Mass Rapid Transit Corp SB (MRT Corp) has signed an agreement with MMC Gamuda KVMRT (PDP) SB last Friday formalizing the latter’s position as the project delivery partner (PDP) for the country's biggest infrastructure project, the My Rapid Transit (MRT). Under the agreement, the PDP will receive a fee of 6% of the total aggregate work package contract value. Should the eventual total cost of the project be less than or equal to the target cost, the PDP shall be entitled to the full fee. But if the project cost is more than the target cost, the PDP fee shall be reduced in accordance with an agreed formula. MRT Corp CEO Datuk Azhar Abdul Hamid confirmed that the PDP would have to bear cost overrun of the projects that exceed 15%. (StarBiz Week)
Syarikat Prasarana Negara Bhd (Prasarana) hopes to award all LRT Line Extension contracts by 1H12. Its group director for project development, Zulkifli Mohd Yusoff, said the entire project consisting of the Kelana Jaya line and the Ampang line had a combined total of between 40 and 50 contracts. To date, about 80-90% had been awarded while only two stations and the main depot for the Ampang line were still undergoing the process of tendering, he said. The total value of contracts that have been awarded for both lines currently stands at RM4.5bn. For the supply of 20 trains for the Ampang line, estimated to be worth RM1bn, the company was presently evaluating seven supply submissions, Zulkifli said. Trains for the Kelana Jaya line as were ordered last year. (BT)
The target cost of the MY Rapid Transit (MRT) project will be known by 4Q12 after all 90 tenders have been awarded, said Mass Rapid Transit Corp Sdn Bhd (MRT Corp) CEO, Datuk Azhar Abdul Hamid. The target cost was the aggregate of all tenders plus reimbursable capped at RM2.8bn and the contingency amount capped at 6% of the total tender awarded. "We will only know the full tender value of all jobs after they have been awarded. We will be on a better footing towards the end of this year," he said. On the financing for the MRT project, Azhar said the project would be fully financed by the capital market. (Bernama)
Chan to inject Sagajuta into Naim Indah after stake buy
Datuk Raymond Chan, who caused quite a stir when he bought into Harvest Court Industries Bhd late last year has now bought a stake in Naim Indah Corp Bhd (Nicorp) to inject his private company Sagajuta SB via reverse takeover that will see his stake in Nicorp increasing from 12% to 45%. Nicorp told Bursa Malaysia that it had entered into a heads of agreement (HoA) with Generasi Cipta to buy 60% of Sagajuta for RM240m on Thursday. Chan and Tan Tiang Lai are the directors of Generasi. In addition, Nicorp intends to buy the remaining 40% stake in Sagajuta that is not owned by Generasi on similar terms as agreed between Nicorp and Generasi. (StarBiz Week)
MPHB reduces stake in racing club
Multi-Purpose Holdings Bhd (MPHB) has reduced its stake in Philippine Racing Club Inc (PRCI) to 19.94%. In a filing with Bursa Malaysia, the company said it disposed of 13.07% equity interest in PRCI in the open market in the Philippines since 20 Jan for a total of PHB722.41m (RM51.64mil) and estimated to make a gain of about RM17.34m from the disposal. (StarBiz Week)
Deal said to be brewing at Genting Plantations
A deal may be brewing at Genting Plantations, whose stock is just off its all-time high, industry sources said. The shares have risen by some 10.5% YTD and closed yesterday up 10 sen, or 1%, at RM9.51. It hit a record high of RM9.65 on Jan 26. At its current price, Genting Plantations has a market capitalization of some RM7.18bn, which makes it an expensive acquisition target by any party. It is trading at an estimated PE ratio of 16x for the 2012 financial year, somewhat higher than its peers United Plantations, 12x and Sime Darby 15 times, but cheaper than IOI Corp Bhd’s 17x. (StarBiz Week)
Tebrau Teguh soars on JB waterfront project
Property and construction firm Tebrau Teguh Bhd’s share price surged nearly 10%, to 89 sen at the close on heavy trading volume following news reports about plans for the development of the Johor Baru waterfront facing Singapore that may be worth up to RM80bn. Tebrau Teguh was recently the subject of a mandatory general offer (MGO) by Iskandar Waterfront Holdings (IWH), which had acquired Johor government investment arm Kumpulan Prasarana Rakyat Johor’s (KPRJ) 33.15% stake in the former. The exercise would pave the way for the injection of landbank held by businessman Datuk Lim Kang Hoo, the executive chairman of Ekovest Bhd as well as Danga Bay SB CEO, and the Johor government, into IWH. The sale was part of a consolidation exercise which would see IWH become the master developer of the entire waterfront. (StarBiz Week)
IOI mulls relisting of arm
IOI Corp is mulling a relisting of its property arm that would see the group unlock values in that segment and enhance the attractiveness of the parent company to investors as a more plantation-focused company, according to reliable sources. IOI Corp may wish to also time the relisting of its property arm in line with a more bullish view on the property sector. (StarBiz)
Redza denies leaving Bank Muamalat to return to DRB-HICOM
