Friday, November 11, 2011

Singapore billionaire Peter Lim

By The Star

Singapore billionaire Peter Lim, dubbed the “Remisier King”, has signed a deal with the Johor royal family to acquire 10ha in Johor for the development of a medical hub and a marina city.

The joint venture company behind the development is Best Blend Sdn Bhd, which Lim owns 70%, and the royal family owns 30%. Lim is ranked by Forbes business magazine as Singapore's eighth wealthiest individual with a fortune of S$1.8bil.

“The cost of the medical hub is estimated at S$200mil and the total development cost could range from S$1bil to S$2bil. The medical hub will be funded through a mixture of debt and equity,” said Koh Kim Huat, a director of Best Blend.

The hospital, when completed, will be managed by Thomson International Health Services, the consultancy and management division of Thomson Medical Pte Ltd.

Singapore-listed Thomson Medical was taken private by Lim last year. It is described as a leading healthcare service provider in Singapore for obstetrics, gynaecology and paediatric service.

The site of this hub is located at Bandar Johor Baru, and is within close proximity to Johor's new royal customs, immigration and quarantine complex as well as Singapore's Woodlands checkpoint.

The first phase of the project will see the construction of a medical hub which will include a private hospital and healthcare-related facilities and also supporting facilities including serviced apartments, a mega shopping mall and a mega fully secured car park. A special feature of the complex is a state-of-the-art security deterrence and detection systems.

The 200-bed general hospital will house centres of excellence for diabetes, orthopaedics, ophthalmology, women's health, and a state-of-the-art day surgery centre.

“The medical hub will provide quality private healthcare at affordable prices to Singaporeans and Malaysians,” said Koh.

When asked whether TMC Life Sciences would be involved in the medical hub, Koh said there were no plans at this point.

Lim made headlines in Malaysia last year when he bought a substantial stake in TMC Life Sciences Bhd, a private healthcare group which is popular for its fertility treatments. Lim is now the largest shareholder of TMC with 32.59% stake.

Koh said fertility would be one of the key focus segments of the hospital. Among others, the focus for the hub will be the treatment of chronic and lifestyle diseases associated with growing affluence and which afflicts increasing numbers of Malaysians. The hub aims to provide a one-stop centre for chronic disease management of diabetic patients. A training school will be set up for nurses and medical technicians.

*Medical industry is really expanding in Johor, any property which can grab nearby?

Monday, September 05, 2011

Sime partially acquired Eastern & Oriental Bhd (E&O)

By The Star

Sime has got the biggest chunk of E&O, but was the price worth it?

THE pundits have it. For the last month or so, the rumour mill was working overtime around Eastern & Oriental Bhd (E&O), the luxury lifestyle property developer, that a merger or acquisition was in the works.

First came the persistent speculation that SP Setia Bhd would merge with E&O, which was soon quashed by SP Setia. Then last week - quite out of the blue - Sime Darby Bhd announced it was acquiring a 30% stake in E&O for a significant premium over the latter's share price.

In early August, E&O's shares galloped to a three-year high of RM1.75 on the back of the SP Setia merger rumours, then came down again in line with the global stock slump. Yet, amid the broader market sell-down a few weeks later, its stock again saw aggressive trading, this time from its own shareholders who appeared to be upping their stake.

The notable ones included GK Goh Holdings Ltd, a substantial shareholder of E&O, and Datuk Azizan Abd Rahman, a director of E&O. According to shareholder changes filed with Bursa Malaysia, GK Goh had bought 1.25 million shares in three days, raising its stake to 11.6%, while Azizan acquired 100,000 shares.
The upward trend in E&O's share price can be observed since Aug 24, from RM1.43 to Friday's close of RM1.60, an 11.9% increase.

The deal with Sime Darby, which E&O called a “milestone” development, raised more than a few eyebrows about why such a high price was paid. The share sale agreement is for Sime Darby to acquire 273 million shares in E&O and 60 million irredeemable convertible secured loan stocks, representing a 30% equity interest, for RM766mil cash.

