Amanah Saham Malaysia (ASM) is offering the remaining units from 21st of july 2009 to the 27th!

By the Star

It has set maximum limit of 20,000 units per account holder

Permodalan Nasional Bhd (PNB) will offer the remaining 1.6 billion Amanah Saham Malaysia (ASM) units, including those initially set aside for bumiputras, for subscription by all Malaysians from July 21.

President and group chief executive Tan Sri Hamad Kama Piah Che Othman said to ensure a fair distribution to the public, a maximum limit of 20,000 units had been set per account holder during the offer period from July 21-27. The limit would be void after the offer period.

“Thereafter, investors can subscribe for the ASM units without any maximum investment limit, depending on the amount of units left.

“Sales of the additional ASM units are based on a first-come, first-served basis,” he told reporters here yesterday.

ASM is an equity-income fund aimed at providing unitholders with a long-term investment opportunity that generates regular and competitive returns through a diversified portfolio of investments.

According to Hamad, the remaining 1.6 billion ASM units are from the 3.33 billion units launched in April.

Of the 3.33 billion units, bumiputra investors were allocated 50%, Chinese 30%, Indians 15% and other races 5%.

However, only the allocated units for the Chinese and Indian investors were fully subscribed and it has now been three months since the fund launch.

“We will continue to hold seminars and talks on the benefits of investing to encourage more bumiputra participation in our unit trust products,” Hamad said.

PNB has confirmed that excluding Amanah Saham Bumiputera, there were some 6.6 billion units that have not been taken up by bumiputra investors.

These are from unit trusts such as ASM, Amanah Saham Wawasan 2020, Amanah Saham Didik, Amanah Saham Nasional dan Amanah Saham Nasional 2.

On the 1Malaysia Unit Trust as proposed by Prime Minister Datuk Seri Najib Razak last week, Hamad said an announcement would be made soon.

Meanwhile, a PNB spokesman said it was not aware of any practices of its agents such as banks on reserving ASM units for selected customers.

“We are not aware of such practices nor do we encourage this,” the spokesman said, referring to the latest ASM annual report which revealed that in the top bracket of unitholders, there were only 296 individuals holding a whopping 264 million units.

This translates into an average of 893,068 units per person.

* On how to make purchase of the ASM unit thrust, you can approach the authorised agents such as Maybank, CIMB, RHB and Pos Malaysia. The satistic of ASM Fund's return.

Construction a comeback with govt spending on infrastucture like the proposed LRT?

By The Star

More than a year after the local construction industry was hit by deferred projects coupled with high material costs, its prospects appear to be on the mend, say industry players.

“We can definitely look forward to better times, especially with cheaper material prices now,” Malaysian Resources Corp Bhd (MRCB) group managing director Shahril Ridza Ridzuan told StarBiz.

Shahril said he believed the Government would be “efficient” in rolling out projects under the 9th Malaysia Plan (9MP) and stimulus packages which were key to the survival of the sector.

MRCB’s ongoing projects were “going well”, he said, adding that the company, largely involved in construction and property, had several projects under tender of which “one or two” fell under the RM67bil stimulus packages. Its current construction order book stands at close to RM3bil.

Last year was a difficult one for the construction industry with the change in government in certain states which subsequently thwarted certain infrastructure plans.

Coupled with the surge in prices of materials like steel, which peaked at RM4,000 per tonne and crude oil which hit a record of US$147 per barrel, many construction companies were struggling to keep margins afloat.

Steel prices have since softened to around RM2,000 per tonne last month while crude oil is about US$60 per barrel now, translating possibly into healthier margins for the players.

A clearer political direction is also apparent under the administration of new Prime Minister Datuk Seri Najib Tun Razak.

“Execution is now the order of the day,” CIMB Research told clients in a recent construction sector update.

“We believe things are getting better but we urge the Government to be ‘quicker’ in the implementation of more of the announced projects,” Prinsiptek Corp Bhd managing director Datuk Foo Chu Jong said.

The smallish construction company which has an order book of about RM400mil to RM500mil was “in discussions” with the relevant parties on several infrastructure projects and hoped to secure “some soon”, he said without elaborating.

In its update, CIMB Research identified 12 mega construction projects worth up to RM80bil, of which RM30bil to RM35bil was for the Klang Valley light trail transit extension and upgrade project, also known as the “highlight” project of the government’s pump-priming over the remaining 9MP period.

