Monday, July 30, 2012

20120730 1115 Malaysia Corporate Related News.

New market reps to lure investors
Faced with an ageing remisiers pool, stockbroking companies have forwarded a proposal to the Securities Commission (SC) Malaysia to create two new categories of capital market representatives. The new market representatives are to complement remisiers in bringing more retail business. This objective that runs parallel with that of the SC’s, which is currently deliberating on the proposal that could help reverse dwindling retail participation in the market. (Financial Daily)

Ken Holding Bhd’s RM1.22bn project dwarfs its market cap
Ken Holdings Bhd is poised to embark on a huge development project in Johor Bahru. The proposed mixed development, with an estimated gross development value (GDV) of RM1.22bn over six to seven years, is expected to deliver gross profit of RM301m, about three times the company’s current market capitalization of RM114.1m, at its closing price of RM1.19 last Friday. For the project, the company acquired four parcels of land through the proposed acquisition of a 100% stake in land owner Gadini SB from Malaysia Building Society Bhd. The acquisition is now in the final stages. (Financial Daily)

Banking system stirred
A recent issuance of banking licenses in Singapore may have some implications on the Malaysian banking system, according to industry sources. Recently, the Monetary Authority of Singapore (MAS) said it would be granting two full-fledged licenses in the city state to two yet unnamed Chinese. The full banking licenses, called Qualifying Full Bank (QFB) licenses in Singapore, will be issued to two Chinese banks already operating in Singapore. (StarBiz)

MRCB in line for RM1bn MRT job
Malaysian Resources Corp Bhd (MRCB) is expected to win a contract worth about RM1bn this week for the Sungai Buloh-Kajang My Rapid Transit (MRT) line. If awarded, this will be the first railway-related job for MRCB this year. The contract is expected to boost MRCB’s existing order book to more than RM2.5bn. (BT)

Bank Indonesia turns to Chinese bonds for diversity
Indonesia’s central bank is set to buy Chinese bonds by year end, helping to diversify its holdings of foreign reserves and cushion the archipelago from external shocks to its financial system. The planned purchase would mark Bank Indonesia’s first ever move to buy China’s interbank bonds, said Hartadi A. Sarwono, a deputy governor for research and monetary policy at the central bank. (BT)

Seaport Terminal charts course for Penang Port
Seaport Terminal SB – the successful bidder for the proposed privatization of Penang Port SB (PPSB) – broke its silence last week by assuring that it is committed to invest in increasing the capacity of the country’s oldest port. In a statement, the Tan Sri Syed Mokhtar al-Bukhary-owned company said it will deepen the navigation channel according to the needs of the port and dispelled claims that no dredging works will be carried out to deepen the northern channel. (BT)

MPHB: Govt liberalization will help boost legal betting
Multi-Purpose Holdings Bhd (MPHB) expects growth for its wholly-owned gaming arm, Magnum Corp SB, to come mainly from the migration of gamers from one end of the spectrum – the illegal games – to the legal ones in view of potential liberalization by the government. MPHB managing director Tan Sri Lau Kim Khoon@Surin Upatkoon believes the games that Magnum creates, such as the 4D Jackpot, cannot be duplicated by illegal gaming syndicates due to their sheer size, and this advantage is crucial in pulling customers away from illegal games. (Malaysian Reserve)

Bonus for civil servants will not affect Govt’s deficit reduction plan
The half-month bonus payment to civil servants, which will involve a total payout of RM2.2bn, will not disturb the government’s deficit target, said Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah yesterday. The country’s finances can afford a yearly bonus payout through the government devices, and the government debt is under control, he said. (Malaysian Reserve)

Oka Corp gains RM8.4m on revaluation
Oka Corp Bhd has made a gain of RM8.4m from a revaluation exercise of its properties in the country. The gain sees the concrete and readymix product maker’s net asset per share value rise to RM1.56 per share from RM1.43 per share as at the end of 31 Mar 201, according to an exchange filing last Friday. (Malaysian Reserve)


MAHB: Posts higher 2Q earnings on improved passenger traffic
Malaysia Airports Holdings (MAHB) posted a higher net profit of RM100.69m for the second quarter ended June 30 against RM91.1m a year ago. The improved performance was driven by growth in passenger traffic and commercial revenue. Its revenue rose 21.9% to RM807.8m from RM662.7m in the same corresponding period a year ago. Earnings per share increased to 8.32 sen in the second quarter from 8.28 sen previously. CFO Faizal Mansor said the results were good for the first 6 months and the group was on track to achieve its headline key performance indicators. (StarBiz)

