FBM KLCI FKLI FCPO Blogs & News

Happy New Year ... Gong Xi Fa Cai

2012-01-21T23:34:00.001+08:00

FTSE Bursa Malaysia KLCI 30 (Malaysia) highest dividend yielding stocks top 30

2010-09-24T20:05:00.000+08:00

FTSE Bursa Malaysia KLCI 30 (Malaysia) highest dividend yielding stocks top 30

2010-08-20T23:32:00.000+08:00

Elder Alexander

2010-08-14T18:18:00.000+08:00

If prices closed higher than they opened, then market professionals were probably more bullish than amateurs. If prices closed lower than they opened. then market professionals were probably more bearish than amateurs. It pays to trade with the professionals and against the amateurs.

Malaysia Shares End +0.6; 1320 Resistance

2010-07-06T17:33:00.001+08:00

DJ MARKET TALK: Malaysia Shares End +0.6; 1320 Resistance - MIBB
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0916 GMT [Dow Jones] Malaysia shares end higher with benchmark KLCI +0.6% at 1307.08, rebounds from 1294.37 intraday low, tracking gains in regional markets. "Investors are taking the opportunity to bargain-hunt after a few days of losses... but concerns over the global economy remain," says dealer. Volume thin at 568 million shares. Maybank analyst Lee Cheng Hooi recommends "sell on rallies" strategy for KLCI, tips next resistance at 1320, support at 1297. Market breadth positive with 403 advancers vs 195 decliners. Tanjong (2267.KU) +2.1% at MYR17.50, MISC (3816.KU) +1.7% at MYR8.61, UMW (4588.KU) +1.6% at MYR6.34; Sime Darby (4197.KU) down 1.1% at MYR7.50, Sunway City (6289.KU) down 1.6% at MYR3.70.

Blogger of The Week

2010-05-04T20:34:00.000+08:00

Jom Saham

Tujuan saya menulis blog ini sekadar berkongsi pengalaman dan pengetahuan didalam bidang pelaburan saham. Mempunyai klien melebihi seribu orang dengan pelbagai portfolio pelaburan, dengan ini telah dapat mengenalpasti/mengetahui 'investment attitude' pelabur.

Blog ini secara ringkas memberi gambaran turun naik harga saham berdasarkan analisa teknikal. Ayat2 yang digunakan mudah difahami menggunakan ayat sendiri agar pelabur2 yang baru berjinak2 didalam bidang pelaburan saham dapat memahami dengan mudah kerana tidak semua pelabur/pembaca memahami istilah2 teknikal.

Pendekatan yang digunakan diterangkan seringkas2nya dan semudah2nya kerana pelabur hanya ingin mengetahui bila waktu yang sesuai untuk membeli atau menjual sesuatu saham dan adakah harga untuk membeli/menjual itu tepat dengan keputusan yang diambil. Juga kaedah ini sesuai kepada pelabur jangkapendek dan jangkapanjang.

Please click ==> Link

Blogger Of The Week - MY Trading Adventure

2010-04-26T19:02:00.000+08:00

MY Trading Adventure

1.Hi Teh, can you please tell us a bit about yourself?

I am a maths lecturer. I am from science based, so no knowledge about economics, business, financial, accounting, management etc etc which needed in analysing markets. That was merely 2 years ago. I read a lot ...

2. Do you consider yourself a trader or an investor and are you in it full time or part time?

I am a trader, rather than an investor. I m both, actually as I m still experimenting on both, some to buy&hold … some for short trades, others using different approaches. Not many in......

3. What other market do you trade besides Bursa?

I have bought into HKEx and SGX stocks. I only bought some US stocks for trial. Basically, I am experimenting. I even bought call/put warrants in HKEx before. That requires different mindset. Then only we could compare the differences.....

4 Why do you blog and what do you blog about?

The main reason I blog WAS to record my trades but I traded too fast than I blog. Haha. Ok, it is my footprint in markets, if u know what I mean. Also, I WAS a blogger …......

5 What tips or advise you can share with us.

I will want to see myself well-verse in different markets, different way of investing/trading, seeking opportunities when it comes. I may want to TEACH investing/trading someday and ......

To read the rest of the Q & A Please click ==> Link

The network underlines a prejudice.

2010-04-24T14:35:00.000+08:00

The network underlines a prejudice.

Blogger Of The Week - Alpha Chart

2010-04-16T13:01:00.000+08:00

Alpha Chart

Stock investment has always been a preferred asset class for investors seeking profits to build up wealth. Unfortunately, there are far too few investors who succeed in the quest while many struggled and have dropped out eventually.

With a personal stock investment experience of 17 years, the author of the blog, Alpha Chart, aims to share with his readers that when one persists to up-skill oneself through the application of right technical and fundamental analysis, proper money management skill, continual refining of one’s trading principles and having reasonable investment time horizon and expectation of the market; the odds of making consistent returns from market is enormous.

In Alpha’s opinion, stock market investment shall remain any serious investor’s core portfolio as it was, it is and it will remain a profitable asset class when one expands market knowledge and skills insistently.

Please click ==> Link

Blogger Of The Week - cwyeoh

2010-04-06T18:58:00.000+08:00

cwyeoh KLCI stock analysis

I am just a normal guy just like most of the stock investor, want to get a good return from the stock investment. My strategies is based on company fair value and technical analysis to find an entry point and exit point. I also review each quarter company result and latest news about the company to forecast future result.

The purpose of my blog is to discipline myself so that i can always on track what happen to the company. Beside that, all the information such as news, announcement, graph, quarter result data, recommendation, etc gather at the blog mainly served as a platform to assist you in making decision.

My blog welcome you to visit and just feel free to give any comment.

Please click ==> Link

Blogger Of The Week - ck5354

2010-03-31T14:01:00.000+08:00

ck5354

I am ck5354. Why I choose 5354 because I never take life seriously and I like to talk anything.

I always practice LAUGHTER is the BEST medicine.

I like stock and now learning to invest in property.

I am in mid 30s, a guy with a little bit of investment experience that like forehand call rather than back hand call.

I set up my blog in 2008 after I burn seriously in call warrant but I still like call warrant. High gain high risk. (*GRIN*)

My investment is based on 90 % FA + 10 % mood+volume+tips. I always have Holding Power before I buy.

My ultimate purpose of my blog is to build a SUPPORT Group that can share about Bursa Malaysia.

You can access this through the chat box which required you to register. Sometimes the chat box will have some TIPS but BUY AT YOUR OWN RISK.

My blog welcome you, Together we make money from Share Market.

We have no denomination, no school of thought, no discrimination, but definitely and hopefully will not bring you to HOLLAND.

Please click ==> Link

Blogger Of The Week - Wisdom Wise

2010-03-17T18:32:00.001+08:00

Wisdom Wise

I am Ben Gan from Bentong. My greatest success in life is investing in the Malaysian stock market. It is here that I have stayed focused and built up my wealth over the years. I am absolutely convinced that by investing intelligently in the stock market, one can be financially independent by the time one retires. The important thing is to start early and learn to be smart early.
My blog, Wisdom Wise, was set up in 2006 with the primary goal of sharing knowledge about investing in the Malaysian stock market. Knowledge sharing is the best way to increase knowledge. Without knowledge, making money in the stock

market is impossible. Tips will lead you to the slaughter house.

Nowadays, the blog is also used to keep interesting news and good articles written by others for my own reference and for others to read.

My philosophy of life is that helping others is helping yourself and that integrity is the best policy.

My best advice is: Insist on value when you buy.

Please click ==> Link

Get Listed Here

2010-03-10T12:12:00.002+08:00

Do you have a blog or website that mainly focus on Bursa Malaysia, FKLI or FCPO? Get it listed here. Contact me and let me know your site URL, just click on the icon below.

Get Listed Here

2010-01-24T18:53:00.002+08:00

Do you have a blog or website that mainly focus on Bursa Malaysia, FKLI or FCPO? Get it listed here. Contact me and let me know your site URL, just click on the icon below.

KL shares set to move in tight range

2009-12-19T16:42:00.000+08:00

Malaysian shares are likely to move in a tight range next week, with investors reluctant to actively trade ahead of the year-end holidays, dealers said.

"The market was completely in a holiday mood. Stocks were just moving up and down, amid thin trading, with no certain direction," a dealer said.

The dealer said any gains next week would encourage investors to lock in profits, as there is lack of catalyst to follow-through.

However, the dealer expects the FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) to move steady at between 1,250 and 1,280 next week.

"Despite the holiday season mood, we foresee technical indicators remaining bullish over the longer term, with 1,300 as the ultimate target," the dealer added.

The dealer also said the Malaysian bourse would be pressured by the strengthening US dollar, which will encourage investors, to shift funds to Japan or the United States for a higher yield.

The greenback is likely to be attractive after the US central bank kept its overnight lending rate unchanged, in a range of zero to 0.25 per cent.

However, the dealer did not foresee any huge impact as there was not much foreign holdings in the local stock market.

Another dealer said the local bourse would be generally quiet but the index may not fall sharply as investors still like banking and commodity stocks, amid a positive outlook for these sectors.

The banking sector is expected to perform well amid a healthy loan growth and the plantation industry due to good demand and prospects of tight supply.

For the holiday-shortened week, the market was quiet and traded within a tight range with players on leave for the school holidays.It was closed on Friday for the Awal Muharram (Muslim New Year) holiday.

On a Thursday-to-Friday basis, the FBM KLCI rose seven points to 1,266.97 from last week''s 1,260.

The FBM Emas Index increased 39.0 points to 8,432.99, the FBM Top 100 Index added 46.0 points to 8,255.25 and the FBM70 Index jumped 48.0 points to 8,153.35.However, the FBM Ace Index fell 45.0 points to 4,195.5.

The Finance Index was 96.0 points higher at 10,985.05, the Plantation Index jumped 112.0 points to 6,358.42 and the Industrial Index gained three points to 2,673.10.

A total of 2.388 billion shares worth RM3.456 billion changed hands for the week compared with the 3.035 billion shares worth RM4.142 billion previously.

Volume on the main market fell to 1.889 billion shares valued at RM3.328 billion against last week's 2.490 billion shares valued at RM3.940 billion.

However, the volume of call warrants declined to 73.442 million units worth RM11.860 million versus the 110.603 million units worth RM20.056 million before.

The ACE Market volume slipped to 273.072 million shares valued at RM95.118 million from the 286.857 million shares worth RM110.603 million the week last week.-- Bernama

KL shares close flat (26.11.09)

2009-11-26T19:03:00.002+08:00

MALAYSIAN shares closed flat today due to pre-weekend selling and profit-taking, dealers said.

The Kuala Lumpur Composite Index lost 0.39 points, or 0.03 per cent, to 1,270.61. Losers outnumbered gainers 401 to 267.

At today's close, the FBM Emas Index dropped 17.37 points to 8,458.35, the FBM Top 100 decreased 12.46 points to 8,273.46 and the FBM 70 fell 52.16 points to 8,148.87.

The FBM ACE slid 39.05 points to 4,290.95 while the Industrial Index rose 12.82 points to 2,710.13.

The Plantation Index surged 14.01 points to 6,245.94 but the Finance Index dropped 57.75 points to 10,902.77.

A dealer said retail players stayed out of the market ahead of a long weekend.

Maybank Investment technical analyst Lee Cheng Hooi said the bourse ended flat as “pre-weekend selling persisted ahead of the holiday break.”

The bourse is closed Friday for a public holiday.

