Thursday, July 16, 2009

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.

Monday, July 13, 2009

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?

Thursday, June 18, 2009

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..

Tuesday, June 09, 2009

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?

Monday, June 01, 2009

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!

Thursday, May 21, 2009

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?

Tuesday, May 05, 2009

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.

Thursday, April 23, 2009

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..

Monday, April 20, 2009

Making money through undervalue stocks

By The Star

THERE is now a widely-held view that economic growth levels in Asia bottomed in the first quarter, with growth rising a faster clip from the second quarter.

That would mean economic data and company results that are being released for the first quarter would still be weak, with losses even for some of the companies. Most of their profits are now expected to improve, or be back in the black, in the current second quarter.

While the Chinese were convinced since January when their markets started to surge, there is conviction of this only now in the rest of Asia.

For this reason, it is only in the last one month that the other Asian markets, including Malaysia’s, made a swift, speculative rise.

There was a clear speculative tone in the run as many of the stocks that surged were penny stocks or those of companies that made losses.

Besides speculative trading by punters, there is some rhyme and reason for the prices of bombed out stocks to surface. While critics may say that most of the small cap companies are not worth much, prices of their stocks are now viewed as being been suppressed too far.

It can be argued a link house in Petaling Jaya may be worth RM500,000 and that a similar house in the distant suburbs is worth less but it should not be priced at just RM50,000 either, to use an analogy of property.

The announcement on Friday of a proposal to take small cap company SRII Bhd private shows its major shareholders know the stock is under-valued.

The exercise to take the company private will cost RM35mil cash but the company itself has RM40mil cash. So, it’s a straight-forward exercise that will be self-financed. SRII is a supplier of fire-fighting equipment.

All listed property stocks are similarly under-valued relative to their assets, and properties tend to regain their values over time. It’s sometimes speculated they will be taken private, but the critical question that must be answered is how will the exercise be funded.

Last week, as SRII announced the offer for its minority shareholders, Johor Corp made an offer of RM1.55 cash a share for the rest of the shares in its subsidiary Johor Land Bhd.

Johor Land is not cash-rich but it has a large land bank such that its net assets amount to RM5.40 a share. As a large state agency, Johor Corp will not have a problem financing the full takeover.

For most other owners, bank financing for takeover exercises is not available at this time. Hence, to take a company private, there are three criteria of which at least one must be fulfilled.
  1. The company must have cash to self-finance the exercise;
  2. Some of its properties can be pre-sold to finance to the exercise;
  3. It must have a very large or cash-rich offerer.
Like SRII, Plenitude Bhd is an obvious case of a company that can easily be taken private. The company held cash of RM198mil at the end of last year and received RM64mil cash in February from the sale of a piece of land. Together, that amounts to RM262mil cash which coincidentally equalled its total market value.

It would cost a lot less than that since three substantial shareholders already own 72% of Plenitude. That leaves just 28% to be bought to own the entire company. They would then fully own a company with cash and about RM300mil worth of property assets.

Glomac Bhd is a company that some analysts believe might be taken private. Like many property stocks, its share price has dropped to 62 sen against net assets of RM1.85 a share.

It does not have net cash though, and would need to lock in sales of some properties to finance a full takeover.

Inch Kenneth Kajang Rubber plc is in a similar situation, with its share price at 25 sen against net assets of RM1.23 a share, and no net cash.

Its assets, other than properties, are well in excess of its bank borrowings of RM20mil. In addition, it has two large pieces of plantation land which are now close to town due to urban sprawl.

It has expressed an intention to sell 600 acres in Bangi, which it said could fetch RM350mil. If it were willing to lower that to RM200mil, it could quickly find a buyer among the listed property companies. That would still be twice the company’s total market value of RM107mil.

In addition, Inch Kenneth owns 350 acres in Kajang, which it said is planned for a township project with a gross development value of RM1.2bil.

Last week, two brokerages issued reports on the property sector, pointing out it encompasses high beta (volatile) stocks. It makes sense that as property stocks were sold down heavily ahead of a global recession, they’ve a lot of ground to regain in an economic recovery.

The window for taking property companies private, however, is closing fast as the stock market re-rates stocks towards higher price-to-book values and price/earnings ratios. The exercises to take private IOI Properties Bhd and Johor Land was just in time. For the other property companies, it’s now or never.

*Many public companies are trying to privatise as all their stock are under value. So is there any gd performing company that do not have the sufficient cash/fund to take themself private? Or are they any companies that are planning to privatise? Its time to do some research and earn some quick money!

Tuesday, April 07, 2009

Brand New Ikea store in Ampang or Cheras?

By Biz Times

Swedish home furnishing company Ikea has set its sights on densely populated Cheras and Ampang in Kuala Lumpur for a new store.

The 13-year old Ikea Malaysia runs an outlet in Mutiara Damansara, Selangor, and has confirmed the opening of a second in Johor.

General manager Joseph Lau told Business Times that it was scouting for suitable land that will offer ample parking space.

"We need a second store in the Klang Valley. We are looking at the Cheras and Ampang corridor," Lau said.

It is looking at land not less than 6ha - roughly the size of eight and a half football fields - next to a highway.
Since it sells bulky items and thrives on the do-it-yourself model to keep prices low, size does matter for this retailer. It has to provide ample parking for customers to take their purchases home.

"Our Ikea now is on 5.3ha, and that is too small. We will need a larger piece of land. The minimum we want is 6ha. Our bottleneck now is the carpark. There is insufficient parking," Lau said of its existing store.

