Malaysian strive to be a multi-billionnaire

Swapping of shares, it's a win-win situation for Air Asia and MAS

2012-01-12T09:55:00.007+08:00

By The Star

AirAsia X (AAX) seems all set to start ticket sales for the much-awaited KL-Sydney route next week and will begin mounting flights to the Australian city by April this year, way ahead of rival Scoot.

The airline is also said to be in the final stages of rationalising its route network where it would cut some routes which it deemed to be unprofitable and add Sydney and some routes to China (provided it can get slots there) to its network.

“We want to do that (Sydney) well ahead of the competition,'' said a senior official of the airline group.

Scoot is Singapore Airlines' long-haul low-cost carrier that has named Sydney as the first city of call out of Singapore and plans to begin flying the route by mid-year.

The official declined to elaborate, but market has it that AAX will begin selling tickets for the sector next Tuesday and a team is planning to launch the sales from Sydney.

The first flight is slated to take off on April 1. However, all is subject to its internal planning, though the airline may be looking at daily flights for the KL-Sydney sector.

This puts an end to the near three-year wait and a bitter fight with Malaysia Airlines (MAS) over the route. MAS had previously lobbied against competition and the national carrier is still the only airline serving the KL-Sydney route after Jetstar withdrew from the sector in 2009.

This sharing of routes has been made possible after a share-swap agreement between AAX's sister company AirAsia and MAS on Aug 8 last year and both will collaborate rather than compete.

Currently, MAS flies twice daily from KL to Sydney and whether MAS will reduce the frequency to once daily and make way for AAX to take on the other slot is unclear.

“Choices and reasonable fares are what a traveller wants. But the biggest fear for travellers over the collaboration is the lack of competition and that is seen by the fare pricing for the Dehli/Mumbai sectors where the fares offered by AAX are somewhat close to that offered by MAS,'' said an industry source.

To be fair, AAX does offer reasonable rates for its Melbourne, Perth and Gold Coast flights and if the booking is made in advance, the savings can be up to 40% of the full-service fares. The airline is currently offering a 20% discount on its base fares for all its routes for a limited period.

Asked on the strategy for the KL-Sydney route, the official said:“We would offer lots of low fares and as we are already well known in Australia it should be (fairly easy to fill up our aircraft).''

Interestingly, those in the know claim that AAX is close to finalising details on whether to exit from the Indian (New Dehli, Mumbai), European (London and Paris) and Christchurch routes.

Sources said both MAS and AAX had had several meetings over the matter so that MAS could take over all the slots from AAX for the routes and carry AAX passengers that have booked seats with the airline.

The date for axing the route is said to be as early as February. AAX has, however, repeatedly said that “no decision on routes, whether to add new ones or cancel new ones'' had been made.

But those in the know claim that “all this adding and axing of routes is part of the understanding under the collaboration.'' Looking from the collaboration perspective, moving out of the European/India/Christchurch routes is seen as a compromise to get Sydney and some China routes.

MAS CEO Ahmad Jauhari Yahya in his executive summary of his business plan said that “we are close to finalising a connecting-service that will enable passengers on either airline to seamlessly connect between carriers and non-overlapping routes.”

Separately on Tuesday, AirAsia boss Tan Sri Tony Fernandes tweeted: “With all that's going on, we will need to get more planes. I will be speaking to the board. The growth in the low-cost arena is very exciting.''

Last Friday he was quoted in Paris as saying: “AirAsia will consider buying up to 25 Airbus A320 aircraft. Our growth will probably exceed the aircraft that we have right now, and the initial public offerings of AirAsia's units in Thailand and Indonesia will give us the ability to probably take more aircraft.''

*MB: Afterall the swapping of share between Air asia and MAS would be a win win situation. Closing some routes and compromising some routes between the two airlines, a total win-win that sets our airline industry even stronger in the international arena. What's the shout all about by the Union previously? Bunch of dumbnuts who cant foreseen the future.

Singapore billionaire Peter Lim

2011-11-11T11:59:00.002+08:00

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?

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

2011-09-05T14:29:00.002+08:00

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,

MAS, AirAsia share swap

2011-08-08T10:17:00.002+08:00

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.

A gem in the Genting family?

2011-08-04T16:13:00.002+08:00

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 catcha.com, 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

A billionaire story from Indonesia

2011-07-04T14:53:00.003+08:00

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.

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

2011-05-11T11:17:00.004+08:00

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..

Malaysia is a huge heaven for gold mining?

2011-04-26T19:14:00.004+08:00

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?

VW to be malaysia No.1 luxury car market?

2011-01-13T11:00:00.003+08:00

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.

Volkswagen VW cars to be assemble in Pahang, Malaysia

2010-12-11T13:40:00.004+08:00

By Business Times (Francis Fernandez)

DRB-HICOM Bhd is scheduled to sign a definitive agreement on December 21 with Volkswagen AG, Europe's largest carmaker, to assemble VW cars in Malaysia.

The cars will be assembled in Pekan, Pahang, for local and Southeast Asian markets.

"Tentatively, it is scheduled for December 21 with the signing ceremony being held either in the KLCC area or at DRB-HICOM's (1619) operational headquarters in Glenmarie, Shah Alam," said the source.

It is understood that DRB-HICOM's top officials from its automotive divisions are currently abroad for the final leg of negotiations with VW.

In August, DRB-HICOM signed a memorandum of understanding with Germany's VW to assemble and manufacture Volkswagen vehicles in Malaysia.

An agreement with VW will help boost business and raise its profile among investors further. Although a big chunk of income comes from stable businesses like Islamic banking, insurance and power plant maintenance and plans to expand its property unit, its share price is still well below its net asset value of over RM2.

DRB-HICOM shares closed 9 per cent higher at RM1.80 yesterday.

In August, it was reported that minority shareholders voiced their displeasure at the company's annual general meeting over the undervalued shares.

As a result, the company said it plans to beef up investor relations (IR) activity.

"I do understand the anxiety of the shareholders and the public ... the current share price does not reflect the actual value of the company, which is actually worth more," group managing director Datuk Seri Mohd Khamil Jamil reportedly said after the AGM.

Yesterday, HwangDBS initiated coverage on DRB-HICOM with a RM3.55 target price.

The research house said DRB-HICOM is the cheapest conglomerate in the country with a net gearing of 0.3 times.

"With efforts to be more investor-friendly now, we expect a significant re-rating from its bargain basement valuation of 5.5 times 2012 financial year's earnings per share," Hwang said in the report.

The research house added that a key catalyst for DRB-HICOM is the conversion of a letter of intent from the Ministry of Defence for 257 AV 8x8 armoured wheeled vehicles, worth about RM8 billion.

Malaysian Billionaire :

* With the failure of partnership between Proton and Volkswagen VW, VW is set to get DRB-HICOM to assemble Volkswagen cars in malaysia. So izzit the right time to get some DRB-HICOM shares and a Touareg in a cheaper price tag in the near future?

Cabinet agrees to electricity price increase

2010-12-09T15:31:00.003+08:00

By the Star

KUALA LUMPUR: The federal Cabinet has agreed in principle to a revision of electricity tariff but has not decided when it should take place.

Energy, Green Technology and Water Minister Datuk Seri Peter Chin Fah Kui said an electricty tariff revision was on the cards but the Government had not decided when.

He said there were many issues that the Government needed to address before a time could be set for the revision.

Under the Government Transformation Plan, we have to roll back the subsidies, which involves so many other things, such as fuel cost and the Government has to make a decision as to when Tenaga Nasional Bhd (TNB) is allowed to make the revision and this has not be confirmed, he said after the launch of TNB Service Charter yesterday.

The TNB Service Charter has the mission to improve TNB's services to its customers.

* I do not understand why the electricity has to be review again? The ringgit has been stronger against the greenback = purchasing power is stronger. Lower prices in all commodities, but WHY everything is increasing? Salary is not increasing. What and where went wrong? Is our dear KPI Minister about to fine tune other things instead of focus on the rising of commodities. All our dearly Malaysian wish/hope that he can contribute somehow and somewhat.

Good news is the former Selangor MG has been arrested. It's a big boost of confidences in our international business as it shows that Malaysia condone corruption and making it a safe haven for investment n business.

Is that true there will be a super bull run in 2010 or 2011 for Malaysia stock market?

2010-11-04T14:39:00.003+08:00

By the Star

Although the economic situation now compares with that of 1993, the last push must come from local retail investors

THE recent rally in our local bourse has prompted many seasoned investors, especially those who experienced the super bull run in 1993, to wonder whether the current rally is about to turn into a real bull run. Of course, nobody can tell for sure what will happen next, but we certainly can do some homework, comparing the circumstances back in 1993 against the current situation.

In 1991, Tun Dr Mahathir Mohamad unveiled the philosophy of “Malaysia Incorporated” which was a development strategy for Malaysia to achieve a developed nation by 2020. In the early 1990s, despite slowdown in the global economy, as the third largest economy in South-East Asia, after Indonesia and Thailand, Malaysia was supported by relatively strong macroeconomic fundamentals and resilient financial system. With the real GDP growing at 9.9%, ringgit appreciation, strong export growth and the Government’s measures to hold inflation low at 3.6%, the local stock market became an attractive alternative to foreign investors.

Before 1993, foreign investment in Malaysia was mainly dominated by long-term direct investment in the manufacturing sector. However, as a result of measures taken to develop our domestic equity market, coupled with the strong economic backdrop, we saw a massive influx of foreign capital inflow, which helped fuel the super bull-run in 1993. Within the year, the market increased by 98% to reach an all-time high of 1,275.3 points and foreign investors’ participation accounted for 15% of total trading value of our local bourse. This had also driven the market into a highly speculative one, which lured many retailers into the market, thinking of making fast and easy money.

With the presence of new and unfamiliar players, the market became a huge “casino”. Retail investors bought into stocks based on rumours rather than company fundamentals. Among the hottest topics during that time were the awards of government mega projects, privatisation candidates, sector play and regular news on upward revision of corporate earnings. Examples for the highly speculative stocks were Ekran, Ayer Molek Rubber Co, Berjuntai Tin Dredging and Kramat Tin Dredging.

In 1993, with the economy booming, the Government planned several mega projects, including the KL International Airport (RM8bil), Johor-Singapore Second Link (RM1.6bil) and Kuala Lumpur Light Rail Transit (RM1.1bil). The news of contract awarding immediately sent the market into speculative mood on those potential candidates. Similarly, the news of the Government planning on privatising some of the its own corporations, such as Petronas, KTM and Pos Malaysia had also driven these counters into prime trading targets.

Besides, the ease of accessing bank credit by investors also contributed to the market rally. We noticed that a high percentage of loans was channelled to broad property sector as well as the purchase of securities.

As a result of massive inflow of foreign funds and the super bull run in stock market, Bank Negara introduced a number of selective capital controls in early 1994 to stabilise the financial system,

Recently, our Prime Minister Datuk Seri Najib Tun Razak unveiled the Economic Transformation Programme (ETP) with the aim to boost our gross national income (GNI) to US$523bil in 2020 from US$188bil in 2009. The programme is to attract investment not only from the Government, but also (more importantly) from domestic direct investment as well as foreign direct investment. In view of strong economic growth, our GDP growth is anticipated to increase by 6% this year.

In September, we notice that there was a net inflow of foreign funds again in our equity market. Over the past few weeks, the average stock market daily volume had been hovering above one billion shares per day. Almost every day, the top 10 highly traded stocks were those speculative stocks with poor fundamentals. In addition, we noticed that some retail investors had started to get excited again in the stock market.

According to Andrew Sheng in his book titled From Asian To Global Financial Crisis, there were two main indicators to irrational exuberance during the super bull run in 1993. The first was the amah (domestic maid) syndrome. We need to be careful when amahs got excited about the stock market. This was because they did not know what they were buying and would always be the last to sell. The second indicator was when businessmen began to speculate stocks in the stock market. This was because they might neglect their businesses and use some of their cash for speculation.

Comparing our current market situation with the 1993 bull run, there are certain similarities that we see, such as strong economic growth, ringgit appreciation, inflow of foreign capital and ease of credit. However, our local retailer participation is yet to get boiling, which may be the last push factor towards the bull run. Hence, once the participation of the local investors starts to get heated up, together with more inflow of foreign fund, that may be the signs of the market heading for a ‘mini’ super bull run.

* Article is by Ooi Kok Hwa is an investment adviser and managing partner of MRR Consulting.

FRS 7: Are we disclosing too much?

2010-09-27T17:23:00.003+08:00

By The Star

MUCH has been said about corporate misdeeds, which are now considered to be more worrisome than in the past. There have been concerns raised over corporate governance, questions as to the role of management, directors and shareholders in running listed companies, as well as the role of auditors and regulators.

Equally, there has been a growing list of companies missing debt repayment and companies falling into the financially-troubled category of Practice Note 17 (PN17).

Shouldn’t alarm bells sound for these corporate misdeeds or failure to repay debt before the companies fall into the PN17 category and face the risk of being delisted? Would adequate disclosures in the financial statements have provided those alarm bells?

On the Malaysian accounting scene, there has been a big wave of change, with the requirement for full convergence with the International Financial Reporting Standards (IFRS) by 2012.

While this means more difficult times for the preparers of financial statements in terms of compliance with new standards and disclosure requirements, one also wonders whether this additional information would in turn benefit the investors and shareholders.

Let’s look at the arrival of FRS 7: Financial Instruments: Disclosures that have been effective from Jan 1, 2010.

FRS 7 is based on IFRS 7, which replaces IAS 32 (the Malaysian equivalent of FRS 132) Financial Instruments: Disclosure and Presentation and IAS 30, Disclosures in Financial Statements of Banks and Similar Financial Institutions (not adopted by the MASB or Malaysian Accounting Standards Board).

It provides an overview of the entity’s use of financial instruments and the exposure to risks they create. While some of the disclosures previously required by FRS 132 have been eliminated, FRS 7 introduces a number of additional and far-reaching disclosure requirements.

FRS 7 requires qualitative and quantitative information about the exposure to risks arising from financial instruments, including specified minimum disclosures to describe management’s objectives, policies and processes for managing those risks.

The quantitative disclosures provide information about the extent to which an entity is exposed to risk, based on information provided internally to the entity’s key management personnel with the most significant additions discussed below:

i) Credit risk disclosures have been beefed up, with more detailed disclosure being required on the credit quality of financial assets that are not impaired as at the balance sheet date, and the carrying value of renegotiated assets that would have been past due or impaired as at the balance sheet;

ii) Inclusion of sensitive analysis of the financial risks inherent in financial instruments through disclosing, for each type of market risk, effect on profit or loss and equity of a change in the relevant risk variable (eg an increase/decrease in interest rates by certain basis points, or a change in foreign exchange rates by certain percentage).

An entity is required to disclose, not only the methods and assumptions used in preparing the sensitivity analysis but also any changes from the prior period and the reasons for the changes;

iii) Disclosure of the carrying amounts of financial assets and financial liabilities under each of the classifications of FRS 139, Financial Instruments: Recognition and Measurement, together with the net gains and losses of each of those categories; and

iv) Disclosure of the hedge ineffectiveness.

The diagram depicts the changes in the requirements of FRS 7:

Collating these data to comply with this standard will be challenging, as it is imperative that the accounting function becomes fully aware of all quantitative data being reported to key management personnel since such information will be reported externally.

It is imperative that both the accounting and treasury functions ensure that the nature and extent of the information that is reported internally forms an appropriate and meaningful basis on which the disclosures in the financial statements will be derived from. The quality and depth of such information will reflect the strength and operational effectiveness of this relationship.

One of the many issues to consider is to strike a balance of the disclosures – too much or too little. One needs to guard against disclosing insufficient information, as the shareholders, analysts or users of the financial statements may interpret this as a sign of poor financial management.

Similarly, one needs to ensure that internal risk and financial reporting provides an appropriate base, in terms of quantity, quality and depth of information, on which externally provided financial information can be generated.

In this regard, two questions arise. Will the internal reporting stand up to external scrutiny? How does the internal reporting benchmark against other similar entities?

Looking at the requirements under FRS 7, one would agree that such disclosure enables users to evaluate the significance of financial instruments on the financial position and performance of an entity and to provide stakeholders with greater transparency with regard to the manner in which financial risk is monitored, measured and managed.

To the preparers, the requirements under this standard would be more onerous and subject to scrutiny.

Written by Teresa Chong, an audit partner of KPMG in Malaysia.

* As i have mention on my previous post in June. Will FRS 7 stand up to be the transparency of accounting and gives investor a better and clearer picture of corporate's health check?

Source/ Rumour: A high ranking officer in one of malaysia local banking industry has de-value the bank's assets on the previous year, making it a nett lost. The next year, the officer re-value again the bank's assets and making a tremendous profit making player in the industry. Does FRS 7 will able to overcome this?

Investor moving into gold and bonds 2010?

2010-09-23T13:38:00.004+08:00

By The Star

NEW YORK: For lack of a better option, investors are flooding into gold.

Gold prices hit a record high Wednesday, settling at $1,292.10 after a rally that started late Tuesday.

The run-up came after the Federal Reserve indicated it will leave interest rates historically low, and might be open to printing more money to stimulate a weak economy. The news sent the dollar lower, and big investment funds snapped up gold as a safe haven.

"People are questioning where to turn," said Dan Cook, an analyst with IG Markets in Chicago. "As long as there are a lot of concerns on the global economy ... gold can keep going higher."

Gold has been climbing steadily since the financial crisis of 2008, a sign that investors aren't sure where to park their money. While the stock market has been rising in recent weeks, equities are still a volatile investment. And the stalled economic recovery has added to the uncertainty, as central banks and governments consider more stimulus measures that could boost inflation.

Gold cost $718.20 in October 2008, just after the financial crisis, 80 percent below Wednesday's closing price.

The immediate factor behind gold's rise was the Federal Reserve's announcement Tuesday that the bank might again jump in to help the struggling U.S. economy, said William Rhind, strategic director of ETF securities.

The Fed's actions, coupled with more stimulus from other countries, raises the specter of inflation, Rhind said. That makes gold a natural shelter for investors who see a long stretch of weak growth and a sagging dollar.

That means current gold prices could stay around the level of $1,300 for some time to come, Rhind said.

