Monday, 31 December 2012

JPMorgan is planning to shut down its retail banking operations in Malaysi

JPMorgan Chase & Co, a leading global financial services firm with assets worth US$2.3tr (RM7 tr), is planning to shut down its retail banking operations in Malaysia, according to Zacks Equity Research. According to the investment research house, JPMorgan is aiming to limit its retail banking operations worldwide with a major focus on domestic markets, but is willing to continue with its wholesale banking operations globally. (BT)

China textile firms to invest RM500m in warehouse in M'sia

Thirty-seven textile manufacturers from the China Textile Industry Association have agreed to invest RM500m to build a textile warehouse complex in Bandar Baru Kijal, Kemaman, in a move to expand their operations to Malaysia. (Bernama)

OCK eyes transfer to Main Market

Newly-listed OCK Group Bhd aims to transfer to the Main Market of Bursa Malaysia in mid-2013, possibly in May or June.
  • The company’s move up from the Ace Market was part of its strategy to clinch more businesses, both locally and abroad, group managing director Sam Ooi told StarBiz in an interview.
  • Next year, it expects a double-digit growth in revenue. (StarBiz) 

Source: CIMB Daybreak - 31 December 2012

Sentoria Group to develop a RM1.5bn theme park in Morib, Selangor

Sentoria Harta Sdn Bhd, a wholly owned subsidiary of Sentoria Group Bhd, is set to develop a RM1.5bn theme park in Morib, Selangor in a joint venture with a government-linked fund, a source said.
  • The theme park, called Morib Beach Resort City, will be developed over the next eight to ten years.
  • Designed as an integrated resort city, the theme park will consist of a water theme park, a safari park, a resort and convention centre and a boutique hotel. The 121ha land, estimated to be worth some RM20m, belongs to the government-linked fund and will be developed on a profit-sharing basis.
  • The land is sited close to the Kuala Lumpur and Putrajaya vicinities. (StarBiz) 

Protasco ventures into the oil and gas business in Indonesia

Construction and property developer Protasco Bhd is venturing into the oil and gas business in Indonesia.
  • It is buying 75% in oil and gas outfit PT Anglo Slavic Indonesia (PT ASI Group) from PT Anglo Slavic Utama for US$55m (RM168m).
  • It will fund the purchase via bank borrowings and issuance of new shares.
  • PT ASI Group operates 30 oil wells in KST Field located in Aceh Tamiang Regency of Nanggroe Aceh Darussalam Province. It is part of a bigger Rantau Block which has a total number of 600 production wells. (BT)

Privatisations of Tradewinds and two listed subsidiaries to cost RM2.5bn?

The offer to privatise Tradewinds (M) Bhd and its two listed subsidiaries will cost Tan Sri Syed Mokhtar Albukhary up to RM2.5bn.

  • People close to the deal said the fund to take over Tradewinds, Tradewinds Plantation Bhd and Padiberas Nasional Bhd (Bernas) will come from bank loans and internally generated funds.
  • They also said the privatisation will enable the low-profile businessman to restructure the three companies and eventually relist them into four separate business divisions, namely oil palm, sugar, rice and rubber. (BT)

EITA plans to expand operations, double turnover next year

EITA Resources Bhd is now busy charting its next course of action for 2013 and beyond, with its eye on the Asean region. EITA managing director Fu Wing Hoong tells StarBizWeek that not only has its overall business grown, so have contributions from overseas clients.
  • For 2013, he is setting his eyes on expanding the company's operations, which could potentially double its turnover depending on the product sales mix.
  • “We are currently waiting for the delivery of the 2.9 acres of land acquired in Bukit Raja. The proposed facility could more than double our current existing manufacturing capacity,” he says.
  • The RM12.3m elevator manufacturing facility would include an elevator test tower, and would expand the group's scope of services currently provided through its existing plant in Subang Jaya. Besides that, the facility would also expand EITA's research and development arm, envisioned to come up with more innovative and technologically advanced elevator components suited for the industry. (StarBiz) 

RHB Islamic: 2 more branches in 2013

RHB Islamic Bank Bhd aims to strengthen its domestic operations by opening two more branches in 2013, said managing director Abdul Rani Lebai Jaafar. Currently, RHB Islamic has 14 branches nationwide. He said the expansion plan was in line with the bank's strategy to expand operational footprint not only in the region but also on the international stage. (Bernama)

JKSB aims to recover construction cost within 10 years

Jambatan Kedua Sdn Bhd (JKSB) aims to recover the Second Penang Bridge's construction cost of RM4.5bn within 10 years of operations. Managing director Datuk Dr Ismail Mohamed Taib is positive that the construction cost would be recovered within the timeframe due to rapid developments in the surrounding areas. He also noted that the Batu Kawan and Balik Pulau areas would benefit from the bridge as economic activities become more focused in the districts with the new bridge. (Bernama)

