Petrol Prices increase in Malaysia

By Star Biz

The Malaysian Institute of Economic Research (Mier) says there is a possibility of a 30 to 40 sen increase in the price of petrol after the general elections due to the rising cost of subsidising fuel.

So far this year, Petroliam Nasional Bhd had to cough up about RM35bil in petroleum and gas subsidies.

The Government last raised prices at the pump in early 2006, when it was raised by 30 sen to RM1.92 per litre, at a time when crude oil was trading at US$60 a barrel. The crude oil price surpassed US$99 per barrel in overnight electronic trading on the Nymex recently.

Mier executive director Professor Datuk Dr Mohamed Ariff Abdul Kareem said the Government should cut the subsidies sooner rather than later due to the high cost.

“The amount to be cut will be up to the Government and it will most likely happen after the elections,” he told reporters on the sidelines of the National Economic Outlook Conference 2008/2009 yesterday.

Ariff said consumers would be comfortable with a hike of up to 40 sen.

Inflation, which might reach 3% next year on the back of fuel, toll and electricity tariff increases, might be dampened by an increase in revenue and a stronger ringgit, he said.

“With higher revenue, the Government may not pass on the entire burden,” he said, adding that the US dollar was expected to hit RM3 or lower next year, partly due to the diversification of foreign exchange reserves by China and the Middle East.

Ariff said that next year would see a slower growth rate for the global economy due to residue problems from the US subprime crisis and high crude oil prices but it would pick up again in 2009.

“We’ll see a rebalancing of the global economy in 2008 while growth in 2009 will correspond to 2007,” he said, adding that the Government’s target of 6% gross domestic product (GDP) growth next year was too high given the circumstances.

Mier had estimated this year’s GDP growth at 5.7% and for 2008, 5.4%.

Ariff said the targeted growth rate of 5.8% during the Ninth Malaysia Plan implementation period was a realistic target compared with the potential growth rate of 6.5% for the country.

Is happening again and is coming to us very soon! When will inflation happen to our salary or bonus?

'Money back' if your flight is delayed

By Business Times

AIRASIA Bhd will soon start refunding passengers for delayed flights.

The airline's chief executive officer Datuk Tony Fernandes said giving refunds for delays was part of AirAsia's plan to improve the low-cost airline's service.

"If we're late and we cause you inconvenience, we'll give you your money back," Fernandes said, adding that the airline hopes to implement this within the next two months.

Fernandes said that AirAsia is currently working out the mechanics to ensure the programme is not abused.

Airline executives, however, said the plan was to refund passengers who were delayed at least three hours or more.

Once implemented, AirAsia would be the first airline in Asia to do this.

"We're showing that we put our money where our mouth is ... that we are confident about our product and are constantly innovating it," he told reporters after an event yesterday.

He said the low-cost airline is able to do this now because of its new Airbus fleet "which is making a lot of difference".

Another service enhancement in the pipeline is a web product, through which customers will be able to order a wide variety of food that they can collect at the terminal and take on board the plane, Fernandes said.

He said AirAsia is currently negotiating with airport operator Malaysia Airports Holdings Bhd (MAHB) to take over an outlet at the low-cost terminal where customers can collect their food. It also plans to start a food trolley service.

On a different matter, he said AirAsia has requested for low-cost terminals to be set up in Kuching and Penang.

"We've talked to MAHB and I think their idea is not to build a separate terminal, but to try and build an extension - a wing - from the existing terminal," he said.

AirAsia would have no objections to this as long as the charges are low and the operations are simple, he added.

Fernandes, who is eyeing new routes in China, also hopes to be able to start a second flight to Shenzen by October given the overwhelming demand.

Public Mutual is "Most Outstanding Islamic Fund Manager"

By The Edge

Public Bank Bhd's unit, Public Mutual won the Most Outstanding Islamic Fund Manager award at the recent Kuala Lumpur Islamic Finance Forum's Islamic Finance Awards 2007 ceremony.

The award was presented by Second FInance Minister Tan Sri Nor Mohamed Yakcop Public Mutual’s chairman Tan Sri Dr Teh Hong Piow during the award presentation ceremony on Nov 20, 2007 at the Nikko Hotel Kuala Lumpur.

Public Mutual said on Nov 26 the objective of the awards was to honour and appreciate efforts of the institutions and organisations that have given significant contribution in developing the industry.

