NZ ops boost Dialog Group’s financial performance

KUALA LUMPUR (Nov 16): DIALOG GROUP BHD []’s posted net profit of RM44.54 million in the first quarter ended Sept 30, 2011, an increase of 34.6% from the RM33.09 million a year, underpinned by a strong increase in revenue, mainly from its New Zealand operations.

It said on Wednesday that revenue rose 35% to RM355.24 million from RM263.81 million while earnings per share were 2.26 sen compared with 1.69 sen.

“The consolidation of the revenue from the newly acquired fabrication and multi-disciplined engineering company, Fitzory Engineering Group Ltd, based in New Zealnd was the main contributor to this significant increase,” it said.

Dialog also said contribution from the Asian operations increased significantly in the current quarter mainly due to higher revenue of specialist products and services in Brunei, Oman, India, China and Indonesia.

As for the Malaysian operations, it said revenue increased by 5% due to higher sales of specialist products and services. Revenue recorded by its Singapore operations fell 35% due to lower plant maintenance undertaken.



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Amway earnings up nearly 20%, declares 39c dividends

KUALA LUMPUR (Nov 16): Amway (Malaysia) Holdings Bhd’s net profit rose 19.8% to RM25.77 million in the third quarter ended Sept 30, 2011 from RM21.51 million a year ago as it benefited from higher sales and improved gross margins due to the favourable foreign exchange impact.

It said on Wednesday that revenue rose at a slower pace of 5.4% to RM211.52 million from RM191.50 million while earnings per share were 15.68 sen compared with 13.08 sen.

“Despite the strong third quarter sales performance, the fourth quarter operating environment is expected to be more challenging due to weaker consumer sentiment arising from continuous uncertainty in global economic outlook. As a result, the group expects to achieve minimal growth in sales revenue for the current financial year,” it said.

Amway said its gross profit was RM73.53 million, after deducting of cost of sales of RM137.98 million from the revenue of RM211.52 million.

For the third quarter ended Sept 30, 2010, the gross profit was RM58.43 million, after deducting RM133.07 million as cost of sales from the revenue of RM191.50 million.

However, selling and administrative expenses for the quarter ended Sept 30, 2011 was higher at RM31.78 million compared with only RM20.99 million a year ago.

Amway declared a third interim single tier dividend of 9.0 sen net per share and special interim single tier dividend of 30.0 sen net per share for the financial year ending Dec 31, 2011.

Its nine-month earnings increased by 8.4% to RM65.05 million from RM60 million while revenue rose 3.4% to RM553.44 million from RM535.31 million.



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Tanjung Offshore posts net loss RM429,000 in 3Q

KUALA LUMPUR (Nov 16): TANJUNG OFFSHORE BHD [] swung into the red with net losses of RM429,000 in the third quarter ended Sept 30, 2011 compared with net profit of RM807,000 a year ago.

It said on Wednesday that revenue fell 14.3% to RM117.64 million from RM137.25 million a year ago, Loss per share was 0.15 sen compared with earnings per share of 0.29 sen.

“The reduction in revenue is due to the slowdown in business activities for the engineering equipment division. The group registered a loss in the current quarter due to impairment of receivables and higher costs incurred in certain engineering equipment packages,” it said.

For the nine months ended Sept 30, its net profit fell 51.9% to RM3.42 million from RM7.12 million a year ago while revenue was marginally lower at RM401.33 million compared with RM401.95 million.

Tanjung Offshore had borrowings totaling RM560.53 million.

“The board of directors of Tanjung is cautiously optimistic of the prospects of oil and gas industry in Malaysia and the region as the market remains fragmented and competitive. Whilst we are experiencing a more robust demand for our offshore support vessels, we are undertaking a business rationalisation exercise for the non-marine division so as to reduce costs and seek strategic growth within our core business divisions,” it said.



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Main shareholder to sell Negeri land for RM118m to Nilai Resources

KUALA LUMPUR (Nov 16): Nilai Resources Group Bhd has received a proposal to acquire a company, LK Prisma Sdn Bhd, which owns 418.2 acres of land in Negeri Sembilan, from a common major shareholder, Tan Sri Dr Gan Kong Seng.

Nilai Resources said on Wednesday its subsidiary BBN Development Sdn Bhd had received an offer letter from Lapangan Kota Sdn Bhd to sell the entire paid-up of LK Prisma to BBND for Rm118.41 million cash consideration.

“LK Prisma owns 418.2 acres of land, which is part of the township development of Seremban Utara. The land was approved for residential or commercial or institution or industry use. This would be at RM6.50 per sq. ft,” it said.

Lapangan Kota said it is a company owned by Gan and G.O. Enterprise Sdn Bhd, which in turn, Gan is a major shareholder. Gan is also a major shareholder and director of Nilai Resources.



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Xingquan gets orders worth RM333m at sales fair in China

KUALA LUMPUR (Nov 16): Xingquan International Sports Holdings Ltd (Xingquan) has received total orders of RM333 million for its GERTOP brand of shoes, apparels and accessories at its Spring/Summer 2012 Sales Fair held in Quanzhou, China.

In a statement Wednesday, Nov 16, Xingquan said the increase in sales order represented a 10.7% year-on-year growth.

Its chairman and chief executive officer Wu Qingquan said the response from its customers at the sales fair reinforced their confidence in its GERTOP brand as a well demanded outdoor casual wear brand.

“I am pleased to report that we continue to see healthy growth in orders especially for shoes and apparels,” he said.

Wu said GERTOP featured new designs of apparels and footwears and the Sales Fair was attended by a total of 31 regional distributors from 26 provinces in the PRC.

The demand for outdoor casual wear in PRC continues to grow in tandem with the rise in GDP and consumer spending power, he said.

Wu said that based on market research conducted by Converging Knowledge Pte Ltd, the outdoor casual wear market in China was expected to grow at 30% annually in the next two years (2011 – 2012), thereafter slowing down to 20% in the third year (2013) to reach approximately RMB55 billion (RM27.3 billion) by 2013.

He said GERTOP was currently distributed through a network of more than 2,300 stores located across 26 provinces in China.

Wu said the 2012 Spring/Summer sales orders would contribute positively towards the company’s sales revenue for financial year 2012 (FY2012).

The company is scheduled to announce its first quarter results for FY2012 in the third week of November 2011.



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Malton 1Q earnings double to RM12m, boost from on-going projects

KUALA LUMPUR (Nov 16): Malton Bhd’s earnings jumped 118% to RM12.11 million in the first quarter ended Sept 30 from RM5.54 million a year ago, boosted by an improvement in the property development division from a year ago.

It said on Wednesday that revenue rose 44.3% to RM99.27 million from RM68.78 million while earnings per share were 2.90 sen versus 1.59 sen. Malton said pre-tax profit improved by 111.4% to RM16.7 million from RM7.9 million.

“Revenue and profit from the property development division improved as compared to the previous corresponding quarter due to recognition of income from on-going projects with good take-up rates and new launching of Amaya Maluri project during the second quarter of last financial year.

“Total revenue and profit from construction and project management division also improved as compared to the previous corresponding quarter due to construction progress of external projects,” it said.

However, the revenue declined from the preceding quarter’s RM167.9 million. It said the 40.1% decrease was mainly due to lower billings from property development division following the completion of Amaya Saujana project in last financial year and completion of Mutiara Indah Phase 3A, Azures and 48 units shop in Bukit Rimau and near completion of V Square and The Grove projects.

The group recorded a pre-tax profit of RM16.7 million for the current quarter versus RM33.3 million in the immediate preceding quarter.

“The lower pre-tax profit for the current quarter was mainly due to corresponding reduction in revenue in the current quarter as compared to the last quarter,” it said.



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Market Commentary

The FBM KLCI index lost 0.38 points or 0.03% on Wednesday. The Finance Index increased 0.25% to 13171.93 points, the Properties Index up 0.15% to 971.87 points and the Plantation Index rose 0.69% to 7687.49 points. The market traded within a range of 17.28 points between an intra-day high of 1487.37 and a low of 1470.09 during the session.

Actively traded stocks include COMPUGT, DPS, TIGER, TCUBES, ASIAEP, TMCLIFE, SYF, INGENS, MTRONIC and NICORP. Trading volume decreased to 2031.51 mil shares worth RM1468.73 mil as compared to Tuesday’s 2983.88 mil shares worth RM1553.85 mil.

Leading Movers were MAYBANK (+12 sen to RM8.39), IOICORP (+12 sen to RM5.23), GENTING (+8 sen to RM10.88), SIME (+2 sen to RM8.93) and PBBANK (+2 sen to RM12.60). Lagging Movers were PETCHEM (-19 sen to RM6.21), TENAGA (-11 sen to RM5.74), CIMB (-4 sen to RM7.06), YTL (-4 sen to RM1.44) and DIGI (-13 sen to RM34.76). Market breadth was negative with 322 gainers as compared to 462 losers.-- JF Apex Securities Bhd



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KLCI closes marginally lower

KUALA LUMPUR (Nov 16): The FBM KLCI closed marginally lower on Wednesday, Nov 16 as most key regional markets fell in line with the steep drop at the Shanghai and Hong Kong markets.

