20100426 1003 Malaysia Corporate News.

PAAB has narrowed down the list of companies that can bid to build a RM2bn water treatment plant in Hulu Langat, Selangor, to 12 from more than 30 before. A source said PAAB will call for a tender in May or June. The 12 groups are expected to submit a detailed proposal, outlining the framework, costing and design of the project. "The 1,130 MLD treatment plant, which will take two to three years to construct, will process the raw water transferred from Pahang to Selangor via a 44.6km tunnel," the source said. The 12 groups are Gamuda and Biwater International, MMC and Salcon, Loh & Loh and UEM Builders, WCT and Sinohydro Corp, LGB Engineering, George Kent and Taliworks. Others include LBH Group, Puncak Niaga, IJM, Kumpulan Perangsang Selangor, Hati Muda Sdn Bhd, Mewah Kota Sdn Bhd and Asia Baru Construction Sdn Bhd. (BT)
The timeline of the tenders are within our expectations. This development is positive for the construction sector as the progress of water infrastructure works are beginning to pick-up pace. Initial estimates for the total project value of the Langat 2 water treatment plant was RM5bn for over 2,000 MLD, and it appears that the tenders in June/May is for phase 1 of the project.

Palm oil may advance in the second half as dry weather caused by El Nino pares output in Malaysia and Indonesia, according to Godrej International Ltd.

• The tropical commodity may rise as high as RM3,200 a metric ton after June, Dorab Mistry, a director at Godrej said, restating a prediction made in March. 
• El Nino, which damages crops of rice, corn, sugar cane and palm oil in Asia, has started to weaken after reaching a peak in the third week of December, according to India’s weather bureau. Still, its effects will be felt later in the year. “Typically the effect on production comes after a time lag and we are yet to see them,” said Mistry, who has traded edible oils for more than three decades. 
• Palm oil will rise “substantially” after June and trade between RM2,800 and RM3,200, he added. (Bloomberg)

Malaysian Palm Oil Council (MPOC) reiterated that palm oil is safe for consumption as well as the environment despite the negative news on palm oil, CEO Tan Sri Dr Yusof Basiron said. “Claims of negative health effect of palm oil was initiated by soybean producers in the mid-80s in order to protect interest of market share in the US,” he said. Basiron said the “public was misled” by allegation that saturated fat raised blood cholesterol level in the body, leading to hear diseases. He said the semi solid appearance of palm oil was also being claimed by soft oil producers as not healthy for human consumption. “Such claims subsided after research found that trans fatty acid formed during hydrogenation process have more adverse effect on health than saturated fats” he said, adding that many researches have been done and found palm oil was safe for consumption. (Starbiz)

Palm oil imports by India, the largest buyer, may drop this year as buyers switch to soybean oil to profit from China’s ban on shipments of the commodity from Argentina, the biggest global supplier. Purchases may fall to 6.7m metric tons in the year to Sept. 30, from 6.9m tons a year ago, Thomas Mielke, executive director of Oil World, said. Soybean oil shipments may rise to as much as 1.5m tons from 1.06m tons a year ago, he said. “The price of soybean oil is attractive because of the lack of Chinese buying,” he said. “That’s impacting palm oil as India is buying less.” he added. (Bloomberg)

Indonesia will keep May export taxes for crude palm oil and cocoa beans unchanged from April, the trade ministry said. The export tax for crude palm oil in May will remain at 4.5%, while the base export price for the vegetable oil is set at $752 a tonne against $755 in April, the ministry said in a statement. (Reuters)

Hong Leong Bank has submitted its improved RM5.06bn all-cash bid for EON Capital to Bank Negara Malaysia and shareholders of both banks are set to vote on it in May. At the same time, Hong Leong said it plans to raise up to RM1.6bn from a renounceable rights issue and RM1.8bn from the sale of capital qualifying securities.

• The submission brings the deal, which would create the country's fourth biggest banking group, a step closer to completion. However, it did not include a share option that was requested by EONCap. 
• Hong Leong's offer comes with several conditions. Chief among them is that it has to be satisfied after going through the books of EONCap. If the due diligence reveals any adverse effects on EON Capital's financial position or any contingent liability that amounts to at least RM100m, Hong Leong will offset its bid price against that sum or it could also choose to drop the deal. (BT)

Affin Bank will work with its parent company to convert PT Ina Perdana into a syariah bank once the purchase of the Indonesian lender is concluded, as the group expands into the populous Muslim country. "Our holding company is looking at it, it will acquire the bank and then we will work together to convert it into an Islamic bank. It is now a conventional lender," Affin Bank MD Datuk Zulkiflee Abbas Abdul Hamid said. The legal and financial due diligence have been done recently.

