20100407 0942 Malaysia Corporate News.

RAM Ratings has revised the outlook on the AAA ratings of Idaman Capital’s RM50m Class A and RM430m Class B super senior fixed-rate bonds to negative from stable. The rating agency has also reaffirmed the ratings of Idaman Capital’s RM220m senior fixedrate bonds, RM20m mezzanine fixed-rate bonds and RM80m subordinated bonds at C3, with a negative outlook.

• RAM Ratings said the revision of the rating outlook on the super senior bonds reflected its concerns that the over-collateralisation level of the papers could be diminished further by the rapid and severe deterioration in the general credit quality of its pool of obligors. 
• Idaman Capital is a trust-owned, bankruptcy-remote, special-purpose vehicle, incorporated specifically to undertake a primary collateralised-loan-obligation transaction. “While the over-collateralisation level of 123% as at end-March 2010 still supports the AAA rating of the super senior bonds, the rating is vulnerable to the negative effects of any further substantial downward rating migration or additional defaults within the portfolio,” it said.
• “Since our last review on Dec 9 2009, our analysis of the most recent quarterly performance has revealed steeper-than-anticipated deterioration in the credit quality of the obligors rated BB1 and below,” it added. (StarBiz) 

As a whole, any deterioration of the credit quality of Idaman Capital would be negative for Alliance Financial Group as it has RM240m exposure to collateralised loan obligation (CLO). Although Alliance's exposure has a provision coverage of 96%, any weakening of the credit quality could dim the prospects for subsequent recovery.

EON Capital will call for a general meeting soon to seek shareholders' approval on the revised RM5.06bn all-cash buyout proposal from Hong Leong Bank, says EON Bank Group chief executive Michael Lor.

• He added that the decision could come anytime from now as the board of directors, in particular the independent director, was satisfied that the strategic option had been considered to preserve and enhance the value of EONCap. 
• Besides, Lor said the bank was confident of securing 60,000 GSC-EON Bank credit card holders by the year-end. It has almost 30,000 to date. He also disclosed that the bank was allocating about RM10 million to promote all of its credit cards, aiming to attract another 120,000 new cardholders by the year-end. It has 620,000 currently. (BT, Bernama)

The Works Ministry may consider studying a proposal by Asas Serba Sdn Bhd to take over all 22 toll roads in the country for RM50bn. "If they have a good proposal we will look at it. However, there is nothing on the table now," Minister Datuk Shaziman Abu Mansor said. (BT)

The Works Ministry will propose to the Cabinet to allow toll expressway operators to build townships and industrial projects along the roads that they operate so that users pay less toll, said Minister Datuk Shaziman Abu Mansor said. "There are many potential that can be developed along the expressways. Private developers will not be affected as only certain stretches will be developed," he added.

• Shaziman said his ministry may look at renewing toll rates yearly instead of every three years now but that requires further discussions. (BT)

Construction of the RM9bn Pahang-Selangor raw water transfer project officially took off Tuesday after a ground-breaking ceremony graced by Sultan Ahmad Shah of Pahang. Once completed in 2014, the project will pump 1,890m litres of raw water daily from Sungai Semantan in Pahang to the Hulu Langat water treatment facility in Selangor. The project was awarded to a joint venture company of Japan's Shimizu Corporation and Nishimatsu Construction, and local companies IJM Corp and UEM Builders. (The Star)

The government has not proposed a ceiling price for the tariff price structure for the Pahang-Selangor raw water transfer project. Energy, Green Technology and Water Minister Datuk Seri Peter Chin said the government would take note of the Pahang state government’s request to have the RM0.10 for each cubic meter to be raised 2-3x every five years. (Malaysian Reserve)

Palm oil futures declined as crude oil dropped for the first time in six days, curbing a rally in vegetable oils used in biofuels. June-delivery palm oil futures on the Malaysia Derivatives Exchange dropped 1% to RM2,506/MT at midday. Soybean oil in Chicago lost 0.6% to 39.10 cents/pound in after-hours trading. (Bloomberg, Malaysian Reserve)

Thai, Indonesian and Malaysian rubber grades have been traded at record prices well above US$3 a kg as tyre makers scramble to buy the commodity because of tight supplies, dealers said yesterday.

• Thai RSS3 changed hands around $3.50 a kg late last week, Indonesia's SIR20 was sold late on Monday at 1.50 to 1.51 US cents a pound, while SMR20 was traded at between US$3.365 and US$3.405 a kg for nearby shipment, they said. (Reuters)

Malaysia plans to woo foreign investors to handle the expanding water services industry, said Deputy International Trade and Industry Minister Datuk Jacob Dungau Sagan. "We're taking a targeted approach to draw in capital intensive in industrial engineering support and biotechnology," he added. (BT)

The plan to remove 14-stick cigarette packs from the market will definitely help to prevent youths, especially schoolchildren from picking up the habit, said non-governmental organisations and consumer groups. However, the current no-smoking zones should be further extended to cover a wider area.

• Meanwhile, many hardcore smokers said the move to remove 14-stick packs would not affect them, for now. "Many of us will consider quitting only if there's no place for us to smoke and cigarette prices are too high," a smoker said. (The Star)

Malaysian mills have raised rebar offer prices by RM100-200 per tonne over the past fortnight in response to higher raw material costs, and amid talk of a higher annual benchmark iron ore settlement. Mills are offering at RM2,300-2,400 per tonne this week, up from RM2,100-2,200 per tonne two weeks ago, said officials.