Hong Kong shares slumped on Wednesday, dragged down by weakness in Chinese insurers and property developers, with turnover low as investors became more averse to riskier assets on fears of contagion from Europe's festering debt crisis, according to Reuters.

The FBM KLCI shed 0.38 of a point to close at 1,476.84.

Losers led gainers by 462 to 322, while 286 counters traded unchanged. Volume was 2.03 billion shares valued at RM1.47 billion.

At the regional markets, the Shanghai Composite Index fell 2.48% to 2,466.96, Hong Kong’s Hang Seng Index lost 2% to 18,960.90, South Korea’s Kospi was down 1.59% to 1,856.07, Taiwan’s Taiex lost 1.38% to 7,387.52, Japan’s Nikkei 225 fell 0.92% to 8,463.16 and Singapore’s Straits Times Index shed 0.15% to 2,807.44.

On Bursa Malaysia, Harvest Court securities were the top losers on resuming trade after Bursa Malaysia Securities Bhd had on Monday declared the securities counter as a designated counter.

Harvest fell 64 sen to RM1.49 while its warrants lost 54 sen to RM1.27.

Among the other losers, Malayan Flour Mills lost 24 sen to RM7.54, Petronas Chemicals down 19 sen to RM6.21, Chin Teck PLANTATION []s and Nestle lost 18 sen each to RM8.25 and RM49.22, Genting Plantations and SYF Resources fell 15 sen each to RM7.97 and 60 sen, while Manulife was down 14 sen to RM2.81.

Compugates was the most actively traded counter with 79.9 million shares done. The stock added half a sen to 8 sen.

Other acties included DPS Resources, Tiger, Tricubes, Asia EP, TMC Life, SYF Resources and Ingenuity Solutions.

Among the gainers, Dutch Lady added 70 sen to RM22.50, Proton 32 sen to RM3.53, TDM and BAT 30 sen each to RM3.28 and RM47, Warisan 28 sen to RM2.55, Carlsberg 21 sen to RM7.26, Bumi Armada 16 sen to RM3.99, while LPI Capital, Panasonic and Parkson added 14 sen each to RM13.02, RM19.50 and RM5.79 respectively.



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AirAsia Indonesia eyes 4m Jakarta passengers

AirAsia Indonesia aims to transport approximately four million passengers from and to its Jakarta hub alone in 2012, 33 per cent up from this year's estimated 3 million.

In a statement from Jakarta today, the airline said the integration of its operations at Terminal 3, Soekarno Hatta International Airport, will enable guests to seamlessly transfer between domestic and international flights and vice versa.

"In addition, our Fly Thru facility enables connection from Jakarta to many exciting destinations such as Melbourne, Gold Coast, Chengdu, Hangzhou (Shanghai), Muumbai, Christchurch, New Delhi, Seoul, Tokyo, Osaka, Taipei, Paris and London.

"In the long run, we hope to transform Jakarta into a critical international transit hub," president director of AirAsia Indonesia, Dharmadi said.

He said Air Asia Indonesia operates a brand new fleet of Airbus A320s, which by year-end will consist of 16 aircraft.

"Five ordered planes are set to be delivered in 2012, which will make a total fleet of 21," he said.

Yesterday, AirAsia Indonesia unveiled its sophisticated green home at Terminal 3.

The state-of-the-art terminal, which formerly housed only Indonesian domestic flights, will officially be open for international flights from today.

"The sleek and eco-friendly Terminal 3 has served as AirAsia Indonesia's main base of domestic operations since April 15, 2009.

"The airline now consolidates its Jakarta hub operations under one roof by serving both domestic and international flights from Terminal 3," Dharmadi said.

He added that for passengers' convenience, AirAsia Indonesia provides four and five self check-in kiosks for domestic and international flights respectively.

"Guests are able to check in from these kiosks 24 hours prior and up to one hour before the scheduled departure time," he said. -- Bernama



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Will focus shift to Malton?

KUALA LUMPUR: The listing of Pavilion REIT, slated for Dec 6, will result in the realisation of a net worth of approximately RM1.69 billion for controlling shareholder Datuk Desmond Lim Siew Choon and his spouse Datin Cindy Tan Kewi Yong. Attention is shifting to Lim’s low profile, undervalued property arm Malton Bhd, as a possible privatisation candidate with the couple now flush with cash.

Lim and Tan will own a collective 37.6% stake in Pavilion REIT upon listing, which is worth RM992.64 million based on a market capitalisation of RM2.64 billion at its initial public offering price of 88 sen.

In addition, the couple will also receive an estimated RM702.7 million in cash from the exercise, which involves the injection of properties into the REIT in return for cash and REIT units.

Pavilion REIT will establish an initial portfolio comprising two properties, Pavilion KL Mall and Pavilion Office Tower, which it will acquire from Urusharta Cemerlang Sdn Bhd (UCSB) and Capital Flagship Sdn Bhd (CFSB) for a total purchase consideration of RM3.32 billion.

The amount will be paid with RM1.378 billion in cash and RM1.944 billion in the form of consideration units in Pavilion REIT.

Lim and Tan, who own 51% of UCSB and CFSB, will receive RM702.7 million in cash from the sale of the properties to Pavilion REIT, as well as 37.6% of the REIT post listing. Qatar Holdings LLC, which holds the remaining 49% in UCSB and CFSB, will hold 36.1% of Pavilion REIT.

These calculations are based on the IPO offer price of 88 sen per unit, which is well below the REIT’s net assets per unit of RM1.18.


Pavillion REIT has a capital base of three billion units and total asset value of RM3.54 billion, according to its prospectus.

With these new funds in hand, certain observers note that it may be an ideal time to privatise Malton Bhd, in which Lim and Tan are controlling shareholders.

Malton’s undervalued position and relatively small market capitalisation may be one factor to support its privatisation.

Malton’s shares surged 8.5 sen or 13.8% to a four-month high of 70 sen yesterday. Trading volume grew over 10 times from 6.81 million shares on Monday to 76.8 million shares yesterday -- its highest level in over a decade. The property company has a market capitalisation of RM292.6 million.

Its five-year high was a mere 83 sen and the stock has consistently traded well below its book value, which stood at RM1.46 on June 30, 2011.

According to Bloomberg estimates, Malton is trading at a low price-earnings ratio (PER) of 2.95 times, compared with the industry average of 8.47 times.

Lim and Tan own 158.4 million shares or a 37.9% stake in Malton and are the only substantial shareholders in the company. The next biggest shareholders are Lee Kim Hooi with 3.47% equity interest and Teras Layar Sdn Bhd with 2.5%.

Buying out the remaining 62.1% stake would cost the couple an estimated RM181.7 million at yesterday’s closing price.

That is equivalent to just a quarter of the cash proceeds they will receive from the Pavilion REIT IPO.

Malton is a niche developer with pockets of land in Puchong, Petaling Jaya, Subang, Sungei Buloh and Ulu Klang in Selangor. It is best known as the developer of the Bukit Rimau township in Shah Alam.

As at June 30, 2011, Malton had RM960.4 million in total assets including RM219.8 million in land held for property development and RM76.09 million in investment properties.

It is in a net cash position, with RM224.42 million in gross cash and RM115.18 million in borrowings.

The company saw its 4QFY11 net profit quadruple to RM26.8 million from RM5.54 million in the previous year, as revenue for the quarter rose 95.2% to RM167.9 million from RM86.02 million.

It saw higher earnings from its property development division, which contributed 84% of total revenue, due to higher revenue recognition from the advanced stages of construction of ongoing projects and projects launched during the year.

Malton has seen a marked improvement in its financial performance in recent years.

Its net profit grew to RM72.6 million in FY11 ended June from a net loss of RM4.6 million in FY08, while revenue rose to RM462.3 million from RM394.8 million over the same period. Its earnings per share rose to 20.86 sen in FY11 from 6.33 sen the previous year.

Most recently, Malton said it had acquired a 56.05-acre piece of land in Gombak, Selangor, for RM105 million for a proposed residential development with an estimated gross development value of RM500 million.

Pavilion REIT, meanwhile, is aiming to raise RM659.2 million from its IPO, the bulk of which will go toward paying the purchase consideration for the acquisition of the two Pavilion buildings.

The company registered RM291 million in revenue last year and a net property income of RM203 million.

CEO Philip Ho said the company projects revenue of RM314 million and net property income of RM220 million from the current financial year, a growth of 7.9% and 8.3% respectively.

“We are very confident, and the forecast figures are achievable as tourist numbers have improved and the market is resilient,” said Ho.

The company targets to inject more retail properties into its portfolio by 2015.

It has right of first refusal (ROFR) to Fahrenheit88, a three-floor retail building fronting the Pavilion Mall.

“I believe Fahrenheit88 just opened its doors late last year. We are waiting for the mall to mature a little bit and then we will evaluate the situation, maybe in 18 to 24 months,” Ho told the media.

It also has ROFR to an extension of Pavilion Mall, involving 30,000 sq ft of retail space, and a six-storey retail mall to be developed in Subang.


This article appeared in The Edge Financial Daily, November 16, 2011.



