from RM5.5 million three years earlier.   Others such as Notion VTec Bhd and MyEG Services Bhd have since migrated from the old Mesdaq to the Main Market and are widely held by institutional funds.    There were also companies that were caught in circumstances beyond their control. Green Packet Bhd, for example, which migrated from the former Mesdaq to the Main Market has seen numerous broadband licences going to other companies since its listing. While its target to break even earnings before interest, tax, depreciation and amortisation remains elusive as ever, the company continues to draw good faith from investors. Last year, South Korea’s SK Telecom bought a 25.8% stake in Green Packet’s subsidiary for US$100 million (RM304 million). In a nutshell, would these former small firms have grown to their current size without the Mesdaq or ACE Market? This article appeared in The Edge Financial Daily, June 20, 2011.

https://theedgemalaysia.com/node/53429

Asian markets wobbly, KLCI above 1,500

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KUALA LUMPUR: The FBM KLCI edged above the 1,500-level at the mid-day break on Wednesday, Aug 17, with plantations among the gainers, but trading remained cautious ahead of the second quarter gross domestic product and July consumer price index data due out later. Regional markets were mixed as Japanese shares fell on Wednesday, dragged down mainly by hi-tech firms, while the euro wobbled after French and German leaders failed to deliver a solution to the euro zone debt crisis and restore investor confidence after a global market rout, according to Reuters. Electronics stocks were weak across Asia after computer maker Dell slashed its 2012 sales forecast late on Tuesday, a deeply bearish signal not only for the shaky state of global demand but for other hi-tech manufacturers, many of which are listed in Tokyo, Seoul and Taipei, it said. At 12.30pm, the FBM KLCI gained 3.86 points to 1,502.10. Gainers edged losers by 313 to 246, while 262 counters traded unchanged. Volume was 412.58 million shares valued at RM584.83 million. The ringgit strengthened 0.05% to 2.9801 versus the US dollar; crude palm oil futures for the third month delivery rose RM7 per tonne to RM3,009, crude oil added 67 cents to US$87.32 while gold eased 98 cents per troy ounce to US$1,784.72. At the regional markets, Japan’s Nikkei 225 shed 0.52% to 9,060.46, Taiwan’s Taiex fell 0.58% to 7,753.18 and the Shanghai Composite Index slipped 0.04% to 2,607.25. Hong Kong’s Hang Seng Index rose 0.94% to 20,402.95, Singapore’s Straits Times Index up 0.48% to 2,846.38 and South Korea’s Kospi added 0.39% to 1,887.17. On Bursa Malaysia, KLK rose 38 sen to RM21.48 after posting a strong set of earnings, PPB gained 32 sen to RM17.12 while Batu Kawan added 14 sen to RM16. Sindora jumped 27 sen to RM2.92, just below the RM3 offer made by its major shareholder Kulim. Allianz gained 20 sen to RM4.90, Kenmark 18 sen to RM1.25, Shell 16 sen to RM10.28 while Mudajaya and Catcha Media added 14 sen each to RM2.92 and 85 sen. Among decliners, BAT lost 42 sen to RM43.70, loss-making Theta 17.5 sen to 42 sen, Malayan Flour Mills nine sen to RM7.60, Sunchirin eight sen to RM1.50, while KFCH, Pensonic and JT International fell seven sen each to RM3.90, 53 sen and RM6.83 respectively. Eduspec was the most actively traded counter with 21.86 million shares done. The stock was unchanged at 12.5 sen. Other actives included DVM, Axiata, Sanichi, Talam, Dialog, AirAsia and  Catcha Media.

https://theedgemalaysia.com/node/98635

Australia shares close lower on Syria, gold sector pares losses

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SYDNEY (Sept 4): Australian shares fell 0.7 percent on Wednesday, retreating from 3-1/2 month highs, as the United States edged closer to military action against Syria, but a rally in gold prices helped temper losses. The S&P/ASX 200 index lost 35 points to finish at 5,161.6. The benchmark rose 0.2 percent on Tuesday to its highest close since May 20. New Zealand's benchmark NZX 50 index rose 0.1 percent or 3.6 points to finish the session at 4,610.3. - Reuters

https://theedgemalaysia.com/node/67677

#Update* Guan Chong aborts Singapore dual-listing

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KUALA LUMPUR (Aug 17): Cocoa ingredients-maker Guan Chong Bhd has aborted its plan to dual-list its shares on the Singapore Exchange (SGX) “for the time being”, the company said in a statement issued after closing bell today, confirming an earlier report by edgemalaysia.com The company’s statement did not specifically say if the exercise had been pulled due to weak market conditions or if Guan Chong still needed to comply with additional regulatory requirements for its Singapore dual-listing. When contacted, a company spokesperson declined further comment at current juncture. However, in a statement last month, Guan Chong had said approval from its shareholders for the dual-listing concluded all necessary approvals from Singapore and Malaysia for the exercise. The aborting of the exercise came as a surprise given that Guan Chong’s managing director and CEO Brandon Tay Hoe Lian had on July 21 told reporters details on the launch of the IPO prospectus for the Singapore dual listing was being finalised. Instead, in a statement yesterday evening, Tay said: “After much consideration, we wish to reassess our strategic direction with regards to capital requirements for expansion.” “The group remains committed to expanding our global reach and broadening our profile as one of the leading cocoa processors in the world, going forward. Ultimately, we remain focused on implementing growth strategies to bring sustainable benefit to Guan Chong,” he added. Nonetheless, one analyst who tracks Petra Foods Ltd in Singapore pointed out that Petra Foods, which is larger and more established, had in their recent earnings announcement for the second quarter ended June 30, 2012, flagged that margins for it cocoa processing business had been hit by over-capacity in the industry. Another Johor-based cocoa-ingredients processor, JB Foods Ltd, which debut on the SGX last month closed below its IPO price of 30 Singapore cents per share yesterday (Thursday, Aug 16). It added 1 cent or 2.39% to close at 30.5 cent today. Guan Chong shares shed 7 sen to close at RM3.01 with 291,300 shares traded.

https://theedgemalaysia.com/node/31618

Summary of 10MP

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KUALA LUMPUR: Prime Minister Datuk Seri Najib Razak on Thursday, June 10 unveiled the Tenth Malaysia Plan (10MP). The following is a summary of The Edge Malaysia's coverage on 10MP.   Main story: RM230b for devt under 10MP Side stories: Plan for economic transformation Reactions to 10th Malaysia Plan Govt eyes growth of 6% in 10MP Govt aims to cut subsidies to RM15.7b in 5 years’ time Fiscal deficit to be reduced to 2.8% in 2015 10 big ideas to drive the 5-year plan World-class infrastructure, MRT for KL Govt to further liberalise services sector FDI, talent recruitment and retention crucial area in 10MP Najib's speech on 10MP

https://theedgemalaysia.com/node/57430

KPJ to lease hospital in Seberang Perai for 10 years

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KUALA LUMPUR: KPJ Healthcare is to lease a medical care facility to be built on four acre-land in Seberang Perai Tengah, Pulau Pinang under an initial ten-year agreement with and Aseania Development Sdn Bhd. In a filing Friday, Nov 11, KPJ said that its wholly-owned subsidiary, Penang Specialist Hospital Sdn Bhd (PgSHSB) together with Lembaga Kemajuan Wilayah Pulau Pinang (PERDA) and Aseania had entered into a design, build, and lease (DBL) agreement to construct the medical care facility. KPJ said that in 1994, PERDA had granted Aseania the right to develop a township on 456.01 acres of land in Seberang Perai. Aseania had earmarked 9.76 acres for the development of healthcare facilities exclusively for PgSHSB, of which four acres were allocated for the hospital.  Under the DBL agreement, Aseania will construct the hospital according to PgSHSB's specifications and upon completion, PgSHSB wil lease the hospital from Aseania for 10 years. KPJ said that under the agreement, it had the option to renew the lease for a further ten-year period.

