Sri Lanka’s The Union Bank entered into a strategic partnership with
Genting Bhd and USA-based fund, Shorecap to raise Rs 2bn additional equity capital to fulfill the banks’ fiveyear strategic plan. Genting will pay RS1bn (RM28m) for its 20% stake while Shorecap will invest Rs500m (RM14m) for its 13% stake. Union bank will go for an IPO shortly and will be listed in the stock exchange in year-end or early 2011. (Sri Lanka Daily News, Lanka Business Online)
We are negatively surprised by the group’s latest move to expand its business ventures into the banking sector. In our view, this latest subscription seems to be a stretched extension of its core gaming operations. Having said that, we note that the investment of RM28m is small as it makes up <2% of the group’s net cash balance as at end-2009.
Airbus has confirmed that
A380 deliveries to
Malaysia Airlines has been delayed for a few months. “We can confirm that there will be a delay in delivery of its first A380 by a few months,” spokesman
Sean Lee said by phone from Singapore. A new delivery schedule is being finalised.
- Deliveries will now begin in the first half of 2012, from 2011 previously. MAS said in December that it had been awarded RM330m in compensation from Airbus for previous delays, but additional compensation for the new delay is not yet known. (Bloomberg)
MAS was originally scheduled to receive five A380s in 2011 and one in 2012, but the first A380 is now scheduled for 1H12. This is an unfavourable development for MAS, as it banks on replacing its older B747s with new A380s. In mitigation, MAS will be able to secure compensation, while its fleet renewal plans will still make progress via its new B737-800 and A330-300 orders that will be delivered from 2010-11 onwards.
Thai AirAsia has reduced flights on its Bangkok-Taipei and Bangkok-Guangzhou routes to reflect weakened demand largely caused by Thailand's political turmoil.
- From last Saturday, the low-cost carrier has cut flights on the Taipei route from daily to four flights a week and Guangzhou to three flights a week from daily, said chief executive Tassapon Bijleveld. Traffic from China and other North Asian states has continued to plunge as their respective governments have advised citizens against travelling to the kingdom as violent political protests show no signs of stopping.
- Mr Tassapon indicated the political mayhem may influence the airline's plan to start daily services from Bangkok to New Delhi and Kolkata in June.
- Thai AirAsia is also reducing frequencies on two domestic routes. The Bangkok-Chiang Mai route will be reduced to five flights a day from six now, and Bangkok-Krabi will drop to three flights from four at present. (Bangkok Post)
Over the weekend,
Malaysia Airlines openly questioned through the media
AirAsia X's insistence on wanting the rights to fly the
Kuala Lumpur-Sydney route when the latter could opt to ply other international routes it has already received approvals for. MAS MD Tengku Datuk Azmil Zahruddin has come out to say that AirAsia X was not keen to operate new destinations such as Manchester, Vienna and Moscow, as it realises it takes years of investment to make a route profitable.
- "It's not fair for another airline to want to ride on the investments made by us. Instead, they need to be able to develop their own routes," he said. For MAS, it may take up to five years before any new route is profitable as it must create awareness about that destination. (BT)
Malaysia Airlines has added five more flights to
Ho Chi Minh City, the largest city in Vietnam, bringing the number of non-stop weekly flights to the city to 19. MAS senior general manager for network and revenue management Dr Amin Khan said the move was due to an increase in the demand. Passenger loads have been encouraging with an average of 75%. (Bernama, Star)
Malaysia would be preparing to defend its seat at the
International Civil Aviation Organisation Council (ICAO) at the organisation's next elections in September this year. Transport Minister Datuk Seri Ong Tee Keat said retaining the seat was important to the country as the council was instrumental in deciding matters related to civil aviation standards and regulations.
- He said Malaysia will have to strive and work hard to retain their seat at the ICAO council this year as other Asia Pacific regions have already shown interest in contesting for the seat. (BT)
Tenaga expects its 300MW coal-fired plant, costing more than RM1.3bn, in Felda Sahabat, Lahad Datu, Sabah to generate enough power supply to spur the development of the
palm oil industrial cluster (POIC). This capacity will become an anchor power plant providing the base load power supply and grid system stability to the east coast of Sabah.