• The group's deputy chairman Tan Sri Lodin Wok Kamaruddin told reporters this month that he hopes the purchase will be concluded by the third quarter this year. 
• PT Bank Ina Perdana is a tiny lender in Indonesia's fragmented market, which has 121 commercial banks. It operates about 20 branches, most of them in Jakarta. Despite its small size, Zulkiflee said the bank is profitable with relatively low NPLs. Most of PT Bank Ina Perdana's business comes from consumer banking, like car loans, while business banking only takes up a small portion of its portfolio.
• "We are of the view that, if we want to go (into Indonesia), this is the time for us to go. There are not too many Islamic banks in Indonesia considering its big population. Islamic finance is still in the early stage of development as compared to Malaysia, so there is vast potential for growth," he said. (BT)

MASkargo plans to mount additional charter flights into Europe in the coming weeks, said MD Shahari Sulaiman. "2010 has started off with a much more optimistic outlook with demand improving to pre-crisis levels and shows sign that it will be sustainable at least for the rest of the year." Cargo load factors have improved to above 70% and revenue has increased by more than 50% yoy so far.

• MASkargo will start additional flights to Narita, Japan, from May 16. "This is timely in light of Japan Airlines' decision to pull away from the freighter business," he said. Also in the pipeline is an additional flight to Jakarta and two flights to Manila onwards to Shanghai. If approval is granted for the Kuala Lumpur-Manila-Shanghai route, MASkargo will be the only airline which has freighter capacity between Manila and Shanghai. 
• Meanwhile, to meet the government's request to support the local perishable industry, MASkargo will increase the allocation to certain key destinations by over 20% compared to 2009. MASkargo will also be upgrading the material handling system in KLIA not only to resolve the obsolescence issue but also to increase the capacity from 700,000 tonnes to 1m tonnes.
• Finally, MASkargo is exploring the viability of freighter flights into the US via China, with its newly signed US-based wet lease operator. MASkargo is expected to make a firm decision by the end of June. The last time the air cargo operator had a freighter service into the US was in 2001. (BT)

The bid for all-India 3G spectrum crossed the Rs 79bn (US$1.8bn) mark on Saturday, ensuring the government a minimum revenue of Rs 319bn (US$7.2bn). On the 13th day of the auction, the activity level in the metros and 'A' category circles continued to remain high. The operators are yet to venture into the categories 'B' and 'C' service areas, according to DoT sources. There was a jump of Rs12bn (US$0.3bn) today in government's revenues, from yesterday's level of Rs308bn (US$6.9bn). India now expects its 3G and broadband spectrum auctions to raise Rs500bn rupees (US$11.2bn), much higher than the government's budget estimates of Rs 350bn (US$7.9bn), India telecommunications minister Andimuthu Raja said. (Economic TImes of India)

Rubber is one of the hottest commodities traded so far this year with price rallies seen in most international rubber exchanges. Tyre-grade Standard Malaysian Rubber (SMR 20) has also been hitting new highs particularly in the past three months and currently trading above the RM10,600 per tonne level.

• According to Association of Natural Rubber Producing Countries (ANRPC) directorgeneral Prof Djoko Said Damardjati, tightness in rubber supply would remain an issue amid an upsurge in demand from China and India for their booming auto and tyre manufacturing industries. “Severe drought, the current wintering season as well as active replanting activities in most major producing countries could affect rubber output. “Even the preliminary estimates from members of ANRPC indicate that the global rubber supply is unlikely to rise above 6% this year,” he added. (Starbiz)

Hartalega Holdings remain buoyant on the outlook of the rubber glove industry this year and beyond despite concerns over raw material costs of following the rise in natural rubber (NR) prices to a 20-month high and the ringgit's speculation against the US$. Hartalega's managing director Kuan Kam Hon sees demand growth stemming from the healthcare reform in the US and China, as well as emerging markets such as South America, Middle East and Africa. He said the recent US Healthcare reform would boost demand by 10%, while the reform in China which spreads over the next decade, would see an initial 850bn yuan (RM397bn) to be spent by 2011. "The impact is very much dependent on the execution of the reform. Conservative estimate usage of 30 pieces per capita will drive China's increase in glove usage exceeding 40bn pieces per annum". (Financial Daily)

Northport said in the January-March period, the port handled a total of 779,867 TEUs, which was one of the strongest growth in recent years.

• The number of export containers rose by 25% to 223,450 TEUs for the quarter under review, while import container volume climbed 21% to 231,450 TEUs over a year earlier. Transshipment containers rose 30% to 324,899 TEUs. “It exceeded all expectations considering the fact that the container traffic fell marginally by 2% in 2009 on account of the global economic slowdown," said managing director Datuk Basheer Hassan. Noncontainerised traffic grew 40% in 1Q10 to 1.8m tonnes. 
• Basheer expects the year-on-year growth in cargo volumes (both containerised and noncontainerised cargo) at Northport could even increase to between 10-15% in 2010. Meanwhile, NCB Holdings Bhd has put aside some RM300m to expand Northport. (BT)

Takaful Ikhlas, a subsidiary of Main Board-listed MNRB Holdings, is weighing options of expanding its business overseas and is looking at three countries including Indonesia as its foreign debut. "We are monitoring certain markets and we have our eyes set on three countries which include Indonesia," its president and CEO Datuk Syed Moheeb Syed Kamarulzaman said. He did not name the other two countries under their expansion radar but said they were neither from the Gulf region nor Asia.

• Takaful Ikhlas is confident of meeting its targeted premium growth of RM625 million in the current year to 31 Mar. The company, which has 1.4 million customers, posted a premium growth of RM580m last year. (BT)

20100426 0951 Malaysian Economic News.