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CIMB 3Q profit up 11%

KUALA LUMPUR: CIMB Group Holdings Bhd posted a net profit of RM1.012 billion for 3QFY11 ended Sept 30, 10.5% higher than the RM916 million for the corresponding period last year.

“We posted another record quarter in net earnings in 3Q11, underpinned by the continued improvement at our Malaysian consumer banking operations and a rebound in Treasury and investments. We remain behind our full-year targets, but given the deteriorating environment and our cautious stance, we are pleased with these results,” Datuk Seri Nazir Razak, group chief executive of CIMB, said in a release.

The country’s second largest banking group by assets recorded an annualised net return on equity (ROE) of 16%.

Against the previous quarter, 3QFY11 revenue rose 2.5% to RM3.03 billion from RM2.96 billion, leading to a 4.3% increase in net profit to RM1.012 billion. For the cumulative nine months ended Sept 30, 2011, net profit rose 9.6% year-on-year (y-o-y) to RM2.898 billion on revenue of RM8.74 billion.

“The growth in net interest income was largely offset by lower non-interest income as last year’s non-interest revenues were boosted by sales of ex-Lippo Bank bonds. Excluding this, total revenues would have increased 4.4%. The group’s profit before tax was 8.5% higher at RM3.8 billion bolstered by much lower credit losses and low overhead cost increase,” CIMB said.

The group’s profit before tax (PBT) for 9MFY11 rose 8.5% y-o-y to RM3.8 billion from RM3.5 billion the year before.

The group’s Indonesian arm, CIMB Niaga, was the largest contributor to CIMB’s 9MFY11 PBT at 30% with RM1.15 billion. CIMB Thai’s RM61 million PBT was flat y-o-y.

The Malaysian consumer banking operations contributed 28% to group PBT in 9MFY11 against 17% in 9MFY10. Treasury and investments contributed 21%, corporate and investment banking (CIB) 17%, group asset management (GAM) and insurance 2%, while CIMB Thai’s contribution was 2%.

Total non-Malaysian PBT declined to 38% in 9MFY11 from 47% in 9MFY10 due to the absence of the ex-Lippo Bank bond gains at CIMB Niaga.

For 9MFY11, PBT at the group’s consumer banking increased by 79.3% y-o-y to RM1.06 billion due to the combination of a 9.5% improvement in revenue and lower credit charges. PBT at CIB was 9.9% lower y-o-y at RM657 million, while Treasury and investments declined 8.4% y-o-y to RM802 million.

The group’s total gross loans increased by 15.3% y-o-y supported by a 33.4% growth (in ringgit terms) at CIMB Niaga, as well as a 12.6% increase in Malaysian consumer loans. Mortgages grew by 16.1%, credit cards by 13.6% and the group’s micro credit by 81.4% y-o-y.

Hire purchase loans grew at a modest 1.1% y-o-y while commercial banking loans were unchanged. Corporate loans expanded 3.5% y-o-y. The group’s overall net interest margins eased to 3.12% from 3.39% last year.

The total loan impairment for the group declined by 55% y-o-y at RM198 million in 9MFY11 against RM440 million in 9MFY10. As a result, the group’s total annualised credit charge was 0.14% compared with the 0.40% full-year target.

The group’s gross impairment ratio continued to improve to 5.5% for 9MFY11 from 5.7% as at end-1HFY11 and 6.6% as at 9MFY10, with an impairment allowance coverage of 80%. The group’s cost to income ratio rose to 56.1% compared with 54.1% in 9MFY10.

CIMB Bank’s risk weighted capital ratio stood at 16.7% while its Tier-1 capital ratio stood at 14.5% as at Sept 30 (after the inclusion of 9MFY11 net profit).

CIMB’s Islamic division saw improved performances. Its PBT increased by 28.4% y-o-y to RM359 million. This was due to rising demand for syariah-compliant banking product.

Looking forward, Nazir remained optimistic.

“Although we may fall short of our ROE target of 17%, we should exceed consensus analysts’ forecasts for 2011,” he said. For 4Q, Nazir said that CIMB’s Treasury and mergers and acquisitions businesses “should do well”, while Malaysian consumer banking and CIMB Niaga will sustain the group’s current momentum.

“However, markets are volatile and regional economic indicators are softening, so we remain conservative on capital, liquidity and credit standards,” he said.

No dividends were declared for 3QFY11. Net assets per share was RM3.37 as at Sept 30 against RM3.13 a year ago.


This article appeared in The Edge Financial Daily, November 16, 2011.



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All eyes on Harvest Court

KUALA LUMPUR: With newly imposed trading curbs, investors will be closely watching the price performance of Harvest Court Industries Bhd today, the high flying former penny stock which has surged nearly 30 times in under two months.

Harvest Court shares and warrants have been declared “designated securities” from 9am this morning, which requires buyers to make upfront payments for purchases and have a free balance of securities before selling.

Announcing the decision in a statement late Monday night, Bursa Malaysia ordered a one-day trading suspension yesterday for the news to sink in, and again advised investors to assess the company’s fundamentals.

Harvest Court joins a very small group of companies, including Iris Corp Bhd in 2006 and Union Paper Holdings Bhd in 1993, that have earned the designation.

Iris is the most recent high-profile case. Trading curbs on the company, which manufactures electronic security cards and passports, were imposed in mid-2006 after the stock jumped 3.5 times over two months and charted a gain of over 580% for the year at one point.

When trading curbs were imposed, the stock tumbled as much as 52% to 65.5 sen from RM1.36 when trading resumed on May 16, 2006, before ending the day with a 26.5% loss to close at RM1.

Iris asked the exchange to lift the trading curbs and its stock price climbed in the run-up to the lifting of the restrictions on June 22, 2006. Its shares continued to stay high for at least one more month before tumbling to where they were before the action began.

At the time, fears that trading restrictions would be imposed on more companies nudged the then Mesdaq Index lower.

Today, Iris shares are trading at 16.5 sen, a fraction of what they were more than five years ago. Its shares have fluctuated within a range of 13 sen to 26 sen over the past year.

In Harvest Court’s case, the rare move by the front-line regulator followed two unusual market activity (UMA) queries in three weeks (Oct 17 and Nov 4), and comes one market day after investors were told to exercise caution when trading the company’s shares and warrants.

Still, the stock continued its spectacular price ascent. Harvest Court, which last traded at RM2.13 on Monday, was still a penny stock fetching 7.5 sen apiece on Sept 27 but had seen its value skyrocket 28 times over seven weeks.

That translates to a whopping RM371.2 million gain in market capitalisation from a company whose market capitalisation stood at little over RM13.5 million seven weeks ago.

Similarly, its warrants, Harvest-WA, which have a 25 sen strike price, went from three sen to RM1.81 over the same seven-week period.

Trading interest in Harvest Court stocks spiked a month ago on Oct 14. Soon after, news got out that managing director Ng Swee Kiat had pared his holdings in the company, and had entered into a put option to buy a block of shares from Affin Bank Bhd. Stoking more interest was the emergence of a new shareholder and director, Datuk Raymond Chan, the controlling shareholder of property developer Sagajuta (Sabah) Sdn Bhd, which has since awarded contracts to the company.

Chan was appointed to Harvest’s board on Oct 28, the same day as 28-year-old Mohd Nazifuddin Najib, the prime minister’s second son.

At Monday’s closing price of RM2.13 and with a 180.65 million share base, Harvest Court would have to deliver RM11 million to RM26 million in net profit for this year or next year, if one were to assume the current average price-earnings ratio of between 15 and 35 times for the FBM Emas Index and the ACE Market (formerly Mesdaq), respectively.

That may be a tall order, considering the company posted net losses of RM678,000 for 1HFY11, and RM2.82 million for FY10.

That said, in a statement yesterday evening, Harvest Court said it intends to accept a job worth about RM70 million to build a pulp and paper plant to process oil palm fibre in Negri Sembilan. On Nov 14, its unit accepted a non-binding letter of intent to enter into a related party transaction (RPT) with 1Green Enviro Sdn Bhd, a company linked to Mohd Nazifuddin and Chan. It needs RM6 million capital for the three-year project, to be funded from proceeds of a proposed new rights issue, placement exercise and borrowings.

Whether or not Harvest Court’s share price tumbles today, as in the case of Iris then, what is certain is that the entire market will be watching.


This article appeared in The Edge Financial Daily, November 16, 2011.



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Maybank launches US$500m clean energy fund

KUALA LUMPUR: Maybank Investment Bank Bhd (Maybank IB) yesterday launched a US$500 million (RM1.58 billion) clean energy fund to tap a growing appetite for clean and renewable energy investments in Asia.

Some US$145 million commitments had already been secured from institutions, including that from US-based Overseas Private Investment Corp (Opic), the Asian Development Bank and the International Finance Corp, said Tengku Datuk Zafrul Tengku Aziz, CEO of Maybank IB.

The targeted amount should be achieved by mid-2012, Zafrul added, calling the Pan-Asia fund size among the largest of its kind.

