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https://theedgemalaysia.com/node/90825

#Stocks To Watch* Bumi Armada, TA, MBSB, Aeon Credit, AMMB, CPIB, Luster, Eastland, Compugates.

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KUALA LUMPUR (July 5): Based on news flow and corporate announcements today, companies that may attract interest on July 8 could include Bumi Armada, TA Enterprise, MBSB, Aeon Credit, AMMB, CPIB, Luster, Eastland and Compugates. Bumi Armada Bhd announced that BAC LLC, its unit, has entered into a supplementary agreement to the existing contract with OOO LUKOIL-Nizhnevolzhskneft for an additional EPIC works (40 km of additional pipelines) on a lump sum basis. The total price payable for the additional EPIC works is RM567.6 million (USD178.5 million), Armanda said in a filing with Bursa Malaysia. LUKOIL is a major international oil and gas company and one of the biggest Russian oil business groups. These additional works are expected to contribute positively to the revenue and earnings of Bumi Armada for the financial year ending 31 December 2013 and the financial periods thereafter, the company said. TA Enterprise Bhd managing director Datin Alician Tiah declared today the company is not selling its stockbroking business as speculated in the market. "Definitely, there have been a lot of interests shown by different companies and a lot of informal overtures have been made. But no, it's not true (we are going to sell TA Securities)," said Datin Alicia Tiah. As the share price of TA Enterprise has run up in the past one month, it may come under pressure after Tiah denied the rumour openly. Speaking to the media after the annual general meetings of TA Enterprise and TA Global Bhd, Tiah noted the company had issued a statement to the stock exchange on June 11 to dispel the rumours. However, Tiah said she would definitely consider divesting TA's stockbroking business if she was offered with a price that "I cannot resist". A company insider told this writer that the company is open to selling TA Securities. It is only a matter of setting an attractive price. Malaysia Building Society Bhd (MBSB), Aeon Credit Services Bhd and other financial institutions which have plans to give out loans with long tenures may be hit by the latest guidelines implemented by Bank Negara Malaysia (BNM) today. In a statement, BNM announced the implementation of a new set of measures aimed at curbing excessive household indebtedness and to reinforce lending practices by key credit providers. These measures, to take effect immediately, are: * Maximum tenure of 10 years for financing extended for personal use; * Maximum tenure of 35 years for financing granted for the purchase of residential and non-residential properties; * Prohibition on the offering of pre-approval personal financing products. These measures apply to banks and development financial institutions under the regulatory oversight of the central bank. AMMB Holdings Bhd announced that its subsidiary, AmBank, has obtained the approval of the Securities Commission to set up a Euro Medium Term Notes Programme of up to US$2.0 billion. “The net proceeds from the proposed Programme of up to US$2.0 billion in nominal value will be utilised by AmBank for its working capital, general funding requirement and other corporate purposes,” AMMB said in its filing with Bursa. The programme is not expected to have any material effect on the earnings of AMMB, it said. CB Industrial Product Holding Bhd (CBIP) announced that AVP Engineering (M) Sdn Bhd, a 51% owned subsidiary, has received a job award from the Ministry of Housing and Local Government Malaysia. The award is to install and commission 100 units of 4x2 Prime Mover vehicle attached with water tank trailer, engine and fire fighting equipment to the Fire and Rescue Department of Malaysia. The company informed Bursa that the award is expected to contribute positively to the earnings of CBIP for the financial years ending 31 December 2013, 2014 and 2015. However, no sum was mentioned about the award in the filing by CBIP. Luster Industries Bhd, which has been one of the top active stocks in recent weeks, informed Bursa that its substantial shareholder Wee Siew Heng had disposed of 21.51 million shares on June 28. As a result of his shareholding falling below 5%, he is no longer a substantial shareholder. The share of Luster had risen on misguided reports in May through to June. It only began to fall after hitting a high of 24 sen on June 17 when all rumoured positive news did not materialise. It ended flat at 10.5 sen today. Luster is involved in the manufacture of high precision plastic parts and components. Its share price had also rallied on speculations that a company linked to Tan Sri Syed Mokhtar Al Bukhary could possibly be Luster Industries Bhd's technical partner in the Kuala Muda port development project. Eastland Equity Bhd, which was slapped with a UMA (unusual market activity) query by Bursa Malaysia for its sudden and sharp surge in share price today, replied to the stock exchange that it had held negotiations with several parties to jointly develop a piece of land in Kota Bahru, Kelantan. In addition, the company also plans to undertake a private placement. At market close today, Eastland share rose 30.5 sen or 57% to end at 84 sen. Earlier in morning trades, it hit limit up on thin trades. Compugates Holdings Bhd informed Bursa that its unit Compugates Sdn Bhd has been appointed by YTL Digital Sdn Bhd as a distributor to market, distribute and provide distribution of Yes Products and related devices for dealers within Peninsular Malaysia. The appointment is for a period of two years from 1 July 2013, which may be extended for one year. The appointment is expected to contribute positively to Compugates’ earnings for the financial year ending 31 December 2013, the company said.

https://theedgemalaysia.com/node/91352

Danger of projects bypassing local authorities

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GEORGE TOWN (July 8): Not unexpectedly, the issue of the fatal collapse of a rooftop structure from Menara Umno here became a recurring topic of concern in the current meeting of the Penang state assembly. While most assembly members expressed sympathy for the victims, several felt troubled by a crucial matter of principle in the whole affair – that the building's construction took place even before its plans were submitted to or approved by the Penang Island Municipal Council (MPPP). In this light, the anxiety has grown into the bigger question of how a local government can rein in development projects that take place without the approval of the local government. This is especially true for many federal projects, including those by the government and by government-linked companies (GLCs) that were implemented without approval from local authorities. The issue is worrying, not least because it raises the serious question of legal responsibility in ensuring the building is safe and sound – particularly as the project's implementation circumvents scrutiny from the main local authority. "This issue is not about playing politics. It is about people's safety," RSN Rayer, the DAP assembly member for Seri Delima, pointed out. The Menara Umno disaster The issue erupted when it was revealed last month that the MPPP had on Dec 23, 1995, issued a special permit to the Menara Umno contractor – two years before the first plan was submitted on July 31, 1997. Inevitably, fingers pointed at the former Barisan Nasional-controlled state government for allowing the construction of the 21-storey building to commence in such a way. Questions were raised about structural safety and design of the building. The portion that collapsed during the incident on June 13 was a 38-metre vertical concrete beam and a 58-metre metallic pole attached to it. Weighing more than 150 tonnes, their collective impact left a deep crater on MacAlister Road, crushing two people to death. Tanjung MP Ng Wei Aik quoted a letter by then Chief Minister Tan Sri Dr Koh Tsu Koon to MPPP president (Datuk) Dr Teng Hock Nan, asking why there had been a delay in completing the project. Koh reportedly said he had to report the matter to Datuk Seri Anwar Ibrahim, who was then deputy prime minister and Penang Umno chief. Anwar, who ironically enough today leads the opposing political camp of Pakatan Rakyat, has brushed aside any involvement in the matter. But it is hard to dismiss his alleged complicity. This is because if Ng's assertion is true, the state government may well have caved in to pressure from Umno as the leading party in the federal government, as well as from Anwar. (Umno was renting the building from original owner South-East Asia Development Corporation, a GLC, followed by Amanah Capital which took over later. Current owner JKP Sdn Bhd, fully owned by Finance Ministry Inc, bought the building in 2005.) Current Penang Umno chief Datuk Zainal Abidin Osman has rubbed it in by proclaiming Anwar as the most qualified person to answer questions regarding the controversial Menara Umno. 'Common practice' to circumvent procedures But Menara Umno was not the first project to bypass normal approval procedures of the local government. "It has become common practice," Rayer said. "All federal buildings are developed without local approval. This has become a serious issue." He questioned why local authorities are not tightening the law to make it compulsory for federal projects to obtain prior approval. But in fact the state government gives special permits to important private investors as well, so as to allow buildings to be built before their plans are passed. State executive councillor Chow Kon Yeow, who is the DAP assembly member for Padang Kota, confirmed suspicions by BN's Teluk Bahang representative Datuk Shah Headan Ayoob Hussain Shah that many factories in the state's Free Industrial Zone were built without planning approval. "The factories can begin operating before the plans are passed. This has been the practice since before," he revealed to the house. As for federal government projects, many are undertaken by the Public Works Department itself, and are therefore allowed to go ahead without local council approval, he said. Flouting neighbourhood guidelines But what about those which are not built by the Public Works Department? Take for example the controversial construction of a multi-storey army hostel by the Defence Ministry without prior approval of the state authorities in July 2010. Residents lodged numerous complaints over the construction. The issue became heated also because the project defiantly flouted local guidelines for buildings in the residential area to be of a specific height of up to two or three storeys. Many felt that just because the land belonged to the federal government, it did not mean the ministry could build without due consideration for local laws and guidelines.

https://theedgemalaysia.com/node/87280

Stocks To Watch: Ho Hup, Multi-Code, Karyon, plantation firms

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KUALA LUMPUR (Oct 9): Based on Bursa Malaysia announcements and news flow today, stocks to watch tomorrow (October 10) may include the following companies : Ho Hup Construction Co Bhd will hold an extraordinary general meeting (EGM) tomorrow to seek shareholders' consent for the Practice Note 17 (PN17) firm's proposed regularisation exercise. "Shareholders of Ho Hup Construction Co will meet at an EGM at 2.30 pm tomorow to vote on the proposed restructuring scheme designed to take the company out of PN17. "Ho Hup executive director, Derek Wong Kit Leong would like to invite the media for a press conference to answer any questions you may have related to the restructuring," Ho Hup said in a statement today. Multi-Code Electronics Industries (M) Bhd and Karyon Industries Bhd's dividends may attract market interest. Both stocks will trade ex-dividend this Friday (October 11). Multi-Code has proposed dividends of nine sen. These comprise a second interim single-tier dividend of three sen a share and a special payout six sen a share. The dividends are for financial year ended July 31, 2013. Karyon which manufacturers toiletries plans to pay a tax-free interim dividend of 0.5 sen a share for FY ending December 31, 2013. This is equivalent to 5% of the stock's par value of 10 sen a share. Oil palm plantation companies may be closely watched. This is in anticipation of the Malaysian Palm Oil Board's announcement tomorrow on the sector's output, and inventory for September. Today, Bloomberg reported that palm oil climbed for a fourth day to the highest level in a month on speculation that output in Malaysia, the world’s second-biggest producer, might have expanded last month at a slower pace than predicted by analysts. Output probably climbed 15 percent to two million tons last month, matching the record in September 2012, according to a Bloomberg News survey published on Oct. 7. Inventories expanded 13 percent to 1.89 million tons, while exports gained 2 percent to 1.55 million tons, the survey showed.

https://theedgemalaysia.com/node/36847

Corporate: EPF mulls bigger exercise for RHB Cap

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The Employees Provident Fund (EPF), the major shareholder of RHB Capital Bhd, is not discounting the possibility of a bigger corporate exercise in its move to pare down its interest in the fourth largest banking group in the country, say sources. It is said that some key people in top management at the EPF are looking at the possibility of RHB Cap merging with another local banking giant in the pension fund’s effort to reduce its interest from 55% now to less than 40%. “But it is only a preliminary discussion with a few people. Nothing has been put in place to get actual work started,” says a source. This is because regulations state that any merger or acquisition between banks must have Bank Negara Malaysia’s  approval before the two parties can start negotiations officially. According to sources, the top officials at the EPF have identified three potential partners — AmBank Group, Malayan Banking Bhd and CIMB Group. “However, any hope of a tie-up with AmBank ended a few weeks ago — even before any serious thought process could begin — when initial feedback indicated that ANZ [Australia and New Zealand Banking Group Ltd] was not interested,” says a source. ANZ is AmBank Group’s strategic partner with 27% equity interest. Talk of a RHB Cap-AmBank merger surfaced four years ago but nothing came of it. There was a similar proposal in 1998 when RHB was headed by Tan Sri Rashid Hussain and CIMB Group, then known as Bank of Commmerce, was under Renong Group. But Rashid’s proposal did not materialise and RHB took over the beleaguered Sime Bank instead. When contacted, analysts say they doubt the possibility of RHB Cap tying up with CIMB or Maybank as they feel the exercise will not add value to the merged entity. “There is a lot of duplication, which means there will be layoffs. And it is difficult to downsize in the domestic market. Still, the biggest selling point for RHB is its cheap valuation,” says an analyst. At the moment, RHB Cap is said to be an attractive takeover target as it is the cheapest banking stock on the market. BNP Paribas has a target price of RM8.40 for RHB Cap based on forecast 2011 earnings. At RM8.40, the research outfit adds, RHB Cap will be trading at a price-to-book valuation of 1.4 times. By comparison, the industry average is two times. However, based on a goodwill amount of RM3.7 billion in its books, some analysts say RHB Cap is expensive at its current price of RM6.85 (as of last Thursday). Different viewsThere is also a view in the EPF that the bank should be under the control of the pension fund and that it should simply stick to its plan of reducing its equity interest to 35% to 40%. This is because apart from valuations, the EPF as a shareholder is financially strong with a lot of cash. “Having a lot of money is a problem for the EPF. If it were a minority shareholder in a much bigger bank, it may be indirectly exposed to unwanted risks over which it has no control. For instance, a bank that is controlled by the EPF would certainly think twice about lending to projects deemed as being associated with national interests. But the EPF may not be able to control its risk exposure if it has no control over the bank’s lending policies,” says a source who is of the view that the EPF should keep RHB Cap in its fold. The source says the available block of shares should be sold to a strategic investor that is able to add to RHB Cap’s growth. The EPF has until the middle of next year to comply with a Bank Negara ruling requiring it to reduce its 55% stake in RHB Cap to 40% or less. Although there is a time frame for the disposal of its interest, industry observers say it is a moving deadline because the EPF will not be forced to sell at valuations that are unreasonable. The next biggest shareholder of RHB Cap is Abu Dhabi Commercial Bank (ADCB), which has a 25% stake that it acquired for RM7.20 per share in 2008. At the time, the purchase was valued at 2.2 times RHB Cap’s 2007 book value. But such valuations are hard to come by these days as banks are required to put up more core capital while new regulations restrict the avenues for financial institutions to generate income. Nevertheless, most research houses are positive about RHB Cap. In its latest quarterly results, RHB Cap posted an improvement in asset quality and loan growth. According to HwangDBS Vickers Research, loan growth in 2Q2010 was 4%, bringing the year-to-date figure to 9%, while the gross non-performing loan (NPL) ratio improved to 5.9%. RHB Cap’s capital ratio is also strong, with the risk weighted capital adequacy ratio standing at 15.7%. BNP Paribas believes RHB Cap’s transformation is working and that an increase in free float (when the EPF cuts its stake to less than 40%) will lead to better trading in the stock and pave the way for the entry of institutional shareholders. Meanwhile, in whatever decision the EPF takes on RHB Cap, it will have to bear ADCB in mind. The Arabs came in at a high price and have probably still not recovered their investment after taking into account the appreciation of the ringgit and interest costs. Thus, any move the EPF makes will have to be good for them too, which means it should also benefit the minorities. This article appeared in Corporate page of The Edge Malaysia, Issue 822, Sep 6-12, 2010

https://theedgemalaysia.com/node/78848

Interview: SapuraKencana in Brazil for the long haul

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SAPURAKENCANA PETROLEUM BHD, which recently broke into the Brazilian market, plans to compete for oil and gas-related jobs in the oil-rich country and the surrounding regions. Having launched a deepwater flexible pipe laying support vessel (PLSV) with partner Seadrill Ltd for Brazil’s Petroleo Brasileiro (Petrobras) two weeks ago, the Malaysian company is looking for other jobs such as the fabrication of offshore structures, hook-up and commissioning, topside maintenance and engineering, construction and procurement there. It will also use Brazil to springboard into the Gulf of Mexico and West Africa.   “We have entered the market with flexible pipe laying. Later on, we will expand to other businesses. That will be our strategy in Brazil. We’re investing in the country for the long term,” SapuraKencana group CEO Tan Sri Sharil Shamsuddin tells The Edge. “We will look at West Africa and the deepwater in the gulf [of Mexico] with Brazil as our beachhead.” The PLSV for Petrobras, which was unveiled in Rotterdam, is the first of six vessels from two contracts worth a total of US$4.1 billion from the Brazilian company.    Seadrill Brazil’s senior vice-president Eduardo Antonello, who is also present at the interview, says there will be many chances for the partners to gain a foothold in the Brazilian waters in the future as the country’s equatorial margin presents vast opportunities for oil and gas companies. “Right now, they [oil and gas players] are doing seismic geological modelling. By the end of 2015 or 2016, drilling will start in these blocks [in Brazil’s equatorial margin]. When that happens, the services required will create opportunities for providers like SapuraKencana. “Another opportunity is the Libra field auction that takes place on Oct 21. It is expected to have 10 billion barrels of reserves. Petrobras operators are expected to court international partners,” he adds. SapuraKencana’s success in penetrating the highly competitive oil and gas field in Brazil is a tale in itself. It started in 2010 when Seadrill, which already had a presence in Brazil, informed the Malaysian entity of a PLSV opportunity in the Latin American country, says Sharil. “They said there was an opportunity for deepwater flexible pipe laying in Brazil. So I sent my team to meet Eduardo in Rio.” But it was no plain sailing. The company spent more time than usual studying the technical difficulties of executing the job. The study involved extensive ground-up evaluation of the cost of such an endeavour. After eight months, the partners finally decided to bid for the project while they were in a stadium in Houston. “It was at that meeting that we decided we had all the resources we needed in terms of technical expertise, a relationship with Seadrill and the right team. We were ready to bid,” recalls Sharil. “We evaluated the risks very carefully. In eight months, we did the costing of the vessel and gained an understanding of local conditions to learn how much it would cost to use local infrastructure, expertise and manpower, and how to put it together with our international capabilities.” When asked if Brazil’s shaky economic and financial position poses a risk to the Malaysian entity’s operations in the country, Sharil waves off such concerns. “Let me just say this. It’s about oil. Oil converts to money. They [Brazil] have one of the biggest reserves in the world, so if the reserves are money, what is this thing about money problems in Brazil? It’s just a lot of noise,” he says. “For all oil companies, when work is ramped up, there are delays in the projects. But the delays are not because of [lack of] money. It is because of the growing amount of work to be done ... it has to be in phases. But people quickly jump to the conclusion that a slight delay equals a lot of problems.”   Sharil adds that the PLSV contract with Petrobras will keep SapuraKencana busy for the next 20 years.   “But Eduardo keeps force-feeding me contracts. Every time he says my name, I know he is about to present me with another opportunity,” he jests. Even though SapuraKencana’s operations are spread across the world, Sharil keeps a close eye on them and is directly involved in the deals. “I’m very much involved in every deal. I rose through the ranks in the industry and hence like to be a hands-on leader. It is all about knowing the work and the people you work with. “If you don’t talk to your people, work with them or discuss things with them, you will never know them. So, how can you do your work? I believe the future CEO will be even more involved because the work is getting more and more complex,” he explains.   Sharil also credits his team of managers for SapuraKencana’s success. “We have very capable, top-notch people to manage this big project. It is not just me. We have 10,000 people and 20 nationalities in the group. More than 60% of the people you see there are technically inclined. That should give you an idea of the engineering powerhouse SapuraKencana has become.”   The company was formed when SapuraCrest Petroleum Bhd and Kencana Petroleum Bhd merged two years ago and has since grown at breakneck speed. Shortly after, it brought in Norwegian offshore deepwater drilling company Seadrill as a shareholder after acquiring the latter’s tender rig business in a US$2.9 billion deal. “Our growth has been extra fast. Maybe it won’t be as quick [in the future], but we will continue to grow as the regions we are in start to grow horizontally. And we will cross-sell the group’s services in the regions that have opened up,” Sharil says. Currently, the company’s order book stands at RM24.8 billion, 24% of which are local projects and the remaining 76% international ones. This article first appeared in The Edge Malaysia Weekly, on October 7, 2013.

https://theedgemalaysia.com/node/29491

Blue chips barely higher, key markets down

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KUALA LUMPUR: Blue chips were barely higher at the midday break on Thursday, May 6 but all key regional markets continue to slip on worries about the contagion effect from Greece's debt crisis. At 12.30pm, the FBM KLCI was up 1.05 points to 1,336.7. Turnover was 307.75 million shares valued at RM531.24 million. There were 148 gainers, 398 losers and 265 stocks unchanged. The Nikkei 225 fell 3.16% to 10,708.19 when it reopened after a three-day break, Hong Kong's Hang Seng Index fell 1.09% to 20,106.07 while Shanghai's Composite Index eased 1.71% to 2,808.34 and Singapore's Straits Times Index 0.86% lower at 2,835.64. Reuters reported German Chancellor Angela Merkel as saying Europe's fate was at stake. France declared the euro was under speculative attack but said such a move would fail. And the Greek government vowed not to retreat a single step despite violence on the streets of Athens. The euro sank to its lowest level in over a year, falling below US$1.28 in Asia and down over 10 percent since the start of the year. At Bursa Malaysia, fund managers said investors were mostly staying on the sidelines due to the volatile trading, with some downside pressure from the Greek sovereign debt crisis. CIMB rose 14 sen to RM14.34, pushing the 30-stock FBM KLCI up 1.58 points. Tenaga added 10 sen to RM8.54, PLUS six sen to RM3.39 while DiGi added 10 sen to RM22.76 and MAHB gained nine sen to RM4.94. LPI was the top loser, down 60 sen to RM14.90 after the recent surge in its share price while Proton lost 12 sen to RM4.68. Sime Darby fell six sen to RM8.57 and Maybank three sen to RM7.60. Among glove makers, Top Glove fell 32 sen to RM12.02, Supermax 17 sen to RM6.49 and Latexx-WA 13 sen to RM3.08.

https://theedgemalaysia.com/node/39722

Better than expected results boost interest in DiGi

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DiGi.Com’s (RM25.50) recent earnings results for the third quarter (3Q) ended September 2010 were ahead of our expectations. In fact, the cellular operator has done very well in the year-to-date, relatively speaking, in an industry that is widely viewed as matured. Revenue in the first nine months was up 8.6% year-on-year (y-o-y) — despite the 40% downward revision in mobile termination rates (MTR) — while net profit grew a stronger 12.2% over the same period. The company also surprised by announcing a higher-than-expected dividend payment of 50 sen per share, or roughly 134% of earnings for the quarter. In the previous two quarters, it had paid about 98% of net profits. DiGi indicated that the higher payout was attributed to its improved earnings and outlook going forward. Certainly, its balance sheet has strengthened on the back of strong cash flow from operations. Gearing (measured as net debt to total capital) stood at just 9% at end-June 2010. Even after taking into account this latest round of dividends, its gearing will rise to about 27% — still well below DiGi’s optimal capital structure consisting of 35% to 40% borrowings. Lower capex frees up cash for dividendsThe government’s recent move to award the 2.6MHz spectrum through apparatus assignment (annual rental payments) rather than a potentially pricey auction may have also played a role in DiGi’s decision to up its dividends. The 2.6MHz spectrum block will be utilised for the next generation of services (4G) coined Long Term Evolution or simply, LTE. Unlike the existing 2G and 3G networks that are essentially voice-centric with data capability added on for the latter, LTE is based on the Internet Protocol and designed primarily for high-speed broadband data services. DiGi targets to submit to the government its business plan for 4G services before the end of the year. It is also hoping to secure additional spectrum in the 700MHz-900MHz bands under the government’s re-farming plans to boost its capacity and coverage. Few concrete details are known at this point but if allocations for the 3G, WiMAX and LTE spectrums are any guide, the upfront cost requirements will be minimal. The company is also upbeat on its ongoing infrastructure sharing talks with Celcom. Progress is good and an agreement could be finalised within the next few months. If all goes to plan, the effort would pare overall capital expenditure requirements for both companies, in addition to operational costs savings. Indeed, DiGi has guided its capex for 2011 at roughly the same levels as that spent last year and expects to spend about RM700 million this year. Lower capex — for spectrum and rollout — will free up more cash that can be distributed back to shareholders. More than 100% profit payout sustainableBased on our earnings forecast, DiGi could sustain a higher than 100% profits payout and still remain comfortably below its debt-to-equity ceiling. We estimate dividends will total 160 sen per share this year, assuming a final dividend of 40 sen per share. Recall that DiGi had earlier paid two rounds of 35 sen per share dividends in 1Q-2Q10. The ex-date for the third interim dividend of 50 sen per share was fixed for Nov 11. This implies 110% payout of our estimated earnings of RM1.13 billion for 2010 — and will give shareholders a net yield of 6.3% at the current share price. Assuming a similar payout ratio, dividends would rise to roughly 173 sen per share in 2011, earning investors an attractive 6.8% net yield. Broadband is the way forwardDiGi is convinced that broadband will remain the primary growth driver in the foreseeable future — as it continues to expand its 3G coverage, targeted to hit 50% by end-2010. Case in point, data revenue grew 10% quarter-on-quarter (q-o-q) — in 3Q10, and accounted for 22.3% of the company’s total revenue during the quarter. Within this segment, the fastest growing is mobile Internet, which made up some 30% of data revenue, up from just 12% at the start of 2009. By comparison, pre- and post-paid voice revenue, collectively, dipped 2% q-o-q, affected by the lower MTR. Adjusted for this, voice revenue would have been flattish.Broadband subscribers increased by 48,000 to 170,000 while the number of post-paid subscribers was boosted by uptake for the company’s smartphone packages, including the popular Apple iPhone. In all, DiGi’s total subscribers grew 143,000 to 8.25 million by end-September 2010. We expect to see more and more customers switching from pre-paid to post-paid-cum-data packages on the back of increasing adoption of smartphones in the country. Industry estimates at least half of the new handsets sold today are smartphones. The sale of the iPhone 4 is expected to further boost uptake in 4Q10. Reception for the latest Apple product has exceeded expectations. This bodes well for higher average revenue per user going forward — as consumers pay more for higher data consumption. Competition will intensify with YTL CommsHaving said that, competition is expected to intensify further with the entry of YTL Comms into the mobile telecom space. The latter is targeting a nationwide launch for its WiMAX broadband services on Nov 18. Whilst little detail is known of its product packaging and pricing, YTL intends to grab a share of both the mobile broadband and mobile Internet markets, both segments of which are currently dominated by the three largest cellular operators, Maxis, Celcom and DiGi. Only time will tell of its impact on the industry. — InsiderAsia Note: This report is brought to you by Asia Analytica Sdn Bhd, a licensed investment adviser. Please exercise your own judgment or seek professional advice for your specific investment needs. We are not responsible for your investment decisions. Our shareholders, directors and employees may have positions in any of the stocks mentioned. This article appeared in The Edge Financial Daily, November 3, 2010.

https://theedgemalaysia.com/node/23252

Highlight: Another delay for Rapid?

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KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) is looking at another delay in its RM60 billion Refinery and Petrochemicals Integrated Development (Rapid) project as its final investment decision (FID) cannot be made before the deadline by the first quarter of this year. “The project will be further delayed as Rapid’s FID will most likely not be approved by the timeline stipulated, which is in March, and Petronas will incur a sunk cost of RM4 billion,” a source familiar with the matter told The Edge Financial Daily. Another source added that one of the reasons delaying the decision involves the still unresolved problems faced by the community in the Pengerang area in Johor where the project is to be built. “Some of the fishermen in the area are still protesting and they don’t want to move because that area provides a better catch for them,” said the source. In addition to this, most of the villagers in the area are reluctant to move too. Then there is also the question of the relocation of Muslim and Chinese cemeteries in the area which was highly objected to by the community. Petronas has already pushed the completion deadline of the project from late 2016 to early 2017 and the FID was supposed to have been approved in mid-2013. Ideally the construction and engineering works for RAPID should start between 2015 and 2016 so that the project can be completed by 2018. According to Petronas’ president Tan Sri Shamsul Azhar Abbas in an interview with The Edge Weekly, Rapid would be able to ride the up cycle of the petrochemical industry if it commences operations by 2017 at the latest. Should the national oil firm miss this cycle, it would need to wait for the next wave — which could be 10 years later — when the project’s economics would again be viable in terms of market conditions and expenses. However, despite talks on the delay in the mega project, an executive familiar to the project told The Edge Financial Daily separately that “As far as we all know, the RAPID project is still a ‘go’. We currently have our people working on the FID as we speak. And as usual when we get closer to the date and with a project this big, rumours such as this (delay) would be brought up by certain people”. As for the sunk cost of RM4 billion, the executive was not sure how the figure came about as the project is only at its preliminary stage involving land acquisitions and basic infrastructure cost. For the project, in terms of foreign direct investments and joint venture partners, Petronas’ website stated that it has signed a few contracts with several parties. One of them is France’s Technip SA for the front end engineering and design of the project. Other than that, Petronas also signed two heads of agreements (HOA), one with Japanese firm ITOCHU Corporation and the other with the partnership of ITOCHU and Thailand’s PTT Global Chemical Public Company Limited. These partnerships were formed to jointly own, develop, construct and operate two separate complexes for the production of high value-added downstream chemicals. The national oil firm had also signed a HOA with Italy-based Versalis SpA to jointly own, develop, construct and operate elastomer plants. It also has partnerships with Germany’s Evonik Industries AG, after BASF SE pulled out after differences in business strategy, to develop production facilities for specialty chemicals. It also awarded CB&I for the license and engineering design work on five petrochemical units within RAPID. Details on the value of these contracts were not made known. Locally, Gadang Holdings Bhd in 2012 was awarded the preparation work for the proposed project on phase one of the site for RM312.8 million. Initially, RAPID’s proposed refinery was to have a capacity of 300,000 barrels per day and will supply feedstock for RAPID’s petrochemical complex as well as produce gasoline and diesel that meets European specifications. It is also supposed to produce nine million tonnes of petroleum products and 4.5 million tonnes of petrochemicals a year to meet the demand for such products in the Asia Pacific region in 2016. RAPID was first announced by Prime Minister Datuk Sri Najib Razak in May 2011, before a detailed feasibility study on the proposed project was completed in October 2011. The project is a cornerstone of Najib’s Economic Transformation Programme which is aimed at turning Malaysia into a high-income nation by 2020. This article first appeared in The Edge Financial Daily, on February 24, 2014.

https://theedgemalaysia.com/node/82266

M’sian firms urged to plug into Brazil’s huge broadband plan

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KUALA LUMPUR: Malaysian firms could benefit from Brazil’s US$51 billion (RM157.6 billion) plan to expand its broadband connection with high speed networks, said Malaysia External Trade Development Corp  (Matrade). Spearheaded by Brazil’s state-owned Telecommunication Brasil (Telebras),  it calls for the installation of new broadband cables that will provide high speed Internet services of up to 100 megabytes per second (mbps) for 50 million urban and 10 million rural households. “The project would involve investments by the private sector as well as the government and is targeted to be completed in the next four years,” Malaysian trade commissioner in Sao Paolo, Yusram Yusuf, said in a statement yesterday. At present, Brazil has  limited Internet service and few broadband options especially in rural areas and  outside major cities where the average broadband speed available is less than 12 mbps. According to Matrade, the project is expected to increase the import of information and communications technology (ICT) applications and services as the high speed networks require support in terms of technology and expertise. The main components of the fibre optic broadband network include fibre optic cables, connectors, adapter modules, adapter panels, cassettes, enclosures, patch cords, cable assemblies, cable distribution products and accessories. “Currently, Brazil imports most of its ICT applications while some components are produced locally,” Yusram added. In 2012, Brazil imported over US$567 million fibre optic adapters, with the top exporters being China, which accounted for 36% of Brazil’s total imports, followed by Germany, Japan, USA and Korea. “Malaysia’s export share of the product in 2012 represented 0.7% of Brazil’s total imports, ranking Malaysia the 15th largest exporter,” Yusram said. Last year, Brazil’s import value of fibre optic cables was more than US$33 million, with China, USA, India, Mexico and Germany being the five biggest exporters. Malaysia ranked 29th, taking 0.18% of total exports of the product. Yusram said Malaysian companies should consider investing in Brazil’s ICT industry by leveraging with local ICT players. “Participation in trade shows is a good channel for Malaysian companies to showcase their expertise and quality products.  The Brazilian FIEE exhibition pertaining to eletric and electronics industry is one of the main exhibitions to promote their products,” he added. This article first appeared in The Edge Financial Daily, on April 3, 2013.

