20100326 1015 Malaysia Corporate News.

Maybank proposed to undertake a recurrent and optional dividend reinvestment plan, which allows its shareholders to reinvest their dividends in new ordinary Maybank shares. The subscription to the new Maybank shares will be at a discount of not more than 10% to the 5-day volume weighted average market price prior to the price fixing date. The proposed dividend reinvestment plan will provide shareholders with greater flexibility in meeting their investment objectives as they will have the choice of receiving cash or reinvesting in the company through subscription of additional Maybank shares without having to incur material transaction or other related costs. Whenever a cash dividend (interim, final, special or other dividend) is announced, the board will decide if the reinvestment plan applies to the whole or a portion of the dividend. (BMSB)

Indonesia in April will raise the tax on palm oil exports to 4.5% from 3%, Diah Maulida, director general of foreign trade at the Trade Ministry, said in a mobile-phone text message today. The government raised the base price used to calculate the duty to US$752 a metric ton from US$708 a metric ton, she said. (Bloomberg)
This is expected and is in line with the rising international CPO price.

Hartalega Holdings is spending some RM40m to upgrade Plant 1 which will help to almost triple production capacity by next year. With 10 production lines, Plant 1 currently is only producing about 500m pieces of gloves a year. The refurbished plant will increase production to 1.7bn pieces of gloves a year. The refurbished plant is expected to be ready by July next year. Hartalega is also in the midst of completing its Plant 5 by November which will have 10 production lines. Currently, the group produces 7bn pieces of gloves a year and once all the new plants are upgraded and completed, the group will produce 9.7bn pieces of gloves a year. Kuan said the group is continuously looking to acquire land to prepare for the next phase expansion. (BT) Management's comments are in line with our estimates. Thus, no change to our earnings forecasts.

Malaysia Airlines is targeting a profit of RM100-300m this year, which would mark an improvement in operating terms from 2009, CEO Tengku Azmil Aziz said on Wednesday.

• Mr Azmil said at the FIDAE air industry fair in the Chilean capital that the carrier would look at debt financing, possibly including corporate bonds, to fund its fleet renewal, but had no plans for any additional equity raising. 
• 'Results for last year incorporated a lot of the fuel price difference. So if you strip that out, RM100-300 million would be better. We did lose money at an operating level last year,' he added.
• 'The key thing will be what happens to the global economy. We are seeing quite different regions recovering at different paces. Fuel prices obviously are a concern as well. Those are the two big elephants in the room. The other things don't matter as much.' (Reuters, SBT) 

We are currently projecting operating loss under FRS of RM432m for 2010, so MAS’s projections for RM100-300m profit exceed our expectations.

Malaysia Airlines will reinstate most of the capacity it took out during the economic downturn in the coming days to months as demand for air travel picks up except for its American route.

• Its forward bookings for 2Q10 is also showing a strong growth trend with bookings hitting 70% despite 2Q being traditionally a slower quarter. “We carried about 62% load last year,’’ MAS senior general manager (sales) Datuk Bernard Francis said. 
• Traffic picks up in 3Q and exceptional growth is experienced by most airlines in 4Q. Bernard said it would be good if the airline could end the year with loads of 70% to 75%. He said there was a lot of growth in the Asia-Pacific region, Asean, Europe and Australia but a bit slower in the United States.
• To reinstate capacity, the airline will add flights from Kuala Lumpur to Auckland (from four to five weekly) and Perth (from nine to 10 weekly) before end of March. For Paris, the plan is to add two weekly flights from five to seven, and recently it added two weekly flights to Brisbane. “With this and some more, we would have added back more than half the capacity that we took out during the crisis,’’ he said.
• By the last quarter of this year the airline will take delivery of three new aircraft and for that it is reviewing its network to add more frequency and routes. It has eyes on the Indian sub continent, Middle East and Asean. “We run labs to determine profit viability of each route that we intend to mount and we will make the announcements in mid-year,’’ he said. (StarBiz)

A Malaysia Airlines Boeing 737 from Singapore to Langkawi via Penang, with 83 passengers and seven crew members on board, made an emergency landing at the Bayan Lepas International Airport yesterday. The plane landed safely and all passengers and crew on board were safe. A passenger on the flight, Eddie O’Hara from Sydney, said that before the plane made an emergency landing, he heard loud noises and saw fire and thick smoke from one of the engines. “The captain made a circular movement and attempted to land on the runway but had to abandon the move and take off before making a second attempt successfully.” He also praised the pilot for being very professional throughout the ordeal and for his ability to land the plane safely without causing any injuries to the passengers or crew. (Bernama)