https://theedgemalaysia.com/node/10664

Man in the street: GOME’s revival may take shine off Parkson

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Embattled GOME Electrical Appliances Holdings Ltd, the largest electrical store chain in China, is now on a sound financial footing as US private equity firm Bain Capital LLC is underwriting its fundraising plan of about HK$3.24 billion (RM1.47 billion) to shore up its working capital. The changing fortunes of GOME may attract investors looking for exposure in China’s retail market because the valuation of Parkson Retail Group Ltd (PRG) — the top pick in the sector — appears rich. Also, PRG’s major shareholder, the Lion group, recently disposed of some of its interests for a handsome gain. Bain’s proven track record in retail business investment will give GOME’s credibility a boost. Also, as part of the deal, Bain will propose three members to GOME’s board as non-executive directors. There will be four to five executive, three to four non-executive and three independent non-executive directors. The new appointments will improve investor confidence in GOME’s corporate governance. Its reputation was tarnished after its chairman and major shareholder Huang Guangyu was arrested by the Chinese authorities last November for alleged financial misconduct. Financially, a successful fundraising exercise by GOME will ease its current tight working capital condition and strengthen its operations amid a tough macro environment. Note that GOME was once worth twice as much as Parkson, which is currently the largest retail group on the Hong Kong Stock Exchange (HKSE) in terms of market capitalisation. Both GOME and Parkson are listed on the HKSE. Last Wednesday, Parkson closed at HK$11.08 (near its all-time high of HK$12.32 registered in January), putting its worth at HK$31.06 billion. Closing at HK$1.93 a share (its all-time high was HK$5.18 seen in early 2008), GOME had a smaller market cap of HK$24.75 billion. GOME, at its peak in early 2008, was worth over HK$66 billion and was the market’s top pick in China’s retail sector. But it lost its position to Parkson in 3Q2008. Still, GOME leads in terms of retail floor space. As at end-2008, it had 859 stores covering 3.12 million sq m of operating area whereas Parkson, a department store operator, occupied a total retail area of 991,500 sq m through 42 stores. GOME’s prospects turned bleak last year after its strategy to roll over suppliers’ credit to rapidly expanding sales networks backfired. To rub salt into the wound, the company’s founder, chairman and major shareholder was arrested by Chinese authorities last November over alleged financial misconduct involving matters outside GOME. This brought management’s integrity into question. The arrest of Huang, once the richest man in China, triggered an immediate suspension of trading in GOME’s shares on the HKSE. But even before that, signs of weakness in the company’s operations and rumours of Huang’s impending problems with the authorities, caused GOME’s shares to plunge from HK$5.18 in early 2008 to its pre-suspension price of HK$1.12. The minority shareholders of GOME have the board of directors to thank for swiftly responding to the “crisis” late last year. After Huang was arrested, the board formed a special action committee (SAC), comprising the company’s three independent non-executive directors, to take charge of company affairs. The SAC first engaged Ernst & Young to conduct a thorough audit of GOME to convince investors that the financials of the company had not been “tampered with”. It then put together a fundraising or recapitalisation plan, which led to Bain’s involvement, with the signing of an underwriting agreement on June 22. In the agreement, Bain agreed to underwrite GOME’s new share offering and subscribe for HK$1.8 billion worth of convertible bonds issued by the electrical store giant to raise some HK$3.24 billion in fresh capital. The seven-year convertible bonds give Bain an annual coupon of 5% and allow the firm to redeem or convert to GOME shares at a conversion price of HK$1.108 each (adjusted for GOME’s new share offering). This deal could potentially give Bain a shareholding of between 9.8% and 23.5% of GOME’s enlarged share capital. The maximum scenario is on the assumption of full conversion of the 2016 convertible bonds and zero participation of GOME’s existing shareholders in the new share offering. The recapitalisation could give Bain a firm grip on GOME because the combined interest of Huang and his wife of 35.6% may be diluted by the fundraising exercise — that is, if Huang does not pick up his entitlement to the new share offering. Note that existing shareholders of GOME are entitled to subscribe for not more than 2.48 billion new shares in the company, on the basis of 18 new shares for every 100 shares held at 67.2 HK cents — a steep discount to GOME’s current price of HK$1.93. After the funding and recapitalisation plan was made public, the seven-month suspension on GOME was lifted on June 23. Investors reacted positively to the plan, sending GOME’s stock up 69% in a single day to close at HK$1.89 that day. The stock remained at that level to close slightly higher at HK$1.93 on July 1. However, at its current price, GOME’s valuation is still cheaper than Parkson’s in terms of price-earnings ratio (PER). At last Wednesday’s market close, GOME was traded at 17.1 times forward PER (adjusted for the new share offering) while Parkson was traded at 28.4 times forward PER, according to Bloomberg. Parkson’s much higher PER could be due to its largely “concessionaire sales” business model, where inventory risk is low because the company does not keep much stock. The risk is borne more by the suppliers that place their products in Parkson’s outlets. Parkson also earns fees for managing the branded stores not owned by the company. This is evident from Parkson’s inventory of HK$213.2 million as at end-2008 against total merchandise sales of HK$11.49 billion for the year. It’s worth noting that total revenue registered by the company was only HK$4.01 billion, although net profit was at a healthy HK$0.95 billion. In GOME’s case, inventory as a percentage of revenue is high. The company’s FY2008 (ended Dec 31) revenue stood at HK$52.06 billion, gross profit at HK$5.11 billion (gross margin of 9.8%) and net profit at HK$1.19 billion. Inventory amounted to HK$6.21 billion as at Dec 31, 2008, indicating an annual inventory/turnover of 8.4 times. While its business model is similar to that of conventional retail chain operators, GOME’s problem was that it stretched suppliers’ credit too much to fund the expansion of its sales network. This resulted in trade payables piling up to HK$14.66 billion as at Dec 31, 2008, versus HK$6.21 billion in inventory, HK$51.2 million in trade receivables and HK$3.46 billion in cash. Nevertheless, the company’s borrowings remain manageable, with a short-term interest-bearing loan of HK$192.9 million and HK$4.05 billion of convertible bonds. Its gross gearing was at less than 50%. While in essence GOME’s net current assets or working capital amounted to HK$3.79 billion as at Dec 31, 2008, the amount was too small for the company to churn out an annual turnover or revenue of over HK$50 billion. In addition, revenue and net profit shrank 19.5% and 37.2% y-o-y to HK$11.12 billion and HK$0.32 billion respectively in 1QFY2009. With less business at the outlets, it was difficult for GOME to roll over payables owed to suppliers. This is where the funding plan underwritten by Bain comes into play. According to the proposal, the proceeds of at least HK$3.24 billion will be utilised entirely as working capital for GOME to sustain its operations through the current difficult period where demand has softened. “In view of the credit crunch and the tightening by financial institutions in extending loans and other forms of financing to companies, the board considers that it is in the interests of the company and the shareholders as a whole to raise new capital so as to broaden the shareholder and capital base of the company. The exercise will also introduce an independent and significant investor who shares the business vision of the company,” said GOME’s board in a circular to shareholders detailing the fundraising plan. With Bain in the picture, other investors may want to ride a stronger GOME, although at its current price, they will be going in at about HK$1.74 a share (after subscribing for the 18-for-100 entitlement in the new share offering at 67.2 cents each), which is about 57% higher than Bain’s conversion price of HK$1.11 for the convertible bonds. However, if Parkson is worth nearly 30 times PER, there may be further upside in GOME.   This article appeared in The Edge Malaysia, Issue 762, July 6-12, 2009