It identified MRCB, IJM Corp Bhd, Gamuda Bhd, UEM Builders Bhd and WCT Bhd as potential winners of this huge project, citing their cost efficient measures and track record.

The Bakun power transmission project is another mega project to look out for with CIMB saying that the project may take off “sooner than later” as cost had come off from RM14bil to RM9bil on lower steel prices.

MRCB was at the forefront for this project given its experience in undertaking major power transmission in the country, it said.

Najib said early this month that as at June 19, RM9bil worth of projects had been awarded under the Government’s RM67bil stimulus packages to stimulate economic growth. Of this, RM3bil had been disbursed.

* Now is already 2009, will Najib execute the long awaiting proposed lrt project. From Cheras to Kota Damansara, extension of Sri Petaling Lrt to Puchong. I think this is the most anticipating infra project that malaysian & investor are waiting. I'm planning to get a piece of gem in Puchong but the traffic is massive, the proposed lrt in Puchong is a pain killer to the highways but are there enough space for a said proposed LRT station around IOI mall?

How to do business like Air Asia?

By the Star

AirAsia X’s latest fleet purchase has raised concerns among analysts that it is following the high debt-leverage route of AirAsia Bhd, expanding the risks to its bankers.

The long-haul, low-cost airline company’s CEO, Azran Osman-Rani, said there was a fundamental difference between the business model of AirAsia X and that of traditional airlines.

“For AirAsia X, most of its tickets are sold through the Internet and bought by customers months before their flights.
“As for traditional airlines, tickets are mainly bought through agents and paid by customers just two weeks before the flights.

“The agents may even pay the airlines after the flights,” he told StarBiz in a telephone interview yesterday. The airline has a similar business model as AirAsia as both are low-cost carriers.

“We have forward cash. In this business, what is important is cashflow. We’re holding the forward cash,” he added.

It was announced on Tuesday that AirAsia X placed a firm order for 10 Airbus A350 aircraft which carried a list price of US$2.2bil.

This follows an earlier order for 25 Airbus A330 planes for delivery between last year and 2015.

On the company’s debt leverage, he said AirAsia X’s gearing was about 200% and was not expected to increase.

The 10 planes in the latest order will only be delivered from 2016.

“It’s not like we’re buying all the planes at the same time. But it is important to place the deposits now. This is to ensure we’ll have the delivery slots. The deposit is just US$10mil, we’re not paying US$2.2bil yet,” he added.

Progressive payments will start 36 months from delivery but the bulk of payments will be made when the planes are delivered.

By the time the A350 planes are delivered from 2016, most of the borrowings taken for the A330 planes would have been repaid.

Azran said some equity analysts did not understand AirAsia X’s business model, but that was not important.

“What is important is what the banks do. If the banks are worried with our gearing, wouldn’t they be the first to run away?

“But the banks are saying they’ll fund all our deliveries this year,” he said.

AirAsia X will take delivery of three Airbus A330 planes between September and December. Financing has been obtained for these planes.

Currently, the airline flies five planes to London, Melbourne, Perth and Gold Coast (Australia), and Tianjin and Hangzhou in China.

Its most profitable routes are Gold Coast and Hangzhou because these were the first two routes flown by the airline.

“They’re more matured markets for us than London or Melbourne. It’ll take us a year to build brand awareness for the newer routes and, initially, the pricing has to be aggressive,” he said.

*Air asia set a very gd example of a business model, if any business woudl adapt/copy this model, it would surely be a thriving business. Invest in branding/advertising your promotion, cut off agents and orders are made from on9. Consumer trust is there as it is a gd brand and they would place orders in early stage with payments made, this would allow the business to collect forward cash. Its a win win stituation as consumer gets a gd discount and the company gets to secure the deal with forward cash. Think abt it, any industry can adopt this strategy! hehe..

Public Bank selling its debts?

By The Star

Public Bank Bhd (PBB) group has made the first issuance of RM1.2bil in stapled securities under its RM5bil capital raising programme.

The RM5bil non-innovative tier-1 stapled securities programme was approved by Bank Negara on March 16 and the Securities Commission on May 4.

The programme proposes the issuance of non-cumulative perpetual capital securities of up to RM5bil in nominal value to be issued by PBB which are stapled to an equivalent in nominal value of subordinated notes to be issued by a unit of PBB.

The group told Bursa Malaysia yesterday the subordinated notes would be issued by unit PBFIN Bhd.