Lau, who said that the company was eyeing land with room for future expansion, added that it was too premature to say how much it would invest.

One property consultant said that land in Cheras and Ampang could cost about RM150 per sq ft if located next to the main road. This means that Ikea may spend some RM100 million for a 6ha site.

On the size of the land it hopes to acquire, Lau said: "The bigger the better. We do this everywhere in the world."

Lau said that he had received numerous proposals from landowners, many of which were not appealing. While Ikea was looking at a standalone store, the proposals were for it to occupy a portion of a mall as a tenant.

"If we have the land, it should be ready in three years," Lau said of the earliest possible date to open the store.

The second outlet in the Klang Valley is expected to equal the existing store's 360,000 sq ft, or a third of the retail space in Suria KLCC.

On its outlet in Desa Tebrau, Johor, Lau said the Ikano Group is yet to obtain possession of the land it bought from Plenitude for RM64 million.

Various issues on the project have to be resolved, including the design, before a likely operational date can be given.

It is buying 14.97ha to set up an Ikea outlet slightly smaller than that in Mutiara Damasara.

Ikea first opened at the 1Utama shopping mall, but moved to its own site in Mutiara Damansara in 2003.

It was reported that it invested RM180 million in the store and land. An additional RM120 million was pumped into the adjoining building of 45,000 sq ft where the Ikano Power Centre was set up.

Lau said that Ikea's next likely location was Penang, after Johor and a second one in the Klang Valley.

* So felles, its time to predict where is Ikea goin to open the new store in Ampang/Cheras? Property should shoot well ard them! hehe..

Friday, April 03, 2009

Air asia X raising fund again.

By the star

AirAsia X is looking at a capital-raising exercise via an initial public offering (IPO) or a private placement to raise funds for future aircraft purchases.

The airline wants to add the Airbus A350 XWB wide-body aircraft to its fleet but any firm order will only be made after the manufacturer is able to firm up delivery dates.

“This year is a watershed year for us in terms of profitability. Our equity value has increased and so have our intangibles. This opens up avenues for equity funding and, in the long term, an IPO or even a private placement is possible,” chief executive officer Azran Osman-Rani told StarBiz.

“It will be when the equity markets turn around and this could be in 2010. Our equity value gives us more capital-raising capabilities and our audited results will have a very compelling story to tell,’’ he said.

It is learnt that investment bankers are already crunching numbers for the airline’s IPO but Azran laughed it off when asked to elaborate.

The last time AirAsia X placed out shares was at the end of 2007/early 2008, to British billionaire Sir Richard Branson, Japanese leasing firm Orix Corp and Bahrain-based Manara Consortium, to raise funds to start up its operations.

AirAsia X is confident of turning in net profit of RM150mil to RM200mil for the current year ending Dec 31 on revenue of about RM1bil. With this revenue, Azran said, the company would join the ranks of many firms making up the KL Composite Index.

The income will come mainly from its mature routes, such as Gold Coast and Hangzhou, and its profit margins are 20% to 30%. Its cost is low at 2.8 US cents per available seat kilometre and, despite the global slowdown and a slump in air travel, Azran said the airline enjoyed load factors of 75% for the first three months of 2009. For 2008, it was 77%.

Its recently launched London route will only be profitable in a year.

To order new aircraft requires a deposit. “We would be in a position next year (for that). We will have more capital for the deposit,’’ Azran said, adding that he was looking at 25 to 50 A350s as “our’s is an even bigger story going forward’’ and expansion of long and medium-haul routes would be its thrust going forward.

Since flying to London, it has had several US airports knocking on its doors. For Azran, it will be either New York or Los Angeles. The airline would be ready “as early as July’’ to ply the transatlantic route, especially New York, he said, provided it obtained the rights. If not, it should be later this year or 2010.

That should come with a stopover in London but a direct flight is Azran’s dream, which can only be achieved with a long-range aircraft, thus the need for the A350.

A highly-efficient, medium-capacity and long-range aircraft, the A350 is expected to take to the air in 2013. Thus far, Airbus has received over 400 orders.

“We are in extensive discussions with the manufacturer but it is no point placing an order now as the maker cannot firm the delivery dates. We want to see sufficient development to the A350 assembly line, then there will be certainty to commit,’’ he said.

The aircraft will be used to ply the American and African continents, Russia and eastern Europe. The existing A330 and A340 will be used for new routes to Sydney, the Middle East and part of its expansion into Asia.

“This (order of 25 to 50 aircraft) is nothing, look at what other airlines, such as Qatar Airways, are ordering – 100 planes at one go! By going into long-haul markets, AirAsia X will be competing with the bigger boys in the industry and it needs a fleet size to support that route expansion,’’ Azran said.

* With many China's route they are tapping into and with help from our Malaysia transport ministry tapping into India's market. Do u think Air Asia X will make it? What's the PEST or SWOT analysis of Air Asia X? If is viable, i think many ppl will be queuing up to get a share of Air Asia X.

Tuesday, March 24, 2009

Magna Prima is buying the Lai Meng school's land

By Biz Times

Magna Prima plans to build commercial and residential properties worth RM1.3 billion on the land on which the Lai Meng Primary School and Lai Meng Kindergarten sits. Magna Prima Bhd (7617) appears to have struck gold as it is buying a piece of prime land in Jalan Ampang, Kuala Lumpur, a stone's throw from the Petronas Twin Towers.

It will spend RM148.2 million to buy the land on which the 44-year-old Lai Meng Primary School and Lai Meng Kindergarten currently sits.