https://theedgemalaysia.com/node/45345

CPO prices to moderate, biodiesel could be wildcard

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KUALA LUMPUR: Analysts expect the price of crude palm oil (CPO) to fall towards RM3,000 per tonne, before settling into a range of RM2,700 to RM3,200 per tonne for the rest of the year. However, an increase in demand for biodiesel use could be a potential wildcard for the commodity. Palm oil prices surged in the last three months of 2010, as production was disrupted by volatile weather amid strong demand. The third-month CPO futures reached RM3,967 per tonne — close to a three-year high — last month but has since fallen to RM3,455 on Feb 24, and closed at RM3,546 yesterday. CPO prices are expected to veer towards RM3,000 per tonne and average RM2,700 per tonne for the year, said ECM Libra Research in a report released on Monday. “This is on the expectation of a recovery in palm oil production. Increased production will help ease supply concerns in the market and therefore keep CPO prices down,” said an analyst from the research house, noting the decline in palm oil production and exports in the past two months. Malaysia’s palm oil exports fell 9.1% in February to 1.09 million tonnes, according to estimates by cargo surveyor Societe Generale de Surveillance. Intertek Testing Services said exports fell 10.4% to 1.1 million tonnes for the same period.Meanwhile, production in January fell 14.2% month-on-month and 19.8% year-on-year (y-o-y) to 1.6 million tonnes, as heavy rain from La Nina tampered yields. ECM Libra expects this condition to persist into March. Exports for the month declined 5.8%, mainly due to a considerable 59% y-o-y drop in exports to China. Purchases by Pakistan, the US and India were also lower, although exports to the European Union (EU) increased. “We expect CPO price to trend towards RM2,700 per tonne in the near-term, but our target average price for the year is RM3,200 per tonne”, said an analyst from OSK Research. He added that the current price is considered “unsustainable” and that palm oil supply is expected to improve as supply from Indonesia recovers.   Plantation Industries and Commodities minister Tan Sri Bernard Dompok earlier said that CPO prices are expected to trade above RM3,000 per tonne on average this year, when addressing the media at a seminar last Friday. Exports of palm oil products increased 2.8% to 23.6 million tonnes for 2010. China maintained its position as Malaysia’s biggest buyer followed by Pakistan, the EU, India, the US, Egypt and Japan. In total, these markets accounted for 68.2% of Malaysian palm oil exports in 2010. Palm oil, which has traditionally traded at a discount to soybean oil due to perceived quality, excess supply and other issues, could see positive effects from the government’s initiative to promote biodiesel. This follows a five-year delay, from when the plan was first conceived in 2007, and the recent divergence between palm oil and crude oil prices. Palm oil inventory is expected to benefit from the government’s plan to implement the use of B5 biodiesel in four months, as RM200 million has been allocated for the establishment of blending facilities. Additionally, the 10% sales tax on biodiesel will be removed and subsidies ranging from five sen to seven sen per litre are expected to be provided. The implementation of the B5 biodiesel mandate will absorb 0.5 million tonnes of palm oil from the system. This is equivalent to 3% of Malaysia’s palm oil production last year and 35% of the current inventory level as of the end of January, said AmResearch in a sector report issued yesterday. “The persistent demand for world commodities, restoration of biofuel output and stabilising equity markets should allow more buying momentum back to the crude palm oil market”, said LT International Futures in a report issued on Monday. In contrast to the more bearish stance of local analysts and research houses, Prudential Bache commodities analyst Anne Frick takes a different view. As reported by Reuters, Frick said that CPO prices could hit RM4,000 per tonne in the short term as the rising demand for biodiesel turns to soyoil supply, leaving less for vegetable oil export markets and increasing the demand for palm oil as a substitute. “There is a short window of opportunity when palm oil prices could respond to tightening stocks,” said Frick. This article appeared in The Edge Financial Daily, March 2, 2011.   Related Stories: Palm oil biomass can double contribution to GDP

https://theedgemalaysia.com/node/80266

Highlight: UN Sec-gen keeping close eye on Sabah crisis

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KUALA LUMPUR (Mar 7): The United Nations Secretary-General issued a statement yesterday saying he is monitoring the military clashes in Lahad Datu, Sabah, closely. Ban Ki-moon urged an end to the violence and encouraged a dialogue among all the parties for a peaceful resolution of the situation, according to a statement by his spokesman posted on the UN website. “The Secretary-General expresses concern about the impact this situation may have on the civilian population, including migrants in the region. He urges all parties to facilitate delivery of humanitarian assistance and act in full respect of international human rights norms and standards,” it said. He urges “all parties to facilitate delivery of humanitarian assistance and act in full respect of international human rights norms and standards”. In latest news, the self-proclaimed Phillipine sultan, Jamalul Kiram III, has called for a ceasefire at 12.30opm today as Malaysian troops continued to hunt for his fighters. At least 28 people, mostly militants, have been reported killed since an initial stand off  began more than three weeks ago in Kampung Tanduo. Malaysian security forces on Tuesday launched an airstrike using F-18 and Hawk fighter jets in the first operation to end the intrusion by Filipino Sulu gunmen who have holed up in Lahad Datu, Sabah since Feb 12.    They have also been detected elsewhere in the state. Eight police personnel were killed -- two in a firefight in Lahad Datu last Friday and six in an ambush in Kampung Simunul, Semporna one day later.

https://theedgemalaysia.com/node/78807

Palm imports by India seen tumbling for third month on harvest

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(Oct. 11): Palm oil imports by India, the world’s largest consumer, probably fell for the third month in September as traders trimmed purchases before the start of the main domestic oilseed harvest. Shipments of crude palm oil and refined, bleached and deodorized palmolein fell 22 percent to 650,000 metric tons from 833,917 tons a year earlier, according to the median of estimates from five processors and brokers compiled by Bloomberg. Imports, including for industrial use, fell 12 percent to 880,000 tons, the survey showed. The Solvent Extractors’ Association of India will release data next week. India is on the cusp of the biggest oilseed crop ever because of a potential increase in output of soybeans and peanuts, according to Atul Chaturvedi, chief executive officer of Adani Wilmar Ltd. Increased domestic supplies may cut imports and boost palm oil stockpiles in Indonesia and Malaysia, the biggest producers, amid a seasonal increase in output. World stockpiles are seen at a record by the end of 2013-2014 as production climbs, the U.S. Department of Agriculture estimates. “We had less imports as the local crop is estimated to be good and everyone was expecting the crop arrivals to start early,” said Ashok Sethia, executive director at Sethia Oils Ltd. and a former president of the association. “Because of extended rains, harvest was delayed and the crop will arrive within the next 10 days.” Monsoon BoostThe monsoon oilseed crop is estimated to be 23.96 million tons this year compared with 20.86 million tons a year earlier, the Agriculture Ministry said on Sept. 24. The crop makes up about 70 percent of the annual output. Farmers boosted planting after the nation got the highest rainfall since 2007 during the June-September monsoon season. “Refined palm oil imports have come down on expectation that the import duty would be raised by the government,” Sandeep Bajoria, chief executive officer of Sunvin Group, said by phone from Mumbai. Refined palmolein imports jumped 36 percent to 1.9 million tons in the 10 months to August this year, compared with a 7 rise in crude palm oil purchases to 4.8 million tons during the same period, according to the association. The government is considering an industry demand to revise the tariff on refined oils, Food Minister K.V. Thomas said Sept. 25. Processed oils currently attract a duty of 7.5 percent, while crude oil is taxed at 2.5 percent. Monthly Loss Palm for delivery in December climbed 0.9 percent to 2,391 ringgit ($749) a ton on the Malaysia Derivatives Exchange in Kuala Lumpur yesterday. Futures slid 3.5 percent in September, the biggest monthly decline since July. Inventories rose 7 percent to 1.78 million tons last month from August, the highest since May, the Malaysian Palm Oil Board yesterday. India’s palm oil imports may increase 5 percent to 8.7 million tons in the year beginning Nov. 1 from 8.3 million tons this year, said Govindlal G. Patel, managing partner at G Patel & Nikhil Research Co., who has traded cooking oils for more than three decades. The country meets more than half its cooking oil demand through imports. Vegetable oil purchases in the 10 months through August rose 8 percent to 8.79 million tons, association data show. Imports will surge to 10.6 million tons this year from 10.2 million tons a year earlier, Patel said. Crude soybean oil imports probably more than doubled to 150,000 tons in September from 59,000 tons a year earlier, while sunflower oil purchases may have dropped to 50,000 tons from 80,000 tons, the survey showed.

