SP Setia together with Rimbunan Hijau Group inked a deal with Qinzhou Jingu Investment Co Ltd to jointly develop the China-Malaysia Qinzhou Industrial Park (QIP), which will be the third industrial park in China that is developed under the G2G initiative. A ground-breaking ceremony was held in the presence of Chinese Premier Wen Jiabao and PM Datuk Seri Najib Tun Razak in China yesterday. SP Setia' participation will be via its 45% equity stake in a Malaysian JV company known as Qinzhou Development (Malaysia) Consortium, which in turn will hold 49% stake in the China JV Co to be formed with Qinzhou Jingu as its JV partner. The QIP is located 10km south of Qinzhou City and 5km north of the Guangxi Qinzhou Fre Trade Port Area - a national economic and technological development zone. The industrial park has a planned area of 55 sq km, consisting of five functional districts namely industrial, residential, auxiliary service, production and living centre, and scientific and technology service. On completion, this ecological coastal city development is expected to house a population of 500,000, which is nearly 13% of Qinzhou's current estimated population of 3.9 million. (Star)
MRCB is to be compensated by the government following changes to the terms under which it can collect toll on the EDL. “The amount is to be worked out, but it will compensate MRCB for a loss in income…” a source said. The government is now looking at charging a levy on all foreign registered vehicles going into Singapore and using the causeway. The reason for the change in CA terms is following PM Datuk Seri Najib‟s announcement that motorists who do not use the EDL will not be required to pay toll. This move is likely to impact Malaysians who are permanent residents (PR) of Singapore and who commute daily, which is about 30k vehicles, and not tax all Malaysians going into Singapore. The levy imposed is unlikely to deter Singaporeans coming to Johor Bahru. EDL is scheduled to be opened for a one month trial period from 1 Apr 2012. (Edge Weekly)
After being with AmBank Group for 34 years, Cheah Teck Kuang, aged 64, has retired as group MD effective 2 Apr 12. He is replaced by Ashok Ramamurthy, aged 50, who was previously the deputy group MD and CFO. (BMSB, The Edge)
Seven Felda NGOs on last Friday delivered to Prime Minister Datuk Seri Najib Tun Razak a memorandum expressing support for the proposed listing of Felda Global Ventures Holdings Bhd (FGVH). The memorandum carried the message that the new generation of Felda settlers gave their undivided support to the proposed listing of FGVH on the main board of Bursa Malaysia, rejected all forms of interference and intimidation from outsiders and called for the listing to be expedited. Deputy Minister in the Prime Minister's Department Datuk Ahmad Maslan told reporters later that efforts were being made for a June listing of FGVH. (Bernama)
Prime Minister Datuk Seri Najib Tun Razak has given the assurance that the proposed listing of Felda Global Ventures Holdings (FGVH) on the main board of Bursa Malaysia will not at all involve land owned by Felda settlers. He dismissed the allegations by certain quarters that the listing would result in the mortgage of land owned by the settlers. "I reiterate that not even an inch of land owned by the settlers will be involved in the listing. It will only involve state government land allowed to be developed by the federal government as provided for under the Land (Group Settlement Areas) Act 1960 and hitherto managed by Felda Plantations," he said in his speech. (NST)
CIMB will acquire Royal Bank of Scotland's corporate finance, investment banking and institutional equity broking businesses in India and some of the Asia Pacific markets. The deal is expected to be signed next week, said people familiar with the transaction. Senior CIMB officials, including Carol Fong, CEO of CIMB Securities, were in India on Friday to meet financial market regulators and stock exchange authorities. Once regulatory approvals are in place, CIMB may appoint Devesh Kumar, managing director, head equities, RBS Global Banking and Markets, as the country head of CIMB's India operations. Sources said CIMB will retain all RBS India employees. (Economic Times)