"It's not something that can be changed in the short term. The reason is that with looser monetary policy, and with deteriorating (government) balance sheets, that will lead to inflation pressure," he said.

At the same time, investors are still suspicious of stock markets after a "flash crash" in May wiped out stock values in a matter of minutes, said Cook, the IG Markets analyst. Prices recovered that day, but the causes of the crash are still under investigation.

Other precious metals also rose. Silver December contracts gained 41.5 cents to settle at $21.055 an ounce and copper gained 8.4 cents to settle at $3.5650 a pound.

September platinum gained $20.50 to settle at $1,632.90 a pound while September palladium gained $11.85 to settle at $539.65.

Oil prices slid after the government said stockpiles of oil and gasoline grew last week, even though a major pipeline serving Midwest refineries was shut because of a leak.

Benchmark crude for November delivery lost 26 cents to settle at $74.71 a barrel on the New York Mercantile Exchange.

In other Nymex trading in October contracts, heating oil fell 1.29 cents to settle at $2.1070 a gallon and gasoline lost 1.82 cents to settle at $1.9014 a gallon. Natural gas rose 4.7 cents to settle at $3.966 per 1,000 cubic feet.

In London, Brent crude fell 47 cents to settle at $77.95 a barrel on the ICE Futures exchange. - AP

In view of the uncertainty in US, are investors moving into golds and bonds instead of the stock market in 2010? We see the highest price of gold in 2010 and its gold price going up/ reached peak?

Hugh Hefner to buy back Playboy

2010-08-04T15:52:00.004+08:00

By The Star

CHICAGO: Playboy Enterprises Inc. said Tuesday its board of directors has formed a special committee to consider founder Hugh Hefner's proposal to buy out the rest of the company.

The committee will consist of attorney Sol Rosenthal, who will serve as its chairman, and Playboy director Shing Tao. Rosenthal is a counsel at international law firm Arnold & Porter, while Tao is chairman and chief investment officer of Pacific Star Partners, a private investment group.

Hefner offered on July 9 to buy the roughly 30 percent of Playboy's outstanding shares that he doesn't already own for $5.50 each, and take the company private in a deal valuing Playboy at $185 million. A few days later, Penthouse magazine owner FriendFinder Networks Inc. made a formal, competing bid for the Playboy empire worth $210 million, but any such deal would require Hefner to agree to sell his nearly 70 percent stake.

The company, which is headquartered in Chicago, said Tuesday that no decisions have been made about Hefner's offer, and there's no guarantee any agreement will be reached.

Playboy's stock price has tumbled since hitting a peak in 1999 of more than $32, closing Tuesday up 2 cents at $5.37.

The company's namesake magazine has struggled with competition from the Web, losing readers and advertisers. It has tried to make up for a declining print business by licensing its brand and the iconic bunny ears for consumer products.

It recently released its June edition equipped with 3-D glasses, hoping to capitalize on the popularity of 3-D movies such as "Avatar."

Hefner has said he worries about the editorial direction of the magazine and its legacy. At 84, he still serves as creative director and editor-in-chief. - AP

* I jst commented on my previous post that playboy magazines is losing readers and advertisers and now i came to know that playboy is surviving by its bunny products. Interesting!!

Newsweek magazine sold, editor to step down.

2010-08-03T12:11:00.004+08:00

By the Star

NEW YORK: Sidney Harman, the 91-year-old founder of audio equipment maker Harman International Industries Inc., has agreed to buy Newsweek, ending a nearly half-century chapter for the magazine as part of The Washington Post Co.

Jon Meacham, the magazine's top editor since 2006, will step down.

Newsweek has been struggling to find a profitable niche amid poor economic conditions and a flood of online competition. Declines in circulation and advertising led to a nearly $30 million loss in 2009, and Newsweek expects to lose money again this year.

In an interview, Harman declined to discuss exactly how he will finance the magazine's operations. But he said he will give Newsweek some breathing room for a turnaround effort.

"My purpose is to get the magazine operating in a reasonable amount of time - and that's years, not weeks - on its own fuel," he said.

Harman has pledged to keep most of the magazine's staff, currently at about 350. He also said he doesn't envision any radical overhaul of the magazine, which was redesigned last year with a greater focus on long-form reporting and analysis to compete more directly with titles such as The New Yorker and The Economist.

"I bring intellectual curiosity and serious business experience to a place that could be done no harm from the first and a great deal of good from the second," he said.

Harman said he hasn't decided on a replacement for Meacham as editor.

Financial terms were not disclosed, although the Post Co. said it is keeping the magazine's pension liabilities and certain other, unspecified employee obligations.

With the print industry in decline, the Post Co. likely sold Newsweek at a fire-sale price.

Bloomberg LP bought BusinessWeek last year for just a few million dollars.

"In seeking a buyer for Newsweek, we wanted someone who feels as strongly as we do about the importance of quality journalism," Post Co. CEO Donald Graham said.

"We found that person in Sidney Harman." Graham added, "He has pledged not only to continue to produce a lively, compelling and first-rate news magazine, but also an equally dynamic Newsweek.com."

The Post Co., which acquired Newsweek in 1961, has been looking for a buyer since May, when it hired the investment bank Allen & Co. to help shop the magazine to potential bidders.

Despite continuing losses, Newsweek drew several offers, including ones from Newsmax Media, the publisher of the conservative monthly Newsmax; Open Gate Capital, the private equity firm that owns TV Guide magazine; and Thane Ritchie, a hedge fund manager who made an unsuccessful bid last year for the company that publishes the Chicago Sun-Times.

The winning bidder founded Harman International Industries in 1953. Today, the company brings in nearly $3 billion in annual revenue selling equipment under brands including JBL, Infinity, Harman Kardon and Mark Levinson.

Its audio products are used in such auto brands as Daimler AG's Mercedes-Benz, BMW AG and Toyota Motor Corp.'s Lexus.

Though he retired from the company in 2008, Harman still holds a number of titles at philanthropic and cultural institutions, including the Aspen Institute and Freedom House.

He is the husband of California Democratic Rep. Jane Harman, who is chairwoman of the House Homeland Security subcommittee on intelligence. - AP

* We yet see another magazine buyout. Online ads is gradually or should i put it rapidly taking over conventional ads on magazine, newspaper, flyers, etc. This makes conventional magazine company going down with less advert opportunities. A very good example would be playboy magazine, it was a hit on it heydays and when online porn come into place, the once mighty playboy yet have to go down. Btw, Harman/Kardon is a good product, but my Toshiba laptop embeded with Harman/Kardon speaker has broken on one side. SAD

BLand to launch projects worth RM500m this year

2010-07-26T10:17:00.004+08:00

By Biz Times

BERJAYA Land Bhd (BLand) (4219) will launch new projects worth more than RM500 million this year to take advantage of pent-up demand for housing in the Klang Valley.

BLand is bullish on the property market, its senior general manager of properties and marketing, Mah Siew Wan, said.

"We are seeing a return of buying interest for high-end houses. Our properties are all unique and in prime areas so we are confident of brisk sales," she told Business Times in an interview.

BLand, 53 per cent controlled by Tan Sri Vincent Tan's Berjaya Corp Bhd, will launch Vastana25, a high-end project, at Seputeh Heights in Kuala Lumpur by end-July.

Last weekend, it relaunched The Peak at Taman TAR in Selangor.

The Peak, comprising 88 guarded and gated bungalow lots, was re-launched as it now has freehold status.

By the end of this year, BLand will launch KM1 Condominiun in Bukit Jalil and shop offices in Berjaya Park in Shah Alam, Selangor.

The group has about 10 ongoing developments worth some RM1 billion and it will launch more projects next year, Mah said.

BLand has some 400ha in the Klang Valley with the potential of generating more than RM8 billion in gross development value.

It also has projects in China, Vietnam and South Korea worth more than US$12 billion (RM 38.4 billion).

In China, BLand has a mixed-development project comprising retail, entertainment, theme park and water park in Sanhe City, Hebei Province. It has yet to launch the project.

Infrastructure work on its maiden US$3 billion (RM9.6 billion) resort-type mixed-development township project in South Korea has started.

The project featuring apartments, serviced residences, semi-detached and resort-style villas, a wellness resort, a casino and resort hotel, hotel residences, a mall and an indoor arena will be launched next year.

In Vietnam, BLand has a US$6.3 billion (RM20.7 billion) mixed-development project in Dong Nai Province.

* Bland is coming up with new property development this 2years (2010, 2011), we shall see other players joining in for the following months. "km 1 condominiums is open up for registration" caught my attention. Did a little searches and found that it is a total 300units condo (Density of the Condo is still reasonable & manageable, but i foresee they are many condo popping out like mushroom in that area) Hopefully it will not really dents up that area! hehe.. Location of km 1 condominiums is just beside Green Avenue Condominiums and opposite The Link, check it out "km 1 condominiums location". I guess Bland is offering the Golf Course View again to attract buyers, but i'm not sure.

* My 2cents of thought

Kuala Lumpur International Financial District (KLIFD)

2010-07-15T12:04:00.004+08:00

Read an article on the star about the MRT to give high economic investment return. An interview by STARBIZ to Gamuda Bhd group MD Datuk Lin Yun Ling. It come to my attention on the Kuala Lumpur International Financial District (KLIFD), was curious about the location and information about of this KLIFD.

Come to realise that it is a proposed joint property development comprising office towers for finance and banking, residences and retail spaces between 1Malaysia Development Berhad (1MDB) and the Mubadala Development Company on a plot of land covering 34.4 hectares near Jalan Tun Razak, Kuala Lumpur. (Near Jalan Davis in Pudu, at 1st i tot it was on the Sg.Besi airport/ airfield)

Unfortunately the KLIFD groundbreaking was ceremony postponed due to unknown reason. The event was reported that, was to be inaugurated by Prime Minister Datuk Seri Najib Razak and General Sheikh Mohammed Zayed Al Nahyan, the Crown Prince of Abu Dhabi and deputy Supreme Commander of the United Arab Emirates Armed Forces.

Anywhere is the location of the Kuala Lumpur International Financial District (KLIFD)- http://wikimapia.org/#lat=3.1390485&lon=101.7160821&z=17&l=0&m=h

Hopefully it will start work and MRT will be connected to this area.

Malaysia FRS 139, are they ready for it?

2010-06-25T15:34:00.003+08:00

By The Star

COME Jan 1, the Malaysian Accounting Standards Board’s Financial Reporting Standard 139 – Financial Instruments: Recognition and Measurement (FRS 139) will finally be implemented in Malaysia. Four years since its implementation date was set, it is still considered uncharted waters for many corporations. This is not surprising since FRS 139 is considered the “mother” of all standards by some.

Under FRS 139, many financial assets and financial liabilities are required to be carried at fair value. This will have a significant impact on loans between related parties, which generally can be interest-free or carry interest rates which are well below the market rates.

The definition of fair value under FRS 139 is “the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction”. Paragraph 48A of FRS 139 further states that “The best evidence of fair value is quoted prices in an active market ... Valuation techniques include using recent arm’s length market transactions between knowledgeable, willing parties, if available ... ”

Interestingly, it loosely echoes the Organisation for Economic Cooperation and Development’s guide for an arm’s length interest rate:

“... an arm’s length interest rate shall be an interest rate which was charged, or would have been charged, at the time the financial assistance was granted, to uncontrolled transactions with or between independent persons under similar circumstances.”

It could well imply that the measurement of related party loans initially at their respective fair values and subsequently at amortised cost using the effective interest method, may be deemed to be in line with the arm’s length principle since market interest rate is used.

Following the introduction of Section 140A of the Income Tax Act 1967 (ITA) which basically requires taxpayers to ensure that their related party transactions are carried out at arm’s length, would this then mean that an assessment of the fair value of related party loans by the auditors under FRS 139 can serve as contemporaneous documentation for transfer pricing purposes?

The corporate taxpayers do not have an option as to whether to accept the fair value accounting treatment in their financial statements – it is a requirement of FRS 139 and also the Companies Act 1965.

Further, requiring corporations to measure related-party loans initially at their respective fair value may not only affect the income statement. However, for certain, the subsequent amortisation amounts, measured at amortised costs, will represent accounting interest income or interest expense in the income statement. Book entries are generally not the actual receipts or payments, and in tax terms are not real costs or income earned.

At this point, it would be helpful to look at what other tax jurisdictions have done under similar circumstances. Hong Kong, Singapore and New Zealand tax authorities have issued departmental interpretation and practice notes on the income tax implications arising from the adoption of IAS 39 or its local equivalent.

While in general most tax authorities require the tax treatments to follow or be consistent with the accounting treatment under FRS 139 as far as possible, they also acknowledge that the revenue versus capital consideration would need to be considered in determining the tax treatment.

As an example, in Singapore, the tax adjustment is such that the discount on the interest-free loan recognised in the income statement will not be allowed as a tax deduction and the interest income recorded will not be taxed because these are merely book entries.

The auditor’s primary role is still that of expressing an opinion as to the true and fair view of the financial statements. This means that corporations would still need to provide auditors with supporting evidence of the fair value of the related-party loans to enable auditors to express an opinion.

The fair value measurement rests on the rebuttable presumption that effective interest rates used in the amortised cost method is the market interest rate and is thus, at arm’s length. While this is generally true, loan arrangements made with unrelated parties in the current business environment should be considered as arm’s length, although they may not carry the same market interest rates due to various factors such as level of credit risks, tenure, size of collaterals, etc.

So, what would corporations provide to the auditors? Section 140A of the ITA provides that the acquisition or supply of property or services with related parties be conducted at arm’s length, failing which the Director General of Inland Revenue may adjust the transfer prices.

Since 2003, transfer pricing guidelines have been issued, setting out the extent of information required in a transfer pricing report. The guidelines also stipulate that it is a pre-requisite that a comparable analysis (benchmarking) be carried out to substantiate the arm’s length pricing.

To ensure that corporations provide auditors with the correct arm’s length and market rate interest for related-party loans in the FRS 139 measurement of fair value, it is very likely that a comparable analysis would need to be carried out. This should then provide the setting not only for the auditors but for the tax authorities in support of the argument for arm’s length. Any fair value book entries put through the financial statements should then be met with minimum queries from the tax authorities.

Written by Janice Wong is tax partner and head of transfer pricing services at Ernst & Young Tax Consultants Sdn Bhd.

*What is the impact of implementing FRS 139? Rumour in the financial industry is that it will have a huge impact on the reports of collection system.

Warren Buffett in India?

2010-05-03T22:52:00.001+08:00

By The Star

OMAHA, Nebraska: Warren Buffett said on Saturday he plans to visit India next March, and would not rule out the country for possible future investments.

Speaking at Berkshire’s annual meeting in response to a shareholder question, Buffett said he had decided only on Friday to make the trip, saying the company’s Iscar Metalworking Cos unit “is doing very well there”.

He said “we do not rule out India” as a possible locale for future Berkshire investments, whether in companies or marketable securities, though bureaucratic obstacles could complicate any plans to invest, including limitations on foreign ownership.

“We’ve looked a lot at being in the insurance business in India,” he added. Insurance and reinsurance are Berkshire’s main business lines. Demographers expect India to overtake China as the world’s most populous country within the next two decades, and Buffett predicted that “people in India will be living a lot better 20 years from now.”

Buffett does not disclose where he plans to make future investments, but occasionally travels outside the United States to seek opportunities or check on Berkshire investments.

Among Berkshire’s investments in Asia are the South Korean steelmaker Posco and Chinese car and battery maker BYD. — Reuters

Both have been profitable, giving Berkshire respective paper profits of US$1.32bil and US$1.75bil as of year-end, according to Berkshire’s annual report. — Reuters

iPhone - a temporary satisfaction with a long term slave

2010-03-22T22:48:00.003+08:00

By The star (SOO EWE JIN)

THE thing about technology is that there is no finality to it. More so when it comes to everyday technology.

Take, for example, the smartphone. I have nothing against the iPhone, the BlackBerry or the Android. They have fantastic features and I can assure you that if I have cash to spare, I will happily buy an iPhone.

Not only will I look cool, but it will really freak out the young people who call me Uncle when I use it to play the golden oldies out loud.

But my boss will probably want me to buy the BlackBerry. After all, it has become a necessary accessory of the successful working man, like the tie.

Well, I have seen how this group of people like to hang out in Mont’ Kiara after work. They are able to remove their ties, but they are constantly interrupted by their BlackBerry. And it’s always about work.

As for me and my trusty ordinary handphone, it’s often just an SMS from my dear wife asking me to remember to buy a loaf of bread on the way home.

The problem with all these fancy gadgets is that we are thrilled initially as we try out everything and anything available. But eventually, we only use a smartphone, well, as a phone.

I read an article in The New York Times last week about a feature that is fast gaining popularity. It’s called FourSquare. Basically, it allows you to beam your location to your friends so that they know where you are.

Let’s say you promised to meet friends at Suria KLCC but forgot to tell them where exactly. By beaming your location, your friends can track you down to the exact shop that you are in.

I am sure the women reading this article will be more than happy to tell their husbands or boyfriends to get connected to FourSquare.

It will end forever the little white lies that they tell like, “Sayang, I will be a bit late, still at the office lah!”

“Oh no, you are not! You are hanging outside the spa at Mid Valley and if you don’t come home this minute, you can sleep on the sofa tonight!”

Get the idea?

Actually, it’s a marketing strategy to push us to embrace anything that is new, even though old technology works just as well.

A friend, knowing how much I love the good old days, decided to give me his old PDA last week. These days, PDAs no longer exist since all their features are embedded into the phones.

I am now collating all the information I need, including the full records of my DVD collection, my books, my friends’ email addresses, and all their birthdays, on this cute little Palm.

At the dentist the other day, I whipped out the PDA to read a book about the life of William Wilberforce which I had downloaded. It went well for a while, and then the strain got to me, so I switched it off and reached out for the Reader’s Digest. It was an old issue but it kept me occupied, and happy.

Next to me, a young man was probably happier. He was busy taking photos of his beautiful girlfriend, who was taking a nap, on his iPhone.

* I found this article pretty interesting as i saw many youngster who would indulge into such fancy phone jst for a temporary satisfaction and a long term slave to it.

Small Office/Home Office (SoHo)

2010-03-21T20:01:00.004+08:00

By the Star

CB Richard Ellis Malaysia Sdn Bhd managing director Allan Soo says the typical SoHo buyer are mostly independent individuals rather than professionals.