https://theedgemalaysia.com/node/3267

Increasing effectiveness the Idhammer way

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In troubled times such as these, with the economic recession exacting a heavy toll on businesses, measures to reduce cost and improve efficiency have become even more urgent. Companies like Idhammar Asia see themselves as providing a service that will always be necessary in any economic environment, but more so in the current situation. Idhammer offers a wide range of training and consultancy services in management, maintenance and operations improvement. It was started in 1973 when Borje and Christer Idhammar, together with four employees, formed Idhammar Konsult Ltd, which went on to dominate the maintenance and operational market in Sweden, Norway and Denmark. It then developed and sold computerised maintenance management systems and offered consultancy activity and training. As consultancy services increased, Idhammer’s clients steadily increased, including such names as SKF, Scania, Volvo , Stora Enso, Electrolux, Tetra Pak, SSAB, Akzo Nobel, Kraft Foods, LKAB, Vattenfall and Preem Refinery. Idhammer’s services also include strategic advice on asset and risk management decisions for clients to accurately predict how to improve profitability, reduce financial and safety risks as well as to lower operating and maintenance costs. Idhammar Asia Sdn Bhd — owned by Idhammer AB of Sweden — is based in Damansara Perdana, Petaling Jaya. Its services are divided into the management, maintenance and production categories. In management, Idhammar provides expertise on topics like the modern principles of maintenance and production management. Since there are many different methods and approaches to increase effectiveness, Idhammar has developed a way in which the basic requirements are created at the first stage.  Then, the methods with the biggest effect are applied. Idhammar helps create key performance index (KPI) measurement methods and overall equipment effectiveness (OEE); clean, effective and safe workplace; reliable work process; reducing the set-up or change-over time; simple production flows; eam organisation; flexible duties and eliminating unnecessary losses. The company is also experienced in effective maintenance methods and has consulted for various Swedish multinationals. Apart from training and maintenance management, it also develops maintenance technicians and engineers, situational analysis, maintenance and strategy philosophy, processes and systems, and planning and preparation of maintenance works. In addition, Idhammar also conducts technique-oriented training programmes and trains personnel in maintenance methods. Its training programmes are customised to suit various industries. For more information, log on to www.idhammar.com.my This article appeared in Netvalue2.0, the Special Focus of The Edge Malaysia, Issue 748, March 30-April 5, 2009

https://theedgemalaysia.com/node/36279

City & Country: Accidental developer

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First 6@ Damansara started out as an attempt by a group of friends at communal living. But now, the six homes in a walled compound in Damansara Heights may signal an entirely new direction for Datuk Ling Keak Ming.Datuk Ling Keak Ming enthusiastically describes one of his more astute investments — a Siberian Husky. “My son moved out after he got married. One day, we went out to buy some fish. He saw a beautiful Siberian Husky and he really wanted to to buy it but I told him he couldn’t keep a dog in his condominium. “So I had a very good plan — I bought the dog and now my son comes back to his father’s house every day to play with it. After he first moved out he didn’t visit very often, but now he comes back every day to see his father so he can see the dog,” laughs Ling, who lives in a landed home in Petaling Jaya. “This is just one of the perks of living in a landed home. You have your own garden, your own dogs running around.” Ling is certainly one who values close relationships with family and friends. One could say this is what led him to become a property developer, if one may say so, overnight. Ling’s project, which became known as The First 6 @ Damansara, was born out of discussions among a group of good friends. The six friends enjoyed each other’s company so much they decided to “live together”. They pooled their resources to acquire a plot of land along Jalan Chempenai in Damansara Heights to build a bungalow each within a walled, guarded compound with common facilities, creating their own commune of sorts. While he declined to reveal the names of his friends, he notes that they are bankers, lawyers and corporate figures.  The 55-year-old Ling, who is managing director of MWE Advanced Structure Sdn Bhd, MWE Golf & Country Club Bhd and Melati Mewah Sdn Bhd — all members of MWE Holdings Bhd — had the land developed by London Avenue Sdn Bhd, formed by the group of six, with Melati Mewah serving as the contractor. He, along with his five friends, are owners of London Avenue which was set up to develop the land. Melati Mewah is the construction arm of MWE Properties Sdn Bhd, which is responsible for a number of developments such as the three-block Union Heights Condominium at Overseas Union Garden, Jalan Kelang Lama; Taman Batu Uban II low-cost flats, the 17-storey MWE Plaza at Lebuh Farquhar, Penang; City Gardens Luxury Condominium in Kuala Lumpur, Sri Bintang Heights shopoffices in Kepong and Taman Kristal II terraced homes in Dengkil, Sepang. MWE Holdings also developed Monterez Golf & Country Club in Shah Alam, a mixed development not unlike the upscale Tropicana Golf & Country Resort by Dijaya Corp Bhd. The group is involved in electronics, plantation, leisure,  heavy and commercial vehicle assembly and distribution,  garment manufacturing, property development and corporate services. Ling has over two decades of experience in the construction sector, starting in the late 1980s with a company that supplies building materials. The six families had orginally planned to move into the bungalows when they were ready, but they had a change of heart when enquiries and offers from interested buyers came pouring in. The group recognised the commercial potential and seeing it as an opportunity not to be missed, they agreed to sell the homes instead. The First 6 @ Damansara is now being sold as a boutique development. The strata bungalows share a swimming pool, basement parking and an approximately 30,000 sq ft compound. “During construction (1½ years ago), we received 30 to 40 enquiries, mostly from expatriates, though there were some locals,” Lee says. The bungalows are currently awaiting the certificate of fitness (CF). By virtue of its location, ensconced among older bungalows in the established, blue-ribbon Damansara Heights neighbourhood — the domain of well-heeled Malaysians and expatriates — The First 6 @ Damansara offers peace, quiet and convenience. It is far enough away from the bustle of the busy town centre, yet close enough to numerous amenities, like trendy restaurants and shopping complexes such as Bangsar Shopping Centre, Bangsar Village and Mid Valley Megamall. The built-ups of each unit range from 7,068 sq ft to 7,805 sq ft. Each bungalow will have 24-hour security and a basement level which is accessible through the shared car park, a lift, five plus two bedrooms and seven bathrooms, quarters for live-in domestic help as well as an outdoor deck on the third floor. With some slick manoeuvring, the basement-level car park can hold up to 30 cars, says Ling. Always with the thought of maintaining family ties, the bungalows have been designed to meet the needs of both young and old in a family. They are designed for comfort and convenience. “Actually, this project is perfect for those with one or two kids. We [may] want [our] children to be near to us, or we want to be near to our children. That’s why we [installed] the lift, for the convenience of elderly parents and so that you don’t have to squeeze [your parents] into a small room downstairs just because they can’t use the stairs,” he says. “[It’s] just a normal family house with a small maid’s room downstairs.” One that comes with a price tag of at least RM8.3 million, or about RM1,200 psf. He says: “Of course, we hope we can get en bloc sales — we might even sell cheaper to extended families. The parents, for instance, may want to live in one house and the son and his family in another.” The lifts are an especially useful feature, not only for elderly parents but for pregnant women or other emergencies, he says, speaking from experience. An incident in his past spurred him to incorporate lifts into the bungalows. His father had to carry his uncle down one floor after the latter suffered a heart attack. “My father had to tie a belt around his waist to strengthen his back to carry him down,” he says. “And at the basement level with the cars, there is a big room with enough space for a kitchenette which could be used for a disabled person. It’s very well thought out,” he says. With the entire area wired up for Internet connectivity, Ling says younger families could use the basement space as a home office, instead of purchasing a small office/home office (SoHo) suite, as working from home gains popularity. He aims to launch the project in the second week of August, but it seems that some real estate agents have beaten him to the punch with listings appearing online around June. Ling, who emphasises his personal preference for landed properties throughout the interview, says the prices are comparable to other high-rise developments in the neighbourhood such as the upscale One Menerung residential highrise by Bandar Raya Developments Bhd on the fringe of Bangsar. In 2008, L&H Property Development Sdn Bhd unveiled Anggun, a boutique development comprising six three-storey bungalows resting on a sloping, acre-wide plot of land along Jalan Dungun. Two units of this development share the same entrance and exit while the remaining four units are accessible via a second entrance. With built-ups ranging from 5,800 sq ft to 9,300 sq ft, the bungalows were priced at RM5.8 million to RM9.3 million. A real estate agent who handles residential properties in Damansara Heights says a traditional bungalow in good condition on the secondary market along Jalan Setiakasih, roughly two kilometres away from Jalan Chempenai, can fetch anywhere from RM666 to RM750 psf. Another agent cited a freehold, linked terraced home in a guarded community along Jalan Beringin, about a kilometre away from Jalan Chempenai, going for about RM900 psf. Going forward, Ling plans to build more such developments as he believes there is a market for them. He is already hunting for little pockets of land in the Damansara area and Ukay Heights in Ampang, due to their exclusivity,  convenience and potential for appreciation . “I believe you should be able to choose your neighbours,” he says. Ling expects future strata bungalows in Ukay Heights to be greener as he intends to keep most of the flora intact. This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 816, July 26-Aug 1, 2010   