Switzerland-based Mercuria Energy Group is said to be partnering CIMB Group Holdings to revive the beleaguered Asia Petroleum Hub (APH) bunkering project off Tanjung Bin in Johor. It is learnt that Mercuria will establish a joint venture with a well-connected local firm to invest in the APH project, which has stalled for the past one year. Mercuria claims to be one of the world‟s five largest independent energy trader, with trading platforms in Singapore, Jakarta, Bangkok, Beijing and several locations across the US, the Middle East and Europe. There have been other suitors for the APH project, including PTT Thailand – the state-owned oil company – which was prepared to be the off-taker and to lease the facilities on a long-term basis. (The Edge)
Sustainable Energy Development Authority (Seda) is persuading the Sabah government to contribute to the Renewable Energy (RE) Fund as heavy power users in the state are not contributing to the fund. "We're in talks with the Sabah Government to contribute to the RE Fund. We cannot always expect heavy power users in Peninsular Malaysia to pay for the Feed-in Tariff (FiT) benefits enjoyed by eligible green power producers in Sabah," said Seda CEO Badriyah Abdul Malek. Seda, a government agency under the Energy, Green Technology and Water Ministry, is a one-stop centre that regulates supply and usage of RE in the country. Currently, electricity consumers in Peninsular Malaysia, who use more than 350 kilowatt per hour or whose monthly bills exceed RM77, pay an additional one per cent RE levy. Manufacturers, which make up more than 40% of TNB's clientele, are the ones hit hardest by the RE levy. Tenaga Nasional Bhd (TNB) started collecting this money from December 2011. Sarawak is exempted from the RE levy because under the Renewable Energy Act 2010, the FiT is only applicable to Sabah and Peninsular Malaysia. (BT)
Emerging industries such as green energy and bio industry will be the mainstay of investments from South Korea this year, said its ambassador Lee Yong-joon. Already both countries have set up cooperation channels in green energy and nuclear energy sector for two years now. Lee said the Malaysian economy has presented a unique window of opportunity for South Korea. According to the Korea International Trade Association, South Korea-Malaysia trade volume hit an all time high in 2011, with Korea's export and import value reaching US$6.3b and US$10.5b (RM19.34b and RM32.24b) respectively. South Korea is part of the trillion dollar trade club since 2011. As for investment, South Korea emerged as Malaysia's second largest foreign investor last year with a total investment of US$1.7b (RM5.22b) in 10 projects. (BT)
Positive consumer sentiment, strong purchasing power and minimal impact from Bank Negara‟s newly implemented responsible lending guidelines collectively helped boost sales of premium vehicles in February. “It is due to a combination of attractive sales and after-sales campaigns by manufacturers to clear 2011 manufactured cars and aggressive registration and delivery of orders,” said Frost & Sullivan Asia Pacific automotive and transportation practice principal consultant Rajaswaran Tharmalingam. “Further, continuous novel efforts to increase sales by manufacturers and strong consumer sentiments made it a better month,” he added. Malaysian Automotive Association (MAA) president Datuk Aishah Ahmad pointed out that Bank Negara‟s new lending guidelines, which came into effect on Jan 1, had little to no impact on buyers of premium vehicles. (Starbiz)
UMW Holdings said the decision on whether to take its 22.3% associate WSP Holdings Ltd private could be known by as early as this month. "Discussions are ongoing. We will have a decision soon," said its president and group CEO Datuk Syed Hisham Syed Wazir recently. (BT)
UMW's subsidiary, UMW Standard Drilling, has received a letter from Petronas Carigali for a two-year extension for the provision of a jack-up drilling rig Naga 3 contract worth US$105m (RM321.3m). The commencement date for the contract extension shall be March 22, 2012, and shall be valid until March 21, 2014, both dates inclusive. (Bernama, Malaysian Reserve)
The revival of rubber as a major commercial crop for Malaysia can be a success should local plantation companies adopt strategies such as land expansion overseas. This is apart from acquiring local brownfield and greenfield areas, as well as converting current marginal oil palm land to rubber, said Tradewinds Plantation Bhd head of plantation advisory Ramesh Veloo. For ventures abroad, he said local players should look at Liberia, Gabon, Cameroon, Indonesia, Cambodia and Latin America. “These countries have optimum plantation base such as ample contiguous and sizeable land, suitable agro climatic conditions and sufficient labour,” Ramesh added. It was reported that there are seven million to 14m hectares of degraded land comprising degraded forest, marginal/waste land, idle/unused land in Kalimantan, Sulawesi, Sumatra, Java, Nusa Tenggara and Papua. (Starbiz)