Malaysia Pacific expects to return to black

Malaysia Pacific Corporation Bhd (MPC) expects to return to the black next year, said president and chief executive officer Datuk Bill P. Ch'ng. He said that earnings mainly would be driven by full optimisation of its Wisma MPL asset in Kuala Lumpur and higher rental collections and occupancy rate. (Bernama)

MNGV and Jeffa formed SPV to collaborate on a RM7bn investment

Malaysian NGV Sdn Bhd (MNGV) and Jeffa Holdings Sdn Bhd have formed a special purpose vehicle (SPV) to jointly collaborate on a RM7bn investment comprising a regasification plant in Pasir Gudang, Johor, and 200 natural gas stations nationwide. The SPV, called Malaysian NGV Venture Capital Sdn Bhd, may issue foreign-denominated bonds, including Islamic bonds, for the purpose of financing the project, MNGV president and chief executive officer Rahmat Ahmad said at a media briefing. The project is expected to be completed by 2016. Jeffa, which will facilitate the funds for this project, has a 60% stake in the SPV while the remaining stake is held by MNGV. (Source: StarBiz)

KEURO recorded RM7.52m net loss

Kumpulan Europlus Bhd recorded a net loss of RM7.52m for its third quarter ended Oct 31 compared with a net profit of RM1m in the previous corresponding period. The loss reported in the current quarter was due to a share of losses in associates of RM2.9m, a provision for doubtful debt of RM1.83m and a finance cost of RM2.31m. (StarBiz)

Yinson's 49% PTSC raises US$300m loans to convert FPSO

Yinson Holdings Bhd's 49%-owned PTSC Asia Pacific Pte Ltd has raised up to US$300m (RM918m) to fund the conversion of its floating production storage and offloading system (FPSO).
  • Yinson said PTSC, in which PetroVietnam Technical Services Corp owns the other 51%, had on Friday completed the signing of a senior secured loan facility with Singapore's Oversea-Chinese Banking Corporation Ltd and United Overseas Bank Ltd.
  • The conversion of the FPSO was necessary under its engineering, procurement, construction and installation contract and a bareboat charter contract, valued at US$733m (RM2.21bn).
  • Yinson said that upon delivery of the FPSO, the vessel would be chartered to Lam Son Joint Operating Co. Lam Son is jointly owned by PetroVietnam Exploration Production and Petronas Carigali Overseas Sdn Bhd. (Source: StarBiz)

Airlines positive for next year despite Malindo factor

The vibrant Malaysian aviation sector is expected to spur further growth next year with potential competition expected from new entrant, Malindo Airways, which is poised to hog the industry limelight.
  • The new low-cost airport, klia2, scheduled for operation in May 2013, is also expected to increase the number of airlines arriving in Malaysia, thus increasing competition in the low-cost segment. With so much competition expected in the local aviation industry next year, MAS remains cautiously optimistic of a challenging operating environment. (Bernama) Bhd will further beef up its investment next year Bhd, which has invested RM700m to RM750m on its telecommunication network this year, will further beef up its investment next year partly to drive its marketing ambitions to spur its mobile Internet business.
·         DiGi Telecommunications Sdn Bhd chief marketing officer Albern Murty says this will involve segmenting the customers and providing different packages to meet their needs.
·         “The investment of between RM700m and RM750m this year is part of our telecommunication network investment to provide customers with better Internet experience and to differentiate ourselves from other telco players in the market. We will continue to upgrade the company's network for better speed and data, including long-term evolution or 4G services, in 2013.
·         “Today, we have 3G sites covering about 60% of the population, and DiGi hopes to push it to about 70% in the first half of next year. For data, the coverage is about 95% of the population, including both 2G and 3G sites,'' he tells StarBizWeek in a recent interview. (StarBiz)

Felda Global Ventures Holdings may sell its 20% stake in Tradewinds

Felda Global Ventures Holdings Bhd (FGV) may sell its 20% stake in Tradewinds (M) Bhd, worth an estimated RM551.5m, to fund future land expansion. FGV president and chief executive officer Datuk Sabri Ahmad said if the company decides to sell the stake, the proceeds will be used in its upstream sector, which is to buy more plantation land. (BT)

CIMB Political News - 31 December 2012

State DAP chairman Datuk Ngeh Koo Ham has been challenged to disclose the amount paid by his company for a piece of land in Kelantan. State exco member Datuk Hamidah Osman said Ngeh had been evading the issue although the matter was raised at the last state assembly sitting.
·         At the last sitting, Hamidah alleged that Ngeh and state DAP secretary Nga Kor Ming had received a piece of land from the Kelantan Government after Datuk Seri Mohammad Nizar Jamaluddin from PAS was made Menteri Besar in 2008. (The Star)

