The Najib administration is taking another step in economic liberalisation by preparing to sell down stakes in government-linked companies (GLCs) in a bid to raise revenue and encourage the private sector to drive the economy. The Malaysian Insider understands that the first sell-downs will likely involve property and construction companies held by government investment arm Khazanah. Funds raised from a sell down would also come in useful for the government which is grappling with a budget deficit. Among the property companies that Khazanah has substantial stakes in include UEM Land, Putrajaya Holdings and STLR. Its collection of infrastructure and construction companies include Plus Expressways, UEM Group, UEM Builders and Opus International Group. Critics of GLCs have also long argued that the government should not get involved in business and compete with the private sector but should instead concentrate on improving the economic climate and regulatory framework. While it might make sense for the government to have a stake in companies in strategic sectors such as utilities, critics also point out that the government can still retain control without owning too high a percentage of the company. (The Malaysian Insider)
Crude oil prices are in “the right range” and there is no need to reduce inventories, Saudi Arabian Oil Minister Ali al-Naimi said ahead of a 22 December OPEC meeting scheduled for later this month. “Inventories are coming down, the price is perfect, and all investors, consumers, producers -- they’re all very happy,” Al-Naimi said today in Cairo, where Arab oil ministers are holding an annual meeting. Algerian Oil Minister Chakib Khelil said it will be “some time” before oil production will have to increase. (Bloomberg)
This is bad news for tanker shipping rates and MISC, as rates are highly correlated to OPEC output.
Malaysia is looking to genetics to help its palm oil industry improve productivity, according to Oxford Business Group (OBG). The country is also moving towards enhancing the sector's image while seeking to capture a bigger share of the global vegetable oil market, it added. (Bernama)
James Fry, who heads LMC International in London, said palm oil prices may rise to RM3,200 by Jun-10 based on Brent crude hitting US$85/barrel and Malaysian palm oil stocks falling to 1.25m tonnes. Dorab Mistry, head of vegetable oils trading with Godrej International, echoed Fry's views, saying that palm oil will rise to RM2,800-RM3,000 in 1Q 2010 on strong demand and as hotter weather hits yields. Mistry based his predictions on the brewing El Nino pattern, which can cause drought conditions in the Asia-Pacific region, hitting production in Malaysia and limiting output growth in Indonesia. (Reuters, BT)
Carlsberg Brewery Malaysia managing director Soren Holm Jensen says Carlsberg Malaysia has big advertising and promotion (A&P) campaigns in 2010, starting with the Chinese New Year (CNY) period in February.
- Carlsberg Malaysia also plans to do “something big” during the FIFA World Cup that kicks off in early June in South Africa next year.
- Given the improved economic outlook for next year, the World Cup season and the need to cash in on sales during CNY, the brewery will be increasing its A&P expenditure for next year, Jensen says.
- Jensen says Carlsberg Malaysia also has “something big” planned for the third quarter of 2010 but says it is too early to disclose anything. Carlsberg Malaysia will be launching two or three new brands next year. (Starbiz)
Celcom will focus on pushing its mobile broadband service to sustain its quarterly growth streak, its CEO said after announcing a record quarterly net profit. Its primary target now is to double its mobile broadband customer base to one million by end-2010 from 475,000 in 3Q09. "That's our ambition. It's challenging, but it won't be impossible. In fact, right now, we have already touched the 500,000-mark," Celcom CEO Datuk Seri Shazalli Ramly said. (BT)
Industry players, who have contributed a total of more than RM5bn to the Universal Service Provision (USP) fund would like to see more transparency on how the fund is managed to achieve its goal of bridging the country's digital divide. They would also like the Malaysian Communication and Multimedia Commission (MCMC) to consider lowering the base contribution rate of 6% of revenue, considering that the fund is under-utilised at present and that the earnings of telco operators have been impacted by the economic slowdown. They would also like to see more progress on the "clawback provision" where contributors are able to get back up to 50% of their contributions by applying to roll out their services in under-served areas. (Starbiz)
Hektar REIT, an investor in shopping malls, says it is in talks to buy new assets and plans to sell more units to fund future purchases. Most of the potential buys are located in Peninsular Malaysia, chairman and CEO Datuk Jaafar Abdul Hamid said, adding that it was in talks with township developers and other asset managers. While rival Axis REIT has garnered more investor attention after converting into an Islamic REIT, Jaafar said that Hektar had no plans to follow in Axis' footstep. (BT)
Sunway's construction division has been awarded a contract worth RM23.44 million by Damansara Assets Sdn Bhd for piling and substructure works in Johor with a completion date targeted for May 31, 2010. (BT)
SAAG Consolidated (M), an oil and gas support service provider, will build two power plants in Bangladesh for US$120m (RM405.6m). It has received a letter of award from Garisan Etika Bangladesh (Pvt.) Ltd for the engineering, procurement and construction of the 6 X 6 MW DG power plant and the 2 X 34 MW combined cycle power plant. (BT)
Uni.Asia Life Assurance is looking to partner more banks to grow its bancassurance channel, especially since its support service and infrastructure are developed based on multiple distribution strategy. "We are in talks, but the tie-ups will depend on our partners and when they are ready. Since we are stronger in alternative than tied-agency, we have a better understanding of our distributors' needs in servicing their customers," CEO Ooi Say Teng said. On the insurer's outlook for 2010, Ooi said the group hopes to maintain doubledigit growth in regular premiums. (BT)
Faber Group is toying with the idea of venturing into the healthcare business by owning hospitals in the future to broaden its income streams, said MD Adnan Mohammad. “We would like to see a lot of non-organic growth and we are not discounting M&As to expand the facility management business,” he said. Abroad, Adnan said Faber’s track record in the UAE would serve as a springboard for it to tap into the other GCC countries. (Financial Daily)
CB Industrial Product (CBIP) is not ruling out the possibility of expanding its plantation operation by acquiring additional land in neighbouring countries using funds from its private placement exercise. “There are plenty of growth opportunities for palm mill construction in these markets,” MD Lim Chai Beng said. CBIP’s targets would naturally be plantation land and assets in either Kalimantan or Papua New Guinea, where the company has existing operations. (Financial Daily)
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