https://theedgemalaysia.com/node/86902

Australia shares hit fresh 5-year high on U.S., China optimism

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SYDNEY (Oct 21): Australian shares rose 0.7 percent on Monday to hit a fresh five-year high, buoyed by news of improving economic growth in China and stronger-than-expected earnings results from some U.S. companies. Blue-chip financials and basic materials stocks underpinned the market in a broad rally. Among banks, Australia and New Zealand Banking Group climbed 1.1 percent, Commonwealth Bank of Australia rose 0.4 percent and National Australia Bank advanced 1.1 percent. Iron ore miners BHP Billiton Ltd and Rio Tinto Ltd added 1 percent and 0.7 percent, respectively, after copper prices rose on Friday, supported by data showing China's economy expanded as forecast in the third quarter. "Forward earnings suggest Australia stocks are good value," Tim Radford, global analyst at Rivkin Securities, said in a note to clients. "Technically, momentum is again to the upside, and with stocks entering a seasonally strong period amid a significant reduction in headline risk," he said. The S&P/ASX 200 index was up 35.8 points at 5,357.3 as of 0027 GMT, hitting its highest point since June 20, 2008. The benchmark rose 0.7 percent on Friday, and has recovered from a one-month low hit this month during the U.S. debt ceiling impasse. Dealers said the end of the stalemate has bolstered investor confidence. The local index took a cue from Wall Street, where the S&P 500 closed at a record high to cap its biggest weekly gain in three months, underpinned by better-than-expected earnings from Google, Morgan Stanley and others. Wealth management firms also gained, with AMP Ltd climbing 1.7 percent and Platinum Investment Management Ltd adding 0.9 percent. Retail staple Woolworths Ltd jumped 2.4 percent and rival Wesfarmers Ltd added 0.5 percent. Blood products maker CSL Ltd bucked the trend and fell 0.7 percent, with dealers saying investors were looking to take profits on the strong healthcare sector. Sundance Resources Ltd soared 16.2 percent and hit a six-month high of A$0.11, continuing its recent rally. "It looks like something's going on with some offtake agreements as far as iron ore shipments are concerned," said Michael Heffernan, senior client adviser and economist at broker Lonsec. "Obviously the market thinks there's something going on there that will be very positive for them." But Qantas Airways dropped 4.4 percent after Chief Executive Alan Joyce said at its annual general meeting on Friday that yields, or returns on fares, would decline by 2 percent to 3 percent in the first half compared with the same period last year. New Zealand's benchmark NZX 50 index rose 0.5 percent or 24.6 points to 4,783.2. - Reuters

https://theedgemalaysia.com/node/26718

Mudajaya JV secures RM241m project

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KUALA LUMPUR: Mudajaya Group Bhd and its joint venture partner Bina Rezeki have secured a RM241.29 million project to design and build the Boulevard Plaza Development at Lot 3C7, Putrajaya. Mudajaya said on Thursday, Feb 4 the JV had received the letter of acceptance from Boulevard Plaza Sdn Bhd, the owner of the project. Its unit Mudajaya Corporation Bhd has a 51% interest in the JV. The project is expected to be completed by Dec 31, 2011. "The project is expected to contribute positively to the current and future earnings and net assets of the company," it said.

https://theedgemalaysia.com/node/28751

Palm oil may breach RM3,500 this year, says Frost & Sullivan

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KUALA LUMPUR: Crude palm oil (CPO) futures prices are expected to reach RM3,500 per tonne this year due to the inability of supply to meet increased demand as well as bad weather, Frost & Sullivan’s Asia Pacific director Chris de Lavigne said yesterday. In addition, the actions of governments in Europe and Asia Pacific to encourage the use of biofuel will also support prices. “It is a price (RM3,500) that we could see happening again, and it may happen quicker than we expected,” said Lavigne, who spoke at the Palm & Lauric Oils Conference & Exhibition 2010 here yesterday. “I don’t think CPO price would reach 2008 levels (of about RM4,000 a tonne), but we would see some big swings from its current price.” Lavigne’s predictions add to the bullish stance taken by prominent industry analysts so far. On Tuesday, palm oil industry analyst Dorab Mistry said he expected CPO futures to trade at between RM2,600 and RM3,200 per tonne in the second half of this year due to the El Nino weather effect. Another analyst, Prudential Bache Commodities LLC senior oilseed & supervisory analyst Anne Frick had said she expected CPO to trade at RM2,400 to RM3,300 per tonne this year. This article appeared in The Edge Financial Daily, March 11, 2010.

https://theedgemalaysia.com/node/74865

Highlight: M'sia Jan palm oil stock falls 2.63% m-o-m, output down 9.57%, exports decline 9.93%

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KUALA LUMPUR (Feb 10):  Malaysia's total palm oil inventory fell 2.63% in January 2014 from a month earlier on lower crude palm oil (CPO) output as exports of the commodity declined. The Malaysian Palm Oil Board (MPOB) said in a statement on its website today that palm oil inventory comprising CPO and processed palm oil, fell to 1.93 million tonnes in January 2014 from 1.99 million tonnes in December 2013. "It (inventory) refers to the total physical amount of crude and processed palm oil kept at the premises of mills, refineries, bulking installations, and oleochemical plants as at 31 January 2014," MPOB said. MPOB said CPO output declined 9.57% to 1.51 million tonnes in January from 1.67 million tonnes while palm oil exports decreased 9.93% to 1.37 million tonnes from 1.52 million tonnes. MPOB's latest inventory figures compare with a median of 1.98 million tonnes obtained from a Reuters survey. According to the survey, January output and exports were seen at 1.52 million tonnes and 1.35 million tonnes respectively. Reuters reported that Malaysian palm oil stocks in January were expected to fall for the first time since June thanks to seasonally lower output, but sluggish demand for the tropical oil meant inventories were likely to be only slightly lower. Demand is widely expected to improve in the coming months, as buyers begin to re-stock ahead of the Muslim Eid al-Fitr festival that typically drives up consumption of the tropical oil used in a variety of foods such as cookies and chocolate. Consumers in countries experiencing the northern winter could also switch back to palm oil as winter fades and the weather becomes warmer. Demand usually softens during winter as palm tends to solidify in cold temperatures. MPOB data shows that in December 2013, palm oil inventory rose 0.33% month-on-month while CPO output fell 10.43%. Palm oil exports declined 1.36%.

https://theedgemalaysia.com/node/42401

Hot Stocks: Investors sell blue chip shares on weaker China PMI

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KUALA LUMPUR (Jan 1 ): Malaysia's blue-chip stocks dominated the exchange's largest-decliners' list at about noon as investors digested weaker economic data from China. The decline in blue-chip stocks had resulted in an 11-point fall in the FBM KLCI.  At 11.47am, six of Bursa Malaysia's 10 largest decliners were KLCI-linked entities.   Among blue-chip firms, top decliner Kuala Lumpur Kepong Bhd fell 54 sen to RM24.36 while Public Bank Bhd declined 30 sen to RM19.10. Tenaga Nasional Bhd dropped 18 sen to 11.20. Reuters reported that Asian markets got off the new year to a sluggish start as Chinese economic data disappointed ahead of a raft of reports on global manufacturing due out through the session. China's official Purchasing Managers' Index  fell to 51.0 in December, from 51.4 the previous month and below forecasts for 51.2. Malaysia's KLCI has seen fresh highs, hence, analysts have predicted that investors may take profit today. "A profit-taking correction should follow-through after the year-end window-dressing action, as overbought momentum would encourage profit-taking retracement," TA Securities Holdings Bhd wrote in a note today. Meanwhile, Maybank Investment Bank Bhd said the KLCI's resistance levels of 1,866 and 1,882 may curb the index's gains. "We recommend a “nibble on dips” stance for the index. Due to the firmer US performance, we expect the FBMKLCI to be volatile in a new lofty  all-time high range," Maybank said.

https://theedgemalaysia.com/node/26944

Federal Court: Zambry is Perak MB

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PUTRAJAYA: After more than a year of court battles, public protests and rallies, the Federal Court today upheld the May 22, 2009 Court of Appeal decision. The decision was 5-0 in favour of Barisan Nasional Menteri Besar Datuk Seri Dr Zambry Abdul Kadir. The judgment was read out by Chief Judge Tan Sri Arifin Zakaria. According to Arifin, who read the background of the case, Court of Appeal was justified to reverse May 11, 2009 High Court decision based on Sultan's rejection to dissolve state assembly which was made under Article 16 (6) of the Perak Constitution which requires Nizar to resign and not under Article 36 (2). Federal Court also noted the test that Nizar had lost confidence of majority of assembly had been satisfied in a special palace meeting between Sultan Azlan Shah and 31 assemblymen. Federal Court said: "There is no requirement in state Constitution which requires a vote of no-confidence to be taken in the state assembly". "In the present case, there is no doubt that Zambry has the support of 31 out of 59 members of the assembly," said Federal Court. The decision comes more than a year after the Pakatan Rakyat (PR) government in Perak was unceremoniously overthrown by its Barisan Nasional counterpart on Feb 6, 2009. PR MB Datuk Seri Mohammad Nizar Jamaluddin arrived at 9.10am amid shouts of "Dissolve Perak Assembly" and "God is great" by his 100-odd supporters. Nizar was accompanied by his wife and DAP's Datuk Ngeh Koo Ham. The yellow-clad BN supporters jeered Nizar as he entered the court building while police just watched. Zambry did not come to court although Perak Speaker Datuk R Ganesan arrived well before 8am. Earlier, PR lawyer Edmond Bon Twittered, "From my limited experience this may be sign BN has got 'wind' of a BN win. Have not seen them turn up in full force in any court during case".

https://theedgemalaysia.com/node/61261

#The Edge Education Forum 2014* English takes centre stage in forum on education quality

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KUALA LUMPUR: In a forum hosted by The Edge, titled “Malaysian Education System — can we bring back the quality?”, the topic of English as a medium of instruction and the 2003 policy of teaching science and mathematics in English (PPSMI) were at the forefront of the points raised by the panellists and audience as some of the main weaknesses of the education system. Tan Sri Yong Poh Kon, immediate past president of the Federation of Malaysian Manufacturers (FMM), said that under the law, the government is obliged to fund English-medium public schools because English is the mother tongue of some Malaysians. “The Education Act says the government is empowered to establish mother-tongue education and is obligated to fund it,” he said. “I traced back all those who went to English schools up to 1983 [the year when English was completely phased out as a medium of instruction]. If you are the product of an English-medium school, it is extremely likely that you marry somebody who speaks English and that your children speak English, regardless of race. If you total up these people, it makes up about 26% of the population. “You have Tamil schools for 11% of the population and Chinese schools for 18% to 20% of the population, but you do not have English-medium schools to cater to those whose native language is English.” Yong was responding to a comment made by the forum’s moderator, Ho Kay Tat, who is the group chief executive officer and publisher of The Edge Media Group, that students should be given the option of English-medium schools. “Parents will be angry with politicians one way or another. But if you give English-medium schools as an option, the onus for their children’s success is then put on the parents,” said Ho. The system not only overlooks the needs of native speakers but, as the complaint goes, also fails to meet the needs of the market and the students who do not have the privilege of learning English in private schools or at home. Panellist Tan Sri Arshad Ayub, Universiti Teknologi Mara’s (UiTM) pro-chancellor, said: “Don’t mistake it as a zero-sum game. Just because you give a higher emphasis on English, it does not mean that it is minimising the importance of the Malay language.” It is worth noting that English as a medium of instruction is included in UiTM’s constitution. Fellow panellist Datin Noor Azimah Abdul Rahim, chairman of Parent Action Group for Education (PAGE), said that under PPSMI, 40% of classroom instruction time was in English. But with the policy’s reversal in 2012, it is now only 20%. According to Yong, Malaysia will have a “fighting chance” of achieving its National Education Blueprint 2013-2025 goal of 70% credit pass in the Cambridge English 1119 test if instruction time in English is brought up to at least 40% to 50% of the total. Panellist Rafizi Ramli, PKR’s director of strategy and Pandan MP, meanwhile, prioritised the problem of access before quality. “There is a two-step process. The first step of reform [is] to make sure there is a bare minimum of quality in all schools so that all children can survive once they leave school. After that, all the other things are a lot easier,” he said. “We remain opposed to PPSMI,” he added. PKR joined the campaign against PPSMI in 2009 that played a key role in the policy’s reversal three years later. “We concur with Pemandu that it is not a question of how many hours of English are taught. It is a question of the depth and quality of the English subject and the quality of the teachers. So we must get around that issue first,” said Rafizi. However, Yong disagreed with Rafizi that the problem of access should be solved before quality. “Proficiency in English is one of the greatest keys to social upward mobility. I think it is very difficult to say that until all the rural schools are done, you cannot do anything in the meantime. It would mean restraining everyone to a level that leads to low performance.” Despite the long weekend, the forum was attended by some 500 people. There was lively — and markedly emotional — participation from an audience that included parents, teachers, ex-teachers, bureaucrats and fresh graduates. This article first appeared in The Edge Financial Daily, on January 20, 2014.

https://theedgemalaysia.com/node/9000

Formula One set to split as teams plan new series

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A statement said BMW-Sauber, Brawn, Ferrari, McLaren, Red Bull, Renault, Toro Rosso and Toyota were united in the decision. "It has become clear...that the teams cannot continue to compromise on the fundamental values of the sport and have declined to alter their original conditional entries to the 2010 world championship," the Formula One Teams Association (FOTA) said. "These teams therefore have no alternative other than to commence the preparation for a new championship which reflects the values of its participants and partners. "This series will have transparent governance, one set of regulations, encourage more entrants and listen to the wishes of the fans, including offering lower prices for spectators worldwide, partners and other important stakeholders," the statement added. "The major drivers, stars, brands, sponsors, promoters and companies historically associated with the highest level of motorsport will all feature in this new series." The decision, if the teams carry through their intention, will split Formula One in two. Legal battleFormer champions Williams and Force India have already committed unconditionally to the FIA's world championship along with three new entrants — Campos, US F1 and Manor — who have yet to build any grand prix cars. The FIA has said there are other would-be newcomers waiting to take the places of those teams that refused to enter unconditionally although one, Lola, has already withdrawn its application. The stage is also set for a legal battle, with the FIA saying champions Ferrari and the two Red Bull teams have existing contracts which commit them to the existing championship. The FIA had set a Friday deadline for five teams — Brawn, BMW-Sauber, McLaren, Renault and Toyota — to convert their provisional entries into unconditional ones or risk being excluded. The eight FOTA members met at Renault's Enstone headquarters on Thursday evening and issued a joint statement emphasising their common will and accusing the FIA and commercial rights holders of trying to divide them. "The wishes of the majority of the teams are ignored," the statement said. "Furthermore, tens of millions of dollars have been withheld from many teams by the commercial rights holder, going back as far as 2006. "Despite this, and the uncompromising environment, FOTA has genuinely sought compromise." There was no immediate comment from the FIA or Formula One's commercial supremo Bernie Ecclestone. — Reuters

https://theedgemalaysia.com/node/23205

RHB sees stronger earnings for Faber

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Faber Group Bhd (Dec 8, RM1.52)Reiterate outperform, fair value raised to RM2.69: Faber’s Kamunting incineration plant 2 was completed in July 2008 at a cost of RM16.8 million, fully funded by internally-generated funds and borrowings. This incineration plant has been designed to meet the European Union emission standards and is capable of handling 12 tonnes of clinical waste a day compared to the six-tonne capacity of the existing incinerator previously. The Edge Financial Daily reported on Monday that Faber is currently toying with the idea of owning hospitals to broaden its income stream. The article further added that the company is looking at building and owning hospitals, putting the emphasis on non-organic growth. Management told us that this is a long-term plan and would not materialise in the near term. We note that recently, the government extended its concession agreement with Pharmaniaga for a further 10 years with the terms and conditions governing the extension to be negotiated by the company and ministry within the next six months. Assuming Faber’s concession is renewed for another 10 years, together with a conservative one-off 10% cut in overall service fees for FY11 earnings, we estimate an NPV (net present value) of RM1.23 from the concession alone (versus our current assumption of RM1.60 for a new 15-year concession agreement). We see little risk of Faber losing the concession given its political links as well as for its size and geographical reach. Given that Faber has now met the conditions stipulated in the United Arab Emirates (UAE) contract, all of the work done so far will be recognised in 4Q09, which is approximately RM60 million. Assuming a net margin of 12%, the contract would boost Faber’s earnings by around RM7.2 million. Risks to our recommendation include failure to secure an extension to the concession agreement with the government; and further delays in property launches and approvals, which could affect revenues from the property segment. Our FY09-FY11 net profit forecasts have been revised upwards by 12.7% to 16.6% to account for the recognition of contribution from the UAE government as well as higher progress billings for property. — RHB Research Institute, Dec 8 This article appeared in The Edge Financial Daily, December 9, 2009.

https://theedgemalaysia.com/node/5247

Major investors in Penang staying on

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GEORGE TOWN: Most of the investors, who committed RM10.2 billion to implement projects in Penang, are staying on, said Invest in Penang Bhd chairman Abdul Malik Abul Kassim. Of the 150 projects, only three were affected but he said these were minor projects and involved small investments. One of the three projects, one was deferred while the other two projects, undertaken by the same company, had been shelved. "These are relatively small investments compared to the other projects which are to be implemented or have already begun,” he said at a press conference. Also present were Penang Chief Minister Lim Guan Eng and Deputy Chief Minister II Prof. P. Ramasamy. "InvestPenang is monitoring these projects to ensure they proceed according to schedule, he said. On the proposed RM360 million golf course in Batu Kawan, he said the South Korean company had already committed to the project and target completion date was 2013. Abdul Malik was rebutting rumours that the project, to be undertaken by DK ENC, would be cancelled. The company had built golf courses in South Korea and also one in Ho Chi Minh City. "There is no truth to rumours that the project will not take off. Even two weeks ago, the Koreans were in Penang for talks with the Penang Development Corporation (PDC) as this project is still the planning stages," Abdul Malik added. Meanwhile, Lim said the state government would step up efforts to attract more investors this year. He said during the first quarter of this year, while foreign direct investments had remained the same, there was a decline in local investments. "For the first quarter of this year, we recorded RM278.94 million in domestic investments and RM470.91 million in foreign investments, totalling RM749.85 million investments to date."We hope to continue attracting high-end knowledge intensive industries. On plans to develop Pulau Jerejak, which was once a leper colony, he said the state government was still waiting for Sime Darby to make its proposal.

https://theedgemalaysia.com/node/80063

#Stocks To Watch* Plantations, Pintaras Jaya, Top Glove, Inari, UEM, Armada, Sime, TM, IHH and SPK

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KUALA LUMPUR (Mar 5): Based on announcements to Bursa Malaysia and news flow today, companies that may attract investor interest on Wednesday (March 6) could include plantation firms, Pintaras Jaya, Top Glove, Inari, UEM Land, Bumi Armada, Sime Darby, TM, IHH and SPK. Plantation companies with oil palm plantations and refining operations in Sabah may continue to see their shares reacting to Sabah situation, if the on-going violent clashes between Malaysian security forces and the Sulu armed intruders get worsen and prolong. Shares in some major plantation firms, such as KLK, PPB, Batu Kawan were among the top decliners across the stock market today (Tuesday). CIMB Investment Bank’s analyst Ivy Ng Lee Fang said the current backdrop does not bode well for upstream and downstream plantation operations. She said the clashes may affect harvest, transportation and sales of palm oil from Sabah if the issue is not well managed. Production of palm oil in the state accounts for about 25% of Malaysia’s total output. Pintaras Jaya Bhd’s wholly owned unit has received a letter of award from Mammoth Empire Construction Sdn Bhd to undertake bored piling works for a commercial development project at Subang Jaya. The works are to commence immediately with a completion period of nine months. The said contract, valued at RM47.5 million, is expected to contribute positively to PJB Group's future earnings, the company said. Top Glove Corporation Bhd has proposed a subscription of 27% equity in Value Add Sdn Bhd (VA) and acquisition of T.S Law Reality Sdn Bhd’s commercial building for a total of RM226 million. Top Glove added that the 27% equity interest in VA amounted to RM12.2 million. The world’s largest rubber gloves maker added that the subscription exercise was to partially fund the purchase of said property. The acquisition was meant to generate a higher return for its current investment and potential capital appreciation in the future, it added. Inari Bhd announced that its unit, Inari Technology Sdn Bhd, has been granted full tax exemption, in relation to the production of miniature integrated front end module for wireless millimetre-wave devices for five years from 1 April 2012 to 30 March 2017. Meanwhile, in a separate announcement, Inari said its controlling shareholder Datuk Thong Kok Khee had bought 50,000 shares of Inari from the open market at 41 sen per unit on Feb 28. Thong has been raising his stake in the company for the past month. Telekom Malaysia Bhd, IHH Healthcare Bhd, UEM Land Bhd, Sapura Kencana Petroleum Bhd, Bumi Armada Bhd and Sime Darby Bhd were companies highlighted at an investor’s conference in New York by CIMB on May4-5, and they could possibly attract interest from US-based foreign funds. In a press release today, CIMB said the conference provided an opportunity for US-based institutional investors to gain a first-hand insight into leading Asia-Pacific companies. Shares of UEM Land, Sapura Kencana, Bumi Armada and Telekom closed higher today. The others closed flat.

https://theedgemalaysia.com/node/80729

Pesona registers RM340,000 revaluation gain

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KUALA LUMPUR (Mar 13): Pesona Metro Holdings Bhd, which took over the listing status of Mithril Bhd last October after a restructuring exercise, registered a surplus of RM340,000 from the latest revaluation for the construction company’s investment property. In a statement to Bursa, Pesona said it has done a valuation for its one-and-a-half-storey terrace factory in Putrajaya, with the new value of the asset being RM1.56 million. “The company has incorporated the revaluation surplus in the financial statements of the Company for the financial year ended December 31, 2012 (FY12),” said Pesona in the statement. The revaluation has brought a negligible effect to the company’s net asset per share, as it increased by only 0.07 sen per share. As at the end of last year, the company’s net asset per share stood at 13.69 sen per share. Pesona’s shares were traded unchanged at 21 sen apiece today, with 50,200 shares changed hands.

https://theedgemalaysia.com/node/5203

Decision on PPSMI within next few weeks

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PUTRAJAYA: Aiming to put an end to the issue of teaching of mathematics and science in English (PPSMI), the government will decide on this contentious matter in the next “few weeks”. Introduced in 2003, the much-politicised PPSMI issue will be resolved once and for all after Education Minister Tan Sri Muhyiddin Yassin has briefed the prime minister and the cabinet. Muhyiddin, who is also the deputy prime minister, said this in a press conference after meeting a delegation of Chinese education non-governmental organisations (NGOs) yesterday evening. But when pressed by reporters on what were “a few weeks”, Muhyiddin said: “It should be quite quick”. “We are in the final stage of deciding on this matter although the ministry is still open to different views,” he added. Asked if any changes to the PPSMI would be effective from 2010, Muhyiddin said: “We’ll see if there is time to implement any new changes. There has to be a comprehensive plan to ensure that manpower, human resources and infrastructure needs are in place before things can begin”. The PPSMI issue has been a thorny issue for the government since its inception in 2003. The policy was introduced under Tun Dr Mahathir Mohamad’s administration to boost English, mathematics and science proficiency among Malaysian students. However, lately this issue has been politicised by politicians with the backing of language experts and vernacular educationists. While the Chinese educationists are concerned over its implementation and effectiveness, Malay writers and poets are worried that this would water down the use of the national language. The coalition of nine Chinese NGOs presented a memorandum to Muhyiddin urging the abolition of PPSMI and allow vernacular schools to teach the two subjects in their mother tongue. Muhyiddin said: “I’m not saying if the government agrees or otherwise on abolishing PPSMI but we have reached a consensus on the need to improve Bahasa Malaysia and English proficiency among the students”. Besides the PPSMI issue, Muhyiddin said the government had agreed to relocate 14 Chinese-language schools and build another six new ones in states like Selangor, Kuala Lumpur, Johor, Sarawak, Melaka and Kedah. “The government has the budget for this but the site (for relocation) has to be found by the Chinese schools,” he said. The government, he said, would also look into the issue of shortage of teachers in vernacular schools. Muhyiddin, however, disagreed with the Chinese NGOs on the recognition of Unified Examination Certificates (UCE) for the purposes of admission into teacher training colleges.“ I cannot agree with that suggestion and they seem to agree,” he said jokingly. “The UCE doesn’t conform to ministry standards and hence cannot be recognised.” The minister also said “independent” schools would not be getting financial aid as they did not conform to ministry standards. But Muhyiddin said his ministry “agrees in principle” to look into abolishing examination fees but the matter would have to be decided by the Ministry of Finance as it involved the budget.

https://theedgemalaysia.com/node/26637

Scicom’s 2Q net profit drops 22%

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KUALA LUMPUR: Scicom (MSC) Bhd’s net profit fell 22% to RM2.21 million in its second quarter (2Q) ended Dec 31, 2009 from RM2.83 million a year earlier mainly due to the reduction in billings from the group’s US subsidiary and lower forex gain recognised due to the weak US dollar. Revenue fell 20% to RM29.57 million from RM36.96 million while basic earnings per share fell to 0.84 sen from 1.07 sen. It declared a tax-exempt interim dividend of one sen per share. For the half year ended Dec 31, 2009, net profit fell 25.3% to RM4.22 million from RM5.65 million a year earlier while revenue declined 14% to RM60.57 million from RM70.39 million. EPS fell to 1.59 sen from 2.13 sen. In a separate announcement, the company said it had redesignated its non-executive director Krishnan C K Menon, 60, to non-independent non-executive chairman, effective Feb 3. Krishnan is the chairman of Putrajaya Perdana Bhd and a non-executive director of Malaysia International Shipping Corporation Bhd, SPK-Sentosa Corporation Bhd, M3 Technologies (Asia) Bhd and UBG Bhd as well as a director of Putrajaya Holdings Sdn Bhd.

https://theedgemalaysia.com/node/7714

Things looking up for semicon industry, but visibility still murky

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KUALA LUMPUR: The semiconductor industry, which witnessed a drastic reduction in the active number of order renewals due to the global economic downturn late last year, is beginning to see some pick-up in demand again, Unisem (M) Bhd chairman and group managing director John Chia said. “We believe we probably saw the worst of the slowdown in January 2009. There was a substantial improvement in business volume in March and this has continued into April. “In recent weeks, our customers’ forecasts have decidedly turned less pessimistic and we believe a gradual recovery has started, supported by better end-demand for semiconductors,” he told The Edge Financial Daily. Chia said the global economic recession severely dampened semiconductor sales in the fourth quarter (4Q) of 2008. Unisem, along with other semiconductor players such as AIC Corporation Bhd and AKN Technology Bhd, incurred losses in the last three months of 2008. For the 4Q ended Dec 12, 2008, Unisem posted a net loss of RM52.2 million against net profit of RM57.2 million a year earlier, while revenue fell 25.7% to RM267.4 million from RM359.9 million. The significant net loss incurred was mainly due to the impairment loss on the remaining balance of goodwill arising from the acquisition of Unisem Europe amounting to RM54.9 million, reduced revenue and forex gains, and compensation cost arising from termination of a major sales agent, it said in notes on its 4Q results. “Weak demand for the major drives of semiconductor sales including automotive products, personal computers, cell phones and IT products resulted in a major drop in industry sales that affected nearly all product lines,” Chia added. He said visibility in the industry remained poor due to the uncertainty of the timing of global economic recovery, while inventory levels were at a record low due to the overall cautiousness of industry players over the past couple of quarters. In response to the declining business volume, aggressive measures have been put in place to mitigate the slowdown. Since the third quarter of last year, Unisem had brought its production and operating cost down in anticipation of the slowdown. These aggressive measures included headcount reduction, cancellation of salary review, reduction in working days, minimum over-time and wage cuts for employees and maximum restraint on capital expenditure, he said. “However, due to the pick-up in demand in recent weeks, we have reverted to a seven-day work week and have commenced recruitment of engineers and operators to support a gradual ramp-up of production,” Chia said.