Lee said going forward, investors should only nibble on dips as profit-taking is likely to keep a lid on the market, adding that buying interest would emerge at 1,255 and 1,269.

“It was a very quiet trading day with thin participation from funds,” Lee was quoted as saying by Dow Jones Newswires.

Among gainers, top mobile operator, Maxis added 1.3 per cent to RM5.37, national carmaker Proton gained 2.2 per cent to RM4.10 and plantation giant Sime Darby rose 0.3 per cent to RM9.01.
Construction firm Gamuda lost 5.2 per cent to RM2.75 . - Agencies

News Highlights (08.10.2009)

2009-10-08T09:48:00.001+08:00

Tenaga Nasional Bhd (TNB MK, Buy , TP: RM9.90) is being sued for RM106.89m jointly by Irham Niaga Sdn Bhd (INSB) and Irham Niaga Logistics Sdn Bhd (INLSB), that involves an ongoing legal dispute with TNB’s subsidiary TNB Transmission Network Sdn Bhd (TNBT). The dispute dated back to 2005, when the former filed an arbitration proceeding for restitution of all rentals made to INSB and INLSB under 5 year tenancy agreements, which was responded by a counter-claim for wrongful repudiation of the tenancy agreements. Last July, the High Court dismissed TNBT’s application to set aside the arbitration awards and allowed with cost INSB’s and INLSB’s application to register and enforce the arbitration award against TNBT, which TNBT had later appealed against the court order. (Financial Daily)
* * * * *
Tenaga Nasional Berhad (TNB MK, Buy, TP:RM9.90) inked a renewable energy power purchase agreement (REPPA) with Pesaka Technologies Sdn Bhd for the 10MW mini hydro project the company will develop in Sungai Brooke , Kelantan. Under the REPPA, TNB will purchase the power generated for RM14.89m per year or 17 sen per kilowatt hour for a 21-year period. The 17sen/kWh rate is at the high end of the 14-17 sen range TNB acquires power from hydro based RE projects as compare to 21 sen for non-hydro projects (biomass, biogas). (Malaysian Reserve)
* * * * *
Future increases in tobacco excise duty will only encourage the trade of illicit cigarettes and hamper the earnings of legitimate cigarette companies further, according to British American Tobacco Malaysia Bhd (BAT) (ROTH MK, Hold, TP: RM47.00). The company said it was hopeful that the government would not increase excise duties further at Budget 2010, to be tabled later this month, as the illicit cigarette trade was increasing at an alarming rate. Steve Rush, BAT’s finance director, said the government should increase enforcement, impose stringent non-financial penalties and heighten awareness of criminal involvement in illicit cigarettes in order to curb the rise in illicit trade. Rush also said it was too early to determine the impact of the current excise hike on future earnings, adding that it had no immediate plans to increase cigarette prices further. (StarBiz)
* * * * *
Astro All Asia Networks plc paid “over US$250m” (RM855m) to keep its exclusive rights to broadcast the 2010/2013 English Premier League (EPL) in Malaysia, as “competition” caused the price to double from the previous bid in 2006. Astro commented that all in costs for EPL, over 3 years could come to US$300m and subscription rates is expected to move up gradually with cost. Astro, which had 2.78m subscribers as at end-July 09, had added over 1m customers from previous round of bidding for the EPL rights in 2006. The management had guided analysts that sports content cost will be about 35% of total content cost for FY1/10, up from 30.2% in FY1/09 and 25.5% the year before. Basing on these statistics and assuming its subscribers base grow too about 3m, it’s estimated that Astro’s average EPL cost would average about US$143 per subscriber for the 2010/2013 season, which is about 55% more than the 2006/2009 estimated cost. (Financial Daily)
* * * * *
Dialog Group Bhd has proposed a special share dividend of one treasury share for every 50 shares held, amounting to 27.71m treasury shares to be distributed for the ended FY June 30 2009. It was to commemorate the 25th anniversary of the incorporation of its group of companies. The entitlement date has yet to be fixed. Together with cash dividends, interim and proposal final) of 36% less 25% tax, total gross dividend rate for FY09 is 57.6%, which adding the dividend payout ratio for FY09 is 74%. As at Oct 6, the gross dividend yield is 4.6%. This is the 2nd time the company is distributing share dividends. The proposal special share dividend and final cash dividend of 24% less tax are subject to shareholder’s approval at the forthcoming AGM. (Financial Daily)
* * * * *
The pre-marketing for Maxis Bhd’s initial public offering (IPO) of shares, possibly Malaysia’s largest IPO in recent years, will start next week, a person familiar with the deal said yesterday. The source, speaking on condition of anonymity, told Dow Jones Newswires that the listing exercise is targeted to be completed by the end of November. (BT)
* * * * *
Privately-held Global Rail Sdn Bhd and its partner from China have jointly submitted a RM28bn proposal to develop a high-speed railway and inter-modal freight system in Malaysia, linking economic corridors to major airports and seaports. Global Rail managing director Fan Boon Heng said the proposal was submitted on September 28 to the Ministry of Finance, the Economic Planning Unit and the Johor Menteri Besar. The project is a private finance initiative (PFI) with China Infraglobe Consortium, a global infrastructure development and logistics specialist. Fan said China Infraglobe has the financing in place to fully fund the project, which will be implemented in four phases over 10 years. Fan said the implementation of the project to lay electrified double tracks will start from Iskandar Malaysia in Johor. Under the first phase, the parties involved will lay the tracks from Johor Baru to Gemas, while under Phase 2, the tracks will run from Gemas to Tumpat in Kelantan. Phase 3 will start from Kluang, with connections to the KL International Airport, Port Klang and the Port Klang Free Zone (PKFZ) in Selangor. The fourth phase will be from PKFZ to Perlis and up to the Thai border. (BT)
* * * * *
Petgas Trading and Gazprom Marketing and Trading, the UK subsidiaries of Petroliam Nasional Bhd (Petronas) and Russia's Gazprom respectively, are in talks to expand gas ventures beyond Britain, Petgas said yesterday. "The companies have expanded the initial area of collaboration to include other gas marketing and trading activities," Petgas said. "And discussions are ongoing to deepen and extend the scope of the two companies' relationship, which may include ventures beyond the UK gas market." Initial collaboration between Petgas and Gazprom involved delivering liquefied natural gas (LNG) cargo to Britain's Dragon LNG terminal in south Wales in August and last month."Additional LNG cargo is now planned through this coming winter and into 2010," Petgas added. (BT)
* * * * *
Malaysia’s interest rates still need to support the country’s economic recovery, said central bank governor Tan Sri Dr Zeti. Malaysia’s central bank kept borrowing costs unchanged in August after the economy’s contraction eased in the 2Q. As quoted by Dr Zeti, “It’s important to not prematurely exit from this strategy of supporting growth and interest rates still need to be supportive to growth but also need to be normalised.” Bank Negara Malaysia (BNM) will look at “potential distortions” that could emerge from a very low interest rate environment and even so, its borrowing costs are “not near zero” will still be able to remain supportive. Easing inflation allowed BNM to cut its benchmark interest rate from 3.5% in mid-Nov to a record low of 2%. GDP shrank 3.9% in 2Q from a year earlier, easing from a 6.2% drop the previous quarter. Zeti commented that the contraction (Financial Daily)
* * * * *
Malaysia’s budget deficit in 2010 will be “well below” this year’s level as government trims spending and increase revenue. Malaysia’s economy is forecast to contract as much as 5% this year as the world recession slashes exports, spurring the government to boost spending and increase its deficit to 7.6% of GDP in 2009. The central bank predicts the economy will resume growth this quarter and is ready to pick up the slack after slipping into a recession in the 1H. (Financial Daily)
* * * * *
The property development and construction players want Budget 2010 to remove, or keep to the minimal, the levies and stamp duties on private projects and property transactions. Penang Master Builders and Building Materials Dealers Association (PMBBMDA) president Finn Choong said levies for project contracts and foreign workers had raised construction costs, which had to be passed on to consumers. “Presently the levies are high in comparison with those of developed countries and have eroded the competitive edge of the local construction industry.” Choong said. PMBBMDA also urged the government to remove approved permits for new construction machineries as this will spur the adoption of new and green construction technology by local construction companies. (StarBiz)
* * * * *
Stocks seesawed Wednesday, with blue chips weaker and techs a bit higher as a two-day advance petered out amid a mixed dollar, lower oil prices and some jitters at the start of the quarterly financial reporting period. Dow component Alcoa (AA, Fortune 500) got things started on the right foot after the close Wednesday, reporting quarterly earnings and revenue that fell from a year ago but surpassed analysts' estimates. Alcoa's report is typically seen as the symbolic start of the reporting period, as it is usually the first Dow component to report. The Dow Jones industrial average lost 0.1% (-5.7 pts, close 9,725.6). The Nasdaq gained 0.3% (+6.8 pts, close 2,110.3) and the S&P 500 gained 0.3% (+2.9 pts, close 1,057.6). U.S. light crude oil for November delivery fell US$1.31 to settle at US$69.57 a barrel on the New York Mercantile Exchange. (CNNmoney)
* * * * *
U.S. consumer credit fell in August for a seventh straight month as banks maintained restrictive terms and job losses made households reluctant to borrow. Consumer credit fell by US$12bn, or 5.8% at an annual rate, to US$2.46trn, according to a Federal Reserve report released yesterday in Washington. Credit dropped by US$19bn in July, less than previously estimated. The series of declines is the longest since 1991. Labour Department figures last week showed there were more job cuts than forecast in September and the jobless rate kept rising. Economists had forecast consumer credit would drop US$10bn in August, according to the median of 36 estimates in a Bloomberg News survey. Projections ranged from a decline of US$15bn to an increase of US$6.2bn. The Fed initially said consumer credit decreased a record US$21.6bn in July. (Bloomberg)
* * * * *
U.K. consumer confidence rose to the highest in 1 1/2 years in September as the economy showed signs of escaping the recession, Nationwide Building Society said. An index of sentiment rose six points to 71, the highest since April 2008, Britain’s biggest customer-owned lender said in an e-mailed statement yesterday. TNS questioned 1,000 people for Nationwide from Aug. 24 to Sept. 20. The Bank of England will today keep its asset-buying program capped at 175bn pounds (US$280bn) as policy makers assess the strength of the recovery, economists say. Reports this week showed house prices have recovered to the level of a year ago and that the economy is no longer shrinking. An index measuring expectations for the economy rose 9 points to 106, the highest since December 2005, Nationwide said. The gauge of spending increased by 3 points to 103. (Bloomberg)
* * * * *
Europe’s economy contracted more than estimated in 2Q09 as consumer spending, investment and exports were weaker than earlier reported. Gross domestic product in the 16-nation euro region fell 0.2% from 1Q09, when it dropped 2.5%, the European Union’s statistics office in Luxembourg said yesterday in publishing final figures on 2Q09 GDP. The decline was sharper than the 0.1% decrease estimated on Sept. 2.While the euro-area economy is gathering strength after governments injected billions of euros through tax cuts and spending incentives to fight the worst recession since World War II, the International Monetary Fund projected last week that Europe’s recovery will be “slow and fragile.” From a year earlier, 2Q09 GDP decreased 4.8%, also sharper than the 4.7% drop estimated earlier. The economy may expand 0.2% in 3Q09 and 0.1% in 4Q09, the European Commission forecast on Sept. 14. (Bloomberg)
* * * * *
German factory orders rose more than economists forecast in August, indicating that growth in Europe’s largest economy continued to accelerate in 3Q09. Orders, adjusted for seasonal swings and inflation, rose 1.4% from July, when they advanced a revised 3.1%, the Economy Ministry in Berlin said yesterday. That was a sixth consecutive increase and exceeded the 1.1% median forecast of 38 economists in a Bloomberg News survey. Compared with a year earlier, orders were down 20.4%. Foreign orders climbed 4.6% in September from the previous month, yesterday’s report showed. Domestic orders decreased 1.9%. (Bloomberg)
* * * * *

