AirAsia will acquire a 30% equity stake in Vietjet Aviation Joint Stock Company to establish a Vietnam-based joint venture low-cost airline which will carry the name
Vietjet AirAsia. Vietjet AirAsia is expected to commence operations between April to June of 2010.
- The Ministry of Transportation of Vietnam approved the share acquisition on February 9. Vietjet AirAsia will be operating both domestic and international flights. It is currently finalising details regarding routes, frequencies and launch of flights. The formation of Vietjet AirAsia makes Vietnam AirAsia’s fourth country base, following Malaysia, Thailand and Indonesia.
- Licensed in the air transport sector in Dec-07 with the initial capital of 600bn dong (RM112m), VietJet Air is the first and only aviation joint stock company in Vietnam permitted to operate both domestically and internationally. AirAsia will purchase a 30% equity in the Joint Venture Airline from Madam Nguyen Thi Phuong Thao at a price of 180bn dong (RM33m). The Joint Venture Airline does not require fresh capital injection.
- The main Vietnamese party to the Venture is SOVICO Holdings which is an established Vietnamese corporation with interests in banking and finance, real estate, plantation, power plants, various industries and education. Mr Nguyen Thanh Hung is currently the Chairman of SOVICO Holdings’ Board of Directors.
- Following the completion of the share transfer, the shareholding structure in the Joint Venture Airline shall be AAIL with 30%, SOVICO Holdings with 51% and Mr Nguyen Thanh Hung with 19%. (BMSB, Press release)
We understand that Vietjet Aviation is current dormant. AirAsia’s 2007 attempt to establish an airline in Vietnam via a JV with Vinashin fell through due to protest by incumbent Vietnam Airlines, but AirAsia’s 30% stake in Vietjet AirAsia appears to have the approval of Vietnam’s Ministry of Transportation. We expect AirAsia to inject/lease its A320 planes into the new JV, as with the Thai and Indon models. Please see our QT this morning for more details.
AirAsia X will be increasing its frequency to
Hangzhou, the gateway of Shanghai with direct daily flights commencing 28 March 2010. Previously, AirAsia X had five weekly flights.
- Kathleen Tan, Regional Head of Commercial, AirAsia says: “The response has been extremely good as we are running past 80% load factor for the Hangzhou – Kuala Lumpur routes. This demand has enabled us to ramp-up our frequency.”
- The Kuala Lumpur - Hangzhou route is serviced by Airbus A330-300, which holds 383 economy seats including 28 Premium seats which have an impressive 60-inch seat pitch. The AirAsia group has nine destinations in China including Chengdu, Tianjin (Beijing), Hangzhou (Shanghai), Shenzhen, Guangzhou, Haikou, Guilin, Hong Kong and Macau. (Press release)
Speculation has been rife that the theme park and casino at
Genting Singapore’s Resorts World Sentosa will open in time for the Lunar New Year this weekend. But it now seems that the Universal Studios theme park will not be ready in time. Sources said that the park will only open in a few weeks' time, after final safety checks are completed. (Channel News Asia)
Although we are slightly disappointed that Universal Studios Singapore might not open in time to capitalise on the Chinese New Year festivities, we think that the casino might still debut in time, given that the authorities have awarded the casino licence last Saturday. We note that the casino is the biggest revenue generator for RWS, accounting for about 70- 80% of the property’s EBITDA, based on our estimates.
Genting Singapore has received conversion notices from bondholders for all of its outstanding S$450m convertible bonds due 2012 except for some S$2.7m in aggregate amount. The company has mandatorily converted the outstanding S$2.7m bonds into ordinary shares at S$0.95/share and the new shares will be sold in due course and proceeds after expenses returned to the relevant bondholders. (SGX)
F&N has clinched a 5-year contract to distribute Red Bull products in Malaysia. The deal with franchise holder Allexcel Trading, which will take effect on 1 Apr 10, may contribute RM120m in revenue in the first full year, representing 10% of F&N drinks sales. (BMSB) Please refer to our note for comments.
The number of
aluminium smelters being planned in Sarawak has raised uncertainty on the fate of the multi-billion ringgit
submarine cable project meant to transmit power from
Bakun to Peninsula. “Yes, it is a concern to us. We are seeking government direction on the matter,” said
Tenaga’s president and CEO Datuk Seri Che Khalib. (Starbiz)
Although this news is a medium-term negative for Tenaga, it is not entirely a surprise as the intention to keep Bakun's power in Sarawak was first highlighted by Sarawak’s Chief Minister back in Dec-09. With a 5-7 year development period for the yet-to-be-constructed undersea cable project and Bakun’s power ready for despatch by end-2010, Bakun’s power could be kept in Sarawak as an interim measure. However, we take some comfort that Sarawak has some 20,000MW of hydro potential which Peninsula can eventually tap into over the long-term.