https://theedgemalaysia.com/node/77070

REITs a stable security

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Malaysia REITsMaintain overweight: Real estate investment trusts (REITs) should continue to provide safe refuge amid the tumultuous market expected in an election year. Retail spending should get a boost from the government’s pro-spending measures. This year is a great opportunity for REITs to raise rentals as tenancies expire. We remain “overweight” on REITs as they still offer attractive dividend yields. Our top pick is Sunway REIT. The retail REITs could benefit from various government measures to boost the disposable incomes of Malaysians. Another round of RM500 in cash aid for low-income households, a 7% to 13% pay rise for civil servants, the implementation of a minimum wage and the “feel-good” factor prior to the general election should spur consumption. The lease expiry profiles of IGB REIT, Pavilion REIT and Sunway REIT have a large percentage of tenancies expiring in 2013. Malls (like The Gardens Mall and Pavilion KL) entering their second round of tenancy renewal cycle would have a stronger bargaining power as they had proven successful in attracting the crowds. — CIMB Research, Jan 10 This article first appeared in The Edge Financial Daily, on Jan 11, 2013.

https://theedgemalaysia.com/node/69421

MIDF Research maintains Positive on oil & gas sector

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KUALA LUMPUR (Sept 21): MIDF Research has maintained its Positive stance on the oil and gas sector and said that Malaysia was currently ranked the world’s 14th largest in natural gas and 23rd largest in crude oil reserves. In a note Friday, the research house said the state of Sabah alone held 14% of Malaysia’s gas reserves (approx. 12.7tcf) and 30% of its crude oil reserves (approx. 1.5 billion barrels). Hence, Sabah is ripe with opportunities for exploration and production (E&P) activities which will in turn produce knock-on effects which will spur the oil and gas services industry, it said. MIDF Research said that Petronas had repeatedly stressed on the fact that deepwater exploration was the way forward for Malaysia’s future as an oil producing nation. Sabah has nine major deepwater blocks which are still not fully explored. Of these, only Kikeh and Gumusut-Kakap fields had actually produced with the latter hit its first oil earlier this month, it said. “We continue to reiterate our Positive stance on the oil and gas sector based on (i) renewed confidence that proposed projects which were announced way back will be awarded, (ii) major fields will hit first oil/gas soon, (iii) the slurry of HUC and EPC jobs will continue, and (iv) Petronas will continue to play its role in facilitating E&P activities further, deeper and harder. “Our top Buyss are Dialog (BUY @ RM2.80), SapuraKencana (BUY @ RM2.74) and Wah Seong (BUY @ RM2.13),” it said.

https://theedgemalaysia.com/node/49130

New Listing: Kanger is “confident” of main board transfer in 2-3 years

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KUALA LUMPUR (Dec 23): Leng Xingmin, managing director of Kanger International Bhd, said today that he is “100% confident” that this newly-listed company will be transferred to the main board of Bursa Malaysia in two to three years. The bamboo flooring manufacturer, at its maiden trading day today, saw an opening price of 39 sen after fetching a 14 sen premium over its IPO price of 25 sen. The listing of the China-based firm was the first foreign listing for the ACE Market of the local bourse this year, according to Bursa Malaysia. Its share, which began trading at 39 sen this morning, had shot up to a high of 41 sen or a gain of 64% in morning trades. The top active ended at 33 sen on trades of some 49.8 million shares at 12.30 pm lunch break. Leng, managing director of Kanger, said at the official listing ceremony the opening price of 39 sen is “not as great” as what he was looking at. Kenanga Investment Bank has given a fair value of 27.5 sen to 36.5 sen for the stock, but believes that the share price performance could be greater as it had an oversubscription of 60.6 times. Alliance Research, though did not give a specific target price, believes that there is limited upside on the stock, as its valuation seems expensive compared to its direct peer, Nature Flooring. Christopher Goy, corporate adviser of Kanger, said at the listing ceremony that the group had looked to a listing in Malaysia due to the abundant untapped bamboo resources in the country and the group’s joint venture with Forest Research Institute Malaysia (FRIM). The collaboration of Kanger and FRIM mainly consists of research on the Malaysian bamboo species to determine whether it is suitable for structural and non-structural applications. “Currently, we do not have any outlet in Malaysia, as it is purely a research & development (R&D) collaboration with FRIM,” said Goy. Looking forward, the group expects to expand their line of flooring products through the purchasing of new machineries, which will be funded by the proceeds from the IPO. Kanger also plans to increase the number of its dealerships by 50% in 2014 in order to strengthen its presence in China. In Malaysia, the group would expand throughout the country after the completion of its R&D with FRIM, which is forecast to be in two years’ time. Kenanga Investment Bank expects strong revenues from the group for 2013 and 2014 of RM71.6 million and RM92.8 million respectively. For the nine months to September 2013, Kanger posted a net profit of RM4.6 million and revenue of RM33.4 million, according to its filing with Bursa. Its net asset per share was 11 sen at end-September 2013.

https://theedgemalaysia.com/node/42571

Gold futures higher on single month trade

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KUALA LUMPUR (Jan 2): Gold futures contracts opened higher on Bursa Malaysia Derivatives today with only one contract month traded. As at 9.20 am, January 2014 gained 24 ticks to RM128.20 a gramme. Turnover stood at eight lots while open interest was at 726 contracts.