https://theedgemalaysia.com/node/71060

Feature: Malaysia restraining its own Singapore property boom

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(Nov. 20 ): Chris Metcalf commutes for 45 minutes to Singapore each day from Iskandar, a region just over the border in Malaysia, to work as a lawyer at Clyde & Co LLP. “It’s too expensive to live in Singapore,” said Metcalf, who moved across the Johor Strait in June after finding he could no longer afford the island-state on a local salary and with four children. “We’re selling a house in the U.K. and when we do we’ll consider buying in Malaysia because it’s definitely better value.” Malaysia is seeing the spillover from Singapore’s four-year property boom and its subsequent efforts to cool the market. Prices of homes at Horizon Hills, where Metcalf now lives, have jumped almost threefold over the past five years amid a flurry of foreign buying, according to data from property broker Knight Frank LLP. Now Malaysia is taking steps to prevent its own real estate inflation from emerging and appeasing locals who say they can no longer afford to own a home. In last month’s budget, Prime Minister Najib Razak doubled the minimum amount foreigners must spend on property and raised the capital gains tax to 30 percent on homes they sell within five years. The local governments of southern Johor state, where Iskandar is based, and Penang to the north, are considering additional tariffs on overseas buyers. While Horizon Hills surrounds a golf course and is luxurious by Malaysian standards, homes cost far less than in Singapore. Four-bedroom houses in the 1,200-acre (487-hectare) development, popular with expatriates, are advertised online at $270 per square foot, compared with the $503 per square foot asked for a four-bedroom public-housing flat in Singapore’s central Bishan district. Comparative CostsThe average price of a new 1,000-square-foot (93-square- meter) condominium in Singapore is between $800,000 and $960,000, according to London-based broker Savills Plc. A similar-sized place in Kuala Lumpur costs about $374,000, according to CBRE Group Inc.’s Malaysian unit. Singapore has ramped up efforts to bring down housing costs with measures such as linking borrowers’ maximum debt levels to their incomes, higher stamp duties and capital gains taxes. Home prices have still jumped 40 percent to a record since the island-state started introducing curbs four years ago. The gains led to Singapore being ranked the most-expensive city to buy a luxury home in Asia after Hong Kong by Knight Frank in a wealth report in March. Malaysia Attracts The difficulties of purchasing in Singapore have prompted potential buyers to explore Malaysia. “Malaysia has certainly been the recipient of a lot of Singaporean money since the tighter cooling measures here,” said Nicholas Holt, Knight Frank’s Asia-Pacific research director. “Singaporeans probably top the list in terms of overseas buyers in Malaysia, most notably in Iskandar, but also in Kuala Lumpur and Penang.” That’s prompting Malaysia to act, joining Hong Kong and mainland China in seeking to cool surging housing markets to help combat concerns over affordability and prevent a housing debacle from emerging in the financial system. Malaysia’s central bank shortened the maximum length on mortgages in July, saying household indebtedness had risen by an average 12 percent per annum in the past five years. Last month, the government barred developers from helping home buyers by absorbing some interest payments on loans. Malaysians have accumulated Southeast Asia’s highest level of household borrowings at 80.5 percent of gross domestic product, according to Bank of America Corp.’s Merrill Lynch unit. Priced Out B. Shashikumar, a 32-year-old Malaysian bank manager, wants to buy a home before he gets married. “Even with my 5,000 ringgit ($1,568) monthly salary, I can’t buy a house in Kuala Lumpur or Selangor below 300,000 ringgit,” said Shashikumar, who typically spends three hours each day commuting to and from work in Malaysia’s capital from Shah Alam, a city where he lives with his parents. “I’ll have to find one in another state. It’s difficult to get high loans for a house in the city.” Average Malaysian home values rose 43 percent to a record in the four-and-a-half-years to June, according to government data. Prices in Kuala Lumpur climbed 62 percent to 605,711 ringgit between the start of 2009 and the end of the second quarter this year, said CBRE, citing government data. They rose 49 percent to 298,697 ringgit in Penang and 37 percent to 187,644 ringgit in Johor during the same period, the data showed. Cooling Measures Cooling measures may slow home sales, according to consultants including CBRE and Knight Frank. “The market is expected to self-correct in the next six to 12 months,” said Judy Ong Mei-Chen, a Kuala Lumpur-based executive director at Knight Frank. Iskandar, a development zone spanning 2,217 square kilometers (856 square miles), three times the size of Singapore, was started in 2006 to compete for manufacturing and logistics business with its neighbor in the south. It’s aimed at piggy-backing on Singapore’s economic rise, just as Guangdong gained from Hong Kong, by offering lower-cost alternatives to manufacturers, food processors and energy companies. Residential neighborhoods featuring large homes, gardens and swimming pools, are being built. Spin-offs of foreign schools and universities are also opening offering cheaper international-standard education than Singapore, including Britain’s Marlborough College, where Metcalf now sends his kids. Legoland, Pinewood Some high-profile projects, including the Legoland Malaysia amusement park and Pinewood Iskandar Malaysia Studios -- a franchise of the U.K.-based company where James Bond films were made -- are done or nearing completion in a flagship development zone called Nusajaya. Wealthier foreigners are encouraged to settle in the country under the government’s Malaysia My Second Home Programme, which provides them with renewable 10-year multiple- entry social visit passes. About 77 percent of the 22,709 people who have applied are from Asia, with the largest number of recent arrivals coming from China, government data showed. Singaporeans account for 70 percent of overseas buyers in Malaysia, making them the largest group of foreign purchasers, Wan Abdullah Wan Ibrahim, chief executive officer of UEM Sunrise Bhd., told reporters Nov. 13. UEM, which is co-developing Horizon Hills with Gamuda Bhd., is the biggest landowner in Iskandar. “The impact of the budget measures will be temporary,” Wan Abdullah said. “Developers are very creative. We will find other means of attracting buyers.” Developers Fall UEM, UOA Development Bhd. and Mah Sing Group Bhd. may post slower sales growth due to the cooling measures, K&N Kenanga Holdings Bhd. said a research note dated Oct. 28, predicting a knee-jerk reaction to foreigners’ appetite in the next few months. UEM shares have fallen 12 percent since Najib announced property cooling measures on Oct. 25. UOA dropped 12 percent and Mah Sing is down 9 percent in the same period, under-performing a 0.5 decline in the benchmark FTSE Bursa Malaysia KLCI Index. “Currently, Malaysia has a rather low number of foreign purchasers despite having one of the most accommodative environments for property investment in the region,” Leong Hoy Kum, Mah Sing’s group managing director, said in an e-mailed response to Bloomberg News queries. “This means that even should sales be slower, it may not have a very strong impact on the market in terms of pricing and sales volume.” Johor, Penang Johor is planning to impose an additional 2 percent tariff on buyers from overseas across all segments of the property market from May, Singapore’s Business Times reported Nov. 13, citing Koh Moo Hing, chairman of the Johor branch of the Real Estate and Housing Developers’ Association. Penang is seeking public feedback on proposals to introduce a 3 percent levy on foreigners purchasing homes next year, Lim Guan Eng, the state’s chief minister, said last month. “If I buy a property, I’m not going to buy it to speculate,” Metcalf said. “I want to buy a house that I can live in and the kids can grow up in and that we can call home. Iskandar feels more like living in the U.K.”

https://theedgemalaysia.com/node/42930

LBS to undertake mixed development project

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LBS Bina Group Bhd(Feb 17, RM1.65)Maintain buy at RM1.51 with target price of RM2.32: On Feb 14, LBS Bina announced that it had acquired two parcels of leasehold land measuring 4.32 acres (1.75ha) in Iskandar Malaysia, Johor, from the Employees Provident Fund (EPF) for RM71.82 million. The new acquisitions will be added to its existing parcel of land in Zone A, Iskandar Malaysia, bringing the total land size to 5.5 acres with a total value of RM113.8 million. This translates into an average land cost of RM475 psf, which is slightly steeper than the current asking price of RM300 psf to RM400 psf for commercial land nearby. The group’s three parcels of land are strategically located in Zone A, Iskandar Malaysia, which is a prime area surrounded by amenities and catalytic projects with ready catchments. To recap, LBS Bina purchased its first parcel of land in Zone A on July 6, 2013, from Hotel Rasa Sayang for RM42 million. Its initial plan was to develop serviced apartments with a gross development value (GDV) of RM500 million. The plan, however, has since been revised following the acquisition of the two parcels of land from EPF. The new plan calls for a mixed development project with a GDV of RM2.0 billion. We do not discount that there could be potential price revision to the GDV in future as management said the project will most likely commence in financial year 2016 ending Dec 31 (FY16) as the group currently has a full pipeline for FY14 till FY15. With the project’s GDV of RM2 billion and gross development margin of 33% spanning across eight years, we expect  the project to contribute net earnings of about RM62 million per annum to the group. We opine that the revenue and earnings contribution for the Johor project will only materialise in FY16. Hence, there will not be any changes to FY14 and FY15 forecasts. The group was back to being profitable in 2010 and has since successfully maintained its earnings momentum after restrategising its business model and product offerings. Moving forward, we expect the group’s FY13F and FY14F earnings to grow at 23% and 17% year-on-year to RM45.7 million and RM53.5 million respectively on the back of strong unbilled sales of RM710 million with our new sales target of RM650 million-RM700 million in FY13F and FY14F. Maintain “buy” with target price of RM2.32, based on 50% discount to its FD realisable net asset value per share of RM4.64. We favour the stock for its: (i) attractive dividend yield of more than 6%; (ii) strong earnings growth; (iii) strong cash flow from the divestment of China assets; and (iv) aggressive landbanking exercise. — JF Apex Securities, Feb 17 This article first appeared in The Edge Financial Daily, on February 18, 2014.

https://theedgemalaysia.com/node/99388

#Merdeka Cup* Kim Swee wants his boys to maintain winning momentum against Thailand

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KUANTAN (Sept 10): Malaysian Under-23 squad (Harimau Muda) coach Ong Kim Swee urged the players to maintain their winning momentum when playing against the Thailand Under-23 squad at the Darul Makmur Stadium, tomorrow. Kim Swee said though Malaysia have already qualified for the final, it would not be a reason for players to rest on their laurels. "The question of taking it easy or playing for a draw does not arise...fans who come to the stadium want to see both teams, especially the home team, performing up to expectation," he told reporters, here, today. Malaysia who play Thailand tomorrow have already qualified for the final after beating Singapore 1-0 and Myanmar 2-1 in as many matches while Thailand who are in second place with four points from two matches will be going all out for a win because losing to Malaysia is not an option. If Thailand lose to Malaysia and Myanmar score a big win against Singapore, they will have a chance to make it to the final with better goal difference. Malaysia will be without striker A. Thamil Arasu whom is facing a one match suspension... Wan Zack Haikal Wan Nor has sprained his ankle while K.Reuben has a swollen foot. Meanwhile, Thailand coach, Kairung Threejagsang said they would be playing, tomorrow without several key players due to injuries and suspension but gained confidence to beat the Young Tigers' side. "Our skipper, Mahamasabri Awaebuesa will not b e playing after picking up two yellow cards but our key role in midfielder (Pakorn Parmpak) will be in action tomorrow although he has a minor leg injury. "For me, Malaysia is a good team but we'll give our best against them," he said through an interpreter.

https://theedgemalaysia.com/node/77831

Astro Malaysia: New avenues for long-term growth

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Astro Malaysia Holdings Bhd(Jan 25, RM2.86) Initiate coverage with a buy at RM2.84 with a target price of RM3.20: We initiate coverage on pay TV operator Astro Malaysia with a long-term “buy” call, given its strong long-term prospects. While short-term earnings are pressured by the upgrading of set-top boxes (STB), we expect earnings for the financial year ending Jan 31, 2016 (FY16) to soar 48% thereafter. Hence, we expect investors to position for this growth starting next year. Our target price of RM3.20 offers 13% upside. The stock offers 3% net dividend yield. For upgrading set-top boxes to high-definition (HD) technology, Astro charges subscribers an additional RM20 per month. We expect Astro’s TV average revenue per user (Arpu) to increase by an average of RM2.70 (3%) per year over FY13 to FY15. Coupled with an average of 6% subscriber growth a year over this period, we project revenues to grow by an average of 7% to 8% per year. The STB upgrade will pressure earnings before interest, tax, depreciation and amortisation (Ebitda) margin until FY15 (down to 30% against 37% in FY12), as installation costs are expensed and the STB are capitalised and depreciated over three years. Net debt-to-Ebitda should fall to a comfortable 1.2 times in FY16. We expect net debt-to-Ebitda to rise to a still comfortable 1.7 times in FY15, in line with its STB upgrade. Unlike its previous listing which included overseas operations, the current listing holds only the Malaysian businesses. About 93% of Astro’s revenue comes from its pay TV operations, with 5% from its radio division. It has 3.2 million pay TV subscribers (generating an Arpu of RM92) and representing about 48% of total Malaysian households. Astro has a virtual monopoly of the pay TV market, with a 99% share against Telekom Malaysia Bhd’s (TM) 1% (via Internet protocol TV [IPTV]). Astro’s subscriber base can still grow, given that the household penetration rate is still below 50%, and that it added an average of about 49,000 users per quarter in the first quarter (1Q) to 3QFY13 (annualised 195,000 subscribers, or a 6% net add, in FY13.). Even if the pay TV segment had reached saturation, we think subscriber growth rate would still be a positive 2%, mimicking the population growth rate. Note that Astro’s total shareholders’ funds are very small, leading to unusually high net gearing ratios. Nevertheless, with healthy cash flows, we expect Astro’s net gearing to fall below to 3.5 times for FY14 to FY15 against an estimated 4.2 times in FY13. This is projected to fall further to 2.4 times in FY16 when the STB upgrade cycle ends. — UOB Kay Hian, Jan 25   This article first appeared in The Edge Financial Daily, on Jan 29, 2013.  

https://theedgemalaysia.com/node/33020

IOI sells indirect unit Paduwan

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KUALA LUMPUR: IOI Corp Bhd has disposed of an indirect subsidiary, Paduwan Development Sdn Bhd, for RM53.5 million. Paduwan’s principal asset is a plot of agricultural land planted with oil palm measuring 535.45 acres (217 hectares) in Krubong, Melaka. In an announcement to Bursa Malaysia yesterday, IOI Corp said its 99.7% subsidiary IOI Properties Bhd has sold the entire issued and paid-up share capital of Paduwan comprising 100,000 shares of RM1 each. The shares were sold to Starwatt Engineering Sdn Bhd for a total of RM53.5 million, inclusive of settlement of IOI Properties’ loan. The disposal will not have a material effect on earnings or net assets of the company for the financial year ended June 30, 2010, said IOI Corp. This article appeared in The Edge Financial Daily, July 6, 2010.

https://theedgemalaysia.com/node/54611

CIMB Research maintains Sell on WCT

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KUALA LUMPUR: CIMB Equities Research said it is maintaining a Sell on WCT at RM2.54 at which it is trading at a FY12 price-to-earnings of 12.7 times and price-to-book value of 1.5 times. It said on Monday, Sept 12 that it would likely to remain sellers for WCT as it sees no signs of a turnaround yet. The recent rebound has been weak. “Its indicators are also looking weary despite falling from a high of RM3.18 in July. The MACD could be doing a rollover, which likely to indicate further selling ahead,” it said. CIMB Research said traders should use any rebound towards the RM2.70-2.72 gap to sell into strength. Prices could potentially weaken towards RM2.35 next once the RM2.50 support gives way.

https://theedgemalaysia.com/node/90925

Toyota says to recall 185,000 cars globally, including Yaris

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TOKYO (July 3): Toyota Motor Corp said it is recalling around 185,000 vehicles globally including the Yaris compact due to a glitch in the electric power steering system, which could make the steering heavier. Yaris models, known as the Vitz in Japan, made between November 2010 to March 2012 have been recalled. Toyota said it is also recalling the Verso-S, known as the Lactis in Japan, manufactured from August 2010 to August 2011. The world's best selling carmaker is recalling around 130,000 vehicles in Japan, some 7,050 vehicles in Germany and about 7,000 vehicles in France, as well as in several other countries. No accidents have been reported from this glitch, said Toyota spokeswoman Shiori Hashimoto. - Reuters

https://theedgemalaysia.com/node/36480

City & Country: Building Kuala Lumpur Harley Street

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Jalan Ampang in Kuala Lumpur boasts several landmark buildings housing medical and health-and-wellness related services, among them Gleneagles Hospital and the Ampang Puteri Specialist Hospital. That has given the Al–Hidayah Group, owner of a 4.88-acre commercial tract on the thoroughfare a brainwave — to complement the health-related facilities found within 3km of the plot. To do this, the group is developing Olive 108, a RM920 million project designed around the “wellness concept”, reveals Al-Hidayah group chief executive Ismail Mustaffa. The group is a diversified business corporation involved in Islamic financing via its Al-Hidayah Investment Bank Labuan, an offshore investment bank under the Labuan Financial Services Authority; agro-based industries; education; information technology and property development. It is currently developing some apartments in Morocco but Olive 108 marks the group’s debut in the Malaysian property development scene.Olive 108The wellness concept, Ismail tells City & Country, was chosen because of the presence of the wellness-related facilities in the area such as hospitals, insurance companies as well as the head office of the Social Security Organisation (Socso). Even the project name, Olive, was selected for its association with health and wellness. “Jalan Ampang has all the ingredients to be developed into a wellness-focused enclave of Kuala Lumpur city like Harley Street in London which houses all kinds of medical assistance facilities. Projects and developments here can be coordinated by the authorities to turn Jalan Ampang into a wellness street,” says Ismail. The developer has done its homework — discussions with the Gleneagles Hospital and Ampang Puteri Specialist Hospital have confirmed that medical tourism in Malaysia is on the rise. “More and more people are coming from the Middle East and Indonesia to Malaysia for treatment and these people don’t come alone. They come with their families and they should stay in a comfortable place near their loved one while they are here,” he adds. Olive will be built in two phases, with the first comprising three condominium blocks — two rising to 20 storeys and the third to 10 storeys. Phase two will have one block of serviced apartments and an office block, each 20 storeys high and sitting atop a 3-storey retail podium. There will be a total of 242 condominium units. Sized from 1,900 sq ft to 2,500 sq ft, these will be priced at an average RM750 psf. Meanwhile, the 210 units of serviced apartments will be smaller, from 750 sq ft to 1,500 sq ft and these will be sold at a higher average of RM900 psf. The gross floor area of the office block is 15,000 sq ft per floor. The project will be served by 1,300 parking bays on two basement levels. Each condo block will have its own access to the car park. The developer has chosen Korean builder Kukdong Engineering & Construction Co Ltd — one of the builders of the Petronas Twin Towers — for the construction of Olive 108. In all, the project has a gross floor area of 1.3 million sq ft and 400,000 sq ft of car park space. The Al-Hidayah Group unveiled all the condo and serviced apartment blocks in May in Singapore and Malaysia. At press time, interest has been shown for 80% of the units. The group hopes to start construction by year-end. First to be built will be the condo blocks, followed by the serviced apartment and the office block within six months. The developer is targeting foreign corporations looking for staff accommodation as well as Koreans, Japanese, Iranians and Indonesians. As for the offices, the developer is trying to attract local medical practitioners. Unit size and indication pricing of the offices were not immediately available. The developer is watching the market closely and is not oblivious to the current soft office space market.  “We are concerned ... There are a few alternatives before us. We can redesign 10 of the 20 storeys in the block into serviced apartments, considering the demand,” Ismail says. As for the retail podium with 93,000 sq ft, the developer is targeting wellness-related businesses like spas, pharmacies, health food outlets, banks and insurance companies. It may sell the podium en bloc or keep it for recurring income. The Olive 108 site used to belong to the Malaysian Armed Forces. Al-Hidayah got the land in a swap with the Ministry of Defence. It signed a privatisation agreement with the Ministry to build a new camp site on Jalan Padang Tembak in exchange for the leasehold land on Jalan Ampang. LandbankSet up in 1995 as a company involved in electrical construction works, the Al-Hidayah Group went into subcontracting of civil works before moving on to becoming a main contractor. Under the government’s private funding initiative (PFI), the group built a 3,600-unit student hostel for Universiti Kebangsaan Malaysia (UKM) under the build, operate, transfer (BOT) concept. The hostel was completed in 2005. In Alor Gajah, Melaka, near the A’Famosa Resort, the group owns a 190-acre site on which it has built the Advanced Technology Training Centre (ADTEC) and Malaysian Institute of Chemical Engineering Technology (MICET) on a full turnkey basis. They were completed in 2005 and are now operational. The Group will also develop the curriculum, supply teaching materials and conduct training for teaching staff for the two institutions. The two institutions occupy a total of 73.8 acres, while 50 acres has been reserved for another foreign university to set up campus here. “We have to build the population here first before we build homes. So we decided to get education institutions to set up campuses here. We are also talking to three universities from Canada and Australia to set up their campus here. Once we have these universities, we have the critical mass and we can start building houses,” Ismail says of the site. The remaining area will be developed within five years. Plans are for landed homes such as bungalows, semi-detached homes and townhouses, targeting Singaporeans looking for weekend homes. Located near to Simpang 4, the site is only a short distance from the North-South Expressway. This project in Melaka has a gross development value of RM170 million. The Al-Hidayah Group is also planning for its 382-acre land in Tebrau, Johor, which will be developed in the next 10 years. Comprising residential, commercial and office components, the project will be based on the eco concept, with a green lung and a river created within the city. The site will be carved out into four tracts. The developer is looking for local and overseas joint-venture partners. As for the project timing, the developer is taking the cue from the market.  “We are looking at a GDV of RM13 billion but it will depend on how much the market can absorb. It has to be something unique to attract people there. The project is located along Jalan Tebrau and is 8km to Johor Baru,” Ismail says. The group also has a 14-acre tract in Bentong, Pahang on which it plans to build 18 units of homesteads of about half an acre each. The developer is now developing the concept for the RM30-million project located just next to the Bentong Golf Course. MoroccoThe Al-Hidayah Group ventured into property development in Morocco in 2008. In a 1,000ha (2,471 acres) new township located 20km from the capital, the group purchased 27ha (66.7 acres) to build 5,000 apartment units in three phases.  Known as Maraja-Al-Bahrain, the RM1.2 billion low-rise project is being developed in three phases and will be completed by 2013, says Ismail.  The first phase of 600 units were recently completed and handed over in May 2010. Work on Phase two started early this year. “We joined some business missions organised by the government and we went to several countries, including Morocco in 2005. Many people went to the Middle East which we thought was over-crowded. We saw the opportunity here. “The Morocco government was building houses as the country was fast developing while more and more people were moving into the city and housing demand was increasing. The majority of the homes are in the medium range and the rest in the high-end range,” Ismail notes. The group has a regional office in Morocco with 25 staff and from there, it plans to venture into other countries like Libya, Saudi Arabia and Mauritania. It was also appointed to conduct a feasibility study on ICT development in that country, and is doing a study on vocational training. The group will also be developing a Waqf land project with the Islamic Development Bank (IDB) under a 50:50 joint venture to build student hostels for University Moulay Ismail in Morocco for 4,000 students. The first phase is currently under construction and is scheduled for completion by end-October. “From time to time, we need funding for our projects overseas and our Al-Hidayah Investment Bank Labuan offshore bank will raise funds and facilitate the funding arrangements. All its clients are from overseas,” Ismail says. The company is also the plantations consultant to the Peru Ministry of Agriculture as it is embarking on a 9 million-acre oil palm plantation project. According to Ismail, the group may also be appointed as the turnkey agriculture contractor to develop oil palm plantation of over 75,000ha in Peru, including supply of seeds, plantation materials and construction of Infra-structures, housing and public amenities. The project is expected to cost about RM10 billion. “We are done with the feasibility study and to make sure that the project will be successful, we made a proposal to become the turnkey agriculture contractor,” he adds. This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 819, Aug 16-22, 2010.

https://theedgemalaysia.com/node/28802

Tan Chong Motor to distribute CBU Nissan vehicles in Cambodia

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KUALA LUMPUR: Tan Chong Motor Holdings Bhd's (TCM) unit will distribute Nissan brand completely built-up (CBU) vehicles in Cambodia. It said on Thursday, March 11 that its unit, ETCM (C) Pty Ltd had entered into a distribution agreement with Nissan Motor Co, Ltd for the sole and exclusive right to distribute Nissan brand CBU vehicles in Cambodia. TCM said the total financial commitment for the new Nissan business in Cambodia for the first five years of operation, including setting up of showrooms and working capital, is estimated at US$5 million to be funded by the group from its internal sources. The distribution is expected to start in the second quarter of 2010 with an initial sales volume of 200 units per year. The initial term of the agreement shall be for two years.

https://theedgemalaysia.com/node/699

Degem, NHF, APM, Emas Kiara dividends

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Degem proposed a first and final gross dividend of 2.5 sen per share, New Hoong Fatt a final tax-exempt dividend of 8 sen per share, while APM Automotive a final gross dividend of 9 sen per share. Meanwhile, Emas Kiara proposed a first and final tax-exempt dividend of 3% or 1.5 sen per share.

https://theedgemalaysia.com/node/34615

AHB’s dividend reinvestment plan

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KUALA LUMPUR: Following in the footsteps of Malayan Banking Bhd (Maybank), AMMB Holdings Bhd (AHB) is now proposing to undertake a dividend reinvestment plan that allows shareholders the option to reinvest their cash dividend entitlements in new shares. In a statement yesterday, AHB said as part of its capital management programme, its board would have absolute discretion, for each declared dividend, to determine whether to offer shareholders the option to reinvest the whole or a portion of their dividend entitlements in AHB shares. It said new shares to be issued under the option would be priced of the higher between that of not more than a 10% discount to the five-day volume weighted average market price and the par value. The share issuance will be free from any brokerage fee. AHB said the plan was expected to be in place by the current quarter of this year. For income tax purposes, shareholders will be treated as having received a cash distribution equivalent to the amount of the cash dividend declared. Shareholders must expressly elect for the reinvestment in writing, that is by signing and returning the notice of election. Otherwise, it will be paid in cash. AHB said the proposed plan was a capital management tool that would strengthen its capital position as the new share issuances would enlarge its share capital base. It said the cash, which would otherwise be paid out, would be preserved to fund the banking group’s working capital and capital funds requirements. “This is consistent with the themes outlined in the capital proposals issued by an international committee on banking supervision for the further strengthening of the capital funds of banking institutions,” it said. This article appeared in The Edge Financial Daily, August 3, 2010.

https://theedgemalaysia.com/node/88751

#Forex* Dollar falls as investor focus shifts to U.S. economy, Fed

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* U.S. House, Senate pass bill to avert debt default * Dollar index down 0.7 percent, U.S. bond yields down * U.S. currency pulls back from 3-week high against yen LONDON (Oct 17): The dollar fell against a basket of currencies on Thursday as investors marked a deal to end the U.S. debt stalemate by focusing on the economic impact of the government shutdown. Analysts said the two weeks of uncertainty that knocked investor and business confidence would have dented the world's largest economy's growth prospects. That would keep the Federal Reserve from withdrawing monetary stimulus at least until the beginning of next year. As such, U.S. Treasury yields  slipped and dragged the dollar down against most major currencies, including the yen. Adding to the dollar's woes was Chinese rating agency Dagong, which downgraded the United States to A- from A and maintained its negative outlook. The dollar index was down 0.75 percent at 79.877, well off a one-month high of 80.754 struck on Wednesday. Against the yen, it lost 0.8 percent to trade at 97.95 yen, pulling back from a three-week high of 99.01 yen set earlier in the day. The dollar lost momentum after rising initially in anticipation of an end to the fiscal impasse, falling to lows versus the yen after the U.S. House of Representatives approved a deal already passed by the Senate.   The deal offers only a temporary fix and does not resolve the fundamental issues of spending and deficits that divide Republicans and Democrats. "We would expect this impasse to shave off part of fourth-quarter growth and hurt consumer confidence especially from the government sector," said Simon Derrick, head of currency strategy at BNY Mellon. "What this does is push back expectations of Fed tapering to early 2014 and this is dollar negative." The Fed's Beige Book report on Wednesday suggested confidence had been dampened somewhat by uncertainty caused by budget battles in Washington. Carry trades The dollar's broad losses saw the euro rise 0.7 percent to $1.3638 not far from a eight-month high of $1.36465 struck on Oct. 3. It also pushed growth-linked currencies including the Australian and New Zealand dollars to fresh multi-month highs. The Australian dollar rose past reported option barriers at $0.9600 to hit a four-month high of $0.9603. The New Zealand dollar soared to a five-month high of $0.8467. With implied volatilities  - a gauge of how choppy currency moves are likely to be - anchored, and expectations that Fed is likely to keep pumping in dollars at $85 billion a month, analysts said conditions were turning in favour of dollar-funded carry trades. In carry trades, investors borrow in a low yielding currency to buy a higher yielding or riskier one to earn better returns. "With soft but positive economic growth, and investors ever more confident that a Fed exit isn't around the corner, we remain skewed towards selective bullish risk positions," Societe Generale analysts said in a note. "They are a green light for risk takers to position for a recovery of the G-10 carry trade."

https://theedgemalaysia.com/node/36224

HSBC Bank Malaysia targets 8 Islamic Banking branches by year end

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KUALA LUMPUR: HSBC Bank Malaysia Bhd plans to have eight Islamic Banking branches in Malaysia by year end. Its deputy chairman and chief executive officer Mukhtar Hussain said HSBC will add two more branches to the existing six branches here. "We will continue to invest in Malaysia," Mukhtar said in at HSBC's forum on the global economy on Wednesday, Sept 1. HSBC has 40 conventional banking branches in Malaysia.

https://theedgemalaysia.com/node/23959

AKN aborts purchase of glove maker

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KUALA LUMPUR: The Securities Commission has rejected AKN Technology Bhd’s application for the proposed utilisation of some RM17.3 million to acquire a glove manufacturer. The company told Bursa Malaysia yesterday that the proposal was not approved because the target acquisition, Nobel Gloves Sdn Bhd, has yet to commence operations and does not have the required facilities to immediately start operations. The proceeds of RM17.3 million came from the disposal of Innovative Polymer Systems Sdn Bhd, Innovative Resins Sdn Bhd and Delta Polymer Systems Sdn Bhd. AKN said yesterday the cut-off date for the acquisition was on or before Dec 17, 2009. It said the proposed acquisition of Nobel Gloves should therefore be deemed terminated. The company said it would deliberate on the next course of action in respect of the utilisation of proceeds amounting to RM17.3 million. Prior to the Innovative group’s disposal, AKN was principally involved in the manufacturing of polymer coating solutions used by the glove makers and support services in the re-work and re-cycling of recyclable parts and components, as well as servicing multinational corporations in the electronics industry. AKN in a filing to Bursa Malaysia in April said due to its focus on the consumer electronics industry, the group’s financial performance was severely impacted by the global financial crisis. It said the proposed acquisition of Nobel Gloves is part of the group’s plan to reduce the group’s sole dependency on its existing core business. The company believed that its venture into the glove industry would contribute positively to future earnings, as the move would cushion the negative effect of the consumer electronics industry. AKN noted that the increasing awareness of healthcare and hygiene and regulations would drive the demand for gloves in the developed countries. For the fiscal year ended June 30, 2009, it posted a net loss of RM47.75 million on the back of RM6.26 million revenue. AKN changed its year-end from March 31 to June 30 in the previous financial year. As such there were no comparative numbers.     This article appeared in The Edge Financial Daily, December 22, 2009.

https://theedgemalaysia.com/node/79717

Legitimacy of international award conferred to FRIM, DG questioned

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KUALA LUMPUR (Feb 28): The legitimacy of a prestigious international award conferred in 2011 and last year to a government statutory body and its director-general (DG), is currently in doubt. The Forest Research Institute Malaysia (FRIM) received the International Socrates Award for the Best Enterprise (Applied Research and Scientific Achievements) Award in United Kingdom from the Europe Business Assembly (EBA) in 2011. It was for the “institute’s reliability, consistency and excellence of achievement and professionalism in research and development (R&D) in tropical forestry and forest products”. Meanwhile, its DG Datuk Dr Abd Latif Mohmod was awarded the International Socrates Award for Manager of the Year (Applied Research and Scientific Achievements) Award in 2011 and was one of 17 recipients of the “Name of Science” Award for his “contribution to the world science” last year. It is understood that although the recipients did not pay for the award, they were instead asked by EBA to pay for the promotion of their companies that comes together with the certificate. However, Abd Latif told fz.com that he was unaware of the situation and added that other Malaysians have also received the award in other categories. "It's good you asked... I will check on them (EBA) on the legitimacy of the awards,” he said. Bernama had reported that the body and DG are the first recipients from Malaysia since its inception 47 years ago. Recently, fz.com has learnt that EBA has been seeking new recipients in the country and recently sent a registration form to a rector from a local public university. According to the registration documents, EBA had placed the cost of the “official package of the event for the nomination laureate” at £5,400 (RM25,318.28) with value-added tax (VAT) included. The package will grant the title of “The Name in Science” together with “a diploma, memorable sign and inscription of the name to the world register of prominent scientists.” EBA calls itself as an independent corporation and a non-government organisation that promotes “transformation of state-of-the-art experience and economic practices, establishment of economic, educational, cultural, and scientific ties, creation of national business elites”. According to its website, past recipients of award winners include Rosneft Oil Company (Russian Federation), KRKA d.d. (Slovenia), SERY* Creative Communications GmbH (Austria), Makpetrol AD (Slovenia), joint-stock company Aluminium of Kazakhstan (Republic of Kazakhstan), public corporation Belshina (Republic of Belarus), Banca de Economii S.A. (Republic of Moldova) and Azer-Ilme Company Ltd. (Republic of Azerbaijan). The issue of fake awards and titles is not new in Malaysia with politicians often accused of buying their degrees. Hulu Selangor MP P. Kamalanathan was accused of forging his degree certificate during the seat’s by-election in 2010 while chef Mohd Nadzri Redzuawan, better known as Chef Riz, was caught red-handed in overstating in qualifications in 2011.