News Highlights (06.10.2009)

2009-10-06T10:38:00.002+08:00

A series of unusual and “erroneous” but matched transactions, which caused Kuala Lumpur Kepong Bhd’s (KLK) (KLK MK, Hold, TP:RM14.40) share price to record its biggest one-day surge of RM3.26 or 24% to close at RM17, created much confusion among market participants yesterday. According to available stock market data, a total of 26 buy
transactions involving 163,000 shares were done at RM17 within the last eight minutes of the day’s trading. Analysts said a single institution was involved in the aggressive buying of KLK shares at that elevated price, albeit in relatively thin volume. The stock was expected to see a steep “correction” today, given the “erroneous” trades, they said. (Financial Daily)
* * * * *
Telekom Malaysia Bhd (TM) (T MK, Buy, TP: RM3.98) has not put in a bid for the English Premier league (EPL) broadcasting rights for Malaysia for the next three seasons starting in 2010. In a statement, TM said that it has not put in a bid for EPL broadcasting rights at the moment. When asked if TM may look into submitting a bid at a later stage with a
partner, the company said it “does not comment on matters speculative in nature.” (Malaysia Reserve)
* * * * *
KNM Group Bhd’s (KNMG MK, Buy, TP: RM1.05) wholly-owned units in Malaysia, Germany and Dubai, have collectively secured RM155m worth of new orders, from Sept 25 to Oct 5. KNM’s FBM-KNM FZCO, a unit incorporated in Dubai’s Jebel Ali Free Zone, won a contract from Danieli & Officine Meccantiche Spa for reactor vessels for the Gulf Steel Plant project in Egypt. KNM expects the orders to contribute positively to its earnings for the year ending Dec 31, 2009 and 2010. (Financial Daily)
* * * * *
EON Bank Bhd expects its loan book to expand by 5%-6% this year even when the economy is shrinking as low interest rates drive up demand for consumer loans, especially mortgages. “For the consumer side of the business, we are humming along pretty well since January and we will probably end the year at around 9%-10% of growth,“ Micheal Lor, head of consumer banking at EON Bank Group, said. Corporate lending remains sluggish and the bank, which has a market capitalisation of about US$1.1bn (RM3.81bn) plans to speed up this year the provisions for some of its corporate loan accounts in the Middle East, said Lor. (Financial Daily)
* * * * *
MISC Bhd, the shipping arm of Petroliam Nasional Bhd (Petronas), has teamed up with PetroVietnam Technical Service Corp (PTSC) to launch a US$280m (RM972m) floating oil production, storage and offloading (FPSO) facility in Pasir Gudang, Johor last month. It is understood that Petronas Carigali Vietnam Ltd, a Ho Chi Minh City-based oil and gas explorations and production company, will use the FPSO for eight years, with an option to extend for another two years. Known as “Ruby II”, the facility has a miximum capacity of 645,000 barrels of oil and is able to receive 39,000 barrels per day and offload 20,000 barrels per hour. Meanwhile, Australia’s SWG said it has together with UMW Holdings Bhd (UMWH MK, Hold, TP: RM5.52) secured a contract for an undisclosed sum to undertake the installation works associated with the Ruby II FPSO development. SWG said the award of the contract has sealed the newly-formed joint venture between SWG and UMW. (BT)
* * * * *
TA Enterprise Bhd (TAE) is planning a foray in the venture capital (VC) business as the financial services entity strengthens its corporate finance unit and scout for more acquisition targets upon completion of its reorganisation. Its managing director and chief executive officer Datin Alicia Tiah said the initiatives would be financed with the estimated RM230m to be raised from the offer for sale of shares in TA Global Bhd, the soon-to-be-listed real estate and hospitality arm of the TA Group. TAE executive chairman Datuk Tony Tiah Thee Kian said the TA group planned to acquire more hotels, capitalising on battered global asset prices during the economic downturn. (Financial Daily)
* * * * *
KFC Holdings (M) Bhd (KFCH) will open its first two outlets in India – Mumbai and Pune, by year’s end and planning a second KFC outlet each in the two cities in January. KFCH is investing US$400,000 in each outlet and target to have 20 outlets in major cities in India by end-2010 which is populated with 1.2bn people and 26.6m population alone in Mumbai and Pune. (Starbiz)
* * * * *
The Malaysian Accounting Standards Board (MASB) said it will not extend the January 1, 2010 deadline for public-listed companies (PLCs) to mandatorily adopt the Financial Reporting Standards (FRS) 139. This is despite a review being carried out on its international accounting standards equivalent IAS 39 by the International Accounting Standards Board to reduce complexity and make it easier for investors to understand financial statements and address how financial instruments are classified and measured. MASB chairman Mohammad Faiz Azmi said that most banks are already complying with FRS 139 but the new changes to the standard may see the banks having to revisit their impairment methodology. (BT)
* * * * *
Minister in the Prime Minister’s Department Tan Sri Nor Mohamed Yakcop said the government has no plans to sell PLUS Expressways Bhd, putting a dent in little known Asas Serba Sdn Bhd’s plans to acquire all the tolled roads in Malaysia. Nor Mohamed declined to comment on reports that Asas Serba was scheduled to brief Prime Minister Datuk Seri Najib Razak on its proposed RM50bn takeover of PLUS and other tolled highways in the country. Asas Serba was reportedly to have planned to consolidate and streamline the operations of all tolled roads and subsequently reduce toll rates by 20% until the end of the concession periods. (Financial Daily)
* * * * *
Stocks rallied Monday, with the Dow, S&P 500 and Nasdaq all gaining at least 1%, as investors used a two-week sell-off as an opportunity to jump back into the market. A better-than-expected reading on the services sector of the economy and strong demand for Treasury' s first bond auction of the week bolstered the broad-based gains. The Dow Jones industrial average gained 1.2% (+112.1 pts, close 9,599.8). The Nasdaq gained 1.0% (+20.0 pts, close 2,068.2) and the S&P 500 gained 1.5% (+15.3 pts, close 1,040.5). U.S. light crude oil for October delivery rose 46 cents to settle at US$70.41 a barrel on the New York Mercantile Exchange. (CNNmoney)
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U.S. service industries expanded in September for the first time in a year as the emerging recovery spread from housing and factories to the broader economy. The Institute for Supply Management’s index of non-manufacturing businesses, which make up almost 90% of the economy, rose to 50.9, higher than forecast, from 48.4 in August, according to the Tempe, Arizona-based group. Fifty is the dividing line between expansion and contraction. The index was projected to increase to 50, according to the median forecast in a Bloomberg News survey of 70 economists. Estimates ranged from 45 to 52.1. Before yesterday’s report, the gauge had shown contraction in every month since October 2008, just after Lehman Brothers Holdings Inc. filed for bankruptcy. (Bloomberg)
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U.K. service industries expanded at the fastest pace in two years in September, adding to evidence that the economy emerged from recession in 3Q09. An index based on a survey of about 700 service companies by the Chartered Institute of Purchasing and Supply rose to 55.3, the most since September 2007, from 54.1 in August, Markit Economics said yesterday in London. Economists predicted 54.5, the median of 28 forecasts in a Bloomberg News survey showed. Expectations among services companies rose to the highest since April 2007, yesterday’s report showed. U.K. financial firms say their confidence has increased for the first time since the global economic crisis began in 2007, a survey by the Confederation of British Industry showed yesterday. While financial companies are more optimistic about the future, they remain worried a lack of demand will crimp expansion plans, the CBI said. (Bloomberg)
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Europe’s manufacturing and services industries expanded more than initially estimated in September, adding to signs the economy is gaining steam after the worst recession in six decades. A composite index of both industries in the euro-area economy rose to 51.1, up from 50.4 in August and higher than an initial estimate of 50.8, London-based Markit Economics said yesterday in a statement. A reading above 50 indicates expansion and the gauge, which is based on a survey of purchasing managers, had remained below that level for 14 months before topping it in August. Economists had projected the index would rise to 50.9 in September, according to a Bloomberg News survey. (Bloomberg)
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Japanese banks’ bad loans won’t be driven higher by a proposed moratorium on debt payments by struggling small companies, said Financial Services Minister Shizuka Kamei. Lenders won’t have to classify loans encompassed by the plan as non-performing, Kamei said in an interview yesterday at his office in Tokyo. That means they won’t be forced to boost provisions when borrowers postpone repayments of interest or principal, he said. At the same time, Kamei vowed to push banks to extend more credit to small businesses after bankruptcies hit a six-year high in Japan. The moratorium, which would postpone repayment of principal and interest, will be extended to individuals as well companies, Kamei said. It will be aimed at giving relief to small firms with about 100m yen (US$1.1m) or less in capital. (Bloomberg)
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Indonesia’s central bank kept interest rates unchanged for a second month after nine consecutive reductions revived Southeast Asia’s largest economy and prompted inflation to accelerate. Bank Indonesia held its reference rate at 6.5%, Deputy Governor Budi Mulya told a news conference in Jakarta yesterday. The decision was expected by all 22 economists in a Bloomberg News survey. Policy makers across Asia have stopped cutting rates and are signalling their next moves may be to increase borrowing costs as the region leads the world out of the deepest global slump since the Great Depression. Indonesian inflation unexpectedly accelerated last month and is expected by economists to breach the central bank’s target next year. Bank Indonesia raised its forecast for economic expansion this year to 4.3% from an earlier estimate of 4%. Growth in 3Q09 is predicted at 4.2%, up from 4% in 2Q09. (Bloomberg)
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News Highlights (02.10.2009)

2009-10-02T09:21:00.002+08:00

Telekom Malaysia Bhd (TM) (T MK, Buy, TP: RM3.98) and Astro All Asia Networks plc may be getting into a bidding war to secure the rights for broadcasting the English Premier League (EPL) for the next three seasons, with the price likely to be more than RM500m. Industry sources said the bidding was entering a second round and might include other contenders such as ESPN STAR Sports. ESPN currently holds EPL broadcast rights for the Southeast Asian region and sells it exclusively to Astro in the Malaysian market. TM is believed to be keen on having the EPL broadcast rights for its planned broadband TV or IPTV (Internet protocol television) launch, following Singapore Telecommunications’ (SingTel) moves to secure EPL rights for three years beginning 2010. (StarBiz)

