Scomi picks Time as sole network provider

KUALA LUMPUR: Scomi Group Bhd (Scomi), a global oilfield services, transport solutions and marine services provider, has appointed TIME dotcom Bhd (TIME) as the sole network provider to meet its global connectivity needs across five countries.

The partnership includes the design, implementation and full management by TIME of Scomi's Private Data Network connecting Scomi's offices in India, Indonesia, United Arab Emirates, United Kingdom and Malaysia.

TIME chief executive officer Afzal Abdul Rahim said the deployment of Scomi's global network solutions is a result of TIME's efforts in building strategic network partnerships, allowing TIME to extend its reach to over 60 countries today.

"As a leading Malaysian multinational, Scomi's trust in our technical capabilities to deliver critical network services for its global operations speaks volumes of our ability to support companies with a global presence.

"This opportunity to work with Scomi comes as an endorsement to our regional expansion strategy. We hope this partnership serves Scomi's business well and will lead to a satisfying long-term working relationship for both companies," said Afzal.

He said TIME's Private Data Network will help facilitate collaboration between Scomi's global project teams and its global headquarters in Malaysia by allowing for faster cross access to shared applications.

Bank stocks rise on talk of higher foreign stake cap

KUALA LUMPUR: Banking stocks rose yesterday on talk that Bank Negara Malaysia (BNM) may raise the foreign ownership cap in commercial banks.

It is believed that the central bank will include the measure in its Financial Sector Masterplan (FMSP), which is due to be unveiled by year-end.

Among the sectoral movers, Maybank rose by 30 sen to RM8.32. Affin Bank up 4 sen to RM2.96, CIMB edged up 6 sen to RM7.36, AMMB 1 rose sen to RM5.97, BIMB grew 6 sen to RM2.07, Public Bank gained 2 sen to RM12.52 and Alliance Banking Group inched up 2 sen to RM3.42.

Analysts said in preparation for the FSMP, the central bank has been in talks with the banking sector, compiling feedback on what steps are needed to further liberalise the financial sector.

The last time such liberalisation took place was in 2009 when the government raised foreign equity limits from 49 per cent to 70 per cent of investment banks, Islamic banks, insurance companies and takaful operators.

The limit for commercial banks, however, remained at 30 per cent.

The rationale behind the move was to enhance the growth of financial institutions through the involvement of the global network of foreign shareholders.

Analysts, however, said it may not be wise to raise the cap on foreign shareholding, given the current global economic downturn.

"Even if BNM wants to do so, it has to be on a gradual or staggered time frame," said an analyst.

In a statement to Bernama, the National Union of Bank Employees (NUBE) expressed its concern over the matter, saying that the move has to be studied carefully.

Its secretary-general, J. Solomon, said with what is going on in Europe and its banks, any liberalisation in Asia may attract the European banks' interest for all the wrong reasons.

"Malaysia should not allow itself to be used by foreign banks for their own interests."

He said in drawing up the second financial sector masterplan, BNM should recognise the direction of the global economy and have the foresight to chart what is right for the economy and society.

Prime Minister Datuk Seri Najib Razak had in March said Malaysia was ready to relax its bank ownership rules and allow for foreign ownership of local financial institutions to go above 30 per cent.

AmBank and Affin Holdings are among Malaysian lenders with foreign shareholders.

The Australian and New Zealand Banking Group holds 24 per cent of AmBank and the same equity is being held by Hong Kong's Bank of East Asia in Affin Holdings.

Resorts World Casino NYC to open Oct 28

KUALA LUMPUR: Even as lobbying goes on for a gaming licence in Miami, the Genting Group’s Resorts World Casino New York City (RWNY) is set to open in 10 days at the Aqueduct Racetrack in Queens. The opening has been set for Oct 28, 1pm New York time (1am, Oct 29 here), according to information posted on the RWNY website.

The New York casino, with 5,000 gaming machines spread over two floors, will kick off with 2,485 video lottery terminals and electronic table games. The remainder are expected to be in place by Jan 1 next year, local daily the Saratogian reported last Friday.