https://theedgemalaysia.com/node/64158

HK gadfly David Webb on governance

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In early 2009, with markets reeling at the height of the global financial crisis, Hong Kong’s main telco PCCW was being privatised by its listed Singapore holding firm Pacific Century Regional Development. Most analysts had written off the actual vote for the firm — controlled by Richard Li, the younger son of billionaire Li Ka-shing — as a mere formality. Enter Hong Kong’s corporate governance campaigner and gadfly David Webb. The former British corporate finance executive, who runs the popular Webb-site.com, which uncovers corporate shenanigans in Hong Kong, had been campaigning to derail PCCW’s privatisation effort but initially had not attracted much attention. In mid-January 2009, Webb had received an anonymous tip-off that there was a ballot rigging plot to influence the privatisation vote. He complained to the Hong Kong Securities and Futures Commission and kept up the pressure via his website. Eventually, SFC intervened, taking PCCW to court, but losing the initial case and only to succeed in blocking the privatisation on appeal. While the move won him few friends in Hong Kong, it did reaffirm his role as Hong Kong’s most feared corporate governance campaigner who would not spare even the city’s richest clan. Started in 1998, Webb-site.com has become the go-to portal for retail investors in Hong Kong and global hedge funds following the shenanigans of companies in the greater China region. Webb arrived in Hong Kong in 1992 as a rookie corporate finance executive with BZW Securities, the then investment banking arm of London-based financial services giant Barclays. He later worked for Wharf Holdings as an in-house corporate finance executive until the tail end of the Asian financial crisis, when he found himself out of job. Instead of returning home to the UK and looking for another investment banking job, the shy, soft-spoken Webb decided to retire early in Hong Kong to manage his own portfolio and start a website in a city long known for opaque business practices and tame disclosure laws. Although Hong Kong’s business elite as well as its securities regulators may not like him, Webb knows they read almost everything he posts and pay attention to what he is saying. Just recently, the regulators abruptly reversed gears on the handcount rule on privatisations in Hong Kong after Webb forcefully made his point in the wake of the PCCW privatisation in 2009. Hong Kong law currently says companies need three-quarters of the vote in favour of the privatisation move in addition to the majority of the people through a handcount. “The problem has always been that you can manipulate the handcount by adding extra hands [just as PCCW was trying to do],” Webb, 46, tells The Edge Singapore in an interview on June 7. In late May, Hong Kong’s Law Reform Commission, first set up three years ago, took up another major cause that Webb has campaigned for years: class action suits. The commission recommended the introduction of class action suits in Hong Kong. For now, there is a small caveat. “The commission says class action suits will be allowed in Hong Kong, but not for investors, only for consumers of goods and services,” says Webb. “What’s been proposed is far too little and far too late, but if there is a positive, it is that Hong Kong now permits class action suits.” At some point, perhaps investors will be allowed to file class action suits as well. As the full impact of the European crisis is felt across the world, China starts to slow and other Asian economies slow, Webb says investors should watch for more financial scandals. “In boom times, when profits are growing fast, things get covered up easily. But, in more challenging economic times, shenanigans come to light,” he says. In the 14 years that he has been campaigning for better corporate governance, Webb says, a lot has changed in Hong Kong and elsewhere across Asia, including Singapore, but the region still has a long way to go. “Clearly, the biggest change in Hong Kong has been in market composition,” says Webb. Mainland Chinese companies with their listed H-shares, including top banks such as ICBC, big oil companies such as Petrochina and giant telcos such as China Mobile, now dominate the Hong Kong bourse, making up for more than half of the market capitalisation. Tightening of rulesTo be sure, regulations in Hong Kong have improved. Take, for instance, the takeover threshold, which has come down to 30%, from 35%; and disclosure agreement for shareholders, which now triggers at 5% instead of 10% previously. Moreover, insider trading has been a criminal offence in Hong Kong since 2003, along with being a civil offence. “The frequency of financial reporting has improved,” notes Webb. “When I first started in Hong Kong, it used to take up to five months for companies to publish their annual results. Now, that’s down to three months.” Still, he says there are things that Hong Kong can learn from Singapore. “Hong Kong needs to catch up with Singapore and the rest of Asia in terms of quarterly financial reporting,” he says. “There are those who say it will only force companies to push for short-term results but, as long as most Hong Kong companies are controlled by people who have large portions of their net worth in their listed vehicles, they are not going to be cavalier and just try to make quarterly earnings targets.” Will Singapore benefit from the tightening of rules in Hong Kong and snare a bigger share of quality China listings instead of being satisfied with second- and third-tier Chinese companies? The way he sees it, luring companies through some sort of competitive regulatory arbitrage just will not work. “In the end, if investors believe a certain market was attracting lower quality companies, they will pay much less for stocks in that market,” he says. “Ultimately, good companies will go where they see investors are willing to pay a premium and, often, that’s an exchange with the most stringent of rules.” Trying to lure big IPOs by offering a slightly more lax regulatory environment, he says, is a short-term strategy that Hong Kong or Singapore should not fall for. To attract the best listings from Asia and around the world, Singapore and Hong Kong need to develop their own niche. He cites how Singapore has done well by attracting shipping companies, shipyards, and offshore and marine players because it has long had an expertise in the area. Another area in which Singapore has done well is in real estate investment trusts and business trusts, while Hong Kong has done well attracting global resources companies such as Glencore or luxury global brands such as Prada and Coach. He cites how Singapore has successfully attracted IPOs such as Formula One and Manchester United, while Chinese Internet companies have avoided both Hong Kong and Singapore, listing directly on Nasdaq because analyst coverage there is better. So, the likes of Baidu, Netease, Sina are all listed in the US. “In the long run, policymakers and regulators need to build a top quality framework and attract the best companies in the world and say they don’t care about a few bad ones that can’t come in,” he says. “Hong Kong and Singapore need to be in a virtuous cycle of listings, not a vicious cycle,” says Webb. Fighting for transparencyWebb has for years campaigned for better disclosure and stringent rules against related party transactions that are common across Asia. “At least in Hong Kong and Singapore, there is a system for approving such transactions,” he notes. “Minority shareholders do have the opportunity to stop them, provided the company admits that they are related party transactions,” he says. Often, in emerging markets, it is years after a transaction that investors realise a company was sold or bought from a relative of the chairman or CEO, who was acting through some nominee companies, Webb says. “In many jurisdictions, including Singapore and Malaysia, often they don’t name the counterparty or the people behind the buyer or vendor,” he notes. “In Hong Kong, even if it is a [British Virgin Island] company, you can get the names behind the buyer or seller. In corporate transactions, it is absolutely crucial to know who is actually behind it — the name of the beneficial owner, not just the name of a nominee company registered in some offshore island. If somebody is actually lying and is just a puppet for someone, you can go after them and find out who exactly benefits from the sale or who is forking out money for the purchase.” Another key issue in Asia is the lack of truly independent directors. “You have tycoons appointing their cronies and golf buddies as ‘independent directors’,” notes Webb. “There are very few really independent directors in Asia who are not tied to management or owners and who are willing to ask difficult questions,” he says. “It is important that independent directors be elected by minority shareholders, with controlling shareholders forced to abstain from voting.” He adds that independent directors should be answerable to minority shareholders; so, if they fail to do a decent job, they can be quickly replaced. Webb also wants regulators with more teeth. “One thing you have to recognise about regulations globally is that they are limited by jurisdiction, and there is a lack of cooperation between governments,” he says. As investors in the beleaguered Sino-Forest Corp found out last year, it is hard to keep tabs on a company based in Hong Kong, with main operations in China and a dual listing in the US and Canada. “The US doesn’t have an extradition treaty with China, nor does Canada or Hong Kong, so even the threat of prosecution isn’t much of a deterrent,” he says. “The thing to remember is that China is still an emerging market, one without a clear rule of law and one without a respectable enough court system that it can have extradition treaties with the US, the UK, Canada or Australia.” After 20 years in Asia following companies and corporate shenanigans in the region, Webb still says a lot of things never cease to amaze him. He chuckles when he talks about the long-running saga of pump-and-dump Chinese reverse takeover companies in North America. “Why does a Chinese herbal medicine company want to list through the backdoor by taking over a small Maryland company and giving it a Chinese name?” he asks. If the company had good fundamentals, it could have always listed in Hong Kong, Singapore or China, he says. “You have to ask yourself, did they ever want to make a profit or was it always just all financial engineering and shenanigans?” Webb is now as much a part of the Hong Kong establishment as he is a gadfly. He is on the Security and Futures Commission’s takeover panel — as its longest-serving member — and previously served as a director of the Hong Kong Stock Exchange. Yet, he is not expecting to be invited to Li Ka-shing’s or son Richard’s home for tea any day soon. This article appeared in The Edge Financial Daily, June 12, 2012.

https://theedgemalaysia.com/node/31475

Proton's units sign CAs with unions

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SUBANG JAYA: Proton Holdings Bhd's wholly-owned subsidiaries Perusahaan Otomobil Nasional Sdn Bhd (PONSB) and Proton Tanjung Malim Sdn Bhd (PTMSB) had on Wednesday, June 9 signed collective agreements with their respective workers unions following the conclusion of successful negotiations. Proton's group managing director Datuk Syed Zainal Abidin Syed Mohamed Tahir, who signed on behalf of the two wholly-owned subsidiaries, said this was the eighth collective agreement with PONSB and the second for PTMSB. He said the collective agreements covered a a three-year period from Jan 1, 2010 to Dec 31, 2012 and incorporated new and improved financial and social benefits for members of the unions. Syed Zainal said the agreements included an average of 7.5% increase in salary across the board. According to him, the new agreements would benefit 4,195 PONSB employees and 2,204 PTMSB employees, stressing it would see improvements in "call back," transport allowance, laundry assistance, medical benefits and condolence contribution. "The spirit of philosophy in which the new agreements were drafted were designed to allow Proton to remain as a competitive employer in the Malaysian automotive industry," he pointed out. Syed Zainal said the objective of the agreements were to create a motivated and skilled workforce, obtain employees' commitment towards increasing productivity, encouraged harmonious industrial climate and instilled awareness on the consequences of the National Autmotive Policy. "The eighth collective agreement with PONSB marks the fulfillment of Proton's responsibility to look after the welfare of its workers, something it has been committed in doing for more than 25 years," he said adding that the company had not reduced benefits to workers even during trying times. PONSB Workers Union and PTMSB Workers Union were represented by their respective presidents Mohammad Fauzei Yusuf and Mohd Yusmar Omar. Proton's share price rose one sen to close at its intra-day high of RM4.50, with 829,600 shares traded.

https://theedgemalaysia.com/node/16631

UOA Dev earnings down on absence of FV gain

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KUALA LUMPUR: UOA Development Bhd’s net profit for 1Q ended March 31, plunged to RM47.6 million from RM133.6 million a year ago due to the absence of fair value (FV) gain on investment properties in the quarter under review. Revenue was marginally higher at RM148.07 million from RM145.73 million a year ago. Earnings per share stood at three sen versus 15 sen a year ago while net asset per share was RM1.54 compared with RM1.56. UOA Development remains upbeat on growth prospects for financial year 2012. “There were some purchasers that had difficulties with their bank financing. But other than that, the demand for our development has still been sustainable. “We have a couple of launches coming up. So, of course, there is room for us to improve on the sales revenue,” chief operating officer (development) David Khor told the media after the company’s AGM yesterday. UOA Development’s pipeline of launches for FY12, mainly comprising residential properties, are worth an estimated RM1.5 billion in gross development value (GDV). The company has no plans to deviate from its focus on the Greater KL region. Khor said the Economic Transformation Programme and other government initiative projects lined up for the Greater KL region, will boost the demand for property within the area. “Looking at the size of Greater KL region, it’s much bigger than Singapore. So there’s still plenty of opportunity. It’s just a matter of price., he added.   Executive director Alan Charles Winduss said the group has yet to see any impact from the economic slowdown. However, he did not discount the fact that should the banks resort to further tightening of loans for end consumers, it may become a challenge for the company in the future.      “We are balanced between commercial and residential properties, so we have hedged our bets. “With our business plan, if we find that the commercial [property sector] is slowing down, we’ve got enough to move into residential properties to maintain the same momentum,” Winduss said. The counter closed two sen higher at RM1.57 yesterday with 942,300 shares done. This article appeared in The Edge Financial Daily, May 30, 2012.

https://theedgemalaysia.com/node/67760

Time to hang up on SingTel?

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It’s the biggest company in Singapore by market capitalisation and has long been viewed as a safe haven for investors who lack the stomach for risk. As a telecoms company, Singapore Telecommunications generates steady cash flows and pays regular dividends year after year. Such corporate stalwarts are often forgiven for failing to match the returns of the broad market, their underperformance simply explained away as the trade-off for the certainty they offer. Indeed, shareholders of SingTel have tolerated sub-par returns for some years. Since March 2009, when the Straits Times Index hit its crisis low, to the end of last year, shares in SingTel have delivered a total return of 50.4%, including dividends. In comparison, the STI returned 85.7%, including dividends, and 67.8% on share price appreciation alone. This year, SingTel has continued to lag the market, its shares rising just 8.1% against an advance of 15.7% in the benchmark STI. However, recent developments in the telecoms sector and SingTel’s financial results have some analysts and investors wondering if the company is really such a safe place to hide from the turmoil in the global markets. Besides being susceptible to foreign exchange movements because of its significant exposure to markets such as Australia, India and Indonesia, the company also now appears to be swimming against a tide of intensifying competition, uncertainty over government regulation and technological change. That’s eating into its profitability and forcing it to take on new risks in order to keep growing. These problems were evident in its results for the first quarter of fiscal 2013 (1QFY13) ended June. Operating revenue and earnings before interest, taxes, depreciation and amortisation (Ebitda) declined by 1.6% and 3.2%, respectively, impacted by a 3% depreciation in the Australian dollar against the Singapore dollar. In constant currency terms, operating revenue would have been stable although Ebitda would still have declined 1.5%. Meanwhile, pre-tax contributions from SingTel’s regional associates were roughly flat at S$506 million  (RM1.26 billion) from S$508 million a year ago, also partly owing to the adverse movements in major regional currencies in the quarter. In particular, the Indian rupee fell 18% and the Indonesian rupiah fell 6% against the Singapore dollar. Excluding a one-off gain from the sale of an investment in Far EasTone Telecommunications Co, SingTel’s underlying earnings fell 2.6% to S$850 million. According to Bloomberg, this is the lowest since the quarter ended December 2008. That was thanks to a host of challenges at its overseas units. Notably, its Indian associate Bharti Airtel was “adversely impacted by regulatory guidelines around processing fees that restricted the sales of combo packs offering bundled service propositions, as well as a service tax hike from 10.3% to 12.36% in India”, the company says. Higher network-related costs and higher selling expenses as Bharti sought to grow its customer base also led to Ebitda declining 5%. Bharti, once a primary driver of growth for SingTel, now appears to have become a drag. In Australia, SingTel’s wholly-owned subsidiary Optus reported a 3.2% fall in revenue to S$2.2 billion, partly due to mandated mobile termination rate cuts and lower equipment sales. And on the local front, a drop in roaming revenues and higher take-up of capped-rate roaming packages have caused the average revenue per user in the post-paid segment to fall from S$87 a month in the year-ago quarter to just S$80. At the same time, subscriber acquisition costs per post-paid user have risen to S$301 from S$294 in the same period last year. New growth challengeThat’s not to say that SingTel hasn’t been growing its subscriber base. With strong footholds in key markets in the region, its various units had a combined subscriber base of 462 million as at end-June, up 11% year-on-year (y-o-y). However, the additional subscribers haven’t been contributing to its earnings as they once did, in part because of the steadily lower profitability of basic mobile voice services. The long-term challenge that SingTel and other telcos face is to get mobile phone users to spend more byoffering them a broader range of value-added services. From developed markets such as Australia and Singapore to emerging economies like India and Indonesia, the long-term challenge that SingTel and other telcos face is to get mobile phone users to spend more by offering them a broader range of value-added services. That means making acquisitions of newly emerging Internet-related companies, sometimes for hefty prices; tinkering with untested business models; and trying to sell customers something they don’t yet know they need. So much for the supposed certainty of the telecoms business. SingTel recently restructured its management and operations to address this issue. Instead of being divided geographically — Singapore, Australia and other international associates — it is now divided by business group. There are three CEOs in charge of three business groups: consumer; information and communications technologies (ICT); and digital life. The consumer business is currently the largest, with revenue of S$2.8 billion in the quarter. It includes all the consumer-facing businesses in SingTel Singapore, Optus and the regional associates. The ICT division, with revenue of S$1.6 billion, includes subsidiary NCS and deals with enterprise-related businesses such as cloud computing and systems integration. Digital life, the newest division, currently includes mobile advertising company Amobee and two food review websites — one in Singapore called HungryGoWhere and another in Australia called Eatability. The three companies were acquired within the last year. The digital life group chalked up S$82 million in revenue for the quarter. Mature markets such as Singapore and Australia are already generating revenues for the SingTel group from the sale of mobile data and additional services. But it is really in emerging markets such as Indonesia, Thailand and the Philippines where SingTel stands to gain the most. If it is successful, it should be able to harness a global trend of increasing time and money being spent on smart mobile devices. Credit Suisse estimates that there will be 998 million smartphone users in Asia ex-Japan by 2015. Revenues and cash flows in the emerging markets, where SingTel has exposure, are forecast to grow at a compound annual rate of 8.1% and 25.2% respectively, from now to 2015. That compares to rates of 3.7% and 9.2% in developed markets. Juniper Research forecasts that the total market for mobile search and discovery — including local search apps and web search — will triple to US$15 billion (RM46.95 billion) by 2017. As the number of tablet users rises and more apps are downloaded, spending on in-app advertising is expected to reach US$10.4 billion in 2017 from US$2.4 billion this year. Not so safeThat potentially enormous upside means little for investors hunting for safety and stability, though. In fact, SingTel might well be a riskier prospect than StarHub, its closest peer in the local market, according to some analysts. Moreover, investors haven’t had to tolerate any underperformance from StarHub for the relative safety it offers. Shares in StarHub have risen 25.1% this year. In the wake of SingTel’s 1QFY13 results, ratings agency Moody’s Investors Service downgraded its senior unsecured ratings to Aa3 from Aa2, citing “a weakening in key financial parameters”. In a statement, Nidhi Dhruv, a Moody’s analyst and also lead analyst for SingTel, says: “In Moody’s view, SingTel’s commitment for higher shareholder returns, coupled with the ongoing need to invest in its businesses, will lead to ongoing pressures on free cash flow.” Dhruv also draws attention to the lower margins of the company’s new businesses. A number of other analysts have also adjusted their view of its stock. For instance, in a report dated Aug 14, Deutsche Bank analyst Alan Hellawell reduced his price target by 4% to S$3.12 and cut his earnings estimates by 7% to 8%, saying that there are “more areas to be cautious [on] than positive”. Meanwhile, Kim Eng analyst Gregory Yap says in his report that the company is “still on the wrong side of key trends”. He expects the company to continue to face margin, competitive and currency headwinds through its FY13. “The best that can be said is that earnings are likely to be stable, hence we have trimmed our forecasts only slightly despite a below-expectation 1Q. However, the same cannot be said of cash flow, as capital expenditure is expected to rise on the back of 4G rollout and potentially expensive 4G spectrum auctions,” Yap says. In the quarter, free cash flow fell 21%. “Moreover, net-debt-to-Ebitda is high at 1.1 times. Against this backdrop, we see no upside for dividends.” Yap has a “sell” call on the stock and a price target of S$3.03. Besides the pressure of heightened capital expenditure, SingTel has also made a number of missteps as it expanded into new businesses such as pay TV. In May, customers watching the simultaneous broadcasts of two English Premier League matches — Manchester City against Queens Park Rangers and Sunderland against Manchester United — complained of interruptions in coverage. In particular, viewers missed two late winning goals by eventual Premier League champions Manchester City. To placate its irate customers, SingTel gave them a rebate that cost it a total of S$5 million. In fact, SingTel now appears to be encountering difficulty in maintaining its pace of growth in the pay TV sector. In the recent quarter, it only managed to add 12,000 subscribers. That compares with 15,000 in 4QFY12 and 18,000 in 3QFY12, according to DMG & Partners Research. There is also growing evidence that its strategy of bidding aggressively for exclusive content to draw subscribers hasn’t been all that effective in dislodging StarHub from its dominant position. At any rate, the introduction of cross-carriage rules that require pay TV operators to make exclusive content available to one another’s customers means there is little point in continuing to bid aggressively for exclusive content. SingTel and StarHub are expected to begin the bidding process soon for the rights to broadcast the English Premier League for another three years, and DBS Vickers analyst Sachin Mittal thinks it is more likely that the two companies will either put in a joint bid or bid separately but on a non-exclusive basis. Uncertainty abroad SingTel isn’t having it any easier overseas. According to analysts, competition in India is intensifying. And, the existing players there face some uncertainty over the cost of renewing their spectrum holdings. An auction is being scheduled for the reallocation of some 2G spectrum held by 2008 licensees. Prices paid will be used as a benchmark for future spectrum renewals. Meanwhile, regulatory uncertainty continues to hang over the Indian telecoms sector. One example: The government structured the last 3G auction so that no Indian operator would have a 3G licence covering the entire country. Operators have since made national roaming agreements with each other in order to offer a nationwide service — a tactic the government is now trying to outlaw. Then, there is the risk posed by SingTel’s plan to expand its new digital life business. DBS analyst Mittal says: “We like SingTel’s strategy of venturing into the mobile advertising space and its bold restructuring exercise. However, we expect to see cost pressures in the near term, before rewards in the longer term.” He also highlights that although shares of SingTel have underperformed, they are not necessarily cheap. The stock’s 12-month rolling forward price-earnings ratio of 14 times is above its historical average of 13.2 times by his calculations. There are many bright spots in SingTel’s diverse divisions, though. For one thing, Bharti’s operations in Africa are turning around nicely. In US dollar terms, operating revenue increased 9% y-o-y, while Ebitda was up 12%. The group’s share of pre-tax operating profits from the African operations amounted to S$28 million, up from S$25 million in the last corresponding quarter. SingTel’s operations in Indonesia, Thailand and the Philippines have also shown stellar results this quarter. Telkomsel in Indonesia reported a 10% growth in operating revenue and a 7% increase in Ebitda. In Thailand, Advanced Info Service reported a 12% increase in service revenue and an 8% rise in Ebitda, driven in particular by data-related growth of 35%. And in the Philippines, Globe Telecom saw service revenue rise 6% to a quarterly record high. In a recent report, UOB Kay Hian notes that competitive intensity has moderated in Indonesia and “industry players intend to increase prices gradually”. The report also says that Indonesians are avid users of social media on mobile and the country has the second-largest community of Facebook users in the world. “Telcos have introduced bucket plans to monetise data traffic. Telkomsel and [competitor] XL Axiata recorded 71% y-o-y growth in data revenue in 1Q12.” Don’t expect a smooth ride as companies such as SingTel seek to tap this new potential, though. And, that volatility might result in its stock no longer being perceived as a safe haven for risk-averse investors. — The Edge Singapore This article appeared in The Edge Financial Daily on 23 August, 2012.

https://theedgemalaysia.com/node/58300

Palm oil drops as Malaysian stockpiles advance most in 14 months

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10 Dec 2013 18:24 (Dec. 10): Palm oil dropped to a one-week low after reserves in Malaysia increased the most in 14 months in November as exports fell from the second-largest supplier. The February contract fell 0.3 percent to 2,638 ringgit ($822) a metric ton on the Bursa Malaysia Derivatives, the lowest close for most-active futures since Dec. 3. Prices rose 8.2 percent this year, set for the first annual gain since 2010. Inventories climbed 7.2 percent to 1.98 million tons from a month earlier, the biggest gain since September 2012, while exports lost 8.7 percent to 1.52 million tons, the biggest drop since February, MPOB data showed. The median of estimates in a Bloomberg survey was 1.96 million tons for reserves and 1.57 million tons for exports. Production fell 5.6 percent to 1.86 million tons, the first drop since February and compared with 1.92 million ton predicted in the survey. “Inventories may be higher than expected, but the market has already priced this in and is looking ahead to lower inventories from December onwards,” said Alan Lim Seong Chun, an analyst at Kenanga Investment Bank Bhd., who forecasts stockpiles will drop to 1.92 million tons this month. Shipments from Malaysia fell 20 percent to 378,579 tons in the first 10 days of December from the same period a month earlier, cargo surveyor Intertek said today. Soybean oil for January delivery climbed 0.5 percent to 40.40 cents a pound on the Chicago Board of Trade. Soybeans were little changed at $13.43 a bushel. Refined palm oil for May delivery closed little changed at 6,242 yuan ($1,028) a ton on the Dalian Commodity Exchange. Soybean oil ended 0.1 percent higher at 7,228 yuan.

https://theedgemalaysia.com/node/50052

#Forex* Dollar searches for fresh inspiration in holiday week

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SYDNEY (Dec 23): The U.S. dollar got off to a sluggish start in Asia on Monday, having slipped late last week as investors took some profits although analysts still expect its longer-term uptrend to stay intact. The dollar bought 104.01 yen, having stepped back from a five-year peak of 104.64 scaled on Friday. The euro, which slid to a two-week trough of $1.3625, last stood at $1.3670. Trading could be choppy this week as liquidity dries up with many markets across the globe shut on Wednesday for the Christmas holiday. Japanese financial markets are closed on Monday for the Emperor's Birthday. "Between now and the return of full liquidity, beware the high volatility often associated to low liquidity. Breakouts without the satisfying follow through are common in such conditions," said John Kicklighter, chief currency strategist at DailyFX. The greenback rose last week after the Federal Reserve took a first step towards winding down its massive stimulus program, trimming its monthly asset purchases by $10 billion to $75 billion. The outcome was not a total surprise and had a brief impact on markets given investors had been speculating for months on the timing of such action. Data on Friday supported the Fed's decision with revised figures showing the world's biggest economy grew at its fastest pace in almost two years in the third quarter. "Maintaining dollar momentum still requires upcoming U.S. data to meet a certain threshold of strength," analysts at BNP Paribas wrote in a note to clients. "However, with the Fed having begun the tapering process now, the burden of proof has shifted somewhat - data now has to be just strong enough to keep tapering on track, as opposed to the presumably stronger track record needed to justify a start to the tapering process." U.S. data due for release this week include personal income and spending on Monday and durable goods on Tuesday. Investors are also keeping an eye on China's money markets after the country's central bank last week sought to allay fears of a cash crunch by injecting $50 billion in three days into the interbank market. The pullback in the greenback helped lift both the Australian and the Canadian dollars off 3-1/2 year troughs. The Aussie was last at $0.8923, while the loonie traded at C$1.0639 per U.S. dollar. In contrast to the Fed, the Bank of Japan last week maintained its ultra-loose monetary policy although it played down chances of the need for more stimulus next year. Still, with the BOJ nowhere close to scaling back support for the economy, analysts expect the yen to remain the funding currency of choice in carry trades. The euro was a touch softer against the yen at 142.15 in early Monday trade, but still near a five-year peak of 142.90 set last week. - Reuters

https://theedgemalaysia.com/node/16758

Moody’s: Sukuk issuance credit positive for RHB Islamic, AmIslamic

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KUALA LUMPUR: Moody’s Investors Service Pty Ltd said the issuance of RM 1 billion of Basel III-compliant Tier 2 subordinated sukuk by RHB Islamic Bank Bhd and the issuance of a similar programme by AmIslamic Bank Bhd for RM3 billion are credit positive for the two banking groups and other banks that follow their lead. Last Tuesday, RHB Islamic Bank received regulatory approval to issue up to RM1 billion of sukuk. The approval came a few days after AmIslamic Bank’s announcement. “That’s because these point of non-viability (PONV) sukuk programmes facilitate access to capital, support growth and strengthen their loss-absorption capability, while complying with Basel III,” said the rating agency in a report yesterday. “Moreover, the subordinated programmes will provide these institutions with other avenues to raise capital than capital support from parent banks.” Moody’s estimates that RHB Islamic’s RM1 billion issuance will improve its total capital adequacy ratio to around 22% from 14.6% as at Sept 30, 2013. “The same amount at AmIslamic would have boosted its capital adequacy ratio to around 19% from 14.6% as at end-2013,” it said, adding that AmIslamic is unlikely to issue the entire RM3 billion amount allowed under its programme this year because of its sound capitalisation. “We expect the two Malaysian deals to create legal precedents in the domestic market and set pricing benchmarks that will open up new PONV sukuk issuance in Malaysia amid rapid growth in the Malaysian Islamic banking sector,” said Moody’s. Last year, Malaysian Islamic bank assets increased 16%, twice as high as growth in non-Islamic commercial banking assets. The global outstanding sukuk market increased 17% last year and reached US$270 billion (RM886.9 billion), with Malaysia the global sukuk market leader, accounting for 59% of the market. This article first appeared in The Edge Financial Daily, on February 25, 2014.

https://theedgemalaysia.com/node/53219

#Hot Stock* XiDeLang active on proposed rights issue, speculated Wal-Mart tie-up

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KUALA LUMPUR (Dec 18): Sportswear firm XiDeLang Holdings Ltd, one of the China-based firms listed on Bursa Malaysia was seen active on the local bourse on its proposed rights issue and the speculation of a tie-up with Wal-Mart Stores Inc. At 2.40 pm today, the firm which was the third most active counter saw heavy trades of some 26 million shares. However, the share price remained flat at 38 sen. According to senior remisier Goh Kay Chong, the stock was active due to the proposed rights issue and speculation of a tie-up with global retail giant Wal-Mart. “It could be due to the rights issue of up to 322.7 million shares,” Goh said over the telephone. “The speculation that XiDeLang might ink a deal with Wal-Mart could also be a factor of heavy trades for the stock.” Meanwhile, a dealer said investors remained sceptical of China-based firms as representation of their financials was a concern. “Thus, we will not see XiDeLang’s share price skyrocketing.” Last week, the firm proposed a rights issue of up to 322.7 million shares at an issue price of 35 sen apiece. These comes together with up to 242 million free detachable warrants and an attached bonus issue of up to 242 million new shares on the basis of four rights shares with three free warrants and three bonus shares for every 12 existing shares. Speaking at a press briefing last week, XiDeLang’s managing director and CEO Mark Ding said the company had plans to work with either the government, local firms and even sports celebrities to help market its brand in Malaysia. “At the moment, we are talking to the parties involved in the agreement but nothing has been finalised yet. We will start working with the local parties next year,” said Ding. In its latest reported financials, XiDeLang’s net profit for 3Q FY13 plunged nearly 46% year-on-year (y-o-y) RM13.2 million from RM25.6 million, while revenue fell 34% y-o-y to RM94.2 million from RM142 million. For the cumulative nine months, net profit halved to RM37.36 million while revenue fell 37% y-o-y to RM249.16 million. XiDeLang’s sales performance has deteriorated over the past few quarters as a result of intensified competition within the industry and softer market demand in China.

https://theedgemalaysia.com/node/84652

Outsourcing industry in Malaysia is set to double in growth by 2017 – PIKOM

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KUALA LUMPUR (Oct 22): The outsourcing industry in Malaysia is set to double in growth by 2017 with a Compound Annual Growth Rate (CAGR) of 15 per cent from its current 2012 revenue of US$1.7 billion, according to Outsourcing Malaysia (OM), an initiative under PIKOM (The National ICT Association Of Malaysia). In a statement Tuesday, OM chairman David Wong said a key advantage for Malaysia was that the country had been ranked 12th worldwide by the World Bank for the ‘Ease of Doing Business’ category. Wong said the ranking was also the highest amongst all countries that were considered ‘outsourcing countries.’   “A simple illustration of this is that a potential investor can start doing business in Malaysia in a mere 6 days, while it takes an average of 36 days to do the same in other APAC countries,” he said. OM also released its second industry report titled ‘Malaysia’s Global Services Outlook’ in conjunction with the four day international Asia-Pacific Outsourcing Summit (APOS) in Iskandar, Johor. The research findings by leading B2B market researcher Valuenotes, were commissioned by OM to provide the SWOT (Strength, Weakness, Opportunity, Threat) insights of the industry in Malaysia. The research findings revealed the urgency for Malaysia to move away from playing the numbers game in outsourcing and from the entry-level outsourcing sector. Wong said the largest Malaysian outsourcing company only managed to employ 5,0000 people as compared to over 100,000 employees in some of the larger firms in India and China. “This illustrates the average size of outsourcing centers in Malaysia - which limits our capability in taking on volume-driven type of outsourcing project,” he said.  