PAS president Datuk Seri Abdul Hadi Awang has come under fire for asking for a live television slot to explain his “Amanat Haji Hadi” (Haji Hadi’s Message) delivered in 1981, branding Umno members and supporters as “kafir” (infidels).
·         Perak mufti Tan Sri Dr Harussani Zakaria, in describing the request as unacceptable, said as a Muslim leader, Hadi needed to learn to have a sense of “tawadduk” (humility) and admit his mistake instead. (NST)

The Selangor government announced today that it will scrutinise and possibly stop Putrajaya's plans to purchase a piece of land in Bukit Raja that has been in the center of power abuse allegations against the Barisan Nasional (BN) government by businessman Deepak Jaikishan.
·         Selangor Menteri Besar Abdul Khalid Ibrahim's political secretary Faekah Husin said the state has ordered the Selangor Land and Mines Department to examine the deal for any possible breach of legal procedures. (Malaysian Insider)

CIMB Global Economic News - 31 December 2012

US House and the Senate were due back in session Sunday, for what could be a dramatic 36 hours up to the turn of the year, for a stop gap deal to avert the fiscal cliff.
·         If leaders fail to find an agreement, President Obama has demanded a vote on his fall back plan that would preserve lower tax rates for families on less than US$250,000 a year and extend unemployment insurance for two million people.
·         Should Republicans block that attempt, they would face being lambasted by angry voters who see their taxes shoot up. Some reports said the Republicans were working on a deal to put the higher taxes threshold at around US$400,000 a year. (AFP)

The US Chicago PMI moved up to 51.6 in Nov (50.4 in Oct), to indicate accelerating growth in month-to-month business activity. The market expected a reading of 51.0. (Bloomberg)

US pending home sales rose 1.7% mom in Nov (+5.2% in Oct), slightly below market consensus of 1.8%. Fewer distressed properties on the market and very low interest rates are boosting the housing sector. (Bloomberg)

The People’s Bank of China will focus on controlling risks in the financial system and will seek "stable and appropriate" growth in aggregate financing, a measure of funding that includes loans, stock and bond sales. (Bloomberg)

Japan’s industrial output fell 1.7% mom in Nov, more than triple the median market forecast for a 0.5% decline. That followed a 1.6% gain in Oct, which was the first rise in four months. (Reuters)

Japanese wage earners' cash earnings fell 1.1% yoy in Nov (+0.4% in Oct), declining for a third straight month as the export-reliant economy struggled with falling demand. (Reuters)

South Korea’s industrial output grew by a seasonally adjusted 2.3% mom in Nov following a revised 0.7% gain in Oct, marking the strongest growth since Jan. (Reuters)

Indonesia Chambers of Commerce and Industry (Kadin) chairman Suryo Bambang Sulisto said the power price increase of 15% will certainly raise operational costs and force some industry players to push it onto consumers by adjusting the price of their products to cut their budgets. (Jakarta Post)

Indonesia Finance Ministry is considering the imposition of taxes on foreign borrowing of the private sector in a bid to put the brakes on the escalating increase of the country’s corporate foreign debt. “The tax imposition will be introduced later: first we will set rules requiring private companies to report their foreign exchange loans,”the ministry said. (Jakarta Post)

Indonesia’s Energy and Mineral Resources Minister Jero Wacik confirmed that the government will introduce a new electricity tariff starting 1 Jan that will see the rate increasing by 4.3% once every three months. (Jakarta Globe)

The Thai government hopes to achieve 4.5 to 5.5% economic growth in the year 2013 and believes this year's growth will be around 5%, Prime Minister Yingluck Shinawatra said. (Bangkok Post)

Thailand’s fiscal deficit stood at THB264.56bn or 2.2% of GDP for fiscal 2012, reflecting the administration's injection of funds into the economy via a range of stimulus measures. This was up THB8.9bn from the previous fiscal year. (The Nation)

Thailand’s economy in Nov 2012 continued to expand, according to the Bank of Thailand’s monthly economic analysis.
·         Private spending, both consumption and investment, remained the key drivers of growth, while merchandise exports also picked up, all of which led to a noted improvement in manufacturing production.
·         The current account reversed into a surplus of US$392m (-US$199m in Oct), in line with market consensus estimates of US$240m. (Bloomberg, Bank of Thailand)

The Philippine government’s financing position in the 11 months to Nov showed a net borrowing of PHP477bn, or about five times the PHP99.7bn registered in the same period last year. (Business Inquirer)

Economic Update - Nov monetary tracker: Still in low gear

Overall loan growth slowed further to 11.2% yoy in Nov for four months in a row, with both household and business sectors dragging their feet. Most loan indicators remained weak in Nov, with business sector showing a bigger pullback in growth. With the base effect at work amid the lingering impact of responsible lending guidelines, we maintain our slower loan growth target of 10-11% for 2013 vs. estimated 11-12% for 2012.