https://theedgemalaysia.com/node/82906

Salcon bags two projects worth RM13m

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Salcon Bhd(April 9, 54.5 sen) Maintain add at 54 sen with a revised target price of 55 sen (from 49 sen): Salcon Bhd has announced that Envitech Sdn Bhd, a 60% owned unit of Salcon Engineering Bhd which in turn is a wholly owned subsidiary of the company, had accepted two awards. The first, awarded by Lebar Daun Development Sdn Bhd (LDD) is for carrying out upgrading works on the Sam 048 pump station at a proposed housing and commercial development located in Section 13, Shah Alam. The second, awarded by Temasya Development Co Sdn Bhd (TDC), is for carrying out upgrading works on the Sam 043 sewage treatment plant at Temasya Glenmarie in Section U1, Shah Alam. The contracts are valued at RM3.5 million and RM9.9 million respectively. The contract duration for the LDD project is about six months commencing April 23, 2013 while it is 15 months for the TDC project, commencing April 16, 2013. The contracts are expected to contribute positively to group earnings based on annual contract billings of approximately RM8.8 million and RM4.6 million in 2013 financial year (FY13) and FY14 respectively. With the two contracts, Salcon’s current order book is estimated at approximately RM1.5 billion, with RM415 million unbilled for the next three years. With these new contracts, construction billings for FY13 would increase to approximately RM170 million, slightly above our forecast of RM150 million. Based on a pre-tax margin of 10%, profit after tax contribution is estimated at RM1 million, an amount which will help mitigate further operating losses for the construction division. We maintain our FY13 to FY15 forecasts pending more contract wins as well as further progress on the group’s venture into property development. Revised net asset value (RNAV) estimate is raised to 61 sen from 58 sen after taking into account Salcon’s property development in Selayang, Selangor, comprising shop/office units and small office home office (SoHo) units. New property development ventures (including the Johor Baru Festival Mall) and concessions will add further to its RNAV estimate. With the improved outlook from recent new contract wins, discount to RNAV is cut to 10% from 15%. Accordingly, target price is raised to 55 sen from 49 sen. Maintain “add”. — Affin IB Research, April 9 This article first appeared in The Edge Financial Daily, on April 10, 2013.

https://theedgemalaysia.com/node/54499

#Update* KLK to invest RM706m in downstream

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KUALA LUMPUR: Kuala Lumpur Kepong Bhd is to invest RM706 million to develop the palm oil downstream sector which would involve four projects. Prime Minister Datuk Seri Najib Tun Razak said on Thursday, Sept 8 the first project was an integrated methyl ester sulphonate and fatty alcohol plant involving investment of RM480 million. The second project is a plant to produce specialty fatty ester while the third project in a plant to produce high grade tocotrienol and isomers. The fourth project is to development a world class research and development centre. Speaking at the Economic Transformation Programme (ETP) update on Thursday, Sept 8, Najib said the initiative was to push Malaysia up the value chain from upstream (production) to downstream. This involved producing oleo-derivatives with a much higher profit margin. The Malaysian Palm Oil Board had approved a RM134 million grant for KLK to set up three production plants which would use excess capacity of basic oleo chemicals to venture further downstream. The investment of RM706m million would result in a gross national income (GNI) impact of RM1.15 billion by 2020 and about 205 jobs would be created. KLK chief executive officer Tan Sri Lee Oi Han said the government transformation programme provided KLK a ready platform to further accelerate the realisation of its vision to integrate forward into more specialised derivatives and to optimise the value extraction in the whole chain.

https://theedgemalaysia.com/node/91181

Highlight: Karpal: Amend constitution to end unilateral conversions for good

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KUALA LUMPUR (July 4): Veteran DAP parliamentarian Karpal Singh today called on Putrajaya to amend the Federal Constitution in order to end the current imbroglio over the unilateral conversion of minors.

https://theedgemalaysia.com/node/36185

OSK Research maintains Buy on Kulim

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KUALA LUMPUR: OSK Research is maintaining its Buy call on Kulim Bhd with a a target price of RM10.30. It said on Wednesday, Sept 1 that Kulim’s 1HFY10 core earnings at RM96.8 million were below its full-year forecast at RM269.6m as its oleochemical segment swung from an EBIT of RM17.9 million in 1Q to a loss of RM18.6 million in 2Q ended June 30, 2010. “While the 2Q results were weighed down by a turn for the worse at the oleochemical division, Kulim is in the process of completing its sale, which should no longer be a drag from 4Q onwards,” it said in a research note. OSK Research the stock is trading at a very cheap valuation of 11.1 times FY10 and 9.6 times FY11 earnings compared to its peers’ at 17 times to 20 times forward earnings. It said this is especially so considering the quality of Kulim’s assets and its industry-leading sustainable palm oil practices.

https://theedgemalaysia.com/node/67728

#Film* Steve Coogan brings comic relief to a sorrowful story

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WHEN British comedic actor Steve Coogan first read the mournful story behind his new film Philomena in a newspaper, he noticed that the two people in the accompanying picture were laughing. The photo showed Philomena Lee, an elderly Irish woman looking for the son she was forced to give up as a teenage girl, and former BBC journalist Martin Sixsmith who had accompanied her on her search and written a book about it in 2009. The photograph “struck me as being at odds with the tragic nature of the story”, says Coogan. “I wondered if I could tell a story like this, a tragic and moving story, and find the way to make people smile at the same time.” That musing led Coogan to co-write, co-produce and co-star as Sixsmith in Philomena, opposite veteran British actress Dame Judi Dench in the title role. The film is directed by Britain’s Stephen Frears. The film is a step up in the serious department for a man whose name alone makes people chuckle in Britain. There he is best known as Alan Partridge, the buffoonish and politically incorrect regional BBC broadcaster he portrays to parody TV talk shows and commentators. But Coogan, 48, says the intersection of drama and comedy was a natural place for him to make a film. “I don’t like the notion that you either have a drama or a serious movie that is taxing and a comedy that is light thing that you don’t have to think about,” Coogan says. His goal: that the audience thinks about something real and important, has a “nice time” and feels “uplifted at the end of the story”. As it happens, Coogan’s deadpan delivery suits the Martin Sixsmith character well. He is portrayed as a world-weary former foreign correspondent for the BBC, fired from a high-profile job in the British government and wary of stories that come under the “human interest” label. When he meets Philomena, Martin cracks a few jokes that are lost on the plain-speaking, grounded and religious woman. But he agrees to help her find her long-lost son, beginning at the Irish Catholic convent where as a teenage girl she gave birth to an illegitimate son who was given up by the nuns for adoption to a US couple, a fate suffered by many girls in 1950s Ireland. They then set off to the US, where the disparity between Philomena’s humble background and Martin’s worldliness is magnified by the foreign locale. But Philomena is undeterred by Martin’s jaded ways. “I wanted to show Martin not as a cynic but as someone whose heart is moral and has real values but they have been worn down,” says Coogan. “And Philomena helps him discover those.” While Philomena is more accepting of the fate that befell her, Martin is outraged at the cruelty the girls suffered at the hands of the nuns and the Church, which tried to cover up the adoption scheme. Together, they become a formidable team. One of Britain’s leading actors, the 78-year-old Dench has garnered critical acclaim for her portrayal of Philomena and is considered a front-runner for a best actress Oscar nomination. Coogan says that Dench was so good at morphing into character that on set he would only see Philomena, “this slightly eccentric old Irish lady”. “Between takes I would make her laugh and joke,” he adds. “It was only at the end of the day when they took the makeup off and transformed her back into Judi Dench that I would suddenly have a reality check and realise that I had spent the day with this icon.” As for his next moves, Coogan says there will be comedy but not too much. He wants to work more in the comedy-in-drama vein and keep writing, calling the Philomena writing experience “a little revelation” that often made him emotional. “If you do comedy constantly it is always going to be diminishing returns,” he said. “You need to be judicious with comedy. You need to save up all the funnies and then do them and walk away. Otherwise, you are going to end up on a treadmill.” — Reuters This article first appeared in The Edge Financial Daily, on November 25, 2013.