https://theedgemalaysia.com/node/95976

#Update* Pharmaniaga 2Q net profit falls 62.4% to RM5.87 million

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KUALA LUMPUR (Aug 16): Pharmaniaga Bhd net profit for the second quarter ended June 30, 2013 fell 62.4% to RM5.87 million from RM15.71 million a year earlier, due mainly to a slowdown in orders from the concession business, recognition of doubtful debts and increased provision for our obsolete stocks. Its revenue for the quarter fell to RM437.63 million from RM456.74 million a year earlier. Earnings per share was 2.27 sen while net assets per share was RM1.86. The company declared a second interim dividend comprising single tier 3.41 sen. For the six months ended June 30, Pharmaniaga posted net profit RM30.64 million versus RM44.39 million a year earlier, on the back of revenue RM937.97 million versus RM903.48 million a year earlier. In a statement Friday, Pharmaniaga chairman Tan Sri Lodin Wok Kamaruddin said the despite the company starting the year on a strong note, it was pulled down in the second quarter as a result of this drop in sales from the concession business, leading to its earnings to have been impacted for the half-year period. Lodin however expressed confidences that despite the setback in earnings, Pharmaniaga would be able to improve its prospects for the remaining quarters of this financial year. “It boils down to strengthening efficiencies and managing our inventories and production levels in order to ensure that our bottom-line remains strong,” he said.    

https://theedgemalaysia.com/node/76790

Malakoff’s aggressive expansion

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KUALA LUMPUR: Malakoff Corp Bhd plans to bid for a nine-mouth power plant in Indonesia and possibly build another coal-fired power plant in Tanjung Bin, Johor, to export electricity to Singapore. The expansion of its electricity generation business in the region is part of the plan by Malaysia’s largest independent power producer (IPP) to increase its generation capacity to 10,000mw by 2020 from 5,500mw currently. In a draft exposure prospectus issued last Friday, Malakoff revealed its plan to expand its capacity in Malaysia to 7,000mw by 2020 from the current 5,020mw. It is already adding another 1,000mw to the existing 2,100mw coal-fired power plant in Tanjung Bin. The project is slated for commercial operation in March 2016. To reach its 7,000mw target, Malakoff plans to participate in the Energy Commission’s proposed competitive bidding for the construction of another 3,000mw of coal-fired power plants in the peninsula. “We believe that we have a competitive advantage, as we are one of the few IPPs in Malaysia with a proven track record and experience in the development and operation of a coal-fired power plant. In addition, we can leverage on ready access to requisite land and existing coal handling infrastructure at our existing Tanjung Bin site for the new coal-fired power plant,” the company said. On its plans to export power to Singapore, Malakoff is studying the feasibility of a new coal-fired power plant at the existing Tanjung Bin site that will target the export market of Singapore. “We intend to develop our capabilities to become a merchant power operator in selected foreign markets,” it said. Unlike Malaysia, in Singapore, power supply is through a bidding process where the cheapest power plant gains the most. On its plans in Indonesia, Malakoff said it intends to participate in the upcoming bidding exercise that is expected to be issued by Perusahaan Listrik Negara, the Indonesian national electricity company, in the first half of 2013 for the construction and operation of an up to 1,800mw mine-mouth power plant in south Sumatra, Indonesia. Malakoff also plans to expand its water production business by almost doubling its effective water production capacity from approximately 358,550 cu m of water per day to approximately 530,000 cu m of water per day and diversify its asset portfolio by building a renewable power generation portfolio of 300MW both domestically and internationally. According to the prospectus, Malakoff’s IPO involves the sale of 760.87 million shares, accounting for 30.4% of the company’s expanded share base of 2.5 billion units post listing. This comprises a public issue of 500 million new shares and an offer for sale of 260.87 million shares by existing shareholders of the company. Malakoff did not specify the issue price for its IPO, hence, the amount to be raised from the exercise was not stated. The company, however, said it is setting aside 90% of its IPO proceeds to redeem its debt instruments while 5% and 2.5% will be earmarked for business expansion and working capital respectively. Malakoff plans to pay out between 50% and 75% of its net profit as dividends after its relisting. The prospectus indicates that Malakoff, a 51% owned subsidiary of MMC Corp Bhd, intends to pay the dividends from the cash generated from Malakoff’s operations after allocating adequate funds for capital expenditure and working capital needs. “As part of this policy, our company targets a dividend payout ratio of 50% to 75% of our consolidated profit attributable to equity holders under the MFRS (Malaysian Financial Reporting Standards), beginning Jan 1, 2013,” Malakoff said. The company, which did not indicate its listing date on Bursa Malaysia’s Main Market, said its shareholder rewards will depend on factors including the firm’s financial performance, cash and debt levels apart from its capital requirements. Based on the draft prospectus, Malakoff’s net debt is RM10.7 billion as at end September 2012, and this figure is expected to come down by about 20% with the proceeds from the listing. Its earnings before interest, income tax, depreciation and amortisation (Ebitda) for the nine months as at Sept 30, 2012 was RM1.6 billion. For the full year ended 2012, it was RM2.3 billion. The move will see MMC reducing its interest in Malakoff to associate level under its plan to relist the unit. Post listing, MMC, which now holds a 51% stake in Malakoff, will see its interest diluted to 37.8% due to the issue of new shares and sale of existing shares. On the sale of existing shares amounting to 260.87 million shares, the biggest seller is the Employees Provident Fund (EPF) that is divesting 113.9 million shares followed by MMC Corp which is disposing of 74.8 million shares. Malakoff was initially set up in October 1975 as a plantation company and was listed on the then Kuala Lumpur Stock Exchange in 1976. Thegroup revised its corporate direction which led to the sale of its plantation business, hence , making way for its venture into electricity-generation operations in 1993. Malakoff was delisted from the exchange in May 2006 and became a private entity where MMC owns a controlling 51% stake in the subsidiary. The EPF owns 30% while Kumpulan Wang Amanah Pencen holds 10%. The remaining 9% is held by private equity funds.   This article first appeared in The Edge Financial Daily, on Jan 8, 2013.

https://theedgemalaysia.com/node/70022

MIDF Research: Malaysia’s overall economic growth to remain strong

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KUALA LUMPUR (Oct 12): Malaysia’s overall economic growth would remain strong in 2012, despite the external headwinds that continue to weigh on exports and export-led manufacturing activities, according to MIDF Research chief economist Anthony Dass. In a note Friday, Dass maintained his real GDP projection of 5.3% in 2012, explaining growth will come from domestic activities and complemented by the modest exports growth. Dass said the Industrial Production Index (IPI) fell for the first time since July 2011, dragged by sluggish manufacturing output. Contraction in manufacturing output in the month of August turned out to be the first time since September 2009, he said. “We suspect it is due to weak output from E&E and probably slower growth from primary-related manufacturing output. “We believe the domestic-oriented manufacturing output may have out a lid on the downside of manufacturing’s contraction. Here, we believe consumer-related manufacturing activities would have remained healthy, and complemented by construction-related manufacturing activities,” he said.  

https://theedgemalaysia.com/node/76201

India mission to Mars blasts off successfully

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NEW DELHI: India’s first mission to Mars blasted off on Nov 5, as the country aims to become the only Asian nation to reach the Red Planet, with a programme showcasing its low-cost space technology. “It’s lift off,” said a commentator on state television, as the red-and-black rocket launched into a slightly overcast sky, on schedule at 0908 GMT, from Sriharikota. The 350-tonne launch vehicle, carrying an unmanned probe, was monitored by dozens of scientists in the control room, who face their most daunting task since India began its space programme, in 1963. The country has never before attempted inter-planetary travel and more than half of all missions to Mars have ended in failure, including China’s in 2011 and Japan’s in 2003. The Mars Orbiter Mission, known as “Mangalyaan” in India, was announced only 15 months ago, by Prime Minister Manmohan Singh, shortly after China’s attempt flopped, when it failed to leave Earth’s atmosphere. The timing led to speculation that India was seeking to make a point to its militarily-and-economically superior neighbour, despite denials from the country’s space agency. “We are in competition with ourselves, in the areas that we have charted for ourselves,” Indian Space Research Organisation (ISRO) chairman K Radhakrishnan said, during the week of Oct 28-Nov 3. The gold-coloured probe, the size of a small car, will aim to detect methane in the Martian atmosphere. Lacking the power to fly directly, the launch vehicle will orbit Earth for nearly a month, building up the necessary velocity, to break free from our planet’s gravitational pull. Only then will it begin the second stage of its nine-month journey. The cost of the Mars mission is 4.5 billion rupees (RM231.7 million) — less than a sixth of the US$455 million earmarked for a Mars probe by Nasa, which will launch later in November. “We didn’t believe they’d be able to launch this early,” project scientist for the Nasa Mars probe, Joe Grebowsky, said. “If it’s successful, it’s fantastic.” — AFP This article was published in The Edge Financial Daily, on November 6, 2013.

https://theedgemalaysia.com/node/11360

Cover Story: A name that spells abundant fortune

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It is interesting to note that Goh Ban Huat (GBH), founded in 1897, does not take its name from the founder, the late Goh Leng Soon, the grandfather of the company’s current executive chairman Alex Goh Tai Seng and managing director Tony Goh Tai He. Instead, Leng Soon retained the family name of Goh and added the phrase “Ban Huat” to form the company’s name, as he liked the auspiciousness of the Hokkien phrase that literally means “ten thousand wealth” or abundant fortune. While it is common to find the GBH brand in the bathrooms and toilets of Malaysian households, the company did not start its business producing sanitary ware. Its first product was the brown glazed ceramic cup that was used to collect latex from rubber trees. The ceramic cup was its sole product in its early years, and it was only in the 1920s that it started making flower pots. Goh Siang Kow, father of Tony and Alex, took over the family business in the 1930s. It was then that GBH ventured into producing hand-formed clay sewage pipes. Some 20 years later, the company was able to manufacture machine-made clay sewage pipes for the country, which was then under British colonial rule. GBH also began manufacturing sanitary ware with organic technology. In the 1960s, it began using foreign technology and equipment to produce sanitary ware. Alan Goh, the eldest son of Siang Kow, was sent to Stoke-on-Trent, the home of the pottery industry in England, to learn the A-to-Z of making sanitary ware. The 1970s could be seen as a watershed era in the company’s growth. The World Bank had provided some funds to Kuala Lumpur City Hall to modernise the city’s sewage system and GBH imported flexible jointed clay pipes from Australia that could meet the local authority’s required quality. In 1979, GBH built its own plant in Segambut, and began to produce flexible jointed clay pipes to replace the imported wares. Tony had said on many occasions that “if you dig up any part of the country now, chances are 75% of the pipes are from Goh Ban Huat’s plant in Jalan Segambut.” GBH continued to grow into the 1980s. It was able to ride the huge boom in demand for rubber gloves, sparked by the fear of AIDS. While it did not make rubber gloves, GBH pioneered the production of ceramic moulds that were essential in the manufacturing of rubber gloves. The company was listed in 1989. In the 1990s, GBH became the first company outside Australia to manufacture dual flush toilets for export to that country. It later introduced the product to the domestic market. In 1993, GBH acquired the assets of New Zealand ceramics manufacturer Crown Lynn, and ventured into the high-end porcelain tableware segment. Today, Crown Lynn products compete with international renowned brands such as Royal Doulton, Wedgwood and Noritake, and are used by some palaces in the country, government ministries, and Malaysian embassies and high commissions overseas, among others. While GBH seems to have sailed safely through the past 100 years, it has not always been smooth going. In 1994, privately owned Indah Water Konsortium Sdn Bhd (IWK) was awarded a concession to undertake nationwide sewerage services, which had previously come under the responsibility of local authorities. It was expected that there would be huge demand for clay pipes and GBH had responded by building a 70,000 tonnes per annum pipe plant in Segambut. However, IWK did not prove to be big success and it was taken over by the government, through the Minister of Finance Incorporated, in June 2000. In recent years, GBH has worked on improving its sanitary ware, producing higher-margin products such as vacuum-assisted flush toilet — usually seen on aircraft — for export to New Zealand and the Netherlands. It even makes toilets decorated with Swarovski crystal that are targeted at Middle Eastern customers. However, the jewel in its crown would have to be its production facility which offers a full range of big-diameter sewage pipes, a niche market with high entry barriers because of the sophisticated technology required. This article appeared in Corporate page of The Edge Malaysia, Issue 762, July 6-July 12, 2009

https://theedgemalaysia.com/node/40774

Corporate: Three consortiums keen on US$250 mil Sepat job

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Three consortiums are understood to be vying for a US$250 (RM778 million) million turnkey project from state-controlled oil major Petroliam Nasional Bhd (Petronas) for the development of the Sepat marginal oil field located 130km off Terengganu, say sources. It is learnt that the three consortiums are recently listed Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE) and its partner, France-based Technip SA; Kencana Petroleum Bhd and London-based Petrofac Ltd; and Australia-based Roc Oil Company Ltd and Griffin Energy Ltd. The job will entail the use of a floating storage and offloading (FSO) unit with a jack-up production unit or a floating production storage and offloading (FPSO) unit with a wellhead platform, sources familiar with the deal say. Petronas is understood to have asked both the MMHE-Technip consortium and the Kencana-Petrofac joint venture for bid clarifications on their plans, as certain aspects of their proposals were unclear. While certain quarters say the two consortiums are the front runners to bag the job due to this clarification, the Roc Oil-Griffin Energy consortium is understood to still be very much in the running to bag the job. A closely fought battleIt seems that both the Kencana-Petrofab and MMHE-Technip consortiums will use either an FSO with a jack-up production unit or an FPSO with a wellhead platform, while the Roc Oil-Griffin Energy consortium is looking at a mobile offshore production unit with a well head. It is learnt that the selection criteria is stringent, with bidders having to show details of experience over the past five years, work currently performed, anticipated workload over the next 24 months and jobs it is currently bidding for. US-based Murphy Oil Corp is understood to have shown interest initially, but it has since dropped out of the race. According to international oil and gas (O&G) publication Upstream Online, the Kencana-Petrofab joint venture could also rope in T Ananda Krishnan’s Bumi Armada Bhd to provide FPSOs and Tan Sri Syed Mokhtar Al-Bukhary’s MMC Corp Bhd for front-end engineering and design support. This however remains unsubstantiated. According to its website, Bumi Armada has three FPSOs — the Armada Perkasa deployed off the Okoro Setu Field in Nigeria, the Armada Perdana which has been commissioned at the Oyo Field also off Nigeria, and Armada Perwira which is located off the Te Giac Trang oil field in Vietnam. Upstream Online has it that Bumi Armada, having acquired Griffin Venture FPSO (previously owned by BHP Biliton), is pushing it for the Sepat job. The Roc Oil-Griffin plan is understood to entail a low-cost solution, which could be attractive to Petronas. Griffin is understood to have low-cost, single-installation integrated units which combine the features of conventional remote field development technology. Its mobile offshore production and storage unit is understood to be able to replace the combined functions of a jack-up drilling rig, wellhead platform and FSO. Roc Oil, which was founded by the late John Doran in 1997, has assets in Australia, China, Africa and the UK. Its primary focus however is Asia and Australia. Sources say cost-wise, Rock Oil-Griffin Energy’s proposal has merit and could bag the job if Petronas awards the contract based on cost alone. The Malaysian players According to O&G players, Sepat has large oil reserves that have yet to be fully assessed. Thus the findings of the three companies will likely be closely monitored. It is noteworthy that fabricator MMHE is a 66.5%-owned unit of national carrier MISC Bhd, which in turn is 62.4%-controlled by Petronas. Technip, which is likely to conduct the front end engineering and design work, is also a shareholder of MMHE, with 8% equity interest. Several analysts are betting on MMHE to bag the job, largely because of its ties to Petronas. While MMHE and Technip have close links with Petronas, Kencana and Petrofac have gained the requisite experience at the Cendor oilfield at Block PM304. In 2004, Petrofac Resources acquired a 40.5% stake in the Cendor field from Amerada Hess Corp for an undisclosed sum. After the acquisition, Petrofac was the operator of the field, partnering Petronas Carigali Sdn Bhd which had a 30% stake, Kuwait Foreign Petroleum Exploration Company with 25% shareholding, and PetroVietnam Investment Development Co which had about 4.5% equity interest. At Cendor, Petrofac utilised a mobile offshore production unit connected to a spread moored FSO via a flexible submarine pipeline. Kencana’s share price hit a 52-week high of RM1.98 on Oct 27. It ended trading last Friday at RM1.91. YTD, the counter has gained 33%, outpacing the FBM KLCI by 11.6%. Its trading volume has also been relatively high. MMHE commenced trading on Bursa Malaysia last Friday, and was the top gainer and most active stock, gaining 71 sen to close at RM4.71. Its parent MISC gained 11 sen to close at RM8.78.   This article appeared in Corporate page, The Edge Malaysia, Issue 830, Nov 1-7, 2010

https://theedgemalaysia.com/node/87365

JCorp happy with conditionsfor sale of PBD land to IESB

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KUALA LUMPUR: Johor Corp (JCorp) is positive about the conditions for selling its 9.57 acres (416,993 sq ft) of land in Pusat Bandar Damansara (PBD) to Impian Ekspresi Sdn Bhd (IESB), a private company majority owned by Datuk Desmond Lim Siew Choon of Malton Bhd and his wife Datin Tan Kewi Tong. JCorp president and CEO Datuk Kamaruzzaman Abu Kassim said the company hopes to complete the sale within six months, despite the agreement being subject to several conditions. “Hopefully those conditions will be met. Otherwise, it’s back to square one. But I am certainly happy with the sale conditions,” he said after the signing of a memorandum of understanding between JCorp and the Ex-Army Personnel Affairs Corp (Perhebat) yesterday. JCorp’s indirectly owned Bukit Damansara Development Sdn Bhd (BDDSB) is selling the land parcels to IESB. Under the agreement, IESB will pay RM500 million cash and allocate office space totalling 266,668 sq ft in the redeveloped PBD land to BDDSB.   The 266,668 sq ft of office space will be split into two portions. The first portion of 186,667 sq ft will be assigned by BDDSB to Khuan Choo Property Management Sdn Bhd, a subsidiary of Malton Bhd, in return for a 20-storey commercial office building known as V Square located in Petaling Jaya. The balance 80,000 sq ft of office space will be delivered by IESB to BDDSB within five years from the date of IESB buying the land in PBD. The sale of the land in PBD comes together with nine vacant commercial office blocks. All the commercial office blocks, except for 25 parcels of properties within the PBD commercial complex which have already been sold to other buyers, belong to BDDSB. IESB’s preliminary plan is to build five new towers, comprising two office towers and three residential towers, and a suburban retail mall within the office space. The multi-billion ringgit development is expected to be completed over seven to eight years. Prior to both IESB and JCorp agreeing to the sale and purchase agreement of the land in PBD this month, both parties were engaged in a legal battle over an earlier joint-venture agreement (JVA) signed in January 2009. The original agreement was cancelled when JCorp said IESB and other Malton-related companies had not fulfilled the terms and conditions of the JVA by the Feb 28, 2011 deadline. In November 2011, IESB and Malton-related companies filed a lawsuit against JCorp’s Damansara Assets Sdn Bhd to claim damages totalling RM67.63 million. In its 2012 annual report, JCorp noted proceedings were set for April 30 this year but it did not make any formal announcement on the hearing. The pending legal case was not mentioned under the new agreement. Kamaruzzaman said JCorp is on the lookout for more merger and acquisition opportunities. This article first appeared in The Edge Financial Daily, on May 29, 2013.

https://theedgemalaysia.com/node/66166

Legal firms must embrace liberalisation to compete

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WITH the Legal Professional (Amendment) Bill passed in Parliament recently, Malaysian lawyers finally joined their counterparts in other professions to embrace the inevitability of liberalisation in the services sector. The bill allows foreign law firms to practise in Malaysia as a qualified foreign law firm or to partner with a Malaysian counterpart as an international partnership. Foreign lawyers will also be permitted to practise in Malaysia under the two new entities or with a Malaysian firm. However, foreign law firms and foreign lawyers will be limited to practising within prescribed areas of the law only. In order for Asean, as an economic bloc to compete for trade and investments on the global platform, member countries have committed to increase intra-Asean connectivity. Individually, each member state has neither the software nor the hardware to compete against the powerhouse economies of China, India and Australia. However, as a single entity with a combined population of 600 million people and a combined GDP of more than US$1.8 trillion (RM5.6 trillion), Asean has a strong hand to compete if investors perceive the region as a collective force. Liberalisation of the services sector is indispensible for attracting foreign direct investment (FDI) and promoting the transfer of knowledge. The growth of borderless markets and cross-border trade has changed the scope and character of services to an international scale. Institutional connectivity, of which services liberalisation is a key driver, is necessary to facilitate any successful development and execution of transactions by the private sector. Asean has long recognised the importance of having a common framework for liberalisation of key services such as transport (shipping, aviation, logistics), banking, accounting and legal practices. Under the the Asean Framework of Services (AFAS) in 1995, member countries undertook commitments to liberalise their services by substantially eliminating restrictions to trade in services and worked towards developing a common services framework. Seven sectors were selected for services liberalisation, including business services, which cover legal services. Unfortunately, unlike technical and transport services, the rhetoric to open up the legal services sector has not been matched in reality with little progress so far. While five Asean countries — Cambodia, Indonesia, Malaysia, Thailand and Vietnam — have pledged "assurance" on legal services, these are not fully transparent and are tied up with many conditions or restrictions. The liberalisation of legal services faces a number of unique structural impediments, which hinder integration within the region. Within Asean, each member country is governed by a different legal and constitutional system. Malaysia and Singapore, for instance, are governed by common law principles, whereas Cambodia and Indonesia follow the French civil code and the Roman-Dutch civil system respectively. Law students are not taught the basic principles on how to bridge the differences. It is ironic that law students in Malaysia and Singapore, in order to gain their law degrees from the UK, are more familiar with the EC laws than Asean laws. Qualification requirements also pose a barrier to export and trade in legal services, especially for the practice of host country law. Legal education differs from country to country, which in turn results in a disparity of skill between each member country. In most instances the differences are so significant that regulators require foreign qualified lawyers to requalify in order to be able to practise. National treatment limitation is another significant barrier. This includes but is not limited to restrictions on partnership with local professionals such as equity restrictions, restrictions on the use of international and foreign firm names and residency requirements. Another major challenge is that the legal sector in Asean faces inward looking and exclusive regulation by national professional bodies among many member states. As of yet, there has been no significant driving force to effect any forms of real liberalisation. Local lawyers are reluctant to give up their monopoly on lucrative legal services and are apprehensive at the thought of having to compete with well resourced international law firms if the legal market is opened up. The spectre of loss of "national sovereignty" is often raised in response to dealing with any proposal for intra-Asean connectivity, the purpose of which is supposed to give lawyers the freedom to practise law in all Asean member countries. Nevertheless, there are useful lessons from the experience of China and Singapore in successfully opening their legal markets without sacrificing the interests of local lawyers. In China, foreign law firms are not allowed to practise local law, but are licensed to advise in areas of law which facilitate the flow of trade and investments. Domestic firms are allowed to form collaborations and strategic alliances with foreign firms to facilitate knowledge sharing and best practices. This delicate balance has succeeded in attracting leading foreign firms to expand into China and provide value-add services to multinational corporations and major Chinese companies competing globally. Chinese law firms are now able to service major Chinese corporations that are expanding globally. These firms have opened branch offices in financial centres like London, New York and Singapore. On the other hand, Singapore adopted an incremental approach to the liberalisation of legal services. It started by allowing foreign firms to practise foreign law and then allowed them to form joint ventures with local firms. Over the last two years, the introduction of new reform now permits foreign law firms to practise Singapore law. However, certain areas of law are being fenced for local lawyers only. This approach has allowed Singapore to attract more than 100 foreign law firms, which work closely with other professions and foreign companies to drive the growth of the country as a regional financial and legal centre. This is an opportune time for Malaysian lawyers to be proactive and capitalise on opportunities from the liberalisation of their services. The global economic centre of gravity has shifted from the West to the East. Global companies are following the flow of trade and investments to Asia and Asean. Rising Asian economies led by China and India are driving growth globally while intra-Asean trade is expanding rapidly. Most of the leading companies in Southeast Asia have strong balance sheets with less leverage and continue to enjoy high levels of liquidity. As a result, they are able to focus on growth, both organically as well as through merger and acquisition activities in the region. Witness the recent flurry of acquisitions and expansion by banks such as CIMB Group, Maybank and DBS as they expand their footprints in the region. Similarly, the region's stock exchanges have announced plans to market themselves jointly as an Asean brand to woo international investors. The Big 4 accounting firms are integrating their management and operations to operate as regional entities to service global clients in the region. To take advantage of the current rise of Asia, including the Asean region, lawyers in Malaysia should embrace liberalisation by investing in international networking and strategic alliances with foreign partners. Liberalisation provides opportunities for Malaysian lawyers to adopt best practices and technology from foreign firms and expand their knowledge and practices beyond Malaysian laws. They must invest and learn the skill set and experience required to advise on cross-border transactions and projects undertaken on a regional basis. They should also consider embarking on regional expansions together with their clients. Finally, they must change their mindset on the "market" for their services beyond the shores of Malaysia. This way, they will be equipped to compete on the regional playing field with the foreign lawyers actively engaged in advising companies doing business in the region. There is no reason why Malaysian lawyers cannot emulate the successful transformation of Malaysian banks like Maybank and CIMB into Asean banks. It is time to see the emergence of Asean law firms led by Malaysian lawyers. Chew Seng Kok is the regional managing partner of ZICOlaw, an integrated network of legal and related service providers in the Asean region. Tengku Azura Safiyuddeen is a lawyer with Zaid Ibrahim & Co. This story appeared in The Edge on July 23, 2012.

https://theedgemalaysia.com/node/3186

#Stocks to watch:* Banks, Axiata, SILK, AirAsia

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KUALA LUMPUR: The market got off to a firm start on April 1, with banks among the gainers after the positive growth in the loans applications, mainly from businesses. Banks would continue to attract interest, with Maybank, Public Bank and BCHB in focus, analysts said. However, of concern would be the banks’ wider exposure to the economy, with the GDP to range between -1% and 1% this year, at best. Other stocks which could see trading interest are Axiata (formerly TM International), AirAsia, SILK Holdings, or formerly Sunway Infrastructure, Time Engineering and IJM Land. The Employees Provident Fund bought 5.25 million shares of Axiata, on March 25 to 26. The acquisitions increased its stake to 16.21% or 608.26 million shares. Axiata will continue to see heavy interest ahead of the ex-date for its 4.69 billion new rights shares of RM1.12 each next week. The entitlement date was fixed at 5pm on April 10 and will start trading on April 15 and cease on April 22. The latest development which saw it paying RM2 billion or half of the amount owing to Telekom Malaysia ahead of schedule would position it better in terms of its financial capability. However, the concerns are weakening outlook for mobile phone operations overseas while the local market is already saturated. SILK Holdings has received the Securities Commission approval for its proposed regularisation scheme. It involves a rights issue ofup to RM10 million RCULS, one-into-share capital reduction where 25 sen will be cancelled from each existing share of 50 sen each. SILK will acquire the entire stake of AQL Aman, comprising 4.7 million shares for RM87.5 million via issuimng 175 million new SILK shares. AirAsia plans to borrow RM3 billion next year to help pay for 24 new planes. The money is on top of the estimated RM2.1 billion already lined up for 14 planes this year. It closed three sen higher to 97 sen but it is way below its listing price in  November 2004. Time Engineering has received the SC’s approval for the issuance of 712.5 million nominal value redeemable secured loan stocks at 48 sen each totaling RM342 million Constructionof the Canal City project in Kuala Langat, Selangor, is going ahead as scheduled, except for the canal component which is being renegotiated with the state government, according to IJM Land, the equity partner in the project. In Sunzen Biotech, Dr Fong Chan Seng bought 800,000 shares, increasing his stake to 16.43 million shares or 11%. DutaLand has again sought extension to the proposed implementation of remaining portion of special issue of shares with 54.26 million free warrants to bumiputra investors. It had obtained a 12-month extension last year and was to implement the special issue balance by April 29. However, it had applied to the Securities Commission for 24 months extension up to April 26, 2011 to complete the implementation. DutaLand share price closed two sen lower to 36.5 sen. WWE Holdings received a last-minute reprieve from being delisted. It had on March 31 applied for an extension of time to submit its regularisation plan to the relevant authorities. Following the application, Bursa Securities deferred the removal of WWE securities pending the decision of the Appeals Committee of Bursa Malaysia. RHB Capital made the first issuance of RM370 million nominal value of hybrid tier-one capital securities under the HT1 Programme on March 31.

https://theedgemalaysia.com/node/91639

Indonesia rupiah weakens past 10,000/dlr, first time since Sept 2009

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SINGAPORE (July 15): The Indonesian rupiah fell below 10,000 to the dollar on Monday, for the first time in almost four years, on sustained dollar demand from local companies, traders said. The rupiah's indicative prices fell 0.3 percent to 10,020 to the greenback, the weakest since early September 2009, and stood at 10,010 as of 0347 GMT. The Indonesian currency was under pressure from corporate dollar bids such as for importers' dollar purchases, but the central bank was suspected of providing dollar liquidity, traders said. Saktiandi Supaat, head of FX research for Maybank in Singapore, said the market "could be testing the 10,000 psychological barrier following comments late last week that the 10,000 threshold is not a Bank Indonesia hard target limit. Furthermore, BI seems to be allowing the rupiah to go above 10,000." Indonesia's reserves remains "quite comfortable", Supaat said, adding the only worry now is if the rupiah "overshoots on the downside", which would worsen the deficits Indonesia is facing. The rupiah is one of many emerging market currencies that has weakened since Federal Reserve Chairman Ben Bernanke talked in May about the possibility of begin to reduce U.S. monetary stimulus. Adding to pressure on the rupiah have been Indonesia's hefty current account and budget deficits. To help contain them, the government in late June raised domestic fuel prices - a move that has increased the inflation rate.'NOT TOO VOLATILE'Gundy Cahyadi, economist at OCBC Bank in Singapore, said he doesn't think BI has any specific target level for dollar/rupiah. "Their intention is just to ensure that market moves are orderly and not too volatile, and I think, they have done pretty well on this front. Eventually, BI will certainly let market to determine the rate in the USD-IDR. The moves in the USD-IDR are in line with the regional trend, in which the strong USD tone still dominates," Cahyadi said. The Indonesia stock market benchmark started the day up 0.1 percent, but slipped after the rupiah hit 10,000 and was down was down 0.7 percent at 0345 GMT. On Thursday, Bank Indonesia surprised the market by raising the benchmark policy rate by 50 basis points to 6.50 percent, double the expected increase. In June, BI increased the policy rate 25 basis points, becoming the first Asian central bank to hike rates since 2011. BI Deputy Governor Perry Warjiyo on Friday said no more rate rates should be needed as he was "very sure" the annual inflation rate - which could be 7.5 percent this month - would return to normal by September. He also said he didn't see a risk that the foreign exchange reserves, which dropped to a two-year low of $98.1 billion at the end of June, would fall further.

https://theedgemalaysia.com/node/74019

#Focus* KLCI to decline before election on portfolio de-risking

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KUALA LUMPUR (Nov 28): With the 13th general election (GE13) approaching, the market may drift lower in the coming months due to selling by local and foreign funds, AmResearch said in a market strategy report today. The perceived uncertainty over the outcome of the election as well as the associated aversion to risks will trigger a tactical shift in asset allocation leading to a trimming of exposure to equity, it said. The run-up to GE13 will see portfolio de-risking that will cast a downward bias on the market as fundamentals take a backseat. “Domestic portfolio funds would now be selling into strength as opposed to buying on dips, implying that the market may drift lower in the coming months,” AmResearch said. This de-risking maneuvering indicates that domestic institutional funds would be cashed up relative to benchmarks moving into the first quarter of 2013. The redeployment of freed capital would primarily depend of the outcome of election, the report read. “Our base case scenario is that the Barisan Nasional (BN) coalition government would be returned to power. The uncertainty is whether the BN would secure a stronger mandate compared to the previous election in 2008. A reduced majority in the last election led to a steep sell-down: the market collapsed by 9.5% in the immediate aftermath,” AmResearch opined in its report. Although a weaker mandate this time around would still be a disappointment, it may not pose that big of a shock particularly with the market already retracing ahead of GE13, 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 the research house. In addition, the greater clarity on the continuation of growth policies embedded in the Economic Transformation Programme (ETP) may spur stronger foreign interests. “We set our end-2013 fair value for the FBM KLCI at 1,770, based on average price-earnings ratio of 15 times… The potential upside is about 10% from current the index level of 1,600. Corporate earnings are projected to expand by 11.5% in 2013,” AmResearch stated.