Speculation is rife that Bank Muamalat Malaysia’s executive director and CEO Datuk Mohd Redza would be called back by his former employer, DRB-HICOM, to play a pivotal role in the corporate restructuring of Proton Holdings post. Rumours spread and came about after DRB-HICOM group MD Datuk Seti Mohd Khamil Jamil announced at a media briefing last month that plants to rationalize Proton were being drawn up, and “by taking national carmaker private, things could be done more efficiently.” Mohd Redza was appointed CEO of Bank Muamalat in Nov 2008 and prior to that, he was DRB-HICOM’s executive director and CEO since Mar 2006. Contrary to the statement, “I deny the speculation, and I have another two and half year contract with the bank.” Mohd Redza said. (Malaysian Reserve)
Bank Islam Malaysia Bhd is in early talks to buy a stake in PT Bank Muamalat Indonesia, sources said. Bank Muamalat is controlled by shareholders from the Middle East. Islamic Development Bank, Boubyan Bank Kuwait, and an investment holding company from Jeddah called Sedco Group collectively owned just over 75% of the lender and were looking to sell some of these holdings, the source added. Bank Islam MD Datuk Seri Zukri Samat confirmed that the bank was in preliminary talks with an Indonesian Islamic lender but declined to say if it was Bank Muamalat. "The most important thing is we can do equity accounting. The whole idea is to get a foot in," he said. A stake of at least 20% would allow Bank Islam to do equity accounting. It is unlikely to be interested in buying into Maybank's Indonesian subsidiary, Bank Internasional Indonesia (BII), as the stake up for sale is too small. (BT)
Thailand's national oil and gas company, PTT Public Co Ltd, is believed to have lent its support to a special purpose vehicle (SPV) anchored by CIMB and Muhibbah Engineering, to revive the APH project. PTT has given its commitment that it would continue to honour its 15-year offtake agreement with APH as long as the project gets on track and is completed in accordance with a new work schedule which is part of the restructuring scheme. PTT is not interested in owning the facility. PTT views the facility as one that would be key a infastructure asset to expand its oil trading business to the Far East, sources say. An offtake agreement from a credible player such as PTT is one the key determinants of the financial viability of the project. A successful restructuring of APH would need the consent of 75% of the creditors, including CIMB and Muhibbah. Muhibbah is prepared to convert its debt into equity to revive the project.
KIC O&G, which is controlled by Abdul Rashid Mohamed Isa, is said to be exiting the APH project. (Edge Weekly)
Puncak Niaga is believed to be close to securing a solid waste management contract in Phnom Penh, Cambodia, according to sources. The waste management contract is said to be for landfill disposal of waste materials. On top of that, sources say that Puncak is keen on developing marginal oil fields locally. Sources say that it has submitted a proposal to the Malaysian government, seeking support for its bid to develop marginal oil fields. (Edge Weekly)
The Malaysian Institute of Estate Agents (MIEA) expects a slowdown in the high-end residential property sub-sector this year as potential buyers are likely to maintain a cautious approach in light of the economic uncertainties in Europe and the United States. MIEA president Nixon Paul said the various "checks and balances" by Bank Negara to control the increase in household debt would also affect residential property transactions. Paul said there was an over-supply of condominium units in the country and that rental rates for such units could be affected. Despite this, he said, it would be a good thing now to invest in the high-rise market for long-term investors. (Starbiz)
The Securities Commission is looking to enhance its governance-related guidelines for real estate investment trusts (REITs) to further boost investor’ understanding of the asset class, sources say. Among the areas being looked into are fees structures set by REIT managers and the independence of the trustees. “As part of the SC’s ongoing regulatory review, the exercise, which is primarily to enhance disclosures, is also aimed at boosting investor awareness of the nature of the asset class,” a source says. Another area being looked into is whether guidelines should be more prescriptive on what the ideal benchmark would be to measure a REIT manager’s performance and calculate its fee. As it is, some market watchers reckon that NPI is not an ideal benchmark to calculate management fees as it does not take into account the size of debt and interest charges, which could be substantial for highly-geared REITs. (Edge Weekly)
Feedback is now being gathered on the proposed Sungai Besi-Ulu Kelang Elevated Expressway (Suke) that will connect Sri Petaling and Ulu Kelang. One of the main objectives of the expressway is to provide an alternative route for the MRR2 and lessen traffic congestion that occurs at the Cheras, Pandan Indah and Ampang linkages. The 31.8km three-lane dual carriageway elevated expressway will also link major highways in the eastern Klang Valley including the Duta-Ulu Kelang Expressway (DUKE), Ampang-Kuala Lumpur Elevated Highway (AKLEH), Besraya, KL-Seremban Highway, Cheras-Kajang Highway, Kesas and MRR2. SUKE will provide a direct link between new growth centres such as Kajang, Segambut and Kepong and save 50 minutes of travel time between the two points on the MRR2. Once completed, traffic is expected to reduce on the MRR2 by 24% and Jalan Ampang by 36%. (Star)