Skytrax‟s website shows that Malaysia Airlines’ (MAS) 5-star airline status is under review‟ which industry observers believe that this could point to a possible downgrade. Checks show that its status has been „under review‟ since October last year, dismissing doubts that it could be a periodical review. (BT)
The upgrading works at KLIA costing RM116.8m to accommodate Airbus A380 has been fully completed. The upgrading works include runway, taxi shoulder, pavement strength, ground service requirements, a third aerobridge and holding lounge. (Bernama)
American International Assurance (AIA Malaysia), which posted RM483m in annualised new premiums last year, is confident of achieving stronger growth on the back of its 1.2m customer base and an under-insured protection market. AIA Malaysia is currently the leading player in personal accident and medical insurance. On its takaful business, via AIA-AFG Takaful Bhd, the pick-up rate of takaful was encouraging as the company had clocked in more than 6,000 cases in the first 10 months of last year despite the fact that it started operations only in January 2011. (Star Biz)
The government has approved an additional RM6bn for the National Higher Education Fund Corp (PTPTN) for 2012 and 2013, said the Minister of Higher Education Datuk Seri Mohamed Khaled Nordin. The Cabinet last Friday approved the application by his ministry considering the importance and relevance of PTPTN in financing the education of students in tertiary institutions. (Bernama)
It was the pricey power tariff that made Salco, a JV between Rio Tinto and CMS, abort plans to develop a RM7bn aluminium smelter plant in Samalaju, Sarawak. Sarawak Energy wanted to supply power to Salco at 14 sen/kWh, but the price is more than double what Salco had anticipated. Electricity accounts for at least 30% of the smelter plant‟s operating cost. Also, the 14 sen/kWh is also more than the 6.25/kWh Sarawak Energy pays for electricity feed from Bakun. (Edge Weekly)
Glomac which recently acquired two parcels of land in Klang for RM44m, is still on the lookout for good land banks in the Greater Kuala Lumpur area. Currently, Glomac has a total of 11 ongoing projects, comprising a range of mixed developments in Greater KL and in Johor Baru. The company is looking into expanding into Iskandar Malaysia but that is something that is not decided yet. (BT)
Suspended Silver Bird Group MD Datuk Jackson Tan and his wife Datin Ong had their shareholdings in the company reduced further. A filing with Bursa Malaysia showed that there was a forced sale and disposal of about 1.6m ordinary shares of RM0.50 each, which represented 0.39% of the total issued and paid-up share capital of Silver Bird. The shares were transacted from March 22 till 28 at prices ranging from 18 to 21 sen per share. Silver Bird is now categorised as a Practice Note 17 and Practice Note 1 company because it has not been able to repay its debts to the parties that had lent them money to do business. (Starbiz)
Silver Bird Group Bhd may see a white knight emerging in the coming weeks although no turnaround plans have been put forward to the board of directors of the bread and confectionary maker. However, sources told StarBiz that this could happen in a matter of weeks. In reply to a query, the members of the special committee that was formed to take charge of the daily operations of the company said they were finalising the forensic report results and the development of a restructuring plan. “To date, we‟ve not received any proposal from Lembaga Tabung Haji (LTH),” they added. Meanwhile, parties whose names have been linked to the turnaround plans have denied that they were involved in any deal. LTH and Koperasi Permodalan Felda (KPF) denied that they were negotiating with the board. LTH group managing director and CEO Datuk Ismee Ismail declined to comment on the speculation. An investment banker noted that any white knight coming in would have to resolve the company‟s debt woes. “If that‟s not resolved, the company will go under,” he said. Moreover, the banker said KPF might not be the party favoured by others to take over since the condensed milk joint venture with Silver Bird was one of the businesses that have come under scrutiny. Nevertheless, there have been speculation that LTH and KPF or a combination of the two could emerge as the white knight. An industry observer said the shares of Datuk Jackson Tan have been force-sold in recent weeks and this has brought the share price down. “I believe it is only a matter of weeks when something is firmed up and an offer made,” he said. He said should the operations be run efficiently, the company should be able to post a net profit of between 10% and 12% from the revenue generated from the consumer food division, which came to RM228.60m from continuing operations in FY11. (Starbiz)