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Genesis Smaller Companies SICAV, a Luxembourg-based fund has emerged as a substantial shareholder in AirAsia Bhd (AIRA MK, Buy, TP: RM1.80) with 170.8m shares, or 6.19%, as of Tuesday. Genesis subscribed for 37.5m AirAsia shares on Sept 24 under the low-cost carrier’s placement exercise. After subscribing for the placement, it acquired 4m shares on Monday and 1m shares on Tuesday. (Financial Daily)
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Proton car sales in the United Kingdom (UK) have surpassed the company’s full-year target by 10% despite a weaker demand for new cars in the country due to the global economic slowdown. Proton Cars (UK) Ltd managing director Brian Collier said the company’s target had been to sell about 1,000 units this year. The larger base of repeat customers and efforts to keep costs down helped the company surpass its full-year target, he said. He added that car sales in the UK market were expected to drop to 1.7m this year from 2.4m two years ago. (Financial Daily)
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KPJ Healthcare Bhd has proposed to subdivide every existing share of RM1 each into two shares of 50 sen each and a subsequent one-for-four bonus issue of up to 105.53m shares as well as an issue of up to 131.91m free warrants on the basis of one warrant for every share held. In a statement, KPJ said as at Sept 30, 2009, its paid-up stood at RM211.05m comprising of 211.05m shares of RM1 each, including 620,800 treasury shares. (Financial Daily)
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Naza have failed in their conditional takeover bid for Kumpulan Jetson Bhd (KJB) as their RM1 per share offer for the remaining shares in Naza was rejected by the minority shareholders. The ICULS and warrants were offered at 93 sen cash per unit and 0.01 sen cash per unit respectively that commenced from Aug 20 2009, failed to meet the acceptance condition, which is more than 50% of the company’s shares and thus lapsed on its closing date. KJB’s shareholders were advised to reject the conditional takeover offer as market prices of the securities were significantly higher than offer prices. (Financial Daily)
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United Malayan Land Bhd (UMLand), which is in the process of a RM233m exercise to acquire and develop land in Johor, has gotten its shareholders to approve the land buy as well as a proposal to jointly develop the project with Tradewinds Johor Sdn Bhd, a company connected with its substantial shareholder Tradewinds Corp Bhd. Tradewinds Johor is a wholly-owned subsidiary of Tradewinds Resources Sdn Bhd, which in turn is a Tradewinds Corp unit. The latter, meanwhile, is a substantial shareholder in UMLand, with a 7.39% stake. UMLand said it had gotten shareholder approval to purchase the 254.5ha parcel of freehold land in Kulai from vendors, Ambang Budi Sdn Bhd, another Tradewinds Corp unit and Hartaplus Realty Sdn Bhd. It said the cash payment would be paid under two-year deferred payment arrangement. The land would be used to develop a mixed development project as well as supporting residential developments. The gross development value was RM718.1m while the estimated gross development cost was RM456.6m, which yielded a gross profit of about RM261.5m. The proposed development was estimated to take up to five years. It would be carried out via a UMLand-Tradewinds Johor joint-venture vehicle called Extreme Consolidated Sdn Bhd, in which UMLand would hold a controlling 51% stake. (Malaysia Reserve)
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The Ministry of Energy, Green Technology and Water has been exploring wind energy as a renewable energy option in Malaysia. Tests had been undertaken to access its viability and looking to develop as a source of electricity in 15 to 20 years. Minister Datuk Peter Chin during a visit to IMPSA (Malaysia) Sdn Bhd, which manufactures facilities in Lumut, Perak, said that they were to visit South Korea to obtain information on nuclear electricity power generation development there. As on electricity tariffs, there would be another review in December but there would be no guarantees in an increase. (Financial Daily)
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Stocks tumbled Thursday after a bigger-than-expected rise in weekly jobless claims and a weaker-than-expected reading on manufacturing sparked worries about the pace of the economic recovery. Many of the stocks and sectors that fuelled massive 3Q09 gains also drove the sell-off. Friday brings the week's biggest economic report: The monthly jobs report from the government. Employers are expected to have cut 175,000 jobs from their payrolls in September after cutting 216,000 in August. The Dow Jones industrial average lost 2.1% (-203.0 pts, close 9,509.3). The Nasdaq lost 3.0% (-64.9 pts, close 2,057.5) and the S&P 500 lost 2.6% (-27.2 pts, close 1,029.8). U.S. light crude oil for October delivery rose 21 cents to settle at US$70.82 a barrel on the New York Mercantile Exchange. (CNNmoney)
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Manufacturing in the U.S. expanded less than anticipated by economists and more Americans filed claims for unemployment benefits, pointing to a recovery that will be slow to generate jobs. The Institute for Supply Management’s factory gauge decreased to 52.6 in September from 52.9 in August, the Tempe, Arizona-based group said yesterday. Fifty is the dividing line between expansion and contraction. The ISM index, which dropped for the first time this year, was forecast to rise to 54, according to the median of 80 estimates in a Bloomberg survey of economists. Projections ranged from 51.5 to 56. Manufacturing accounts for about 12% of the world’s largest economy. The number of jobless claims climbed to 551,000 last week, more than economists forecast, figures from the Labour Department showed. Last week’s jobless claims figures overshot the median estimate of economists surveyed by Bloomberg News which projected an increase to 535,000, raising concern today’s jobs report will also disappoint expectations that payroll decreases are slowing. (Bloomberg)
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Spending by U.S. consumers climbed in August by the most since 2001, indicating the biggest part of the economy is starting to rebound from its worst slump in almost three decades. The 1.3% increase in purchases was larger than forecast and followed a 0.3% gain in the prior month that was bigger than previously estimated. (Bloomberg)
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The number of contracts to buy previously owned homes in the U.S. increased more than forecast in August, reinforcing signs of a rebound in housing, industry figures showed yesterday. The index of signed purchase agreements, or pending home sales, rose 6.4% after a 3.2% gain in July, the National Association of Realtors announced in Washington. The gain was the seventh in a row. Compared with a year earlier, pending sales rose 12.4%. Declining home prices, low mortgages rates and government stimulus programs have helped end the housing-market meltdown that sparked the financial crisis. Federal Reserve policy makers last week committed to buy full amount of a US$1.25trn mortgage-backed securities program and extended the end-date by three months. Pending home sales were projected to increase 1% in August, according to the median forecast of 36 economists in a Bloomberg News survey. Estimates for August ranged from a drop of 2.5% to an increase of 3%. Pending home sales are considered a leading indicator because they track contract signings. (Bloomberg)
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U.K. manufacturing activity unexpectedly contracted for a second month in September as factories cut jobs and growth in new orders slowed, a survey showed. An index of manufacturing fell to 49.5 from 49.7 in August, the Chartered Institute for Purchasing and Supply and pollsters Markit said in a report. The reading was lower than the 50.2 median forecast in a Bloomberg News survey of 26 economists. A level below 50 indicates contraction. While the pace of manufacturing output growth eased “sharply,” export business accelerated as the global economy strengthened and the fall in sterling made British goods more competitive abroad, according to the survey. “The picture is one of consolidation not contraction in September” and manufacturing probably contributed to economic growth in the third quarter, said Rob Dobson, senior economist at Markit. “But the outlook remains uncertain given the current reliance on price discounting and fiscal support.” (Bloomberg)
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Europe’s unemployment rate rose to the highest in more than 10 years in August as companies continued to cut jobs even as the region’s largest economies emerged from recession. Unemployment in the 16-member euro region increased to 9.6 percent from 9.5 percent in July, the European Union statistics office in Luxembourg said. That’s the highest since March 1999 and matched the median forecast from a Bloomberg survey of 23 economists. (Bloomberg)
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Retail sales in Germany, Europe’s largest economy, unexpectedly fell in August as concern about rising unemployment kept a lid on consumer spending. Sales, adjusted for inflation and seasonal swings, decreased 1.5% from July, when they rose 0.7%, the Federal Statistics Office in Wiesbaden said yesterday. Analysts had forecast a 0.2% increase, the median of 28 estimates in a Bloomberg News survey showed. German retail sales may decline 2% in nominal terms this year, industry association HDE said on Sept. 16. 40% of the retailers surveyed by the association said they expect the bottom of the economic crisis next year, compared with just 6% who foresee the trough in 2009. (Bloomberg)
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The European Central Bank will lend banks less money than economists forecast in its second 12-month auction of unlimited funds, indicating banks’ need for cash has eased for now. Banks bid for 75.2bn euros (US$110bn) at the current benchmark interest rate of 1%, the Frankfurt-based ECB said yesterday. It loaned a record 442bn euros at the first auction in June and economists had forecast demand for 137.5bn euros this month, according to the median of 16 estimates in a Bloomberg News survey. The ECB, which will offer banks 12-month loans for a third time on Dec. 15, is flooding the system with money in the hope it will be lent on to companies and households. Money-market rates have dropped as the economy shows signs of emerging from recession and banks become less wary of lending to each other. ECB Governing Council member Marko Kranjec said the demand “shows the system is liquid enough and that banks don’t need funds so much.” (Bloomberg)
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European Union finance chiefs said the pace of recovery means they probably won’t withdraw stimulus measures before 2011 as they grapple with rising unemployment and the effects of the euro’s gains. Governments should start to end their stimulus measures once economic growth “takes hold,” EU Monetary Affairs Commissioner Joaquin Almunia told a press
conference yesterday at a meeting of European finance chiefs in Gothenburg, Sweden. Exit plans should be implemented once the recovery is under way, “in our own view the latest in 2011,” European Central Bank President Jean-Claude Trichet said. (Bloomberg)
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Japanese companies plan to deepen investment cuts as profits slump, inhibiting the recovery from the nation’s worst post-war recession, the central bank’s Tankan survey showed. Large businesses aim to cut spending 10.8% this year, more than the 9.4% planned three months ago, the central bank said in Tokyo yesterday. Confidence at big manufacturers climbed to minus 33 from minus 48 in June and a record low of minus 58 in March, the Bank of Japan said. A negative number means pessimists outnumber optimists. The improvement matched economists’ predictions and only brought the index on par with the level during the 2001 recession. Confidence among large service companies rose for a second straight quarter to minus 24 from minus 29. The capital spending plans are the worst for a September survey in at least 26 years. Large companies see profits falling 22% this fiscal year, the Tankan showed. (Bloomberg)
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China’s manufacturing expanded at the fastest pace in 17 months in September on stimulus spending and this year’s record growth in new loans. The Purchasing Managers’ Index rose to a seasonally adjusted 54.3 from 54.0 in August, the Federation of Logistics and Purchasing said yesterday in an e-mailed statement in Beijing. The latest number was lower than the median estimate of 55 in a Bloomberg News survey of 13 economists. A reading above 50 indicates an expansion. An output index rose to 58.0 in September from 57.9 in August, a measure of new orders climbed to 56.8 from 56.3, and an export-order index increased to 53.3 from 52.1, according to yesterday’s statement. An index of employment index rose to 53.2, the highest level since April 2008, from 51.4. Fifteen out of the 20 industries surveyed by the agency showed expansion in September. (Bloomberg)
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The World Bank’s private investment arm said it will spend more than US$1.5bn over three years in developing countries to buy distressed assets and invest in companies struggling to refinance their debt. The Washington-based lender’s International Finance Corp. is also in talks with partners from private industry and other international institutions to raise as much as US$5bn for specific projects, it said in an e-mailed statement yesterday. The IFC and its partners aim to direct funds to businesses, pools of illiquid assets and investment funds, it said. (Bloomberg)
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The International Monetary Fund raised its forecast for global growth next year as more than US$2trn in stimulus packages and demand in Asia pull the world economy out of its worst recession since World War II. The Washington-based IMF said the economy will expand 3.1% in 2010, more than a July forecast of 2.5%. China’s economy will grow 9% and India’s 6.4%. That compares with growth of 1.7% in Japan, 1.5% in the U.S. and 0.3% in the euro region. Days after President Barack Obama and other leaders declared that the Group of 20 is now the main forum for steering the global economy, the forecasts show emerging Asian nations powering the return to growth. The IMF warned that the recovery would be “weak by historic standards” and said restoring banks to health remains a priority. The world economy will contract 1.1% this year, less than the 1.4% in July, the IMF said. So-called advanced economies including the U.S., Germany and Japan will lead the slump, shrinking 3.4%. As a bloc, emerging economies will expand 1.7% this year. (Bloomberg)
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Losses for the airlines industry as a whole got worse in 2Q, with 68 major airlines reporting net losses of US$2.3bn (RM7.96bn) following US$4bn in 1Q, the International Air Transport Association (IATA) said. “The European Union and Asian airlines had the worst 1H, accounting for around US$5bn of industry losses; US losses were moderated by much larger capacity cuts,” it said in its Airline Financial Monitor release for August-September. Airline stocks however got a boost in September due to favourable interest from investors as signs emerged of an upturn in this highly cyclical sector. It has resulted in airlines raising a further US$3bn debt and US$500m equity to cash cushion. IATA said the improvement in both passenger numbers and freight volumes from 1Q lows accelerated in the first two months of 3Q, with seasonally adjusted levels for passenger kilometres flying up 3% on 2Q and freight volumes up 6%. IATA said forecasters are getting more positive on 4Q but it is not clear whether economic recovery would continue to strengthen or fizzle out in 2010. (Malaysia Reserve)
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News Highlights 29.09.2009