“This can be advertising agencies or those within the IT industry.”

Soo says the location of the SoHo is critical.

“It definitely makes sense to work in the city within a business environment and having your business partners nearby. If it’s going to be a hassle for your clients to come to you, than it does not make sense.”

Zerin Properties chief executive officer Previndran Singhe concurs that the location of the SoHo is very important.

“You need to be around amenities. Otherwise it’s going to be tough! But ultimately, it all depends on both the product and the location of the property.”

Wong, however, reckons that a SoHo buyer would be more comfortable working outside of the city centre.

“The whole idea of living and working in the same environment is so that you can avoid the hassle of getting stuck in traffic jams when travelling to your place of work.

“People who operate out of a SoHo would most likely prefer a quiet environment rather than to be smack in the middle of the city centre and dealing with the noise. The ideal location would be the outskirts of the city, near a park or commuter train station.”

A search on iproperty.com, the country’s top property portal, reveals four SoHo developments that are currently in the pipeline.

They are the Selangor State Development Corp’s (PKNS) Kasturi Idaman in Kota Damansara, HR United Group’s SB1 and Persanda 2 in Sungai Besi and Shah Alam, respectively and Ong Chong Realty Sdn Bhd’s PJ5 SoHo in Kelana Jaya.

Previndran says there is a growing market for SoHo developments and cited YTL Land & Development Bhd’s CENTRIO at Pantai Hill Park in Bukit Kerinchi, Kuala Lumpur.

According to reports, 70% of the development (at CENTRIO) have been sold. It opened for sales in 2006.

Akashdeep Singh, a 30-something freelance film editor, says working from a SoHo provided him with great flexibility.

“Some people enjoy this lifestyle – working late and sleeping overnight. It can lead to a lot of office romances,” he says, laughing.

Akashdeep, who was going to India for a month that same day, says: “And in cases of emergencies, like if you need to take a sabbatical, you can avoid the hassle of giving notice. In a normal working environment, it’s hard to do this.”

Former lawyer Melissa Ram used to work out of her home and relished the fact that she could completely avoid traffic jams.

“There’s a lot of flexibility, plus there’s no overhead cost or rentals to worry about. With the internet, you can work from virtually anywhere.”

Melissa, however, adds that there were also drawbacks when working from home.

“Sometimes when you need to meet with clients, having them over in your house isn’t appropriate and in such situations, having an office would be better. In such situations, you would have to go out of your way to meet your client rather than to have the convenience of them coming to you.”

She adds, however, that if given a choice, she would still prefer to work from home.

“While working you could still manage the house and do the cooking. Plus, you could work till midnight and not have to worry about security issues.”

Malaysia Goods and services tax (GST) in 2011 and 2012??

2010-03-18T22:07:00.003+08:00

By The Star

It is not a question of if but when the goods and services tax (GST) will be implemented in Malaysia, according to Taxand Malaysia Sdn Bhd managing director Veerinderjeet Singh.

The GST had been scheduled to replace the current sales and services tax (SST) by the middle of next year.

But Second Finance Minister Datuk Ahmad Husni Hanazlah recently said the government would defer tabling the GST bill for a second reading in Parliament.

Husni had said the government wanted more time to seek public feedback before proceeding with the GST.

But Veerinderjeet believes it is only a matter of time before the GST is implemented despite the deferment in tabling the GST.

“We believe that if the GST is not implemented this time next year, it would likely be implemented the following year,” he told reporters after his presentation at the GST & Other Indirect Tax Developments seminar yesterday.

The seminar was organised by Taxand Malaysia and the Malaysian International Chamber of Commerce and Industry.

Veerinderjeet said the seminar was to educate professionals on the actual mechanics of GST in preparation for the eventual implementation of the GST. “Businesses in general need to understand the detailed rules and consider how these would apply to their own business operations. “Failure to do so may result in the loss of the set-off or credit for input taxes suffered and/or being exposed to onerous penalties for non-compliance with the law,” he said. On the challenges of implementing the GST, he said there were several, including pricing and embracing appropriate technology in areas such as GST collection at each stage of the supply chain. On the proposed GST rate at 4%, Veerinderjeet noted that the current SST rate far exceeded the proposed GST rate.

So does this means that everything is goin up? Inflation would be cap high? Property prices are goin to go further up? I just think that KL property prices has gone crazy and overly priced. The real problem is there are buyers who are willing to pay that price that has been overly priced. E.g Valuer only value that piece of 2nd hand corner 2 storey terrace link house property at Cheras for 450k but the seller is asking for 600k and the buyer just blindly purchase that piece property. Nobody's fault and is there a mechanism to educate ppl? lolx.. Else KL property will gorang untill hangus :P

Malaysian property market to improve further this year

2010-01-26T22:58:00.006+08:00

Its been a long time i leave it rot and there are many valuable business news that i missed out:

The new LRT (The Star) extention from Sri Petaling all the way to IOI Mall, everyone is predicting where will all the station will be location. Kinarara suddenly become a boom.
The internal conflicts of Ho Hup, land sold in a lower price. Can we still trust Ho hup on its new project in Bukit Jalil/Kinrara? Its a strategic piece of land though!

Let's continue with some interesting and valuable insights!

By The Star

The Malaysian property market, estimated to have registered transactions worth RM75.42 billion last year, is expected to improve further in 2010 in line with the economic recovery.

The transactions involved 337,990 properties as compared with the 340,240 valued at RM88.34 billion in 2008, said the director general of Valuation and Property Services Department, Finance Ministry, Datuk Abdullah Thalith Md Thani.

He said the challenging economic and financial environment had affected the overall performance of the Malaysian property market last year. "2010 will be a good year for all.

"The property market for this year will improve as the number of transactions involving new housing and construction activities, increases," Abdullah Thalith told reporters at the Third Malaysian Property Summit 2010, here Tuesday.

He pointed out that Malaysia is expected to steer towards a recovery path this year, driven primarily by domestic demand, with commodity prices for rubber, crude oil and palm oil also improving.

These, he said would increase the confidence level among consumers and provide a positive impact for the property sector.

"The demand for properties is returning," he added.

Abdullah Thalith said the government would continue to implement appropriate measures to restore confidence and market sentiment.

He said the liberalisation of Foreign Investment Committee (FIC) guidelines, would increase the competitiveness of Malaysia, as a preferred investment destination.

Furthermore, Abdullah Thalith said acquiring properties in Malaysia would be more attractive, as FIC approval is no longer required.

He said the review of the Real Property Gains Tax (RPGT) would also augur well for the property industry. - Bernama

Banks are getting more business with their mortgage loan pie expanding wide. NPL will also be monitor with the new Bank Negara Malaysia ruling. So the very big questiong with property investor (2010) : will bank negara malaysia will review its lowered BLR rate? hehe..

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

2009-07-16T12:28:00.009+08:00

By the Star

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

2009-07-13T11:49:00.003+08:00

By The Star

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

How to do business like Air Asia?

2009-06-18T09:33:00.003+08:00

By the Star

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Public Bank selling its debts?

2009-06-09T09:39:00.002+08:00

By The Star

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

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

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

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

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

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

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

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

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

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

* Is this wat we call the money market?

Australia as your 2nd home?

2009-06-01T10:21:00.003+08:00

By The Star

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

EPF takes profit from banking stocks

2009-05-21T00:20:00.003+08:00

By The Star

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

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

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

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

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

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

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

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

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

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

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

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

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

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

2009-05-05T12:05:00.003+08:00

By The Star

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

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

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

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

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

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

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

Economists say the recession began in December 2007.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

2009-04-23T14:36:00.004+08:00

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..

Making money through undervalue stocks

2009-04-20T16:38:00.003+08:00

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.

The company must have cash to self-finance the exercise;
Some of its properties can be pre-sold to finance to the exercise;
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!

Brand New Ikea store in Ampang or Cheras?

2009-04-07T14:42:00.003+08:00

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..

Air asia X raising fund again.

2009-04-03T14:15:00.004+08:00

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.

Magna Prima is buying the Lai Meng school's land

2009-03-24T15:48:00.004+08:00

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?

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

2009-03-18T16:13:00.002+08:00

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.

Weak SE Asia property stocks 2009

2009-03-17T10:05:00.002+08:00

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.

MORE PAIN FOR PROPERTY SECTOR

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

Malaysia largest import & export products in 1st quarter 2009

2009-03-12T11:32:00.008+08:00

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]

Critical to keep good employees during an economic downturn

2009-03-10T14:29:00.002+08:00

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.

Kumpulan Sentiasa Cemerlang (KSC) says it..

2009-03-03T21:52:00.002+08:00

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 DiGi.com 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.

MORE EARNINGS DOWNGRADES?

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

Malaysia's top 10/20 companies performed 2008

2009-03-02T15:41:00.013+08:00

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.

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

2009-02-27T11:02:00.005+08:00

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.

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

2009-02-25T13:19:00.004+08:00

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.

Mah Sing new project in setapak

2009-02-24T09:15:00.002+08:00

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.

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Satyam saga’s impact on outsourcing industry

2009-02-23T10:03:00.005+08:00

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.

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

2009-02-20T10:54:00.002+08:00

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.

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

2009-02-19T11:20:00.002+08:00

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...

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

2009-02-18T09:10:00.002+08:00

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.

Higher Unemployment for 2009

2009-02-09T16:19:00.001+08:00

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.

Challenging year ahead seen for secondary residential properties (2009)

2008-12-15T16:44:00.001+08:00

By Star Biz

It will continue to be challenging in 2009 for the secondary residential property market as buyers continue to adopt a wait-and-see stance on property purchases due to the global economic slowdown, property experts said.

The degree of softening in property sales would depend on the severity of the economic downturn next year, they said.

Regroup Associates Sdn Bhd executive director Paul Khong acknowledged that the secondary residential property market has been quite slow as potential buyers have been holding off decisions on house purchases. “This has significantly impacted the property market especially in the current quarter,” he told StarBiz.

“The quiet period is expected to continue through to the first quarter of 2009 after all the holidays are over.” S.K. Brothers Realty (M) Sdn Bhd general manager Chan Ai Cheng said buyer sentiment had taken a beating due to the current economic uncertainties.

“It’s a waiting game for buyers. There are even ‘aborted’ cases where buyers have placed an earnest deposit to purchase a property and subsequently pulled out from the transaction, in the hope that prices will come down further or in search of fire-sales while others are uncertain of their job stability and postponing the purchase commitment,” she said.

Nevertheless, Hartamas Real Estate Sdn Bhd managing director Eric Lim is anticipating stable to moderate growth due to bargain hunting in certain segments of the secondary property market, especially landed residential property. “(However) the market for properties that are purchased for investment and speculation will be slower,” he acknowledged.
The agency experienced a 20% to 30% drop in sales in the second half of the year versus the corresponding period of 2007. “This is quite substantial for us. Sentiment is still not good,” Lim noted.

CH Williams Talhar & Wong Sdn Bhd managing director Goh Tian Sui concurred. “The last two to three months have been quite bad – enquiries and sales activities have dropped. Owners are more open to negotiations in pricing,” he said. The prices of certain secondary residential properties could also face more pressure next year due to a lack of demand and an increase in supply of completed projects.

Citing an example, Regroup’s Khong said the situation for high-end condominiums in the KLCC and Mont Kiara areas were getting critical and there would be more pressure on rental and capital values as many of the projects in the vicinity would be completed within the next one or two years.

“Supply will be mounting on a monthly basis as demand continues to be low and this will eventually translate into lower capital values and rental.

“An easy 15% to 20% shed in values are envisaged for this sector generally,” Khong said.
The asking prices for middle-class residential properties in general, for example, terrace houses in good locations such as Sri Hartamas, Bandar Utama and even Taman Tun Dr Ismail, had already been adjusted 5% to 10% lower to reflect current market conditions, Khong said.
Khong & Jaafar Sdn Bhd managing director Elvin Fernandez noted that prices of high density condominiums with a low occupancy rate in not-so-choice locations were about 10% lower now compared with a year ago.

“Although prices have softened, it is still difficult to sell such properties,” he said.

YTL Power a BUY?

2008-12-04T14:02:00.000+08:00

By Star Biz

YTL Power International Bhd’s proposed purchase of Singapore’s PowerSeraya Ltd looks unattractive from the earnings record of the latter. It was announced on Tuesday the YTL Power group will purchase the entire equity of PowerSeraya, owner of two power stations that has 25% of Singapore’s electricity generation capacity.

The price for PowerSeraya is S$3.4bil (RM8.09bil) and the assumption of a S$200mil debt that owner Temasek Holdings Ltd owes the former. As the debt is owed to a company that will become YTL Power’s wholly-owned subsidiary, it is believed the debt can be cancelled.
The acquisition is expected to be completed in the first half next year and in its first full year of contribution in 2010, PowerSeraya is projected to produce a net profit of RM76mil, YTL Power said. That translates into an earnings per share contribution of 1 sen for YTL Power, the company added.

That sounds miniscule for an investment outlay of S$3.4bil. It should be noted, however, that PowerSeraya’s net profit was much higher at S$218.3mil for its year ended March 31 (FY08). The reason for the wide fluctuation in its profitability is not known.

It could be due to factors such as scheduled maintenance shutdown at a certain period. PowerSeraya’s earnings in FY08 would be a return of 6.4% on YTL Power’s purchase price. The free cashflow from PowerSeraya should exceed that because depreciation, a large non-cash item, would have been deducted to arrive at the profit figure.

In addition, PowerSeraya is constructing two 379MW cogeneration units that will be operational in 2010, which will expand its revenue-generating capacity. Power project investments are premised on free cashflow of the acquired assets being used to repay loans taken to finance the acquisition.

YTL Power said the PowerSeraya purchase will be funded by S$1.15bil from the former’s cash reserves and S$2.25bil from a loan.

Outlining a scenario, an investment banker told StarBiz yesterday that if YTL Power took a 10-year loan for S$2.25bil, half of that would be repaid in five years from PowerSeraya’s own cashflow. At that time, S$1.125bil of debt would have been repaid and become equity for the YTL Power group.

In 10 years, the entire loan would have been repaid and YTL Power would then own PowerSeraya with the entire debt repaid. Effectively, YTL Power would have gained an equity value of S$2.25bil by then.

That’s a huge sum in equity value, although it’s not an acquisition primed for high growth. The objective is steady, assured wealth creation. Furthermore, YTL Power is not getting PowerSeraya at a distressed sale price because Temasek is not in any form of distress. The word on the street is the internal rate of return (IRR) - the return to be earned on invested capital - for PowerSeraya is about 10% or in the low teens.

For a richer IRR in the mid-teens, YTL Power will have to trawl further afield for distressed asset sales which, no doubt, it is working on.

Petronas revenue still up!

2008-12-03T09:32:00.001+08:00

By the edge

Despite falling oil prices, national oPeil company Petroliam Nasional Bhd (Petronas) continued to chalk up an impressive growth in net profit on the back of higher average prices of the commodity.

Petronas posted a 46% year-on-year growth in net profit to RM42.68 billion for the first half (1H) of its financial year ending March 31, 2009 from RM29.27 billion, after paying tax expense of RM20.5 billion.

Revenue was sharply higher at RM157.2 billion versus RM102.8 billion a year ago. Pre-tax profit soared nearly 49% to RM63.26 billion from RM42.57 billion previously. Higher earnings boosted Petronas’ cash pile to RM124.6 billion from RM113 billion as at March 31. The group’s other liabilities, however, shot up 47% to RM112.8 billion from RM76.9 billion in the previous corresponding period.

The surge in Petronas’ profit did not come as a surprise given the 64%, or US$49.50 (RM179.68), jump in the average price of Tapis crude to US$126.48 per barrel during the six months under review. The average price of the commodity was US$76.64 in the corresponding period last year.

Tapis crude is the benchmark for Petronas’ production.

However, the national oil company which contributes over 40% of the government’s coffers in the form of petroleum taxes and dividend, is likely to see lower profits in the second half of its financial year in tandem with the drastic drop in crude oil prices since July when the worldwide commodity boom collapsed.

The average price of Tapis fell to US$74.77 in October, down 30% from US$106.92 in September. Yesterday, Bloomberg Asia-Pacific Tapis crude oil spot price was US$50.03 per barrel. The current level is the lowest since January 2005. The price has plunged 67% from the peak of US$153 in mid-July.

The last financial year, ended March 31, 2008, was a record year of profit for Petronas. The operating environment has since turned harsh, for on top of the meltdown in crude prices, the weakening ringgit and increase in production costs will further erode the group’s profitability.
According to Petronas president Tan Sri Mohd Hassan Marican, every 10-sen fall in the ringgit against the US dollar will take away about RM2.5 billion from the group’s profit.
The US dollar has strengthened substantially in recent months due to its standard currency status. The greenback has appreciated to RM3.628 against the ringgit, up almost 13% from the US$3.21 level in July.

International operation is Petronas’ biggest revenue contributor, generating RM68.9 billion or 44% of total revenue, followed by exports with RM56.7 billion or 36%, and domestic opertation, RM31.5 billion or 20%. But domestic operation, including exports, is still the most profitable due mainly to the lucrative production-sharing contracts it has with international oil majors for exploration and production (E&P) activities.

Giving a breakdown, the oil business, including refined petroleum products and crude oil trading, is the most profitable division, accounting for 40% or RM25.7 billion of the company’s operating profit. Gas is the second biggest profit-earner, contributing RM20.8 billion or 32.5% to group operating profit. Next comes E&P with 19% or RM11.9 billion.

Malaysia's most valuable brands 2008

2008-11-27T13:30:00.002+08:00

By the edge

For the second year running, Maybank has been ranked as Malaysia’s most valuable brand with a brand value of RM9.3 billion in a valuation study commissioned by 4As (the Association of Accredited Advertising Agents Malaysia) and The Edge.

The Malaysia’s Most Valuable Brands (MMVB) 2008 study, conducted by leading brand consultancy Interbrand, also ranked Public Bank, with a brand value of RM6.8 billion, as Malaysia’s second most valuable brand, followed by CIMB, with a brand value of RM6.3 billion.
The three banks, together with Genting (RM4.5 billion), Parkson (RM4.2 billion), and Celcom (RM3.9 billion), make up the six most valuable brands. All six had a brand value that exceeded US$1 billion (RM3.6 billion) each.