The intention is to have the entire 700,000 sq ft development fully open by mid-December, just in time to capture the Christmas and New Year crowd, the Singapore Business Times (SBT) reported on Monday, quoting RWNY president Michael Speller.

An estimated US$5 billion (RM15.6 billion) a year leaves New York to casinos in the neighbouring states of Pennsylvania, Connecticut, and New Jersey, the SBT report said. One of RWNY’s two main target markets is the mid-level and VIP customers who have been travelling to casinos in other states, Speller said. The other is the 50 million plus passengers flying into the nearby John F Kennedy international airport every year, whose transit time could be as long as six to eight hours.

RWNY expects to generate as much as US$800 million a year in gaming revenue and in excess of US$300 million a year in tax revenue for the state of New York, the SBT report said, adding that the intention is to set aside 1% of pre-tax earnings for local community projects including education funds.

For a start, what is called the Times Square Casino on the first floor, which will open on Oct 28, will have at the heart of its gaming floor a bar and lounge with a theatre in the round for live music, comedy and other entertainment including Broadway-themed performances, the Saratogian report said. Apart from the 200-seat theatre, Bar 360 and Lounge will also broadcast live action from major sporting events via a 28ft by 18ft high-definition television screen — the biggest in Queens. Besides the Aqueduct buffet spread, a new food court featuring familiar local fare like Wolfgang Puck Express, Stage Deli and Queens Burger will also be opened.

A second casino floor — the 5th Avenue Casino and Crockfords Casino — will open later this year along with the 130,000 sq ft Central Park Events Center, reportedly set to be the largest event space in Queens. According to the RWNY website, the events centre has a capacity for 5,000 people, while another open-air venue can hold 10,000 people and is enough to host New York Fashion Week, the NYC Food, Wine Festival and Independence Day celebrations as well as summer concerts. Also to open on the second floor will be RW Prime Steakhouse and the Chinese-themed Genting Palace.

More importantly, a new covered sky bridge connecting Resorts World directly to the Aqueduct subway station “will be fully operational by end-2011”, earlier than the initial target of 2012, which is expected to greatly boost accessibility.

The project has created at least 1,350 jobs, RWNY’s Speller reportedly said. Previous press statements had highlighted that three massive construction bids were awarded to local Queens subcontractors — a factor that could help boost Genting’s case as it steps up lobbying for a full casino licence in Miami, Florida, where legislators are expected to hear a bill at its next sitting which begins on Jan 12 next year. More than one-third of construction sub-jobs at RWNY awarded to minority and women-owned business enterprises was also highlighted.

The Saratogian also quoted New York Racing Association president and CEO Charles Hayward as saying fatter purses from the opening will be a boon for the thoroughbred industry. Racetrack operator NYRA expects to rake in US$30 million next year alone, and is reportedly planning more than US$100 million worth of capital investments to improve the Saratoga Race Course over several years.

RWNY — with more than 4,500 slot machines and 475 electronic table games for everything from baccarat to roulette — is part of New York Lottery’s video lottery programme, where all gaming machines are supplied by Lottery and are controlled by a state-wide computer system also operated by Lottery.


This article appeared in The Edge Financial Daily, October 18, 2011.

Boustead project called off

George Town: The Penang state government has cancelled a plan to allow Boustead Holdings Bhd (BHB) to reclaim up to 0.16 hectares of land off the Penang Bridge.

Boustead was initially given the rights as part of compensation package for agreeing to scale down a hotel development project in the state's heritage zone.

A statement from Chief Minister Lim Guan Eng's office, obtained by Business Times yesterday, noted the decision was made following public consultation and a legal notice sent by Boustead to a state assemblyman who was defending his constituents in the affected area.

"After much public consultation, the Penang State Government has taken cognisance of the views of the residents of Putra Marine, Gold Coast and Bay Garden and decided not to pursue the land reclamation at Bayan Bay to Boustead.