2009-09-29T10:51:00.001+08:00

Petra Perdana Bhd (PETR MK, Buy, TP: RM4.20) subsidiary Perdana Marine Offshore Pte Ltd is selling a work barge to PT Pelayaran Tamarin Samudra for US$2.65m (RM9.22m). In a statement, Petra Perdana said the disposal was in line with the group’s fleet renewal and expansion plan in providing marine support services to the offshore oil and gas facilities. The proceeds will be used to repay borrowings. The realised loss will be about US$130,000 on disposal. (Financial Daily)
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Cityneon Holdings Ltd has more than doubled its order book to S$110m from S$52m in January. The company, a subsidiary of Star Publications (M) Bhd (STAR MK, Hold, TP: RM3.36), said in a statement its order book to 2012 was also more than twice its total revenue for financial year ended Dec 31 (FY08). Cityneon expects to charge about 70% of the order to revenue for the current FY09. Cityneon group managing director Ko Chee Wah said Cityneon had clinched two new contracts at the World Expo Shanghai 2010, a S$110m deal to build the Qatar pavilion and a S$13m contract for the Indonesia pavilion. (StarBiz)
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Tan Sri Azman Hashim’s AmcorpGroup Bhd’s offer for sale of 119.8m shares in a restructured AMDB Bhd met with a cool reception as only 7.19% of the total shares offered were accepted. At the close of the offer yesterday, the acceptance for shares that were offered at 50 sen each to existing AMDB shareholders was 6.47% while excess share applications were 0.72%. According to a company announcement, the undersubscribed portion was 92.81%. Azman, via wholly-owned Amcorp, will hold approximately 66.83% of the restructured AMDB that will see the disposal of Seri Melayu restaurant, Harpers Tour and Harpers Travel to Amcorp. The disposal is for a sum of RM22.1m that will be partly used to offset AMDB’s acquisition of Amcorp Prima Realty Sdn Bhd, Regal Genius Sdn Bhd, Distrepark Sdn Bhd and a 60% stake in a HDC-Amcorp joint-venture. (Financial Daily)
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Securities Commission (SC) released the Venture Capital Tax Incentives Guidelines to incorporate the new tax incentive for the venture capital industry as stipulated in the income Tax (Exemption) (Amendment) Order 2009. This new and more attractive tax exemption incentive supplements existing incentives, where venture capital companies (VCC) registered with SC are eligible for tax exemption for 10 years of assessment if they invest at least 70% of their invested funds in the form of seed capital in qualified investee companies. Venture capital management companies (VCMCs) registered with the SC can also enjoy tax exemption on income arising from a profit-sharing agreement between the VCMC and VCC. (StarBiz)
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Malaysia will further liberalise the services sector, as it is an important growth area for the economy, says International Trade and Industry Minister Datuk Mustapa Mohamed. “The new economic model that we’re working on will include driving growth in the services sector. Manufacturing has seen a lot of loosening in the last decade but services have a lot of potential (for deregulation),” he said. The ministry remained pro-business and aimed to promote entreprenurship through the reduction of bureaucracy and red tape. (StarBiz)
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CPO for December delivery in Malaysia dropped 3.8% to RM2,103 a tonne on the Malaysia Derivatives Exchange. It was the biggest drop since June 22. Crude palm oil (CPO) tumbled the most in more than three months after Dorab Mistry, director of Godrej International Ltd, said prices must slump 13% from current levels to stoke demand for food and fuel applications and as crude oil fell. The commodity needs to decline to RM1,900 a tonne for demand to rebound, Mistry said on Sunday. “Prices need to become more competitive if biodiesel usage is to expand,” Mistry said. The outlook for CPO was based on an assumption that crude oil will trade at between US$65 and US$80 a barrel until spring of 2010, Mistry said. (Financial Daily)
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Stocks surged Monday, recharging their recent advance after a one-week break, as a pair of multi-billion dollar merger announcements gave investors a reason to get back into equities. Abbott Laboratories is buying the drug unit of its development partner, Belgian pharmaceutical company Solvay, for about US$6.6bn in cash. Xerox is buying Affiliated Computer Services for US$6.4bn in cash and stock. The Dow Jones industrial average gained 1.3% (+124.2 pts, close 9,789.4). The Nasdaq gained 1.9% (+39.8 pts, close 2,130.7) and the S&P 500 gained 1.8% (+18.6 pts, close 1,062.9). U.S. light crude oil for October delivery rose 82 cents to settle at US$66.84 a barrel on the New York Mercantile Exchange. (CNNmoney)
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Treasury bondholders will lose money for the first time in 10 years amid an unprecedented decline in the gap between the interest rate on 30-year mortgages and government notes, signalling an end to the worst financial crisis since the Great Depression. Yields on benchmark 10-year notes will end the year little changed at 3.36% before rising to 3.65% by mid-2010 as bond prices fall, according to the average estimate in a Bloomberg News survey of JPMorgan Chase & Co., Goldman Sachs Group Inc. and the rest of the 18 primary dealers that trade Treasuries directly with the central bank. The 2.65% loss posted so far this year, as measured by Merrill Lynch & Co.’s Treasury Master Index, shows investors no longer require the refuge of U.S. government debt that led to a gain of 14% last year. Borrowing rates have declined on everything from mortgages to corporate bonds after the Fed and the government lent, spent or guaranteed US$11.6trn to shore up banks and end the recession. (Bloomberg)
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U.K. house prices increased the most in two years during September as confidence in the property market improved, Hometrack Ltd. said. The average cost of a home in England and Wales rose 0.2% from August to £156,100 (US$248,000), the London-based property-research company said in an e-mailed statement yesterday. The increase, the biggest since June 2007, left house prices 5.6% lower y-o-y, the smallest annual decline in a year. The report adds to evidence that the housing market may be starting to level off after the credit squeeze ended a decade-long boom. There still is a risk that the recovery from recession will falter as unemployment continues to rise, Bank of England policy maker Kate Barker said last week. In August, house prices fell 0.1% from the previous month, the government Land Registry said in a separate report yesterday. From a year earlier, prices dropped 9.4%. (Bloomberg)
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German consumer prices fell at a sharper annual pace in September after energy costs declined. Prices, calculated using a harmonized European Union method, dropped 0.4% y-o-y after easing 0.1% in August, the Federal Statistics Office in Wiesbaden said yesterday. From the previous month, prices also fell 0.4%. Economists predicted a 0.2% annual decline, the median of 16 forecasts in a Bloomberg News survey showed. Oil prices have dropped about 32% in the past year during the biggest global economic slump since the Great Depression, dragging down inflation rates around the world. Prices may begin to rise again as the impact of cheaper oil drops out of annual data and the economic recovery gathers momentum. (Bloomberg)
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Consumer confidence in Italy rose in September to the highest in more than seven years as concerns about unemployment were offset by signs that the country’s worst recession in six decades is easing. The Isae Institute’s consumer confidence index climbed to 113.6 from 111.8 in August, the Rome-based research center said yesterday in an e-mailed statement. That was the highest since July 2002 and exceeded the median estimate of 112 by 15 economists surveyed by
Bloomberg News. Yesterday’s report mirrors the situation in France and Germany, the biggest economies of the euro region. German consumer confidence and French households’ optimism both rose in September, two separate reports showed on Sept. 25. (Bloomberg)
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Emerging-market countries face pressure on their credit ratings as the economic recovery remains sluggish and governments rack up deficits, Standard & Poor’s said. “Our forecasts also point to persistent ratings pressure,” said New York-based John Chambers, managing director of S&P’s sovereign ratings in a report yesterday. “Economic conditions remain difficult. The fiscal positions of almost every government will be worse than that of the preceding five years.” Gross domestic product per capita will decline or remain steady this year in two-thirds of the 42 developing nations S&P rates, while eight economies, including Bulgaria, Hungary, and El Salvador, will continue to contract next year, the ratings company forecast. The state debt of 14 emerging-market sovereigns will grow at least 5% by 2011 compared with 2007, the year before the crisis, it said. China’s economy will expand at the fastest rate, 8.3% next year and 6.9% in 2011, S&P projected. The other so-called BRIC nations, which account for 15% of the world economy, Brazil, Russia and India, will grow in 2010 at a rate of 2.5%, 2.4% and 4.5% respectively, according to S&P. (Bloomberg)
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News Highlights 28.09.2009

2009-09-28T09:50:00.001+08:00

AirAsia Bhd (AIRA MK, Buy, TP: RM1.80) wants to increase its cargo business by targeting clients that are more price sensitive and less time sensitive, said AirAsia X chief executive officer Azran Osman-Rani. He also stated that the airline will be able to grow its cargo revenue by half in 2009 from RM40m recorded last year. While cargo revenue represents roughly 1.5% of the group’s topline in 2008, the airline hopes to increase the contribution to 10% by 2011. (Business Times)
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Ahmad Zaki Resources Bhd is close to bagging a RM50m contract for the initial works of the Hulu Terengganu hydroelectric project, which among other things entail clearing works and the building of roads, sources say. It is understood that a letter of award has yet to be issued to AZRB with the last lap of negotiations still ongoing with state utility Tenaga Nasional Bhd (TNB MK, Buy, TP: RM9.90). According to Tenaga, work on the dam was slated to start this year with construction targeted for completion by 2013. (Financial Daily)
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Ekuiti Nasional Bhd (Ekuinas) may take some listed companies private as one of its investment strategies. However, these listed firms would still be deemed medium-sized and not large companies that are the domain of other government investment institutions such as Permodalan Nasional Bhd or Khazanah Nasional Bhd. It also plans to invest around RM50m to RM70m in companies with a track record and they could then do initial public offerings (IPO) after three or seven years. Ekuinas is still studying its investment prospects, but is sticking to its plan of making the first move in six months or sometime at the end of March 2010. (Business Times)
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Berjaya Hotels & Resorts plans to sell off its properties in Seychelles, Sri Lanka, Singapore and London to concentrate on its more profitable markets in Asia-Pacific. Chief executive officer Joseph Won said if prices are right, it would also dispose of Berjaya Beau Vallon Resort and Berjaya Praslin Resort in Seychelles and Berjaya Eden Park Hotel in London. He said the group is in discussions with a few parties for its properties in Seychelles and London and hopes to sell them within the next two quarters. He added that the plan for Asia-Pacific would be to open up to 20 new hotels and resorts in Japan, South Korea, Vietnam, Maldives and Malaysia over the next six to seven years. The list would include Berjaya branded
properties, which the group would own and operate on its own, and hotels operated by third parties. Berjaya Hotels & Resorts will use proceeds from the sale of the foreign properties, and its own reserves and existing cash flow to finance the expansion. (Business Times)
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Tradewinds Corp Bhd (TCB) will open its RM170m luxury accommodation in Langkawi called "The Danna" in July next year. The Danna, to be positioned in the same league as the existing Tanjung Rhu Resort and The Datai, will be built, owned and operated by TCB, its chief executive officer Shahrul Farez said. Shahrul said TCB's decision to open the property in Langkawi was prompted by the high average room rates (ARRs) that the island garners. Shahrul said the new hotel, located in Telaga Harbour Park and neighbouring Burau Bay, will have 130 rooms. This property sits on a 11,363 sq m site, which is on a 55-year lease from the Langkawi Development Authority (Lada). The market value of the property as appraised by Rahim & CO
in May 2007 was RM100 million, on a completed basis. (Business Times)
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Multi Sports Holdings Ltd has entered into an agreement with Fujian Xueyu Property Co Ltd for the acquisition of land and two completed factory buildings for RMB29.5m (RM15.02m) cash. The 3.12ha site was located in Xibin Farm, Xibin Town, Jinjiang city, Fujian province while the six-storey factory buildings had an aggregate built-up area of 17,631.6 sq m. The sports shoe manufacturer said the purchase would be funded by the proceeds arising from its initial public offering and internally generated funds. The setting up of a new production centre and new production lines on the land would increase the group’s production capacity, future earnings and earnings per share. (StarBiz)