The Consumer Price Index (CPI) for March rose by 1.3% yoy to 113.2 (1.2% in Feb). Compared with the previous month, the CPI remained unchanged at 113.2. Ytd, the inflation increased by 1.3% yoy. Economists had projected it would advance to 1.5% yoy for March. (Bernama, Bloomberg) Please see our Economic Update for further details

The government has agreed to increase by RM150 a month the motorcycle allowance for members of the police volunteer reserve (PVR) serving in hot areas. DPM Tan Sri Muhyiddin Yassin said that the allowance for members of the People's Volunteer Corps (Rela) would also be increased and that a proposal to that effect had been submitted to the Public Service Department. (Bernama)

The Human Resources Ministry has proposed an allocation of RM50m to enable plantation workers to apply for loans to buy houses under the 10th Malaysia Plan (RMK- 10) said its deputy minister Datuk Maznah Mazlan. "Employers have been urged to build comfortable houses for their workers by 2013," she said. (Bernama)

Malaysian Industrial Development Finance Bhd (MIDF) expects to disburse RM200m under Soft Loan Scheme for Small and Medium Enterprises (SMEs) before year-end. So far, RM34m had been disbursed to 44 SMEs. (Bernama)

Terengganu is expected to get a RM1bn investment from China to build an iron factory in the Teluk Kalong industrial zone. Menteri Besar Datuk Ahmad Said said the agreement to build the factory, expected to start early next year. He added that the Chinese investors were expected to invest RM50m to build bird's nests in various places in the state. (Bernama)

Recent liberalisation of terms and conditions in the loan scheme for the Malaysia Kitchen Global Campaign is expected to promote more Malaysian restaurants abroad. International Trade and Industry Minister Datuk Seri Mustapa Mohamed said Exim Bank had revised equity conditions owned by Malaysia from 70% to 51%.

• The repayment structure has also been liberalised to a maximum of 5 years inclusive of a 6-month grace period plus 3-month moratorium. 
• The government allocation amounted to RM180m, of which RM20m has been disbursed. The loans are also open to all franchises from Malaysia, at an interest rate of 3%. (Bernama)

PM Datuk Seri Najib Tun Razak announced a RM4m allocation for the Sikh community. Of that amount, RM2m was for upgrading and maintaining the Sikh community's 118 houses of worship or Gurdwara, RM1m for teaching of the Sikh language to the young and RM1m for Siklh cultural programmes. (Bernama)

20100426 0948 Global Economic News.

US new home sales improved in March at the fastest single-month rate in 47 years. Newhome sales rose 26.9% to a seasonally adjusted annual rate of 411,000 last month, compared to an upwardly revised annual rate of 324,000 in February. The gain snapped a four-month streak of declines. This was well ahead of consensus forecasts for March sales to rise to an annual rate of 330,000. (CNN Money)

The cost of the US government's controversial bailout of the financial system could amount to less than a third of what the Obama administration originally expected, Treasury Secretary Timothy Geithner said. "A year ago we estimated that our support for the financial system could cost more than US$500bn or 3.5% of GDP," Geithner wrote. "We now expect that the direct costs of all our interventions will cost less than 1% of GDP." Citing the White House's Fiscal 2011 budget, Geithner estimated losses from the Troubled Asset Relief Program (TARP) at US$117bn. The Congressional Budget Office in March estimated the loss from TARP would be US$109bn. (CNN Money)

The World Bank forecast global economic growth of 3.1% this year, more than the 2.7% it forecast in January, and cautioned that not all risks to the recovery have subsided. For 2011, it predicts the global economy to grow 3.3%, could be “as low as 2.5% or as high as 3.5%.” (Bloomberg)

European industrial orders rose 1.5% mom in February (-1.6% in Jan), led by demand for intermediate goods such as car engines. Economists forecast an increase of 1.0% mom. From a year earlier, February industrial orders jumped 12.2% (7.5% in Jan). (Bloomberg)

The UK gross domestic product rose 0.2% qoq in 1Q (0.4% in 4Q09). Economists had projected for a 0.4% increase. Prime Minister Gordon Brown said that the economy still needs stimulus to avoid a “double-dip recession” and that Conservative leader David Cameron’s plans to cut spending this year are a “risk” to growth. (Bloomberg)

China’s industrial production is outpacing the trend rate by the most since 1998, adding to concern the world’s third-largest economy may be overheating. The industrial output gap, which gauges actual production against so-called potential, widened to 3.06% in March. (Bloomberg)

China’s central bank governor, Zhou Xiaochuan, said the country will keep its “proactive” fiscal measures and maintain its “relatively easy” monetary policy as the global economic recovery remains tentative. China will continue with “stable and relatively rapid” growth this year, while balancing “inflation expectations,” Zhou said. The primary risks to the global economy come from developed countries and he urged developed nations to “restore fiscal discipline as quickly as possible” to contain “sovereign risks” and avoid “contagion”. (Malaysian Reserve)