The sale price works out to RM2.30 per E&O share, which is a 58.6% premium over the stock's pre-suspension price of RM1.45. Sime Darby came out in defence of its purchase, saying the RM2.30 was actually a 20% discount to E&O's estimated realisable net asset value of RM3.2bil or RM2.88 per share.

Upon completion of the deal, slated for Sept 9, 2011, Sime Darby will be the single largest shareholder of E&O.

E&O's largest project is the 980-acre Seri Tanjung Pinang seafront development, a coveted address in Penang.

To recap, the 30% block in E&O was acquired by Sime Darby from three substantial shareholders: E&O managing director and founding member Datuk Tham Ka Hon, Tan Sri Wan Azmi Wan Hamzah and Singapore-listed GK Goh.

The trio's collective 41.7% shareholding in E&O will be diluted to 11.5% post-acquisition.

Tham, previously the largest shareholder with 15.7%, will end up with a 5.1% stake while Azmi and Goh will have 3.5% and 2.9% respectively.

A sore point with analysts is the high price paid for E&O. TA Research said the price was 19 times E&O's forecast earnings for 2012 and 1.85 times its price to book value based on consensus estimates. By comparison, the property sector has an average of 12 times forecast earnings for 2012 and 0.8 times price to book value.

Kenanga Research also noted that since Sime Darby was expected to equity account E&O's earnings on an associate level, that would only translate to a meagre 0.6% increase to Sime Darby's profits in 2012 and 2013.

It suggested that management might have been better off using the RM766mil to expand its plantation land or motor segment in China.

A local broker, however, had a more pragmatic view, saying that although Sime Darby was keen to venture into high-end development, it did not necessarily want to obtain everything at one go via a general offer, which would have been a much riskier proposition.

“Furthermore, E&O's shares in the open market are quite fragmented and not very liquid, making the task of acquiring 30% quite cumbersome and time-consuming.

“By getting the substantial shareholders to agree on a share sale proper, Sime Darby avoided facing a hostile takeover situation,” she said.

In terms of mutual benefits, Kenanga pointed out that phase two of the Seri Tanjung Pinang development might have factored strongly in the deal.

The project, estimated to have a reclamation cost of between RM3.2bil and RM3.5bil and a gross development value of RM9bil to RM10bil, could do with the financial muscle of a company like Sime Darby,

Monday, August 08, 2011

MAS, AirAsia share swap

By Jahabar Sadiq(Malaysia Insider)

The surprise share swap between Malaysia Airlines (MAS) and budget carrier AirAsia Bhd is slated to be sealed tomorrow in a deal that will allow Tan Sri Tony Fernandes to step in and pilot the ailing state-owned airline back to profitability.

The Malaysian Insider understands that the share swap will likely see a change in leadership with a new chief executive to replace Tengku Datuk Azmil Zahruddin, who took the job almost two years ago from Datuk Seri Idris Jala who is minister leading Malaysia’s economic transformation.

“There is a slew of meetings today to dot the i’s and cross the t’s but it’s done and has the blessings of Putrajaya,” a government source said, referring to the office of Prime Minister Datuk Seri Najib Razak, who is chairman of MAS’s ultimate owner, Khazanah Nasional Berhad.

Under the deal, Fernandes and his Tune Air Sdn Bhd partner Datuk Kamarudin Meranun are expected to swap a portion of their AirAsia shares for 20 per cent of Khazanah’s stake in MAS.

The state asset manager’s wholly-owned unit Penerbangan Malaysia Bhd (PMB) owns 69 per cent of MAS after the wide asset unbundling (WAU) restructuring programme carried out in 2002 by boutique consultancy BinaFikir. BinaFikir’s then boss Tan Sri Azman Mokhtar is now managing director of Khazanah.