IJM Corp Bhd announced that the government agreed that the company will bear the RM649m cost to extend Besraya Highway by 12.3km in return for an extra eight years in concession period. The land cost of RM95m will be borne by the government. A supplemental pact to the concession agreement (CA) will be sealed with the government in due course. (BT, BMSB) This news is not entirely a surprise. We estimate the extension of the Besraya highway by another eight years would increase its NPV by 11%.
Khazanah Nasional will buy a 10% stake in Oriental University City Ltd (OUCL) for some RM150m from Asia-Pacific's largest private education group,
Raffles Education Corp Ltd. "This investment is part of our China and education services strategy. It gives us exposure to the exponential growth potential of China's education services sector," Khazanah managing director Tan Sri Azman Mokhtar said. He said there would be increased demand for skilled workers every year as China continued to lead the world in economic recovery and growth. (BT)
Malaysia's
palm oil stockpiles fell by almost 11% in Jan compared with Dec 09 while exports gained amid declining production. The latest statistics released by the Malaysian Palm Oil Board (MPOB) yesterday showed that inventories fell 10.6% to 2m tonnes in Jan from a revised 2.23m tonnes in Dec, due to higher export and lower production during the month. Inventories of CPO went down 5.6% to 1.13m tonnes from 1.19m tonnes in Dec while processed palm oil stocks decreased to 870,065 tonnes from 1.04m tonnes previously. (Starbiz)
Odfjell, a Norway-based global logistic services supplier, and Damen Shipyards of the Netherlands are keen to invest in the state-owned
Palm Oil Industrial Cluster (POIC) in Lahad Datu, Sabah. Officials of the two company were in Sabah recently to hold talks with State officials on the POIC, which is being developed into an international port of call.
- POIC Sabah chief executive officer Dr Pang Teck Wai said he was satisfied with the progress of the talks. "We acknowledge that logistic infrastructure is the key to making POIC Lahad Datu a global port of call." (BT)
Bank Negara is believed to have rejected
Mulpha International’s application to commence talks with
EON Capital to acquire a stake in EON Capital, according to sources. In a filing to Bursa Malaysia on 27 Jan, Mulpha International said its long-term strategy was to gain greater exposure in the Malaysian financial services sector and diversify its property business. (StarBiz)
CIMB Bank expects a 22% growth or an additional RM8bn in retail deposits by year-end, supported by continuous promotion campaigns and new product launches. Head of Retail Banking Peter England said the bank's current total retail deposits stood at RM35bn, of which, 35-40% came from Islamic banking.
- "The target is achievable as we will continuously organise campaigns, provide good service and offer unique innovative products," he said. England said CIMB Bank, which has 5.5 million depositors, hopes to secure RM3bn in retail deposits from the four-month campaign, which runs from 1 Feb to 31 May. (BT, Bernama)
The volume of
corporate bond issuances in Malaysia is expected to reach between RM45bn to RM50bn in 2010, says Malaysian Rating Corporation (MARC). On the economic outlook, MARC is maintaining its 2010 GDP growth forecast for Malaysia at 3.6% for now, with an upside bias.
- Against the backdrop of a strengthening of the economy, normalisation of interest rates is expected in 2010 through hikes in both the overnight policy rate (OPR) and the Statutory Reserve Requirement (SRR).
- On the water services industry, MARC said the current water supply capacity in Selangor may not be sufficient to meet future demand and the state could experience water shortage in 2014. The RM3.9bn Pahang-Selangor Raw Water Transfer Scheme is expected to address the capacity shortage and is scheduled to be completed by 2014. (Bernama)
Axiata said its Indian unit Idea has received the approval from the high courts of Gujarat and Delhi for its merger with Spice Communications. Axiata acquired a 14.99% stake in Idea in Aug 09. (Starbiz)
Packet One (P1) announced that it will launch a complement of WiMAX embedded devices starting with Malaysia's first embedded netbook developed by its parent,
Green Packet, by 2H10. The soon-to-be launched netbook will be SE Asia's first WiMAX computer and is key in preparing the market for more WiMAX embedded computers coming into the market later this year. In addition, to the netbook, the company said it aims to further strengthen its leadership position by expanding the P1 WiMAX coverage to 45% of the population including East Malaysia by 2010. (Malaysian Reserve)
It may take seven working days for customers to change their operator when
mobile number portability (MNP) is implemented across
India from Apr 1. The seven-day time frame was part of the solution that the communication ministry and telecom companies have worked out jointly in a meeting last week to address concerns of the country’s security agencies which had raised severe objections to the implementation of MNP.
