20100204 0943 Malaysia Corporate News.

Proton Edar, the marketing arm of Proton Holdings, aims to sell 165,000 proton cars this year from 148,027 units last year, says CEO Mohamad Shukor Ibrahim. He said the higher sales target stemmed from aggressive marketing strategies to compete with established car companies, introduction of new upper-end sedan model and rising consumer sentiment in view of improved economic outlook. On challenges in the automotive industry, Mohamad Shukor said the likely increase in the overnight policy rate (OPR) this year would affect sales, adding that the market was currently enjoying lower rate over the last 20 years. (Bernama) We view the higher sales target of 165,000 this year positively as it reflects the management's optimism towards the industry outlook. Proton is slated to launch the Waja replacement model in 2H 2010, which could create excitement in the market.

The Star newspaper is planning a month-end launch of a national-language weekly to tap the growing Malay readership. The launch of the new Bahasa Malaysia paper would intensify competition for advertising dollars among newspapers, which have been losing advertising expenditure (adex) share to television and radio. The 24-page tabloid Mingguan Star would be officially launched by the Sultan of Selangor on Feb 25 and distributed for free to Sunday Star buyers. (SBT) This news is not entirely unexpected as the group had hinted earlier on the possibility of launching a new Malay tabloid. We are surprised that it will be a free paper, which is understandable, as it would need to penetrate the existing Malay language segment which is now dominated by Harian Metro. The downside would be the forgone circulation revenue and the impact to margins as Star would need to absorb the cost.

Key shareholders of EON Capital will inform the company today of their plans to call for a special meeting to change the board composition, sources said. A notice to other shareholders is likely to be advertised in major newspapers tomorrow, Business Times learnt. The move arose after EON Capital's decision this week to turn down a RM4.92bn takeover offer from bigger rival Hong Leong Bank, saying the proposal would not be presented to shareholders.

• It is understood that some shareholders were not happy that the deal was rejected even before they had a chance to consider it. Changing the board composition could potentially pave the way for Hong Leong's proposal to be reconsidered. 
• Under local laws, an extraordinary general meeting (EGM) can be requested by any shareholders holding more than 10% of a company. A company board can consist of up to 15 directors.
• EON Capital's seven-member board includes chairman Tan Sri Syed Anwar Jamalullail, Datuk Dr Mohd Shahari Ahmad Jabar, Hong Kong-based banker Rodney Gordon Ward and Yeo Kar Peng. The four are independent directors. The other three members are major shareholders Rin Kei Mei, Datuk Seri Dr Tiong Ik King and Ng Wing Fai.
• Both Rin and Tiong are seen as the willing sellers since they have secured Bank Negara Malaysia's approval to talk to Hong Leong earlier on a potential deal. Ng is the MD of Primus Pacific Partners, a Hong Kong investment fund widely seen as the main resistance to Hong Leong's takeover due to its high entry cost into EON Capital.
• It is understood that the negotiation between Hong Leong and EON Capital had been making progress before EON Capital's seven directors decided on Tuesday to reject the proposal after a five-against-two vote.
• Hong Leong had agreed to relax certain restrictive conditions in a letter to EON Capital on Monday, including to remove the exclusive nature of the talks.
• EON Bank Group CEO Michael Lor said that the bank could stand alone and perform well even in a tougher banking landscape ahead. "This bank is capable of standing independently and flourishing. It has a bright future as an independent bank," Lor said. (BT)

EON Bank Group aims to double bancassurance sales to RM200m this year on more new products. This is compared to RM105m sales booked last year, CEO Michael Lor said. "This is a more than 90% growth rate and we are aiming for similar pace of expansion across all product range this year," Lor said. The bank expects to bring in RM10m in sales at the end of the three-month "Power of Love" campaign launched in partnership with Uni.Asia Life Assurance. (BT)

CIMB Investment Bank has won two awards at The Asset magazine’s annual “Triple A Awards 2009” for its work on Maxis Communications’ initial public offering (IPO). CIMB Investment Bank was awarded the “Best Equity Deal/Best IPO” for its role as joint global coordinator and joint book runner for the Maxis Communications US$3.3bn public offering, under the Triple A Regional Awards category. The Bank also walked away with the “Best IPO” in Indonesia award, for its joint lead underwriter and bookrunner role in PT Bank Tabungan Negara Persero’s 1.89tr rupiah IPO. (BT)

HSBC Bank Malaysia has issued its renminbi (Rmb) denominated documentary credit (DC), another first for the bank following its achievement in being the first to execute an RMB trade settlement in Malaysia last year.