Another BinaFikir consultant in the WAU, Mohd Rashdan Mohd Yusof, is Khazanah’s representative on the MAS board and was thought to be a potential chief operating officer after the share swap but sources say an outsider is likely to get the job.

“Most of the people in the MAS board are either bankers or accountants. What is needed is a person with airline experience,” an industry source said, pointing out that Fernandes himself is an accountant but has 10 years’ experience turning AirAsia into Asia’s largest budget carrier.

“Most of the past solutions for MAS, either the WAU or Jala’s business transformation plan, were financial in nature to keep the airline in the black. But what is needed are operational fixes,” he added.

The flag carrier recorded a first-quarter net loss of RM242.3 million against a profit of RM310.6 million in the same period a year ago. Tengku Azmil took over the reins of the company on August 28, 2009 from Jala.

Analysts expect the flag airline to make full-year operating losses for its current financial year ending December 31, in line with higher fuel costs and falling yields. Its sales director Datuk Bernard Francis recently resigned within 24 hours despite having a few more months in his contract.

MAS recently named former managing director Tan Sri Md Nor Md Yusof as its non-executive chairman from August 1, replacing long-serving chairman Tan Sri Dr Munir Majid.

Md Nor managed the airline between 2001 and 2004 where he implemented the WAU restructuring of MAS in 2002, involving uncoupling the airline’s massive debts and transferring of the MAS fleet to PMB.

Khazanah said yesterday it remain the biggest shareholder in MAS, following reports of the share swap. It did not deny the share swap but said it will make an announcement about the flag carrier’s transformation plan at an appropriate time.

“The aviation sector is a strategic sector to the economy and MAS remains a core holding in Khazanah Nasional Berhad’s portfolio. Khazanah will continue to maintain its position as the single largest shareholder in MAS,” the statement said.

Both Fernandes and Kamarudin also issued a statement denying that they will be the largest single shareholder in MAS but they did not deny news of the share swap.

The Malaysian Insider has reported that the share swap will ensure MAS reclaims its premier airline status while long-haul budget carrier AirAsia X will serve the low-cost market sector.

It will also lead to both carriers rationalising domestic routes and leave MAS subsidiary Firefly to only operate turbo-prop operations from the Skypark in Subang.

Malaysia Billionaire: Can the govt find some expertise for the stupid Proton so that it wont waste out tax payer money and impost heavy tax-duty on imported cars.

Thursday, August 04, 2011

A gem in the Genting family?

By The Star

Datuk Justin Leong Ming Loong, who yesterday emerged as a substantial shareholder of newly-listed Catcha Media Bhd, is confident about the company's ability to thrive in a new media environment.

“We often hear of declining readership figures in the print media. The future is truly in the online media space,” the 33-year old Genting Group head of strategic investments and corporate affairs told StarBiz from China.

He now has a 5.01% stake in Catcha Media. The company, which made its debut on the Ace Market two weeks ago at 15 sen above its 75 sen offer price, jumped from 58 sen at the market opening yesterday to a high of 84 sen.

It closed at 73 sen with 135,838 shares traded.

Leong could not disclose the price he paid, but said his stake was procured through a combination of shares in the open market as well as private placement.

He said Catcha Media had a comeback story to tell.

“Catcha Media's founder and director Patrick Grove, who is the poster boy of, survived the dotcom bust of the 90s. The media business is a tough place to be, but he managed to turn around his fledgling company and came back stronger than before,” Leong said.

Leong also clarified in a statement that he had no immediate plans to merge Catcha Media into the Genting Group: “Right now, this investment in Catcha Media is purely a personal one. The Internet sector is of great interest to me look at how the Internet has changed the world, and how it continues to change industries.”

Leong, who is a grandson of Genting founder Tan Sri Lim Goh Tong, was said to be instrumental in Genting's bid for the hotly-contested casino-resort complex in Singapore, now known as the Resorts World Sentosa.

The Oxford-educated businessman left Malaysia in June for a six-month sabbatical to learn Mandarin in Peking University.