The Maybank MEACP Clean Energy fund will be managed by Maybank MEACP Pte Ltd (MMPL), a 50:50 joint venture between Maybank Ventures Sdn Bhd — a Malayan Banking Bhd (Maybank) subsidiary — and a Singapore-based private equity firm, Middle East & Asia Capital Partners Pte Ltd (MEACP). Mumtaz Khan, a leading private equity infrastructure professional in the Middle East and Asia, founded MEACP to focus on infrastructure investment opportunities in emerging markets, according to data on Maybank’s website.

Maybank IB has put US$50 million into the fund that will be offered globally to institutions and ultra-high net wealth individuals and families with a minimum buy-in of US$10 million.

The fund which will seek out clean energy projects in the Asia- Pacific region, with focus on countries like China and India, as well as opportunities in Southeast Asian countries like Indonesia, Malaysia, Thailand, the Philippines, Vietnam, Cambodia and Laos. Its focus will be on implementing clean and renewable energy production, said Ali Khan, managing director of MMPL. “Our focus will be power generation and not an investment into the technology [per se],” he added.

Sub-sectors of interest to the fund include biomass, biogas, geothermal, wind, solar and small-hydroelectric.

“We already have projects in the pipeline, but I can’t disclose them,” Ali said, “However, the types of projects we undertake will depend on the country. For example, Indonesia is viable for geothermal and Malaysia is a good candidate for biomass and biogas given its oil palm production.”

Accordingly to Zafrul, the target yield for the fund is in the “high teens” and the prospects for clean and renewable energy are bright. And while many corporations have jumped on the renewable energy bandwagon, Zafrul promised that the fund isn’t one that’s obsessed with being “green”. At the end of the day, returns are what matters to investors, and that will be the fund’s primary purpose, he said.


This article appeared in The Edge Financial Daily, November 16, 2011.



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VSI optimistic on securing more global clients

SENAI: Integrated electronic manufacturing services (EMS) provider VS Industry Bhd (VSI) plans to add more international brands to its portfolio of clients with the opening of its newest production facility here.

“Keurig Inc marks our first American-based customer. With Keurig, we expect to have more leading international brands as our customers in the future, especially from the US,” its managing director Gan Sem Yam told The Edge Financial Daily after the official opening of the plant in Johor yesterday.

The RM30 million plant with a total built-up area of 20,695 sq m is dedicated to producing single-cup coffee brewers and accessories for Keurig. Keurig is the market leader for coffee makers in North America, according to its president Michelle V Stacy, who attended the opening.

Gan said VSI will provide its full suite of EMS services to Keurig ranging from mould fabrication, printed circuit board assembly, packaging and logistics.

Keurig, a wholly owned subsidiary of Nasdaq-listed Green Mountain Coffee Roasters Inc, is expected to account for 20% to 30% of VSI’s revenue by 2013, Gan said.

He said 60% of VSI’s revenue in FY11 came from its main customer Dyson Ltd, a British company known for its vacuum cleaners, hand driers and bladeless fans.

(From left) VS Industry Bhd Beh Kim Ling, Stacy and Johor Menteri Besar Datuk Abdul Ghani Othman looking at the Keurig coffee brewer.

Gan said production from the new plant will begin immediately with a target to export the products to North America in the first quarter of 2012. Gan added that the plant is expected to reach its full annual production capacity of six million units in two years.

Stacy said Keurig is hoping to produce at least two models of the Keurig coffee brewers in VSI’s plant.

VSI is Keurig’s first EMS partner in Southeast Asia. Prior to VSI, Keurig manufactured its products in China, she said.

VSI is a leading EMS provider in consumer household electronics with extensive manufacturing services ranging from plastic injection mould design and finishing processes to printed circuit board production.

For FY11 ended July 31, VSI reported a 28.6% increase in revenue of RM1.03 billion from RM800.17 million the previous year, while its net profit increased to RM27.72 million from RM24.29 million a year ago. VSI attributed the improved year-on-year performance to better sales.

The company has set a dividend policy of 40%. In March, VSI announced to Bursa Malaysia that it has been paying dividends since its listing in 1998, with a payout ratio ranging from 20% to 60% of its annual net profit. It said on average, it has been paying more than 40% of net profit.

During FY11, VSI paid out total dividend of nine sen, which translates into a net dividend payout of 6.3% based on its closing price of RM1.42 yesterday. Over the last year, its stock has fallen 33.64% and traded between a year-high of RM2.23 and low of RM1.21.


This article appeared in The Edge Financial Daily, November 16, 2011.



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Petronas Carigali makes oil find in Sabah

KUALA LUMPUR: Petronas Carigali Sdn Bhd, the exploration and production arm of Petroliam Nasional Bhd (Petronas), has made a significant oil discovery via the Wakid-1 well within Block 2G-2J, about 100km northwest of Kota Kinabalu.

Current preliminary estimates of reserves from this discovery are at 227 million barrels of oil with expected upside potential, Petronas said in a statement yesterday.

The group said three production tests were conducted in three different reservoirs with the oil flowing at a combined maximum rate of 8,200 barrels per day.

The well reached a total vertical depth of 3,300m and confirmed the presence of significant oil and some gasbearing reservoirs.

According to the statement, Wakid-1 is the second well drilled in Block 2G-2J since the award of the production sharing contract (PSC) in October 2010. The block’s first well, Tambuku-1, was drilled earlier this year with only a minor gas discovery.

According to the statement, Petronas Carigali is the sole equity holder of the PSC for the block.


This article appeared in The Edge Financial Daily, November 16, 2011.



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Higher costs nudge BHIC into 3Q losses

KUALA LUMPUR: Boustead Heavy Industries Consolidated Bhd (BHIC) fell into the red for the third quarter (3Q) ended Sept 30, due to higher operating and finance costs as well as the booking of smaller share of profits from its associates.

Net loss stood at RM2.4 million, a reverse from the RM26.9 million profit previously, while revenue fell 34.1% to RM150.02 million from RM227.7 million in 3QFY10.

“This quarter has been challenging and we have worked with great effort to manage our projects efficiently. With the projects nearing completion, we are actively exploring new opportunities in shipbuilding and fabrication, taking into account the lessons learnt from the current projects,” managing director Tan Sri Ahmad Ramli Mohd Nor said in a statement yesterday.

The company is still in the black year-to-date, with profits at RM9.04 million for 9MFY11 or 15.5% of the RM58.37 million booked last year.
Revenue fell 8% to RM387.5 million from RM420.6 million for 9MFY10.

“The revenue was lower given that the previous year’s corresponding period incorporated revenue for the accumulation of work done on submarine maintenance for a longer period, compared with the nine months recorded in the current-year cumulative period,” the company said.

Earnings per share (EPS) sank to a negative 0.98 sen from 10.83 sen last year for 3Q. For 9MFY11, EPS was 3.64 sen versus 23.49 sen last year. Net assets per share fell three sen to RM1.70 as at Sept 30.

On its prospects for the current year, BHIC said, “The group will continue to strengthen its internal processes and governance oversight. Efforts to contain cost and improve financial performance were on-going.”

“In addition, our joint-venture companies are expected to continue providing positive contributions to the group’s bottom line,” Ramli said.

For associate Boustead Naval Shipyard Sdn Bhd, negotiations to finalise a contract to build six new littoral combatant ships “are at an advanced stage of preparations”, BHIC said.

A subsidiary of Boustead Holdings Bhd, BHIC is involved in maritime, defence and heavy engineering, with shipyards in Lumut, Penang, Langkawi and Ghana.
BHIC shares shed one sen or 0.35% to close at RM2.84 yesterday.


This article appeared in The Edge Financial Daily, November 16, 2011.



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Carlsberg’s net profit jumps 43% to RM49m

SHAH ALAM: Carlsberg Brewery Malaysia Bhd registered a 43.3% jump in net profit for the quarter ending Sept 30 to RM48.85 million from RM34.09 million in the corresponding period last year on the back of stronger sales and better margins.

Its revenue for the third quarter (3Q) rose 21.9% to RM401.66 million from RM329.49 million a year ago.

Soren Ravn, managing director of Carlsberg, pinned the strong 3Q results of the group on the successful outcome of its 2011 global Carlsberg brand packaging change and consumer promotions under the tagline “That Calls for a Carlsberg”, which is now aligned in 140 countries.

“This, together with the earlier initiatives taken by the supply chain on productivity improvements as well as cost efficiencies in sales and marketing, have given rise to an increase in margins during the quarter under review,” added Soren.

According to calculations by The Edge Financial Daily, pre-tax profit margins for Carlsberg during the quarter rose to 17.16% from 14.21% in the corresponding period the previous year.

The higher margins could also be linked to an increase in market share in the premium beer segment.

Soren said: “This year, we continue to gain market share in the Malaysian premium beer segment through our subsidiary Luen Heng F&B Sdn Bhd and their impressive super premium beer range, including the No 1 imported beer in Malaysia, Hoegaarden, as well as the fast growing Asahi, Erdinger and Budweiser. Furthermore, our newly launched Carlsberg Group owned brands Kronenbourg 1664 and Kronenbourg Blanc are showing great potential in the super premium segment.”


For the nine-month period ending Sept 30, Carlsberg’s net profit grew 25.4% to RM128.81 million from RM102.75 million a year ago, while revenue improved by 10.8% to RM1.15 billion from RM1.04 billion in the corresponding period last year.