https://theedgemalaysia.com/node/62747

Water dispute stalls Labu dam

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KUALA LUMPUR: The recently built Labu water treatment plant and dam in Negri Sembilan could turn into a RM168 million white elephant if the federal and Selangor governments do not resolve their dispute over water assets in the state, sources say. The Edge Financial Daily understands that the state government has refused the federal government extraction rights, connecting the treatment plant to the water pipes, which fall under the state’s domain. The state wants the operation and maintenance of the plant but the federal government is opposed to this.   “It is at a standstill, it cost a lot of money to build, now it’s not being utilised... it can only be utilised if the two governments get their act together,” said one of the sources.   Work on the dam and 110 million litre a day water treatment plant form part of the Kuala Lumpur International Airport (KLIA) alternative water supply scheme, on which construction began in July 2010 and was completed recently. The dam and water treatment plant were slated to shore up water supply to areas such as Salak Tinggi, Bukit Tampoi, Semenyih and the vicinity. The contract for the building of the water treatment plant and dam was awarded to Salcon Engineering Bhd, a wholly owned unit of water player Salcon Bhd, and is believed to have cost RM88 million. However, Salcon’s job scope only involves the designing, procurement, construction, installation, commissioning, operation and maintenance, training and handover.   Sources familiar with the water sector said the dam cost an additional RM80 million to build. However, it is not clear who built it. Tan Sri Rozali Ismail declined to comment on the issue. He has 41.2% equity interest in Puncak Niaga Holdings Bhd. Puncak has 70% equity interest in Syarikat Bekalan Air Selangor Sdn Bhd (Syabas). Syabas has the mandate to supply treated water to Kuala Lumpur, Selangor and the federal capital Putrajaya. Rozali did say that there are problems with water supply in certain areas, and he will meet with the Federation of Malaysian Manufacturers and the Real Estate and Housing Developers Association of Malaysia to advise them on where water pressure is low or not available. “There are some areas in the Klang Valley that cannot be developed as a result of low water pressure. There are some new areas which have been developed that I cannot supply water. I will be holding a press conference soon,” was all he offered. Rozali, who is said to be close to the ruling Barisan Nasional coalition, has been at loggerheads with the Pakatan Rakyat state government since 2009. The state opposed a 37% tariff hike for Syabas which was slated to kick in from January 2009. Selangor has attempted to revoke Syabas’ concession, stating that there have been breaches of key terms, as the non-revenue water targets are not being met. Rozali and Syabas have sued for compensation but the state is fighting the claims.  has been sustained by soft loans from the federal government. For FY11, Puncak posted a net profit of RM9.32 million on the back of RM2.59 billion in revenue. In FY10, it suffered a net loss of RM72.34 million from RM2.12 billion in sales. In the notes accompanying its financials, Puncak said the marginal profit in FY11 was attributable to higher revenue and profit from a rural water supply project. As at end December last year the company had cash and bank balances of RM1.27 billion and long-term debt amounting to RM5.04 billion and short-term borrowings amounting to RM471.17 million.   Puncak gained 12 sen to close at RM1.47 last Friday. This article appeared in The Edge Financial Daily, March 5, 2012.

https://theedgemalaysia.com/node/5780

Moody's negative on China property developers

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KUALA LUMPUR: Moody's Investors Service has a negative outlook for China's property development sector over the next 12-18 months. “China's rated property developers still face critical challenges in the near and medium term despite a revival in property sales at the start of 2009,” it said. The report's author and a Moody's analyst Kaven Tsang said property prices remained under pressure and inventories of unsold properties were still high so the recent improvement in sales volumes may not be sustainable. "Issuers' balance-sheet liquidity and financial profiles continue to be weak, particularly for those developers still exposed to some large land payments coming due this year," he said. On servicing debts in 2009 and 2010, he said a number of rated property developers in China had higher refinancing needs, particularly for their offshore debt. Moody's senior credit officer and co-author Peter Choy said there were some mitigating factors, citing the Chinese government's loosening of credit to combat the global financial crisis. He added the credit-loosening policy had improved onshore market liquidity and lowered interest rates while relaxed mortgage lending for second-home buyers has also spurred demand. However, Choy conceded offshore sources of funds from international bond markets or foreign banks remained shut. He also noted that worsening balance-sheet liquidity among issuers has resulted in negative rating actions for more than half of Moody's rated portfolio over the past six months. "The high degree of domestic borrowing by developers not only raises subordination risk for bondholders, but also reduces the headroom under the debt-incurrence covenant,” he said. "Our scenario analysis of financing needs and access to funding identifies certain vulnerable issuers, rated mostly in the Caa or low-B range, and several of these are highly exposed, with significant amounts of offshore debt coming due in the next six to 12 months."

https://theedgemalaysia.com/node/6243

#Comment* China’s attack on yuan speculators risks backfiring

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CHINA’S central bank rattled speculators this week by engineering a sudden fall in the yuan against the dollar, but economists warn that induced downside risk was no substitute for true liberalisation in the currency market. Unless the central bank takes bolder steps toward allowing the market to determine the exchange rate, traders believe the correction could do little more than present speculators with a fresh buying opportunity. Beijing has committed to letting the market determine the yuan’s true value, part of a wider project to encourage international usage of the currency to rival the dollar. The yuan’s orchestrated reversal also has unleashed speculation that the central bank is preparing to widen the currency’s daily trading band, currently set at 1% either side of a daily midpoint fixed by central bank. But even if the band is widened, traders doubt whether it can hold the yuan back from strengthening further, given the enduring ability of Chinese assets to attract capital inflows. Since Jan 13, the spot yuan has undergone an unprecedented fall of more than 1.5%, guided downward by the central bank with the help of major state-owned banks, which traders say were selling off yuan at the central bank’s behest. Wang Jun, senior economist at the China Centre for International Economic Exchanges, a well-connected think tank in Beijing, told Reuters that the central bank had to deliver a clear message to speculators. “It needs to tell the market, ‘No more one-way rise for the yuan,’ and introduce two-way fluctuations in the rate like other major currencies have,”’ Wang said. The country’s foreign exchange regulator attempted to soothe markets on Wednesday afternoon, saying that the adjustment was “normal. As a relatively low-risk, high-yield currency that has gained over 35% against the dollar since it was revaluated in 2005, the yuan remains a favourite among international investors. The Greek debt crisis in early 2012 did provoke a brief swoon that saw the currency lose 1.6% in six months, but it began to recover to gain as much as 5.5% by mid-January. In reaction to this inexorable rally, speculators onshore and off built huge long yuan positions on assumption that the bull party would run and run. Most economists expect the trend to continue this year, unless the yuan enters an extended decline. The People’s Bank of China (PBOC) has attempted to deter yuan bulls in the past, but seldom achieved much success. Most economists and traders still expect the yuan to appreciate between 2% to 3% this year, even given recent developments. GaveKal/Dragonomics research house economists Chen Long and Arthur Kroeber argued in a report titled “No, the Renminbi Is Not Tanking” that the PBOC’s short-term goal is to mislead speculators into thinking the era of yuan appreciation is over, panicking them into liquidating long positions at a loss. “Some observers have leapt to the conclusion that Beijing is spooked by slower economic growth and the recent sharp devaluations by emerging-market competitors, and now wants to drive the currency lower to keep its exports competitive,” they wrote. “We don’t buy it.” While most agree that widening the band would be a positive incremental step toward further reform, by itself it cannot introduce genuine downside risk so long as the PBOC and its allies at the major state-owned banks continue to meddle. Indeed, when the PBOC widened the yuan’s trading band from 0.5% to 1% in April 2012, the market confounded expectations by becoming less, rather than more, volatile. That’s because the central bank continued to use the daily midpoint to restrain appreciation, setting it so that the spot rate remained on a tight leash. In reaction, traders refused to do business anywhere near the midpoint and simply waited for the PBOC to cave in and let the yuan rise again — a bet that has consistently paid off until recently said the head of FX trading at a European Bank in Hong Kong. “What is needed is a more market-determined exchange rate,” he said. — Reuters This article first appeared in The Edge Financial Daily, on February 28, 2014.