Malaysia Reinsurance Bhd is currently accessing losses arising from the recent floods in Thailand but the reinsurer does not expect it to have a negative impact on earnings. "The numbers are manageable in the sense that it's something that is not going to kill us. We should probably be okay," MNRB Holdings Bhd president and chief executive officer Mohd Din Merican told Business Times recently. He declined to say what Malaysian Re's exposure to the Thai floods was, except to say that the national reinsurer has a "decent" risk spread. Malaysian Re, a unit of MNRB, is the largest reinsurance player in the local market. (BT)
Indonesia-based hotel management firm, Aston International Hotels, Resorts & Residences is seeking contracts in Malaysia to expand its geographical reach. The company had recently secured a management contract with privately-held Langkawi Saga Sdn Bhd, to manage its property, Favehotel Cenang Beach Langkawi. Favehotel is a two-star hotel that will be operating this year, with room rates starting from US$50 (RM154) a night. Aston national assistant director of sales for Asia, Happy Lutjikha, told Business Times in an interview recently that the company is looking for more assets to manage in Malaysia as it is bullish on the market here. The company manages 45 properties under nine brands in Indonesia, for third party operators. The portfolio comprises hotels, resorts, villas and serviced apartments under the two- to five-star categories. (BT)
Ho Hup Construction Company Bhd still faces a number of hurdles to get its Bukit Jalil project off the ground even though a ruling by the High Court has ordered the company to buy out the other shareholder that owns the rights to the land. Among the concerns raised was the ability to raise financing to buyout Zen Courts Sdn Bhd, which appears in a favourable position post the judgement, off its 30% share of Bukit Jalil Development Sdn Bhd (BJD), which owns the right to develop 60-arces of prime land in Bukit Jalil. It is still unclear as to who would get the right to develop the land. Ho Hup has appealed to the Federal Court to hear its case of having the development rights to the project after the Court of Appeal upheld Malton Bhd's case of being a joint developer to the land. In dispute is the joint development agreement where Pioneer Haven, a subsidiary of Malton, would fund and develop the land and BJD would be entitled to 17% of the gross development value of the project with a minimum payment of RM265m to be paid throughout the development of the land. (Starbiz)
A win-win deal for Prasarana, Crest Builder
The redevelopment of the Dang Wangi light rail transit (LRT) station site is expected to have a gross development value (GDV) of RM1.04bn, with land owner Syarikat Prasarana Negara (Prasarana) to get a 21.1% share amounting to some RM220m, said a Crest Builder Holdings spokesman. Prasarana entered into a deal last week with a joint venture between Crest Build and Detik Utuh SB (Crest Builder-Detik Utuh JV), to turn the 1.1ha plot into a mixed commercial development comprising a retail mall, upscale premium serviced residential suites, hotels and offices sitting on top of the Dang Wangi LRT station. (Financial Daily)
MJGL no longer an MMC unit
MMC Corp said in a filing to Bursa Malaysia that Malakoff Jordan Generation Ltd (known as ACWA Power Jordan Generation Ltd) (MJGL) has ceased to be a subsidiary of Malakoff International Ltd (MIL), following the completion of MIL's disposal of its entire equity interest in MJGL comprising two ordinary shares of USD1.00 (RM3.06) each. The disposal does not have a material impact on the earnings or net assets of MMC Corp for the financial year ending 31 Dec 2012. (Malaysian Reserve)
MBSB offers new home financial scheme
Malaysia Building Society (MBSB)’s new home financial scheme is targeted at first-home buyers. It is a package that offers 100% margin of financing to houses with a ceiling price of RM500,000. The MBSB First Home Scheme, officially launched last Friday, also offers an exemption of the normal 10% down payment. Speaking at the launch, chief executive officer Datuk Ahmad Zaini Othman said the new scheme is designed for young adults who want to own their very first residential property. (Malaysian Reserve)