https://theedgemalaysia.com/node/49240

Not just a famous or pretty face

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What exactly does a celebrity endorsement entail? Singer Mawi says his endorsement deal includes photo shoots for above-the-line and below-the-line advertising, radio commercials, press conferences, live appearances at events and meet-the-fans sessions. The amount paid for endorsements varies depending on the deliverables, but the minimum is RM100,000, he said in an email interview. Contrary to what some may believe when they see a celebrity endorsing a plethora of brands, Mawi, who is currently representing Marrybrown fast food and Silky for Men skincare, believes that it is acceptable to endorse multiple brands so long as they do not compete with each other. “The products I endorse have to be of high quality, compliant with local and international regulations, green and useful to consumers,” says Mawi. Supermodel Amber Chia says the brand has to suit her image before she agrees to represent it. “I used to do more fashion, beauty, skincare and slimming centre brands because that was reflective of my younger image then. Since I’ve started a family, I want to do ads with my baby and hope to focus more on the family aspect [of branding]. People remember me as sexy but I’m quite sick of it, to be honest!” says the 29-year-old who runs a modelling agency and event production company. She says she has turned down endorsement deals for men’s health products and men’s underwear because they did not fit her image.Chia has learnt the importance of researching a prospective client beforehand, the hard way. “When I was new to modelling, I agreed to endorse an injection-type whitening product. I pulled out of the endorsement deal once I realised that there was no medical approval for the products but some of the marketing materials had already gone out by then,” she says. “It’s important to learn about your product and your client because you’re not only a spokesperson to the public and to the media but you’re also helping to build your client’s business,” she says. Chia says not every celebrity can be a brand ambassador as one needs to reach a certain status of popularity. “It took me 13 years since I started modelling to build my name and to get to where I am today,” she says, adding that she is only endorsing three brands now as she is more selective than she was years ago. “I have stopped doing commercial modelling because once you’ve reached a certain [celebrity] status, it is unfair for my clients who pay 10 times more [than a commercial deal] to appoint me as a brand ambassador,” she explains. Chia commands a brand endorsement fee of about RM80,000 to RM200,000. Unlike a brand ambassador, a commercial model is not bound by contract to represent a brand exclusively, she says. A broad appeal and a string of achievements contribute to Datuk Lee Chong Wei’s celebrity status – he has endorsed Kaspersky Lab, Samsung, Faber Castell, Maxis and100Plus. “Datuk Lee is at the top of his game – world No 1 badminton men’s singles player, a Malaysian sporting hero and a person Malaysians trust, admire and aspire to be like…  He is known not just among sports fans but all Malaysians,” says Kaspersky Lab Southeast Asia channel sales director Jimmy Fong. Both Nestlé and Prudential leveraged Datuk Sheila Majid’s image as a positive role model for mothers when they appointed her brand ambassador. Sheila, who was Lux’s longest reigning Malaysian “Lux Star”, has also endorsed Ogawa and StemLife, and is the ambassador for IJN (National Heart Institute) Foundation. Another well-known Malaysian celebrity is Maya Karin, who has represented Brand’s InnerShine, Nescafé, Vono, Tag Haeur, Celcom, Wella, MyEG and L’Oreal. Her natural beauty and good skin demonstrate the product benefit of Brand’s InnerShine, says Cerebos Malaysia marketing manager Carmen Liew. It may be good money but becoming the face of a product carries with it certain obligations.  “When I signed on to represent a product in Taiwan a few years back, I was not allowed to have a boyfriend or get married because I had to carry a certain image,” says Chia. Representing a slimming centre also means maintaining a healthy image, such as capping her weight at exactly 50kg. “There are more restrictions in international contracts than local ones,” she says. Chia says celebrities also have to be actively seen on the local entertainment scene to maintain top-of-mind recall in the public sphere. A hectic schedule of public appearances and product launches can be tiring, but are ultimately rewarding, says Mawi. “It is still worthwhile in the end, as my fans and product users are delighted to be able to meet and be up close during the appearances,” he says. This article appeared in Management@work, the monthly management pullout of The Edge Malaysia, Issue 848, Mar 7-13, 2011

https://theedgemalaysia.com/node/14780

#Highlight* Ambiga urged to start national movement against racial/religious hatred

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KUALA LUMPUR (Jan 29): Former Bar Council chairman Datuk Ambiga Sreenevasan was last night urged to start a movement, roping in NGOs and former statesmen, to stem the escalation of racial and religious intolerance in the country. In a public dialogue at DAP’s headquarters last night, veteran DAP leader Lim Kit Siang said he supported this proposal from the floor. The former statesmen named were Tun Musa Hitam and Tengku Razaleigh Hamzah. “I hope Ambiga, who has led BERSIH, will consider the suggestion from the floor to head a new NGO movement to save Malaysia from racial and religious intolerance,” said Lim, the Gelang Patah Member of Parliament. Ambiga, who was another speaker at the dialogue, said there is currently a ‘leadership void’ in Malaysia in tackling critical issues in the country as no leader in power has showed political will to stop this worrying development. She commented that if Prime Minister Datuk Seri Najib Razak and the Inspector General of Police (IGP) Tan Sri Khalid Abu Bakar were willing to push the button, incidents linked to racial and religious hatreds in recent past months would not have continued unabated. She said she was horrified by the recent Molotov cocktail attack on the Church of the Assumption in Lebuh Farquhar, Penang, and the inflammatory banners posted outside three Catholic churches. “Why does the Prime Minister and the IGP remain silent? They should set the tone and standard. They should declare zero tolerance for those who incite racism and hatred. It is the leaders who must come out to say this,” stressed Ambiga. “I urge the Prime Minister to do just that,” she added. The prominent and outspoken lawyer said the “deafening silence” in Putrajaya and omission is worrying. She said it is insufficient for leaders to just urge people to stay calm. They have to do more than that. “In my book, you are either complicit by taking part by commission, or you are complicit by omission…They have chosen to remain silent. It is not that they cannot take action, but they do not want to take action to stop racial differences and disharmony.” She said the religious animosity between the Muslims and Christians incited by certain specific groups is a situation seemingly condoned. “You realise as these things happened, the leaders in the government who pretend to be progressive have remained eerily quiet. They do not say anything. “At least, if they come out and say: ‘We do not condone these. It is unacceptable.’, then this shows leadership,” she stated. Ambiga said ugly incidents can be stopped if the full force of the law is brought upon those groups who incite racial and religious disharmony “I can guarantee you it will stop,” she declared. She said like over 90% of Malaysians, she does not want to have another “May 13” to occur as it will not only destroy the country but also is of no benefit to anyone. Meanwhile, she said she supports the Opposition coalition’s call to convene an emergency Parliament sitting to discuss the recent spate of ugly incidents as well as nation-building. “I hope the government will take up the offer because it shows leadership if they do that. That will be ideal,” said Ambiga. If the government refuses to act, the Opposition should “fill up the leadership void and drive the agenda of the country.” She said one of the ways the public can voice their disapproval to recent incidents is to start a nation-wide petition urging the government to act to bring stability and harmony to the country.

https://theedgemalaysia.com/node/90577

Stocks to watch: ILB, Dialog and Sime Darby likely to lead actives

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KUALA LUMPUR: Integrated Logistics Bhd (ILB) and Sapura-Kencana Petroleum Bhd are likely to lead the active counters today, possibly with gains, due to their positive announcements last Friday. The other stocks that could attract investor attention include Dialog Group Bhd, Sime Darby Bhd, Hock Seng Lee Bhd (HSL) and Yinson Holdings Bhd. ILB announced that its 70% indirectly owned Hong Kong unit, IL HK, has agreed to sell its entire equity interests in IL Shenzhen and IL Henan to Winfair of Hong Kong for RM519 million. ILB will obtain proforma gains of RM178 million from the proposed disposals. "Upon the completion of the proposed disposals, ILB may become a cash company," said ILB in its filing with Bursa Malaysia. SapuraKencana's net profit for the first quarter (1Q) ended April 30, 2013, increased by over 100% to RM93.67 million from RM41.66 million in the same period last year. Revenue surged to RM1.62 billion from RM681.83 million in the same quarter in the previous year. Dialog executive chairman Ngau Boon Keat said the company has completed 65% of the first phase of the Pengerang deepwater petroleum terminal. The total storage capacity of Phase 1 is 1.3 million cu m, he said, adding that the company is planning to set up a total of 57 tanks in Phase 1. So far, 40 tanks have been set up. The deepwater project is a joint venture between Dialog and Royal Vopak, the world's largest independent tank storage provider. Dialog holds 51% and Vopak the remaining 49%. Sime Darby's industrial arm, via its joint venture (JV) with the Netherlands-based Terberg group, has secured contracts worth up to RM80 million from PSA Singapore Terminals (PSA), the world's largest container transhipment hub. In a statement last Friday, Sime said the contracts would see the JV, Terberg Tractors Malaysia Sdn Bhd, manufacturing and supplying 299 units with options for another 330 units of Terberg terminal tractors to PSA. The first delivery to PSA will comprise 49 Terberg terminal tractors starting from May 2013 with the remaining units to be delivered by February 2014. HSL has landed a construction contract worth RM228 million for a building project at Petra Jaya in Kuching, Sarawak. The company said it had entered into an agreement with Eastbourne Corp Bhd on June 27 for the job. The company said the duration of the contract is 30 months and the project is due to be completed by 1Q 2016. "The contract is expected to contribute positively to the earnings and net assets of HSL Group for the financial years  ... 2013 to 2016," it said. Yinson reported that its net profit for the first quarter to end-April surged to RM15.4 million from RM10.7 million in the same quarter the previous year. But revenue fell to RM228.3 million from RM264.2 million. Explaining its results, Yinson said the revenue decrease was due to falls in sales of the trading and transport businesses. But the increase in contribution from the marine transport business and revenue contribution from the JV company helped push up profit, it said. "Looking forward, we are confident we will continue to deliver favourable results for the rest of our financial year with the anticipated contributions from our upcoming acquisition of Fred Olen Production," said Lim Han Weng, group managing director. "The proposed acquisition of FOP will potentially provide an extensive and immediate international platform for Yinson to expand its presence and operation growth to become the world's sixth largest [floating production storage and offloading] player," he said. This article first appeared in The Edge Financial Daily, on July 01, 2013.

https://theedgemalaysia.com/node/53628

KLCI falls 1.29% as global markets routed

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KUALA LUMPUR: The FBM KLCI fell 1.29% on Friday, Aug 19 in line with the losses at key regional markets that were rattled by the overnight slump at Wall Street on worries that the US economy could be sliding into recession. The rout continued at European markets that opened sharply down today. The FMM KLCI fell 19.32 points to 1,483.98, weighed by losses including at Genting and CIMB. Market breadth was negative with losers beating gainers by 677 to 127, while 231 counters traded unchanged. Volume was 958.90 million shares valued at RM2.19 billion. At the regional markets, South Korea’s Kospi plunged 6.22% to 1,744.88, Taiwan’s Taiex fell 3.57% to 7,342.96, Hong Kong’s Hang Seng Index lost 3.08% to 10,399.92, Japan’s Nikkei 225 down 2.51% to 8,719.24, Singapore’s Straits Times Index fell 3.23% to 2,733.63 and the Shanghai Composite Index shed 0.98% to 2,534.36. On Bursa Malaysia, Panasonic was the top loser and fell 48 sen to RM23.32; PPB lost 30 sen to RM17.20, LPI Capital and Genting 28 sen each to RM13 and RM9.70, Top Glove 24 sen to RM4.94, UMW 23 sen to RM7.22, CIMB 22 sen to RM7.93, Boustead and Carlsberg 21 sen each to RM5.29 and RM6.81, while MISC lost 20 sen to RM7.10. Petronas Chemicals was the most actively traded counter with 30 million shares done. The stock fell 18 sen to RM6.40. Other actives included Axiata, AirAsia, Dialog, CIMB, DVM, MAS, Timecom, MAA and Telekom. Among the gainers, BAT added RM1.04 to RM45.24, Dutch Lady 56 sen to RM18.80, NSOP 34 sen to RM5.35, Nestle 20 sen to RM1.36, SHL 17 sen to RM1.50, Hong Leong Bank 16 sen to RM13, BLD Plantations 12 sen to RM7.02 and Utusan 10 sen to 82.5 sen.    

https://theedgemalaysia.com/node/30835

#Update* UBS bullish on Asian IPOs this year

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KUALA LUMPUR: UBS AG is bullish about the initial public offering (IPO) market in Asia and Malaysia this year, on the back of a relatively stronger Asian equity market than Europe and strong interest from investors. Its Asia global capital markets head of equity syndicate managing director Sam Kendall said that the equitization of Asia is strong at the moment, and he foresees US$100 billion worth of IPOs to be executed by the end of the year. "That is a conservative number. Investors are seeing a lot of opportunities in Asia as the market is strong and is not fraught by the uncertainty faced by European market. While there is some volatility here at the moment, it indicates more of an overreaction to Europe. It is seeing more sell-off and correction rather than a downtrend," he said, who is also the global head of blocks. He added that there a lot of Asian companies who are seeking capital this year, and it would be met by investors who are hungry for more equity. "Previous IPO offerings such as Maxis Bhd and JCY International Bhd have shown that interest from investors is strong. While we might not see multi-billion IPOs like Maxis here, there are growth stories and the market is open for them. And there are attractive companies here who are in need of capital,” he said, adding that some of the local sectors to look out for are oil & gas, palm oil and agri-commodity. Year-to-date, Asia had continued to see more IPOs being offered compared to the European and US market. "Year-to-date, we have seen IPOs up to US$18 billion in both Europe and US each, while Asia saw US$45 billion completed. If you look at what is coming up, The Agricultural Bank of China’s upcoming IPO is estimated between US$25 billion to US$35 billion. These are huge numbers. I am definitely very upbeat on the IPO market here,” he added. Kendall added that despite the current market situation in Europe might have some impact on the Asian market in the past seven days, he does not expect it to spillover to Asia. “What is happening in Europe would be contained there. The fact is that balance sheets (in Asian companies) are stronger and earnings are better than expected. Gross domestic product (GDP) here is pulling up high single-digit and low double-digit. Investors are afraid of uncertainty and there are no uncertainties in Asia,” he said. He added that investors are simply over-reacting to the European crisis. “Now, the market is simply overselling and over-panicking but the market always overshoot during both the downside and upside. The market sentiment in the past seven days merely indicates an over-reaction to the crisis,” he said. On the local front, its Singapore and Malaysia chairman and head of investment banking Keith Magnus said that there would be a lot of foreign interest in Malaysia in the next 12 to 18 months, due to the pedigree of companies here. “Volatility in the market aside, there will be a lot of interest in Malaysia going forward due to strong credit story and solid finances. Secondly, there has been a lot of government initiative to attract foreign investors in addition to quality of growth companies here,” he said, adding that the stronger Ringgit currency makes it more attractive for investors in comparison to weakening Euro and pound. In addition to oil & gas and agri-commodity, Magnus said that there are also some possible IPO movements in the electronics and engineering sectors. “These are the markets that are most attractive and in need of capital to take it to the next level,” he said. “Given these factors of strong credit, good governance and political context, good efforts to attract investors, and quality growth companies, we think Malaysia in the next year or so would attract a lot of foreign interest if the companies choose to come out,” he said. UBS is a leading international bank that has executed some of the biggest IPOs in Malaysia including Maxis Bhd and JCY International valued at US$ 3.3 billion and US$205 million respectively. It is also the financial advisor to Astro All Asia Networks on its privatisation by Astro Holdings, and had initiated strategic collaboration between Bursa Malaysia and CME Group. Since 2003, it has completed 39 investment banking spread across capital markets, advisory and merger & acquisition. .

https://theedgemalaysia.com/node/34925

Market Open: KLCI drifts lower as regional markets stay tense ahead of crucial data

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KUALA LUMPUR (Jan 10): The FBM KLCI drifted lower in early trade on Friday, in line with the jittery sentiment at most regional markets ahead of crucial data from China and US later in the day. At 9.05am, the FBMKLCI fell 4.82 points to 1,823.39. Gainers led losers by 125 to 92, while 141 counters traded unchanged. Volume was 83.81 million shares valued at RM72.74 million. The top losers included Nestle, Petronas Gas, Tenaga, GW Plastics, KPS, Puncak, Naim and Sime Darby. M & A Securities head of research Rosnani Rasul in a market preview Friday said Wall Street ended Thursday trading in lackluster mode unnerved by the upcoming job market data to be released on Friday. She said the S&P 500 added a paltry 0.64 points while DJIA erased 17.98 to end at 1,838.13 and 16,444.76 respectively. Rosnani said that as an indication on what to come, first time claim on unemployment benefit dropped to 330,000 last week from consensus expectation of 335,000. She said this gave hope that US unemployment rate may drop further to below 7.0% for the month of November. She said that US October unemployment rate dropped sharply by 30 basis points to 7.0% giving the US Federal Reserve enough conviction to taper on its quantitative easing measures. Rosnani said this trend and likely outcome of US unemployment rate today may suggest that the Fed may have no qualms in increasing the speed of tapering. “That has dented trading sentiment to some extent. Nonetheless, we believe that trading sentiment will be lifted back should the numbers turn out to be upbeat as that would mean that the US economy is on the mend nicely. “In another development, Janet Yellen gave a hint that the US economy may grow as high as 3.0% this year in what would be the US’ best since the onset of the Global Credit Crisis. “As for today, in the absence of trading clue and catalyst to shore up sentiment, we foresee the local market to continue trading in sideways with downside risk,” she said.   Elsewhere, Asian markets were set for a tense session Friday as reports on Chinese trade and U.S. jobs have the power to cause convulsions by shifting the outlook for monetary policy in the world's two largest economies, according to Reuters. In subdued early trading, MSCI's broadest index of Asia-Pacific shares outside Japan had barely budged, while Australia's market eased 0.2 percent, it said.

https://theedgemalaysia.com/node/51762

Global semicon sales to reach US$44.3b in 2011

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KUALA LUMPUR: Global semiconductor equipment sales are forecast to reach US$44.33 billion (RM134 billion) this year, according to the US-based Semiconductor Equipment Manufacturers Industry association (SEMI). In a statement on Monday posted on its website SEMI, in its mid-year SEMI Capital Equipment Forecast, said the equipment market would expand by 12.1% in 2011, following a 148% market increase in 2010. “The year 2011 is likely to be the second highest spending year in history, second only to the US$48 billion spent in 2000. It will also be the highest spending year ever for wafer processing equipment,” it said. SEMI is the global industry association serving the manufacturing supply chains for the micro-electronic, display and photovoltaic industries. SEMI president and CEO Stanley T Myers said semiconductor equipment manufacturers will still see a double-digit increase in spending for 2011 following a phenomenal recovery year with triple-digit growth in 2010. “Growth is forecast for all regions in 2011, with Taiwan expected to be the largest market for equipment spending in both 2011 and 2012.   “In 2011, North America will be the second largest market in equipment spending (US$9.25 billion), with an almost 61% increase in spending over the previous year. Korea will be third in terms of equipment spending (US$7.98 billion). We expect worldwide equipment sales to remain at high levels in 2012,” Myers said. SEMI said that wafer processing equipment, the largest product segment by dollar value, is expected to increase 18.8% in 2011 to US$35.1 billion. However, the forecast predicts that the market for both test and assembly equipment, which is of smaller value, will contract in 2011, with semiconductor test equipment forecast to decline by 5.5% (to US$3.92 billion) and assembly and packaging forecast to decline by 18% (to US$3.18 billion). But after the expected strong performance in 2011, SEMI said that the equipment market is expected to experience a slight decrease of about 1.2% in 2012, with wafer processing equipment spending declining 2%. Low single-digit growth in both the test and assembly equipment markets is also expected. This article appeared in The Edge Financial Daily, July 13, 2011.

https://theedgemalaysia.com/node/85105

#GE13 Results* BN wins 38 Parliament seats at 11.04pm; PR 16 seats

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#GE13 Results* BN wins 38 Parliament seats at 11.04pm; PR 16 seats

https://theedgemalaysia.com/node/37374

#US Stocks* Wall St scores first rally of 2014; S&P ends 3-day drop

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NEW YORK (Jan 8): U.S. stocks ended higher on Tuesday, snapping the S&P 500's three-day losing streak to give the benchmark index its first positive session of 2014. A sharp decline in the U.S. trade deficit and upbeat German data helped improve market sentiment as the data pointed to strengthening economic fundamentals in both the United States and Europe. "One way or the other, (the data) is all pointing to the story about how it might still be tough, but things are starting to point to better days ahead," said Ken Polcari, director of the NYSE floor division at O'Neil Securities in New York. "Overall, if you look at the broader picture, it does feel like it means it is starting to move ahead." The S&P healthcare index, up 1 percent, was the best performer among the 10 major S&P sectors, buoyed by a Deutsche Bank upgrade of UnitedHealth Group Inc to a "buy." Shares of UnitedHealth, a Dow component, gained 3.1 percent to close at $76.51. Tenet Healthcare shares climbed 4.9 percent to $46.10. Community Health Systems Inc shares rose 3.8 percent to $43.49 a day after the company said the new U.S. healthcare law should give a slight boost to its 2014 earnings. The S&P 500's gains followed a three-day losing streak, which pushed the benchmark index down more than 1 percent as traders took profits in the wake of 2013's rally that drove the benchmark index up nearly 30 percent. Data showed U.S. exports hit a record high in November, while weak oil prices restrained import growth, resulting in the smallest U.S. trade deficit in four years. German unemployment unexpectedly fell in December on a seasonally-adjusted basis. The Dow Jones industrial average rose 105.84 points or 0.64 percent, to end at 16,530.94. The S&P 500 gained 11.11 points or 0.61 percent, to finish at 1,837.88. The Nasdaq Composite added 39.501 points or 0.96 percent, to close at 4,153.182. Shares of Google Inc hit a record intraday high of $1,139.69 before closing up 1.9 percent at $1,138.86. JPMorgan, which has an "overweight" rating on Google, raised its target price on the stock to $1,305 from $1,100. Economic activity may be hurt by a polar vortex - strong upper-level winds in the Northern Hemisphere that normally hover over the polar region - that has been pushed south to envelop a large part of the United States. JPMorgan Chase & Co shares fell 1.2 percent to $58.32 after the largest U.S. bank holding company said it would pay more than $2 billion of penalties to settle charges by U.S. federal authorities that it failed to report suspicious activity involving Bernard Madoff's Ponzi scheme. GameStop Corp shares plunged 8.4 percent to $44.14, its biggest drop since May 2013, and ranked as the S&P 500's worst performer after Sony Corp said it will begin testing a new PlayStation-based streaming service that could cut into the video game retailer's used game sales. U.S.-listed shares of Sony edged up 0.1 percent to $17.32. In the pharmaceutical space, Neurocrine Biosciences soared 89.7 percent to $18.51, its highest level since June 2006, a day after it said its movement disorder drug showed a reduction in symptoms compared with a placebo in a mid-stage study. Stereotaxis shares jumped 12.5 percent to $4.50 following completion of a clinical trial. The Nasdaq biotech index gained 1.4 percent. Bob Doll, chief equity strategist of Nuveen Asset Management, forecast further upside for equities in 2014, with a year-end target of 1,950 for the S&P 500. But he expects stocks to endure a 10 percent correction during the year. Volume was modest, with about 6.11 billion shares traded on U.S. exchanges, slightly above the 6.01 billion average so far this month, according to data from BATS Global Markets. Advancing stocks outnumbered declining ones on the NYSE by a ratio of 2 to 1, while on the Nasdaq, nine stocks rose for every four that fell. - Reuters

https://theedgemalaysia.com/node/69358

A test of endurance

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WITH a cast of over 20 characters and an author who has a penchant for detail and complex storylines, the audio-book format may not be the best vehicle for fantasy novel A Game of Thrones. Thrones was first published in 1996, but has experienced a resurgence of late, thanks to HBO's launch of the gritty TV series by the same name. The TV version is for the most part a success despite criticism from some segments of the gratuitous amount of sex and violence. Nonetheless, the series has reignited interest in the original book and, in my case, the audio book. I had no interest in another epic fantasy saga, having previously been entrapped by Robert Jordan's Wheel of Time series — another marathon of a series. So, I gave George R R Martin's Song of Fire and Ice (of which Thrones is the first book) a wide berth. But I am a sucker for HBO productions and a bit of a snob, and thus was drawn to the unabridged version of the story (so I can tell people that the book was better). Thrones, the audio book, is unfortunately a miss. The performer of the book is Tony Award-winner Roy Dotrice, who — despite his fine thespian background — can hardly be expected to perform 20 different voices consistently throughout the 831-page book. Dotrice, interestingly, also plays a small role in the series as the lecherous and traitorous Grand Maester Pycelle. Another problem with the audio book is the length. The book is already long — one of five books and counting — and it may be a bit much to expect readers to maintain focus for the duration of the book, which comes in at just under 34 hours. Add to the fact that there are numerous storylines going on at the same time and you have a recipe for utter confusion. A book reader can at least flip back or dog ear pages for important developments, but bookmarking a spot in an audio book is nearly impossible, unless you are listening while commuting to work and have your hands free to skip back the track. As for my experience with Thrones, I found that I had to get a hold of the printed book to verify details and check back because I just got lost after a while. Thrones requires a certain amount of focus and concentration, which you simply don't have if you're doing something else, say navigating a traffic jam. But what of the story itself? Thrones has received a number of awards in the Fantasy category and I am admittedly a fan of the genre. However, my reading endurance is not what it used to be, and I'm more than likely to give it a miss if it takes more than three books to tell. Thus, I found myself frustrated with Thrones because I knew there were at least four more books on the way. But the story, in summary, is an entertaining yarn about the descent into ruin of a noble house in the fantasy land of Westeros after being caught up in kingdom-wide conspiracies, including murder, incest and aberrant lineage. Meanwhile, an ancient and mysterious threat brews in the North, which has been conveniently separated and protected by an ancient and mysterious wall. To make matters worse, the scions of the previous king now plot in the East, separated only by the flimsy-sounding Narrow Sea. Not only have they secured the brutish Mongol-inspired Dothraki forces, but there are rumours that they now have dragons to help them force their way back to the iron throne. So the stage is set — Westeros is threatened by the North and East (so far as we readers can tell), but has meanwhile busied itself with petty fights and politicking thereby weakening its own defences. If it were a typical tale, a hero would emerge in the second book just as the external threats start to press, and handily saves the day in the third book. It's not a typical tale, however. My reservations with Thrones are similar to that of the aforementioned Wheel of Time. The first books of both series start with such promise of a tight, compelling story only to unravel into hubris. I am convinced in my heart of hearts that Martin, like Jordan, was probably too caught up in the success of his first book and thus decided to stretch out the tale — be it for the money or for the ego trip. I must confess that I gave up on both the audio book and the written one about two-thirds in, in favour of the TV series. I managed to obtain a copy of the original HBO series, replete with the gratuitous acts of sex and violence of which I shall offer no comment here, and subsequently finished all of Season One in a single sitting or about 10 hours. The series is that good. However, it did not encourage me to pick up the second book in the series, A Clash of Kings, but it did make me get the second season in the TV series, which loosely corresponds with the second book. I have now had the second season for over a month, and have yet to finish it mainly because the story starts to get a bit silly and turns into a bit of a soap from the midpoint of the season. I am of the opinion that one of the most important virtue of writers is knowing when and how to end a story, and I'm afraid that Martin lacks that fundamental trait. I recognise that fantasy and science-fiction franchises tend to be long, drawn-out affairs, but Thrones shone with such promise that it is disappointing that it has become one of those books. Thrones is a good book, but give the audio book a miss unless you have the time and predisposition to sit down hours at a time. As for the rest of the series, I suggest each reader should make up their minds as to what is humanly bearable. But I do feel that there is better reading out there for the amount of commitment Martin demands. This story appeared in The Edge on Aug 27, 2012.

https://theedgemalaysia.com/node/72878

Nurul: Under-21 persons registered as voters

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KUALA LUMPUR (Nov 8): A total of 772 individuals under the eligible voting age of 21 have been registered as electorates in the Lembah Pantai constituency, its MP Nurul Izzah Anwar revealed on Thursday. Citing an example, she said, a voter born on June 19, 1990, was listed in the master electoral roll on March 2, 2011, three months before the individual turned 21. "The Election Commission (EC) must explain if those not of legal age can be registered as a voter," Nurul Izzah told a press conference in parliament. This story first appeared in fz.com on Nov 8, 2012.

https://theedgemalaysia.com/node/78149

#Global Markets* Dollar firms against euro after ECB cut and U.S. jobs data ahead

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(08/11/13 17:26:15) * Fed tapering talk may gain momentum, if payroll data strong* Euro at 7-week low, after surprise ECB rate cut, French downgrade* European shares fall, but stumble towards small weekly gain LONDON (Nov 8): The dollar was near a seven-week high on Friday, as markets awaited their monthly serving of U.S. jobs data and reassessed the euro, after the European Central Bank's surprise rate cut and S&P's rating downgrade for France. The euro fell to $1.3410, following Standard & Poor's lowering, late on Thursday, of France's sovereign credit rating to AA, from AA+. It was at its weakest level against sterling since January, and hit multi-month lows against a crowd of other currencies. Thursday's ECB rate cut came sooner than markets had anticipated, and investors were bracing for further currency market volatility, if U.S. non-farm payrolls come in strongly later in the day. A high reading for October could revive bets that the Federal Reserve will start scaling back its stimulus this year, especially after Thursday's pacy growth data. The U.S. economy expanded 2.8 percent in July-September, far more than the 2.0 percent economists had forecast. Economists polled by Reuters expect 125,000 jobs to have been added in October, although last month's 16-day U.S. government shutdown may affect the figures. "I don't think the non-farm payrolls are going to have a sustained market reaction," said Chris Turner, head of foreign exchange strategy at ING. "People understand, there are going to be some distortions after the government shutdown." "Were the dollar to sell off, I don't think it would last too long. We are listening to the ECB with great respect now, with regards to lower rates," he added. Share markets in Asia had fallen, after Wall Street suffered it worst day since August overnight, and European bourses quickly went into reverse when they opened. The pan-European FTSEurofirst 300 was down 0.6 percent in early trading, as London's FTSE and Frankfurt's DAX fell 0.5 and 0.6 percent, and Paris's CAC 40 lost 0.8 percent, as France's downgrade weighed. Pressure mounts French government bonds were also hit by S&P's one-notch downgrade, although the ECB's cut in interest rates helped German Bunds keep up their strong run this week. "S&P's decision reflects the worries over French growth, and the sentiment that government action is not enough," said Philippe Waechter, head of economic research at Natixis Asset Management in Paris. Data showing China's exports rose more than expected in October, hardly eased investors' cautious mood, with the CSI300 of the leading Shanghai and Shenzhen A-share listings, falling to two-month lows. MSCI's broadest index of Asia-Pacific shares outside Japan, fell 0.5 percent and looked set for a loss of 1.7 percent on the week, while Japan's Nikkei average dropped 0.9 percent. Both indexes hit their lowest levels in about four weeks. Still, the dollar strengthened on the U.S. data, with the dollar's index, against a basket of major currencies, hitting an eight-week high of 81.46 on Thursday. It last stood flat on the day, at 80.85 . The dollar's strength suppressed oil prices, with Brent crude hitting a four-month low of $103.22 a barrel. Plentiful crude supplies, progress in talks over Iran's disputed nuclear programme and fall in China's crude imports, all weighed on the prices. U.S. Treasuries maintained gains made after the ECB's rate cut, with the 10-year bond yield standing at 2.6091 percent, near this week's low.