The total brand value of Malaysia’s 30 Most Valuable Brands was RM61.8 billion, up from RM56.6 billion last year. The top 30 brands were honoured at a gala event here last night. The guest of honour, Tan Sri Amirsham Abdul Aziz, Minister in the Prime Minister’s Department, handed out the awards.

“Brand valuation is a step in the right direction. Brands build trust. With the economic situation, branding has become even more important,” said Amirsham.
According to the study, despite a small drop of 3% in value, Maybank still tops the league table. Its acquisition in Indonesia has not affected the results as the study was based on year-end 2007 financials.

Datuk Seri Abdul Wahid Omar, president and CEO of Maybank who received the award last night, said he was happy with the ranking even though the brand value had decreased slightly. “So as we move forward locally, we will aim for the Maybank brand to be recognised, not only in Malaysia, but also in the Southeast Asian region.”

On the other hand, CIMB’s mergers and acquisitions in 2006 and its unifying brand strategy saw its brand value jump 83% to RM6.3 billion from RM3.4 billion last year, the highest increase among the top 30.

“This is a testament to our investment over the last year, We will continue with our long-term strategy as it has proven effective,” said Effendy Shahul Hamid, head of group corporate communications, CIMB Group.

The brand value of DiGi, which moved up one notch from No 10 last year, grew 35% despite a highly competitive and licence-restricted marketplace, said Interbrand in a press release issued yesterday.

Maxis is not in the rankings this year as it has been delisted from Bursa Malaysia. One of the criteria for MMVB is that the brands must be owned by listed companies as the study is based on publicly available information. Brands must also be consumer-facing and Malaysian-owned or originated.

National icon Proton saw the biggest fall in brand value of 37%, causing it to drop from No 23 last year to No 28 this year. The study noted that Perodua’s brand value now stands at more than 15 times that of Proton.

Interbrand’s methodology values brands in the same way that other corporate assets are valued, on the basis of how much the brands are likely to earn for their owners in the future. “Interbrand uses a combination of analysts’ projections, financial reports, and its own analysis to arrive at a net present value of those earnings,” said Interbrand group CEO Jez Frampton.
Interbrand noted that global turbulence roiling the markets had not fully impacted, except for falling margins and the increase in provisioning in general. The brand risk factor has also increased, it added.

4As president Datuk Vincent Lee said the study put Malaysia among the few Asian countries that currently recognised the value of brands as business and economic assets. “It helps the growth of business and celebrates the true heroes of economic value generation, the brand builders of a nation,” he added. Ho Kay Tat, managing director and editor-in-chief of The Edge, said the study “creates a platform for discussing the role of brand-building, ensuring business health and earnings continuity”.

“Through all this (economic turmoil) it has been very clear that brands are a powerful driver of recovery. Fundamentally, brands are there to enable consumers to choose. They mark out one offer from a company from somebody else’s. They are the reason why people will buy, and the reason why people will repurchase. They are a driver of demand,” said Frampton at a press conference earlier.

This year, three new brands made it to the top 30 — Sin Chew (No 27), Jobstreet.com (No 19) and Ogawa (No 29). Jobstreet.com is the first online brand to make it into the list.

Market slump takes RM21b toll on unit trust funds

2008-10-31T14:07:00.001+08:00

By Biz Times

THE sharp falls in the equities market have cut the total value of unit trust funds by RM21 billion in the first nine months of the year.

The value dropped 12 per cent to RM148 billion from RM169 as at December 31 2007.
However, Federation of Malaysian Unit Trust Managers (FMUTM) president Tunku Datuk Ya'acob Tunku Abdullah said the percentage of the current net asset value (NAV) had grown to represent 19.31 per cent of Bursa Malaysia Securities' market capitalisation. At the end of last year, the percentage was 15.32 per cent. This means that the price reduction for shares held by the funds was not as great as the overall market's.

A total value of RM335.61 billion in market capitalisation had been wiped out from the local bourse between December 2007 to September 2008. "Our benchmark (for the NAV percentage) will be 20 per cent by year-end," he told reporters after his welcoming note at the annual convention of unit trust consultants in Kuala Lumpur yesterday.

Based on the Morningstar Fund table as at October 17 2008, the Malaysian equity funds posted losses of 29.36 per cent compared to global equity funds which saw losses of 40.07 per cent over a year. Tunku Ya'acob said there would not be a slowdown in fund launches but a change in the type of new funds is anticipated. "We will see more aggressive-type funds such as distress asset funds, which will pick up cheap assets. However, subscription to the funds may be affected," he said.

Conventional funds launched for the first nine months of 2008 had increased by 40 to 407 compared to funds launched in 2007. Islamic-based funds have also risen by 16 to 144.
While the redemption rate of funds has increased slightly, the level remains low due to strong saving habits practised by Malaysians, said Tunku Ya'acob.

FMUTM technical chairman Tan Keah Huat said unit trust investors should continue investing especially when prices are weak to enjoy the upside when markets recover.
He expects an increase in net inflows for existing funds since purchasing more units at a lower price will lower the average price paid for all units. On FMUTM's ongoing initiative, it has appointed Mesdaq-listed Rexit Bhd to develop an e-Unit Trust system, which will shorten investors' application process for unit trust purchases using EPF (Employees Provident Fund) savings. "The manual process takes roughly two weeks and with this automation system, it should not take longer than six days," said Tunku Ya'acob.

The system should be in place by the first quarter of 2009. FMUTM will also introduce a fund volatility factor early next year for all funds with a three-year record and above.

What's happenin with gold prices??

2008-10-10T10:20:00.001+08:00

By The Star

Gold prices shot up in aftermarket trading Thursday after stocks plunged again, sending investors scrambling for safe places to put their money. Silver also rose.

Gold for December delivery jumped $32.30 to $918.80 in electronic trading on the New York Mercantile Exchange, after earlier closing $20 lower at $886.50.

Investors bought up gold, a traditional safe-haven asset, after fears of a deepening financial crisis sent U.S. stocks tumbling in a late-session swoon.

The Dow Jones industrial average fell 679 points.

Gold has been on the upswing in recent days as panic ripples through world markets, touching off a desperate search for safe-alternative investments.

The precious metal is an attractive investment in times of crisis because it's known for holding its value.

Silver prices also jumped, with the December contract adding 30.5 cents at $12.18 an ounce, after earlier settling 10.3 cents higher at $11.875.

December copper rose 5.1 cents to settle at $2.406 a pound.

In energy markets, crude oil closed at its lowest level in a year as falling demand for energy outweighed news that the Organization of Petroleum Exporting Countries will hold an emergency meeting to discuss oil's downward slide.

Light, sweet crude for November Delivery fell $1.81 to settle at $86.62 a barrel on the New York Mercantile Exchange, the lowest closing price since Oct. 15, 2007.

In aftermarket trading, prices edged below $85, a key technical level that traders say could signal another plunge.

In agriculture markets, grain prices traded mixed on the Chicago Board of Trade.

Wheat for December delivery fell 3.25 cents to settle at $6.0475 a bushel, while December corn rose 10.75 cents to settle at $4.3825 a bushel.

November soybeans rose 16 cents to settle at $9.80 a bushel.

Air Asia is betting high, take note share holders

2008-09-09T11:28:00.002+08:00

By Biz Times

AIRASIA, the region's biggest budget carrier, is making a risky bet.

As soaring fuel prices have forced other airlines to cut back, shed jobs and ground planes, AirAsia is doing the opposite: increasing flights, adding routes and boosting capital investment.
Last month, it even gave away a million free seats (although passengers still had to pay taxes and fuel surcharges). The seven-year-old company is aiming to fill the vacuum as other airlines reduce capacity, betting that more travellers will opt for budget flights amid a global economic downturn.

Analysts say if it survives the industry slump, AirAsia could come out a winner with increased customer loyalty and a strong route network to catch the growth wave when good times return.
"They are reasonably well-positioned for the long run, but there's always a trade-off. It's a long-term decision, which will cause some short-term pain," said Damien Horth, Asia transport analyst at UBS AG in Hong Kong.

Of course, the strategy could also backfire badly.

Last month, AirAsia reported a 95 per cent plunge in its net profit for April-June quarter to RM9.42 million. But the company chalked that up mostly to a RM77 million foreign exchange loss from a weakened ringgit, not weakness in its underlying business.
Average load factor - the percentage of seats taken up in an airplane - dipped to a still relatively strong 76 per cent, from 80 per cent in 2007.

It has a cash reserve of about RM1 billion, but outstanding debts stand at RM5.4 billion, giving it a net debt position of RM4.4 billion. Debts are set to grow as it receives new planes.

Chris Eng, analyst with OSK Securities in Malaysia, said AirAsia's growth prospects may be curbed, while its joint ventures in Thailand and Indonesia are expected to remain in the red.
"It will be challenging but we believe AirAsia can survive," Eng said, citing its efficient regional network and good cost control.

EPF Malaysia is the eighth largest fund in the world

2008-09-04T14:04:00.003+08:00

By Biz Star

Malaysia’s national pension fund, the Employees Provident Fund (EPF), was ranked the eight largest fund of its kind in the world with US$94.66bil.

This is according to the latest Watson Wyatt Global 300 survey conducted with Pensions & Investments, a US investment newspaper.

The list included the country’s Pension Trust Fund (KWAP), at 22nd spot with US$14.55bil.
Watson Wyatt Asia-Pacific investment consulting head Naomi Denning said in a statement that Asia-Pacific sovereign pension funds grew by about 20% to US$1.8 trillion in 2007.

“Sovereign pension funds in this region have seen tremendous growth in recent years, along with the rapid growth in assets of sovereign wealth funds,” she said.

She added that strong equity returns last year contributed to the boost in asset growth.
Denning said that among sovereign pension funds ex-Japan, funds that enjoyed growth of more than 30% from the previous year included China’s National Social Security Fund (up to 38th position from 69th), India’s Employees Provident Fund(from 88th to 68th), Singapore’s Central Provident Fund (from 32nd to 22nd) and Thailand’s Government Pension Fund (from 285th to 241st).

Booming of Setapak Jaya's property?

2008-08-18T16:22:00.002+08:00

By Biz Star

Developer plans Plaza Crystalville project

PROPERTY developer Crystalville Sdn Bhd, which already has a number of projects within Sri Hartamas, aims to turn Setapak into a vibrant business hub with the development of Plaza Crystalville @ Setapak.

Comprising four blocks of three-storey shop offices, the development is targeted at business operators rather than conventional purchasers, said chairman Datuk Azman Mahmood. “The principle is to have the Sri Hartamas lifestyle in Setapak. We hope to get buyers who are owner-operators rather than investors because the former will move in and start businesses there and make the area more vibrant,” he told Starbiz.

“There is a tendency for investors to purchase the property but not move in. We want the area to be buzzing with commercial activities to make the place more attractive.” Built on 7.5 acres of leasehold land, Plaza Crystalville @ Setapak will comprise 52 shop office units with a starting price of RM1.4mil each. The development will also have 400 parking bays.

Plaza Crystalville @ Setapak is located at Jalan Genting Klang, intersecting Jalan Langkawi and Jalan Taman Ibukota. It is accessible from the Kuala Lumpur city centre via North-South Expressway and Middle Ring Road 2.

The project has a gross development value (GDV) of about RM100mil. Construction will begin next month and the project is slated for completion by end 2010.

To date, about 54% of the shop offices have been taken up since its launch in June. Azman said he was confident of a full take-up by October. “Thus far, about 97% of purchasers comprise restaurateurs and other business operators. “Although construction costs have gone up 18% and 25% in the past few months, we are not increasing the price of the shop offices,” he said.
Azman added that Setapak was an up and coming location and could be the “next Sri Hartamas”.
“Lots of amenities such as hypermarkets and departmental stores like Parkson and Tesco are coming up in Setapak. There is even a medical centre there. Plaza Crystalville @ Setapak will definitely add value to the area,” he said.

On another note, the company is confident of a full take-up for Phase 4 of its Subang Alam residential development project by year-end. The development, which has a GDV of about RM35mil, comprises 30 units of two-storey semi-dees and five units of two-storey bungalows.
Since having a private launch last month, almost 40% of Phase 4 has already been snapped up. Azman said two of the bungalows had also been booked.

Subang Alam is located in Taman Bunga Raya, which is within the fringe of Subang Jaya/USJ and Shah Alam. It is accessible via all the major highways.

Azman said the majority of purchasers were from the USJ area.

Prices of the semi-detached homes begin at RM960,000 while the prices of the bungalows start from RM1.1mil.

The Subang Alam project is being developed by Subang Alam Sdn Bhd. Crystalville and Subang Alam have common shareholders.

Crystalville specialises in shop office development while Subang Alam’s core business is in residential projects.

Lafarge to pay RM700m in dividends? A worth while stock?

2008-08-08T08:58:00.002+08:00

By Biz Times

Higher cash dividends, special cash dividends and capital repayment by the cement producer cannot be ruled out over the next 12 months, say analysts
LAFARGE Malayan Cement Bhd (LMC), the country's largest cement producer, may pay up to RM700 million in special dividends within the next 12 months, analysts say.

"We have not factored any special cash distribution in our model, but do not completely rule out the exercise over the next 12 months," Nik-hadi Nik-mahmood, an equity analyst at Deutsche Bank, wrote in a report this week.

Such a move would be a boon to shareholders as LMC returned some RM125 million through dividend payments in its last financial year, including a 20-sen regular cash dividend paid in May.

The total payout came to about 43 per cent of LMC's net profit of RM287.82 million in 2007, a tad higher than its five-year dividend growth of 31.95 per cent.

UBS Warburg, which has a RM5 price target on LMC, expects the share price to be re-rated once there is further clarity of its capital management initiatives.
These would include higher cash dividends, special cash dividends and capital repayment.
LMC, some 62 per cent owned by the world's biggest cement producer Lafarge SA, is banking on a share placement exercise to raise fresh capital.

As at December 31 2007, LMC had about RM115 million in cash.
If the company does take the capital repayment route, it will be following in the footsteps of several foreign-controlled public-listed companies in Malaysia, such as Telenor ASA with DiGi.Com Bhd and Jardine Cycle & Carriage Ltd with Cycle & Carriage Bintang Bhd.
LMC has until the end of the year to comply with a rule by the Foreign Investment Committee whereby it will carry out a special issue of 161.88 million new shares to selected Bumiputera investors.

Analysts said the exercise could raise as much as RM800 million, with some RM100 million to be used for expansion, leaving the door open for a special dividend payment in the future.
"There is scope for a cash repayment of up to 82 sen a share. The Bumiputera shareholding spread requirement deadline is the catalyst for the exercise. The management plans to maximise dividend payments after meeting its capex (capital expenditure) and working capital requirements," Nik-hadi wrote in his report.

LMC's current dividend yield and price-to-earnings (PER) ratio are also pull factors, Kim Eng Research contends.

"Valuations are very decent and dividend yield is an attractive six per cent. It is trading at a PER ratio of 10 times, which by historical standards is low," Kim Eng's Yew Chee Yoon wrote in a report last week.

Air Asia: People will still want to fly

2008-07-31T09:28:00.001+08:00

By Biz Times

BUDGET carrier AirAsia Bhd expects to resolve any outstanding issues it has over the Low-Cost Carrier Terminal (LCCT) charges in two weeks.Group chief executive officer Datuk Seri Tony Fernandes said he met with Malaysia Airports Holdings Bhd (MAHB) managing director Datuk Seri Bashir Ahmad on Monday to discuss the amount it owes the airport operator."I am optimistic that we can resolve this because it was a meeting of minds... the issue with MAHB is coming to an end," he said, but did not elaborate.Fernandes was speaking to reporters at the inaugural session of investPenang's "The CEO Speaks" series in Penang yesterday.

Fernandes presented a talk on "Branding: Jazzing Up Your Business", which was launched by Penang Chief Minister Lim Guan Eng.AirAsia is disputing the amount it owes MAHB because it believes that charges at the LCCT should be lower than the KL International Airport's main terminal.It was reported that the actual amount accumulated since 2002 varies from the RM60 million mentioned in some reports to up to RM110 million as reported in Parliament.The matter was reported to have been brought to the Finance Ministry to resolve."It is a bonus for us to clear that," Fernandes said, adding that the low-cost carrier business is a new one and therefore took a little longer for various parties to understand its operating concept.

Asked whether AirAsia is planning to settle its debts with MAHB, Fernandes said: "We have resolved whatever historical issues which are outstanding and will need further discussions on the future."On the business outlook for AirAsia amid rising fuel costs, Fernandes said: "Despite 24 airlines around the world going bust, I am optimistic that people will still want to fly and we will continue doing what we are doing and ride through the storm."

AirAsia jumps most in 3 years

2008-07-23T16:24:00.001+08:00

By Biz Times

AIRASIA Bhd, Southeast Asia’s largest low-cost carrier, jumped the most in more than three years in Kuala Lumpur trading, leading airlines higher, after the price of oil fell to a six-week low.The carrier rose 8.7 per cent to RM1 at 1.30 pm. Qantas Airways Ltd gained 5.6 per cent to A$3.58 in Sydney. China Southern Airlines Co, Asia’s biggest carrier by passenger numbers, surged 10 per cent to HK$3.43 in Hong Kong.Oil fell to US$127.95 a barrel yesterday in New York, down almost US$20 from July 14’s record close, on forecasts that Hurricane Dolly would miss oilfields in the Gulf of Mexico. Lower oil prices help airlines by cutting the cost of jet fuel, most Asian carriers’ biggest expense.“The drop in crude oil prices is definitely driving gains in airlines today,” said Um Kyung A, a Seoul-based analyst at Shinyoung Securities Co. “Still, there’s long way to go for airlines to turn profitable.”