"Winning this award not only reinforces our leadership position in the industry but also affirms our commitment to excellence. This achievement is a testimony of Public Mutual’s collective dedication and commitment to continuously deliver value to our investors,” Teh said.

The Kuala Lumpur Islamic Finance Forum was organised by the Centre for Research and Training together with Halal Industry Development Corporation (HDC), and in collaboration with Dow Jones Islamic Market Indexes , the International Institute of Islamic Finance and Messrs Hisham, Sobri & Kadir.

Public Mutual said the Islamic fund industry in Malaysia had grown rapidly and remained highly competitive. From 2001 to Oct 31, 2007, Public Mutual Islamic funds’ total net asset value has grown by 2500% from RM300 million in 2001 to RM7.9 billion as at end October 2007.

The industry’s Islamic funds total net asset value grew by 615% from RM2.0 billion to RM14.3 billion over the same period. Public Mutual is the leader in the private Islamic fund industry with a market share of more than 55% as at end October 2007.

Public Mutual currently manages 54 funds for more than 1.35 million accountholders. As at Oct 31, 2007, the total net asset value of the funds managed by the company was RM26.7 billion.

Been considering the Public Ittikal Fund. What about you guys? Do some research..!!

Ringgit to strengthen next week

By BERNAMA

The ringgit is likely to rise against the US dollar next week amid concerns over the US subprime crisis and volatility in global stock markets, dealers said.

One of the dealers said the ringgit is likely to appreciate, moving between 3.33 and 3.35 to the dollar next week on negative news over the US market which have caused investors to remain on the sidelines.

“Investors may want to gain more profits from the dollar’s weakness because they are still not confident about the US situation,” she said.

According to the dealer, the local currency market is expected to remain positive on the possibility that the US Federal Reserve will cut interest rates again next month.

“A further interest rate cut may save the US economy but it will also further weaken its currency as investors turn to higher yielding instruments. So, it’s good news for the ringgit,” she said.

Another dealer said the movement of the local unit will also depend on the local stock market performance as funds coming mostly from foreigners will impact the ringgit.

On a week-to-week basis, the ringgit was firmer against US dollar at 3.3580/3630 compared with 3.3770/3800 last Friday.

The local unit depreciated against the Singapore dollar at 2.3282/3333 from last Friday’s close of 2.3245/3283 and also declined against the Japanese yen at 3.1084/1136 from 3.0644/0685.

The ringgit was weaker against the British pound at 6.9326/9439 from 6.8965/9033 and also against the euro at 4.9907/9988 from 4.9297/9355 previously.

Privatisation of Magnum gets investors fired up

By the Star Biz

Multi-Purpose Holdings Bhd's (MPHB) proposal to take its 55.54% subsidiary Magnum Corp Bhd private has gotten the investing community crunching the numbers to hazard a guess on how attractive the deal will be for the diversified group.

While details on the deal are still being ironed out, analysts are especially excited about MPHB's cash position on completion of the exercise.

“It is an interesting capital repayment exercise,” an analyst told StarBiz.

Under the proposed deal, MPHB together with private equity firm CVC Asia Pacific Ltd will form a special purpose vehicle (SPV) to take Magnum private at RM3.45 per share.

MPHB and CVC will hold 51% and 49% equity interest respectively in the SPV that will own Magnum. The SPV is expected to pay out some RM4.9bil to take Magnum private - RM2.7bil to MPHB and the remaining RM2.2bil to other shareholders.

The proposed privatisation exercise, valued at RM4.9bil, will be funded by interest-free loans provided by the SPV and borrowings by Magnum.

The deal would see Magnum becoming a wholly owned subsidiary of MPHB and then be delisted from the stock exchange. Currently, of MPHB's 55.54% stake in Magnum, 6% is for shares held for MPHB's exchangeable bonds, which can be exchanged for Magnum shares at RM3.04 per share.

Analysts said since the conversion price is lower than the offer price of RM3.45, bondholders who converted the bonds into Magnum shares and accepted the offer stood to profit from the price difference.

In an interview with StarBiz, MPHB managing director Datuk Surin Upatkoon said at the current stage, the idea was to implement the selective capital reduction exercise.

“When we hold 100% in Magnum, we will sell the company to the SPV. That part of the deal is subject to final negotiations; this is as far as we can say, at this stage,” he said, adding that the company would “leave it” to minority shareholders to decide.