A battle royal is shaping up between Gamuda and the Selangor government over the longdrawn planned consolidation of the water services industry in the state. A day after Gamuda made a RM10.75bn takeover bid, Selangor said it would continue to negotiate with federal government for it to be in the driver's seat in the exercise. "The state will continue to work with the federal government to implement the Water Services Industry Act (WSIA) 2006 to consolidate all water concession operators into a single entity under the control of the state government," the Selangor government said yesterday. However, Syarikat Pengeluaran Air Sungai Selangor Sdn Bhd (Splash) which is 40% owned by Gamuda, said it has the shareholders' mandate to legally challenge the WSIA. "We have a clear mandate from our shareholders to challenge the constitutionally of WSIA 2006 in court if we are pushed to the corner," Splash said. (Financial Daily)

Telekom Malaysia (TM) which has just launched its high speed broadband (HSBB), UniFi is maintaining the pricing for most of the packages offered under its current broadband service, Streamyx. Group CEO Datuk Zamzamzairani Mohd Isa said although TM had introduced the 5 Mbps package for UniFi, it was maintaining the prices for the current 1 Mbps and 2 Mbps by Streamyx. However, TM is offering new and existing 4 Mbps Streamyx combo and non-combo customers a rate of RM140/month effective immediately regardless of their location. TM's UniFi pacakges comrpise triple-play service of highspeed Internet, video (IPTV) and phone, with speeds of 5 Mbps, 10 Mbps and 20 Mbps. The 5 Mbps packaged is priced at RM149/month, the 10 Mbps at RM199, and the 20 Mbps at RM249 with a two-year contract. (Starbiz)

Freight Management Holdings, a Port Klang-based multimodal freight service provider, is planning to enter the Vietnamese market under a joint venture (JV) with a local partner Dang Anh Binh. Under the deal, Freight Management will hold 51% of the stake in the JV and the rest will be owned by its Vietnamese partner. The new Ho Chi Minh City-based JV will initially operate a freight forwarding business. It had last year entered into JVs with local partners in Thailand and Indonesia in 2008. In 2006, it bought a 51% equity interest in TCH Marine Pte Ltd, a Singapore-based barge and tugboat operator. Prior to that, Freight Management also established its first overseas office in Western Australia with the setting up of a JV company, Icon Freight Services Pty Ltd, in which it controls 55%. "After Vietnam, Freight Management is likely to venture into neighbouring Cambodia," said the source. (BT)

The Kuala Lumpur International Airport has emerged tops in the Best Airport Immigration Service and Staff Service Excellence category in Southeast Asia, in the recent Skytrax 2010 World Airport Awards. For the top 25 rankings in the World Airport Awards for 2010, KLIA improved its position to fifth placing, from seventh previously. (Bernama)

Kuala Lumpur tops the list for cheapest holiday destination, according to global travel specialist STA Travel UK. The list is based on what is described by STA Travel as the main ingredients for a good holiday -- a meal in a local restaurant, a pint of beer, a night in a hostel, a bus ride and a sightseeing bus tour around the city. When totalling the typical price for such items, Kuala Lumpur emerged the cheapest at £13.09, followed by Hanoi (£18.29), Seoul (£18.38), Mexico City (£22.84), Beijing (£24.82), Istanbul (£27.38), Bangkok (£27.40) and Cape Town (£31.68). (Bernama)

Loh & Loh Corp said a 60:40 JV between its subsidiary has accepted the terms of Tenaga Nasional Bhd's (TNB) letter of intent for the award of a RM828.3m contract involving the Hulu Terengganu hydroelectric project. The project should be completed in 56 months with a defect notification period of 12 months. (BT)

Holcim Malaysia Sdn Bhd, a subsidiary of Swiss-based Holcim Ltd, has launched the first in a series of technologically-advanced and eco-friendly cement products for the country's building industry. The new range of Holcim products contains fly ash, which makes cement stronger, more durable and resistant to chemical attack. The new portfolio of products offers not only total solutions to customers, but is also expected to contribute significantly to Holcim's corporate purpose of providing solutions in building foundation for a sustainable future. (BT)