- The detailed EIA of the proposed site is in progress and the final report is expected to be submitted by the middle of the month to the Department of Environment. (BT, Bernama)
Plantation Industries and Commodities Minister Tan Sri Bernard Dompok said
biomass energy has the potential to be exploited to help tackle
electricity shortages, particularly in Sabah. "So I feel these resources can be exploited but I did not say that these resources can replace other sources," he said. He was commenting on the need to diversify energy sources in Sabah including the use of biomass and coal. (Bernama)
DRB-Hicom is looking into assembling Audi vehicles locally after recently securing franchise of the German marque in Malaysia. Group director of automotive Datuk Nik Hamdan Nik Hassan, however, stressed that any local production will hinge on it registering a minimum annual sales volume of 1,000 cars to make the plan viable.
- The plan seems imminent as the group is confident of selling some 1,000 units of completely built up (CBU) units or fully-imported Audi vehicles this year given the strong demand for models like the A4 sedan and Q5 sports utility vehicle. (BT)
Kian Joo Can Factory (KJCF) is mulling expanding into Indonesia by year-end to capitalise on the republic's burgeoning food and beverage market. The company is currently conducting a feasibility study to set up a factory in Sumatra.
- ED Datuk Anthony See Teow Guan declined to reveal investment cost but on average it cost RM100m to set up a tin can factory in Malaysia. Another possible destination is Thailand but it will wait until the ongoing political storm in the country subsides before making a decision.
- "Prospects for the coming years are good due to Malaysia's status as a halal hub giving the company an edge to supply to Islamic countries such as Indonesia and the Middle East," See said. (BT)
Real estate adviser CB Richard Ellis (Vietnam) Co Ltd says Malaysian
developers should make inroads into
Vietnam as the economy is improving. MD Marc Townsend said there was more affordability in the market, coupled with transparency and clearer rules regarding when a developer can sell a property and collect deposits. Townsend said developers looking to explore Vietnam should study Ho Chi Minh City and Hanoi as there was a lot of land for development. (BT)
Malaysia Airports will become the first international airport operator in Southeast Asia to use the TrackJet system on its runways to boost airport safety and cut maintenance costs. TrackJet is a high-pressure precision water jet system that uses little water, thus offering new operating conditions for airport runways and taxiway rubber, paint removal and maintenance. The system will boost the lifespan of the touchdown zone from eight to 12 years and the runway from 12 to 18 years. (BT)
YTL Corp’s Pangkor Laut Resort expects more business this year from Asia-Pacific on optimism that people will continue to travel with signs of the economy improving. Jeffrey Mong, the resort manager, said it has more bookings from Malaysia, South Korea, Japan, India, Singapore and Australia. "We are running on an average 70% occupancy. The best years for us were 2005 and 2006, with above 80% occupancy and we hope to get there," Mong added. (BT)
Scomi Oiltools, a subsidiary of
Scomi Group, is aiming for 10% yoy growth over the next five years, given the positive signs of a world economic recovery. President Steve Bracker said that he was confident of achieving the target as the company has the capabilities and strong assets in place. He added that Scomi Oiltools saw potential in doing business in West Africa and East Asia, including Malaysia. (BT)
Several accounting firms have raised red flags at six companies last Friday, indicating they could not complete their audits properly. The companies are
Nam Fatt Corp, Patimas Computers, Mangotone Group, Wawasan TKH Holdings, Luster Industries and KBB Resources. Five of them had their accounts qualified while Luster's auditors did not qualify its opinion but pointed out to shareholders that the company's fate rests on an approval by Bursa Malaysia. (BT)
Tanjung Offshore saw its unaudited net profit for FYE12/09 differ by almost half of its audited net profit due to a reversal of income recognised from claims made by its 20%- owned associate, Cendor Mopu Producer Ltd. It reported an unaudited net profit of RM6m for 2009, but the audited results for the period was RM3m. (BT)