In its place, the company plans to build commercial and residential properties worth some RM1.3 billion, Magna Prima told Bursa Malaysia in a statement.

This would probably be the third time that a school in the city centre is giving way for redevelopment. In 2000, the Bukit Bintang Girls School was moved to make way for the Pavilion Kuala Lumpur, a shopping mall.

Eastern & Oriental Bhd and the Lion Group relocated St. Mary's School in Jalan Tengah/Jalan P. Ramlee to Selayang and work on the new project has started.

"The proposed acquisition also creates an opportunity for the group to venture into the high-end property market, seeing that land within the KLCC area available for development is scarce," Magna Prima said in its statement.

Magna Prima will buy the existing land of 10,587.5 sq m from the Lai Meng Girls School Association.

The purchase price, which is a quarter less than its market value, will be paid in cash and funded with internal funds, bank loans or through a joint venture with partners.

As part of the deal, Magna Prima will give another piece of land double the size of the existing property for the relocation of Lai Meng. The new land is in Bukit Jalil.

Magna Prima will design, arrange and organise the construction of the new school. However, it is unclear which party will bear the construction cost.

Its project in Jalan Ampang will only start when the new school is completed.

The development has an estimated gross floor area of 1.2 million sq ft and an estimated gross development value of up to RM1.3 billion.

The project, due to start in 2012, is scheduled for completion in 2015.

*Does that means there will be a new Lai Meng school in Bukit Jalil? Hurray, any more land for property in Bukit Jalil?

Wednesday, March 18, 2009

Amanah Saham Malaysia (ASM) declared dividen for 2008 in 2009

By The Star

Amanah Saham Malaysia (ASM) has announced an income distribution of 6.25 sen per unit for the financial year ending March 31, the lowest since the fund’s inception in 2000.

Last year, ASM paid 7.8 sen per unit in income distribution. The income distribution involved a total payout of RM407.58mil, said fund manager Permodalan Nasional Bhd (PNB) chairman Tun Ahmad Sarji Abdul Hamid.

“The payment will benefit a total of 402,513 unitholders who subscribe to 7.21 billion ASM units,” he told a press conference yesterday.

PNB president and group chief executive Tan Sri Hamad Kama Piah Che Othman said that the fund had the capacity to declare an income distribution of 7.92 sen per unit, but the group decided to reserve the income for the next financial year.

“We feel that 6.25 sen per unit is already in line with the market at this condition,” he said.

He attributed the diminished performance to the global economic downturn and the fund’s 25% increase in the number of units in circulation that had resulted in dividend dilution.

Declining to disclose PNB’s investment strategy going forward, Hamad said PNB’s objective remained creating long-term and sustainable returns for shareholders.

“We are a long-term player; we are looking for opportunity to buy more shares (with good fundamentals and are reasonably priced) that are good for the long term,” he said, adding that PNB was looking to issue more new products this year. He said ASM currently had RM2.1bil in cash.

ASM is a fixed-priced equity-income fund aimed at providing unitholders with a long-term investment opportunity by generating regular and competitive returns through a diversified portfolio of investments.

Up to last Friday, ASM had recorded gross income of RM440.73mil.

Dividend income from investments contributed RM219.33mil (49.76%), profit from the sale of shares generated RM137.84mil (31.28%) and the remaining RM83.56mil (18.96%) came from investments in short-term instruments.

The income distribution was based on the average monthly minimum balance held throughout ASM’s financial year.

Tuesday, March 17, 2009

Weak SE Asia property stocks 2009

By Biz Times
Malaysian property stocks have taken a beating and analysts warn of more pain for investors
MALAYSIAN property stocks have fallen more than 30 per cent this year due to domestic politics and inflation, but an imminent increase in interest rates is dashing any hopes of bargain hunting.

The country’s property sector has also underperformed peers across Southeast Asia, themselves hit by rising interest rates that have stemmed the flow of cheap money to finance a boom in the region’s fast-growing economies.

“If the (regional) interest rate is still going up there’s still some downside risk,” said Jason Chong, chief investment office of Kuala Lumpur-based OSK-UOB Unit Trust Management, which manages the equivalent of US$1.15 billion.

“Right now we are underweight property stocks. We want to wait until we think the interest rate (cycle) is about to turn,” said Chong.

Every central bank in Southeast Asia, with the exception of Malaysia, has hiked rates in recent months.

Malaysia’s inflation hit a 27-year high of 7.7 per cent in June and is expected to remain above 7 per cent in July and August. The Southeast Asian nation, a net exporter of petroleum, slashed fuel subsidies in June, causing a 41 per cent rise in retail gasoline prices and a 63 per cent jump in diesel prices.

Malaysian politics has also been pretty turbulent in recent months, following the ruling coalition’s worst ever performance in a general election in March, which hit local markets.

Also, higher steel and building materials costs have forced developers to put new projects on hold. Even the relaxation of foreign ownership rules and a flood of money for upscale office and residential projects in the central business district in Kuala Lumpur has failed to dispel the gloom.

Investment bank UBS said it was far from clear that falling commodity prices would feed through to lower inflation and allow central banks to pause or even cut rates and thus stimulate the region’s economies.

“It may be wrong to peg hope on the current downtrend in commodity prices sustaining and bringing inflation lower,” UBS said in a report published last week.

Malaysia’s economy is officially projected to grow 5 per cent this year, slowing from 6.3 per cent in 2007, mirroring weakness across Southeast Asia.

This week, Singapore released data showing its economy contracted at an annualised rate of 6 per cent in the second quarter, its worst performance in five years.