He said although the lessons were hard going, he had already picked up over 800 Mandarin characters.

Leong's stake in Catcha Media comes after a series of unrelated investments from companies and individuals, including Star Publications Bhd's acquisition of a 4.99% stake.

* Malaysia Billionaire: So why is this felle that appearing in the limelight for numerous times? Why? Great people which overrated? Afraid not.. Check this

Monday, July 04, 2011

A billionaire story from Indonesia

By The Star

KIKI Barki is veteran Indonesian coal miner and a billionaire.

A friendly and very pleasant gentleman, I had the pleasure of meeting him when he gave a speech to welcome a business delegation organized by Malaysia Chinese Chamber of commerce (ACCCIM/KLSCCCI) and HSBC bank to Jakarta at the end of May.

The most interesting part of his speech was when Barki related how in the late 80s, he signed a long term contract to supply coal from one of his mines to an Asian electric company, when coal prices were less than US$20 per tonne.

The world's coal prices subsequently increased significantly, before his shipments were ready; to add to his misery, cost escalated at the same time. He knew he was in dire straits, even before deliveries begin.

To uphold his reputation as a trusted businessman, Barki said he made his first delivery, and then told the buyer that his losses would mount with every shipment. While he would not renege on his contract, he would nevertheless quickly go bankrupt.

The only way out (for both) was for the buyer to sign another supply contract at the then market price, to give his company an average price that they can survive on. Fortunately, the buyer agreed, the company survived and Kiki Barki persevered.

Today Kiki Barki's stake in coal mining company Tanito Coal group vaulted him to 2011 Forbes magazine list as the 11th richest man in Indonesia with an estimated fortune of US$2bil.

While this may be an interesting snippet from an entrepreneur's success story of perseverance, guts and luck; it is also an amazing story of the phenomenal growth of coal mining in Indonesia, which is electrifying (literally) many parts of Asia.

This amazing story takes off in 1988, when Indonesian coal mining shifted from being predominately a small government owned enterprise (largely in Sumatra) to mainly big privately owned companies with mining concessions, run largely according to international standards (mainly in Kalimantan, with the then untapped rich coal deposits).

During this 23 years period, exports of Indonesian coal increased by an astonishing 30% a year from 4.4 million tonnes in 1988 to 80.8 tonnes in 1999; and then by more than 13% a year from 58.3 tonnes in 2000 to 198.0 tonnes in 2010.

Today, Indonesia is the world's top exporter of thermal coal (Australia is distant second). Exports of mineral fuels (mainly coal) amount to US$18.5bil in 2010 (vs. US$6bil in 2006); contributing to Indonesia's total trade balance of US$22.1bil in 2010.

Indonesia's top two coal export markets are also the world's fastest growing, big and energy hungry economies of China and India; both countries imports 95 tonnes and 58 tonnes of Indonesian coal respectively in 2010, and are expected to increase to 118 tonnes (+24%) and 106 tonnes (+83%) respectively by 2015. Other major export markets are Japan, South Korea, Taiwan and Malaysia.

Indonesia's success of course starts with being blessed with large deposits of high quality thermal coal deposits in Kalimantan and then private investments played crucial roles.

It is fortunate too that the largest Kalimantan coal mines are close to major rivers and ports (so that coal can be barged, railed and transported cheaper to export terminals in the coast), and being geographically closer to major Asian markets by sea makes Kalimantan coal mining viable.

This means Indonesias coal exports to China for example, has a significant price advantage into southern Chinese ports, when compared with the landed costs of domestic coal (for example from Inner Mongolia) into the same southern Chinese ports.

Indonesia's coal mining success story is no doubt also due to Indonesia's improving political and economic stability in the past decade that raised investor confidence.

With investor confidence, many private mining companies could raise more capital to invest in new mines and transport infrastructure such as roads, barges and rails.

The future for Indonesia coal mining will likely become brighter with two major pending improvements.