The capital securities portion of the issuance will qualify as tier-1 capital of PBB and the PBB group under Bank Negara capital adequacy regulations.

The tenure of the capital securities is perpetual while the subordinated notes have a maturity of 50 years due on June 5, 2059 and the first optional redemption date of June 5, 2019.

The distribution rate and the interest rate payable for this issuance of capital securities and the subordinated notes are both at 7.5% per annum, payable semi-annually.

PBB said the stapled securities are issued at par. The proceeds from the subordinated notes will be used by PBFIN to on-lend to PBB.

The placement exercise, with an initial launch size of RM1bil, had been upsized to RM1.2bil due to increased investor demand, said PBB.

Investors that participated in the offering included insurance companies, asset management companies, private bankers, government agencies and financial institutions, it said.

* Is this wat we call the money market?

Australia as your 2nd home?

By The Star

Buying interest in Australian properties by Malaysian as well as other foreign investors has been on the rise the past six months and this trend is expected to continue for some time, say real estate agents and developers.

Jalin Realty International Pte Ltd, a real estate agent that specialises in properties abroad, expects a stronger demand for Australian properties this year.
Chief executive officer Ian Chen said the company was seeing encouraging response for properties Down Under this year, especially from Malaysian investors.

“We are definitely getting a lot of enquiries,” he told StarBiz in an interview before the launch of the Artists apartments promotions here recently.

The Artists apartments, located in Fitzroy, Melbourne, have a gross development value of about A$100mil and is expected to be built by late 2010.

Only 30%, or 50, of the total 173 units are now available and priced from A$600,000 at about A$700 per sq ft. The average size of the two-bedroom apartment is about 860 sq ft.

Chen said because of the good response by Malaysian investors in its previous launch of the Milano Service apartments on Franklin Street, also in Melbourne, last year, the company decided to continue with the promotion of Australian properties here.

He said there were several reasons for the higher uptake in Australian properties.

“Clearly the weaker Aussie dollar against the ringgit is the main factor, which makes Australian residential properties very attractive, especially in this current economic environment when property prices are depressed due to the downturn,” he said.

Chen said there was potentially a 25% upside to the properties in Australia over time and generally properties there had a compounded growth rate of 8% to 10% per annum, depending on the states.

An Australian real estate agent from LJ Hooker said there was stronger buying interest in Australian properties this year.

“The bulk of the foreigners buying Australian properties is from Britain. There is also an increase in interest and purchase of properties from Asian investors, including Malaysians, compared with previous years,” he said, but declined to give numbers.

A spokesman from another Australian property agent said Victoria appeared to attract more foreigners than other states, possibly because of its incentives.

He said that besides federal funding to prop up the property market in Victoria, property buyers in the state would pay a lower stamp if they could choose to buy the land first and pay the full amount when the building was constructed.

On property investors, he said there were mainly four classes – those that buy to invest for capital gain, those that migrate, those that buy for their children to live in and affluent people attracted to a lifestyle of having homes in different countries.

Australian property developer PDG Corp sales manager Charles Vraca said the company was very bullish about properties in Australia, especially Melbourne, going forward.

“Purpose-built properties in choice locations in the inner city with a strong theme should sell well,” he said, adding that developers needed to understand the buying power and needs of the community first before starting construction.

PDG was the developer for the Milano Service and Artists apartments which were 70% sold before their construction.

Vraca said another reason locals and foreigners were attracted to Australian properties was the ease of getting loans to purchase residential homes.

“Generally they can get 70% to 80% financing for their property purchase,” he said.

A local property analyst, who declined to be named, said the Australian government was very supportive of the property market by coming out with a slew of incentives to stem the loss of confidence due to the global economic meltdown.

The Australian government made several interest rates cuts to lower the cost of mortgages for property, pumped in A$10.4bil to prop up the property sector and gave first-home buyers A$21,000 initially to buy their homes and has now extended the programme to June next year.

“There is also a good chance that the amount of assistance for first-home buyers could be significantly increased further,” the analst said.

Moreover, in another positive development, Australian Prime Minister Kevin Rudd recently announced a whopping A$42bil allocation (in stages) to extend the broadband network reach across the country, which will help support the property sector’s growth.

“All these positive moves done by private sector initiatives in tandem with government funding and support help tremendously to strengthen foreign investors’ confidence in the value of Australian properties,” said the analyst.