"To pursue the land reclamation deal with Boustead under the shadow of the legal notice of defamation sent by Boustead to (Pantai Jerejak) assemblyman Sim Tze Sin is wholly inappro-priate," Lim said in the statement.

"Boustead will still be required to comply with the World Heritage building height control of 18 metres within the heritage core zone of George Town.

"The form of compensation to be paid and whether it should be paid," Lim added, "is still subject to further negotiations with Boustead".

Boustead was in the midst of constructing a one-block 300-room Royale Bintang Hotel in George Town's heritage zone in 2009, when works were halted following reports the development could place George Town's heritage status in jeopardy.

Boustead is one of four developers who have been singled out for undertaking projects exceeding the height restriction in the heritage city's buffer and core zone.

The others are Asian Global Business (AGB) Sdn Bhd, Eastern & Oriental Sdn Bhd and the Low Yat Group.

All the firms had approval from the Penang Island Municipal Council for projects exceeding the 18m limit, well before George Town was placed on the World Heritage List in July 2008.

Last year, Boustead said it was seeking compensation from the Penang state government for agreeing to reduce the height of its proposed hotel. It is learnt that the company had sought RM20.8 million as compensation.

A Boustead spokesman, meanwhile, said the company was waiting for the state government to make a decision on the compensation.

"They have to pay us either in the form of land reclamation or cash reimbursement. They have to make a decision as to how to pay us, so we can recover the money we have spent," the Boustead official said.

The spokesman did not divulge the amount spent by Boustead on its hotel project, except to say that they had completed between 10 and 15 per cent of work so far.

ExxonMobil signs RM236mil deal with Malaysia Marine

KUALA LUMPUR: ExxonMobil Exploration and Production Malaysia Inc. (EMEPMI), a subsidiary of Exxon Mobil Corporation, has signed a RM236 million contract with Malaysia Marine and Heavy Engineering Sdn Bhd (MMHE) to fabricate facilities for the Telok Gas development project in offshore Terengganu.

Its chairman and president Hugh W. Thompson said MMHE will fabricate and construct the topsides and platform jackets for the project operated by ExxonMobil.

"The project will involve installation of two gas satellite platforms, Telok A and B, tied back to the existing Guntong gas hub and the installation of facilities is planned to commence in the third quater of 2012," he said in his speech at the contract signing ceremony here today.

He said 14 development wells are planned in the project which is expected to start in the first quarter of 2013.

"This will provide additional supplies for Malaysia's power and industrial needs and also help promote the overall growth of the natural gas sector," he added.

Thompson said an estimated 1,400 workers will be involved in various aspects of the fabrication, project management and support services at the yard and at the site and main offices.

"The fabrication work will take appoximately 18 months and during this period, we expect that the presence of the large project workforce will also be contributing towards the local economy," he said.

At the ceremony Thompson represented EMEPMI while MMHE was represented by its managing director-cum-chief executive officer Dominique De Soras.

De Soras in his speech said the project comprises two topsides and two corresponding jackets supporting the platforms.

"The topsides, known as Telok A and Telok B, are unmanned facilities well head topsides with an estimated weight of 1,735 metric tonnes (MT) and 1,648 MT respectively.

"Both topsides are expected to produce 450 million standard cubic foot (MSCF) of gas per day in the Telok field offshore peninsular Malaysia (Terengganu)," he added. - BERNAMA

FBM KLCI closes lower

KUALA LUMPUR: The FBM KLCI closed lower on Wednesday, in line with regional markets, as hopes for a quick solution to the Euro-zone debt crisis were doused and signs were clear that China's robust growth was moderating.

At 5pm, the local bourse slipped 1.73% or 25.41 points to 1,439.94. Regional bourses were lower. Tokyo's Nikkei 225 fell 1.55% to 8,741.91 and Hong Kong's Hang Seng Index was down 4.23% to 18,076.46.