Korean Air Lines Co, South Korea’s largest carrier, gained 5.4 per cent to 47,900 won in Seoul. Air New Zealand Ltd rose 7 per cent to NZ$1.23 in Wellington. Malaysian Airline System Bhd, the country’s national carrier, jumped 4.8 per cent to RM3.50 in Kuala Lumpur.In Hong Kong, Cathay Pacific Airways Ltd, the city’s biggest carrier, gained 5.2 per cent to HK$15.48. Air China Ltd, the world’s biggest airline by market value, climbed 5.4 per cent HK$4.49. Singapore Airlines Ltd rose 3.4 per cent to S$15.78 in Singapore.Airlines PlungeAirAsia has plummeted 38 per cent this year amid concerns that a near doubling of jet-fuel prices and a weaker ringgit will crimp earnings. The Bloomberg Asia Pacific Airlines Index, which tracks 17 airline stocks, has plunged 39 per cent.Surging fuel prices have forced airlines across Asia to raise surcharges, cut services and ground planes in a bid to defend profits. Qantas said last week it would axe 1,500 jobs worldwide, cancel plans to hire new staff and ground as many as 22 aircraft. Korean Air expects to post a second-quarter operating loss, president Lee Jong Hee said on July 17.The price of jet fuel rose 0.5 per cent to US$165.20 a barrel yesterday in Singapore. That’s 9.2 per cent lower than July 3’s record close of US$181.85. - Bloomberg

Malaysia's 2008 growth forecast cut to 4.6pc

2008-07-18T16:15:00.001+08:00

By Biz Times

THE Malaysian Institute of Economic Research (MIER) has cut its forecast for the country's economic growth to 4.6 per cent from 5.4 per cent this year amid rising inflation and political uncertainties."It is likely that growth which would exceed five per cent in the first half, would deteriorate in the second half of the year as the economy takes the hit from the knock-on effects of higher oil prices and slower growth of our trading partners," said executive director Professor Datuk Mohamed Ariff Abdul Kareem.Speaking at a briefing in Kuala Lumpur yesterday, he warned that the current political instability may put off stock market investors as well as tourists."We are still one of the better economies in the region - comfortable foreign reserves, high savings rate, potential strength of the ringgit, high commodity prices, sound banking system - all support the economy, but if we can do something about the political situation I think the economy can do better than it can."

Domestic demand will be propped up by government spending, which would partly cushion the blow from a faltering global economy.MIER expects the economy to improve next year, expanding by five per cent. However, this could change if a global recession affects commodity prices.Soaring food pries and the rise in global oil prices are weighing heavily on economic prospects."Even with the subsidy cut, the fiscal deficit may reach 3.5 per cent of GDP this year as oil prices have increased further, drastically reducing the savings from the subsidy revision. The government would still have to fork out RM18 billion or more for fuel subsidy due to the subsequent hikes."

Malaysia Banks will be biggest winners: Analysts

2008-07-11T10:59:00.000+08:00

By Biz Times

BANKS will emerge the biggest winners from a proposed move to ease customers’ housing loan payments.

Banking analysts contacted yesterday said home financing is a major business for most major banks and extending the loan tenure by even a minimum of one year could bring more income for the banks.

However, not many customers will opt for this “aid” as a longer loan tenure means extra burden.
“As it is, the duration of mortgage loans is usually up until the borrowers are 60 to 65 years old, and by adding an extra five to 10 years to that is undesirable,” one analyst said.

He added that most banks have already put in place a mechanism to help their customers restructure their loans on a case-by-case basis.

One such bank is Malayan Banking Bhd (Maybank), which has welcomed the call by the government for banks to assist borrowers with payment plans.

“Although we have not advertised the additional financial assistance, we have been offering our customers the flexibility to restructure or reschedule their financing on a case-by-case basis to ensure they are able to continue to meet their financial obligations,” said Maybank chief executive officer Datuk Seri Abdul Wahid Omar.

He said the bank will continue to engage with its customers and monitor the current position with a view to providing additional financial advisory services to customers in need of such assistance.

Second Finance Minister Tan Sri Nor Mohamed Yakcop told the Dewan Rakyat on Wednesday that the Finance Ministry is in discussions with banks to reduce the monthly repayments for housing loans to lessen the financial burden of the lower-income group.

Another analyst admitted that such a scheme would most likely attract low-income earners with housing loans of RM100,000 and below.

“This new arrangement can help banks reduce their cost in managing possible non-performing loans by this group of income bracket,” he said

Fans camping out in Asia for new iPhone launch

2008-07-10T11:14:00.002+08:00

By Biz Times

Seeking to be one of the world’s first to grab the new-generation iPhone, fanatical Apple fans around Asia are queuing up two days before its launch, not discouraged by rain or freezing temperatures.The July 11 launch will be the first chance for Asian consumers to own an iPhone, and related websites have been swamped with inquiries and early orders.In Japan, one of the world’s most advanced mobile markets, about 20 people were lined up outside Softbank Corp’s flagship mobile store in Tokyo yesterday morning, with a sign at the head of the queue reading “We Love iPhone”. “The big appeal (of the iPhone) is that this is an Apple product,” said Hiroyuki Sano, a 24-year-old graduate student who early on Tuesday arrived in rainy Tokyo from Nagoya, 360 km (225 miles) west of the capital, to be first in line.

He will turn 25 today while waiting to get his hands on the high-end version of the iPhone with 16 gigabytes of memory.Apple also offers an entry-level version with an 8 gigabyte memory.“I’ve told my professor I was going to go buy an iPhone, and he gave me permission,” said Sano, wearing a T-shirt with an Apple logo. “He is an Apple-lover too, and he sent me off cheerfully.” The long-anticipated 3G iPhone, which has faster Web links than its predecessor and supports third-party applications such as games and email, will debut in Japan, Hong Kong, Australia, and New Zealand on Friday as part of the global launch in 22 countries.The original iPhone was only available in the United States and Europe, and the next-generation model is expected to go on sale in 70 countries by year-end.

Softbank, Japan’s third-biggest mobile carrier, will start selling iPhones at its flagship store at 7 am on Friday and expand sales nationwide at noon.Targeting a far bigger market with its new iPhone, Apple slashed the handset price and is allowing carriers to subsidise the phone this time around, making it easier for users to bring home the device.Research firm Enterbrain said 6.7 per cent of 1,200 people it surveyed in Japan wanted to buy an iPhone immediately.

WORLD’S FIRST Four New Zealanders with deck chairs, sleeping bags and a small tent started queueing on a chilly Tuesday night outside the Auckland shop of Vodafone, which will launch the iPhone at 12:01 am Friday, the first in the world.“I’m really just doing it to be able to say that I’m the first one in the world with one of these phones,” 22-year-old student Jonny Gladwell told the New Zealand Herald.Vodafone, New Zealand’s top mobile carrier, is selling the phone for as little as NZ$199 (US$150) in the country if consumers sign up for a two-year contract. Demand for pricing details was so heavy it crashed Vodafone’s New Zealand website on Tuesday.

In Hong Kong, Hutchison Telecom International was flooded by 60,000 online applications over the weekend from consumers who are hoping to grab one of just 500 phones on sale.A number of the more desperate would-be users pleaded online they needed the iPhone to appease demanding wives or stressed it was their birthday, according to Hong Kong media.The only woman in the Tokyo queue said she was securing places in line with her co-workers so that her company, Ubiquitous Entertainment Inc, can own iPhones and develop content for the device.

Despite the hype, analysts say Japan’s 108 million mobile subscribers who are already frequent users of Web browsing and email on 3G networks might not be easily wowed by the iPhone.Most of the people in the Tokyo queue told Reuters they plan to buy the device as their second cellphone.“We can expect certain demand from core Apple fans and others, but there will be users who would hesitate about buying the iPhone because of the high monthly charges of some 8,000 yen,” said Hironobu Sawake, a JPMorgan senior analyst in Tokyo.“Even though there will be other features that are more attractive than ordinary phones, the fact that the iPhone does not offer some features that are available on most handsets could turn off some users too,” he said.

AirAsia to take only profitable routes

2008-07-09T19:21:00.000+08:00

By The Edge

Neither AirAsia Bhd nor its associate AirAsia X is jumping in at the chance of taking over all the unprofitable international routes that Malaysian Airline System Bhd (MAS) has given up in the last two years because some of those routes do not make commercial sense.

"We apply for routes that make sense to us, where we believe we can create new markets and offer consumers choice. It does not make sense to have our strategy being dictated by another airline's failures," AirAsia X chief executive officer Azran Osman-Rani told The Edge Financial Daily .

AirAsia X is the long haul budget carrier of AirAsia. He added that it also did not make sense to stop AirAsia X from flying on overlapping routes when foreign airlines were allowed to compete directly with MAS.

Azran was responding to comments by Transport Minister Datuk Ong Tee Keat that AirAsia was "welcomed" to apply for those routes cut by MAS.

Ong told the Dewan Rakyat in a parliament session yesterday that it was up to AirAsia to apply to take over the routes before the requests could be considered.

Those international routes deemed unprofitable by MAS include the Kuala Lumpur-Manchester, KL-Vienna, KL-Nagoya, KL-Xi'an, KL-Kolkata, KL-Padang, KL-Ahmedabad as well as Kuching-Perth, Kuching-Sydney, Langkawi-London and Penang-London flights.

Azran said except for the KL-London route, other European routes were not commercially viable, as its planes to be used for ultra-long haul destinations would not have enough seats to make those routes profitable.

It plans to use an Airbus 340 plane, which would have 390 seats for the KL-London route, which is expected to start commercial service early next year.

"What we want is trunk routes such as Sydney, Melbourne, New Delhi, Mumbai, Tokyo, Shanghai and Beijing, not those non-trunk routes that MAS has abandoned," Azran added.

He said it was vital to enable AirAsia to connect passengers on those trunk routes in order not to lose out to its low cost competitors such as Jetstar and Tiger Airways that were aggressively expanding their networks.

"Competition is biting at our heels. The government should make strategic decisions based on what is good for the country, not reactive to what MAS can or cannot do," Azran added.

Meanwhile, AirAsia chief executive officer Datuk Seri Tony Fernandes said the access to routes should be driven by the principle of safeguarding consumer interest to ensure that there were choices available and competition to keep airfares in check.

"Limiting access to any airline would deprive air travellers of choice and reasonable fares. The issue of non-competition between AirAsia and MAS should not arise because there is overwhelming concrete proof that all routes where our airlines compete, the overall market has grown by leaps and bounds

"MAS has also benefited as it is now making money in the domestic sector, whereby previously it was losing despite being the sole operator," he added.

Fernandes said it would also be a "travesty" to hold back AirAsia X from certain routes, while at the same time, Malaysia Airports was providing incentives to foreign carriers to fly routes that competed head-to-head with MAS.

"Moreover, history shows that these foreign carriers such as British Airways, Air France and now Jetstar have no loyalty to KLIA - retreating at the first sign of trouble," he added.

Inflation likely to hit 6-7pc in June 2008

2008-07-02T21:11:00.000+08:00

By Biz Times

BASEL (Switzerland): Malaysia’s inflation is likely to have hit six to seven per cent in June and the central bank would take action on monetary policy in the event of generalised price increases, Bank Negara Malaysia Governor said yesterday.

In an interview, Tan Sri Dr Zeti Akhtar Aziz also said that domestic factors, including recent cuts in fuel subsidies, and a slower external economic environment could lower the growth rate below five per cent this year.

Costlier food and energy prices pushed Malaysia’s May inflation to a 22-month high of 3.8 per cent, even before the government raised domestic fuel prices in June.

“We expect inflation to rise, especially in the month of June following one of the adjustments by the government — the reduction in subsidies. Therefore, for the month of June, inflation is likely to be between six and seven per cent,” Zeti said here.

“We will monitor it very closely — whether this results in the pass-through to other consumer items and whether there are any second round effects like wage increases ... And the central bank will be prompted to take action in the event that it becomes a generalised price increase.”

Joining a growing rank of Asian countries unable to maintain hefty subsidies in the face of soaring oil prices, Malaysia raised petrol prices by 41 per cent this month and lifted diesel prices by 63 per cent as part of a broad reform of energy policy to prevent subsidies from eating up a third of its budget.

Zeti said when setting interest rates, Bank Negara had to assess effects of both higher inflation, as well as domestic and external factors moderating growth.

Zeti has said that the central bank had no immediate plan to hike interest rates if inflation tapers in the second half in line with its forecast.

The cost of borrowing has stood at 3.5 per cent — one of Asia’s lowest — for the 17th straight policy-setting meeting.

“Interest rate is an instrument of policy to deal with demand-driven inflation,” Zeti said.

“Our interest-rate policy is forward looking. We will look at what the risks are — upside risks to inflation and downside risk to growth as a result of a slower external environment, and as a result of a moderating impact of higher energy prices.”

Asked if investors were wrongly betting on a possible quarter- or half-point increase in interest rates, Zeti said:

“The market is assessing it, based on a price increase, and it is not wrong to assess that indeed prices are going to increase, based on the adjustment Malaysia has taken.”

Inflation is a problem vexing the broader Asia region’s policymakers.

Public Mutual to launch new Islamic equity fund

2008-04-07T18:42:00.000+08:00

By the Edge

Public Mutual Bhd will launch a domestic Islamic fund, Public Islamic Optimal Growth Fund (PIOGF) on April 8 for investors who want an optimal combination of capital appreciation and income growth over the long term.

Its chairman Tan Sri Teh Hong Piow said PIOGF was an Islamic equity fund that sought to provide income and capital growth by investing in Syariah-compliant stocks which offer attractive dividend yields and growth stocks in the domestic market.

“PIOGF invests 50% of its equity investment in syariah-compliant growth stocks in the domestic market while the remaining 50% of its equity investment is invested in syariah-compliant stocks which offer attractive dividend yields,” he added.

The equity exposure of PIOGF will generally range from 75% to 95% of its net asset value. It is priced at 25 sen per unit during the 21-day initial offer period from April 8 to April 28. The minimum initial investment is RM1,000.

Air asia best in innovation

2008-04-03T20:46:00.000+08:00

By Biz Times

AIRASIA Bhd has been recognised as one of the world's most innovative companies by Fast Company magazine, the only Asean brand and the only airline to make it to the "Fast 50" list.

Other notable companies include Google, Nike, Facebook, Apple, Disney, GE, BMW and IBM.

AirAsia ranked number 43 this year on the "Fast 50" list, announced in the March 2008 issue of Fast Company.

From green consumer-products phenomenon Method to 100-year-old Corning, which spends US$2 million (RM6.38 million) each workday on R&D, the list celebrates companies that are redefining the rules of business through new ideas.

Twelve of the 50 firms are based outside the US. Fifteen of them are based in and around the Silicon Valley.

"This is a feat we are very proud of, considering we are placed in the same platform as some of the most recognised brands in the world. We are humbled by this news as we've evolved from a Malaysian brand to an Asean brand within a short span of six years and to be recognised on the global front by the coveted Fast Company magazine, is indeed very rewarding," AirAsia group chief executive officer Datuk Tony Fernandes said in a statement.

Fast Company editors described AirAsia as "innovative down to its corporate bones".

"Most passengers think of it as one carrier, but it's actually a co-branded collection of several, a unique structure Tony Fernandes devised to allow AirAsia to set up hubs in three countries (Malaysia, Thailand, and Indonesia)," it said.

It also credited AirAsia for operating costs that are the lowest of any airline in the world, and so are its fares.

Previous awards won by AirAsia include "Airline of the Year 2007" by the Centre for Asia Pacific Aviation (CAPA) and the "Best Low Cost Airline in Asia" by Skytrax Research of London.

Fast Company's final 50 were selected from a list of 300 finalist companies. The magazine placed a high premium on companies that had demonstrated significant innovation over the past year. Actual rankings were determined by vote by a panel of editors and writers.

Fast Company is a monthly business magazine that reports on innovation, digital media, technology, change management, leadership, design and social responsibility. It was launched in November 1995 by Alan Webber and Bill Taylor, two former Harvard Business Review editors.

American O&G invest in IDR

2008-03-29T15:18:00.000+08:00

By Star Biz

American oil and gas company Halliburton has opened a RM200mil manufacturing centre in the Iskandar Development Region (IDR).

The facility, spanning 20,000 sq m in Johor Technology Park, targets supply chain production and delivery capabilities across Halliburton’s completion and production division.

It is also the sixth eastern hemisphere-based manufacturing centre in the region, supplementing 16 existing production facilities across North and Latin America, Europe and Asia.

The Johor facility performs procurement and customer service activities as well as engineering, machining and product assembly primarily for customers in the Asia Pacific, Middle East, Africa and Europe Eurasia regions.

At present, the manufacturing centre has around 100 employees, with the headcount expected to exceed 250 by year-end.

Halliburton completion and production division president David King said the company was excited to launch a greater offering of its products and equipment to its customers in the region.

“The addition of the Johor facility is another step in our company’s strategic plan to concentrate more of our investment and supply chain resources to our key growth areas,” he said after the launch of the facility on Thursday.

Supply chain and management systems senior vice-president Len Cooper said the facility catered to Halliburton’s international customers while building regional supply networks that supported local economies.

Meanwhile, country lead for Central Asia, Rao Abdullah, said the company decided to invest in Johor given that the state was an economic development hub.

Halliburton plans to continue expand in the eastern hemisphere with a combined manufacturing and technology centre expected to open in Singapore later this year.

The group is one of the world’s largest providers of products and services to the energy industry.

Maybank buys Indonesia’s sixth largest bank

2008-03-27T21:25:00.002+08:00

By Star Biz

Malayan Banking Bhd’s share price fell as much as 10.6% or 95 sen in early trade on Thursday on some investors’ concerns that it was paying a high price of RM8.6 bil for a 100% stake in PT Bank Internasional Indonesia Tbk.

It opened at RM8.40, down 55 sen. Within the first hour of trade, there were 14.81 million shares done at prices ranging from RM8 to RM8.45.

At 10am, it was trading at RM8.45, down 50 sen or 5.6%.

The KLCI fell points to 12.18 points to 1,233.24 as investors locked in gains, uninspired by the weak closing on Wall Street. US financial shares slid when concerns resurfaced that bank profits will take much longer than expected to recover from the housing slump. The Dow Jones industrial average closed down 109.74 points, or 0.88%, at 12,422.86.

On Maybank, OSK Investment Research said in a note to clients that the acquisition price was not cheap as based on the acquisition price.

“We must admit that the acquisition price is not cheap as based on the acquisition price, BII is essentially priced at 4.45 times and 61.5 times FY07 BPS and EPS, respectively, or 4.26 times and 33.0 times FY08 BPS and EPS,” it said.

However, it always believed that Maybank should expand its overseas presence in order to mitigate the saturated domestic market share.