Extol bids RM100m worth of local projects
Extol MSC is bidding for local public and private sector projects contracts worth RM100m. Its president and deputy executive chairman Mohd Badaruddin Masodi said the information and communications technology (ICT) security market’s outlook is “very promising” this year. “The awareness on the importance of the cyber security is increasing. We don’t need to do much marketing about it. Everybody is aware of such security threats nowadays”. (Malaysian Reserve)
Petronas Plans Canadian Acquisition Topping $5 Billion (Source: Bloomberg)
Petroliam Nasional Bhd (PET)., the Malaysian state-owned oil company, is studying a Canadian acquisition exceeding $5 billion as part of the company’s drive to supply natural gas to Asia. “This is going to be big,” Chief Executive Officer Shamsul Azhar Abbas said in a March 30 interview on the 81st floor of the company’s twin towers headquarters that dominates the Kuala Lumpur skyline. “There are quite a few candidates out there, who are willing to talk,” he said, adding a deal may be announced within three months. Petronas, as the company is known, joins Asian peers including PetroChina Co., Mitsubishi Corp. and Cnooc Ltd. in seeking production in North America, where natural gas sells for less than 15 percent of Asian benchmark prices. At more than $5 billion, a purchase would be more than double the company’s biggest deal, the $2 billion acquisition of a 40 percent stake in Santos Ltd. (STO)’s Gladstone LNG project in Australia in 2008.
“I want to grow big in Australia and Canada,” said 59- year-old Shamsul, surrounded by modern art from the Petronas collection that adorned the walls of the round conference room. “In terms of country risk, it’s less” than other natural gas rich areas such as the Middle East, he said. There were $8.7 billion in deals announced in Canada’s oil and gas industry in the first quarter, the busiest start to the year since 2009, when mergers and acquisitions in the sector there peaked at $47 billion, according to data compiled by Bloomberg. Since 2009, there have been 487 deals, the biggest being China Petrochemical’s Corp.’s $4.7 billion purchase of Syncrude Canada Ltd. from ConocoPhillips in 2010.
SILK Holdings: Posts earnings turnaround
SILK Holdings posted a net profit of RM1.7m for 2Q FY2012, against a net loss of RM4.3m in the same quarter of last year. The company said this was partly driven by stronger performance for its highway and oil and gas support services businesses. The quarter also saw revenue increase by 61.8% to RM60.6m, and earnings before interest, taxation, depreciation and amortisation (EBITDA) jump 71.2% to RM30.7m. (Business Times)
Esso Malaysia: Board changes following entry of new major shareholder
Esso Malaysia has seen some changes to its board of directors, following the entry of San Miguel Corp as its new controlling shareholder. Esso Malaysia announced the resignation of chairman and executive director Hugh Walter Alexander Thompson, as well as executive directors Fatimah Merican, Faridah Ali and Abu Bakar Siddik Che Embi, all effective Saturday. San Miguel's nominees namely Ramon S. Ang, Eric O. Recto, Aurora T. Calderon and Lubin B. Nepomuceno had been appointed as new executive directors. (Business Times)
I-Berhad: Continues to seek partners for i-City project
I-BERHAD’s CEO Datuk Eu Hong Chew said the company will continue to seek strategic partners to accelerate developments at its RM3bn i-City project. He said the company is currently talking to several local and foreign firms who are considering co-developing some of the land. I-City is a knowledge and tourism project, sprawled on 42 hectares. Some 20% of the project has been developed with the rest to be completed over the next 10 years. In Dec 2011, I-Berhad entered into a 30:70 JV with Everbright International China to co-develop 12.5ha in i-City to build the mall, some residences and MSC (Multimedia Super Corridor) offices. I-Berhad is looking for similar deals but Eu declined to say who the company is talking to. Eu said I-Berhad is in talks with several local and foreign institutional investors who want to buy some of the buildings at i-City, via en bloc sale. (Business Times)
Yokohama Industries: Ropes in GP Batteries as JV partner