First, Standard and Poor's signalled it may raise Indonesia's sovereign debt rating to investment grade citing strength in the economy, which the government expects to grow up to 6.5% in 2011, the fastest pace in seven years. More Indonesian companies will then find it relatively easier and cheaper to raise capital.

Second, Indonesia's land acquisition reform bill will likely be passed by lawmakers sometime this year.

This reform bill will resolve difficulties in land acquisitions that have hindered the pace of infrastructure developments vital for industrialization and continued economic growth (Indonesia's 2010-14 development plan has US$220bil in infrastructure development).

In Indonesia, the government is paving the way with the right fundamental changes for businesses to succeed.

In these challenging times, it is easy to be bullish on Indonesia, when you see government policies and private companies move with the same economic imperatives, to the equal benefit of all.

* Malaysian Billionaire :

It's all about Perseverance, Guts and Luck.

Wednesday, May 11, 2011

Ringgit strenghten against USD/Greenback but no change of purchasing power of malaysian?

By The Star

The increase in the price of sugar signalled the resumption of the subsidy rationalisation programme many thought was put on hold given the inflationary pressures felt by countries globally.

Economists said although prices for selected goods might rise, they expected the key determinant of inflation - the price of RON 95 petrol - to remain stable as efforts to keep a lid on inflation.

“It will be on a gradual basis,” said CIMB Investment Bank Bhd head of economics Lee Heng Guie on the subsidy rationalisation programme.

The price of coarse and fine sugar increased by 20 sen to RM2.30 per kilo yesterday, reducing the Government's subsidy for sugar to RM116.6mil from RM400mil per year.

The increase yesterday was the first for this year but the fourth overall since the Government's subsidy rationalisation programme was put into effect. Sugar prices saw three increases last year of 20 sen in January, 25 sen in July and 20 sen in December.

Economists feel the move to cut subsidies was still needed given the use of such interventionist policy to keep prices and cost low during a time when inflation has become a thorn in the flesh for many countries.

Inflation in Malaysia hit 3% in March but was among the lowest in Asia where it had been the focus of many central banks. Interest rates have been raised in a number of Asian countries in recent months to stave off inflationary pressures.

For Malaysia, the consequence of cutting the subsidy on sugar and letting prices go up is not expected to have a direct impact on inflation.

Sugar is a constituent in the basket of goods which inflation is calculated from but does not have a big weightage.

Economists, however, wondered if the secondary effect from the higher price of sugar would filter through to a larger food segment should retailers and restaurants push up the price of drinks.

Economists said the willingness of the Government to keep RON 95 prices constant was commendable as fuel and energy costs will have a bigger impact on the rate of inflation.

“If the Government maintains the price of RON 95, it will mean it is concerned about inflationary pressure,” said Affin Investment Bank Bhd economist Alan Tan.

The price of RON 95 petrol, which is the preferred choice of fuel among motorists, have been kept steady at RM1.90 a litre in recent months despite global crude oil prices punching well above US$100 per barrel.

The Government has nonetheless matched the price of RON 97 petrol with that of international crude oil prices. The Government raised the price of RON 97 petrol by 20 sen a litre to RM2.90 a litre on May 5.

* I personally think that it is a wise move by the govt to cut the subsidies of food comsuption rather than petrol as said in the above article, it will have a bigger impact of the inflation rate.

* But i recog that our dear Ringgit is getting stronger than the USD, it should not be a problem to maintain the petrol price? I dunno why everything is increasing, since our ringgit is strenghten, our purchasing power should be greater/better and hence goods n services should be cheaper? Why is the govt still cut the subsi? damn.. can someone enlighten me? Mr.KPI guy..

Tuesday, April 26, 2011

Malaysia is a huge heaven for gold mining?

By The Star

GOLD mining may not be a new activity in Malaysia but it is sad to see minimal efforts being taken to develop the lucrative business on a larger scale.

This is particularly when the country is endowed with huge gold deposits stretching from the major Eastern Gold Belt stretching from Kelantan, Terengganu, Pahang right down to Johor as well as in Sabah all waiting to be fully explored.