MAHB: KLIA2 airport tax to remain unchanged
Malaysia Airports Holdings (MAHB) CFO Faizal Mansor said the airport tax for the new lowcost carrier terminal KLIA2 would remain unchanged when it begins operations in April next year. He said the charges are, however, regulated by the government, and it  is the government's decision whether to increase or lower the tax. Faizal was responding to AirAsia X Chairman Tan Sri Rafidah Aziz's statement Thursday that timeliness and a concrete blackand-white commitment on fixed airport charges in the new low-cost  carrier terminal are needed to cool down the ongoing tension between AirAsia Chief Tan Sri Tony Fernandes and MAHB. (Bernama)

Malaysia Resources Corporation: To get 60-acre prime land boost
The EPF is planning to inject a dose of entrepreneurship into its property business. MRCB, the EPF’s property and construction arm, is in negotiations to acquire private developer Nusa Gapurna Development Sdn Bhd, a Klang Valey-based property concern owned by businessman Datuk Mohamad Salim Fateh Din through Gapurna Sdn Bhd. The deal, to be financed via an exchange of shares, will give the politically well-connected businessman a direct stake in MRCB and a lead management role in the merged entity. A Gapurna executive said  Gapurna is the midst of preparing a proposal for consideration by the MRCB board. However, he said the valuations for the deal have not been finalized and parties are looking at the possibilities. (The Edge Weekly)

AirAsia: Indonesia may cancel acquisition Of Batavia Air
The Indonesian government may cancel the acquisition of local airline Batavia Air by Malaysia's AirAsia Bhd and its Indonesian partner, if the transaction breaches the ownership limit imposed on foreign companies in national airlines. The English weekly, Sunday Post, quoted the Director General of Indonesian Transportation Ministry Herry Bhakti Gumay as saying that AirAsia and its partner in the acquisition, PT Fersindo Nusaperkasa, had yet to report their acquisition to the ministry. Herry said the Indonesian government will give Batavia, AirAsia and Fersindo Nusaperkasa one month to report their plan to them. He added that they will cancel the acquisition process if Indonesia is not the majority shareholder. Herry also said the ministry would not hesitate to revoke Batavia Air's flight permit. (Bernama)

KYM Holdings: Pecoh could attract US$5bn in steel mill investment
Riding on the upcoming Vale iron ore distribution centre, the Perak Eco Industrial Hub (Pecoh) in Lumut to be developed by KYM Holdings with the state and other parties could attract some US$5bn in investment from an international steel mill among others. COO Allan Chin Kong Yaw said Boston Consulting Group (BCG) was appointed to conduct a study last year and the findings indicate that the 1,376ha Pecoh has the potential to house a large steel mill with production capacity of up to 5m tonnes a year. (Financial Daily)

Kim Loong Resources: To drive downstream business with RM10m R&D investment
Kim Loong Resources has allocated about RM10m for research and development (R&D) to drive its downstream business forward. Its executive chairman, Gooi Seong Lim, said considering the high land prices, the group would not be actively looking  to expand its landbank. Nevertheless, he said, the company has set aside fund for land acquisition if the opportunity arose. He said they aim to make this business sustainable by shifting our focus on the downstream sector to make something useful from the palm oil waste, such as developing our biogas power generator and other uses of biomass. Gooi said the group was eyeing something more higher-end, such as cellulose fibre, which could be used to make paper and fabrics. (Bernama)

Crescendo Corporation: To launch Johor township with GDV of RM3bn
Crescendo Corporation is preparing to launch its Bandar Cemerlang township, a development spanning 1,390 acres in Johor. The project will have a GDV of RM3bn over 10 to 15 years. MD Gooi Seong Lim said the company will start the development with some medium-cost houses in phase one which will have a GDV of about RM150m. He added that the township is strategically located near Ulu Tiram town and can be accessed via Johor Baru-Kota Tinggi Highway. He also said Crescendo is enjoying good demand for its Nusa Cemerlang Industrial Park (NCIP) in view of Singapore government's strategy to relocate some of its medium and small industries to Johor. As such, the company plans to develop about 50% of NCIP landbank in the next couple of years and convert some of the land into business park that would entail developments with higher value. (StarBiz)

Integrax: Vale Malaysia open to collaboration
Vale Malaysia Minerals Sdn Bhd, the local unit of Vale SA, is open to discussions with Integrax and other parties on collaboration for its iron ore distribution center and port in Lumut, Perak, said director Marcelo Figueiredo. He said Integrax had approached them and they are currently studying everything in an open way. (Financial Daily)

Integrax: Signs handling services deal with TNB
Integrax’s subsidiary has sealed a 28-year contract with Tenaga Nasional (TNB) to provide handling services for the importation of coal for the latter's power plant in Telok Rubiah, Perak. The company said its unit, Lekir Bulk Terminal Sdn Bhd (LBT), had signed a new jetty terminal usage agreement with TNB’s unit TNB Janamanjung Sdn Bhd (TNBJ) for the coal imports to be used in the new 1,010MW coal-fired power plant. Integrax said the agreement would expire on March 30, 2040. Under the agreement, LBT will procure and appoint a reputable contractor to undertake the design, engineering, procurement and construction of about 80-tonne grab bucket unloader, feeder conveyors and its associated equipment and structures. Integrax added that the agreement would continue to be effective and subsist after the initial period so long as the power plant was in operations and provided that TNBJ and LBT reached an agreement on the base operating payments and tonnage payments to be charged after expiration of the initial period. (StarBiz)