*Wow, the rich gets richer! Jz imagine, your money is componded in Aussie dollar with 8% - 10& per annum. Do u think an avg income earner will be able to afford a unit? Quite intereting if u got the money!

EPF takes profit from banking stocks

By The Star

The Employees Provident Fund (EPF) has taken profit on almost all its banking shareholdings since the start of May with the exception of Public Bank Bhd and AMMB Holdings Bhd.

Analysts said the move was not entirely surprising given the sharp rises in most of the banks share prices over the past few weeks.

AmResearch senior banking analyst Fiona Leong said prices of banking stocks were at a good level in recent times for profit taking since EPF had been accumulating these stocks to its portfolio since December.

ECM Libra, in a latest update, said the profit-taking activity by EPF also explained the slight pause in the share price movement over the last one week, with most share prices trading within the -5% to +5% region for the week.

Despite profit taking, positive sentiment and interest surrounding banking stocks have certainly turned up a notch on the back of expectations that the worst of the recession is over and earlier concerns of widespread loan delinquencies may have been overdone.

“Share prices could continue on their uptrend on returning interest as most stocks are trading at relatively inexpensive valuations,” ECM Libra said.

On the recent results announcement, ECM Libra noted that Bumiputra-Commerce Holdings Bhd (BCHB) continued to register strong growth in its loans book though its overall asset quality had shown some deterioration after the consolidation of CIMB Thai.

“Based on the recent results, it would seem that larger financial institutions, such as Public Bank Bhd and BCHB, are continuing to see decent growth in their loans book while smaller ones, such as Hong Leong Bank Bhd and AMMB Holdings Bhd, are seeing slowdowns, possibly as a conscious decision to protect their balance sheets and capital,” the report added.

Meanwhile, AmResearch’s Leong said the recent results were within expectations except for BCHB, which registered slightly higher net interest margins.

“The general net interest margin contractions registered were due to the recent cuts in OPR (overnight policy rate),” she said.

She added that local banks did not show any significant increase in non-performing loans (NPLs) ratio up till March.

“However, there could be a substantial increase in NPLs by the second quarter of this year,” she said, adding that loans growth were also expected to moderate sharply from 12.8% registered last year.

*Does this means that banking stock has a proven strong record for good profit margin? Should we look at the perspective that banking stock can be a long term high yield stock?

Make as much mistake as you can in the stock market? Learn from it...

By The Star

OMAHA, Nebraska: Billionaire Warren Buffett remains optimistic about the U.S. economy, but he says it's difficult to predict when the recession will end because American consumers changed their behavior significantly.

Berkshire Hathaway's chairman and chief executive conducted several TV interviews Monday after entertaining 35,000 people at his company's shareholders meeting in Omaha over the weekend.

"In the short term, things are going to be tough for a while. We see no real pickup in a whole variety of businesses we have, but they'll be doing fine in a few years," Buffett said Monday in an interview with CNBC.

Among Berkshire's more than 60 subsidiaries, there are furniture, brick, manufactured home, carpet, utility, insurance and jewelry companies, so Buffett gets a good sense of the health of the economy by looking at his internal reports.

On the positive side, Buffett said he sees residential real estate prices stabilizing in important parts of the country like California, although a huge oversupply of houses remains in southern Florida.

And Buffett's long-term outlook for the United States remains rosy.

"I am enormously optimistic about the future of this country over time," Buffett said.

Economists say the recession began in December 2007.

Buffett said the shift in American consumer behavior makes it hard to predict when the economy will recover.

He said many Americans who still have the same jobs, same savings and same homes responded to the financial turmoil by changing their spending and buying habits dramatically.

"I think the American public generally is in a different mood than a year ago or two years ago or three years ago. In fact, I know they are by their buying habits," Buffett said in an interview with Fox Business News.

Also on Monday, a Taiwanese business tycoon criticized an investment Berkshire made in a Chinese battery and car maker that has been accused of stealing trade secrets.

Terry Gou, head of Taiwanese electronics giant Hon Hai Precision Industry Co. Ltd., questioned Buffett's decision to invest in China's BYD Company Ltd. in an interview with a Taiwanese newspaper.

Berkshire officials said they believe the allegations against BYD are unfounded.

Berkshire Vice Chairman Charlie Munger said the allegations made against BYD have already been litigated in a Japanese court and discredited.

Last fall, one of Berkshire's subsidiaries acquired a 9.9 percent stake in BYD, which was valued at $230 million.