What more with gold prices trail blazing since 2011 and currently showing no sign of losing steam. Gold spot price yesterday hit another new record to trade at US$1,517.40 an ounce on weaker US dollar as well as continuing tension in the Middle East and North Africa.

Many traders and research houses have even predicted that the precious metal might hit US$1,600 an ounce before year-end.

As reflected by the surging prices, gold remains a safe haven investment among investors to guard against inflation and geopolitical turmoil.

Given such encouraging developments on the global front for gold, one may wonder whether they will be enough incentives for state governments to issue more exploration licences and mining leases for gold to attract mining investors.

The safest answers could be a small “yes” on the part of some mineral-rich state governments but a big “no” from potential major gold miners.

Pahang, for example, has the largest gold mine in Malaysia at Penjom, Kuala Lipis which contributed almost 95% to total domestic gold production.

There are also five gold mines in Jeli, Kelantan as well as six gold mines in Raub and Kuala Lipis still being excavated for commercial mining. The latest finding for the precious metal is in Mersing, Johor and Lubuk Mandi in Terengganu.

Despite some state governments gradually issuing exploration licences and mining leases in mineral-rich states, there are several impediments among gold miners.

Some quarters maintained that it would not be economical to undertake gold mining activities in Malaysia.

The Eastern Gold Belt, for example, may be rich with gold deposits but it is mostly in “hard rock” formation. In other words, huge capital investment would be needed to undertake prospecting, exploration and mining.

Apart from that, potential miners would also have to deal with other major costs issues.

These include high “tribute” request (payment between the owner of the mining lease and the mining operator) which could reach up to 10%, standard royalty of about 5% paid to the state on the minerals to be produced, corporate tax for the rehabilitation fund and the corporate responsibility (CR) work.

Therefore, it is suffice to say that only major mining groups are capable of undertaking such high risks. On the other hand, mid and small-scale miners might have to take a back seat even though gold mining prospects in Malaysia certainly look promising and lucrative.

* After reading this article by the Star, is that true that Eastern Penisular Malaysia is so rich in gold?

Thursday, January 13, 2011

VW to be malaysia No.1 luxury car market?

By The Star

KUALA LUMPUR: Mercedes-Benz Malaysia Sdn Bhd outgoing president and chief executive officer Peter Honegg believes that the local luxury car market will be shaken up by rival and fellow German automaker Volkswagen in the next three to five years.

“They (Volkswagen) will change the automotive landscape in Malaysia,” Honegg said at a briefing yesterday on Mercedes-Benz Malaysia's 2010 sales performance.

“However, they need to do proper analyses. They want to become No. 1 and they need to chase that (goal). They are already chasing,” he added.

Honegg was commenting on the potential impact of DRB-HICOM Bhd's collaboration and licence agreement with Volkswagen AG to manufacture Volkswagen cars at the former's plant in Pekan, Pahang.

Local assembly means prices of the cars will be cheaper. The local manufacture of the first Volkswagen model is scheduled to commence in the final quarter of this year.

Honegg said while Mercedes-Benz Malaysia had successfully maintained its leading position within the local luxury car segment over the past few years, he believed that the entry of Volkswagen's locally assembled vehicles into the market in future would intensify competition.

“So far, we've maintained our market position despite the entry of luxury players such as Lexus. Even Volvo is coming back strong. (But) Volkswagen will make a big, big difference. I'm pretty sure of it. They will change the landscape in three to five years.”

Honegg's sentiment was shared by an analyst from a local bank-backed brokerage.

“The collaboration with DRB-HICOM means Volkswagen cars will be more affordable and more attractive, especially within the local luxury segment.

“However, as production of the cars will only begin at the end of the year, we only expect to see any impact from next year,” he said.

Malaysian Billionaire :

* Hopefully 2yrs down the road, i will driving a Touareg and Scirocco.