https://theedgemalaysia.com/node/26639

Provisioning risks rise as impaired loans inch up

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Banking sectorMaintain overweight. Banks’ earnings continue to be supported by strong net recoveries and lower than expected provisions. However, the cycle could be reversing gradually as impaired loans have been inching up over the last four months against 30 consecutive months of decline prior to the third quarter (3Q) of last year. Mindful of the potential provisioning risk ahead, we advocate sticking to banks that have balanced growth, low provision risks and reasonable yields — Public Bank Bhd and Malayan Banking Bhd (Maybank). Excluding the one-off impact of the adoption of FRS139 accounting standards on the upward reclassification of non-performing loans (NPL) as impaired loans, the overall NPL trend in Malaysia has been declining since 2001. However, we are mindful that NPL deterioration has a relatively high correlation to an extended period of high loan growth against gross domestic product (GDP) growth. The past four years of near historical low interest rates, ample liquidity and a vibrant property market have fuelled an above average loan-to-GDP growth of 2.0 times against the 10-year post-Asian financial crisis average growth multiple of 1.3 to 1.6 times while the system’s loan-to-deposit ratio (LDR) has increased from 72% in 1Q 2008 to the current 80%, a seven-year high. This, together with rising cost-push inflationary pressure and its impact on domestic consumption, tightening macro-prudential measures and potential increase in interest rates, could raise the risk of the current NPL cycle reversing upwards. Even Public Bank, known for its resilient asset quality, experienced a relatively sharp 5.5% quarter-on-quarter uptick in its overall gross impaired loans in 3Q 2013, a potential early warning indication. In an environment of increasing asset quality headwinds, banks with larger exposure to lumpy business loans, high legacy-impaired loan ratio and relatively low loan loss coverage (LLC) could see greater provisioning upside risk. In this respect, CIMB and RHB Capital Bhd could be perceived to be at the upper end of the risk spectrum. Apart from Maybank, Public Bank, Hong Leong Bank Bhd Bank and AMMB Holdings Bhd, whose LLC are comfortably above 100%, the remaining banks currently have LLC at below 100%, with RHBCap the lowest at 60%. We estimate every 10 basis point increase in credit cost would have a 4% impact on our financial year 2014 (FY14) earnings estimates for the banks under our coverage. However, banks with inferior LLC could be susceptible to higher provision risk. For example, RHBCap, with the lowest LLC among banks would have to hypothetically triple its credit costs to bring its LLC to 100%, potentially translating into a 44% decline in its earnings. Both CIMB and Alliance Financial Group Bhd with LLC below 100% may also be impacted if the NPL cycle were to rise but the impact would be relatively milder given their higher LLC against that of RHBCap. On the other hand, our top two banking picks — Public Bank and Maybank — with LLC at above 100% could afford to maintain their current provisions and yet maintain a 100% LLC ratio even if their respective NPLs were to rise by 28% and 18% respectively from current levels. Given rising industry headwinds, we advocate sticking to banks that have resilient earnings growth, low provision risks and reasonable yields, which lead us to our top two picks for the sector — Public Bank and Maybank. Maintain market weight on the sector. The divergence in share price performance against a moderating earnings growth trend in 2013 has raised Malaysian banks’ valuation premium over regional peers on price-to-book value (P/BV) against return on equity (ROE) metrics. The Malaysian banking sector currently trades at an average 12-month forward P/BV of 1.8 times on the back of a ROE of 14.6%.  — UOB KayHian Research, Jan 16 This article first appeared in The Edge Financial Daily, on January 20, 2014.

https://theedgemalaysia.com/node/33968

Tatt Giap slightly higher on debut

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KUALA LUMPUR: Shares of Tatt Giap opened slightly higher on its first trading day on the Main Market of Bursa Malaysia on Thursday, July 22. At 9.02am, it is up 2.5 sen to 60.5 sen with 8.69 million shares done. However, the FBM KLCI is down 2.03 points to 1,338.99, as sentiment turns cautious over the weaker close on Wall Street. Turnover was 23 million shares done valued at 13.5 million. There were 45 gainers, 45 losers while 74 counters were unchanged. Tatt Giap manufactures and trades in processed steel products.

https://theedgemalaysia.com/node/70555

Key shareholders buy Pan Malaysia Capital, LBS, Tan Chong Motor

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KUALA LUMPUR (Oct 4): Key shareholders at Pan Malaysia Capital Bhd (PMC), Tan Chong Motor Holdings Bhd and LBS Bina Group Bhd are among insiders buying more shares in the companies they own from the open market, latest filings show. Businessman Tan Sri Khoo Kay Peng, who has been buying Malayan United Industries Bhd shares from the open market, also has been buying shares in PMC. According to a filing on Thursday, Khoo’s Bahtera Muhibbah Sdn Bhd bought 7.06 million PMC shares from the open market between Sept 28 and Oct 3 at undisclosed prices. This raised Khoo’s deemed interest in the company to 370.13 million shares or about 45.39% of PMC’s share base. PMC closed unchanged at eight sen on Thursday, or about 0.46 times its book value, with over 11.29 million shares traded. Over at Tan Chong Motor, latest filings showed major shareholder and executive deputy chairman Datuk Tan Heng Chew making further share purchases of the company that assembles and distributes Nissan branded automobiles in Malaysia and Vietnam. Tan Chong Consolidated Sdn Bhd bought 136,800 shares in the company between Oct 1 and Oct 2 at undisclosed prices, raising its interest to 48.3%. Tan, who is deemed interested in the stake, holds 3.576% of the company directly. Combined with the 48.3% held by his family-controlled vehicle, Tan controls some 51.9% of the company. Theedgemalaysia.com recently reported that Tan had over the past six months raised his direct and deemed interest in the company by close to 2%. Tan Chong Motor shed one sen to RM4.63 on Thursday with 950,000 shares done. Latest filings also showed the controlling shareholders of LBS Bina raising their holdings in the company that does construction-related civil works as well property development. Intelrich Sdn Bhd, a company related to its LBS Bina’s founding Lim family, bought 740,000 shares from the open market at undisclosed prices between Oct 2 and Thursday, raising its interest to 188.947 million shares, a filing showed. The stake is about 48.87% of the company’s share base. LBS Bina’s managing director Datuk Lim Hock San and his brothers Datuk Lim Hock Sing, Datuk Lim Hock Seong, Datuk Lim Hock Guan — who are all executive directors and also sons of LBS Bina’s chairman and founder Datuk Seri Lim Bock Seng — are deemed interested in Intelrich’s holdings. LBS Bina added one sen to close at 88 sen on Thursday with 848,000 shares transacted. Meanwhile, a substantial shareholder of Green Packet sold shares of the company in the open market. SMALLCAP World Fund Inc sold 199,900 shares at 43 sen on Sept 29. It further sold 563,200 shares between Oct 1 and Oct 2 at 42 sen apiece, paring holdings to 34.37 million shares or 5.01% stake — just above Malaysia’s threshold for substantial shareholding. Green Packet rose half a sen or 1.23% to close at 41 sen on Thursday with 401,000 shares traded.

https://theedgemalaysia.com/node/41317

Sigh of relief for BToto

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Berjaya Sports Toto Bhd(Dec 8, RM4.25)Maintain buy at RM4.25 with revised target price of RM4.86 (from RM4.50): Number forecast operators (NFO), including BJToto, hve received approval from the Ministry of Finance to revise the special prizes for the 4D Big game from RM200 per RM1 bet to RM180 per RM1 bet. The special prizes in the 4D Big permutation games have also been proportionally revised downwards. The industry has been lobbying hard to pass on the recent two-percentage point (ppt) hike in pool betting duties to punters via the reduction of non-first, second and third prize payouts for its 4D games. This form of limited prize payout reduction restores margins without placing excessive pressure on revenue due to cannibalisation by illegal operators, which would have been more intense if the more lucrative first and second prize payout structure were to be reduced. As there are 10 different variances of 4D numbers entitled to the special prize payouts (higher odds to strike) against just one for the first prize payout, the effect on the overall 4D theoretical prize payout ratio from the reduction of just RM20 in special prize payouts from RM200 to RM180 is equivalent to a RM200 reduction in the first prize payout structure from RM2,500 to RM2,300. The incremental reduction of just RM20 in special prize payouts is unlikely to deter punters from switching to the illegal operators in a meaningful way with most punters very much focused on the more lucrative top three prizes where the payout structure has remained intact. The reduction in special prize payouts would result in a two ppts reduction in the group’s 4D theoretical prize payout from 66% to 64%. However, as only 75% of the group’s gaming business is derived from the 4D operation, the overall impact on the group’s blended theoretical prize payout ratio is estimated to be a reduction of 1.5 ppts. Apart from the lower prize payout ratio, we have also assumed that the lower special prize payouts will have a 1% reduction in sales growth, but this is more than offset by a 1.5 ppts decrease in theoretical prize payout ratio. Consequently, we have raised our FY2011 and FY2012 earnings by 3.2% and 8.1% respectively. As the revision in the new prize payout structure will only take effect on Dec 15, the impact on FY2011 earnings is only a 4.5-month contribution against a full-year impact on FY2012 earnings. We are only forecasting 2.1% revenue growth for FY2012, where the higher prize payouts coupled with the mature industry dynamics are unlikely to translate into exciting medium-term growth. That said, despite the reduction in special prize draw payouts, the industry should still be able to eke out marginal growth as long as GDP continues to expand above the 4% level. During the last pool betting hike in 1999, with industry players passing on the cost to punters via a RM200 decrease in the 4D first prize payouts, industry revenue contracted by 2% to 3%. Given the stronger economic growth that we are currently experiencing, coupled with the smaller incremental reduction in special draw prize payouts against first prize payouts in 1999, we believe that low single-digit industry growth is sustainable. Following our earnings upgrades, while retaining our dividend payout ratio assumptions of 95% and 90% respectively for FY2011 and FY2012, we are raising our discount dividend model-derived target price from RM4.50 to RM4.86 and hence maintain our buy recommendation as the stock’s current gross dividend yield of 8% is still one of the highest among stocks under our coverage. — OSK Investment Research, Dec 8 This article appeared in The Edge Financial Daily, December 9, 2010.

https://theedgemalaysia.com/node/45535

Sunway Holdings gets RM257.9m contract for Legoland Malaysia theme park

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KUALA LUMPUR: Sunway Holdings Bhd has secured a RM257.96 million contract for the proposed construction of part of the Legoland Malaysia Theme Park in Johor. Sunway said on Friday, March 4 its unit Sunway Construction Sdn Bhd had accepted the letter of award from IDR Assets Sdn Bhd to build package four of the theme park. “The proposed project is targeted to be completed on June 2, 2012 with a construction period of 15 months. It is expected to contribute positively to the earnings of Sunway Group for the financial year ending Dec 31, 2011 onwards,” it said. Sunway said while the proposed project was subject to normal construction risk of materials price fluctuation, this risk could be mitigated at this juncture.

https://theedgemalaysia.com/node/90771

Crest Builder expects exciting next two years

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FOR Eric Yong, executive director of Crest Builder Holdings Bhd, the first half of 2013 has been a rather quiet period. The company held back the launch of new developments due to market uncertainty caused by the general election and focused more on other matters, such as getting approvals from the authorities. With the election behind us, the developer expects the next 18 months to two years to be very exciting as it has a number of launches lined up — the small office/home office (SoHo) components of Avenue Crest and Alam Sanjung in Batu Tiga, Shah Alam; The Galleria in Jalan Ampang; and the Dang Wangi light rail transit (LRT) redevelopment project in Jalan Ampang. Yong says these new projects will keep the developer busy for the next two years. "Going forward, we will line up a few other projects but that will be towards the later part of the year." In 2004, Crest Builder purchased a 22-acre freehold tract in Batu Tiga, Shah Alam — which it dubbed Alam Hijau — from Pengurusan Danaharta Nasional Bhd. Alam Hijau comprises five phases — Alam Prima, Alam Mesra, Alam Idaman, Avenue Crest and Alam Sanjung — and has an approximate gross development value (GDV) of RM900 million. The first two phases, Alam Prima and Alam Mesra, were sold en bloc to Syarikat Perumahan Negara Bhd (SPNB) for RM147 million in 2005. Avenue Crest is the fourth phase of Crest Builder's Alam Hijau development. It is made up of three components — retail, office suites and SoHos. The project commands a GDV of RM135 million. With the SoHo suites set to be completed by December 2013, Crest Builder is looking to officially launch the units before Hari Raya Aidilfitri and to allow buyers to collect their keys within three months of their purchase. In 2010, Crest Builder held a private viewing of Avenue Crest's offices suites, which occupies eight floors of the 24-storey tower. The "soft launch" was only open to company employees and later, to immediate family and friends. To date, Avenue Crest has sold 75% of the office suites, and secured an overall sales rate of 40%. With Avenue Crest's tentative official launch to be held before Raya, Crest Builder is looking to soft launch Alam Sanjung — the fifth phase of Alam Hijau — sometime after Hari Raya. With a GDV of RM300 million, Alam Sanjung consists of two 24-storey towers. Each tower has 300 identical units with built-ups of between 864 and 980 sq ft and are priced at RM370,000 to RM530,000. There are also 14 units of shops and 48 units of SoHos within the two towers. The facilities will be located on the seventh floor. Alam Sanjung adopts a green-living concept and offers herb and zen gardens. The developer is only opening Tower A for booking. Pre-registration will start on Aug 24. "Right now we have 2,800 registrants and sales will be conducted on a first-come, first-served basis," says Yong. Crest Builder decided to venture to Batu Tiga as development was shifting towards the area from Subang Jaya and Petaling Jaya, he says. "Looking at the immediate vicinity of Alam Hijau, there are close to 1.3 million people living within a 20-minute radius of our development." Yong adds that with the skyrocketing property prices in Subang Jaya, Shah Alam is the next best location to look at. Batu Tiga is just five minutes away from the Guthrie Corridor Expressway, the North Klang Valley Expressway, the ELITE Highway and the Damansara-Puchong Highway. "To add value to our development sites, there are plenty of offices nearby," he says. The company is in the midst of reacquiring Alam Mesra from SPNB and plans to relaunch the development around mid-2014 with a build-then-sell concept in mind. Meanwhile, Crest Builder is looking to soft launch The Galleria on Jalan Ampang — opposite the Great Eastern Mall — by year-end and officially launch it within the first half of 2014. The Galleria, with a total GDV of RM1.33 billion, comprises a 28-storey SoHo tower with a 33-storey corporate tower and a 6-storey boutique retail mall. The developer is also looking to launch the redevelopment of the Dang Wangi LRT station towards the end of the year, once the marketing package is ready. "Right now, we've got most of the approvals from the authorities," says Yong. "What we're going to do now is try to fine-tune most of the marketing packages, as we are looking to offer fully-furnished units, complete with curtains." He says Crest Builder and Syarikat Prasarana Negara Bhd (Prasarana) are jointly raising the funds for the project, but construction will be carried out by the former. The joint venture, in which Crest Builder holds a 51% stake and Prasarana 49%, is to develop the RM1.04 billion project that will consist of a single-block mixed-use development atop the Dang Wangi LRT station. It has been tentatively named, "The Bank". "When we heard that this project was available for tender, we were very keen to secure it," Yong says. "If you look at the old history of the line run by Projek Usahasama Transit Ringan Automatik Sdn Bhd (Putra), the Dang Wangi station was supposed to have a commercial development. The piling was already up but then the 1997 financial crisis hit and Putra went into liquidation. It has been overlooked for the past 15 years. Now, with the piling in place, that's half of the work done. That's why we're keen." Furthermore, Jalan Ampang is an "economically-fortified location," says Yong. "In the event of any economic uncertainty, Jalan Ampang, because of its location, will always be the last to fall and the first to get back up." Yong adds that he has calculated the risks Crest Builder is taking. "The oversupply situation around this part of Kuala Lumpur — especially Bukit Bintang, Jalan Sultan Ismail and Jalan Ampang — is much less severe. Everywhere else can be rather uncertain, but in terms of a high-end market, we see a very strong future for Jalan Ampang." Crest Builder has secured all clearances from the government. There was a land alienation issue, but Yong says the issue has been resolved. Apart from the redevelopment of the LRT station, Crest Builder will be upgrading the bridge across Sungai Klang and connecting a bridge to the monorail station. Construction is expected to start after Raya. For The Bank, Yong is finalising the terms with various international agents to sell 30% to 40% of the SoHo units overseas. "The international target markets we have set our sights on are mostly Asian countries, such as Singapore, Hong Kong and Taiwan." He adds that there are a number of European property groups interested to invest in Malaysian real estate that the developer is also keen to attract. While other developers believe in landbanking to sustain their current revenue, Crest Builder looks at privatising government assets. "We are working on quite a number of government privatisation deals," Yong says. "At any one time, I am looking at 15 to 20 proposals, with a targeted success rate of 20%. Some are at the study stage, some are pending submission and some have been submitted and are pending negotiations." With its hands full for the next two years, Yong believes that Crest Builder will be able to deliver everything it has on the table at the moment. "It's not a major issue if you look at it resource wise. We have a very strong resource base and don't foresee any major problems." This story first appeared in The Edge weekly edition of June 24-30, 2013.

https://theedgemalaysia.com/node/25044

Ogawa to open concept stores by end-2010

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KUALA LUMPUR: Ogawa World Bhd plans to open at least two concept stores in the Klang Valley by end-2010 to promote its co-owned Cozzia brand, said its executive director Louis Chong. Each concept store would cost RM300,000 to RM500,000 to set up with the first store expected to be opened by the end of March, he said at the launch of the Cozzia product yesterday. “The concept store is in line with Ogawa’s plan to promote wellness home furnishing concept in Malaysia with the introduction of the Cozzia product,” he said.He added that the concept stores would be located at major shopping malls and target customers from the upper-middle to high-income groups.“We will focus on building a strong market in Malaysia for the first two years. Thereafter, we will bring the brand (Cozzia) to countries where Ogawa is present at an accelerated rate because the learning curve will be shorter,” he added. Chong said while the brand was not expected to bring in significant contribution to Ogawa’s revenue at the moment, it would help the company’s growth in the long run. “The massage chair category is still seeing a strong growth, and Ogawa sees the value of adding product offerings as consumer interest in overall wellness continues. “There is a void in the marketplace for better-end consumers, particularly in the home theatre and motion categories featuring massage. We plan to fill that void,” he said. Ogawa recently signed a co-ownership agreement with US-based Cozzia to brand, market and distribute its products in the Asean region and some parts of Asia. Cozzia is a leading retailer of furniture with built-in massage capabilities. Ogawa has 150 outlets in nine countries, namely Malaysia, Singapore, China and Hong Kong, Indonesia, Australia, Vietnam, Myammar and Saudi Arabia.For its first quarter ended Sept 30, 2009 (1Q10), Ogawa posted a net profit of RM84,000, reversing a net loss of RM4.5 million a year earlier. Revenue rose to RM35.2 million from RM27.4 million. However, compared to the preceding quarter, 1Q10 net profit was 97.4% lower.

https://theedgemalaysia.com/node/89076

Perak Umno wants voting results for MT polls announced at respective divisions

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IPOH (Oct 17): Perak Umno today urged Umno's elections committee to allow voting results for the party's Supreme Council (MT) posts this Saturday be announced at the respective divisions. Its secretary, Datuk Mohd Khusairi Abdul Talib said besides this, the results must be verified by the election chairman at the respective division in the presence of representatives of the candidates, with copies of the results handed to the state Umno liaison committee and the division secretary for record keeping purposes. "This step will further enhance transparency of the election process which is in line with the aspirations of the party leadership and grassroots. "Voting delegates at the divisions have a right to know the outcome of the voting process at their respective divisions," he said in a statement here. He added that not allowing the results to be announced at the divisions could cast aspersions on the integrity of Umno's polls.  Following amendments to Umno's constitution, for the first time in its  history almost 150,000 delegates qualified to vote in the party's polls this year which uses the electoral college system (with each of the 191 divisions in Umno carrying one vote), unlike previously when only about 2,500 delegates decided the polls outcome for MT posts.

https://theedgemalaysia.com/node/62191

#Update* Anwar: Goverment must investigate Mat Zain's claim against A-G

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Last Updated: 5:59pm, Dec 02, 2013 KUALA LUMPUR (Dec 2): Datuk Seri Anwar Ibrahim has urged Putrajaya to investigate Former Kuala Lumpur CID chief Datuk Mat Zain Ibrahim's revelation, claiming that Attorney-General (A-G) Tan Sri Abdul Gani Patail had concealed facts leading to the Pulau Batu Puteh blunder. "At least, a full and open investigation should be conducted against Abdul Gani over the allegations of failing to adduce evidence that led to the loss of Batu Puteh," said Anwar, in a press conference at the Parliament lobby today. "This cannot be condone and must be investigated speedily," said the Permatang Pauh PKR MP, referring to Mat Zain's statutory declaration (SD). "Any Malaysian with a love for the country wouldn't condone it," he said. Last week, news portal Malaysiakini reported on Mat Zain's SD which claimed of a high-powered plot to overthrow Abdul Gani for losing Batu Puteh, otherwise known as Pedra Branca, to Singapore at the International Court of Justice. Mat Zain, in the sworn statement, said he was part of a dinner gathering with former prime minister Tun Dr Mahathir Mohamad, prominent lawyer Tan Sri Muhammad Shafee Abdullah and former Commercial Crimes Investigation Department chief Datuk Ramli Yusoff on Aug 10. At the meeting, Mat Zain claimed that his companions had talked about how Abdul Gani handled Anwar's "black eye" incident in 1998, when the latter was being probed by the police on charges of corruption and sodomy. Mat Zain's claimed that Muhammad Shafee had informed him of Mahathir's unhappiness against Abdul Gani, who allegedly concealed vital facts and received an undisclosed sum for doing so. Muhammad Shafee, however, denied the claim. Anwar, suspicious over Muhammad Shafee's involvement in plot, also hopes to try, for the second-time, to exclude the lawyer from leading the prosecution team to reverse his sodomy acquittal. "I will discuss it again with (lawyer) Karpal (Singh) to see if we can bring up the case of Shafee appearing in my case... someone with a credibility like this - who has concealed a secret of this magnitude - is entrusted to represent the government in my case at the Federal Court," said Anwar. For more stories, go to www.fz.com, the website for freedom of expression and fairness in articulation.

https://theedgemalaysia.com/node/27422

#Video* Week In Tech (WIT): Outsourcing

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Watch NetV@lue's Karamjit Singh & Aishah Mustapha discuss the latest news in the local technology scene in this weekly videocast. On this episode, they discuss the state of outsourcing in the ICT industry in Malaysia Part 1 {youtube}eqpWiwhk9MM{/youtube} Part 2 {youtube}5GZ0U5h7odw{/youtube}

https://theedgemalaysia.com/node/62172

Gold down 87 sen at RM124.04 per gramme at 5pm

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KUALA LUMPUR (DEC 2): The physical price of gold as at 5pm stood at RM124.04 per gramme, down 87 sen from RM124.91 at 5pm last Friday.

https://theedgemalaysia.com/node/22542

Lim’s motion to debate CPI performance shot down

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KUALA LUMPUR: DAP veteran Lim Kit Siang’s motion to debate Malaysia’s latest performance in the annual Corruption Perception Index (CPI) was shot down by Speaker Tan Sri Pandikar Amin Mulia today. The Ipoh Timur member of parliament's motion was rejected because "the matter that has been put forth is not urgent", the Speaker replied in a letter to Lim. During today's parliamentary debate, the DAP veteran had attempted to revive the issue when he interrupted the Speaker by standing up. Pandikar Amin had rebuked Lim for the interruption, saying he had violated a standing order that prohibits Dewan Rakyat attendees from standing up while the Speaker was talking. The CPI 2009 saw Malaysia’s rankings and score decline from the previous year — the country slid nine places to No 56 while its score dropped 0.6 points to 4.5 points. Transparency International Malaysia President Datuk Paul Low attributed the poor performance this year to the perception that progress in combating corruption was slow while political will was lacking in implementing effective anti-corruption measures.

https://theedgemalaysia.com/node/27665

Vehicle sales up on consumer confidence

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KUALA LUMPUR: Vehicle sales in January surged to 50,622 units, an increase of 32.8% from 38,107 vehicles a year ago, as an improving economic outlook whets consumers’ appetite for big-ticket item purchases. The Malaysian Automotive Association (MAA) said yesterday vehicle sales or total industry volume (TIV) in January 2010 was also 6.2% higher compared with 47,668 units in December 2009. “Market situation and consumers’ sentiments are very much more favourable compared to a year ago when the global economic downturn set in. Several new models launched recently contributed to the higher sales,” the trade body said. OSK Research Sdn Bhd analyst Ahmad Maghfur Usman said the MAA’s latest figures reflected an improvement in consumer sentiment. He said the jump in January 2010 TIV was due to consumers postponing their intended vehicle and other big-ticket item purchases last year to this year. “Demand has always been there,” he told The Edge Financial Daily. Of the 50,622 vehicles sold in January, 45,973 were passenger vehicles and the remaining were commercial vehicles. In anticipation of a pick-up in sales, manufacturers and assemblers also ramped up output of vehicles to 51,296 units, up a commendable 37% from 37,427 units a year ago. Of the 51,296 units, passenger vehicles accounted for 46,172 units and the rest were commercial vehicles. The MAA last year projected TIV to reach 550,000 units in 2010, compared with 536,905 units in 2009. Its upbeat outlook was based on the strong performance in the last quarter of 2009 with carried over orders into 2010. For 2011 to 2014, the MAA has projected TIV to grow 3% to 566,500 (in 2011), chalk up an increase of 3% also to 583,500 (2012) and grow 2.8% to 600,000 (2013) and expand by 3% to 618,000 (2014).As for February, the MAA expected TIV to decline compared to January due to the seasonal short working month with the Chinese New year festive holiday and company closures for the holidays. Demand for big-ticket items like real estate, and cars are crucial indicators of consumers’ propensity to spend,  a much needed boost to drive domestic demand amid weaker exports which have  hurt the country’s economic fortunes. While policymakers’ stimulus packages are crucial to rejuvenate the local economy, external events would also impact local sentiments. Against the improving global backdrop, Malaysian companies are repositioning themselves as they expect local consumers’ improving appetite for big-ticket purchases. The availability of cheap credit amid an improving economic landscape are crucial to boost consumer demand for real  estate and cars. The banks’ move to raise hire purchase (HP) rates for foreign vehicle brands last year was deemed untimely as it could further stifle potential car buyers’ interest to change their vehicles at a time when consumer demand had waned. However, consumers, who had postponed their purchases of vehicles because of the higher HP rates, decided to go ahead in January. Meanwhile, the impact of imported luxury vehicles from the grey market is worth noting. The grey market refers to new or used motor vehicles and motorcycles legally imported from another country via channels other than the  manufacturers’ official distribution system. According to CIMB Equities Research, the intense competition from grey market importers, while negative, is unlikely to have a major impact on players like Tan Chong  Motor Holdings Bhd and  UMW Holdings Bhd.  Both companies have small exposure to the luxury car segment. “Nonetheless, we are surprised by the size of the grey market, which implies that the auto market in Malaysia may be even larger than expected. “This bodes well for companies with strong competitive advantage, solid brand names and extensive product portfolios,” its analyst Loke Wei Wern said in a research note. Automotive players’ revenue should benefit from stronger demand for vehicles while a firmer ringgit against the US dollar and yen should set the stage for a recovery in profit margins, according to the analyst. CIMB Research, which maintained its 2010 TIV forecast at 569,070 units, or 6% above the 2009 numbers,  is also retaining its Overweight call for the Malaysian automotive sector. Among automotive firms, the research house has maintained its earnings forecast and recommendations for Proton Holdings Bhd, Tan Chong, and UMW. CIMB rates Proton as Trading Buy with a target price of RM6.30, while Tan Chong and UMW were rated as Outperform with fair values of RM4.65 and RM8.10 respectively. OSK Research has “Buy” calls on Proton, and Tan Chong with fair values of RM5.90 and  RM4.12  respectively, while UMW is rated as “neutral” with a target price of RM6.35. This article appeared in The Edge Financial Daily, February 23, 2010.

https://theedgemalaysia.com/node/82244

#Market Open* KLCI extends gains, Genting, Tenaga, CIMB lift

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KUALA LUMPUR (April 3): The FBM KLCI extended its gains in early trade on Wednesday, lifted including by Genting, Tenaga and CIMB. At 9.02am, the FBM KLCI rose 4.78 points to 1,689.78. Gainers led losers by 92 to 28, while 110 counters traded unchanged. Volume was 22.96 million shares valued at RM31.14 million. The top gainers included Lafarge Malayan Cement, Genting, HLFG, BAT, Tenaga, CIMB, MISC, AmBank and MAHB. BIMB Securities Research in a market preview Wednesday said easing concerns on Eurozone debt crisis had injected more optimism amongst investors. It said that in addition, improving US economic data saw Wall Street higher with the Dow Jones Industrial Average up 89 points to 14,662. Now that Cyprus’ bailout is almost at its conclusion by the granting of an extra 2 years to implement the conditions set, European bourses also showed a sigh of relief with all round improvements, said BIMB Securities. As for the Asian markets, it was broadly higher on the back of the higher opening in Europe, it said. The research house said that locally, the FBM KLCI was up by an impressive 17 points to 1,685.0 predominantly driven up by the prevailing high liquidity. “We do not see any basis for such buying exuberance on the local bourse as both earnings growth and market valuations remain unexciting. Then again, we may be playing catch-up as we are still lagging behind the others in term of YTD performance. “One would expect profit taking to emerge if the index edge closer to the 1,700 level. Immediate support is seen at the 1,680 level,” it said. Meanwhile, Asian shares were effectively flat in Wednesday morning trade, cautiously marking time before key U.S. jobs data and news from central bank policy meetings in Japan and Europe later in the week, according to Reuters. The MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.1 percent, helped by a 0.3 percent rise in Australian shares and as the Standard & Poor's 500 Index neared its all-time high the previous session, it said.

https://theedgemalaysia.com/node/77085

Hot Stock: Genting Plant falls 1% on high valuations

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KUALA LUMPUR (Jan 11): Genting Plantations Bhd (GenP) slid as much as 1.01% in early trades on high valuations and record high December crude palm oil (CPO) inventory. Yesterday, official data showed end-December CPO stocks grew 2.4% month-on-month to hit 2.63 million tonnes, a record high for the fourth consecutive month, as exports continued to slow and Sabah state’s output came stronger-than-expected. At 10.45 am today, GenP shares fell 9 sen or 1.01% to an RM8.86 low on 33,900 shares. It was one of the losers among the ten top decliners. In a report today, Affin Investment Bank said it has a “reduce” call on the stock with a target price of RM8.12. It said with a high 16.5 times price-earnings (PE) valuation which exceeds the 16 times target that Affin sets for GenP’s larger peers, the stock is over-valued at yesterday’s closing price of RM8.95. This is despite the fact that GenP offers investors a strong growth profile from good fresh fruit bunches (FFB) growth prospects. GenP’s growth will come from the progressive maturity of its Indonesian estates which is expected to “increase total harvesting area for the group from about 63,000 ha in financial year 2012 (FY12) to 67,000 ha in FY13 and to circa 75,000 ha in FY14,” Affin analyst Ong Keng Wee said in a report this morning. Consequently, FFB production in Indonesia is forecast to triple while that in Malaysia is projected to grow between 3% to 5% annually from FY12 to FY13. “Taking into account the additional new harvesting areas and yield gains, we project FFB production growth of 12% in FY14,” Ong noted. But going forward, GenP will face increasing labour cost arising from the implementation of minimum wage policies in both Malaysia and Indonesia. Following such implementation from Jan 1, 2013 onward, labour cost is expected to rise between 7% and 8% in Malaysia and 39% in Indonesia, Ong said in the research note.