Ajiya: Unit to build factory in Thailand
Ajiya subsidiary Thai Ajiya Safety Glass Co Ltd will design, build and complete two units of factory-cum-three-storey office main building and associated external works at Amatanakorn Industrial Estate, Chonburi, Thailand, for 167.8m baht. Ajiya said in a statement that the company signed a contract yesterday with Vanbilv Co Ltd entailing the payment or such other sum as would become payable equivalent to RM16.78m. (StarBiz)

Building Materials: CMS Cement says will not raise price
CMS Cement Sdn Bhd, Sarawak’s sole cement producer and manufacturer, will not raise the price of cement despite recent reports of a nationwide cement price hike, Cahya Mata Sarawak group MD Datuk Richard Curtis said. He said CMS had always remained committed to the state’s socio-economic growth and would not increase its prices although cement production in Sarawak posed a logistical challenge due to terrain, raw materials and geographical population spread. In considering the impact of its price hike on the construction sector, he said, CMS also respected the Malaysian Competition Act and did not engage in price discussions with any Malaysian cement producers. (StarBiz)

Building Materials: MBAM wants ministry to investigate possible hike in cement prices
The Master Builders Association Malaysia (MBAM), concerned over a possible hike in cement prices, is appealing to the Domestic Trade, Co-operatives and Consumerism Ministry to look into the matter immediately. In a statement, MBAM said it had been notified by a member that a major cement manufacturer would be increasing cement price in the Klang Valley beginning Aug 1. The listed price of cement will increase to RM17.75 per bag, from RM16.75 previously, while the listed price of cement bulk will cost RM340 per tonne from RM320 per tonne earlier. (Bernama)

Construction: Firms keen on high-speed rail job must bid via tender exercise
The Land Public Transport Commission (SPAD) will not be considering proposals submitted previously by several companies for the high-speed rail project linking Kuala Lumpur and Singapore, a key official said. SPAD chief development officer Azmi Abdul Aziz said companies which have submitted proposals and are still interested in the high-speed rail project will have to participate in the tender exercise to be called next year. Business Times reported previously that UEM Group-Hartasuma, China Infraglobe Consortium-Global Rail and YTL Corporation have made presentations on the project to the National Key Economic Area laboratory. Azmi said the feasibility study that is currently being carried out by SPAD does not include details pen out in their proposals as the commission does not want to be influenced by any of the studies that they have carried out in preparing their proposals. (Business Times)

Oil & Gas: Petronas raises Progress Energy offer after rival bid
Progress Energy Resources Corp said Malaysia's state oil company Petronas has agreed to raise its offer to buy the Canadian natural gas producer by 8% after Progress received an unsolicited proposal from a third party. Petronas, which in June launched a C$20.45 per share offer for Progress, will now pay C$22.00 for each share, or C$5.17bn ($5.12bn) in total. Progress did not name the third party that made the unsolicited offer, but said its board has approved Petronas's latest offer. (StarBiz)

Plantation: Players positive on palm oil price will remain strong
Local plantation players say crude palm oil (CPO) is still fundamentally strong with the average price this year expected in the range of RM2,800 to RM3,000 per tonne. Many disagree with international palm oil expert Dorab Mistry, who recently forecast that CPO might decline to RM2,700 per tonne by year-end due to poor offtakes, and even slump to RM2,200 per tonne if there was a repeat of the 2008 financial crisis. United Malacca CEO Dr Leong Tat Thim is positive that the average CPO price can reach RM3,000 per tonne this year. The average MPOB price for the six months of this year was already at RM3,207 per tonne. (StarBiz)

Steel: M&As can help steel makers better tap strong demand in Asean
Malaysian Iron and Steel Industry Federation (Misif) president Datuk Soh Thian Lai said mergers and acquisitions (M&As) are needed among Malaysian steel manufacturers to better tap the strong demand for steel products in the Asean region as a large entity can increase production efficiency and obtain cost savings and economies of scale. Soh, who is also group MD and CEO of Yung Kong Galvanising Industries, said Asean countries were still net importers of steel products. (StarBiz)

Economy: Malaysia’s credit rating affirmed
Standard and Poor’s (S&P) Ratings Services on Friday affirmed its A-/A-2 foreign currency and A/A-1 local currency sovereign credit ratings on Malaysia, with a stable outlook. In a statement yesterday, it also affirmed its Asean scale rating on Malaysia at axAAA/axA-1+. It said the sovereign credit rating on Malaysia reflects the country’s strong external liquidity position, its competitive middle-income economy and high savings rate. (Business Times)

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