Singapore’s consumer prices rose 1.6% yoy in March (1.0% in Feb), marking the highest level in 12 months amid an economic rebound that has led policy makers to allow the island’s currency to strengthen. On a m-o-m basis, prices rose 0.1% (0.4% in Feb), without adjusting for seasonal factors. Economists had projected the inflation would increase 1.8% yoy and 0.2% mom for March. (Bloomberg)

Thailand’s foreign-exchange reserves rose 1.0% to US$146.2bn billion in the week ended 16 Apr, from US$144.8bn a week earlier. The central bank’s holdings of forward contracts fell 7.4% to US$12.6bn from US$13.6bn a week earlier. (Bloomberg)

Vietnam’s consumer prices climbed 9.2% yoy in April, down from 9.5% in March, as food prices eased and higher interest rates cut into borrowing. Prices rose 0.1% mom, the lowest figure since a decline in monthly inflation in Mar 09. (Bloomberg)

China tightened real-estate financing by requiring developers to submit fund-raising plans for review, stepping up efforts to prevent a property bubble, as the central bank pledged to maintain “proactive” fiscal measures. The China Securities Regulatory Commission has sent financing requests from 41 companies to the Ministry of Land and Resources for reviews of land use compliance. (Bloomberg)

Greece moved toward securing an emergency aid package before debt payments come due in mid-May as Finance Minister George Papaconstantinou warned investors they will “lose their shirts” if they bet the cash-strapped nation will default. Papaconstantinou said money will be available “rather soon” and his country wouldn’t restructure its debt. IMF Managing Director Dominique Strauss-Kahn said talks will end “in time to meet Greece’s needs.” (Bloomberg)

Greece on Friday called for activation of a financial life-line of as much as €45bn this year. The request came a day after the yield on the country’s benchmark 2-year note topped 11%, and Moody’s Investor’s Service lowered Greece’s creditworthiness by one notch to A3. (Malaysia Reserve)

Protesters in Thailand readied themselves for a military offensive on the Bangkok business district they have shut down for 23 days after Prime Minister Abhisit Vejjajiva called off peace talks and pledged to disperse them. “We aim to return the site to the public,” Abhisit said in a nationally televised address yesterday with army chief Anupong Paojinda at his side. “We shouldn’t set the precedent that threatening and using force will lead to political gains.” (Bloomberg)

World Bank member countries reached a preliminary agreement on a 3.13% shift in voting power to give emerging and developing nations greater influence in the global institution. This would increase the votes of the developing world to 47.19%. (Financial Daily)

20100423 1836 FCPO Weekly Chart Study.

FCPO closed : 2540, changed : +22 points, volume : higher.
Bollinger band reading : side way range bound downside biased.
MACD Histrogram : getting lower, seller still in.
Support : 2530, 2500, 2450 level.
Resistant : 2580, 2630, 2700 level.
Comment :
Improved volume FCPO ended the week at high ground following a strong soy oil futures price development. Despite today's price surge strongly, weekly chart reading has yet to turned positive and still suggesting a side way range bound downside biased market. On the bigger picture, FCPO is also trading within a getting narrower ascending triangle.

20100423 1823 FCPO EOD Daily Chart Study.

FCPO closed : 2540, changed : +50 points, volume : higher.
Bollinger band reading : side way range bound.
MACD Histrogram : recovering, seller cover position ahead of weekend.
Support : 2521, 2500, 2470 level.
Resistant : 2550, 2570, 2600 level.
Comment :
FCPO price surge substantially to closed right at the high of the day and week with improve volume changed hand as seller cover their position ahead of the weekend. Daily chart reading switch from a downside biased market to a yet to confirm direction side way range bound market.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20100423 1735 FKLI Weekly Chart Study.

FKLI closed : 1340, changed : +4 points, volume : slightly lower.
Bollinger band reading : bullish biased.
MACD Histrogram : weakening, buyer reduce position gratually.
Support : 1335, 1310, 1300 level.
Resistant : 1350, 1360, 1375 level.
Comment :
FKLI ended the 4 points higher week on week with sustainable contracts changed hand. Weekly chart reading still call for a near support(plotted upward trend line) level bullish further upside potential market. Only thing to watch out will be price break below the support line with MACD cross down should price drop significantlly. Second level support will be near middle Bollinger band.

20100425 1725 FKLI EOD Daily Chart Study.

FKLI closed : 1340, changed : -2 points, volume : lower.
Bollinger band reading : side way range bound.
MACD Histrogram : recovering, seller taking small exposure.
Support : 1337, 1330, 1325 level.
Resistant : 1345, 1350, 1360 level.
Comment :
FKLI eased slightly lower after yesterday price surged in reduce volume transacted within a 5.5 points range market. Daily chart wise, market is likely to trade side way range bound testing support and resistant level within the plotted purple colour symmetrical triangle and the getting narrower Bollinger band width waiting for a break out.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20100423 1315 FKLI Mid Day Hourly Chart Study.

FKLI closed : 1337, changed : -5 points, volume : low.
Bollinger band reading : side way range bound.
MACD Histrogram : getting weaker, seller testing the market.
Support : 1337, 1330, 1325 level.
Resistant : 1345, 1350, 1360 level.
Comment :
Lower FKLI traded in narrow 4.5 point range quiet volume market. Hourly chart still call for a side way range bound market testing support level.