Stocks fell on Friday, ending lower for the week, after weaker-than-expected reports on durable goods orders and new home sales sparked concerns about the strength of any recovery. Investors reacted negatively to Wednesday's Federal Reserve meeting and Thursday's weaker existing home sales report and oil slump. The Dow Jones industrial average lost 0.4% (-42 pts, close 9,665.19). The S&P 500 index lost 0.6% (-6 pts, close 1,044.38). The Nasdaq composite fell 0.8% (-17 pts, close 2,090.92). U.S. light crude oil for October delivery rose 13 cents to settle at US$66.02 a barrel on the New York Mercantile Exchange. (CNN Money)
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Demand for U.S. durable goods unexpectedly fell in August and sales of new homes rose less than forecast, restraining the pace of the economic recovery. Orders for goods made to last several years dropped 2.4%, the biggest decline since January, the Commerce Department said Friday in Washington. Economists forecast durable goods orders would increase 0.4%, according to the median of 75 projections in a Bloomberg News survey. Estimates ranged from a decline of 2% to a 4% gain. Outside of transportation, bookings were expected to increase 1%, according to the Bloomberg survey. Sales of new homes climbed 0.7% to a 429,000 annual pace last month, a separate Commerce Department report showed, as builders cut prices at a record pace to compete with the foreclosures that are flooding the market for previously owned houses. Sales were forecast to rise to a 440,000 pace, according to a Bloomberg survey. (Bloomberg)
* * * * *
Federal Reserve decided to keep pumping US$1.25trn of new money into the mortgage market to focus on rescuing the U.S. economy as the financial system revives and banks ask for less help. The Fed is allowing some of the 10 support programs it created or expanded after the credit crisis began in August 2007 to expire or shrink. That caused the first decline in the amount of money the U.S. has committed on behalf of taxpayers to end the recession, according to data compiled by Bloomberg. The central bank has purchased US$694bn of mortgage-backed securities since January and plans to spend US$556bn more by April 2010 to keep interest rates down. The U.S. has lent, spent or guaranteed US$11.6trn to bolster banks and fight the longest recession in 70 years, according to data compiled by Bloomberg. (Bloomberg)
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The French economy will grow in 3Q09, and strengthening the recovery is a priority over currency problems, French Finance Minister Christine Lagarde said in a televised interview. “We will have positive growth for the third quarter,” she said on LCI television. She declined to give a precise figure, saying the forecast for growth in 2010 of 0.75% is “conservative” and the outlook is for “weak” inflation. Emerging signs of economic growth in different parts of the world remain “fragile,” she added. Asked whether the relative strength of the euro compared with the dollar was holding back growth and European competitiveness, Lagarde said the Group of 20 would be a good forum for discussion of monetary issues. “It is not acceptable that the euro pays the price for monetary adjustments between the dollar and the yua,” she said, referring to the Chinese currency. “The main problem is support for recovery by coordinated stimulus measures.” (Bloomberg)
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Bank of Japan board members last month remained concerned that small companies are struggling to borrow even as credit conditions improve, minutes show. “Many members noted that the improvement in funding conditions of large firms was significant, but that of small firms and firms with low credit ratings remained limited,” according to the Aug. 10-11 policy
meeting minutes released Friday in Tokyo. Some members said companies remain concerned about the outlook for their businesses and funding conditions, the minutes said. One policy maker said the central bank should try not to hinder a “self-sustaining recovery” in the functioning of financial markets, while at the same time continue to provide “ample liquidity” to the banking system. (Bloomberg)
* * * * *
Chinese industrial companies’ profits fell at a slower pace as a recovery gathered pace in the world’s third-biggest economy on stimulus spending and record lending in 1H09. Net income declined 10.6% y-o-y in the eight months through August to 1.67trn yuan (US$245bn), the statistics bureau said yesterday. Profits dropped 22.9% in the first five months of the year. Sales in the first eight months of the year rose 1.6% to 32.4trn yuan. The data is for companies with annual sales of more than 5m yuan in 39 industries, including steel, chemicals, electricity, telecommunications and mining. The government is aiming for 8% economic growth to create jobs and so limit the risk of social instability in the world’s most-populous nation. (Bloomberg)
* * * * *
Palm oil may reach US$1,000 (RM3,460) a tonne if a global economic recovery pushes crude oil up to US$95 a barrsaid James Fry, managing director of LMC International Ltd, which tracks the world’s main oilseeds. Oil has risen 48% tyear, averaging US$57 a barrel. Palm oil has increased 29%. The commodity will climb above US$750 a tonne in Rotterdamcrude remains at the current level of about US$65 a barrel, Fry said. He added that the price may reach US$675 if oil drops US$10. “Stocks no longer drive palm oil,” Fry said. “Instead of stocks acting as the main driver of prices, the Brent crude price band is now the major influence.” (Financial Daily)
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News Highlights