• Transaction prices, however, are still lagging behind at RM2,150-2,250 per tonne, said sources. But demand remains weak, causing mills and traders to offer bulk RM50-150 discounts to push sales, said sources. (Metal Bulletin)

CIMB Group has completed the issuance of a RM750m Cumulative Subordinated Fixed Rate Notes. The notes comprise a callable five-year tranche amounting to RM150m and a callable 10-year tranche of RM600m.

• Both tranches have a maturity of 50 years, with the 5-year tranche having a call option for the issuer to redeem at 5th year and on each subsequent coupon payment date, and the 10 year tranche having a call option for the issuer to redeem at year 10 and on each subsequent coupon payment date. (BT)

OSK Investment Bank plans to set up an Islamic stockbroking business and offer syariah equity-linked investments as it explores a greater use of equity products, its Islamic banking chief says. Islamic banks worldwide are considering the use of more equity or risksharing structures, estimated to make up only a tenth of Islamic financing globally, prodded by criticism that their industry mirrors conventional banking.

• The industry is seeking "more equity-based instruments rather than debt-based instruments because that is ideally what Islamic finance is all about", OSK's Islamic banking head Yazit Yusuff said. 
• OSK Investment Bank, part of financial group OSK Holdings, wants to set up Islamic stockbroking services next year to serve the domestic and foreign markets, including the Middle East, Yazit said.
• Yazit said OSK is also looking into developing equity-linked investment products based on the salam contract where advance payment is made for goods. The bank is also pitching for a mandate for sukuk worth RM1.5 billion to be issued by government agencies, he said.
• AMMB Holdings set up an Islamic stockbroking unit in 2008. To encourage more syariah stockbrokers, the government said last year that expenses incurred in setting up such firms would continue to get a deduction in the calculation of income tax until 2015. (BT)

Allianz General Insurance Company (Malaysia) has introduced the enhanced Personal Accident plan Allianz Shield, which is designed to provide a more comprehensive coverage. Allianz Shield is devised to cover among others, medical expenses that include dengue, malaria or Japanese Encephalitis, bungee jumping, amateur sports (except martial arts and boxing), natural disasters, scuba diving (up to 50 metres deep), kidnap coverage, evacuation programme, snatch theft and more. (BT)

Dato' Saiful Bahri Zainuddin has resigned from his position as the Executive Director, Operations of Affin Holdings effective from 1 Apr 10. (BMSB)

U Mobile incurred an audited net loss of RM242.3m for the year ended Dec 08, said its substantial shareholder Multi-Purpose Holding. Audited net assets stood at RM548m or RM1.44 per share. (Financial Daily)

WiMAX broadband operator Packet One Networks is tieing up with Pos Malaysia to make it easier to acquire new customers sign up for P1's Internet packages, as well as for existing ones to pay their P1 bills at almost 600 post offices nationwide.

• "Tying up with Pos Malaysia will help us serve our customers in secondary towns - like Kluang, Batu Pahat, Muar - better. It will help us in terms of customer acquisition as well as retention rate, because we are now accessible in more places," said P1 CEO Michael Lai said. (BT)

Pos Malaysia will revise the price of its domestic postage stamps for the first time in 18 years, from RM0.30 to RM0.60. Starting July 1, price of stamps for sending mail up to 20g will be revised from RM0.30 to RM0.60. For those up to 50g, price would be raised from RM0.40 to RM0.70. (Star)

French carmaker Renault, Japanese alliance partner Nissan and Germany’s Daimler will unveil partnership plans today in Brussels, France’s industry minister said. Renault and Daimler have been discussing a partnership as carmakers worldwide seek to become more competitive by sharing technology costs and gaining scale. The groups are expected to announce a deal that will include plans for small, symbolic cross-shareholdings. (Reuters/BT)

DRB-Hicom is poised to become a sports car manufacturer after sealing a pact with the UK-based Potenza Sports Car Ltd. DRB-HICOM and Potenza plan to produce a range of models in Malaysia for the domestic and Asia-Pacific markets. Potenza is the designer and manufacturer of the niche Westfield and GTM brands of sports cars.

• The company has sold over 10,000 cars since 1983 to Europeans and other driving enthusiasts around the world. DRB-HICOM MD Datuk Seri Mohd Khamil Jamil said that it could become the exclusive importer, manufacturer and distributor of the Potenza sports cars. "The vehicles will include electric and the hybrid variants in the right-handdrive markets of the Asia-Pacific region," Khamil said. (BT)

Jobstreet Corp was granted a patent for its “Text Zoning in a Semi-structured Text” method by Singapore’s Registry of Patents on 31 Dec 2009. “This is expected to actively enhance and hasten the process of candidate selection,” it said. (Financial Daily)

Tanjong plc’s listing status on the London Stock Exchange will be designated as standard listing from secondary listing, in line with changes implemented to its listing rules. (BT)

Iris Corp has been awarded a RM115.22m contract by Syarikat Prasarana Negara Bhd to install an automatic fare collection system (AFC) for the Kelana Jaya LRT line and Ampang LRT Line. (BT)

Haisan Resources is in talks with various parties to implement several corporate exercises. They include rationalising the company's assets and facilities, streamlining operations and improving efficiency. The group is also looking to reduce its debt, but nothing has been concluded at the moment, it said. (BT)

Loh & Loh Corp will soon launch two property projects in Selayang and Bandar Sri Damansara with a total GDV of about RM300m. “The property development business is an extension of our construction capabilities but we don’t have landbank, so projects will be correlated to acquisition of land,” CEO Jason Loh said.

• Loh added that the company’s main focus will be the water sector. It is currently bidding for RM1.5bn worth of projects, 70-80% of which are water-related. (Malaysian Reserve)