Its export-oriented economy is a bellwether for how a global economic slowdown will affect Asia. Prospects for Thai property stocks, viewed earlier this year as beneficiaries of a tax stimulus package, are also uncertain.


Malaysian property stocks have taken a beating and analysts warn of more pain for investors.
IOI Properties, Malaysia’s top property firm by market value, has fallen 30 per cent this year and second-ranked SP Setia has dropped about 34 per cent, underperforming a 23 per cent loss on the benchmark index.

The two stocks could see more downside based on their valuations in previous crises such as the September 2001 attacks and the 2003 SARS crisis, Credit Suisse said in a research note.
IOI Properties trades at 10.7 times 2009 earnings, which is 22-26 per cent higher than the lows recorded in 2001 and 2003, while SP Setia’s current PE of 12 times 2009 earnings is much higher than the 7 times and 8.4 times in the crisis periods, Credit Suisse said.

Property stocks in Singapore and Thailand have fared better, with CapitaLand, Southeast Asia’s largest developer by market value, falling 21 per cent this year and Thailand’s top housing company Land & Houses down just about 5 per cent.

However, the worst may not yet be over for Singapore properties.

Some analysts predict private residential prices in Singapore will fall by up to 40 per cent over the next three years after a more than 10 per cent drop this year, ending a four-year housing boom that had seen home prices jump about 30 per cent in 2007.

Goldman Sachs, Credit Suisse and Morgan Stanley have trimmed their full-year estimates for Singapore’s top developers such as CapitaLand and City Developments, with CapitaLand’s 2008 earnings estimated to more than halve to S$1.0 billion.

“We see Singapore residential developers facing a double whammy of weakening demand amid incremental negatives on the economic front and rising construction costs,” Goldman Sachs said after developers announced first-half results last month. - Reuters

Thursday, March 12, 2009

Malaysia largest import & export products in 1st quarter 2009

Malaysia's largest export statistics/contributor to the economy Jan 2009:

1st = Semiconductor devices (electrical and electronic appliances) RM13.7 billion/ 35.9%
2nd = Liquefied natural gas (LNG) RM4.2 billion/ 10.9%
3rd = Palm Oil & palm oil-based products RM3.8 billion/ 9.8%
4th = Crude Petroleum RM1.8 billion/ 4.7%
5th = Timber-based products RM1.4 billion/ 3.6%
6th = Petroleum products RM958.6 million/ 2.5%

Malaysia's largest import products/goods:

1st = Intermediate goods (raw material) RM19.9 billion/ 67.4%
2nd =
Capital goods (machinery) RM4.8 billion/16.4%
3rd = Consumption goods (final products) RM2.4 billion / 8.2%

Malaysia’s top ten trading partners were Japan, Singapore, the United States of America, the People’s Republic of China, Thailand, the Republic of Korea, the Federal Republic of Germany, the Republic of Indonesia, Hong Kong and Australia. These countries collectively contributed 71.7% or RM48.6 billion of Malaysia's total trade for January 2009.

Harvard referencing:

Source: Department of Statistics Malaysia, 2009, Preliminary Release of Malaysia External Trade Statistics January 2009, Putrajaya, Malaysia, Available from...... [Accessed 12th March 2009]

Tuesday, March 10, 2009

Critical to keep good employees during an economic downturn

By the Star
It is critical to keep employee engagement level high at all times, particularly during an economic downturn, so that an organisation can navigate a crisis and return to stability and profitability, say human resources consultants.

Hewitt Associates consultant Yap Yoke Wah said organisations that had highly engaged employees had better financial results and were more capable in building a sustainable business model.

“Our research shows that the best employers have a revenue growth of about 22% year-on-year and are still able to yield such results despite the downturn,” she told StarBiz.

Yap explained that employee engagement measured the extent to which an organisation had captured the “hearts and minds” of its people to build and sustain strong business performance.
“It goes beyond satisfaction (how much I like things here) and commitment (how much I want to be here) to engagement (how much I want to and actually do improve our business results),” she said, adding that one of the top factors driving engagement was opportunities for growth.

Meanwhile, ongoing WorkAttitudes studies by Watson Wyatt Worldwide showed a strong link between employee engagement and key business metrics such as productivity and turnover.

The studies found that highly-engaged employees are 70% more likely than low-engagement employees to exceed performance expectations. They miss 27% fewer days of work due to illness and they represent very low turnover risk.

Talent2 International Ltd director for South Asia Leigh Howard concurred that high levels of employee engagement correlate to improved performance in areas such as retention, turnover, productivity, customer service and loyalty.

Howard said employee engagement ranked well in Malaysia but predicted that its level would be tested as people begin to feel less secure about their jobs.

“As employees begin to feel there are less developmental opportunities at their workplace and are unsure about their long-term future, their sense of commitment and engagement will tend to fade,” he said.

Hence, he said it was not an option to ignore employee engagement during an economic slowdown.

“Don’t hide bad news from employees but instead be open and honest to eliminate gossip and speculation.

“Utilise your line managers in this instance to work more closely with their teams and create a sense of common purpose in their daily work lives,” he added.
Meanwhile, Yap agreed that the level of engagement among the best employers in Malaysia was still fairly high and had not gone through any drastic changes, despite the current economic environment.

“However, globally we are seeing a dip in engagement,” she said.

Watson Wyatt’s studies reiterated that economic uncertainties could potentially weaken engagement and it was crucial for employers to engage their employees even when business had slowed down.