Yokohama Industries has roped in Singapore-listed GP Batteries International Ltd as a JV partner to manufacture and trade thin metal film (TMF) lead acid batteries. Yokohama said both companies will establish a JV firm where Yokohama and GP will own 70% and 30% respectively. The collaboration was formalised via a JV agreement between Yokohama Industries 100%-owned unit Yokohama Ventures Sdn Bhd and GP’s 80%-owned subsidiary Bolder Technologies Pte Ltd. The JV will allow Yokohama to gain access to Bolder’s TMF technology. Currently, the 1AH TMF battery produces a cold cranking amperes output equivalent to that of a lead acid starter battery. By combining TMF and Yokohama’s current battery know-how, there are possibilities in developing high-powered batteries both for cranking and start-stop applications. Yokohama Industries said that nearly all start-stop applications employ supercapacitors paired with an absorbed glass mat battery. (Financial Daily)
Protasco: Signs service agreement with KL City Hall
Protasco will offer its expertise to the Kuala Lumpur City Hall under a 5-year agreement from Mar 30, 2012 to Mar 29, 2017. Protasco said the agreement will see the firm offering engineering and capacity building services to the client. The appointment is expected to contribute positively to the earnings and net assets of Protasco for FY2012. According to the company, the appointment is non-exclusive and can be extended for another 5 years, subject to mutual agreement between the City Hall and Protasco. (Financial Daily)
Automotive: MAA maintains 2012 sales at 615,000 units
The Malaysian Automotive Association (MAA) is maintaining its earlier forecast of 615,000 sales volume this year, despite Bank Negara Malaysia's move to tighten the conditions for lending. Its president Datuk Aishah Ahmad said it was too early to revise the forecast, taking into consideration the required time for car dealers to adapt to the new rules. She also said that following the ruling, some local banks were found to have tightened the rules a little too much and Bank Negara could have talked to these banks. She said, the first quarter performance is expected to be flat or slightly lower with car dealers just beginning to adapt to the new lending rules. Sales volume for Mar is expected to improve and cover the lower sales recorded in Jan and Feb, with the market adjusting to the stricter requirements in the higher purchase loan application process. (Financial Daily)
Property: MBAM says Malaysia property market not ready for BTS concept
The Master Builders Association of Malaysia (MBAM) says the Malaysian property market is not ready for the implementation of the build-then-sell (BTS) model on a compulsory basis. MBAM president Kwan Foh Kwai said property development is a very capital-intensive business with many of the players comprising small-and-medium enterprises. He said the BTS concept would increase the cost as developers would have to bear the interest which is then passed on to buyers. Likewise, he said, buyers are always looking for developers to produce affordable housing for them. Kwan, who is also the MD of the construction division of the Sunway Group, said implementing the BTS model without ample preparation would reduce the property supply in the market. Asked if the Industrialised Building System (IBS) can offset the higher cost of construction with the BTS model, he said it would initially cost more in terms of investment for land, plant and machinery but in the long term, after the producers
have reached investment break-even, IBS would be cheaper. (Bernama)
Timber: Uphill task for timber producers
Malaysia and other timber producing countries have found it extremely difficult to meet the different measures and requirements imposed by consumer nations to ensure that illegal timber products do not enter their markets. Sarawak Timber Association chairman Datuk Wong Kie Yik said these measures, which were unique to each country, were often unclear and difficult to implement due to different definitions, interpretations and shifting of goal posts along the way. He added that these measures have increased costs significantly for the producing countries to meet the requirements while the consumer countries have not reciprocated accordingly in term of pricing (offering higher prices for timber products). He said the association's member companies applying for certification of forest management units had found it difficult to meet the social components of the available certification schemes due to a number of disputes in native customary rights land in Sarawak. (StarBiz)
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