• The DC was issued pursuant to the Chinese government's pilot launch in Jul 09 to facilitate the use of RMB in cross-border trade which applies to trade between five designated mainland cities, including Shanghai, Guangzhou, Shenzhen, Dongguan and Zhuhai and Hong Kong Special Administrative Region, Macau Special Administrative Region and Asean member countries. 
• "This is a very significant step for us towards many more exciting trade opportunities in RMB with China. We have seen an increase in trade flows between China and Asean markets in recent years. Our RMB capability in Malaysia and Asean puts us in a strong position to present a value proposition and help our customers expand their international trade business with mainland China," said Lawrence Yong, director trade and supplychain, HSBC Bank Malaysia.
• Being the first foreign bank to settle cross-border trade in RMB in Hong Kong, HSBC has subsequently completed its first transactions in Malaysia, Brunei, Indonesia, Singapore, Thailand, the Philippines and Vietnam, in cooperation with its strategic partner Bank of Communications (BoCom).
• The first DC was issued to a beneficiary outside of mainland China - representing a strategic milestone in the expansion of the use of RMB in trade settlement outside China and Malaysian businesses. (BT)

Sime Darby’s proposed acquisition of the Teluk Ramunia fabrication yard and assets from Ramunia Holdings has been extended by all parties on mutual consent. But should the proposed purchase not occur on or before 3 March 2010, a reduction of RM83,000/day would be made from the purchase consideration starting 4 March until the deal was concluded. (Malaysian Reserve)

Singapore Technologies Telemedia sees potential in Malaysia’s telecom market and is “keen to participate in its growth and development,” the company said. It was responding to a report in today's Star newspaper which said STT may buy a 33% stake in mobile-phone operator U Mobile. “We are constantly evaluating investment proposals and exploring business opportunities with potential partners to enhance our business growth. (Bloomberg)

The Indian Finance Ministry said no decision had been made on the timing of the auction of 3G spectrum. "There is no formal decision on 3G spectrum auction yet," Finance Secretary Ashok Chawla said while replying to a query whether 3G spectrum auction has been put off to next fiscal. Earlier official sources said 3G spectrum auction, which was expected to bring in Rs350bn (US$7.6bn) to the exchequer, has been deferred to the next fiscal. (Economic Times of India)

Palm oil rose to the highest in more than two weeks after a rally in crude oil and soybeans increased the prospects of biofuels. Palm oil futures for April-delivery gained as much as a1.8% to RM2,497/MT on the Malaysian Derivatives Exchange, the most since Jan 19. (Bloomberg)

Thailand would step in to buy rubber and build up stocks if the price of unsmoked sheet fell below 80 baht (RM8.23) per kg, a deputy prime minister said yesterday. Suthep Thaugsuban, who oversees the rubber sector, also said he would encourage other producers in the 10-member Asean to support their farmers, too, by not selling exportgrade rubber below US$2.60 (RM8.87) a kg. On his proposed US$2.60 per kg floor for rubber exports, he said, "I have raised this issue with the Indonesian president and he said he agreed with me, so I'll go and set up similar talks with the Malaysian and Vietnamese leaders as well." (Reuters, Financial Daily)

AirAsia X is optimistic that the airline will make a small profit for the year 2009.