20100423 1306 FCPO Mid Day Hourly Chart Study.

FCPO closed : 2528, changed : +38 points, volume : improved.
Bollinger band reading : upside biased.
MACD Histrogram : getting higher, buyer present.
Support : 2521, 2500, 2470 level.
Resistant : 2550, 2570, 2600 level.
Comment :
FCPO opened and traded continously higher in positive tone with improved volume transacted. Hourly chart reading turned from a side way range bound market into a further upside potential market. However, price seems over extended upwards with 3 consecutive hourly candle bar closed way above the upper Bollinger band alerted a possible pullback effect to take place in the near term.

20100423 0935 Malaysia Corporate News.

Loading of Malaysian palm oil destined for China fell in April 1-20 to the lowest level this year because of weak demand and large domestic stockpiles, the China National Grain and Oils Information Center said. About 173,000 metric tons of the cooking oil were loaded during the period, 27% lower than the same period last month, the center said. (Bloomberg) Malaysia's palm oil exports to China grew 37% yoy in 1Q10. Following the strong take-up in 1Q, we are not surprise by the slower demand for palm oil in April.

Mah Sing Group has acquired 0.58ha freehold commercial land in Ampang, Selangor, from a unit of Fraser & Neave Holdings for RM53.8m cash. "The land will be developed into serviced residences, M Suites@Jalan Ampang, with an estimated gross development value of RM257m," it told Bursa Malaysia yesterday. The project is expected to commence by the second half of this year for completion in three years. (Starbiz)
The acquisition is not entirely a surprise as the group continues to actively scout for new land bank locally and internationally. We view the purchase positively as the project is ready for launch with completed show units and should reap pretax margins of 20-25%, boosting pretax profit of the group by RM51m-64m over the next three years. Mah Sing intends to add value to the project by making some slight changes and we will adjust our earnings forecasts accordingly.

Malaysia could boost foreign direct investments substantially with the proposed Renewable Energy Act. "Malaysia has attracted more than RM10bn in FDIs for solar power. This could double or triple in a short period," said Thomas Brandt, general manager of the Malaysian-German Chamber of Commerce and Industry.

• A feed-in tariff mechanism modelled after Germany's system will be introduced under the new law, which allows electricity produced from renewable energy resources to be sold to power companies at a fixed premium and for a specific duration. 
• Malaysia aims to derive 5% of its energy needs from renewable sources by 2050, excluding hydropower which is already a major power source now. Brandt said the Act will partly adopt Germany's model on how tariffs are set and will be tabled in Parliament this October. (BT)

Top Glove Corporation is now required to answer to the US-based Tillotson Corporation's charges of patent infringement, Tillotson said. However, it is not known how this had come about as the US courts had already ruled against Tillotson's complains of patent infringement.

• In a statement on Wednesday, Tillotson announced that the stay on the patent infringement complaint that it had filed against Top Glove Sdn Bhd and TG Medical Sdn Bhd in the US District Court for Northern Georgia had been lifted. 
• "This complaint, in which Tillotson seeks damages for infringement of its nitrile glove technology, was originally filed in 2007, but had no activity while the (US) International Trade Commission (ITC) investigation was active.
• "With the conclusion of that ITC investigation, the Top Glove companies are now required to answer this complaint by the end of April 2010". (Financial Daily) 

Tenaga Nasional has succeeded in getting a RM113m suit by Irham Niaga Sdn Bhd and Irham Niaga Logistic Sdn Bhd struck out at the Court of Appeal. (Financial daily)

Axiata announced its headline FY10 KPIs, with revenue growth of 12.1%, EBITDA growth of 14.1% and ROIC of 10.7%. In establishing the KPIs, the Management took the following into consideration: 1) Increasing competition in tMalaysia, Indonesia, Sri Lanka, Bangladesh and Cambodia; 2) Concentration of the Group’s business activities is in the emerging markets of South and South East Asian region; 3) Currency volatility, liquidity shortages and higher interest rates; and 4) No significant change in foreign exchange rate versus prior year. (Bursa Malaysia)

Axiata's successful placement of its US$300m 10-year bonds is a strong endorement of the company's prospects considering that a similar bond issue by higher-rated Petronas carried similar yields. Proceeds of the bond are to be used to refinance a S$240m term loan granted to SunShare Investments (holding company for M1) which is due in Oct 10. On whether dividends will be paid this year, Axiata's CFO Datuk Yusof Annuar Yaacob said this depends on the capital struture although his personal opinion is that dividends will have to wait until next year. A dividend policy will be announced in 3Q10. (Financial Daily)

Biofuels such as biodiesel from soybeans can create up to four times more climatewarming emissions than standard diesel or petrol, according to an European Union document released under freedom of information laws. The EU has set itself a goal of obtaining 10% of its road fuels from renewable sources, mostly biofuels, by the end of this decade, but it is now worrying about the unintended environmental impacts. (Reuters)

Maxis has fully redeemed and cancelled its RM500m CP/MTN programme and RM500m MTN programme. (Financial Daily)

The iron and steel industry is expected to perform better this year, with demand going up, boosted by the pick-up in the construction sector. International Trade and Industry Minister Datuk Seri Mustapa Mohamed said a new investment of RM300m by a Malaysian company is expected for this industry over the next one to two years. Approved total investments in the metal industry for 2009 amounted to RM3.96bn, a significant drop from RM26.84bn recorded in the previous year. (Bernama)

Iron and steel industry players have cautioned the government to be on the lookout for low-value added companies entering the Malaysian market. "The country should not be recipient of discarded technology since many Chinese steel mills are being scrapped," the Malaysia Iron and Steel Industry Federation (Misif) said. It urged the government to curb companies that produce second-grade materials and do not have industrial standards, looking to enter the market.