“We believe the Indonesia banking sector offers more upside in the long-run as per the ratio of total outstanding loans-to-nominal GDP. However, due to the potential near-term profitability dilution, we have lowered our fair value to RM10.80 but maintain our BUY call,” it said.

On Wednesday, Maybank announced it wanted to take over Sorak Holdings Ltd, which has a 55.7% stake in PT Bank International Indonesia Tbk (BII), from Fullerton Financial Holdings and Kookmin Bank for RM4.8bil cash. It will later make a general offer for all BII shares it does not own. Starbiz reported that to some people, Maybank’s move to pay RM8.6bil, or 4.6 times book value, indicated how desperately the group wanted BII, Indonesia's sixth biggest bank.

The valuation is among the highest in the industry. The offer price is about 20% above Jakarta Stock Exchange-listed (JSE) BII's market price. The book value of 4.6 times is about double the average valuation among Indonesia's publicly traded banks.

The top four banks listed on JSE are currently trading at about 3.9 times. BII's net profit has been declining since 2004. For the year ended Dec 31, 2007, the bank's net profit fell to 404.7 billion rupiah (RM142mil) from 633.7 billion rupiah (RM222.3mil) in 2006.

Malaysia Tourism 2010

2008-03-22T11:58:00.000+08:00

By Biz times

TOURISTS are expected to spend half of their money shopping in Malaysia by 2010, which will give the country its much sought after international shopping heaven status.

Tourism Malaysia calculates that tourists will be spending up to RM30 billion by then to buy anything from apparel and bags to watches and souvenirs.

It plans to promote the country more aggressively to achieve this goal, said Rosly Selamat, general manager of its Shopping Malaysia Secretariat.

"We need to make Malaysia more visible, especially in countries where the people love to shop," he told Business Times in an interview, adding that Thais, Indonesians, Koreans, Indians and Middle Easterners were among those keen to shop.

According to Rosly, Tourism Malaysia has proposed the lifting of duties on more items.

He said this would help promote Malaysia as a duty-free shopping destination and attract more tourists.

"There are still some items like apparel and jewellery ... removal of duties will help boost sales."

Rosly pointed out that Singapore and Dubai have the advantage of being tax-free for tourists.

Malaysia decided in 1999 to brand itself as a shopping heaven, competing against cities like Singapore, Hong Kong and Dubai - the long-established shopping destinations in Asia.

The then Ministry of Culture, Arts and Tourism decided that three nationwide sales would be held annually - in March, August and December - from 2000.

The ministry also gave itself four years, from January 2000 to December 2003, to become Asia's top shopping paradise.

However, eight years have passed and Malaysia has yet to catch up with Hong Kong, Dubai and Singapore as a shopping destination.

Tourism Malaysia has proposed the lifting of duties on more items as this will help promote Malaysia as a duty-free shopping destination

Gold hitting US$1,200 in three months

2008-03-16T22:23:00.002+08:00

By Star Biz

US gold futures, which surged to a record US$1,001.50 on Thursday, is likely to breach US$1,200 an ounce within the next three months.

MIMB Investment Bank Bhd technical analysis manager Lee Cheng Hooi said gold could hit new highs this year on expectations of further Federal Reserve rate cuts and inflationary concerns.

“Based on monthly trends, gold prices are seen to be strong as investors see gold as a real and tangible asset and safe value haven amid economic uncertainties,” he added.

Aseambankers chief economist Suhaimi Ilias said gold was used as a hedge against the weakening dollar and inflationary pressures.

“History also proves that traditionally, gold is favoured during inflationary periods,” he said, adding that gold would continue its upward trend due to the volatility in the dollar.

TA Securities head of research Kaladher Govindan concurred that gold price, which was also driven by soaring crude oil prices that had scaled to a record US$111 a barrel, would continue to rise due to the weak US economy.

According to an AFP report, Asian economic giants China and India have also boosted demand for the precious metal, which is used in jewellery, dentistry and electronics.

“Gold, which is priced in dollars, becomes cheaper for buyers using other currencies when the US unit falls in value. The dollar slumped on Thursday against both the euro and yen as fresh credit jitters swept across global markets,” the report said.

The report added that gold price had risen by about 17% so far this year, spurred also by supply problems in the world's largest producer, South Africa.

“Stoppages by miners protesting unsafe working conditions and ongoing power cuts in South Africa have hampered supplies,” it said.

On the local front, Datuk Andrew Kam Tai Yeow, chairman and chief executive of London-listed Malaysian gold miner Peninsular Gold Ltd, said the overwhelming global demand for gold bode well for the local gold mining industry.

The company has invested RM60mil in the East Coast Economic Region to build a plant in Raub, Pahang. The plant, expected to start production soon, will be able to extract 85% of the gold residue left in mine tailings.

“We would consider increasing our investment as we see a lot of potential, going forward,” he said.

However, trading in local jewellers such as Poh Kong Holdings Bhd and DeGem Bhd was thin despite the recent spike in gold price.

An analyst attributed this to the local political situation and global volatility.

The upward trend in gold price would not necessarily translate into higher share prices for gold jewellers; instead investors preferred to invest in the commodity itself, the analyst added.

Yeah man, quickly go to yr nearest Poh Kong! i'm not joking man!

Air Asia future and goals

2008-03-15T12:48:00.001+08:00

By Star Biz

AirAsia is not a beverage, yet Datuk Tony Fernandes, who has been instrumental in building the low-cost airline, believes that the AirAsia brand can become as popular as Coca-Cola.

His wish is to see the AirAsia’s name plastered across billboards and banners in travel offices around the globe, even on watches and football stadiums, in six years.

A recent article described Coke as “truly a model of marketing power as its image has transcended national borders to cultural barriers to reach almost everyone on earth”.

“I would like the AirAsia brand to be as big as Coca-Cola,” Fernandes, the group CEO of AirAsia, told StarBiz in an interview recently.

“Given fair competition, we can be as big or even bigger than Singapore Airlines (SIA) too.

“We can be, and it is my goal that we, AirAsia, become bigger than SIA, and carry more passengers than SIA.”

He is using SIA as the benchmark as it is a well-recognised global airline brand although the national carrier, Malaysia Airlines, has for several years been winning accolades for having the world’s best crew.

But in terms of brand reach, Fernandes prefers the market reach to be as big as that of Coke.

“Even before AirAsia can fly to Europe, it was already flying Europeans and other nationalities around Asia and that just goes to show that our brand is spreading all over.

“AirAsia is a strong brand and an airline that has managed to create a market for itself. It has gone beyond Malaysia’s borders and would continue to carry the Malaysian flag to more countries,” he said.

Today, AirAsia flies 90 routes and to 47 destinations, has a fleet of 67 aircraft and has ordered 175 new aircraft in the hope of becoming as big as Ryanair. It employs nearly 5,000 people.

Ryanair, according to its website, was set up in 1985 and is today Europe’s largest low-fare airline. This year, Ryanair will carry 52 million passengers on 645 low-fare routes across 26 European countries.

By the end of March, Ryanair will operate a fleet of 163 new Boeing 737-800 aircraft and has placed firm orders for 99 more new aircraft to be delivered over the next five years. The airline employs 5,000 people.

AirAsia's sister company, AirAsia X, is a long-haul low-cost carrier which began flying passengers last November. Its first destination was Australia's Gold Coast and the airline has now added Hangzhou to its network.

More destinations are on its route map but the airline needs to get new planes before it can start operating more routes. It wants to reach out to as far as London to connect Asians to Europe and vice-versa.

AirAsia was incorporated in 1983. It started off as a joint venture between Hicom Holdings Bhd and Mofaz Air Sdn Bhd but only took to the skies in November 1996 after a two-year delay.

The idea of setting up a second airline for Malaysia was to offer travellers new destinations to complement MAS' regional services. But it did do as expected and was sold to Tune Air Sdn Bhd in September 2001 for RM1.

The deal was completed five days before the Sept 11 attacks that threw the aviation sector into a tailspin. Many people had then wondered if Fernandes and his friends, who were from the music industry, knew how to operate an airline amid turbulent times. Not long after that, the Severe Acute Respiratory Syndrome outbreak also shook up the aviation sector.

Tune Air’s strategy was tactical. It re-launched the brand and used red as a base coat. The airline lured travellers by offering several hundreds free seats. Low-cost travel was a new thing then and the promoters of AirAsia just knew how to get people excited with its low, and at times zero, fares.

Many first timers flew with AirAsia and this speaks volumes of the airline's tagline “Now, everyone can fly.” With AirAsia, Malaysians had the choice to travel cheap and it is no a surprise that one planning a holiday would ask: “Does AirAsia fly there?''

AirAsia, as a brand, has gone beyond cities to towns and small villages. Today, it links many Asian cities to Kuala Lumpur. Soon, it will be linking Europe, India and the Middle East to Malaysia.

Entering the Singapore market was a major coup for the airline, which initially had no future in the republic. Today, it provides the linkage for many travellers from Singapore and via Singapore to Malaysia and Asia at low fares.

Giving away free seats and dropping fares to very low levels has helped the brand spread. Encouraging travellers to book online has allowed many to book seats from remote cities anywhere in the world.

Fernandes said many new routes and destinations were on the cards. “We will fly to Amritsar and London soon,” he promises.

Many AirAsia billboards and banners will be put up in other countries but will the AirAsia brand eventually come close to the omnipresence of the Cocal-Cola name?

A lot of work lies ahead of AirAsia as the clock starts ticking.

KL share market slumped

2008-03-10T18:40:00.001+08:00

By Biz Times

MALAYSIAN shares plunged 9.5 per cent today in a session marked by a one-hour trading suspension as surprise weekend election results shook the stock market, dealers said.

Trading was halted when the stock market fell 10 per cent during the day, after the Barisan Nasional coalition lost its two-thirds majority in parliament.

It was the biggest decline in a decade, since stocks dived 21 per cent in a single session at the height of the Asian financial crisis in September 1998.

Bursa Malaysia said the stock market was suspended between 2.58 pm and 3.58 pm, when the 10 per cent drop triggered a failsafe.

The losses continued when trading resumed, but by the end of the session the Kuala Lumpur Composite Index had recovered slightly and closed down 123.11 points to 1,173.22.

Yeah Kim Leng, group chief economist with RAM Holdings Bhd, said the dramatic fall, which was also compounded by fears of a US recession, had been much steeper than anticipated.

“I only expected the bourse to dive by five per cent Monday,” he said.

Dealers said there was some element of panic selling but that volume was still manageable and that the selldown was confined to blue chips and big caps.

The worst-hit sectors were construction, services and property.

Declining stocks overwhelmed advancers 905 to 26, with 62 stocks unchanged and 435 counters untraded. Trading volume totalled 1.2 billion shares, valued at RM3.2 billion.

The construction sub-index plunged 15.8 per cent or 40.7 points to 217.41 while the property sub-index dived 9.2 per cent or 77.4 points to 761.93. The services sub-index tumbled 9.7 per cent or 16.94 points at 157.36.

Yeah said the bourse was expected to head south for the next few days but that it would later rebound.

“The Barisan Nasional is still in power and the country’s economic fundamentals remain intact,” he said.

Among construction and property stocks, Malaysian Resources Corp sank 66 sen or 34.0 per cent to RM1.27 and Equine Capital dived 72 sen or 50.4 per cent to 71 sen.

National power company Tenaga tumbled 1.30 sen or 15 per cent to RM7.35, while Telekom Malaysia shed 95 sen or 8.7 per cent to RM9.95.

Singapore invest in citigroup?

2008-03-06T21:40:00.000+08:00

By The Edge

Investment guru Jim Rogers believes US bank stocks could fall further and predicts Singapore’s state investors will lose money on their multi-billion dollar investments in Citigroup and Merrill Lynch.

“I’m shorting investment banks on Wall Street,” Reuters reported the long-time commodities bull as saying yesterday at a launch event for ABN AMRO certificates linked to commodities.

“It grieves me to see what Singapore is doing. They are going to lose money,” he added, referring to investments by Government of Singapore Investment Corp and Temasek in Citigroup, Switzerland’s UBS and Merrill Lynch.

Rogers, an American who co-founded the Quantum Fund with billionaire George Soros in the 1970s, now lives in Singapore as he wants his four-year-old daughter to learn Mandarin.

Rogers, who also writes investment books, said Wall Street had to work off 10 years of excesses and predicted that losses linked to risky mortgages will eventually spread to credit card bills, student loans and other debt.

Meanwhile, Bloomberg quoted Rogers as saying that crude oil prices would go up much higher, but “how high I don’t know”.

“Commodities are going to go higher because there’s just not enough. The dollar’s weakness is the icing on the cake for commodities.”

On stocks he was buying, Rogers said: “I have been buying Chinese shares, water treatment, power generation and tourism. I plan to buy more shares in China. I bought more Taiwan this week. I’m buying the renminbi, Swiss Francs and the yen.”

“Inflation is going to get worse and you have to be prepared for higher prices of everything. Higher prices always eat into demand patterns but that’s part of the cycle,” he said.

Analysts expect slower corporate earnings growth mainly because of a global economic slowdown and inflation 2008

2008-03-03T21:06:00.002+08:00

By Biz Times

THE recently concluded reporting season saw most of the country's top 100 listed companies posting solid numbers, thanks to bright results by lenders, oil and gas service companies, palm oil producers, and property and construction firms.

A closer look at the top 25 companies by market capitalisation showed that five registered lower net profits in their quarterly results, while three posted lower earnings in their cumulative financial results. None, however, made losses.

Analysts, in general, were happy to see the results of Malaysia Airlines and Public Bank, while those of Malayan Banking, Puncak Niaga, YTL Power and conglomerate Sime Darby were below expectations.

"Most of the companies under our coverage are either above or within our expectations," MIMB Investment Bank research head Pong Teng Siew said.

However, analysts expect slower earnings growth this year, due mainly to a global economic slowdown and inflation.

"We expect companies under our coverage to grow by about 10 per cent this year, slightly below the 12. 2 per cent growth in 2007," said Pong.

The good news is that the weaker earnings estimates do not apply across all industries. Companies involved in steel, plantation, and oil and gas are seen as major beneficiaries.

Steel companies are expected to benefit from ceiling price adjustments and demand from China, plantation firms to see better numbers helped by higher crude palm oil prices, and multi-billion-ringgit jobs to be up for grabs by oil and gas firms this year.

Construction companies are also expected to see earnings growth as many major infrastructure projects under the Ninth Malaysia Plan (9MP) have yet to be awarded.

"We expect the award of contracts to take place after the elections, which are critical in meeting the objectives of the 9MP," Kenanga Investment Bank said in a report.

Foreign investment coming into Malaysia?

2008-03-02T01:24:00.002+08:00

By Biz Times

BRITAIN'S Newcastle University will set up its first international branch campus within the Iskandar Development Region (Iskandar), putting the price of medical studies within reach of Malaysians.

South Johor Investment Corp Bhd (SJIC), the promoter of Iskandar, said the university will offer degree courses in medicine and bio-medicine studies.

"While the university's Iskandar campus is expected to be completed in 2011, the target date for the first intake of students will be for September 2009," SJIC said in a statement.

Higher Education Minister Datuk Mustapa Mohamed handed over the letter of invitation to the university's dean of International Medical Education professor Reg Jordan in Johor Baru yesterday.

Mustapa said students could get a Newcastle University medical degree at about half the cost of doing so in the UK.

"The cost for completing a course in the UK is currently about RM1 million for a five-year programme," he said.

According to SJIC, the Newcastle University will be housed in the Iskandar region under its EduCity concept.

EduCity is a fully integrated education hub where all the educational disciplines will come together in one location.

"EduCity serves to provide a platform for facilities from world-renowned universities to work together within a multi-varsity university environment," SJIC said.

SJIC will develop the campus, accommodation and recreational facilities for EduCity, and is currently finalising the design of the campus. Infrastructure work is expected to commence in the third quarter this year.

Do u think all the corridors proposed by our malaysia prime minister Abduallah Ahmad Badawi will succeed? hahaha...

Unit Trust in Malaysia

2008-02-28T09:07:00.004+08:00

By the Edge

The Securities Commission (SC) is streamlining regulations governing the unit trust industry to enable benchmarking against international standards and enhancement of fund management while spurring the growth of the industry.

Its chairman Datuk Zarinah Anwar said the revised guidelines, to be issued on March 3, would make it easier for fund managers to develop the necessary capabilities to improve their global fund management skills to meet investor expectations for better returns from its investments.

Within the investment management industry, Zarinah said unit trust funds were the largest contributor to assets under management, with the number of funds in operation growing 26% in 2007 to 495, of which some 128 were Islamic funds.

The Malaysian unit trust funds, which hold a 45% share of the local equity market, the largest share among Asean bourses, saw its net asset value (NAV) grow 39% to RM169.4 billion last year, while total investments abroad grew 79% to RM15.16 billion, representing 10% of assets under management.

Speaking at The Edge-Lipper Malaysia Fund Awards 2008 here yesterday, Zarinah said the SC would allow the dissemination to investors of an abbreviated version of an interim report on a fund’s performance.

“We want to make it easier for investors to track their investments. However, the full version of the interim report must still be prepared, made available upon request and posted on the unit trust manager’s websites.”

The revised guidelines include the removal of prescriptive investment restrictions, such as a limit on exposure to options and futures, which would be replaced with prudential limit for investments in derivatives.

“This allows more flexibility to fund managers to transact in derivatives other than for risk management purposes. It would also allow unit trust managers to launch new products that predominantly invest in derivatives,” she said.

To increase domestic fund managers’ competitiveness in the region, Zarinah said SC’s approval for fund managers venturing into foreign markets would be removed on condition that the markets fulfil certain criteria, such as their home regulator being a member of the International Organisation of Securities Commission (IOSCO).

She also said cash borrowing restrictions would be lifted to allow for redemption requests without the need to dispose of assets in a fund’s investment portfolio, which could affect the interest of the remaining unit holders.

Asked on the SC’s move to revise its unit trust regulations, ING Funds Bhd chief executive officer Steve Ong said: “This would help local fund managers to respond better to market needs and market volatility because investments today are moving very fast.”

“As we are looking at different asset classes and investment structures, this move towards relaxing guidelines and restrictions would give fund mangers the option to structure more product solutions for customers.”