• "We tripled our business in the first nine months of 2009, a few routes saw 75 per cent growth despite numbers of other airlines shrinking, and we had a phenomenal December. We are happy we survived," Azran Osman-Rani said. This will be the first time the airline will make a profit after being in operations for almost three years.
• The year 2009 is seen as a growth expansionary year, with AirAsia X growing its fleet size to eight planes and nine destinations by the end of the year. The long-haul budget carrier is expecting another four A330s this year, bringing its fleet up to 12 by the end of 2010. The deliveries for the planes are expected to start in June. (BT)

AirAsia X has appointed Lufthansa Technik Philippines (LTP) as its maintenance, repair and overhaul (MRO) services provider. Both parties signed an agreement on the sidelines of the Singapore Airshow at the Changi Exhibition Centre yesterday for the LTP to provide MRO services for AirAsia X’s fleet of eight Airbus aircraft comprising A330s and A340s for three years beginning next month. The services will be provided at LTP facility in Manila. (Star)

Prudential Assurance Malaysia CEO is upbeat on the company and the insurance industry's outlook for this year. Prudential Assurance Malaysia is optimistic of sustaining growth momentum of its Bumiputera sales force, which doubled in 2009, as it strives to grow its Islamic products and services business. Currently, about one-fifth of the company's turnover is derived from Islamic products and services. It aims to penetrate the underserved Bumiputera market by hiring more sales force to serve the segment better.

• It has about 11,000 agents, comprising 3,000 Bumiputera agents. A year ago, it had 9,000 agents comprising 1,500 Bumiputera agents. 
• "There's still great potential in this (Bumiputera) market, it's very much untapped," said CEO Charlie Oropeza. (BT)

Land & General is expected to launch two residential projects in Ampang and Bandar Sri Damansara worth RM850m by year-end. MD Low Gay Teck said the yet-to-be-named Ampang project will have a GDV of RM400m and will comprise studio apartments and high-end service apartments. Phase one of the Bandar Sri Damansara project will feature upmarket condominiums. (Malaysian Reserve)

The Bukit Jelutong township will be developed with focus on quality retail properties, Sunrise’s assistant GM, branding and community development department, Anne Tong, said. Currently, most of the area residents needed to drive to Petaling Jaya, Kuala Lumpur or Klang for their shopping needs due to the lack of retail premises, she said. "As of now, we won't be able to tell you specifically as the project is still under planning but rest assured it will be something big," she added. (Bernama)

Iris Corp’s JV with Data Edge Ltd and Polish Security Printing Works has been awarded a tender worth RM259.7m for the introduction of Machine Readable Passport and Machine Readable Visa in Dhaka. (Bernama)

Petra Perdana has clarified that the Commercial Court has fixed 18 Feb for a decision on whether to lift the injunction to stop further sales of Petra Energy shares by Petra Perdana. The application was filed yesterday by Petra Perdana directors Tengku Datuk Ibrahim Petra, Nariza Hajjar Hashim, Wong Fook Heng and Tiong Young Kong. (BT)

Vastalux expects minimal impact on group earnings despite a license suspension by Petronas. Petronas has suspended the license after it was not satisfied with the company's efforts to address complaints of non-performance. Vastalux said all existing projects awarded by Petronas and production sharing contractors are not affected. (BT)

Tradewinds (M) has appointed Bakry Hamzah as its MD effective yesterday. Bakry was the company’s non-executive director previously and he currently held directorship in Padiberas Nasional and Tradewinds Plantation. Meanwhile, the company also announced the resignation of its CEO Mohd Nazri Md. Shariff effective 3 Feb 2010. (Starbiz)

Ho Hup Construction Co’s substantial shareholder, Extreme System Sdn Bhd, has won a court order late yesterday to stop an EGM which was supposed to be held this morning. The EGM was called by Low Chee & Sons Sdn Bhd and another shareholder with the intention to replace Ho Hup’s entire board of directors with six nominees. (Starbiz)

Metro Kajang has proposed a 1-for-20 bonus issue of 11.45m new shares. The exercise is expected to be completed by 1Q 2010. (Malaysian Reserve)

Concrete Engineering Products (Cepco) is looking at setting up a spun pile factory in India to capture future growth in the country. The company has been getting enquiries from its counterpart in India for a possible partnership. The cost to set up a spun pile factory ranges between RM40m-RM50m, excluding land cost. "The talk has been ongoing since the last one year. We have no time frame as to when it will happen," said MD Leong Kway Wah. (BT)