Adventa - Year end departure

Target RM2.10 (Short Term: Trading Buy) 

We cease coverage on Adventa as its glove business has been taken private by the founding Lim family for RM2.10/share. Adventa intends to remain listed on Bursa and will retain RM0.40/share to build an integrated healthcare company. Our last rating was Trading Buy. Adventa will focus on building its home dialysis business, which in Malaysia is valued at RM800m annually and is growing by 12% p.a. according to Adventa. For exposure to the rising demand for examination gloves, we recommend Hartalega.

CIMB Daybreak - 31 December 2012

What’s on the Table...
  • Adventa - Year end departure
  • Economic Update - Nov monetary tracker: Still in low gear

News of the Day...
  • Felda Global Ventures Holdings may sell its 20% stake in Tradewinds.
  • Bhd will further beef up its investment next year.
  • Privatisations of Tradewinds and two listed subsidiaries to cost RM2.5bn?
  • Protasco ventures into the oil and gas business in Indonesia.
  • Sentoria Group to develop a RM1.5bn theme park in Morib, Selangor.
  • The US Chicago PMI moved up to 51.6 in Nov.

Click here for the full PDF report 

Friday, 28 December 2012

China Auto to issue 90mil shares

China Automobile Parts Holdings Ltd, an automobile chasis manufacturer, is heading for a listing on the Main Board of Bursa Malaysia by the end of January 2013, joining 8 other Chinese companies listed on the local bourse. The Fujian-Province based company will be issuing 90m new shares, out of which 30m shares will be made available to public via balloting. The remaining 60m shares are earmarked to be placed out to selected investors. There was no offer price mentioned in its statement by its company. (Financial Daily)

HeiTech Padu accepts RM34m deal

HeiTech Padu Bhd has accepted a letter of award for the provision of services of master out-sourcing agreement for IT services from Permodalan Nasional Bhd worth RM34m. The contract is for a period of two years commencing from Jan 1, 2013 to Dec 31, 2014, with an option for an extension of one year upon the agreement of both parties. (Bernama)

Icon Offshore buys two vessels

Icon Offshore Bhd, through its subsidiaries, has purchased two units of anchor-handling tug supply vessels from Nam Cheong International Ltd, Labuan, a subsidiary of Nam Cheong Ltd, the largest offshore support vessel builder in Malaysia. The vessels, which are of American Bureau of Shipping Class, are expected to be delivered in the first quarter of 2013. (StarBiz)

See Hup private placement of 5.6m new ordinary shares

See Hup Consolidated Bhd has announced a private placement of 5.6m new ordinary shares of RM1 each, together with 11.2m free warrants on a two free warrants for every one placement share subscribed basis, at an issue price of RM1 per placement share. (StarBiz)

Kenanga drawn to ING Fund’s PRS licence?

The private retirement scheme (PRS) licence held by ING Funds Bhd was a key factor in its acquisition by K&N Kenanga Holdings Bhd, sources said, a move its new owners expect to pave the way for Kenanga to become a PRS provider. Plans for Kenanga’s own PRS, however, are still being worked out, as its purchase of ING Funds is only slated to be wrapped up by the first quarter of next year, pending regulatory approvals. (StarBiz)

Yinson made RM8.5m in net profit 3QFY12

Yinson Holdings, an integrated off-shore support services provider, made RM8.5m in net profit for the 3QFY12, ended 31st Oct 2012, a rise from RM8.07m in the previous corresponding quarter . On a cumulative 9-months period ended 31st Oct 2012, it made 40.4% increase to RM29.1m. Yinson attributed the increase in revenue and profits were due to improvement in the volume of sales and contribution from the trucking, trading and marine transport businesses. (Financial Daily)

KKB secured a RM10.3m steelworks

KKB Engineering Bhd has secured a RM10.3m steelworks at the University College of Technology Sarawak and a technology park in Sarawak. KKB said it has accepted a letter of award for the supply, fabrication, delivery and erection of structural steelworks for the university's corridor roof structure. (Financial Daily)

Boustead acquired 200 acres of land for RM130m

Boustead Holdings, through its subsidiaries Bakti Wira Development and Astacanggih Sdn Bhd has acquired 200 acres of land in Kapar and Bukit Raja in Klang, Selangor for RM130m from Awan Megah (M) Sdn Bhd. Boustead is optimistic on the prospects of the three land parcels as their location are within the Bukit Raja vicinity, which has good accessibility to major highways and is in close proximity with established housing projects. The acquisition of these parcels of land are just adjacent to a 700 acres of development land held by Jendela Hikmat Sdn Bhd, a company in which Boustead and Lembaga Tabung Haji jointly hold a 60% equity interest. The company added that the combine landbank of 900 acres would provide economies of scale for development in terms of shared infrastructure and other services (Financial Daily).