At the shareholders meeting Saturday, Buffett and Munger said they believe the U.S. government has generally done the right things to help the economy recover.

Buffett and Berkshire board member Bill Gates reinforced that notion in a joint interview on Monday.

Gates, who co-founded Microsoft, said the $700 billion Troubled Asset Relief Program Congress passed last fall may have been flawed because its designers didn't predict how negative factors would work together, but it was necessary.

"It's not going to be perfect, but they've been doing the right things," Gates said to Fox Business.

"There wasn't anybody to count on except for government in late September."

Gates said he enjoys calling Buffett and talking about what's going on in the economy because of all the turmoil.

Buffett's company did have a rough year in 2008, but Berkshire still beat the S&P 500 index that Buffett measures his performance against.

Berkshire's Class A stock lost 32 percent in 2008, and Berkshire's book value - assets minus liabilities - declined 9.6 percent to $70,530 per share.

That was the biggest drop in book value under Buffett and only the second time its book value has declined.

The Standard & Poor's 500 index fell 37 percent in 2008.

Berkshire reported a 2008 profit of $4.99 billion, or $3,224 per Class A share.

That was down 62 percent from the previous year, but better than many companies. Berkshire plans to release its first-quarter results on Friday afternoon.

* Its diff to predict the buying behaviour of the consumers after a fall in the economy. I would said this is where when ppl don make mistake they wont learn, so make as much mistake as u can as long as u don repeat the mistakes. Same goes with Malaysia stock market, have a quota for yourself and give yourself the guts to buy the stock that you had analysed. If there is a mistake on yr analyst on that stock and you ended up losing money, jz make sure you wont repeat that mistake again.

Is Yeo Hiap Seng getting Coca-cola franchise or otherwise?

By Biz Times

Yeo Hiap Seng plans to ride on the opportunity in the isotonic and carbonated drinks, while defending its strong lead in the non-carbonated Asian drinks segment

BEVERAGE maker Yeo Hiap Seng (Malaysia) Bhd (4642) said the "separation" next year between Coca-Cola and Fraser & Neave Holdings Bhd (F&N), a rival, will lead to a major industry shake-up.

"It will usher in a new paradigm, it's a wake-up call to many of us. There'll be new winners and losers," said Owen Ow, managing director of the homegrown company famous for its Yeo's brand of drinks and canned food.

He declined to say if it is eyeing the Coca-Cola franchise once the soft drink giant's distribution contract with F&N ends early next year, nor will he speculate if the deal is up for bid.

"This is extremely price sensitive information, we can't comment. It's hard to say if the franchise will be opened for bidding, the business models are changing everyday now," Ow told reporters after a shareholder meeting in Subang Jaya yesterday.
"We manage our own brands, our own destiny."

The company hopes to deliver better earnings this year, after it swung back to a net profit of RM2.2 million last year, from a net loss of RM13.6 million in 2007.

F&N announced in February that its contract with The Coca-Cola Company, which allows it to distribute Coke and Sprite here, will expire next January after a 74-year union. The development was a major surprise and has caused a stir among the industry.

To help make up the loss, F&N said it has 50 new ready-to-drink products that it can launch by next year, aiming straight at the Asian soft drinks and tea segments - a stronghold of Yeo's.

Yeo's plans to ride on the opportunity in the isotonic and carbonated drinks, while defending its strong lead in the non-carbonated Asian drinks segment. Yeo's is well ahead of competitors in soya drink, tea, and "cooling" beverage segments, Ow said.

"We have an isotonic drink in Singapore under the brand 'H2O', which has a 20 per cent market there. It's an opportunity to address this market once F&N can no longer leverage on a big brand like Coca-Cola," Ow said. F&N's 100PLUS is almost synonymous with isotonic drink.

Yeo's will also revive its carbonated drinks segment under little-known brand "Freedom", which has a range of cola and fruit-flavoured drinks like orange, sarsi and pomelo.

Apart from beverage, it wants to grab a bigger share of the RM200 million market for sauces, of which it has a negligible presence. There is also a plan to enter the halal food market in Indonesia, Ow said, after it successfully ventured into that country.

*With F&N no longer have the rights to distribute Coca cola and sprite, someone has to take up the franchise. If not, we wont have Coca cola drinks in Malaysia. So let's do some analysis on which company would be able to get the franchise? Yeo Hiap Seng is hinting something? Perhaps, you guys have to do some homework and buy the share of Yeo Hiap? hehe..