On the issue of wholesale funds, the SC would allow cash borrowing for investment purposes as wholesale fund investors were more sophisticated and receptive to higher levels of risk, Zarinah said.

“The relaxation to borrow cash for investments will provide greater flexibility for fund managers to meet investor’s expectations,” she said, adding qualified investors (institutions) for the fund would be expanded, allowing trust asset investors with more than RM10 million to invest in wholesale funds.

SC revises guidelines to boost unit trust industry!

The Great potential of rubber in Malaysia

2008-02-26T17:41:00.003+08:00

By Biz Times

MALAYSIA exported RM5.88 billion worth of rubber gloves in 2007, the fifth consecutive year of rising exports, despite challenges of profit erosion from the weakening US dollar and costlier shipping.

Malaysia maintained its position as the world’s biggest rubber glove exporter, churning out some 40 billion pieces last year.

“Last year’s rubber glove exports added another RM430 million to RM5.88 billion,” said Plantation Industries and Commodities Minister Datuk Peter Chin Fah Kui.

“This is a very good achievement considering our rubber glovemakers had to contend with the devaluing of the US dollar and costlier freight rates,” he told Business Times.

The rubber industry has been the pillar of Malaysia’s economy since colonial times and continues to contribute to export earnings, employment and income generation.

Spurred by the government’s industrialisation drive in the 1980s, Malaysia became the world ’s No.1 exporter of rubber gloves, catheters and latex thread.

In a separate interview, Malaysian Rubber Glove Manufacturers Association (Margma) president Oon Kim Hung expressed confidence of a reasonably good growth this year despite the impending price hike in natural gas.

Rubber gloves manufacturing is among the heavy users of natural gas.

An increase in natural gas pricing will hit manufacturers twice — once through natural gas and secondly via electricity tariffs — as the power sector is expected to pass through the added costs to industrial consumer s.

Asked how rubber glovemakers will cope with the prospective burden, Oon replied: “We ’ve submitted our appeal to the government to consider that any increase in gas prices be implemented on a staggered basis. ” “Rubber glove prices will go up as raw material and fuel costs escalate. Depending on whether all 48 Margma members are selling forward or via spot contracts, consumers are informed of costlier natural rubber and transportation and freight costs,” he said.

Another challenge lies in the possibility of the slowdown in the US economy having a negative impact on Malaysian exports.

Oon said American hospitals will continue to buy from Malaysia because medical gloves are a necessity.

“Even hospitals in developing countries like China, India and Vietnam are starting to buy our rubber gloves,” Oon said.

*I always believe there is great potential for rubber industry in M'sia with our tropical weather! hehe.. Go Durex! lolx..

Axis-REIT buys warehouses for RM27m

2008-02-01T22:24:00.000+08:00

By The Edge

Axis Real Estate Investment Trust (Axis REIT) is acquiring two warehousing properties in Pasir Gudang industrial area for RM27 million in Johor, said its manager Axis REIT Managers Bhd (ARMB).

It is acquiring a single-storey detached factory with ancillary buildings from Oriental Pulse Sdn Bhd for RM12.5 million, and a single-storey warehouse building with a three-storey office plus guard house and ancillary buildings from Niro Ceramic (M) Sdn Bhd for RM14.5 million. Both properties are developed by the Johor State Economic Development Corp.

ARMB said the factory acquired from Oriental Pulse was for Delfi Cocoa (M) Sdn Bhd. Delfi Cocoa, a leading exporter of cocoa related products, had renewed its tenancy for three years from Jan 1 last year at a monthly rental of RM108,864 with an option to renew for two further terms of three years each.

The property has a gross yield of 10.26% and a triple net yield projected at 9.1%. The acquisition is yield accretive at 23 sen per unit.

The second property is a sale and leaseback arrangement with Niro Ceramic (M) Sdn Bhd, which has agreed to lease it for six years at a monthly rental of RM130,000 for the first three years with a step-up in rental on the second three years. It has an option to renew the lease for an additional six years. The property has a gross yield of 10.55% and a triple net yield projected at 9.77%. The yield is 345 sen per unit.

ARMB said it intended to use the funds from the recent fundraising exercise with the placement of the Axis REIT 50 million new units to finance the acquisitions. The proposed debt financing will increase Axis REIT’s gearing ratio but it will still be below 50%.

Malaysia FDIs to grow at 15%

2008-01-26T12:24:00.000+08:00

By The Edge

Malaysia is expected to see a growth of 10% to 15% in foreign direct investments (FDI) this year, with spillover effects benefiting sectors like construction, property and manufacturing, said consulting firm Frost & Sullivan GIC Malaysia Sdn Bhd managing director for Southeast Asia Manoj Menon.

While investors would generally be more cautious in making investments, China, India, South Korea and Middle Eastern countries would continue to spur FDI growth in Malaysia.

“Investors from the Middle East are looking very aggressively at the Malaysian market so we see collaboration with Middle East investors going up substantially,” he said.

Its partner and head of automotive and transportation practice for Asia-Pacific Kavan Mukhtyar said despite bearish sentiments on the US economy and its possible impact on the domestic economy, construction and property segment in Malaysia would be one of the fastest growing sectors in 2008.

“There is an overall buoyancy in these markets which is not solely driven by foreign buyers. We believe there is huge home demand and corridor projects driving these segments,” Kavan said after its Futurewatch 2008-The Frost & Sullivan Asia Pacific Outlook briefing on Jan 25.

Asked on the possible impact of a recession in the US on the Malaysian economy, Manoj said: “While our overall view is that the US is showing signs of slowing down, we believe strong domestic demand within Asia would, in many ways, soften the impact of any slowdown from US.”

Manoj said there would be an indirect impact on the local economy, in industries like electronics and manufacturing where the US was the predominant market. “The overall growth pattern for these sectors however, would range between 8% and 10%.”

“If there is a serious recession in the US and this continues for more than 12 months, or up to 24 months, 2009 will then be a recessionary growth year. However, as we have strong domestic demand, we will be relatively insulated from what happens in the US,” he said.

Meanwhile, the firm’s director of chemicals, materials and food for Asia-Pacific Kumaraguru Veerasamy said crude palm oil (CPO) prices would likely decline to RM2,800 per tonne towards June due to a possible slowdown in the US economy.

Five stocks with strong potential upsides

2008-01-20T13:57:00.000+08:00

By Biz Times

CREDIT Suisse is recommending to investors KPJ Healthcare and four other small stocks with significant potential upsides over the next 12 months, ranging from 42 per cent to 88 per cent.

It has a RM5.80 target price on KPJ, Malaysia's largest and only listed private hospital group, implying an upside of 88 per cent from the stock's closing price of RM3.08 yesterday

The other stocks it likes are E&O Property Development (target price of RM4.50), Salcon (RM1.72), Boustead Holdings (RM9.75) and Muhibbah Engineering (RM5.30).
The foreign research house believes these companies could deliver strong earnings in 2008 against a backdrop of high oil and commodity prices and slower global economic growth, offset by Government infrastructure spending and moves to boost the domestic economy.

It also noted that Middle Eastern oil money is flowing into Malaysia, seeking a home in property assets and other investments.

"We have picked (those) companies because they are positioned favourably amidst this backdrop to deliver strong earnings growth in 2008," it said in a report dated January 17.

It said E&O Property Development, a property developer in the Klang Valley and Penang, offers investors exposure to Malaysia's high-end property sector.

The company has five upcoming launches with a gross devlopment value of more than RM1.6 billion in the Klang Valley high-end property segment.

Conglomerate Boustead, meanwhile, has plantations and fabrication yards driving earnings, on the back of higher crude palm oil prices and a strong wave of shipbuilding activity, coupled with a potentially huge privatisation contract.

The research house believes there is also hidden value in Boustead's prime property assets.

It noted that KPJ is the cheapest hospital stock in the region, while water-related Salcon is a laggard.

It expects oil and gas (O&G) company Muhibbah to ride on the back of global O&G exploration activity and infrastructure spending.

The stock closed at RM3.74 on friday, while E&O closed at RM2.60, Boustead RM6.30 and Salcon, RM1.07

What's wrong with the KLCI?

2008-01-08T22:34:00.000+08:00

By the edge

THE Kuala Lumpur Composite Index (KLCI) may hit the 1,500 points level in first quarter of 2008, supported mainly by buying of heavyweights, particularly plantation stocks, CitiGroup Global Markets Malaysia Sdn Bhd director Choong Wai Kee said today.

“Looking at crude palm oil prices and the current positive sentiment towards the market, particularly election speculation, we cannot rule out that the KLCI may hit 1,500 this quarter,” he told a media briefing on Malaysia’ economic and equity markets outlook for 2008.

The benchmark Composite Index reached 1,487.39 points at 9.34 am today, a fresh all time high to date, beating yesterday’s record high of 1,473.74.

Choong, who is the company’s head of Malaysia Research, said apart from plantation, telecommunication was also a sector driving the gains of Bursa Malaysia shares at present.

Since the listing of Sime Darby in November 2007, the plantation and telecommunication counters had accounted for more than 25 per cent of the CI, he said.

Besides the plantation and telecommunication sectors, the banking sector is also favourable as it will be a beneficiary of the government’s efforts to drive consumer spending, Choong said.

Maybank and Public Bank are among the banking stocks expected to be in the forefront because the banking groups are likely to give good visible dividend yields, he said.

However, the potential of rising inflation might impact private consumption, raising concerns among public, especially on the back of slowdown of the US economy and higher cost of living, he added.

Despite assumption that the US economy is going for soft landing and not recession, which will benefit the Asian economy including Malaysia, investors have continued to adopt a defensive approach towards the local bourse, according to Choong.

“We want investors to continue being cautious and be very defensive. Go for stocks with very high earnings visibility and strong dividend yields and cashflow,” he said.

He also said that more than 80 percent of the stocks are considered as
“very defensive”.

Defensive stocks referred to those that remain stable under difficult economic conditions and provide a greater degree of certainty to investors.

Choong said Citigroup has projected the KLCI to be around the 1,600-point level by year-end.

Advertlets

2008-01-06T10:55:00.000+08:00

Apologize to all reader that couldnt log-on on this blog, this is due to the problems that create by Advertlets. I have to thank Advertlets for bringing my blog traffic down, but i don think they mean it. So we shall see what's going to happen next! Thank you guys!!

KLCI likely to undergo brief consolidation

2008-01-05T21:53:00.000+08:00

By S.N.LOCK

The KLCI's technical pullback over the first three trading days hit its intra-day low of 1,431.69 on Thursday, staging a successful re-test of this column's envisaged support zone (1,409 to 1,443 levels).

Subsequent sharp technical rally took the KLCI to a all-time historical high of 1,467.78 yesterday, moving into the confines of this column's envisaged resistance zone (1,451 to 1,485 levels).

Chartwise, the KLCI continued to stay decisively above its downside support (see KLCI's monthly chart - A1:A2). It closed at a new all-time historical closing high of 1,466.67 yesterday.

The KLCI's daily trend staged a successful re-test of its immediate downside parallel support trendline (see KLCI's daily chart - B5:B6). It is staging a re-challenge of its overhead parallel resistance trendline (B7:B8).

The KLCI's daily, weekly and monthly fast MACDs (moving average convergence divergence) continued to stay above their respective slow MACDs. The bullish configuration of the KLCI's three time-frame MACDs will continue to drive the KLCI onto higher technical levels.

The KLCI's 14-day RSI stayed at 68.59 per cent level yeterday. Its 14-week and 14-month RSI stayed at 65.72 and 78.27 per cent levels respectively.

Last week, this column commented on the possibility of ending the year with a bang. It did. The KLCI hit a new all-time historical high of 1,452.57 on December 31, replacing its previous historical high of 1,449.70.

Following the sharp technical rally yesterday, the KLCI is likely to pause for a brief consolidation before resuming its prior technical rally. It has an even chance of staging a re-challenge of 1,490. Second liners are likely to come under some buying support.

Next week, the KLCI's overhead resistance zone will hover at 1,470 to 1,500 points while its downside support will be at 1,428 to 1,462 points

Public Mutual to launch consumer themes fund

2008-01-03T22:05:00.000+08:00

By The edge

Public Mutual Bhd will launch its first Far-East consumer themes fund on Jan 8, enabling investors to tap into growth potential of rising consumer spending in the Far East markets.

Public Mutual chairman Tan Sri Dr Teh Hong Piow said on Jan 3 the Public Far-East Consumer Themes Fund (PFECTF) was positioned to benefit from the robust growth of consumer spending in the Far East region.

PFECTF is an equity fund that seeks to achieve long-term capital appreciation by investing in securities, mainly equities, in the consumer sector in the domestic and foreign markets.

The fund may also invest in multinational corporations in the consumer sector which sell their products in Far-East markets or have distribution outlets/establishments in the Far-East region and are listed in the US, Europe and Australian markets.

Teh said PFECTF was suitable for aggressive investors who could withstand extended periods of market highs and lows to achieve medium- to long-term capital growth for their investments.

The issue price/net asset value (NAV) of PFECTF is at 25 sen per unit during the 21-day initial offer period of Jan 8 to Jan 28.

During the offer period, a special promotional service charge of 5% of net asset value (NAV) per unit is extended to the purchase of units of PFECTF by investors.

Investors opting for the direct debit instruction with PFECTF during the offer period would enjoy a special promotional service charge of 5.25% of NAV per unit for as long as the Direct Debit is active. The minimum initial investment for the fund is RM1,000 and the minimum additional investment is RM100.

Teh said consumer spending accounted for a significant share of Gross Domestic Product (GDP) in most economies. In Asia, consumer spending accounted for about half of GDP.

In the 2001-2006 period, consumer spending in Indonesia and China grew at healthy annual rates of 13.6% and 10.4% respectively on the back of rising income and urbanisation. In South Korea, Malaysia and Thailand, consumer spending growth were also impressive at around 9.0%-9.5% per annum, backed by strong consumer confidence amidst generally buoyant economic activities.

He added in the Far East, consumer spending was fuelled by robust growth in disposable incomes, the wealth effect from rising equity and property markets, increased urbanisation, healthy tourism activities and attractive lending rates.

10-years high for ringgit malaysia

2008-01-01T16:37:00.000+08:00

By Biz Times

The ringgit ended 2007 at a 10-year high against the greenback at close yesterday on strong commercial demand, particularly from foreign funds, dealers said.

The ringgit strengthened to 3.3090/3140 compared to Friday's closing of 3.3160/3210.

Dealers said the ringgit gained momentum on the back of speculation that the US will implement another interest rate cut to revive its economy.

"The upward trend reflects the strengthening of Malaysia's economic fundamentals, plus the weakening of the US dollar due to the subprime mortgage crisis," one of the dealers said.

The greenback also lost its appeal following the release of bearish US home sales data which raised concerns about the US economy and reinforced the expectations of another interest rate cut.

The Commerce Department on Friday reported that new home sales fell nine per cent in November from October.

The dealer said the uptrend showed the optimism of local and foreign funds in the future of the ringgit and the domestic economy.

The ringgit was lower against the Singapore dollar at 2.3008/3059 from Friday's close of 2.2906/2943 and declined against yen at 2.9524/9573 from 2.9270/9301.

The ringgit appreciated against British pound at 6.6058/6167 compared to Friday's close of 6.6177/6250 and declined against euro at 4.8672/8756 from 4.8583/8663.

Proton models for China

2007-12-29T12:49:00.000+08:00

By Star Biz

Proton Holdings Bhd, which is supplying Gen.2 cars to China-based Jinhua Youngman Automobile Group Ltd, is looking at exporting other models to the country in order to capture a larger market.

Head of China business Teo Aeng Kyet said Proton was negotiating with its Chinese partner to introduce different models in China.

“We have an agreement to supply 30,000 Gen.2 to Jinhua Youngman. We are also discussing with our partner to increase the order,” he told a media briefing prior to the second shipment of 348 Gen.2 to China yesterday.

“A total of 1,600 units of Gen.2 is scheduled to be shipped to China by end of next month in order to facilitate Jinhua Youngman’s sales launch programme in China,” he said.

To date, Proton has shipped 408 of the 30,000 units ordered by Jinhua Youngman. Proton will continue to ship 1,500 units of Gen.2 monthly over the next 20 months to fulfil the order.

Proton and Jinhua Youngman, a leading commercial vehicle manufacturer in China with a licence to produce passenger cars, signed an agreement on July 13 under which Proton cars would be re-badged as “Europestar” in China.

Teo said for a start, Proton was selling completely built-up units to Jinhua Youngman.

“Subsequently, we will supply engines and completely knocked-down units (CKD) of several Proton models to Jinhua Youngman for assembly,” he said.

He added that the plant for Proton CKD was expected to begin operating in mid-2008.

Jinhua Youngman quality director Ma Wei Dong said the group had appointed 40 dealers in China to support the launch in January.

He said the group expected to double its sales of Proton cars in China in two to three years. However, Ma declined to elaborate as the negotiation between Jinhua Youngman and Proton was ongoing.

He said the company was confident of Proton cars as all 348 units of Gen.2 in the second shipment had been fully booked ahead of Chinese New Year in February.

“We will consider ordering more cars from Proton in the future. We are satisfied with the quality of the car,” he said adding that currently, car ownership in China is only about 1% of the population.

With the middle-income group expanding, spurred by economic growth that is expected to be above 8% annually, the car market is forecast to expand by 20% to 30% annually in the next few years.

*Everyone is goin to China, do u think our very own national car maker will make it?? haha.. Big Question!

WHat's install for 2008

2007-12-26T23:07:00.000+08:00

By Biz Times

INVESTORS should be prepared for unforeseen shocks that could substantially threaten the robustness of the global economy in 2008, HwangDBS Investment Management Bhd (HwangDBS IM) chief executive officer and executive director Teng Chee Wai said.

He said the stage should be set for a weak US dollar to continue into next year, although he believes the Malaysian economy will be able to withstand external shocks including a recession in the US.

In a statement, Teng said the recent financial crisis has the potential to be a blessing in disguise for Asia and may present an opportunity for the region to showcase its resilience.
A dampened US economic outlook should increase the urgency within Asia to step up efforts to shift its growth dependency away from external demand, and to steer fiscal/monetary policies towards boosting demand.