2009-09-25T10:19:00.001+08:00

DRM-HICOM Bhd has made a pitch to General Motors (GM) about jointly conducting completely-knocked-down (CKD) operations in the country. Market sources said the prospects of doing local assembly for GM would be beneficial to future sales as locally assembled cars would be cheaper. DRB-HICOM started distributing and selling GM cars in 2003 and was selling about 6,000 cars a year with more than 30 dealers under its wing. The number of dealers shrank over time given GM’s preference for its dealer to have 3S (sales, service and spares) capability. DRB-HICOM is willing to invest millions of ringgit in the GM business in the country but it wants a larger say on how operations are run, according to sources. (StarBiz)
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Tycoon Tan Sri Quek Leng Chan and Tan Sri Chua Ma Yu agreed to take part in the initial public offering (IPO) of Wynn Macau Ltd on the Hong Kong Stock Exchange by investing US$80m and US$70m respectively. Quek’s involvement is via Guoco Management Co Ltd and GuoLine Group Management Co Ltd, while Chua’s vehicle is CMY Capital Markets Sdn Bhd. Wynn Macau said CMY’s stake could amount to almost 5% of the offered shares while Guoco and GuoLine could collectively hold 5.3% based on a mid-point offer price of HK$9.30 and assuming the over-allotment option was not exercised. The IPO involves floating 1.25bn shares at HK$8.52-HK$10.08 each. (StarBiz)
* * * * *
The non-interested directors of Kumpulan Jetson Bhd (KJB) have advised shareholders to reject the conditional takeover offer by Superior Pavillion Sdn Bhd (SPSB) and Odyssey Wealth Sdn Bhd (OWSB) for the group’s securities. In an independent advice circular (IAC), KJB said its non-interested directors concurred with its independent adviser Kenanga Investment Bank Bhd (KIBB) that shareholders reject the offer as the prevailing market prices of the shares, ICULS and warrants were significantly higher than the offer prices, adding that it was more beneficial for the securities’ holders who wished to realise their investment to do so in the open market. As such, the non-interested directors turned down SPSB and OWSB’s joint offer for the remaining KJB shares. (Financial Daily)
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Green Packet Bhd hopes to double the number of its subscribers by the end of the year, while continuing to widen its coverage within Peninsular Malaysia, said its subsidiary Packet One Networks Malaysia Sdn Bhd’s (P1) chief executive officer Michael Lai. The company is investing almost RM1bn over a period of five years to boost its coverage. It has invested around RM300m since 2008 and plans to invest a further RM700m by 2012 towards expanding coverage in West Malaysia from 30% to 35% by the end of the year. The company also hopes to double its subscriber base from 80,000 in August to 160,000 by year-end through its “Cut Now” campaign along with two or three more initiatives ahead. (Financial Daily)
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HSBC Bank Malaysia Bhd has become the first custodian bank to be approved by Bursa Malaysia as a lending representative under the Securities Borrowing and Lending Negotiated Transaction (SBLNT) model that was launched on Aug 17. The bank’s role will include the submission of clients’ requests to Bursa Clearing to be appointed as an approved lender, receipt of instructions for lending transactions and subsequent termination, pre-matching of SBL transactions with counterparties and provide timely status updates and updating the SBLNT system for lending contracts entered into by clients. HSBC Malaysia said with the new framework, the bank could act as an intermediary on behalf of its clients for lending activities. It said the new model could improve the liquidity of the securities and borrowing market in Malaysia, making it more attractive for market participants. (Financial Daily)
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Penang Port Sdn Bhd’s (PPSB) existing ferry and port operations will be split and placed under a common holding company in a restructuring exercise that will facilitate the listing of just the port operations on Bursa Malaysia securities, said PPSB executive director Datuk Ahmad Ibni Hajar. He said the move was instructed by the Economic Planning Unit (EPU) under the Prime Minister’s Department as a condition towards PPSB seeking listing in the next few years. Ahmad said thought PPSB’s board has yet to meet on the matter, the Ministry of Transport and Ministry of Finance had given their approvals to the restructuring exercise, which could take about a year to be completed. (Financial Daily)
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International Trade and Industry Minister Datuk Mustapa Mohamed says that Malaysia’s exports are beginning to see signs of recovery. The pick-up in export demand suggests early signs of a global recovery, following the impact of the global financial crisis that had caused the current sluggish export performance. Demand for electronic and electrical (E&E) sectors has been sluggish between the end of last year and the 1H09. However, Mustapa said that at a recent meeting with players from the E&E sector, it was pointed out that additional orders were recorded as well as the need for more foreign labour. (BT)
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Malaysia’s domestic demand is showing clear signs of recovery from the fiscal stimulus and an accommodative monetary policy, says Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz. Zeti expects an improvement in external demand in the third quarter and an expansion in gross domestic product (GDP) in the next three months, adding that there would be a revision in the country’s growth forecast in Budget 2010, to be tabled in parliament next month. The government expects the economy to shrink as much as 5% in 2009. The country’s economic contraction eased to 3.9% in the second quarter from a 6.2% decline in the first quarter. Zeti said interest rates were also “appropriate” as government stimulus and improving overseas demand had helped boost economic recovery. (StarBiz)
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Stocks slumped Thursday, falling for the second straight session, as a surprise drop in existing home sales and tumbling commodity prices gave investors a reason to sell into a rally that pushed the major gauges to one-year highs. Stocks gained in the early going after the Labour Department reported that jobless claims fell for the third week in a row. But the market abandoned gains after the housing report. A slide in oil and gold shares on the back of a stronger dollar dragged on commodity stocks. The Dow Jones industrial average lost 0.4% (-41.1 pts, close 9,707.4). The Nasdaq lost 1.1% (-23.8 pts, close 2,107.6) and the S&P 500 lost 0.9% (-10.1 pts, close 1,050.8). U.S. light crude oil for October delivery fell US$3.08 to settle at US$65.98 a barrel on the New York Mercantile Exchange. (CNNmoney)
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Sales of existing U.S. homes unexpectedly fell last month for the first time since March, signalling the housing recovery will be slow to gain speed. Purchases dropped 2.7% in August to a 5.1m annual rate, the second-highest level in the last 23 months, the National Association of Realtors said yesterday in Washington. The median price dropped 12.5% from August 2008. Existing home sales were forecast to rise to a 5.35m annual rate, according to the median forecast of 74 economists in a Bloomberg News survey. The number of unsold homes on the market dropped 11% to 3.6m in August. At the current sales pace, it would take 8.5 months to sell those houses, the fewest since April 2007. (Bloomberg)
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The number of Americans filing first-time claims for jobless benefits dropped unexpectedly last week to the lowest in two months, another sign firings are slowing as the economy pulls out of the recession. Applications fell by 21,000 to 530,000 in the week ended Sept. 19, from a revised 551,000 the week before, Labour Department data showed yesterday in Washington. The total number of people collecting unemployment insurance fell in the prior week to 6.14m, lower than forecast. Economists forecast weekly claims would rise to 550,000 from a previously reported 545,000, according to the median of 44 projections in a Bloomberg News survey. Estimates ranged from 510,000 to 565,000. Continuing claims were forecast to rise to 6.18m. The report showed the four-week moving average of initial applications, a less volatile measure, fell to 553,500 last week, the lowest since January, from 564,500. (Bloomberg)
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German business confidence rose to a 12-month high in September, indicating Europe’s largest economy will gather strength after exiting its worst recession since World War II. The Ifo institute in Munich said yesterday its business climate index, based on a survey of 7,000 executives, rose to 91.3 from 90.5 in August. That’s the highest reading since September last year. Economists expected a gain to 92, the median of 40 forecasts in a Bloomberg News survey showed. The index reached a 26-year low of 82.2 in March. While the Bundesbank predicts a “strong pickup” in 3Q09, the recovery could falter when stimulus measures expire and as unemployment rises. (Bloomberg)
* * * * *
Germany cut its program of debt sales as the end of the recession helped boost the finances of Chancellor Angela Merkel’s government before national elections. The nation reduced proposed issuance of bonds and bills in 4Q09 by 22% to 59bn euros (US$87bn), the Frankfurt-based Federal Finance Agency said yesterday in a statement. The change is “based on improved funding conditions and reduced borrowing requirements of the Financial Market Stabilisation Fund,” the agency said on its web site. Germany initially planned to issue a record 346bn euros of debt this year, a 57% increase from 220bn euros in 2008. The 4Q09 reduction will lower this year’s total to 329bn euros, still an all-time high. Redemptions in the next three months will be 69bn euros, the agency said yesterday. (Bloomberg)
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The number of jobseekers in France rose by about 40,000 in August and will climb further in the months ahead as companies trim payrolls to reduce costs, Labour Minister Xavier Darcos said. The increase was “maybe 40,000,” Darcos said yesterday on RMC radio. The number of unemployed actively looking for a job stood at 2.54m at the end of July.
Unemployment in France will rise to 11.2% in 2010 from 9.7% this year and 7.4% in 2008, the Paris-based Organization for Economic Cooperation and Development predicted on June 24. The French economy will shrink 3% this year and grow just 0.2% in 2010, the OECD said. (Bloomberg)
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Japan’s exports fell for an 11th month in August as the economic recovery struggled to gain traction. Shipments abroad dropped 36% y-o-y compared with a 36.5% decline in July, the Finance Ministry said yesterday in Tokyo. From a month earlier, exports fell 0.7%, the second straight decrease. Yesterday’s report suggests the boost in overseas demand that helped the economy expand in 2Q09 may be moderating as governments exhaust stimulus spending. The y-o-y drop in exports was in line with the 36.5% forecast by economists. The 0.7% monthly decline may have been overstated by the country’s Obon holidays, a period when Japanese often take vacations to honour ancestors and which isn’t factored into the seasonal calculation, the Finance Ministry said. Imports fell 41.3% y-o-y in August, leaving a trade surplus of 185.7bn yen (US$2bn). (Bloomberg)
* * * * *
South Korea’s consumer confidence stayed unchanged at the highest level in seven years in September as extra government spending and cheap borrowing costs spurred the nation’s economic recovery. The sentiment index was unchanged at 114 from August, the Bank of Korea said in Seoul yesterday. The figure is the highest since 3Q02, when the bank began publishing its confidence survey on a quarterly basis. An index figure of more than 100 indicates optimists exceed pessimists. The consumer confidence index was based on a survey of 2,200 households in 56 major cities, conducted by mail and telephone between Sept. 11 and Sept. 18. (Bloomberg)
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News Highlights

2009-09-24T11:37:00.001+08:00

In a bid to regain market share from its legitimate rivals as well as black market players, Multi Purpose Holdings Bhd’s (MPHB) wholly owned subsidiary Magnum Corporation Sdn Bhd yesterday launched its jackpot game called 4D Jackpot. The key attraction of the 4D Jackpot game is its snowballing prize, particularly when the sum grows to multi-million ringgit. (Financial Daily)
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AEON CO (Malaysia) Bhd may take a stake in its Japanese parent’s expansion plans in Southeast Asia. The parent company AEON Co Ltd, Japan’s second largest retailer, is looking to set up stores in Vietnam, Cambodia, Indonesia and possibly even Laos, managing director Nagahisa Oyama said. “AEON Malaysia may invest money in these countries if it is beneficial to us. We have an option to take a stake on a case by case basis, depending on the situation. Nothing has been decided yet”, he said. Oyama also said Southeast Asia represents a strong potential growth area for the Japanese group. (BT)
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Green Packet Bhd has set a net profit target RM1bn for 2013, driven by a maturing broadband and solutions business. The company expects to sign up 200,000 subscribers by year-end, from 35,000 in the first quarter of 2009. Green Packet expects revenue to increase more than threefold to RM300m this year, from RM88.43m in 2008. Over the next two year, the company
will be aggressively expanding its coverage and acquiring broadband customers. When its subscriber base hits the critical mass, it is expected to launch its new service – mobile voice. (BT)
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Hap Seng Consolidation Bhd (HSC) is selling its wholly-owned subsidiary Hap Seng Consolidation Financial Lease & Rental (China) Co Ltd (HSCFLR) for US$30.29m (RM105.11m) cash booking in a gain of RM36m, in a related party transaction. HSC said the acquirer was Lei Shing Hong Venture Capital Limited, a wholly-owned subsidiary of Hong Kong incorporated Lei Shing Hong Ltd (LSH). LSH’s 36.6% major shareholder, Datuk Seri Panglima Lau Cho Kun @ Lau Yu Chak, is also a director and major shareholder of Gek Poh Holdings Sdn Bhd, the major shareholder of HSC. Gek Poh Holdings owns a 61.48% stake in HSC. HSC said the consideration was about 1.5 times the net asset value of HSCFLR of RM71m as at Aug 31, 2009. It said the valuation was in line with the valuation of unlisted credit companies and the fact that the financial leasing services company was only incorporated on Feb 29, 2008. (Financial Daily)
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Dialog Group Bhd has started operations of phase one of Langsat Teminal (One) Sdn Bhd, which is a joint venture between the company, MISC Bhd and Puma Energy Asia Pacific BV. Dialog announced that the terminal received its first shipment of oil from its customer, Trafigura Pte Ltd last Saturday. The Tanjung Langsat terminal has a total capacity of 400,000 cubic metres (cbm), with the development planned to be completed in two phases. The total capacity for Phase 1, which was officially completed on Sept 16, is 130,000 cbm for storage of naphtha/middle distillates. Phase 2 of the project is targeted for completion by Match 2010 with a tank capacity of 270,000 cbm for storage of fuel oil. (Financial Daily)
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Berjaya Corporation Bhd (BCorp) and Brunei-based contractor have jointly submitted a joint bid to the Brunei Economic Development Board to undertake a waste management project in that country. In an announcement to Bursa Malaysia, BCorp said it and Ribhan Nurhidayah Contractor (RNC) had submitted the tender to undertake the energy efficient waste management system in Brunei. BCorp said it entered into a memorandum of understanding (MoU) with RNC last Friday to put in the tender for the project. Under the MoU, BCorp and RNC are to form a joint venture company with BCorp holding a 60% stake and RNC 40%, if they were to succeed in their bid. (Financial Daily)
* * * * *
AMDB Bhd has proposed to buy two freehold office buildings known as 40 and 50 Eastbourne Terrace in Paddington, Westminster, London via the acquisition of a 60% stake in Westlink Global Investment Ltd (WLG). AMDB said WLG had inked a sale and purchase agreement with LS Victoria Properties Ltd to purchase the property for 50.5m (RM287.33m). AMDB said its subsidiary Walleng Enterprises Sdn Bhd had yesterday subscribed for 60 ordinary shares representing a 60% stake in WLG at par for cash. AMDB said the property provided a net lettable space of 146,000 sq ft of retail and office accommodation which are currently let to a variety of tenants with about 94% occupancy. It said base on current rentals, the net yield on the property was about 8.65%. (Financial Daily)
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Stocks tumbled Wednesday, retreating from one-year highs, as investors took a sell-the-news reaction to the Fed's decision to hold interest rates steady and keep its economic outlook relatively unchanged. Stocks initially rallied after the Fed announcement Wednesday, but failed to hold gains as investors used the latest nearly one-year milestone for the market as a reason to sell. A milder-than-expected response to a government auction of US$40bn in five-year notes also contributed to the
late declines. The Dow Jones industrial average lost 0.8% (-81.3 pts, close 9,748.5). The Nasdaq lost 0.7% (-14.9 pts, close 2,131.4) and the S&P 500 lost 1.0% (-10.8 pts, close 1,060.9). U.S. light crude oil for October delivery fell US$2.79 to settle at US$68.97 a barrel on the New York Mercantile Exchange. (CNNmoney)
* * * * *
The Federal Reserve will slow its purchases of mortgage securities by 1Q10, seeking to avoid disrupting the housing market as an economic recovery takes hold. Officials left the target rate for overnight loans between banks at a record low of between zero and 0.25%. Yesterday’s decision was unanimous. “Economic activity has picked up following its severe downturn,” the committee said yesterday. “Conditions in financial markets have improved further, and activity in the housing sector has increased,” the Fed said. “Household spending seems to be stabilizing, but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit.” The FOMC said monetary and fiscal stimulus combined with stabilizing financial conditions “will support a strengthening of economic growth and a gradual return to higher levels of resource utilization in a context of price stability.” (Bloomberg)
* * * * *
U.S. credit-card defaults rose to a record in August and more losses may lie ahead as delinquencies climbed for the first time since March, according to Moody’s Investors Service. Write-offs rose to 11.49% from 10.52% in July, Moody’s said yesterday in a report. Loans at least 30 days delinquent rose to 5.8% from 5.73%. “Early-stage” delinquencies, or loans overdue 30 to 59 days, surged to 1.65%, from 1.41%, signalling higher losses in coming months. Banks typically write off loans after 180 days. Card issuers have struggled with rising defaults as the recession drove up unemployment to 9.7% and the impact of income tax refunds waned. Credit-card defaults typically track the U.S. jobless rate since consumers tend to fall behind on payments when their income dries up. “We continue to call for a recovery of the credit-card sector to begin once industry average charge-offs peak in mid-2010 between 12% and 13%,” said the Moody’s report, which predicted unemployment may reach 10.5%. (Bloomberg)
* * * * *
The Bank of England may stop buying bonds when it completes its current 175bn-pound (US$286bn) plan as the U.K. shakes off the recession, the Confederation of British Industry said. Gross domestic product will rise 0.3% in 3Q09, the biggest U.K. business lobby said in a report yesterday, reversing a June prediction for a drop of the same size. The CBI forecast 0.4% growth in 4Q09 and said the central bank will start raising the benchmark interest rate in 1H10. “Armageddon has receded somewhat over the horizon,” Richard Lambert, CBI director general and a former Bank of England policy maker, told reporters at a briefing in London Tuesday. “But the recovery will be slow and protracted. Unemployment will continue to rise.” The central bank plans to complete its current program to buy bonds by November. The economy will expand 0.9% in 2010 after a 4.3% contraction this year, the CBI said. (Bloomberg)
* * * * *
French consumer spending fell for a second month as rising joblessness deterred spending such goods as clothes and accessories. Spending on manufactured goods fell 1% in August from July, when it declined 1.2%, Paris-based national statistics office Insee said yesterday. Economists expected a 0.3% gain in August, a Bloomberg News survey showed. French consumers are cutting back on concern that rising job losses will weaken their spending power in the months ahead. Unemployment rose to 9.5% in 2Q09, the highest in more than three years. Finance Minister Christine Lagarde said Tuesday that the government will maintain measures to bolster the economy until joblessness begins to recede. (Bloomberg)
* * * * *
French manufacturing confidence jumped to the highest in almost a year as recovery from the worst recession in half a century buoyed exports and depleted inventories. The index of sentiment among factory executives rose to 85 in September from 82 in August, Paris-based statistics office Insee said yesterday. Economists had expected that the index would climb to 81 this month, according to the median of 16 forecasts in a Bloomberg News survey. The improvement reflects demand from retailers who slashed inventories as the recession hit its trough early this year. Even so, with unemployment rising, consumer demand will act as a brake on growth in the months ahead. Exports increased 9% in July from the previous month, according to the Finance Ministry. The same month, the number of unemployed actively looking for a job increased to 2.54m, matching the 28-month high set in May. (Bloomberg)