- As per current regulations, it is mandatory for telcos to ensure that the entire portability process is complete within four days if a customer requests for a change of operator. The Department of Telecom (DoT) will now ask Trai to change existing regulations to allow a seven-day time frame. (Economic Times of India)
In an ambitious move,
Indian telecom regulator TRAI has kicked of discussions on the introduction of
4G mobile wireless broadband services in India, even as the country awaits the launch of the long-pending auction of 3G services. TRAI on Wed sought the industry’s response on this issue and said it was examining the possibility of launching a consultation process on 4G technologies. (Economic Times of India)
Perodua retained its market leadership in January this year with 16,200 vehicles sold, representing a 36% rise from 11,900 units sold a year earlier. It commanded a 33% share of the domestic market in January, up from 31% in the same month last year.
- "Bookings for the same month were also very healthy with more than 20,000 units received compared with some 12,000 units in January 2009," its MD Aminar Rashid Salleh said. On the Alza, Aminar said Perodua had received more than 25,000 bookings since its launch on Nov 23, 2009, with some 8,000 units now on the road. (Financial Daily)
Honda Malaysia has clarified that all Honda models sold in Malaysia since 2001 are not affected by a global recall made by its Japanese parent. Honda Malaysia's clarification follows Honda Motor Co's move yesterday to recall driver's SRS airbag of certain vehicles produced in 2001 and 2002. The total number of vehicles affected by the exercise is 437,763 units worldwide. (BT)
Malaysian
seafood exporters expect the Ministry of International Trade and Industry to help them deal with the problem of securing money from a special government fund. The RM500m fund was set up to help seafood exporters hit by a ban on exports to the European Union (EU).
- However, the Malaysian Frozen Foods Processors Association (MFFPA) complained that prawn farmers are getting the money but other exporters' applications have been rejected. "We welcome the minister's directive for the setting up of a taskforce to overcome this situation," says MFFPA president Ch'ng Chin Hooi.
- Agro Bank was the designated financial institution to disburse the funds to affected seafood exporters. "It is ridiculous for Agro Bank to approve the special loan to those affected based only on the companies' performances, since it was the government's Competent Authority (CA) that initiated the ban, and this is why the rescue package was approved by the Cabinet." Before the ban, local seafood exporters were the second largest food export industry for Malaysia, hitting annual revenue of RM2.5bn. (BT)
Mah Sing Group has exercised its option to buy a piece of commercial land in Sepang, Selangor. It will pay RM21.74m or RM79 psf to Cyberview Sdn Bhd for the extra 25,570 sq m plot. The company plans to do a commercial development encompassing lifestyle retails and service apartments on the land. (BT)
Mah Sing Group is eyeing 20 acres of prime land in Bangsar that Lever Brothers' soap and margarine manufacturing plant was formerly located. The land's location is very strategic and will be ideal for a good commercial development, according to Mah Sing group MD cum group chief executive Tan Sri Leong Hoy Kum.
- "We have expressed interest in the land and are negotiating for a fair value. Hopefully, the deal can be wrapped up by year-end," he said. A property valuer said the land could easily fetch between RM250-RM300 psf and should be worth between RM250m and RM300m. (Starbiz)
QSR plans to invest RM20m to open 20 new outlets nationwide this year. Despite the economic slowdown last year, the group opened 21 new stores, bringing the total to around 250 restaurants in Malaysia and Singapore. Each outlet costs about RM0.9m. QSR plans to open more Pizza Hut restaurants in Singapore where it has 45 outlets and wants to open one in Cambodia this year. (BT)
Tune Talk hopes to roll out roaming services with a local partner each in Singapore and Indonesia by 2H10, according to its CEO Jason Lo. By tying up with partners in these countries, Tune Talk can offer customers the local rate when customers are in either country and is currently in talks with partners on this potential tie-up. As of now, it has already started to offer roaming services covering all the regional countries, plus China, Australia and UK. (BT)
Fajarbaru Builder Group won a RM69.9m contract from Blue Archipelago Bhd. The oneyear contract is for the earth, civil and infrastructure works for the first phase of an integrated tiger prawn farm in Setiu, Terengganu. (BT)
Gadang may raise between RM25-RM51m in a two-for-three rights issue in a bid to bolster its balance sheet. The company plans to issue up to 78.7m new shares that would come with one warrant for every four rights subscribed to raise working capital and repay bank loans. (Malaysian Reserve)