Earlier this month, competitor Guinness Anchor Bhd (GAB) posted a 42.6% rise in net profit to RM55.21 million for its 1Q ended Sept 30, compared with RM38.69 million a year ago on the back of higher sales.

GAB had recorded a 21.3% increase in revenue in the quarter to RM444.62 million, from RM366.63 million in the corresponding period last year.

Pre-tax margins for GAB rose to 16.55% for the quarter from 14.1% in the same period last year, according to calculations by The Edge Financial Daily.

Carlsberg dropped four sen to close at RM7.05 yesterday with 64,400 shares traded. GAB meanwhile lost two sen to RM10.74 on a thin volume of 27,700 shares.


This article appeared in The Edge Financial Daily, November 16, 2011.



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Still no PNB offer document

KUALA LUMPUR: S P Setia Bhd has yet to receive the official general offer document from Permodalan Nasional Bhd (PNB) to acquire all its remaining shares and warrants, according to the property developer’s president and CEO Tan Sri Liew Kee Sin.

After the group’s official launch of the RM6 billion KL Eco City integrated development project situated on the former site of Kampung Haji Abdullah Hukum yesterday, Liew told reporters that PNB has to submit the offer document first to enable all shareholders of S P Setia to evaluate it and decide whether to sell their shares or not.

“We have to wait for the offer document to come up first so that all shareholders can evaluate PNB’s offer. But on our side, we are very happy because we’re going to get a shareholder which is prepared to put money into S P Setia. Put aside all the sentiments and so on and so forth, we have today a big fund, one of the biggest investment funds in the country, to put money into S P Setia,” he said.

Contrary to the board’s initial response to the offer, which at RM3.90 per share and 91 sen per warrant was deemed to have undervalued the group, Liew appeared to be positive yesterday when asked about his view on the proposed takeover offer.

“We should be pleased because if they don’t like us, if they think we’re not capable, why would someone put money into your company. Now with S P Setia having PNB as a strong dominant shareholder, we have money so we can do more projects. We must always look at the positive side of things,” said Liew.

S P Setia moves a step closer to realising its RM4.6 billion KL Eco City project.

PNB, through Maybank Investment Bank Bhd, had given notice of the takeover offer to the board of S P Setia on Sept 28 and had given a time frame of 21 days for the company’s shareholders to decide whether to sell their shares to the fund. However, they have yet to submit the official document to the board.

On Oct 17, PNB had applied to the Securities Commission (SC) for an extension for the despatch of the offer document, which was approved by the SC via a letter dated Oct 24.

However, no date was given to indicate when the offer document would be sent and when it would close.

According to Aberdeen Investment Bank Bhd assistant investment manager Bharat Josh, the indefinite extension showed a lack of clarity in the process of PNB’s takeover exercise, leaving investors in the dark.

“I think PNB and the SC should be a lot more transparent and they should keep investors in the know. For investors in general, we would like to see the offer document before we know whether the offer really undervalues the company or not,” he commented.
Since making the announcement, PNB and its various trust funds and parties in concert (PAC) have been accumulating S P Setia shares in the open market. They crossed the 33% shareholding threshold on Sept 27 and have since increased the stake to more than 35% as at Nov 11.

Other government funds which have significant shareholdings in S P Setia are Kumpulan Wang Persaraan holding around 5% and the Employees Provident Fund with more than 13%.


This article appeared in The Edge Financial Daily, November 16, 2011.



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RM460m funding for KL Eco City

KUALA LUMPUR: S P Setia Bhd signed a RM460 million syndicated Islamic financing yesterday with three Islamic financial institutions — HSBC Amanah Malaysia Bhd, Hong Leong Islamic Bank Bhd and Bank Muamalat Malaysia Bhd — in conjunction with the official launch of its RM6 billion KL Eco City project.

According to Tan Sri Liew Kee Sin, president and CEO of S P Setia, the RM460 million syndicated loan will be utilised to provide infrastructure such as ramps and bridges to ensure a smooth flow of traffic in and around the development.

S P Setia will invest more than RM150 million to link the project to all major highways surrounding the area.

“Phase 1 will be ready in three to four years. We have started work on the site. Right now, we are doing soil tests and piling. As part of S P Setia’s commitment, we will solve the traffic problems first so that by the time Phase 1 is ready, the traffic problems in that area will be already resolved,” he said.

“We’re building four ramps, and most ... will be built simultaneously. We want to assure our customers that when they come to KL Eco City, they will not only have the KTM and the LRT [at their disposal], we will also make sure traffic for cars is taken care of,” he added.

Once fully completed, the 24-acre development will house approximately 30,000 people, including residents and office workers. Liew said KL Eco City will transform the former Kampung Haji Abdullah Hukum site into an inner city haven, and is expected to start contributing to the group’s earnings in the next two years.

Liew (second from right) exchanging documents with Rafe, witnessed by (from left) Raja Nong Chik, KL Datuk Bandar Tan Sri Ahmad Fuad Ismail and Bank Muamalat deputy CEO Musa Abd Mailk.

The project is expected to take 10 years to complete, said Liew. It aims to be the country’s first integrated green development with accreditation from both the Malaysian Green Building Index and US-based Leadership in Energy and Environmental Design.

Apart from the RM460 million financing it secured from the Islamic banks, the project will be fully funded by internally generated funds and also through the group’s recurring income.

S P Setia has been working with the authorities in the past 10 years to resolve all matters related to land ownership and resettlement of squatters previously resident in the area of Kampung Haji Abdullah Hukum.

“KL Eco City is the perfect example of a public-private partnership. How do we solve the squatters problem on site? It took us 10 years to solve it but we were committed, we never ran away [from the problems]. We wanted to solve the problems of the people, so together with the minister and the Datuk Bandar, we resolved it,” he said.

Present to witness the signing between Liew and Rafe Haneef, CEO of HSBC Amanah Malaysia Bhd, was Datuk Raja Nong Chik Raja Zainal Abidin, the minister of Federal Territories and Urban Wellbeing.

He said S P Setia’s initiative to preserve “Rumah Abdullah Hukum”, the home of the earliest settler in the area whom the kampung was named after, is highly commendable.

“The restored heritage house will be an informative tourist attraction to learn about Kuala Lumpur in the early days, especially in reference to the Abdullah Hukum site, and its significance as one of the early kampung settlements in the development of Kuala Lumpur,” the minister said.


This article appeared in The Edge Financial Daily, November 16, 2011.



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CI Holdings slumps into the red in 1Q

PETALING JAYA: CI Holdings Bhd reported RM307,000 in losses after tax from its continuing tap and sanitary ware businesses on lower revenue of RM9.08 million for its first quarter ended Sept 30, 2011 (1QFY12) compared with a profit after tax (PAT) of RM333,000 in the corresponding period last year.

Profit before tax (PBT) slumped by 81% year-on-year (y-o-y) to RM192,000. The group attributed the decline in its quarterly revenue and PBT of its divisions to the delayed completion of various developers’ projects resulting from softening demand as the global economic environment continues to weaken.

CI, which disposed of its beverages division through the sale of Permanis Sdn Bhd to Japan’s beer maker Asahi Group Holdings Ltd for RM820 million in cash, has classified the company as “held for sale”. The disposal was completed on Nov 11 as the group received the full proceeds from Asahi.

Revenue from Permanis increased by 7% y-o-y to RM153.18 million from RM142.61 million. However, PBT decreased by 34% y-o-y to RM9.5 million from RM14.3 million, leading to lower PAT of RM7.64 million in the quarter against RM11.3 million last year.

“The decrease in profits was mainly due to the increase in sugar price as a result of the final removal of subsidy by the government and an increase in finance cost due to additional financing of the new assets,” the group stated.

Overall, the group achieved PAT of RM7.34 million from the continuing and discontinued operations compared with RM11.67 million in the preceding year.

On a quarter-on-quarter basis, CI recorded a 90% drop in PBT for its continuing operations, compared with the RM1.83 million in the previous quarter ended June 30. PBT from the discontinued operations fell by a smaller percentage of 9% from RM10.4 million.

CI had on Nov 10 announced that it would undertake a total cash distribution of RM724.2 million or RM5.10 per share to its shareholders through a special dividend payment of RM653.2 million or RM4.60 per share and proposed capital repayment of RM71 million or 50 sen per share. These constitute part of the proceeds from the disposal of Permanis.

CI added that it will continue to explore opportunities to replicate its successes in transforming and maintaining extensive growth of its investee companies through new investments. It will also focus on driving its continuing operations in the tap and sanitary ware divisions.

Net assets per share stood at RM1.39 as at Sept 30 against RM1.33 a year ago.

CI’s share price fell two sen yesterday, off its year-to-date high of RM5.30 on Monday. The stock has risen by more than 44% year to date.


This article appeared in The Edge Financial Daily, November 16, 2011.



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Pump-priming in Penang

Construction
Maintain overweight: Four traffic alleviation projects announced by the Penang government could drum up excitement over contractors and developers that already have exposure there, IJM Corp Bhd and Malaysian Resources Corp Bhd (MRCB) for example.