News Highlights

2009-09-23T20:09:00.001+08:00

Boustead Petroleum Marketing Sdn Bhd (BHPetrol), the petroleum retail unit of Boustead Holdings Bhd (BOUS MK, Buy, TP: RM3.94), plans to spend RM180m in capital expenditure (capex) per year to expand its retail station network in the country. Its managing director Tan Kim Thiam said the company is planning to open over 400 fuel retail stations within the next 5-years, and has currently 335 stations in the country. He also stated that the group’s target was to have between 15 and 20 new sites each year, in line with its business expansion plans. (BT)
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AirAsia Bhd (AIRA MK, Buy, TP:RM1.80) will start offering flights from the French city of Nice to Kuala Lumpur next year, because Air France-KLM is blocking its entry to Parisian airports, La Tribune reported, citing Datuk Seri Tony Fernandes, the airline’s founder. Its long-haul flights affiliate, AirAsia X, will be profitable from the first year, the newspaper said, citing the executive. (StarBiz)
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DRB-Hicom Bhd’s major shareholder Tan Sri Syed Mokhtar Al-Bukhary has submitted a bid to purchase a block of shares in Proton Holdings, sources say. The bid was put in 2 weeks ago and the offer was reportedly above the current share price of Proton. The number of shares is not known, but it certainly will not trigger a MGO, continued the source. Besides that, it is reported that there were other parties believed to be bidding as well. (The Edge Weekly)
* * * * *
Maxis Communication Bhd (MCB) is offering for sale 30% or 2.25bn shares of Maxis Bhd’s (Maxis) issued and paid-up capital, of which 2.33% is for retail investors and 27.67% for institutional investors as part of the celco’s initial public offering (IPO). The offer for sale is expected to raise US$2.5bn (RM9bn), which will be the biggest IPO in corporate Malaysia since 1995. Maxis will not issue new shares for the IPO and thus will not get any proceeds. The proceeds will go to the shareholders that are making the offer for sale. The objectives of the IPO are to enable the company to access the equity capital markets to give it the financial flexibility to pursue growth opportunities and to “enhance” its profile. (StarBiz)
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Malaysian Resources Corp Bhd (MRCB) and its substantial shareholder, the EPF, have been given the green light to acquire and develop certain strategically located land parcels belonging to the federal government, sources said. Along with the proposal, it is said that MRCB plans to embark on a fund raising exercise which could see EPF’s shareholding in the company cross the trigger point of 33.3%. To note, land banks to be developed are cited to be in Jalan Cochrane and Jalan Ampang Hilir. The parcel of land in Jalan Cochrane is, according to real estate players, some 150 acres while at Jalan Ampang Hilir, it is 20-30 acres. (The Edge Weekly)
* * * * *
Bursa Malaysia Bhd said it expects the volume of palm oil (CPO) futures trading to more than double in the next two to three years following a stake sale and tie-up with CME Group Inc. About 20% of CPO contacts in Malaysia are traded through international investors, Bursa’s chief executive officer Datuk Yusli Mohamed Yusoff said. The exchange is also seeking to raise the valuation of the commodity’s derivatives, which he said are trading at a discount to other products such as soya oil. “CME will help elevate palm oi’s visibility and close that price gap with other edible oils,” Yusli said. ”We are going to leverage CME’s status as a market leader and this will help elevate the international profile of out derivatives exchange offerings.”
(Financial Daily)
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Malaysia Pacific Corp Bhd (MP Corp) is proposing two renounceable call rights issue of up to 129.448m shares together with 129.448m free detachable warrants. The right share is priced at RM1 each, of which the first call of 42 sen per rights share will be fully payable, in cash, and the second call of 58 sen will be capitalised from the retained profits account. The proposed right issue will involve the issue of new shares without diluting the equity interest of existing shareholders and provide them with an attractive option to increase their equity participation in the company during the tenure of the warrants. The proposed right issue is expected to raise gross proceeds of up to about RM54.37m. (StarBiz)
* ***
Syarikat Borcos Shipping Sdn Bhd plans to submit an initial public offering (IPO) proposal to authorities as early as February, said two persons familiar with the matter. “The target is to list Borcos by the middle of the next year,” said one of the two sources, adding that it was too preliminary to share details, including the estimated potential proceeds, of the exercise. The proposed listing of Borcos is in line with its growth strategy. Borcos, which has an order book of RM300m, is currently extending its fleet. (Financial Daily)
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Bank Negara Malaysia' s international reserves increased 0.24% to RM329.9bn (US$93.5bn) as at Sept 15 from RM329.1bn (US$93.3bn) at Aug 28. The reserves position is sufficient to finance 9.4 months of retained imports and is 3.8 times the short-term external debt, the central bank said in a statement Friday. (Bernama)
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Thousands of workers in the private sector can expect higher salaries soon after the Human Resources Ministry reviews the Wages Council Act 1947. These include those in the security, hospitality, electronic and textile sectors. The last time a review was conducted was about a decade ago. Human Resources Minister Datuk Dr S. Subramaniam said the Wages Council had been reactivated to review salaries in several sectors and that announcements on a few areas where work had been done would be made over the next few months. (NST)
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Stocks rallied Tuesday, finding momentum after a choppy morning, with the Dow, S&P 500 and Nasdaq all hitting one-year highs. Stocks have carved out one-year highs repeatedly over the past two weeks, with the Nasdaq ending Monday' s session at its highest level since shortly after the collapse of Lehman Brothers a year ago. The Dow Jones industrial average gained 0.5% (+51.0 pts, close 9,829.9). The Nasdaq gained 0.4% (+8.3 pts, close 2,146.3) and the S&P 500 gained 0.7% (+7.0 pts, close 1,071.7). U.S. light crude oil for October delivery rose US$1.84 to settle at US$71.55 a barrel on the New York Mercantile Exchange. (CNNmoney)
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Jobless rates rose in 27 US states last month, with several reaching record levels of unemployment, offering a bleak reminder that the economic recovery could be slow and painful for the stricken labour force. In spite of bold stimulus measures intended to stem the flow of job losses, payrolls declined in 42 states, with Texas, Michigan, Georgia and Ohio suffering the
biggest declines, labour department figures showed on Friday. Unemployment rates reached record levels in Nevada, Rhode Island and California, where they hit 13.8%, 12.8% and 12.2%, respectively. Michigan, which has been savaged by the collapse of the car sector, continues to have the highest unemployment rate in the US at 15.2%. The unemployment rate in the US reached a 26-year high of 9.7% in August and sustained high levels of jobless claims are stretching state finances. Next week Congress is expected to decide whether to extend expiring jobless benefits to people in states with unemployment rates higher than 8.5%. (Financial Times)
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U.S. leading economic index increased 0.6% in August for the fifth straight month, capping the longest stretch of gains since 2004 and signalling a recovery is under way. The Conference’s gauge of the economic outlook for the next three to six months rose 0.6% in August, in line with forecasts, after a 0.9% increase in July that was larger than previously estimated, according to data that the New York-based group released today. The gains in stock prices, consumer confidence and homebuilding that are buoying the leading index bolster Federal Reserve Chairman Ben S. Bernanke’s view that the worst recession since the Great Depression has probably ended. (Bloomberg)
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The Federal Reserve has started talks with bond dealers about withdrawing the unprecedented amount of cash injected into the financial system the last two years, according to people with knowledge of the discussions. Central bank officials are discussing plans to use so-called reverse repurchase agreements to drain some of the US$1trn they pumped into the economy, said the people, who declined to be identified because the talks are private. That’s where the Fed sells securities to its 18 primary dealers for a specific period, temporarily decreasing the amount of money available in the banking system. The central bank’s challenge is to decrease the cash without stunting the economy’s recovery and before it sparks inflation. (Bloomberg)
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Federal Reserve Chairman Ben S. Bernanke’s efforts to stoke a U.S. economic recovery may be undermined by the central bank’s other goal of restoring the banking system to health. The Federal Open Market Committee, at the conclusion today of a two-day meeting, will probably maintain its assessment that “tight” bank credit is impeding growth, said economists including former Fed Governor Lyle Gramley. Lending contracted for five straight weeks through Sept. 9, a drop that in part reflects Fed orders to banks to raise more capital and toughen lending standards. A failure to restore the flow of bank credit carries the risk that the economic recovery will be slower than the Fed anticipates, or even that the U.S. lapses into another recession, economists say. That would make it more likely the Fed will keep its main interest rate close to zero for a longer period. Economists surveyed by Bloomberg News unanimously forecast the Fed will leave its benchmark interest rate
unchanged. (Bloomberg)

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Selamat Hari Raya

2009-09-19T23:15:00.003+08:00