https://theedgemalaysia.com/node/82815

#Midday Market* Meagre gains for KLCI in lacklustre trade

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KUALA LUMPUR (April 9): The FBM KLCI eked out meagre gains at the midday break on Tuesday, after managing to claw back from negative territory in early trade, in line with the gains at most regional markets. At 12.30pm, the FBM KLCI added 1.35 points to 1,689.34. The index had earlier fallen to its intra morning low of 1,686.19. Gainers led losers by 315 to 289, while 272 counters traded unchanged. Volume was 586.25 million shares valued at RM718.49 million. The top gainers in the morning session included BAT, Aeon Credit, LPI Capital, Tasek, Aeon, Lion Industries, Shell, Hevea, Amway and Petronas Gas. Nextnation was the most actively traded counter with 22.2 million shares done. The stock added half a sen to 11 sen. The other actives included L&G, Daya Materials, Lion Industries, Kinsteel, Alam Maritim, Tebrau Teguh, MAS, Lion Diversified and Naim Indah Corp. The decliners included Dutch Lady, Lafarge Malayan Cement, Innity, Sarawak Oil Palms, UMS, WCT, Can One, Apollo, Advanced Packaging and Crescendo. Meanwhile, the yen fell to fresh multi-year lows and Japanese stocks extended gains on Tuesday as effects of the Bank of Japan's aggressive reflationary campaign reverberated through markets, while Asian equities drew support from a solid start to the U.S. quarterly earnings season, according to Reuters. Benign Chinese inflation data also boosted sentiment as it kept hopes that an expansive monetary stimulus will stay in place to support the world's second-largest economy, but escalating tensions in the Korean peninsula took a toll on South Korean shares and its currency, it said.

https://theedgemalaysia.com/node/54709

TMC Life makes cash call to raise RM60 million

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KUALA LUMPUR: TMC Life Sciences Bhd is making a cash call to raise some RM60 million from existing shareholders to pare down debts and finance its capital needs. In a statement to Bursa Malaysia yesterday, TMC said it plans to undertake a renounceable rights issue of 200.59 million new shares at 30 sen each, together with 401.19 million free new detachable warrants to sweeten the deal.   The exercise will be done on the basis of one rights share and two warrants for every three existing shares in the company. “After considering various methods of fundraising, the board is of the opinion that a rights issue of shares is currently the most appropriate means... as it will reduce the group’s gearing, recapitalise its statement of financial position and save on financing cost. “The warrants will provide a ‘sweetener’ to shareholders participating in the issue in view of the challenging market conditions,” TMC said. TMC’s single largest shareholder is Gilberta Investments Ltd, with a 32.59% stake, followed by Juara Sejati Sdn Bhd with 10.06%. Gilberta is controlled by Singapore billionaire Peter Lim Eng Hock while Juara Sejati is the investment vehicle of Malaysian tycoon Tan Sri Vincent Tan. As at June 30, the loss-making company’s borrowings amounted to RM45.9 million compared with its cash balance of RM2.33 million. TMC’s share price has been on a downward spiral, falling from the year’s high of 56.5 sen in January to 38.5 sen yesterday. The stock has declined 25% this year. The company drew attention in October last year when Lim acquired a substantial stake in the fertility treatment specialist. The company incurred a net loss of RM34.92 million and revenue of RM80.45 million in the 17 months ended May 31 this year. The company has changed its financial year end to May 31 from Dec 31. CEO Francis Lim Poon Thoo told reporters after the company’s AGM last Friday that the company is focusing on growing its medical tourism business in the next three years to help the firm return to profitability. This article appeared in The Edge Financial Daily, September 13, 2011.

https://theedgemalaysia.com/node/15367

Rehda’s green wishlist

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PETALING JAYA: The Real Estate and Housing Developers’ Association (Rehda) has submitted its Budget 2013 wishlist to the Ministry of Finance, including proposals for more incentives to encourage green building and development. According to Rehda president Datuk Seri Michael Yam, apart from the efforts put in by developers, architects and designers to adopt green features in their projects, more can be done with government assistance. The proposals in the wishlist include the allocation of RM10 billion worth of incentives annually for the upgrading of existing buildings to green buildings and to recognise international green certifications such as the Green Mark from Singapore, Australia’s Green Star, UK’s Breeam and the US’ Leeds. “Green building incentives must be given irrespective of whether the rating authority is local or foreign. As an industry we should be promoting the green agenda and green certification by all green rating agencies. “They should be equally recognised to encourage builders, professionals and developers to pursue multiple globally recognised green certificates and not limit their choice to the local rating tools,” Yam said during the launch of Rehda Youth’s Green Tour Kuala Lumpur 2 on Tuesday. The event was officiated by  Energy, Green Technology and Water Ministry secretary-general Datuk Loo Took Gee. The association also called for grants from the Malaysian Green Technology Corp to be expanded to cover design, consultation and certification fees, particularly for those applying for the Malaysian Green Building Index silver certifications and above. Other proposals include stamp duty waiver for transfer of green certified properties from developers to buyers for five years; a double tax deduction on expenses on green building training; a personal income tax deduction on training fees incurred for attending talks and seminars related to green building and development organised by recognised professional bodies including Rehda; incentives to developers to use recycled building materials sourced locally; and allowing a maximum of 50% discount on assessment rates and quit rents for owners of green properties. Developers of green projects should also be rewarded with higher density as well as higher plot ratios of at least 20% increase not only as an incentive to offset costs but also as a reward for going green, said Yam. On its next Green Tour, Yam said Rehda is looking at Bangkok for the next leg, slated for year-end. The first Green Tour was held in March 2011 and showcased four developments in the Klang Valley, 1First Avenue in Bandar Utama, Challis Damansara, GTower office building and Ken Bangsar serviced apartments in Kuala Lumpur. The second Green Tour took Rehda members and industry professionals to the new Rehda headquarters in Kelana Jaya, architect Dr Tan Loke Mun’s S11 house in Section 11, Petaling Jaya, Mont’Kiara 11 condominium and the Sime Darby Idea House in Shah Alam. This article appeared on the Property page, The Edge Financial Daily, May 25, 2012.

https://theedgemalaysia.com/node/97048

Emerging currencies slide after Fed minutes

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TOKYO: Currencies in emerging Asia slid further yesterday after traders took mixed messages on the US Federal Reserve’s stimulus programme, even as upbeat Chinese manufacturing data provided support. The Indian rupee sank to a new record low of 65.27 to the dollar before slightly recovering to 65.15 in afternoon Asian trade, still well down on the 64.72 late Wednesday. The Indonesian rupiah traded at 10,958 to the dollar against 10,945 a day earlier, while the Thai baht was at 32.12, compared with 31.77. Minutes from the Fed’s July policy meeting showed board members had differing opinions on when to wind down its US$85 billion a month bond buying, known as quantitative easing (QE). Some back a “taper” as soon as next month, while others said the bank needed to see more evidence the US economy was strong enough. Fed boss Ben Bernanke has said it will not reel in the scheme until the economy can stand on its own two feet and unemployment is below 7%. In Tokyo yesterday the dollar rose to ¥98.21 from ¥97.67 in New York late Wednesday, while the euro bought US$1.3340 from US$1.3359.  The single currency fetched ¥131.02, against ¥130.46. “I personally didn’t think the minutes gave any clear indication of whether tapering will begin next month or not, but the market reacted anyway with falls in shares, rise in yields and dollar buying,” said Kengo Suzuki, currency strategist at Mizuho Securities. Expectations of an end to QE have seen foreigners in recent months repatriate some of the vast sums that poured into emerging economies when it was unveiled in September 2012, in turn hitting currencies and equities. However, Marito Ueda, a top currency trader at FX Prime said: “Its massive pressure on emerging market currencies... is falling off slightly, as China’s PMI (purchasing managers index) was better than expected.” Banking giant HSBC said preliminary readings show its PMI for China rose to 50.1 in August, compared with a final reading of 47.7 in July. A reading above 50 indicates expansion from the previous month, while a reading below 50 indicates contraction. The data — the first to indicate growth in four months — come after recent figures showing a pick-up in Chinese trade and tentatively suggest the under-pressure economy may be about to turn a corner. Attention will now turn to the release later yesterday of US initial jobless claims, which will provide an idea of the state of the US economy. — AFP This article first appeared in The Edge Financial Daily, on August 23, 2013.

https://theedgemalaysia.com/node/63992

ECM Libra Research maintains Buy on WCT, target price RM3.20

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KUALA LUMPUR (June 8): ECM Libra Research has maintained its Buy rating on WCT Bhd at RM2.40 with a target price of RM3.20 after the company secured a contract worth RM72.8m for industrial civil works from Vale Malaysia Minerals Sdn Bhd (VMM) which is building an iron ore transshipment plant at Teluk Rubiah in Lumut, Perak. In a note Friday, the research house said that this was the second time WCT scored a job from VMM for Phase 1A construction of the plant; the first package for earthworks awarded to the company in July last year. “The contract win lifts WCT’s effective outstanding order book to RM2.5 billion, which is about 2 times FY11 civil engineering and construction revenue. Maintain Buy on WCT with sum-of-parts target price of RM3.20,” it said.

https://theedgemalaysia.com/node/5362

Local funds still holding back

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KUALA LUMPUR: Most fund managers are still holding back from the stock market despite the ongoing rally, a sign that many have yet to be convinced that the gain in Malaysian equities is backed by firm economic fundamentals. As a local fund manager puts it, many in the fund management fraternity were taken aback by the spike in share prices within a short period despite weak corporate earnings. “Fund managers are still quite high in cash holdings. They have not really, in a big way, gone into the market because they are taken aback by the recovery. The rally has gone ahead of fundamentals,” EAssetManagement Sdn Bhd director Joe KF Wong told The Edge Financial Daily last Friday. The KLCI rose 9.7 points, or almost 1%, last Friday to close the week at 1,045.26, its highest level in eight months. The benchmark has gained 19.2% so far this year.Across the board, the total market value of stocks traded on Bursa Malaysia had also risen by a similar 19.2% between March 31, 2009 and May 21, 2009, according to the stock exchange’s updates. The key questions are whether the rally is spurred by local, or foreign funds, and to what extent overseas investors have been participating in the local market. The general belief is that retail investors have gotten into the act only recently. Bank Islam Malaysia Bhd senior economist Azrul Azwar said the general market perception was that the home market’s fortunes had been spurred by foreign money. “That’s the perception that everyone has. A surge of that kind in the stock market of late, most probably, has been driven by foreign funds,” he said. Bursa Malaysia officials, when contacted, declined to reveal how much money overseas investors had pumped into the market in recent weeks. However, the stock exchange operator’s data show that foreign participation in local equities, as a fraction of the total trading value, had fallen to 23% in April compared to 38% in the two preceding months.According to Bank Negara Malaysia, a total of RM14.57 billion worth of foreign money flowed into the market in 2008, an annual contraction of 42.8% from RM25.47 billion in 2007. There are two possible reasons prompting the inflow of foreign funds. According to Azrul, foreign investors tend to park their money in a country deemed to have positive long-term fundamentals. But speculative elements due to the potential for quick gains could not be discounted. The anticipation that the ringgit will strengthen will spur overseas investors to acquire local assets such as stocks and bonds, which in turn will strengthen the local currency. That Bank Negara has “frontloaded” its monetary policy also supports demand for the ringgit. This essentially translates into double gains for foreign investors when they sell their assets as they will be able to reap both the currency exchange gains, and capital appreciation of their assets. RHB Research Institute Sdn Bhd analyst Yap Huey Chiang offers a historical perspective on Malaysian equity valuations. Using the KLCI’s trough and peak valuations between 2000 and 2002 as a benchmark, Yap said valuations in real estate, and plantation stocks appeared to have run ahead of fundamentals. However, oil and gas, power, gaming, building materials, and semiconductor entities have lagged the KLCI in terms of year-to-date price-to-earnings ratio expansion after earnings adjustments. According to RHB, during the 2000-2002 market downturn and recovery, the KLCI declined 45% over a 14-month period prior to the April 10, 2001 low of 553.34 points before rebounding by a similar quantum over a one-year period to April 2002. In the current cycle, the KLCI also fell 45% over a nine-month period to the Oct 29, 2008 low of 829.41 points and has since risen by 26% over the last seven months. “Our analysis suggests that there is still some more upside ahead, but we highlight that stocks that have run significantly could also see some pullback,” Yap wrote in a note last Friday. Global economic dynamics also are deemed to have improved. A smaller contraction in world indicators suggests that the broader landscape could have seen the worst, but the pace of recovery remains a key question at this point in time, considering unemployment rates in major economies which are key import markets for developing entities like Singapore and Malaysia. Singapore, for example, saw its gross domestic product (GDP) contract by an annualised monthly pace of 14.6% in the first quarter of this year, less than the 16.4% contraction seen in the preceding quarter. Malaysia is expected to announce its first-quarter GDP numbers on Wednesday. Malaysia’s economic performance has weakened. The country’s GDP expanded by a smaller magnitude of 0.1% in the fourth quarter of 2008 from a year earlier. Third-quarter GDP advanced at a yearly pace of 4.7%. However, the good news is that the contraction in certain local economic indicators has slowed, possibly early signs of a recovery in the nation’s fortunes. Malaysian exports in March 2009, for example, shrank at a smaller annual quantum of 15.6% to RM43.65 billion although imports fell at a faster pace of 28.7% to RM31.14 billion. February 2009 exports recorded a yearly decline of 15.9% to RM39.6 billion while imports fell by an annual rate of 27.3% to RM27.6 billion. Manufacturing sales in March declined at a quicker annual pace of 25.5% to RM36.6 billion as manufacturers cut output against a landscape of weaker global demand. February 2009 numbers saw a 22.9% yearly contraction. Nonetheless, manufacturing sales rose 6.3% month-on-month to RM36.6 billion in March, while exports were also up during the period, by 10.3% to RM43.65 billion on-month. The dynamics of the local stock market will be closely watched against the country’s and global economic fundamentals, and also the stability of Malaysia’s altered political scenario since the unprecedented results of the March 2008 general election.  

https://theedgemalaysia.com/node/2516

What is Malaysia’s true sustainable source of advantage?

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We all grew up on stories of the magic bean, golden egg, the silver bullet. From young, we all want to believe that there exists this one thing that is the panacea to all our ills. This tradition was continued in a most animated fashion when DreamWorks Studio brought out Kung Fu Panda. In it, the master Shifu, decides the Panda Po is ready to open the sacred Dragon Scroll, which promises great power to its possessor. However, when Po opens it, he finds nothing but a blank, reflective surface. Stricken with despair at the scroll’s apparent worthlessness, Po returns to the village and meets up with his father, who tells him the secret ingredient of the family’s noodle soup: nothing. Things become special, his dad explains, because people believe them to be special. Yes, we have been blessed. Because we were always given something. Our land yielded tin, then oil, then gas. Rubber grew easily and profusely, then oil palm. But what if all of these ran out. What if we had nothing. If we extend the Kung Fu Panda parable, maybe then would we become truly special. When we stop depending on gifts from the world, and start building on our own gifts. The great thing about having a good leader is that progress can be envisioned, planned, executed and accomplished, ahead of anticipated calamities. A gamut of official and unofficial studies estimate our domestic oil and gas reserves will last only another 20 to 30 years. That’s one generation away. Our children’s Malaysia will have no indigenous energy reserves. We have to start acting now on the basis that we have nothing because by the time our kids grow up, they had better be endowed with their own magic ingredient. Unfortunately, by many accounts, empirical and anecdotal, we have not been working on giving them this mojo. A recent article on themalaysiainsider.com lamented that schools like Victoria Institution (whose famous alums include Tan Sri Ananda Krishnan, Tan Sri Francis Yeoh), St John’s Institution (Datuk Seri Najib Razak), Penang Free School (Tunku Abdul Rahman) and others like Malacca High School and St Michael’s Institution are all storied schools that have been allowed to fall behind until they are no longer counted as among the elite educational institutions in the country. The author went on to highlight how we would have reacted if we heard of England’s Eton College or Singapore’s Raffles Institution falling into such ignominy. Yet, Malaysians remain apathetic to what has befallen the most respected schools in the country. Speaking of Raffles Institution, I visited their sprawling campus recently. At the main entrance rests the bust of Sir Stamford Raffles, with an inscription that reads “would that I could infuse into this institution a portion of that spirit and soul…  as easily as I endow it with lands”.  These words remain true 200 years later and no more so than in Malaysia. To be able to create our own gifts, Malaysia needs to allocate a disproportionate share of its wealth today to the development of the minds and spirit of our children. It is about giving our children the best education money can buy today. We can live with less, (faulty) submarines and (cannibalised) jet fighters. We can make do with less opulent government quarters. But we cannot let our education standards slide. We cannot let schools decline. We should not lower the passing grade so that everyone can feel good about “making it”. We need the best and brightest to become educators. The noble profession needs a makeover to be appealing. No other (political) consideration should be allowed to supersede this ultimate objective of truly educating the nation. With a better-educated population, we can endow our children with their own special ingredient and with this special gift, we can all chart our own progress, come what may. I had asked if Malaysia can regain its competitive edge. In response to a reader, I postulated that all of Malaysia must first recognise that our edge has been eroded, and that the first step to undo this is to arrest the brain drain (and better still, to attract more brains into our country). For, human talent is the ultimate factor of production. Now, I’ve gone further — that we need to ensure we keep building our own human capital pipeline. It is the only sustainable way to maintain our advantage. These writings can come across as a bitter rant to some readers. That would be furthest from the truth. I truly believe there is a desire amongst our people to want to be advantaged and to want to stay there. And the answer, like in the Dragon Scroll, is simple. It is us: a well-educated thinking, acting population. It is not our oil, our gas, our rubber or our palm oil. Our own capability is our silver bullet. With this, Vincent Chin will conclude his 42 column. He will return occasionally next year to comment on the latest developments in management and leadership.His previous columns in Management@Work can be found under the Management section at www.theedgemalaysia.com This article appeared in Manager@work, the monthly management pullout of The Edge Malaysia, Issue 795, Mar 1-7, 2010

https://theedgemalaysia.com/node/13135

PM: RM44b Malacca-Indonesia bridge plan is private sector initiative

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"All I know is that it is a private initiative and it’s too early for me to comment,” Datuk Seri Najib Razak said on Aug 25. Asked if the companies involved in the 50-km bridge plan had sought loans or guarantees from the government to finance the bridge, Najib replied: “No. It’s a private sector initiative and hence so far there is all we know”. Najib, who is also Finance Minister, said the government had not studied the matter yet. "Once we have done that, we’ll discuss the matter with the Indonesian government,” he said after chairing the National Financial Council at the Finance Ministry. A special seminar was organised by Straits of Malacca Partners Sdn Bhd (SOMP) recently to explained the proposal to link the two countries. The length of the bridge is said to be nearly four times of Penang Bridge which is 13-km. SOMP chairman Tan Sri Ibrahim Zain said the company had submitted proposals to the Malaysian and Indonesian governments. According to press reports, Ibrahim said that 15% of the funding will come internally with the remainder from bank borrowings. China’s ExIm Bank was quoted as being interested in funding the remaining 85% for the infrastructure project. The project, which is supported by the Malacca state government, was first mooted by former prime minister Tun Dr Mahathir Mohamad in 1995 but subsequently scrapped during the Asian financial crisis in 1997. The idea was raised again during the Ninth Malay World Islamic Convention in Malacca last January. Meanwhile, the National Financial Council approve a RM390 million contribution to the Employees Provident Fund for 2011. According to Najib, RM100 million will be for the management of accounts while RM290 million is for economic and infrastructural development. The council also approved yearly grants to local municipal councils in Sabah and Sarawak starting from next year. The annual grants will amount to RM62.8 million, said Najib. A sum of RM110 million per year will be given to state governments for the maintenance of hill slopes bordering roads. The federal government, said Najib, had increased the service fee payable to state governments from 5% to 10% for states in the Peninsular and 12% for Sabah and Sarawak. The payment is to compensate the states for state labour used to implement federal government projects. The meeting, he said, had requested states which have debts with the federal government to settle their commitments within 10 years. As of July 31, RM12.7 million of advances were returned to the federal government with another RM473.81 million still outstanding. As of Dec 31, 2008, the amount owing by the states to the federal government stood at RM3.24 billion of which RM114.22 million was repaid by the states for the period Jan 1-July 31, 2009.

https://theedgemalaysia.com/node/22814

Bukit Antarabangsa landslide report not released

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KUALA LUMPUR: The full report on the Bukit Antarabangsa landslide on Dec 6 last year has not been made public. At 11am yesterday, a notice was put up at the lobby of the Ampang Jaya Municipal Council (MPAJ) stating that the report would not be released until the Public Works Department director-general or the minister of works approves the report’s declassification as specified under the Official Secrets’ Act (OSA) 1972. The notice was issued by the president of MPAJ. MPAJ director of corporate planning Norziatulshima Tajuddin told theedgeproperty.com that the municipal council had yet to receive any instruction on the release of the report. She said no date had been set for the report’s release. “So far, there were not many enquiries from the public on the report. The report is tentatively priced at RM80. Members of the public can register themselves at Menara MPAJ’s counter on the 4th floor and they will be notified once the report is released,” she added. On Nov 18, Selangor Menteri Besar Tan Sri Khalid Ibrahim released to the media a summary of the report in which a special technical committee formed to investigate the landslide had stated leakage in active water supply pipes running down the length of a row of abandoned houses as the main cause of the tragedy that claimed five lives. The report has been classified but Khalid said he was declassifying it, adding that the full report would be made available for a fee at MPAJ from Nov 23. “The federal government has since challenged the decision and cautioned the state not to declassify the documents instead,” Khalid said in a statement yesterday. “We call on the federal government to allow the release of the report as its contents are crucial to public discourse to speed up the establishment of regulations for slope development in Bukit Antarabangsa and other parts of Selangor.”

https://theedgemalaysia.com/node/4125

Kenanga Research maintains Hold on KNM, TP 89 sen

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KUALA LUMPUR: Kenanga Investment Research recommends Hold on KNM Group Bhd with a target price of 89 sen. It said on Tuesday, March 23 its recommendation was based on FY10 EPS of 5.9 sen and PER of 15 times. “We maintain our PER assumptions as share price should hold close to 90 sen until the exercise is firmed up. Our previous contention with the stock holds, contracts flows are expected to continue on slow in the near term, with potential improvement beyond 2010,” it said. On Monday, KNM said it was not extending the exclusivity period for due diligence granted earlier to BlueFire Capital Group Ltd, a company controlled by KNM group managing director Lee Swee Eng. BlueFire, together with GS Capital Partners VI Fund LP and Mettiz Capital Ltd had proposed to take over KNM for RM3.5 billion.  However, they target to conclude talks by April 16, 2010. Kenanga Research said speculation was rife on Monday that the due diligence exercise would not be fully completed by the committed March 22 deadline, and post that, a lower offer price could ensue. “We viewed KNM’s first offer price of 90 sen as unfavourable to long term investors as it does not 1) reflect their previous earnings capacity; 2) their historical average PER trading ranges of c.15x; and 3) current global peers average FY10 PER of 15x-19x. With such reasons to prove as potential roadblocks, an even lower offer price is highly improbable,” it said.  

https://theedgemalaysia.com/node/77151

#Exclusive* GDEx sees Afta helping to set M&A trend

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KUALA LUMPUR: Mergers and acquisitions (M&A) between regional and international express carriers will emerge as a trend with the Asean Free Trade Area (Afta) set to open up the region, said GD Express Carrier Bhd deputy executive chairman Teong Teck Lean. In an interview with The Edge Financial Daily last week, Teong said the time is ripe for M&A in the industry as Afta will fully come into effect by 2015. Teong said as distribution starts to cover a larger area like Southeast Asia, it makes better business sense for international players to collaborate with regionally based service providers.“Business collaborations, identifying synergies and getting a feel of each other’s operations are good starting points for M&A to come to fruition,” he said. However, Teong said GD Express has no M&A plan on the cards for now, although the company has established alliances with some of the world’s largest express carriers. “The company will always be open for talks for any potential alliances, M&A opportunities that will bring long-term benefits to the group,” he said. Teong said the landscape for the industry is more liberal in Malaysia and Singapore compared with neighbouring countries. He said foreigners are allowed to take major stakes in express carriers and parcel delivery services firms. Singapore Post Ltd is the second largest shareholder in GD Express with a 27.37% stake or 71.64 million shares. Among the international companies with presence in Malaysia that GD Express works closely with are Yamato from Japan, SF Express from China, Toll Group from Australia and Aramex of the United Arab Emirates, said Teong. As e-commerce and online purchase transactions increase, service providers have been finding new ways to expand their reach and distribution channels. He said the industry outlook is driven by rising domestic demand. “As the cost of distribution of goods and products continues to rise, many companies will relook their model which will include centralising distribution of products via express carriers. “We are looking at the industry growing at 2% plus GDP growth. For longer-term growth domestic companies will have to look out of Malaysia,” he said. Teong said growth will come from the rising trend in e-commerce, adding that Malaysia and the region are moving towards developed status, improved connectivity and ease of doing business in the region. “We always have had double digit growth over the last 12 years, and we hope to maintain the momentum,” he said when asked about the company’s internal growth target.On the company’s strategy going forward, Teong said GD Express would increase its visibility by putting more trucks on the road and adding more access points. “Also, the postal licence will [be divided] into three classes; we will be in class A and I think there will not be too many class A.  Licences are still not out for this year,” he said. Recently, the regulator for the industry, the Malaysian Communications and Multimedia Commission, has proposed for postal licences to be classified into three categories — class A for companies with national distribution network plus import and export capabilities, B for those with national distribution network but without import and export capabilities, and C for those that provide localised or inter-city deliveries. Teong said the company is gearing up for more growth and will still concentrate on the domestic market in the short to medium term as there are ample growth opportunities, as the country enhances the ease of doing business and improves connectivity. “For the medium to longer term, we will look out of Malaysia. “For now, we are concentrating on enhancing the execution of our capacity building and process improvement projects to cater for more capacity as well as improved quality, ” he said. Teong added that GD Express will be seeking a transfer from the ACE Market to the Main Market of Bursa Malaysia this year.   This article first appeared in The Edge Financial Daily, on Jan 14, 2013.

https://theedgemalaysia.com/node/16409

AMMB shares edge down at noon

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KUALA LUMPUR (Feb 15): AMMB Holdings Bhd shares edged down at noon on Wednesday after CIMB Research said the banking group’s 9MFY3/12 results revealed a weak underlying trend for the lending business as year-on-year loan growth was only 6.2% in Dec 2011 and NIM shrank y-o-y. At 11.57am, AMMB shed one sen to RM6.11 with 768,300 shares traded. AMMB posted net profit of RM357.18m for the third quarter ended Dec 31, 2011, up 9.8% from the RM325.31 million a year ago underpinned by profit growth across most divisions. Its revenue increased 7.2% to RM1.955 billion from RM1.824 billion. Earnings per share were 11.95 sen compared with 10.83 sen. For the nine-months ended Dec 31, 2011, its earnings increased by 13.8% to RM1.168 billion from RM1.026 billion in the previous corresponding period. Its revenue registered a 14% increase to RM6.047 billion from RM5.302 billion. CIMB Research in a note Feb 15 said it deemed the results slightly disappointing as 9M net profit was 72% of its full-year forecast and 77% of consensus. The research house said its FY12 net profit and target price (10% discount to DDM value) are trimmed as it lowered loan growth by 1 percentage point and lending yield by 5 basis points. “We retain our Neutral call as the challenging lending environment will dilute the impact of the revamp,” it said. “Despite the benefits of its continuing revamp and strong treasury income growth, we do not advise investors to accumulate the stock for a host of reasons – below-industry loan growth, y-o-y drop in margin and increased competition for the investment banking business. We prefer Maybank,” it said.  

https://theedgemalaysia.com/node/10598

‘Why panic?’ Nazri taunts Anwar

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KUALA LUMPUR: Minister in the Prime Minister’s Department Datuk Seri Mohamed Nazri Abdul Aziz claimed on April 5 Opposition Leader Datuk Seri Anwar Ibrahim was “panicking” over the government’s motion to refer Anwar to the rights and privileges committee of parliament for linking the “1Malaysia” concept to the “One Israel” slogan. Anwar, in a speech on Sunday at Kampung Sungai Tengi in the Hulu Selangor parliamentary constituency, dared the government to suspend him from the Dewan Rakyat if the government wanted to “continue” its support for Israel. “Why is he (Anwar) panicking?” asked Nazri. “Who said this is an Israeli matter? We just want him to retract (his statement), that’s all. If he does not retract, then we will go ahead. “Anyway, I don’t know what is going to happen to him. I am just referring him to the committee. What is he afraid of? Coward,” Nazri told reporters, when asked for his comments at the parliament lobby. Nazri (Padang Rengas-BN) confirmed that the motion had been submitted to the Dewan Rakyat speaker and is expected to be tabled on April 22. If referred to the committee, Anwar could face suspension from parliament. Anwar (Permatang Pauh-PKR) had caused a stir in the Dewan Rakyat two weeks ago when he linked the 1Malaysia concept with former Israeli premier Ehud Barak’s “One Israel” campaign of the 1990s. The Pakatan Rakyat (PR) leader also claimed that Apco Worldwide, the international public relations firm engaged by the federal government, had previously provided its services to the Israeli government. Apco has since denied its alleged ties with Israeli government and maintained that the 1Malaysia slogan was conceptualised prior to its engagement by the Malaysian government. A check by Singapore’s Straits Times found that filings with the US Justice Department showed that Apco had entered into an agreement to provide services for Israel in 1992.

https://theedgemalaysia.com/node/85726

Malay press: PAS ulama head slams polls protest rally

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PETALING JAYA (May 10): In the Berita Harian, the head of the PAS Ulama wing slammed Wednesday's rally attended by tens of thousands to protest the alleged fraud and irregularities in Sunday's national polls. The Malay daily quoted PAS Ulama wing chief Datuk Harun Taib as saying that the wing rejected the rally because the results of the general election should be accepted by the Pakatan Rakyat with an open heart. "The decision made by 13.1 million voters during the 13th general election should be accepted gladly because the Opposition had won many of the seats it contested in," he was quoted as saying to Berita Harian. He added: "Just because we (Pakatan Rakyat) did not win, we have a demonstration, whereas the Pakatan had in fact won many seats including in Terengganu. If they want to protest it is up to them". Reports on Wednesday's protest at the Kelana Jaya Stadium, organised by the Opposition, vary on the number of attendees, ranging from 50,000 to 120,000. PAS deputy president Mohamad Sabu was among leaders who addressed the rally. Asked to comment on his attendance, Harun said that there was no point in blaming others "just because we have not won the elections". Mohamad, better known as Mat Sabu contested in the Pedang parliamentary seat in Kedah on Sunday and lost. Many other notable high-level party leaders also lost in the elections. Among them are party vice president Salahuddin Ayub (Pulai parliamentary seat and Nusajaya state assembly seat, in Johor) and information chief Tuan Ibrahim Tuan Man (Jengka state assembly seat, in Pahang). Harun said that if the electoral process was indeed riddled with fraud, he would not have won elections for five terms since 1990. Utusan Malaysia continued to zoom in on the Chinese voters and the outcome of Sunday's election. Today, it quoted Professor Tan Sri Khoo Kay Kim as saying that the Chinese community still felt that they were still "colonised". He was quoted as saying in Utusan: "The Chinese do not understand the spirit of unity. Many of them still don't feel that Malaysia is their own country but still feel colonised. Because of that their racial sentiment is still strong". He said that the post-election scenario needed to be handled through a new approach which unites all Malaysians with a focus on the younger generation. The article also quoted Dr Thock Ker Pong, from the Tionghua Research Department in University Malaya, as saying that Chinese voters mainly fell in the middle income group which hardly felt any of Prime Minister Datuk Seri Najib Razak's transformation plans.