The proposed new infrastructure projects in Penang are not entirely new but the 2015 timing of their implementation is a surprise and a long-term positive for the construction sector. Maintain “overweight”.

The Edge Financial Daily reported the Penang government has proposed four traffic alleviation projects worth an estimated RM5 billion to RM8 billion, making it the state’s biggest infrastructure exercise.

Chief Minister Lim Guan Eng said the state government will pay the contractors via a competitive land swap deal. The prime land is located in the Gurney Drive tourist belt.

The projects are: (i) a 6.5km sea tunnel connecting Gurney Drive on the island to the northern side of Butterworth; (ii) a 4.2km road from Gurney Drive to the Tun Dr Lim Chong Eu expressway bypassing the city centre; (iii) a 4.6km road linking Bandar Baru Air Itam to the same expressway; and (iv) a 12km dual-carriage road from Tanjung Bungah to Teluk Bahang to pair with the existing coastal road.

The Penang government was to launch a notice of prequalification yesterday and hold a briefing in Penang on Nov 29 for interested bidders. The project will be open to local and foreign contractors. Construction is expected to start in 2015 and complete in 2020. The chief minister added that developers could propose to implement toll payments to recover costs.

We think the projects will be attractive to existing contractors and developers in the state. Within our coverage, IJM Corp and MRCB are among those that already have exposure to Penang.

Payment via land swap would provide a good landbanking opportunity. We view this as a good opportunity for WCT Bhd as it is in line with the group’s landbanking strategy and would expand its township expertise outside the Klang Valley.

Watch out for further news flow on Penang’s new infrastructure projects. There should be more visibility on the potential contenders and project structure in the coming months. This could be a catalyst for the sector, on top of the implementation of existing mega-jobs such as the Klang Valley MRT. — CIMB IB Research, Nov 15


This article appeared in The Edge Financial Daily, November 16, 2011.



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Buzz over Genting Plantations’ Johor Premium Outlet

Genting Plantations Bhd (Nov 15, RM8.12)
Maintain sell with target price RM6.07: The market is abuzz over the new Johor Premium Outlet (JPO), set to have its grand opening on Dec 11, according to the website. While Genting Plantations remains tight-lipped over JPO’s tenants, we gather from the Internet a list of more than 60 brand names is likely to feature.

Although incremental earnings contribution from the JPO is expected to be muted, we are positive over its long-term effect on the remaining 6,670 acres of Genting Plantations’ land.

Maintain “sell” as the stock trades at relatively rich valuation of 19.4 times 2013 price earnings ratio (PER). Our target price is unchanged at RM6.07, based on 14.5 times 2013 PER.

JPO is modelled after Woodbury Common Premium Outlets, an hour’s drive from New York City. JPO is about one hour’s drive from Singapore and three from Kuala Lumpur.

Popular international brands like Coach, DKNY, Burberry, Polo Ralph Lauren, Salvatore Ferragamo, GAP, Timberland, Nike, Emporio Armani, Guess, Levi’s and Tumi (to name a few) are expected to have a presence in JPO.

Homegrown brandnames like Bonia, Padini, Seed, Vincci and Royal Selangor, and Singapore’s Charles & Keith are also expected to be featured. Shoppers will typically enjoy savings of 25% to 65% on branded items all year round.

JPO, with an estimated total development cost of RM149 million, is a 50:50 joint venture between Genting Plantations and Premium Outlets, the outlet division of US-based Simon Property Group. The JPO is synergistic to Genting Plantations as it will enhance the value of properties in the region of Genting Indahpura, its flagship development, over the long run.

Property sales at Genting Indahpura have been slow, at less than RM50 million in 2010. Genting Plantations has approximately 6,670 acres of remaining land with estimated book cost of RM1.22 psf (as at December 2010).

We understand this project is very profitable with a projected internal rate of return (IRR) in the high teens. Assuming a 15% IRR, the project may add some RM11 million per year to net profit beginning 2012, less than 5% of Genting Plantations’ net profit. In addition, we expect the company to recognise some RM8 million in land gain disposal for the JPO in 2H11, which we have yet to recognise in our earnings forecast. — Maybank IB Research, Nov 15


This article appeared in The Edge Financial Daily, November 16, 2011.



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Axiata CEO says stake in India's Idea for long term

HONG KONG (Nov 16): Malaysia's Axiata Group Bhd, which owns about a fifth of Indian mobile phone carrier Idea Cellular Ltd, does not plan to sell its stake in the Indian company, considering itself a long-term investor, Axiata's chief executive said on Wednesday.

Idea, controlled by India's Aditya Birla conglomerate, is the country's fourth-biggest mobile operator with more than 100 million subscribers. Axiata bought a stake in Idea in 2008.

In February, Axiata said it took a charge of 1.1 billion Malaysian ringgit ($348 million) after writing down its investment in Idea. Indian media reports have said Axiata is looking to sell the stake.

"We believe in the long run," Axiata President and Group Chief Executive Jamaluddin Ibrahim told Reuters on the sidelines of a mobile industry event in Hong Kong.

"In fact we have raised our stake slightly," he said, referring to a 0.9 percent stake buy in August that took Axiata's total holding to about 20 percent.

Idea is operating in a fast-growing yet ferociously competitive mobile market. A vicious price war in the crowded 15-operator market has kept profits under pressure for the last two years, while a multi-billion telecommunications licensing scandal has prompted regulatory changes.

India's government is in the process of overhauling decade-old telecoms rules and there is little clarity yet on several contentious issues, leading to uncertainty among market players.

"There are concerns," Jamaluddin said. "But we are positive on Idea. We are positive on India."

Idea last month said it was focusing on increasing revenue from high-margin data services after reporting a sharper-than-expected drop in quarterly profit.

Idea shares are up more than 42 percent this year, outperforming the broader CNX NIFTY Index, which has lost about 18 percent. Top Indian mobile carrier Bharti Airtel has risen nearly 13 percent this year. – Reuters



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Maybank share price up on Laos, Thailand plans

KUALA LUMPUR (Nov 16): Shares of MALAYAN BANKING BHD [] climbed on Wednesday on a news report that it was in talks for a Laos bank licence while it would use its Singapore-based brokerage Kim Eng Holdings Ltd to open a Thai bank.

At 4.03pm, Maybank was up 13 sen to RM8.40. There were 4.47 million shares done.

The FBM KLCI fell 2.48 points to 1,474.74. There were 1.73 billion shares done valued at RM1.15 billion. Losers beat gainers 529 to 263 while 243 stocks were unchanged.

Dow Jones news wire reported that Maybank would focus on Southeast Asia opportunities. The report also said Maybank was in talks for a bank licence in Laos while it would also use its unit Kim Eng to open a Thai bank.

In January, 2011 Mayabnk acquired a strategic 44.6% stake in Kim Eng Holdings Ltd at S$3.10 per share, amounting to S$798 million (RM1.9 billion) with a view to take over the Singapore–based broking firm.



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Al-Hadharah Boustead REIT 3Q net profit up 33% to RM22.9m

KUALA LUMPUR (Nov 16): AL-HADHARAH BOUSTEAD REIT [] net profit for the third quarter ended Sept 30, 2011 rose 33% to RM22.9 million from RM17.17 million a year earlier, due to the injection of new PLANTATION [] assets namely TRP Estate, Sutera Estate and Trong Mill.

Revenue for the quarter rose to RM27.29 million from RM18.86 million in 2010.

Earnings per share was 3.65 sen compared to 3.08 sen in 2010, while net assets per share was RM1.42.

For the nine months ended Sept 30, Al-Hadharah Boustead REIT’s net profit rose to RM66.91 million from RM49.76 million in 2010, on the back of revenue RM77.16 million.

In a statement Wednesday, Nov 16, Al-Hadharah Boustead REIT chairman Tan Sri Lodin Wok Kamaruddin said there was clearly a greater usage of palm oil particularly among established markets in Asia.

“The REIT is expected to benefit from this strong demand given that crude palm oil prices should remain within a favourable pricing range.

“With our strong dividend payout track record and the healthy movement of our unit price, we are confident investors will benefit from their investments in the REIT despite current capital market conditions,” he said.



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Flash: UEM Group-EPF to waive PLUS’s RM2.9b compensation, toll freeze until 2015

KUALA LUMPUR (Nov 16): The UEM Group Bhd and the Employees Provident Fund Board (EPF), which are taking over PLUS EXPRESSWAYS BHD [], have agreed that the toll freeze to continue until 2015.

They said in a statement on Wednesday there would be no compensation while they have agreed to waive PLUS’ current outstanding compensation balance totalling RM2.9 billion.

They added that no compensation will be accorded to PLUS for the five years toll freeze, which would otherwise cost the government an additional RM3.6 billion.

The toll freeze will continue until 2015 and there will be no toll hike on four expressways until 2015. The four expressways are – North South Expressway (NSE), NSE Central Link, Malaysia-Singapore Second Crossing (Linkedua), and the Butterworth-Kulim Expressway (BKE).

They said these were the balanced revised terms of supplementary toll concession agreements on five expressways operated by PLUS and Penang Bridge Sdn Bhd.