This process should be facilitated by orderly adjustments in their undervalued currencies, stronger balance of payments and improved international liquidity positions.

"With the US consumer encumbered by mortgage financing woes, the rise of the Asian consumer should attract the attention of foreign investors. At the country level, it is the countries where domestic demand has been strongest - such as Singapore and Malaysia - where there has been the largest disconnect between the earnings cycle and the US economic cycle," he said.

HwangDBS IM recently launched its first performance-based fund, the HwangDBS Ascendur RIS 1 (HARIS1).

Targeted at the mass affluent, the unique features of the fund are the lower sales charge or front-end fees of a maximum charge of two per cent as opposed to the four to six per cent characteristic of equity unit trust funds, as well as the performance attribute which allows the manager to levy a performance fee if HARIS1 exceeds the pre-determined minimum return benchmark at eight per cent per annum.

The launch of HARIS1 represents HwangDBS IM's eighth fund for 2007.

Teng said the unique features challenge market convention but are necessary in the increasingly competitive marketplace.

"Managing absolute return mandates or funds is nothing new to HwangDBS IM. When we started out in 2001, it was a surprise to the industry when we set an absolute performance benchmark and included a fee on the performance as an incentive for the manager, in the event of positive performance.

"Since then, such features have become more common but somewhat limited to the management of discretionary mandates. Our main objective in bringing such a fund to the local market is to plug the gap between the mass retail and such services by introducing a product targeted specifically at the mass affluent but with elements of a discretionary mandate.

"At the same time we aim to ensure that investors are able to potentially reap more meaningful returns because of the lower fees," Teng said.

HARIS1 will primarily invest in equity securities of developed and emerging markets globally. It may also invest in fixed income securities of developed markets or debt instruments.

HARIS1 has an approved size of 200 million units priced at RM0.50 per unit. The minimum initial investment sum is set at RM500,000 and the minimum additional investment is RM100,000.

HARIS1 is a mixed securities and growth type fund targeted at medium to long-term investors who are risk tolerant and are seeking higher capital returns on their investments.

Malaysia way ahead in Islamic finance

2007-12-21T20:27:00.000+08:00

By The Edge

Malaysia has the capacity to retain its leadership in global Islamic finance despite the emergence of competition from centres such as Hong Kong and Dubai, CIMB Islamic chief executive officer Badlisyah Abdul Ghani said.

He said despite the stiff competition that Malaysia was facing, it was way ahead of other countries in terms of product offerings and its sophistication, having been developing the market for the last 40 years.

Britain, Singapore, Dubai have recently joined the race to offer Islamic banking and investment products to investors, each vying to become the international hub for Islamic finance. Japan recently also expressed interest in launching a government sukuk.

In October, Hong Kong chief executive Donald Tsang had said the city would emulate Malaysia and Singapore as a centre for Islamic finance, in an effort to grab a slice of the thriving market.

It is believed that Hong Kong will be the biggest beneficiary being the gateway to the sought-after market in China.

Badlisyah said, however, the rise of new Islamic markets did not signify that Malaysia would be at the losing end.

“The launch of the Malaysian International Islamic Financial Centre (MIFC) encapsulates all the competitive edge Malaysia has in the Islamic financial market into one brand entity.

“MIFC is second to none as a global hub for Islamic finance as it is still the only country in the world that has the most comprehensive regulatory, legal and Syariah framework for the business. All these other financial centres are effectively new kids on the block,” he told The Edge Financial Daily in an email interview recently.

Badlisyah said: “There is a lot of development being reported on Islamic finance in Hong Kong and Singapore. However, it is still early days for them. Providing double stamp duty exemptions, as being done in the UK, and allowing Murabahah in Singapore is very good progress, but still insufficient to facilitate a robust Islamic finance industry.”

He said Malaysia boasted some of the largest Islamic financial instruments globally, besides being the largest sukuk issuer in the world. Malaysia retains the world’s largest Islamic bond market, accounting for about US$47 billion (RM157.54 billion), representing two-thirds of total Islamic bonds outstanding worldwide.

“The Islamic banking sector in Malaysia is the largest in Asia, and remains the only one in the world that has an active and effective Islamic money market.

“Bursa Malaysia is the largest Islamic stock exchange in the world, with about 86% of shares listed being Syariah-compliant stocks,” he said, adding that Malaysia also had the largest takaful market globally, in which, the biggest Takaful operators were Malaysians.

He, however, said Malaysia needed to develop and grow its brand, to keep its competitiveness as a pioneer and leader in Islamic finance.

“Malaysia needs to continuously and effectively market itself as the hub for investment flows from the Middle East to the Far East, (as it) is the epicentre of the Old Silk Route, and now for the New Silk Route,” he said. Badlisyah added that Malaysia needed to develop MIFC as a global brand.

Additionally, Badlisyah said a lot more needed to be done as Islamic finance had much potential that was still untapped. He said: “There is room for a lot of financial centres in the global Islamic financial market, just as the conventional market has many financial centres.”

“As a global player in the Islamic financial market, we are excited with the advent of the UK, Hong Kong and Singapore as effective financial centres or platforms in undertaking Islamic banking and finance. We hope they would become as successful as Malaysia so that the market can grow globally,” he added.

*Being a leading aka role model Islamic Country, i really think that there are huge potential for Islamic Finance to grow big in Malaysia.

Confident of 6% growth??

2007-12-19T16:50:00.000+08:00

By Star Biz

Malaysia is confident that it can achieve its projected target of economic growth of between 6% and 6.5% next year, Second Finance Minister Tan Sri Nor Mohamed Yakcop said.

He said that based on the growth momentum in the third quarter of this year, the country could achieve a growth rate of higher than 6% in 2008, while the projected inflation rate should be at 2%.

Nor Mohamed said the projected positive growth of the country's economic performance was based on the healthy developments in the investment sector and the increased dividends given to investors by several major funds such as Amanah Saham Berhad Bumiputra (ASB), Employees Provident Fund (EPF), Tabung Haji and Lembaga Tabung Angkatan Tentera (LTAT). The higher dividends and returns by the funds reflected the confidence shown in Bursa Malaysia and the economy, he told reporters at Parliament House on Wednesday.

The Bursa index gained an impressive 1385 points on Tuesday with a market value of more than one trillion ringgit, he noted.

"There will be challenges for next year, such as the sub-prime issue in the United States which had not tapered off yet.

"But we have met more serious challenges before this,” he said.

Nor Mohamed said the government is also confident of reducing the economic deficit to 3.1% in 2008 from 3.2% this year.

*Personally i think the economy wouldn't be so stable next year! But we'll c!

KL shares down for 5th straight day

2007-12-19T00:15:00.000+08:00

By Biz Times

MALAYSIAN share prices extended their losses for the fifth consecutive day today amid an overnight slump on Wall Street and continued concerns over the US economy.

At close, the Kuala Lumpur Composite Index (KLCI) declined 6.16 points or 0.44 per cent to 1,385.45 after opening 3.79 points lower at 1,387.82.

Property, construction and finance counters led the fall in the local bourse today, which touched an intra-day day low of 1,382.44, or down 9.17 points, dealers said.

There were some eleventh hour bargain-hunting in the lower liners but not sufficient to lift the overall bearish market, said one dealer.

On Wall Street, the Dow Jones Index fell for the second consecutive day overnight by 172.65 points to 13,167.2. Last Friday, it dropped 178 points.

The latest sell-off was triggered by renewed concern on the US economic growth on the back of uncertainty over the magnitude of subprime losses, financial impact on mortgage lenders, repricing of credit risk, sky-high crude oil price and weaker consumer spending, according to SBB Securities.

“Given the high degree of uncertainty, we doubt investors would stray too far from the sidelines, at least for now. The local bourse will likely take its cue from the US and regional market,” it said in its research report.

Immediate support and resistance has been put at 1,370 and 1,400 respectively.

The industrial and technology indices bucked the market trend today.
The Industrial Index jumped 14.77 points to 2,898.35 and the Technology Index perked 0.10 of a point to 2318. The Finance Index, meanwhile, fell 59.92 points to 10,556.6.

The FBMEmas dropped 46.42 points to 9,396.3 and the FBM30 went down 45.82 points to 8,945.94.

The FBM2BRD shed 9.44 points to 6,618.24 and the FBM-MDQ was 30.25 points lower at 5,872.34. Decliners led advancers by 440 to 319 while 351 counters were unchanged, 302 untraded and 26 suspended.

Volume amounted to 779.655 million shares worth RM1.611 billion, up from 719.414 million shares worth RM1.411 billion traded yesterday.

*Wait wait and wait! Den its time to go in! hehe..

Lower sales charges on Unit Trust

2007-12-16T14:29:00.000+08:00

By Star Biz

The investing public and unit trust agents will benefit from reduced service charges for unit trust investments funded by Employees Provident Fund (EPF) contributions.

The EPF recently announced that service charge (including commissions) by unit trust companies for investments by EPF members would be capped at 3% from 6% starting Jan 1.

Deputy Domestic Trade and Consumer Affairs Minister Datuk S. Veerasingam said that if the charges were reduced, people would invest more and this would mean an increase in sales for unit trust agents.

”By taking 6%, the investment will set back the EPF contributor by a large amount.

“For example, if the investment was RM100,000, RM6,000 would be taken by the unit trust companies, reducing the investments to RM94,000.

“But at 3%, the invested amount will be RM97,000,” he said.

Federation of Malaysian Unit Trust Managers (FMUTM) president, Tunku Datuk Yaacob Tunku Abdullah said the ruling would hurt profits.

He felt that the 3% rate would cut their income by half.

Overall, unit trust companies have performed well this year, with RM155bil in funds as at the end of September, an increase of 28% from last year’s RM121bil.

Fomca secretary-general Muhammad Shaani Abdullah said that it was a good move by EPF, adding that in line with this, Bank Negara should also reduce the service charges for individuals using their own funds to buy unit trusts.

*Good News, lower sales charge means more investment and more units/returns the investor can garner! hehe..

Economy may grow faster on rise of biodiesel sector

2007-12-15T22:07:00.000+08:00

By Biz Times

THE Malaysian economy is expected to achieve more rapid growth with the rise of the biodiesel industry, Deputy Prime Minister Datuk Seri Najib Tun Razak said today.

He said worldwide demand for biodiesel is expected to increase significantly in the near future, providing a boost for Malaysia as the major producer of palm oil.

“Worldwide demand for biodiesel is expected to explode and this will ensure that the price (of palm oil) is at a satisfactory and stable level,” Najib said.

“So we don’t have worry about the palm oil price falling to a low level as it did before,” he told reporters after officiating the biodiesel factory of Mission Biotechnologies Sdn Bhd at Kuantan port.

Also present were Pahang Menteri Besar Datuk Seri Adnan Yaakob, Mission Biotechnologies’ chairman Tan Sri Razak Ramli and Mission Biofuels Ltd Australia’s chairman Dario Amara.

Najib said analysts have forecast that the palm oil price, now at RM2,900 per tonne, will not fall below the RM2,400 per tonne level with expansion of the industry.

On competition from other countries, he said Malaysia has a major edge, especially in the supply of palm oil.

In his speech, Najib said the government plans to increase palm oil output by another 30 per cent by 2010 to cater to export demand as well as demand from biodiesel producers.

He said Malaysia is now producing 15 million tonnes per annum and the demand for biodiesel is expected to triple to 30 million tonnes by 2010.

*The KLCI closed 0.92% or 13.16 points lower at 1,410.56. I think Growth will also be slower over the next two quarters

KL Composite Index hit another all-time high of 1,440.39 points

2007-12-08T15:47:00.000+08:00

By Star Biz

THE benchmark KL Composite Index hit another all-time high of 1,440.39 points on Thursday.

While this means that blue-chip counters have done well, many mid-cap, small-cap and fledgling stocks are still languishing in the market, attracting little investor interest.

This lack of a broad-based rally has been attributed mainly to retail participation having dried up in the market or is still there but pretty cautious, depending on who you talk with.

The culprit for this is widely felt to be the drop in the market from 1,283.47 points on Feb 23 to 1,110.69 on March 5, and the fall from 1,392.18 points on July 24 to 1,192.55 on Aug 17, sparked by the subprime woes in the US that caught out many retail investors.

To jog the memory, February's drop was sparked by the widespread but short-lived Shanghai contagion.

Thus, retail investors have become understandably cautious. They could be “locked up” in stale bulls from the February or July market dips and did not have the funds to participate in the market.

“Too low to sell out or not high enough to cash out,” said a chartist.

The market needs to attract retail investors, which is essential to a healthy stock market and healthy rallies, but they will not be back until it is worthwhile and less risky to do so.

MIMB Investment Bank head of research Pong Teng Siew believes that apart from some losing money during the two major dips this year, retail investors are becoming more perceptive of the market than before.

“Retail investors are more perceptive now and they can see market rally is more focused, so they are investing more cautiously,” he said.

Pong said he would ideally like to see a gradual and predictable rise in prices of counters rather than them shooting up in a short time maybe past valuations and then falling suddenly.

“I hate to see investors lose money. I would like counters to have sustainable growth in a predictable way.”

He also said the stock market should not rise in a way that was out of step with economic growth and beyond what could be sustained by domestic investors.

In the current market, Pong suggested a stock picking on key counters, as the rally was at present much more focused.

A broad-based rally was always preferable to a focused rally as it benefited a wider base of investors and encouraged participation in the market, he added.

Another analyst said for there to be a broad-based rally in the market, there had to be liquidity both from foreign and domestic sources, but no one was sure when this would happen.

With the US market “climbing a wall of worry” that included subprime issues, high oil prices and worrying economic data, liquidity was unlikely to flow into global markets in the short to medium term, he said.

There is also the issue of investors everywhere finding it better not to have a position before the upcoming Dec 11 Federal Reserve committee meeting.

Malaysian plantation, oil and gas stocks shine

2007-12-06T16:46:00.000+08:00

By Biz Times

SHARES on Bursa Malaysia ended higher yesterday as buying of plantation and oil and gas key heavyweights led the benchmark Kuala Lumpur Composite Index (KLCI) to close at an all-time high of 1,427.77, up 11.96 points or 0.84 per cent, a dealer said.

MIMB Investment Bank head of research Pong Teng Siew said the market rally was led by blue-chips like Sime Darby and IOI Corp.

"Obviously the re-listing of Sime Darby had provided a fresh impetus for the market and gave an upside to the KLCI," he noted.

He pointed out that as Malaysia is more commodity-driven, the local bourse had even outperformed some of its regional peers.

"Malaysia is also fortunate that at a time when some parts of the world are facing slower growth, government spending here has increased," said Pong.

The Finance Index surged 76.79 points to 10,913.6 and the Industrial Index rose 40 points to 2,960.77.

Of the FTSE-BM Index series, the FBMEmas rose 68.58 points to 9,633.07 and the FBM30, which comprises the top 30 companies by full market capitalisation, advanced 46.44 points to 9,156.56.

The FBM-MDQ went up by 75.31 points to 6,048.95 and FBM2BRD gained 42.53 points to 6,798.02.

SJ Securities analyst Phua Kwee Hock said the rise in crude oil prices to US$88.61 (RM255.95) yesterday had rallied the plantation stocks which in turn led the KLCI to touch a new high.

He expects the market to trade between 1,418 and 1,436 today.

Actives included Bio Osmo which fell 4.5 sen to 28.5 sen, FTEC Resources gained one sen to 37 sen, Supercomal Technologies inched up half sen to 15.5 sen and Hubline gained 1.5 sen to 62 sen. KBES went up five sen to 42 sen and Time Dotcom increased 4.5 sen to 80.5 sen.

Among blue chips, Sime Darby rose 30 sen to RM11.30, Maybank went up 10 sen to RM11.70, Tenaga Nasional was flat at RM9.90, Telekom Malaysia fell 30 sen to RM11.40 and IOI Corp increased 20 sen to RM6.85.

Meanwhile, KLCI futures contracts on Bursa Malaysia Derivatives ended higher yesterday on the back of a firmer cash market.

At the close, spot December rose 29 points to 1,445.0, January 2008 futures gained 31 points to 1,443.0, March 2008 added 29.5 points to 1,431.5 and faraway June 2008 futures climbed 28 points to 1,412.0.

Volume rose to 9,107 lots from Tuesday's 5,950 lots and open interest went up to 32,029 contracts from 31,096 previously.

*The KLCI surge again today! Its 5mins to closing! I personally think oil and gas are the shares that give good returns in the long term and short term investment, as the world is thirst for this commodity.!

Public Mutual funds

2007-12-04T16:53:00.000+08:00

By The Edge

Public Bank’s wholly-owned subsidiary, Public Mutual declared distributions for eight of its funds. The gross distributions declared were for the financial year ended Nov 30, 2007.

Public Mutual declared a gross distribution of 10 sen per unit for Public Ittikal Fund, 5.5 sen per unit for Public Dividend Select Fund and 5 sen per unit for Public Islamic Equity Fund.

The three funds topped the gross distribution list for the total eight funds.

Public Mutual chairman Tan Sri Teh Hong Piow said Public Ittikal Fund, Public Dividend Select Fund and Public Islamic Equity Fund had generated a one-year return of 37.43%, 36.63% and 40.04% respectively for the period ended Nov 16, 2007, according to the Edge-Lipper fund table dated Nov 26, 2007.

As for Public Far-East Select Fund and Public Regional Sector Fund, both funds have generated a one-year return of 43.19% and 35.42% respectively for the same period.

Both funds have outperformed their benchmarks of 33.1% and 29.53% respectively for the same period.

Launched in Nov, 2006, Public Far-East Dividend Fund has generated a six-month return of 11.69% for the same period ended Nov 16, 2007.

Public Balanced Fund had also outperformed its benchmark of 21.11% with a one-year return of 31.71% for the same period. Meanwhile, Public Islamic Balanced Fund registered a one-year return of 23.46% for the same period.

Public Mutual currently manages 54 funds for more than 1.3 million account holders. As at Oct 31, 2007, the total net asset value of the funds managed was RM26.7 billion.

Is there anymore opportunity to invest in those 3funds? (Public Ittikal Fund, Public Dividend Select Fund and Public Islamic Equity Fund) Since there are mass media reporting how good is those funds are! If you are really interested, get a copy of personal money from any newsstand, bookstore and etc to analyse yourself.