“Companies in Malaysia must create a culture of continuous engagement built on strong strategic direction and leadership, intense customer focus as well as transparent and equitable compensation packages,” it said in a report on its findings.

It added that companies that excel in these areas were likely to make it through the current crisis and deliver superior results in the years ahead.

Tuesday, March 03, 2009

Kumpulan Sentiasa Cemerlang (KSC) says it..

By Biz Times

MALAYSIAN fund manager KSC is bullish on consumer stocks such as tobacco company BAT Malaysia and utilities such as YTL Power
due to the dividends they pay, but is steering clear of state-controlled power firm Tenaga Nasional.

Choong Khuat Hock, director of research at Kumpulan Sentiasa Cemerlang (KSC), which manages about US$150 million, told Reuters in an interview the deepening economic crisis boosted the allure of dividend-paying stocks as safe-haven plays.

Food maker Nestle Malaysia, mobile phone company and independent power producer (IPP) Tanjong were also expected to be resilient in a worsening economy, said Choong. But it was a different story with Tenaga, he said.

“The problem for Tenaga is that industrial production and electricity demand have dropped quite a bit. The company is suffering from a fall in electricity demand,” said Choong.

Tenaga, which supplies two-thirds of the country’s electricity needs, must purchase all capacity produced by IPPs regardless of its requirement.

The company swung to a net loss in the first quarter and warned that its financial performance would worsen due to ballooning capacity payments to IPPs.


KSC currently owns 106,000 shares of Tanjong and 217,000 shares of YTL Corp, according to Thomson One Analytics.

YTL Corp is the parent of YTL Power. Choong declined to comment on what stocks the company is buying or selling.

Malaysian companies finished their reporting season for the October-December quarter last week, where many companies such as No. 2 palm oil producer IOI and builder WCT reported a big drop in net profits due to a surge in customer defaults, provisions and investment writedowns.

JPMorgan said in a report on the quarterly results from 44 Malaysian companies that 39 per cent had reported earnings below expectations.

“The world economy is getting worse, Malaysia is not immune. Going forward, there will be worries about further earnings downgrades,” said Choong.

The fund manager said he does not expect any major surprises from the second stimulus package to be unveiled by Malaysia’s government on March 10.

The second stimulus package is widely expected to be larger than the first one which was put in place last November and worth about US$2 billion.

“I guess they will pump prime, spend more money on infrastructure and they will presumably relax or open up the services sector as well.

But then there is only so much they can do given that our budget deficit is already quite high,” said Choong. - Reuters

Monday, March 02, 2009

Malaysia's top 10/20 companies performed 2008

Last week we saw the article by the star stating corporate's economic reports to be due at the end of Feb 2009. This week we are able to see the chart provided by Biz Times on Malaysia's top 20 companies performed in 2008.

* Source by Business's Times

By Biz Times's Goh Thean Eu

Most companies reported worse-than-expected numbers, only six of the top 20 posted better quarterly results - PPB Group, Hong Leong Bank Bhd, BAT (Malaysia), RHB Capital, Public Bank and Malayan Banking.

MOST Malaysian companies reported weak financial numbers recently, highlighting the many ways a global economic downturn can hit earnings.

Apart from sluggish demand from consumers abroad, currency movements are also becoming a more important reason for lower profits.

"Foreign exchange (forex) losses are certainly one of the main themes for most companies in this reporting season. However, at the end of the day, it is just accounting losses," ECM Libra Investment Research head Ching Weng Jin told Business Times.

Companies must deal with the effects of a stronger or weaker foreign currency in their accounts immediately, due to accounting rules. However, they are unrealised, which means that no payments were made and it won't change a company's cash position. Big companies, mainly those with international presence or have borrowed in the US currency, were badly hit in the final quarter of 2008.

A weaker ringgit against some major currencies has made debt payments more expensive for these companies.

The quarter's worst two performers, Tenaga Nasional Bhd and TM International Bhd, were mainly hit by a weak ringgit. IOI Corp Bhd was partly hit by currency losses too. But analysts said investors should pay attention to a company's business.

"The main thing for us is still the company's operations, because a company which suffered forex losses last year could bounce back this year as soon as the economy recovers and ringgit strengthens," Ching said.

Still, most companies reported worse-than-expected numbers.

"Overall, companies performance were slightly below my expectations. So many rapid developments the effects of which were difficult to quantify," said Jupiter Securities Sdn Bhd's head of research Pong Teng Siew.

Only six of the top 20 companies posted better quarterly results, they include, PPB Group, Hong Leong Bank Bhd, British American Tobacco (Malaysia) Bhd, RHB Capital Bhd, Public Bank Bhd and Malayan Banking Bhd.

"The banks did much better than I had expected," said Pong.

This year, analysts expect earnings to fall further, mainly due to a weaker economy, with forex translation continuing to hurt.

"(Currency) volatility is going to be quite evident this year, with economies still trying to find their footing in the current environment. So reported earnings could be affected somewhat," Ching explained.

Analysts added that corporate earnings may also be hit due to higher provisions, money set aside to cover potential losses, and write- downs.

"Any strong sets of earnings numbers would probably be lost in a market like this where sentiment is poor and interest is weak. So, it may be a good time for companies to take all these hits now," said an analyst who declined to be named.

Friday, February 27, 2009

US pressure on China to review exchange rate would risk of destabilising Asia

By Financial Times
Washington’s pressure on China to adjust its exchange rate could destabilise Asia, the governor of the Malaysian central bank warned on Wednesday.

Zeti Akhtar Aziz said global imbalances built up over the past 10 years could not be rectified in the space of a few months. The US has run up a huge current account deficit while Asian economies are mostly in surplus.