Following negotiations with the government, both parties have agreed on the revised terms that are considered fair to the Government, users of PLUS’s expressways and Penang Bridge, rakyat in general and the capital markets.

They said there would also be cuts in toll rate increase. Starting 2016, toll rate increase on the four expressways will be fixed at 5% every three years, while the toll rate for Penang Bridge will remain as per current charges (for example, RM7 for Class 2 vehicles) until the end of the concession period.



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UEM, EPF to waive PLUS' compensation

UEM Group Bhd and the Employees Provident Fund (EPF) have agreed to waive PLUS Expressways Bhd's current outstanding compensation balance totalling RM2.9 billion from the government.

In a statement today, UEM said there will also be no compensation for the toll rate freeze until 2015 which will otherwise cost the government RM3.6 billion.

EPF and UEM Group have concluded the negotiation with the government on the proposed acquisition of assets and liabilities of PLUS Expressways and Penang Bridge Sdn Bhd.

They expect to complete the proposed acquisition and payment to shareholders of PLUS Expressways by December this year.

Under the negotiation term, there will be no toll increase for the North-South Expressway (NSE), North-South Expressway Central Link (NSECL), Malaysia-Singapore Second Crossing (Linkedua) and Butterworth-Kulim Expressway (BKE).

Starting 2016, the toll rate on the four expressways will increase at five per cent every three years while that for Penang Bridge will remain as per current charges until end of concession period.

There will be no extension for concession period for NSE and Linkedua which will end in December 2038.

Meanwhile, the concession period for NSECL, BKE and Penang Bridge will be extended to December 2038.

The current expiry for NSECL is May 31 2030; BKE (June 27 2026); and, Penang Bridge (December 31 2021). -- Bernama



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KL shares continue to fall

Share prices on Bursa Malaysia continued its downtrend mid-afternoon, pressured by persistent selling of heavyweights like Petronas Chemicals and Tenaga, dealers said.

As at 3.12 pm, the FTSE Bursa Malaysia (FBM KLCI) was 4.02 points lower at 1,473.2, with the benchmark index moving between 1,470.09 and 1,487.37, thus far.

However, gains in Maybank managed to prevent further losses on the local bourse.

The Finance Index increased 13.59 points to 13,153.03 but the Plantation Index slipped 1.33 points to 7,633.51 and the Industrial Index decreased 7.81 points to 2,707.51.

The FBM Emas Index slid 28.149 points to 10,092.16, the FBM Mid 70 Index eased 7.569 points to 11,013.82 and the FBM ACE Index lost 59.62 points to 4,211.81.

Decliners led advancers 529 to 221 while 253 counters were unchanged, 478 untraded and 23 others were suspended.

Turnover stood at 1.494 billion shares worth RM936.656 million.

For the actives, both Compugates and AsiaEP eased 0.5 sen each to 8.0 sen and 10 sen, respectively, while Tiger Synergy was unchanged at 13.5 sen.

For heavyweights, Maybank rose 12 sen to RM8.39 but Sime Darby was unchanged at RM8.91. CIMB dropped 7 sen to RM7.03, Petronas Chemicals lost 20 sen to RM6.22 and Tenaga was 10 sen lower at RM5.75. -- Bernama



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Tricubes jump 48.5% on police nod for summons contract

KUALA LUMPUR (Nov 16): Shares of TRICUBES BHD [] jumped 48.5% to 24.5 sen on Wednesday after it confirmed getting government approval as a collection agent for the police for traffic summons.

At 3.02pm, it was up eight sen to 24.5 sen. It was actively traded with 40.91 million shares transacted.

At the midday break, Tricubes announced it had secured a contract from the Malaysian police to handle the traffic summons and enquiries.

It had received a letter of award from the police appointing it as the collection agent of traffic summons via the automated teller machines and also enquiry of traffic summons through the short messaging services.



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Tricubes appointed summons collection agent

Tricubes Bhd said today it received a letter of award on Tuesday from the Royal Malaysia Police appointing it as the collection agent for traffic summonses via Automated Teller Machines (ATMs) and enquiries about traffic summonses through short message service (SMS).

Tricube made the announcement to Bursa Malaysia today. -- Bernama



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Al-Hadharah Boustead posts higher Q3 pre-tax profit

Al-Hadharah Boustead Real Estate Investment Trust (REIT) posted an unaudited pre-tax profit of RM22.90 million for the third quarter ended Sept 30, 2011, a 33 per cent increase from RM17.17 million in the same quarter in 2010. Revenue was at RM27.30 million, up from RM18.86 million previously.

In a statement to Bursa Malaysia, the Fund said it recorded a higher revenue of RM77.16 million for the nine-month period, up from RM55.17 million in the same period in 2010.

"Additional rental from the newly acquired Taiping Rubber Plantation and Sutera Estates contributed to the increase in fixed rental income to RM49.1 million from RM43.6 million in 2010.

"Performance-based profit sharing meanwhile was more than double at RM28.1 million from last year's RM11.6 million," it said.

As a result, profit after tax grew 34 per cent to RM66.9 million from last year's RM49.8 million, it added. -- Bernama



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AMMB posts higher Q2 pre-tax profit

AMMB Holdings Bhd posted a higher pre-tax profit of RM498.34 million for the second quarter ended Sept 30, 2011 from RM465.19 million.

In a filing to Bursa Malaysia today, it said its revenue increased to RM2.138 billion compared to RM1.773 billion previously.

The company also recorded 16 per cent growth in profit after tax and minority interest to RM811.0 million for the first half of financial year 2012, supported by higher non-interest income and lower allowances.

AMMB Group managing director Cheah Tek Kuang said the net interest margin was stable while loans growth remained targeted.

"We had good deposit growth, with current account savings account increasing 21 per cent, as a result of expanded product and service offerings, and footprints," he added. -- Bernama



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Ramunia JV declines participating in project due to long delay

KUALA LUMPUR (Nov 16): RAMUNIA HOLDINGS BHD [] and its joint venture partner had declined to take part in the re-tender of the well head platforms project due to the long protracted delay in the issuance of the notice of award.

Ramunia said on Wednesday this was despite that Ramunia’s unit Ramunia Fabricators Sdn Bhd and SEW Infrastructure Ltd (India) joint venture was declared the lowest compliant bidder on Aug 30, 2011, beating five other international consortia and one disqualified bidder.

It was explaining the reason why it declined to take part in the re-tender exercise of the development of the WO-16 cluster and SB-14 well head platforms project.

Ramunia said there was a “long protracted delay in the issuance of the notice of award by the Oil & Natural Gas Corporation Ltd (ONGC) from Sept 2, 2011 up to Nov 11, 2011”.



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Harvest tumbles after declared designated stock

KUALA LUMPUR (Nov 16): HARVEST COURT INDUSTRIES BHD [] shares and warrants fell sharply on Wednesday after they resumed trading after Bursa Malaysia Securities imposed trading sanctions on Monday.

At midday, it was down 63 sen to RM1.50 but the sanctions saw trading volume curbed to 698,000 shares done.

The warrants fell 54 sen to RM1.27 with 182,300 units done.

Under the trading curbs, buyers have to pay upfront for the shares or warrants, hence effectively curbing speculative buying.

The trading sanctions were the sternest warning to speculators who had chased up the stock in recent weeks despite that the regulator also issued unusual market activity queries to other penny stocks.

Bursa Securities had then said its decision to designate the securities of Harvest and the warrants due to excessive speculation were in the interest of ensuring a fair and orderly market.



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AMMB Q2 net income grows to RM370m

AMMB Holdings Bhd, a Malaysian banking group, said second-quarter net income rose to RM369.5 million from RM332.9 million a year earlier, according to a statement to the Kuala Lumpur stock exchange.

Revenue climbed to RM2.14 billion from RM1.77 billion, it said. -- Bloomberg



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KLCI slips into red as Asian markets retreat

KUALA LUMPUR (Nov 16): The FBM KLCI slipped into negative territory at the mid-day break on Wednesday, Nov 16 as key Asian markets sank on fears of a contagion effect from the eurozone.

Asian shares and the euro fell on Wednesday as signs that rising borrowing costs were affecting AAA-rated France stirred fears that even core euro zone members may not escape contagion from the region's debt crisis, according to Reuters.

The political outlook remained unclear in struggling Italy and Greece as they attempt to push through severe austerity measures needed to get bail-out funds and win market confidence. Prime Minister designate Mario Monti was expected to unveil Italy's new government on Wednesday, it said.

The FBM KLCI was down shed 0.34 of a point to 1,476.88 at 12.30pm. Losers overtook gainers by 421 to 241, while 294 counters traded unchanged. Volume was 1.24 billion shares valued at RM706.41 million.

The ringgit weakened 0.47% to 3.1651 versus the US dollar; crude palm oil futures for the third month delivery fell RM10 per tonne to RM3,168, crude oil lost 67 cents per barrel to US$98.70 while gold fell US$11.97 an ounce to US$1,768.85.

At the regional markets, Hong Kong’s Hang Seng Index fell 1.94% to 18,973.07, the Shanghai Composite Index lost 1.73% to 2,486.12, Japan’s Nikkei 225 was down 0.76% to 8,476.62, Taiwan’s Taiex fell 0.79% to 7,431.90, South Korea’s Kospi lost 0.62% to 1,874.47 and Singapore’s Straits Times Index shed 0.50% to 2,797.52.