He said at RM3.45, the numbers forecast operator was valued at a price to earnings ratio of 21.5 times and book value of 4.2 times based on its balance sheet as of Sept 30.

“We want to do a fair deal and are doing it via two steps. First, we have to take Magnum private, then CVC will come into play.''

Upatkoon said the takeover offer provided an opportunity for investors to cash out as the gaming industry was entering a mature cycle. “If not for a partner, we would probably not privatise. It involves a lot of money,” he said.

“We have to borrow RM2.2bil to pay (to privatise) and displace the minority shareholders. It will be a combination of capital and debts but we are not ready to discuss this as we are still negotiating the terms with CVC.

“CVC will have to put in some money but it is going directly into the SPV and not to MPHB,” Upatkoon said.

“Basically, there will be money flowing into MPHB but how much will depend on the levels of equity and borrowings,” he added.

Analysts said if Magnum opted for a debt to equity ratio of 50:50, and with fresh capital from CVC, MPHB might be able to get a capital repayment of about RM1bil from Magnum.

On the valuation of MPHB after the exercise, Upatkoon said: “Everything will look much better. We will have direct cash flow. The most immediate is the RM300mil in exchangeable bonds if shareholders choose to convert those bonds.”

“Obviously, to do this deal, there must be some upside for MPHB,” he added.

Upatkoon said over the past five years, the company had been looking at ways to re-engineer and restructure operations to “further strengthen” its earnings and to ensure growth.

“This is going to be our best year yet. Just look at our results for the nine months just ended.''

For the nine months ended Sept 30, the company made a net profit of RM339mil on sales of RM2.4bil compared with a net profit of RM104.4mil on revenue of RM160.5mil for the same period last year.

Investors to take profit on Petronas Gas

BY The Edge Daily

KENANGA Investment Bank Research advises investors to take profit on Petronas Gas Bhd as all potential re-rating catalysts have been factored into the share price and investors are only exposed to downside risk.

The research house maintained its target price of RM9.70 but downgraded its recommendation from Hold to Sell.

“The 20 times price-to-earnings ratio (PER) valuations are expensive for Petronas Gas when its earnings growth is not expected to increase in the future,” it said.

It said Petronas Gas’ net profit of RM539.4 million for the first half ended Sept 30, 2007 was in line with expectations, comprising 51% of its full financial year forecast (FY ending March 31, 2008) but only 46% of consensus estimates.

Revenue and pre-tax profit grew by 6% and 22% but net profit declined by 2% due to higher effective tax rate as almost all its tax allowances were utilised in FY07.

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Shell and Citibank credit card (Malaysia)

Brand new credit cards has been launched with the partnership of Citibank and Shell just for consumers to use it for petrol purchases, but of course you can still use it for other purchases!

What's the benefits of owing this card?
Simple, it is helping consumers cut down on fuel costs and will offer rebates of up to 5% on fuel purchases at Shell stations and up to 1.5% for other purchases at Shell and selected merchant outlets such as Jusco, Giant and etc.

“To help lessen the burden of Malaysian motorists, Citibank and Shell have came up with a real way to save on fuel costs in the form of the Shell Citibank credit card” said Citibank country business manager Michellina Triwardhany at the launch of the card yesterday.

What is more to offer?
During the promotional period customers can get up to 10% rebate for each litre of Shell fuel as well as up to 3% back from all other purchases at any outlet. What are you waiting for?













Interested? Just one call away it will lessen your burden on today's economy inflation.
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How Richard Branson

Mr.Branson has incorporated five criteria when starting up a business or enter a joint venture. A product or service cannot hope to bare the Virgin label unless it meets these conditions:

• It must have high quality
• It must be innovative
• It must provide god value for the money
• It must be challenge to existing alternatives
• It must have sense of fun

With these core value, Mr.Branson has entered one business after another in which he perceived a customer set that was being undeserved by a fat and complacent dominant player.

"There's no point going into a business unless you shake up the whole industry"

by Richard Branson

There are many gem which can be found from his interview, shall post it later.

Grand Openning Ceremony

This blog will features investment articles from various business groups and investor's experience in the stock market, Unit trust, Mutual Funds, Property and many interesting new product or services in the market! To have starter let's have some word of advise:

"Time is our most precious assets, we should invest it wisely"

by Michael Levy