“If the US puts pressure on China to readjust its exchange rate too much ... it could lead to destabilising consequences for Asian economies ... You cannot expect the unwinding of global imbalances in the short term,” she told the Financial Times.

Ms Zeti fears that if the renminbi quickly appreciated against the dollar it would reduce Chinese demand for goods from other Asian countries, which rely heavily on exports to the region’s biggest economy.

The new US administration has stepped up pressure on Beijing to let its currency appreciate to make US exports more competitive, thereby boosting growth. Measured against the dollar, the renminbi gained about 20 per cent in the three years following its revaluation in July 2005. It has been treading water against the dollar since then.

Ms Zeti said most Asian economies were in good shape to cope with the global financial crisis because they had built up foreign currency reserves and were not heavily indebted. Unlike countries in eastern Europe, which have turned to the International Monetary Fund for financial support, most Asian economies do not need to raise money.

“We are not so vulnerable, in that we expect to have surpluses going into this year and next,” she said.

Ms Zeti admitted, however, that Malaysia and other small Asian countries would suffer this year as exports plunged. The latest IMF forecast shows output among newly industrialised Asian countries contracting by 3.9 per cent this year. In Malaysia, exports fell 14.9 per cent in December, a big setback as exports are worth 100 per cent of gross domestic product.

This week Malaysia cut its key interest rate for a third time, by half a point to 2 per cent. The reduction is the latest sign of concern that the country may slip into recession. Ms Zeti said growth this year was expected to be flat.

Wednesday, February 25, 2009

Malaysia outsourcing position could be in jeopardy (Call center Malaysia)

By Biz Times

MALAYSIA'S position as a preferred outsourcing hub could be in jeopardy as investors turn to cheaper locations during these tough economic times, an industry official said.

"While we may fare well with infrastructure, political stability, human capital and financial security, the million dollar question is still 'Are we cost-attractive?'," Customer Relationship Management and Contact Centre Association of Malaysia (CCAM) president Leo Ariyanayakam said.

He said since January this year, the industry has seen global clients looking for ways to cut costs.
"In the past month itself, we have seen blue-chip companies that used Malaysia as an outsourcing hub migrate up to 80 per cent of their back-office operations out of the country. "In times like these, cost is pivotal to global companies operating outside their shores. Malaysia may not have the desired cost advantage today to drive global outsourcers to its shores without stiff competition from countries like the Philippines," Ariyanayakam told Business Times.

He said there are many areas that the government can help to make Malaysia attractive as an outsourcing destination.

They include:
* Subsidising the cost of providing local human capital to the industry;
* Re-training grants to deploy displaced workers into the contact centre industry; and,
* Subsidising real-estate cost so that immediate value and cost propositions can be made to outsourcing clients to retain their businesses in Malaysia.

"A national framework for retraining and skills enhancement needs to be accelerated to provide value-added job creation for all categories of workers, be they unemployed graduates, the recently retrenched or the under-employed.

"With this in mind, speed-to- market is of the essence and funds for the re-education of our workforce are urgently required," Ariyanayakam said.

He said the government could also increase the number of value-added jobs available by providing enhanced services to the public, through the provision of outsourced contracts to local firms.

CCAM has about 500 members and they comprise mainly those in the banking, finance, hospitality, telecommunications and entertainment sectors.

Ariyanayakam is also chief executive officer and group executive director of Scicom (MSC) Bhd.
*Scicom (MSC) Berhad is a call center located/ address @ Menara TA One, Jalan P.Ramlee. Their clients include Nokia, GE money, Singtel, BAT, Viva Macau and etc.

Tuesday, February 24, 2009

Mah Sing new project in setapak

By the Star
Mah Sing Properties Sdn Bhd is set to launch its latest commercial project, StarParc Point, in three months following good response from a project preview last week, said deputy chief operating officer Andy Chua.

“Whatever factors a good commercial development should have, we have it here at StarParc Point. What’s more, most of the land around that area is leasehold except for our land.

“We expect to sell off the project this year,” he told StarBiz in an interview yesterday.

The RM118mil StarParc Point is an integrated business hub in Setapak consisting of three-storey shop offices and six-storey retail-cum-office suites on five acres of freehold land. Besides fronting Jalan Genting Klang where there is heavy foot traffic, the project offers over 8% rental yield potential, interesting architectural design and a weather-controlled outdoor yard.

The office suites are priced from RM295,000 or about RM200 per sq ft, while the three-storey shop offices are selling for about RM2.3mil or RM400 per sq ft. The retail unit costs about RM1.3mil each.

Chua said the pricing for the development was “reasonable” in view of the similar prices fetched by surrounding leasehold properties.

He added that the group was working with banks to provide buyers up to 85% financing.

Monday, February 23, 2009

Satyam saga’s impact on outsourcing industry

By the star
SATYAM’S fall from grace has been much discussed.

Besides tarnishing the accounting image of all Indian companies, this saga has newfound consequence to the outsourcing industry as a whole. With one of its stars being jolted into the spotlight for the wrong reasons, the entire industry is left to lick its wounds and consider the profound impact to the perception of the industry in the midst of challenging times.

Though unfair, the saga has affected confidence in India as a preferred choice of outsourcing destination. Recently, India’s IT industry suffered a major blow with the barring of Wipro Technologies and Megasoft Consultants from doing any work with World Bank.

These and other similar outcomes have alienated a number of clients from outsourcing companies in India. With the belief that the Satyam scandal may not be an isolated case, people are now starting to question the viability of other Indian companies as well.