• The Apparent Steel Consumption, which is expected to register a 7.5m tonnes production in 2009, is expected to grow by 10-12% this year. 
• Misif also urged the government to accelerate the liberalisation process for flat products instead of 2018, to cope with the competitive environment. (BT)

Malaysia Airlines is expected to mount six additional flights today, subject to the approval of airport authorities, to fly out passengers stranded by flight cancellations due to the volcanic ash cloud over Europe.

• MAS Director of Operations Capt Azharuddin Osman said the additional flights would be KL-Gatwick (London), KL-Amsterdam, and KL-Sydney. The additional flight to Gatwick is fully booked. "As of today, we have managed to clear over 2,500 passengers. However, there are still some 11,000 passengers stranded system-wide, with most of them in Kuala Lumpur." (Bernama, NST)

UMW Holdings plans to make a fresh application sometime this year to list its oil and gas (O&G) business, an official said. Those plans are now being revived, said Suseela Menon, an executive director at UMW Corp, a unit of UMW Holdings. "We'd like to do a fresh submission (to the SC) sometime this year.

• That's our target. But exactly when it's going to be listed would depend on the market conditions," she said. Suseela said it was possible that the listing might happen this year or early next year. It is expected to be "a much bigger listing exercise" than it would have been two years ago as the group now has more companies under its O&G division, she said. 
• There could be more than 30 such companies. Also, a number of entities in the division which were not included in the original listing scheme have since become operational. (BT)

Perodua is now looking into several factors, including the political environment and a suitable partner to market its range of vehicles in Thailand, says MD Aminar Rashid Salleh. The company might enter Thailand by end-10 as part of its move to increase contribution from the export segment.

• The carmaker wants exports to account for 5% of its total sales volume within 3 years and 10% beyond 5 years. It is 2% currently. "We (Perodua) are not happy with the current export figures. We know we can do better," said Aminar. (BT)

Honda Malaysia is confident of selling 1,600 units of its newly-launched Freed, a premium compact multi purpose vehicle (MPV), in its first year of launch. The new model will help Honda Malaysia meet its annual target of 40,000 units this year. MD and CEO Toru Takahashi said the company is confident of achieving the 1,600 sales target, based on response received in countries where Freed has been introduced. (BT)

KUB-Berjaya S/B, the developer and operator of the Bukit Tagar landfill in Selangor, plans to set up a waste recycling plant worth more than RM100m. The company, a 40:60 JV between KUB Malaysia and Berjaya Corp collects 2,500 tonnes of garbage a day from Kuala Lumpur City Hall and the Selayang Municipal Council.

• A bulk is organic waste which the firm plans to process and turn into fertiliser, KUBBerjaya assistant GM Peter Wong said. The Bukit Tagar sanitary landfill is a government-funded project and KUB-Berjaya would need approval to build the plant. 
• KUB-Berjaya is negotiating the concession agreement with the government. It hopes to sign a 30-year concession within the next few months, Wong said. "The Economic Planning Unit and the Ministry of Finance are finalising the agreement now," he said. (BT)

The selling price of processed food such as cereal products and candies, which use sugar as the key ingredient, is likely to go up in the second half of 2010 due to rising raw material and packaging costs. This is because small and medium producers of processed food are finding it hard to maintain a decent profit margin.

• Inscereals MD Lee Guan Soon said due to the higher raw material prices, there had to be some 10% to 15% increase in selling price. Sugar comprises about 30% of the raw materials of Inscereals’ cereal products. (Starbiz)

Fraser & Neave Holdings (F&N) plans to sell its “Ampang Hilir 233” project on Jalan Ampang, Kuala Lumpur, to Star Residence Sdn Bhd for RM53.8m. F&N, via its unit Elsinburg Holdings Sdn Bhd, yesterday entered into a sale and purchase agreement with Star Residence for the 1.44-acre 0.58ha development, which comes with approved building plans for two blocks of serviced apartments, signature offices and retail outlets. Upon completion of the proposed disposal in 2HFY9/10, the F&N group is expected to derive a gain of RM21.98m. (BT)

Nestle (Malaysia) will spend between RM130m-RM140m this year to increase production capacity and for product innovation. "We will be spending the money to increase capacity, (product) renovation, and replacements," Nestle finance and control executive director Marc Seiler said. The spending this year will be lower than last year's RM257m, which was mainly for new manufacturing lines.