On Bursa Malaysia, Harvest Court was the top loser when it resumed trade this morning after it Bursa Malaysia Securities Bhd had on Monday declared the securities counter as a designated counter.

Bursa Securities’ decision to designate the securities of Harvest and the warrants due to excessive speculation observed in the trading of both securities and has been taken in the interest of ensuring a fair and orderly market.

Harvest Court fell 63 sen to RM1.50 while its warrants lost 54 sen to RM1.27.

Other decliners included Shell that fell 24 sen to RM7.55, Manulife and Petronas Chemicals down 18 sen each to RM2.77 and RM6.22, SYF Resources 11.5 sen to 63.5 sen, Nilai and KLK 10 sen each to RM1.40 and RM20.98, while Lafarge Malayan Cement lost nine sen to RM6.78.

Among the gainers, Dutch Lady added 50 sen to RM22.30, Proton up 33 sen to RM3.54, DiGi 22 sen to RM34.84, TDM 20 sen to RM3.18, Carlsberg 18 sen to RM7.23, Bumi Armada 16 sen to RM3.99, Tradewinds 14 sen to RM9.07, Maybank 13 sen to RM8.40, Aeon Credit 12 sen to RM5.68 and Parkson nine sen to RM5.74.

Compugates was the most actively traded counter with 66.98 million shares done. The stock added half a sen to 8 sen.

Other actives included Tiger Synergy, Asia EP, DPS Resources, Ingenuity Solutions, Tricubes and Systech.



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Tricubes secures police contract for traffic summons

KUALA LUMPUR (Nov 16): TRICUBES BHD [] has secured a contract from the Malaysian police to handle the traffic summons and enquiries.

It said on Wednesday it had received a letter of award from the police appointing as the collection agent of traffic summons via the automated teller machines and also enquiry of traffic summons through the short messaging services.



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Alliance Financial Group 2Q net profit up 18.2% to RM120.95m

KUALA LUMPUR (Nov 16): ALLIANCE FINANCIAL GROUP BHD [] (AFG) reported a strong set of financial results for the second quarter ended Sept 30, 2011, with earnings up 18.2% to RM120.95 million from RM102.27 million a year ago.

It said on Wednesday that revenue increased by 5.9% to RM314.60 million from RM296.98 million. Earnings per share were 7.9 sen compared with 6.7 sen.

For the first half, the earnings rose 8.2% to RM250.51 million from RM213 million while its revenue increased 8.9% to RM624.37 million from RM573.20 million.

At the pre-tax profit level, there was a 16.8% increase to RM336.3 million as the improvement was underpinned by growth in non-interest income, Islamic banking earnings and lower impairment charges.

Alliance Bank Malaysia Bhd Group chief executive officer Sng Seow Wah said: “We are happy with our first half performance, which reflects the results of the strategic initiatives undertaken over the last 18 months in upgrading capabilities and systems to deliver earnings and value creation across our franchise in consumer and SME banking.”

For the 1H, the group reported a 13.8% or RM97.2 million growth in income from its lending operations, including Islamic Banking, due to the 8.1% year-on-year expansion in the net loans portfolio.

“However, the 25 bps rise in the Overnight Policy Rate (OPR) as well as the 3% rise in statutory reserve ratio (SRR) in the last 12 months, put pressure on interest margins, and hence, the net interest income, including Islamic banking, registered a marginal increase of RM14.4 million or 3.2%,” it said.



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AMMB 2Q earnings up 10.9% to RM369.4m from yr ago

KUALA LUMPUR (Nov 16): AMMB HOLDINGS BHD []’s earnings rose 10.9% to RM369.47 million in the second quarter ended Sept 30,2011 from RM332.87 million a year ago, boosted by the group’s retail banking operations.

It said on Wednesday its revenue increase by 20.5% to RM2.138 billion from RM1.773 billion while earnings per share were 12.35 sen versus 11.08 sen. It declared a single tier dividend of 6.6% per share.

For the first half, its earnings increased by 15.6% to RM810.99 million while its revenue increased 17.6% to RM4.092 billion from RM3.477 billion.

AMMB also said its core capital ratio strengthened to 10.4% as at end September from 10.2% at end March while the risk-weighted capital ration increased to 14.9% from 14.4%.

“Improvement in earnings for current reporting quarter ended Set 30, as compared to preceding financial year corresponding quarter was mainly attributed to net impairment writeback on financial investment of RM17.7 million as opposed to net impairment loss of RM45.0 million, higher other operating income and net income from Islamic banking business by RM33.6 million and RM27.5 million respectively,” it said.

AMMB said the higher earnings from net income from insurance business of RM49.7 million and net interest income of RM524.8 million had also contributed to the improvement in earnings for the current reporting quarter ended Sept 30.

The banking group said the improvement in earnings for current reporting quarter from a year ago was partially off-set by higher other operating expenses, higher allowances for impairment on loans and financing, higher impairment loss on foreclosed PROPERTIES [] and doubtful sundry receivables of RM428.0 million, RM121.1 million, RM28.2 million and RM1.3 million respectively.



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KL shares lower mid-day

Share prices on Bursa Malaysia remained lower as at midday today with mild profit taking activities seen in selected heavyweights, led by Petronas Chemicals, dealers said.

As at 12.30 pm, the FTSE Bursa Malaysia (FBM KLCI) slipped 0.19 of a point to to 1,477.03, with the benchmark index moving between 1,473.57 and 1,487.37. However, gains in Maybank managed to cap some of the losses.

The Finance Index rose 39.06 points to 13,178.5 but the Plantation Index declined 12.32 points to 7,622.52 while the Industrial Index added 5.27 points to 2,720.59.

The FBM Emas Index shed 1.8 points to 10,118.51 but the FBM Mid 70 Index rose 9.29 points to 11,030.68 while the FBM ACE Index dropped 36.27 points to 4,235.16.

Losers outnumbered gainers by 421 to 241 while 294 counters were unchanged, 525 untraded and 23 others suspended. Turnover stood at 1.241 billion shares worth RM706.413 million.

For the actives, Compugates and AsiaEP added half sen each to eight sen and 10 sen respectively while Tiger Synergy was unchanged at 13.5 sen.

For the heavyweights, Maybank gained 13 sen to RM8.40 and Sime Darby rose six sen to RM8.97 but CIMB eased four sen to RM7.06 and Petronas Chemicals lost 18 sen to RM6.22. -- Bernama



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CI Holdings clarifies Erwin Selvarajah still Permanis CEO

KUALA LUMPUR (Nov 16): CI Holdings Bhd (CIH) clarified that Erwin Selvarajah has resigned as chief executive officer (CEO) of CIH with effect from Nov 11, 2011.

CIH said on Wednesday that Erwin resigned from the CEO post after the recent change in shareholding of Permanis Sdn Bhd and its group of companies from CIH to Asahi Group Holdings Ltd., Japan.

“Erwin, however, maintains his post as the CEO of Permanis,” it said.



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KL shares reverses earlier gain

Share prices on Bursa Malaysia turned easier at mid-morning today as investors remained wary over uncertainties in the global market, dealers said.

As at 11.06 am, the FTSE Bursa Malaysia (FBM KLCI) eased 0.9 of a point to to 1,476.32, dragged down by losses, mostly seen in Petronas Chemicals. However, gains in Maybank managed to cap some of the losses.

The Finance Index improved 49.97 points to 13,189.41, the Plantation Index added 7.23 points to 7,642.07 but the Industrial Index slipped 4.65 points to 2,710.67.

The FBM Emas Index shed 0.529 of a point to 10,119.78 but the FBM Mid 70 Index rose 18.94 points to 11,040.33 while the FBM ACE Index declined 8.89 points to 4,262.54.

Losers led gainers by 292 to 275 while 287 counters were unchanged, 627 untraded and 23 others suspended. Turnover stood at 905.911 million shares worth RM497.617 million.

HWANGDBS Vickers Research, in its research note today said key US stock indices ended higher by between 0.1 per cent and 0.5 per cent on Tuesday, on hopes that the new Italian Prime Minister would make progress in resolving the country’s sovereign debt problems.

"The nervous Wall Street performance may spread to our local bourse ahead, with the benchmark FBM KLCI likely to oscillate around the immediate support level of 1,475, pending the emergence of fresh market leads," it said.

Harvest Court, which resumed trading this morning after being declared as designated securities, lost 63 sen to RM1.50 with 660,000 shares changing hands.

Meanwhile, banking groups AMMB Holdings and Alliance Financial Group are scheduled to announce their latest quarterly financial results during lunch today.

For the actives, AsiaEP added half sen to 10 sen, Tiger Synergy was unchanged at 13.5 sen while Ingenuity Solutions shed half sen to 6.5 sen.

For the heavyweights, Maybank gained 13 sen to RM8.40, Sime Darby was flat at RM8.91, CIMB eased one sen to RM7.09 and Petronas Chemicals lost 16 sen to RM6.24. -- Bernama



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