https://theedgemalaysia.com/node/55465

Highlight: Controversial land deal

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KUALA LUMPUR: A company owned by an executive with links to former Metroplex Bhd’s major shareholders has taken control of some 100 acres (40.46ha) of land at the foot of Genting Highlands after a controversial court convened meeting of scheme creditors last Friday. The company Hana Bestari Sdn Bhd, with Robert Ti as director and major shareholder, has obtained the required approval for the scheme. The land purchasers are compensated at 40 sen per sq ft (psf) for their respective parcels of land, which they acquired 20 years ago at RM4 psf. Surprisingly, among the land purchasers, a major supporter of Hana Bestari’s proposal is Konsortium Enterprises (M) Sdn Bhd, which is controlled by Lim Siew Kim, daughter of the late tycoon Tan Sri Lim Goh Tong. Ti was aligned to Lim in his capacity as a financial adviser, when the latter was up against Sunway REIT in the fight for the Putra Place property in 2011. The 100 acres at the foot of Genting were owned by Peninsular Park Sdn Bhd, a 75% subsidiary of Metroplex. Peninsular Park has sold 190 lots of land since 1993 for a project that is to be developed as a farmstead. The land was charged to Alliance Bank but the project did not take off. In June 2012, the project was due to be auctioned off but Hana Bestari stepped in to settle with Alliance Bank and a vulture fund for the RM72 million debt. In return, Hana Bestari took over the assets and the scheme creditors. In a circular to the scheme creditors issued on Nov 18, Hana Bestari offered to compensate the land purchasers, who are the scheme creditors, 10% of the purchase consideration. This worked out to about 40 sen psf but some land owners contended the land was acquired at RM4 psf in 1993. According to officials, Hana Bestari managed to get the necessary shareholder approval to push the scheme through, largely with the support of Konsortium Enterprise that owns 41 of the 190 lots. This comes as a surprise as Lim is known to be a person who will not easily dispose of assets at a cheap price. For instance, when Sunway REIT won the auction for Putra Place in 2011, Metroplex, which is controlled by Lim, did not easily give up. Metroplex filed for legal action to stop Sunway from taking possession of Putra Place but could not prevent the takeover of the property. In this present land deal, Konsortium Enterprise owns 41 of the 190 lots of land, according to the circular issued to the scheme creditors. Of the total price of RM3.91 million for the 41 lots under the sale and purchase agreement (SPA), Konsortium Enterprise had paid RM4.4 million, which was above the full purchase price. This had raised questions in the court-convened meeting on the amount which was overpaid. “I suspect something is not right. How could it be that their [Konsortium Enterprise] lots have received a more advanced completion, when the rest of the land purchasers have not?” said a land purchaser. The other purchasers said they have only paid 50% of the SPA price so far, as the development schedule in the SPA has not been completed. The meeting saw some controversy as a group of eight land purchasers who had placed private caveats on their lots were not allowed to attend the scheme creditors meeting. As Konsortium Enterprise owns a majority in value of the lots of land, Hana Bestari managed to obtain more than 50% approval, representing a 75% value of each class of scheme creditors present at the meeting. “Had the eight land purchasers been allowed to vote, the value of votes would have been less than 75%, and the result would have been different,” said one of the voters. The majority of the land purchasers said they will challenge the decision in court, as the scheme manager will have to file the deal with the court and have it approved or recognised before it becomes official and binds all the purchasers. The purchasers want their land parcels back because the values have gone up. This article first appeared in The Edge Financial Daily, on December 16, 2013.

https://theedgemalaysia.com/node/89677

Budget 2014: Promote 'one family, one home' policy - real estate group

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Last Updated: 12:14pm, Oct 17, 2013 PETALING JAYA (OCT 17): Housing sector policies must address the pressing need for affordable housing, a real estate professionals' group says in its wish list for Budget 2014. To achieve this, the government must promote a home ownership economy for every family to own a house, said the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector, Malaysia, which is known by its Malay acronym PEPS. This was among a raft of proposals put forward by the association in its wish list released today. These include requesting government institutions to free up their surplus land for affordable housing, measures to mitigate a property bubble and various other measures to protect the interests of people who should be eligible for affordable housing. The full details of the PEPS wish list can be read here. For more stories, go to www.fz.com, the website for freedom of expression and fairness in articulation.

https://theedgemalaysia.com/node/16538

Mah Sing to build up landbank

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KUALA LUMPUR (May 31): Mah Sing Group Bhd is scouting the Klang Valley, Penang, Sabah and Iskandar Malaysia, Johor in search of land to boost its landbank. Group managing director and CEO Tan Sri Leong Hoy Kum said the group has achieved 73% of the RM5 billion gross development value (GDV) planned for this year. Its current landbank is more than 1,500 acres (600ha). "There are still seven months to go this year so we need to lock in more land. The land must also fit into our business model," said Leong, adding that Mah Sing wants to maintain the lead position in the property market. The property group may acquire land via joint ventures (JVs) with landowners or participation in government land privatisation. Mah Sing has 39 ongoing projects in various stages from planning to mature. It has a GDV of RM18.2 billion, of which 98% is unbilled sales. As at May 15, the group achieved property sales of RM1 billion or 40% of its 2012 sales target. Properties in greater KL contributed 82% to sales, followed by Johor Baru with 10% and the rest from Penang. Leong said the projects are in well-placed locations and can sustain the company's earnings for the next eight years. "We deliver the right products coupled with strong branding and a good track record. I would say we are doing the right thing and will continue to do the right thing," he said. Leong said Mah Sing will continue to focus on mass market property worth below RM1 million, such as link houses, and landed property of above RM1 million in good locations, such as its bungalows and semi-detached units in Cyberjaya. Asked if the group has plans to expand overseas, Leong said the focus remains in Malaysia as it is doing well but it will continue to explore. "We are cautious but will not stop exploring. When the right time comes, then we will decide," he said. For 1QFY12 ended March 31, the group posted RM457.8 million in revenue and RM59.9 million in net profit. Commenting on property prices in the Klang Valley, Leong said prices are holding well. "Only selected places in the Klang Valley would do well and appreciate more. This year house prices should maintain," he said, adding that the group's projects in Rawang and Bangi, M Residences and Southville City are expected to do well. Mah Sing is also looking to lock in more land in Iskandar Malaysia, Johor where it has one industrial and four residential projects. "Iskandar region is well-positioned. Most of the products should be able to attract buyers from Singapore. It is definitely the next destination to invest in for foreigners and locals," he said. He expects its industrial project Mah Sing Hi-Park there  to do well due to its close proximity to the Port of Tanjung Pelepas. Mah Sing's new launches have not been severely affected by tighter home loan requirements by Bank Negara Malaysia. Its Garden Plaza project in Penang has a take-up rate of 70% for Tower 1 and 65% for Tower 2, while the land in Rawang it acquired last October has locked in RM81 million in sales. "Malaysia has a young population and high savings rate. And the banks still give competitive rates. Our market is actually targeting first-time buyers and up-graders. That segment is not affected," said Mah Sing executive director Steven Ng. Leong said the group intends to target the foreign buyers, who make up about 5% to 10% of its clients. It has set up an office in Shanghai and will be setting up offices in Jakarta, Singapore and the UK to attract investors, especially through the Malaysia My Second Home programme. This story appeared in The Edge Financial Daily on May 31, 2012.