Shanghai's A index was down 2.33% to 2,383.49 while Taiwan's Taiex Index slipped 1.36% to 7,359.48.

Seoul's Kospi Index dipped 1.41% to 1,838.90 while Singapore's Straits Times Index fell 1.95% to 2,724.69.

Nymex crude oil lost 64 cents to US$85.74 per barrel. Spot gold fell US$12.23 to US$1658.63 per ounce. The ringgit was quoted at 3.135 to the US dollar.

Texchem and Ingress’ Thai operations affected by floods

KUALA LUMPUR: Texchem Resources Bhd’s operation in Thailand is closed temporarily because its factory was flooded last Saturday. The plant in Ayutthaya manufactures thermoformed packaging products and precision injection moulded trays and parts.

It is held under Texchem-Pack (Thailand) Co Ltd, an indirect 70.48%-owned subsidiary of Texchem Resources.

In a statement to Bursa Malaysia yesterday, Texchem Resources said the temporary cessation of production will have an impact on the performance of the group. “However, the group is of the view that the impact ... is not expected to be severe,” it said.

To minimise disruption to the businesses of Texchem-Pack Thailand’s customers that are not severely affected by the flooding, it said arrangements have been made for other members of the group located in China and Malaysia to provide support and continue to supply to its customers.

Ingress Corp Bhd, meanwhile, also announced yesterday that its factory in Ayutthaya was inundated by flood waters last Friday. The factory mainly supplies components to Honda Thailand, whose factory in Ayutthaya was badly affected. The company’s two other Thai factories, located on Rayong’s Eastern Seaboard, remain in operation.

Ingress told Bursa that it had taken precautionary steps before the flooding, moving finished goods and work-in-progress stocks as well as raw materials to its Rayong plant.


This article appeared in The Edge Financial Daily, October 18, 2011.

Public Bank 3Q net profit up 15%

KUALA LUMPUR: Public Bank Bhd’s net profit for 3QFY11 rose 14.8% to RM898.78 million from RM782.7 million a year earlier. Pre-tax profit grew by 13% to RM1.19 billion over the same period while revenue increased by 13.5% to RM3.27 billion against RM2.88 billion previously.

In a filing with Bursa Malaysia yesterday, Public Bank said the higher profit was achieved on strong loans and deposits growth and stable asset quality, which resulted in higher net interest income and lower loan impairment charges.

For 9MFY11 ended Sept 30, Public Bank’s net profit rose 18.4% to RM2.6 billion from RM2.2 billion a year earlier.

It registered pre-tax profit growth of 16.6%, while revenue expanded 17% to RM9.43 billion from RM8.06 billion from a year earlier. It posted basic earnings per share of 74.44 sen against 63.02 sen.

Chairman Tan Sri Teh Hiong Piow said the group’s financial results are a validation of the group’s effective organic growth strategies and sustainable business model.

“The group continues to retain a clear lead with the highest net return on equity among Malaysian banking groups of 26.7%. At the same time, we continue to sustain top ranking in asset quality and cost efficiency among the peers,” he said in a statement yesterday.

He noted that the group’s net interest and finance income has improved by 9.7% for 9MFY11, while fee income grew by 9.1%.

As at Sept 30, its gross loans book stood at RM172.7 billion, 13.8% higher on an annualised basis. Teh noted that domestic loan growth grew by 14.1% on an annualised basis. For 9MFY11, total customer deposits increased by an annualised rate of 12.7% to RM193.7 billion, while domestic customer deposits charted at a stronger annualised growth rate of 13.8%.

“We are confident that with our healthy loans pipeline coupled with our strong Public Bank brand franchise, we will continue to strengthen our core revenue streams,” said Teh.

Public Bank said loans for mid-market commercial enterprises, residential property loans and passenger vehicles loans accounted for 85% of its total loan portfolio at end-September.

“The group’s residential properties financing grew at an impressive annualised rate of 17.7% and passenger vehicles at 9.7% during 9MFY11, compared with lower industry growth of 12.5% and 6.7%,” said Teh, adding that the loans to the SME sector grew by 15.6%.