• Nestle MD Peter R. Vogt said the company may see a lower second-quarter earnings compared with its first-quarter results due to higher advertising and marketing promotions. (BT)

Bangkok Bank will have four branches in Malaysia by end of this year. The bank which has its headquarters in Kuala Lumpur, opened its first branch on Jalan Bakri, Muar, several weeks ago. The second was officially opened in Taman Molek here Thursday. "Another two branches will be opened in Klang and Penang by end of this year," said Bangkok Bank Chairman Staporn Kavitanon. (Bernama)

HLG Capital (HL Cap) wholly owned subsidiaries Hong Leong Investment Bank (HLIB) and HLG Futures Sdn Bhd (HLG Futures) have signed a business transfer agreement that will see the latter transferring all its assets, liabilities, activity, business and undertaking to the former, effective July 31,2010, or at a later agreed transfer date.

• HLCap said the consideration for the transfer of the HLG Futures business would be based on the value of the net assets of HLG Futures as at the transfer date, and would be satisfied by HLIB in cash. It said the proposed exercise would enhance the operational efficiency of the merged entity. (Malaysian Reserve)

Encorp plans to buy a piece of freehold land in Pulai, Johor, from UEM Land for RM26m to build commercial and residential properties. It plans to build properties with an indicative gross development value of RM330m, Encorp said. Work is due to start in 2011 and span five years. (BT)

Northport, the country’s largest multi-purpose port operator, has posted a 26% growth in the volume of containers handled in the first three months this year to 779,867 TEUs. The increase in the volume of containers handled was one of the strongest in recent years and exceeded all expectations considering that the container traffic fell marginally by 2% last year on account of the global economic slowdown.

• Based on the demand-side developments, cargo volumes at Northport could increase between 10% and 15% in 2010 compared with the volume of containers handled in 2009. (Bernama, Star) 

Malaysia’s largest nursing school operator, Masterskill Education Group, plans to raise as much as RM779m from its initial public offering, according to the term sheet. The company, which provides medical nursing training services through Masterskill University College of Health Sciences, set the indicative price range of its offering of up to 205 million new and existing shares at RM3.00-RM3.80 each. (BT)

The auction price for Putra Place, located opposite the Putra World Trade Centre in Kuala Lumpur, has come down by a tenth to RM571.05m as there have been no bids to date. On Wednesday, the Kuala Lumpur High Court set June 28 as the new auction date.

• Putra Place, which houses The Mall shopping complex, Legend Hotel and an office tower, failed for a second time to attract a buyer, resulting in the price cut. Commerce International Merchant Bankers (CIMB) is selling Putra Place to recover loans given to property owner Metroplex Holdings. (BT)

Datuk Ramesh Rajaratnam, who is suing Malaysian Merchant Marine Bhd (MMM) over his employment contract with the firm, said the reason he reduced his shareholding in the company since the third quarter of last year was to finance the operations of MMM.

• “It may look otherwise, but I was selling my shares to fund MMM as most of my monies are tied up in MMM,” he said. He said under his stewardship, MMM had negotiated a deal that would have “moved the company to another playing level.” “The company needed some funds until we closed that deal and approached me to help out with shortterm advances, as nearly all our corporate facilities were exhausted. So, I sold a significant stake in MMM. I need to recover whatever I can now.” he said. (Starbiz)

Murphy Oil Corp said that its interest in two blocks offshore Malaysia has been terminated after a dispute over control over the assets. The offshore exploration areas designated as Block L and Block M are no longer a part of Malaysia, the country's state oil company told Murphy after Malaysia and Brunei determined the designated offshore areas are no longer a part of Malaysia. Murphy's potential participation in replacement production sharing contracts covering these areas is under discussion, the company said. (Reuters)

After just over a month in the hot seat as non-exec director tasked with turning the beleaguered Ho Hup Construction Co around, Hew Thin Chay has resigned from his position on the board, citing personal commitments. (Financial daily)

20100423 0923 Malaysian Economic News.

Bank Negara Malaysia's international reserves amounted to RM313.1bn (US$95.7bn) as at 15 Apr. The reserves position is sufficient to finance 8.8 months of retained imports and is four times the short-term external debt. That compared to RM311.7bn (US$95.3bn) as at 31 Mar. (BNM, Bernama)

The revised domestic mail tariff effective July will not burden the people, Information Communication and Culture Minister Datuk Seri Dr Rais Yatim said. On the other hand, the tariff revision would benefit over 15,000 staff of Pos Malaysia. The tariff revision would save RM76m in subsidy and increase the salary and allowance of Pos Malaysia staff from RM100-RM300. (Bernama)

Starting 1 Jul, about 150,000 local safety officers in the security industry will enjoy a salary hike ranging from 67%-75%. Human Resources Minister Datuk Dr S.Subramaniam said they would take home between RM1,100-1,450 per month more following the pay rise. The present salary for the workers in the industry ranges from RM300-400 a month. "We will increase the salaries based on the various geographical zones and the details will be released later. A similar process would be done for the textile, electronic and hospitality industries,” he added.
·    Subramaniam also said that the ministry was reviewing the labour laws to promote economic growth in accordance with the New Economy Model announced by the prime minister. (Bernama)