Collectively, these events have a disastrous impact on the outsourcing industry for India and the IT industry as a whole. The question now is to what degree will this saga continue to beset Satyam and India, and more importantly how does the world perceive this?
A question of bad timing?

Indeed, the news could not have come at a worse time. Already struggling amidst the backdrop of a weak global economy, the global outsourcing industry now faces a new obstacle – an erosion of confidence.

Consider this. Even before the Satyam scandal broke out, companies were already trying to undercut one another with ridiculously low rates with some companies in India believed to be willing to offer up to a fifth off its competitors’ price.

Following the scandal, outsourcing companies will now have to confront another real obstacle on top of a slowing global economy.

Many questions are now posed after Satyam’s demise. How would customers now guarantee that the outsourcing company that they invest millions of dollars in, would not suffer the same fate as Satyam? What about shareholders and more importantly, financial institutions?
All these factors combined place huge strains upon even the largest outsourcing companies in the world when one can no longer count on a solid reputation to close deals or obtain financing backing.

Satyam’s collapse was so sudden and so badly affected the company that it reportedly didn’t have the money even to pay salaries in January (although subsequently they managed to secure some funding for this). Imagine, if this could happen to the first ever Indian Internet firm to be listed on the Nasdaq, the fear factor is exponentially increased for other smaller outsourcing or IT companies.

The prospects are becoming more daunting when anti-outsourcing voices are growing louder by the day, emanating from the US. Coupled with a weakened US economy, outsourcing companies that used clinch large contracts from American companies may need to brace themselves for a hard landing, especially those based in India.

Closer to home

Whilst the Satyam incident is mostly detrimental to outsourcing companies in India, there might be a reprieve for other countries that are building on their outsourcing competencies and trying to benefit from a slice of the Indian monopoly on major outsourcing deals.

Albeit the slice is thinning, I believe we will see more companies considering options aside from India.

Countries with burgeoning outsourcing companies like Philippines and Malaysia are likely to benefit from this.

Malaysia’s appeal lies not only with its reputation as one of the top ranked outsourcing countries in A.T. Kearney’s yearly rankings, but with external factors as well.

With the strengthening of the US dollar against the ringgit, there is now greater impetus for US firms to invest in Malaysia. There is also the huge untapped Middle East market that has yet to jump on the outsourcing bandwagon and Malaysia could be well poised to benefit from its close ties with countries in that region.

Nonetheless, Malaysia faces challenges from countries like China. Upon hearing about Satyam’s fall, a China IT outsourcer introduced a “zero cost transitioning” carrot to lure customers to switch alliance.

With the market thinning, competition is fierce and Malaysian outsourcing companies need to be more aggressive to capture every available potential.
* Opportunity for Malaysia's outsourcing company to get a slice of india's strong IT market? Much effort, R&D and motivation needed to get hold a slice of this IT fat cake.

Friday, February 20, 2009

F&N is losing rights to distribute Coca-Cola and Sprite soft drinks

By The star
Shares in Fraser & Neave Holdings Bhd (F&N) plunged yesterday after the company lost the rights to sell Coca-Cola and Sprite soft drinks, tumbling RM1.15 or 12.78% to RM7.85.
About 4.2 million shares changed hands.

The selldown was sparked on concerns about the beverage maker’s prospects after The Coca-Cola Co decided not to extend its bottling and distribution agreements with F&N.
Although F&N said the non-renewal agreement was not expected to have any material effect on the operating performance for this financial year ending Sept 30 (FY09) as the agreements only expired in 2010.

In a filing with Bursa Malaysia on Wednesday, F&N said Coca-Cola Co was not extending the bottling and distribution agreements with F&N when they expired on Jan 26, 2010.
Sales revenue of Coca-Cola Co products, mainly Coca-Cola and Sprite, amounted to RM421mil, or 35% of F&N’s soft drinks division’s revenue in FY08.

Sales revenue from this division stood at RM1.2bil in FY08, or 48% of the entire group’s revenue.

Group chief executive officer Tan Ang Meng said in a statement yesterday the non-renewal of the Coca-Cola franchise agreements would give the group the opportunity to further build on the F&N brand equity, and realise a potential which was unavailable in the past.
“As a result of our new status, we are now able to launch new products and venture into new territories and export markets from which we were restricted in the past by the agreements,” he said.

Tan said the relationship between Coca-Cola Co and F&N was a dynamic one and, in the course of the collaboration, there had been differing perspectives, viewpoints and expectations.
“The group’s financial position is sound, our business sustainable and diversified and coupled with our resolve and determination, we will overcome and withstand any eventualities. While challenging, our future is indeed bright and we are confident,” he said.
Analysts were surprised when the agreements were terminated after decades-long partnership between the two companies.

Maybank Investment Bank Bhd head of research Vincent Khoo said the expiration of F&N’s 73-year union with Coca-Cola Co was unexpected.

“This is likely to de-rate F&N in terms of sentiment, as well as operationally,” he said, adding that the loss of Coca-Cola and Sprite revenues were estimated to be RM229mil in FY10 and RM475mil in FY11.

This would translate into an estimated 8.1% and 18.1% reduction in the beverage maker’s FY10 and FY11 net profit forecasts.

AmResearch said it viewed the development as negative for F&N, as its soft drinks division was the most lucrative compared with its three other divisions - dairy products, glass containers and properties.