Teh said the group’s funding position remained strong due to its robust retail franchise and large domestic depositor base of over 4.5 million customers.

“Domestic customer deposits grew at an annualised growth rate of 13.8% compared with the domestic banking industry’s annualised growth of 9.8%.

“The strong domestic deposit growth was mainly attributed to steady inflows of fixed deposits and savings deposits, which saw annualised growth rates of 12.2% and 11.9% respectively,” he said.

The group’s non-interest income grew 9.1% from a year earlier, driven mainly by higher banking transactional income, income from Public Mutual’s unit trust business, and higher investment income.

“Public Mutual continued to show commendable performance with a pre-tax profit growth of 22.3% for 9MFY11 and maintained its pole position in private unit trust business with RM41.3 billion of net assets under management,” Teh said.

He said the group had a cost-to-income ratio of 30%, with operation expenses increasing by 4.6% for the nine-month period.

He noted that gross impaired loan ratio fell to below 1% as at end-September from 1.14% at the beginning of the year.

“The group’s loan loss coverage ratio was at 178.1%, compared with the banking industry’s coverage ratio of 96.3% notwithstanding that more than 90% of the group’s impaired loans outstanding are secured,” said Teh.

New impaired loans formation for 9MFY11 improved to an annualised 0.33% from 0.51% in 2010, resulting in loan impairment allowances of 15%.

As at Sept 30, Tier-1 capital ratio stood at 9.5% and risk-weighted capital ratio at 14.9%, compared with 10% and 13.7% at the beginning of 2011.

The improvement in the risk-weighted capital ratio was due to the issuance of RM3 billion subordinated notes under the existing subordinated medium-term note programme in August 2011, said the banking group.

On the group’s prospects, Teh said Public Bank will continue to focus on its core retail banking and financing business.

“With the expectations that global uncertainties and volatility will persist over the medium term, we remain vigilant and focused on balancing growth with sustainable returns.

“The outlook of the Malaysian banking sector, which the group largely operates in, continues to be stable and supportive of growth,” he said.


This article appeared in The Edge Financial Daily, October 18, 2011.

YTL shares actively traded on Bursa

PETALING JAYA: Driven by news of a group restructuring, shares in YTL Corp Bhd and YTL Power International Bhd were actively traded yesterday while those of YTL Land and Development Bhd chalked up impressive gains.

YTL Land jumped 19 sen or 17.92% to close at RM1.25 yesterday. Since reaching its 52-week low of 76.5 sen on Sept 26, the stock has amassed a gain of 63.4%.

Its parent YTL Corp, meanwhile, rose 4.03% yesterday to RM1.55, up 21.09% from the low of RM1.28 on Aug 9. The stock was actively traded with 10.3 million shares traded.

YTL Power, which also saw heavy volume with 13.8 million shares transacted yesterday, rose 2.72% to RM1.89. The stock had gained 15.24% from its 52-week low of RM1.64 on Oct 14.

The benchmark FTSE Bursa Malaysia KLCI increased by 1.59% to close at 1,465.35 yesterday, in line with the broadly higher closing of other indices in the region.

The Edge weekly reported that YTL group has hired local investment bankers to work on a possible corporate restructuring exercise. It was speculated that the exercise could involve YTL privatising one or two of its listed subsidiaries in order to enhance value at the holding company level.

Analysts said YTL Corp is trading at 1.34 times book value, much lower than YTL Power’s 1.6 and YTL Land’s 1.83 times.

Both YTL Power and YTL Land offer different value enhancing propositions to YTL Corp, according to a market observer.

YTL Power is seen as a cash cow, with recurring earnings before interest, tax, depreciation and amortisation of RM3 billion and annual free cash flow of RM1.2 billion to RM1.3 billion a year, whereas YTL Land has several strategically located plots of land in Malaysia and Singapore.


This article appeared in The Edge Financial Daily, October 18, 2011.