The Government's public debt was RM362.4bn (53.7% of GDP) as at 31 Dec 09. PM Datuk Seri Najib Tun Razak said a major portion of the debt was domestic debts amounting to RM348.6bn (96.2% of total debt) while the remaining RM13.9bn (3.8%) was external debts. "The small amount of external debt is in line with the government's current policy which prioritizes domestic borrowings to finance the country's development projects as the cost is cheaper and there is less exposure to foreign exchange risk," Najib added. (Bernama)

Malaysians need at least RM1m in retirement savings to live comfortably, says Sasitharan Krishnan, Senior Director Customer Relations ReMark Malaysia. He said based on research undertaken, most retirees were unable to reach the needed savings and this caused them to look for jobs, even though retired. It was because they did not plan their finances early and lack of a savings discipline. The study also showed that savings in the Employee Provident Fund (EPF) only lasted for 3 years. (Bernama)

Malaysian investors need not worry about investing in Thailand despite the ongoing political troubles the country is facing at the moment, Thai Finance Minister Korn Chatikavanij said. He pointed to the country's stock and currency exchange were continuing to perform well.

• Under the Stronger Thailand 2012 project, a total of THB1.4tr had been endorsed for infrastructure development that would not only raise the image of the nation as a progressive state but also invite foreign investment. (Bernama)

20100423 0919 Global Economic News.

US sales of existing single-family homes, town homes, condominiums and cooperatives jumped 6.8% in March to a 5.35m annual rate, while inventories of unsold houses improved after a February surge, the National Association of Realtors reported. (Xinhua)

US initial jobless claims fell for the first time in 3 weeks. There were 456,000 initial jobless claims filed in the week ended April 17, down 24,000 from a revised 480,000 the previous week. Economists surveyed had expected new claims to fall to 450,000 in the latest week. The number of new claims was the lowest since the 442,000 reported in the week ended March 27.

• The number of people filing continuing claims totalled 4,646,000 in the week ended April 10. That figure was down 40,000 from the preceding week's revised 4,686,000 claims, and slightly above the 4.6m economists expected. (CNN Money)

US producer prices rose more than forecast in March, boosted by higher costs for energy and the biggest gain in food prices since 1984. The 0.7% increase in prices paid to factories, farmers and other producers followed a 0.6% drop in February. Excluding fuel and food, so-called core prices rose 0.1% for a second month, restrained by cheaper autos and appliances. (Bloomberg)

Federal Reserve supervisors are telling about two dozen of the largest US banks they must do more to end pay practices that encourage excessive risk-taking and are ordering boards to step up scrutiny of incentives, according to three people briefed on the discussions.

• Fed officials met in recent weeks with executives and board members and told them to submit plans for repairing deficiencies in how they monitor pay. Firms in the Fed’s review program include Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co., Bank of America Corp. and Morgan Stanley, one of the people said. (Bloomberg)

The Federal Reserve banks transferred an extra-large payload to the US Treasury last year, as they reaped interest from Wall Street bailouts. The 12 Federal Reserve banks reported that their 2009 income totalled US$53.4bn, a jump of US$17.9bn from the year before. The board of governors of the Federal Reserve system attributed this increase to a surge in the holding of mortgage-backed securities to prop up the devastated housing market. (CNN Money)

Europe’s services and manufacturing industries expanded more than economists forecast in Apr 10 as an export-led recovery prompted companies to step up production. The composite purchasing managers’ index rose to 57.3 in April (55.9 in March), the highest since Aug 07. Economists forecast an unchanged reading, the median of estimates in a survey showed. (Bloomberg)

The euro area’s budget deficit widened to more than double the European Union’s 3% limit in 2009, led by Greece and Ireland. The total budget gap for the 16-nation euro region widened to 6.3% of gross domestic product last year, the biggest since the introduction of the euro in 1999, from 2% in 2008. At 14.3% of GDP, Ireland had the largest shortfall, while Greece’s deficit was 13.6%. (Bloomberg)

Thailand’s exports rose the most in 20 months in Mar 10 as overseas demand for electronics and agricultural products helped support an economy threatened by political unrest. Shipments climbed 40.9% yoy in March (23.2% in Feb) to US$16.25bn last month. The median estimate in a survey was for a 33.2% gain. (Bloomberg)

Hong Kong’s inflation rate fell in March after Lunar New Year celebrations helped drive price gains to a 13-month high in February. Prices rose 2% in March (2.8% in Feb), matching the median estimate in a survey. (Bloomberg)

The Philippine central bank said it will consider raising interest rates in the coming months as it boosts inflation forecasts amid an economic recovery. Bangko Sentral ng Pilipinas pared a lending program for banks by reducing the budget for its so-called rediscounting facility to PHP20bn pesos (US$450m) from PHP40bn, effective 3 May. Policy makers kept the benchmark interest rate at a record-low 4%. (Bloomberg)

Indonesia’s bank lending growth may reach 20% this year, or the higher end of the central bank’s forecast of between 18%-20%, Bank Indonesia Deputy Governor Muliaman Hadad said. (Bloomberg)