“Assuming F&N is unsuccessful in obtaining new contracts with Coca-Cola Co, this will have a negative impact on our forecast earnings for FY10 and FY11.
“Based on our assumptions, the calculations show a potential earnings revision by as much as 14% for FY10 and a greater 22% for FY11,” it said.

Thursday, February 19, 2009

Brand new Jaya Jusco in Bandar Sri Permaisuri by Aeon Co (M) Bhd?

By the Star
Aeon Co (M) Bhd has entered into a sale and purchase agreement to acquire 2.5ha of land and property for RM107.2mil from Kuala Lumpur City Hall.

The purchase comprised RM27.2mil in land cost and RM80mil in building cost to be built in the future. The land forms part of a township called Bandar Sri Permaisuri.

In a statement to Bursa Malaysia yesterday, Aeon said the acquisition would be fully satisfied by cash and financed through the company’s internal funds.

“The acquisition is in line with Aeon’s corporate strategy of accelerating the expansion of its retail business through opening of new shopping centres and outlets,” it said.

This acquisition is not expected to have any impact on the earnings per share, net assets per share and gearing of the company.

There will be no change in the share capital and major shareholders’ shareholding of the company.
*Does it mean that there will be a brand new Jaya Jusco in Bandar Sri Permaisuri? Good chance to snap new property launching in Bandar Sri Permaisuri? Your choice...

Wednesday, February 18, 2009

YTL Francis Yeoh is one of Asia's best executives 2008

By YTL Community News

Tan Sri (Dr.) Francis Yeoh, Managing Director of YTL Group won the accolade of being one of Asias best executive 2008 under the Asias best companies & executives category awards. ASIAMONEY talks to fund managers andanalysts to determine the best managed small, medium and large cap corporations and best executives across the region. Some attribute this patience to his Christianity. An investment banker close to Yeoh says heoften invites staff and advisers to pray before and after deal completion meetings. Whether or not Yeoh's success is the result of divine intervention, he has a knack of timing deals well.

Amongst Asias best executives 2008 were Grant King, Managing Director of Origin Energy in Australia, Zhu Min, Executive Vice-President of Bank of China, Vincent Cheng, Chairman of HSBC in Hong Kong, Liew Mun Leong, CEO of CapitaLand in Singapore, Tadashi Yanai, Chairman & CEO of Fast Retailingin Japan, Om Prakash Bhatt, Chairman of State Bank of India, Nam Yong, CEO of LG Electronics in Korea, Morris Chang, Chairman of TSMC in Taiwan, Manuel Pangilinan, Chairman of PLDT in The Philippines, Khalid Hashim, Managing Director of Precious Shipping in Thailand and Graeme Pitkethly, CFO of Unilever Indonesia.

Asiamoney, December 2008/January 2009 issue:

BEST EXECUTIVEFrancis Yeoh, managing director, YTL Group
Francis Yeoh, managing director of sprawling hotels-to-water empire YTL Group, was born into a wealthy business. He inherited his wealthy father's construction company in 1986.
But the canny business leader has proven his mettle in the years since. Under Yeoh's prudent stewardship, YTL entered both the 1997-8 Asian crisis and the current credit crisis in financial health.

Yeoh sits patiently on the sidelines during bull markets, waiting until businesses run into trouble and need to sell up cheaply. Some attribute this patience to his Christianity. An investment banker close to Yeoh says he often invites staff and advisers to pray before and after deal completion meetings. Whether or not Yeoh's success is the result of divine intervention, he has a knack of timing deals well.

In 2002, after Enron collapsed, YTL bought Britain's Wessex Water for a very cheap 1.2 billion (US$1.8 billion). And as times get tough across Asia, YTL has RM12 billion in net cash and Yeoh is on the look-out for bargains.

In October, YTL bought controlling stakes in two property funds from Australian bank Macquarie for US$189 million. The price valued the real estate investment trusts, which own a stretch of shops along Singapore's Orchard Road, at a bargain 49% of net asset value. A month later, Yeoh announced he was combing through other prospective acquisitions.
His corporate governance record is impressive, too. Unlike many Asian tycoons, Yeoh has avoided the myriad of cross-ownerships and related party transactions that so frustrate investors.

Amongst Asias best executives 2008 were Grant King, Managing Director of Origin Energy in Australia, Zhu Min, Executive Vice-President of Bank of China, Vincent Cheng, Chairman of HSBC in Hong Kong, Liew Mun Leong, CEO of CapitaLand in Singapore, Tadashi Yanai, Chairman & CEO of Fast Retailingin Japan, Om Prakash Bhatt, Chairman of State Bank of India, Nam Yong, CEO of LG Electronics in Korea, Morris Chang, Chairman of TSMC in Taiwan, Manuel Pangilinan, Chairman of PLDT in The Philippines, Khalid Hashim, Managing Director of Precious Shipping in Thailand and Graeme Pitkethly, CFO of Unilever Indonesia.

Monday, February 09, 2009

Higher Unemployment for 2009

By JobsDB

Economists are projecting Malaysia’s jobless/unemployment rate to rise to between 4 and 4.5 per cent this year following a third-quarter 2008 spike when lay-offs were four times those in Q2, says the online news portal, The Malaysian Insider.

It noted that some 11,560 workers were retrenched in Q3.

And the rate of job losses is expected to accelerate this year, with estimates that between 200,000 and 400,000 people could be laid off should the global slowdown bite deeper into consumer demand.

The news portal said tor export-reliant Malaysia - the country’s external trade to GDP is 172 per cent - manufacturing would be hit hardest. And the electrical and electronic (E&E) and automotive-related sectors would likely be bruised most.