Prime Minister Datuk Seri Najib Tun Razak announces RM200m facilitation fund for the Danga Waterfront Development project. The project stretches 25km from the eastern to the western sides of the Johor Causeway and will be launched in phases over 25 years with a gross development value of RM80bn. The project will be a public-private partnership involving the government and Iskandar Waterfront Holdings. (Bernama)
Malaysian rubber prices are likely to be higher this week on concerns over tight supply dealers said. Although the local market would take the cue from regional bearish futures markets, due to falling oil prices, limited supply from major producing countries would support prices. (Bernama)
Furniture makers and exporters are urging the Government to take steps to resolve the sector's labour shortage, which is said to be limiting growth for the industry. "We have to be selective where customers are concerned as we cannot meet demand. We need more foreign workers," said DPS Resources executive chairman Datuk Peter Sow. (Starbiz)
Mahajaya has received a notice of conditional takeover from a group of join-offerors, made up from its major shareholders, to acquire the remaining 75.56m shares representing a 27.57% stake they do not own in the company at 85 sen each. The offer valued the whole of Mahajaya at RM232.9m. (The Edge)
AirAsia, MAS: AirAsia CFO resigns to join MAS
AirAsia’s deputy group CEO Datuk Kamaruddin Meranun will be re-designated as deputy group CEO and president of group finance, treasury, corporate finance and legal with effect from Feb 13. The low-cost carrier also announced the resignation of its CFO Rozman Omar. The statement said Rozman would be stepping down as AirAsia’s regional head of finance with effect from Feb 13 to join MAS. (Starbiz, Financial Daily)
MBSB: To be privatised?
Reliable sources said EPF is considering to privatise Malaysia Building Society (MBSB) as it intends to do much more with the residual properties of the non-bank lender. A source said the EPF is looking to unlock the values in the properties that MBSB has. Based on MBSB's 2010 annual report, the company has 9.21 hectares (ha) in central Johor Baru and another 16.9 ha in Malacca. These pieces of land carry a book value of some RM169.2m. Besides that, MBSB also has a few pieces of land in Sungai Buloh with a combined area of 5.73 ha and a book value of RM31.9m. These properties were inherited by MBSB as many of its delinquent loans of the past were backed by properties in good locations. (Starbiz)
SP Setia: Joint offerors seek SC nod
The joint offerors for SP Setia, namely Permodalan Nasional Bhd (PNB) and SP Setia's president and CEO Tan Sri Liew Kee Sin, have applied to the SC for a ruling in respect to the concert-party relationship of the joint offerors. Maybank Investment Bank said in a Bursa filing on behalf of the joint offerors that the document was despatched to the SC on Jan 25 and that the decision was still pending. (Starbiz)
Bursa Malaysia: High frequency trading soon
Bursa Malaysia is gearing up its regulatory infrastructure and hardware to deal with the new style of trading the stock and derivatives market amongst hedge funds called high-frequency trading. The stock exchange operator had last year introduced and allowed high-frequency trading on the derivatives market. Observers said this style of trading will be allowed on the stock exchange sooner or later following the continual evolution of markets in this new era of technology. (Starbiz)
Alam Maritim: Expects to return to the black due to higher average utilization rate
Alam Maritim Resources expects to return to the black in FY2011 due to higher average utilization rate and daily charter rate for offshore support vessels (OSVs) business segment. MD and CEO Azmi Ahmad said the average vessel utilization rate in FY2011 was close to 80% compared with 65% in FY2010. He also said the company has seen the daily charter rates for OSVs stabilizing at between US$1.70 per brake horse power (bhp) and US$2.00 per bhp in 2011. (Starbiz)
Tan Chong Motor: To be fueled by Indochina expansion
Tan Chong Motor Holdings (TCMH) believes the group's investments within Indochina will result in better earnings contribution in the coming years, in tandem with economic growth in the region. The automotive group said that the region was expected to see rapid economic growth resulting in rising purchasing power. Coupled with the region's large population and current low car ownership of less than 8 cars per 1,000 population, they group see tremendous opportunities from local demand, especially as the population shifts from twowheelers to 4-wheel vehicles. (Starbiz)
Time Engineering: Khazanah has 3 bidders for Time Engineering
Khazanah Nasional is in the process of evaluating 3 potential buyers for its 45.03% stake in Time Engineering (TEB). It is understood that the 3 bidders are ICT Consultancy Zamcorp, IT solutions company MM Tech Corp, and an entity linked to prominent businessman Tan Sri Syed Mokhtar Al-Bukhary. A source said that the 3 were recently asked to submit their proposed business plan for TEB, including their offer price. The offers are generally at a slight premium to the stock’s current trading levels, though there are parties reluctant to pay more than the net asset value. (The Edge Weekly)
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