MAS axes 8 loss-making routes, sees profit impact of RM302m

KUALA LUMPUR (Dec 14): Loss-making MALAYSIAN AIRLINE SYSTEM BHD [] (MAS) will axe eight loss-making routes under its route rationalisation exercise which will take effect early 2012.

MAS group CEO Ahmad Jauhari Yahya said on Wednesday: “The withdrawal was based on our own independent internal profitability and yield analysis. This accounts for almost 12% of our passenger capacity and we estimate that the ongoing route rationalisation will improve loads, increase yields and have a profit impact of RM220 million to RM302 million for 2012.”

KUALA LUMPUR (Dec 14): Loss-making Malaysian Airline System Bhd (MAS) will axe eight loss-making routes under its route rationalisation exercise which will take effect early 2012.

MAS group CEO Ahmad Jauhari Yahya said: “The withdrawal was based on our own independent internal profitability and yield analysis. This accounts for almost 12% of our passenger capacity and we estimate that the ongoing route rationalisation will improve loads, increase yields and have a profit impact of RM220-RM302 million for 2012.”

The route rationalization exercise takes effect early next year and involves the withdrawal from the following loss-making routes:

Effective from Jan 6: Daily flights Kuala Lumpur – Surabaya vv B737 route

Effective Jan 10: Thrice-weekly Kuala Lumpur – Dubai vv A330 route

Effective Jan 12: Twice-weekly Kuala Lumpur – Karachi – Dubai vv A330 route

Effective Jan 13: Twice-weekly Kuala Lumpur – Dubai – Damman vv A330 route

Effective Jan 30: Daily Langkawi – Penang – Singapore vv B737 route

Effective Jan 31: Thrice-weekly Kuala Lumpur – Johannesburg vv B777 route

Effective Feb 1: Twice-weekly Kuala Lumpur – Cape Town – Buenos Aires vv B747 route

Effective Feb 2: Thrice-weekly Kuala Lumpur – Rome vv B777 route

Jauhari said the route rationalisation was expected to have minimal impact on Malaysia's position as a top tourist destination in Asia “as we will work aggressively with our code share partners”.

He said through MAS’ existing arrangements with them, MAS would continue to promote connectivity between Malaysia and key international destinations.

“We also hope to return to these markets after we have stabilised our business,” he added.



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Mithril selling KK office space for RM43.2m to repay loan stocks

KUALA LUMPUR (Dec 14): MITHRIL BHD [] is selling 29 parcels of commercial office space within Menara MAA in Kota Kinabalu for RM43.2 million cash to repay its redeemable convertible secured loan stock (RCSLS).

It said on Wednesday the proposed disposal was expected to result in a consolidated net loss after tax on disposal of RM5.3 million and a discount of about 10.9% to the market value of the PROPERTIES [].

The properties which Mithril is selling are 27 parcels of commercial office space, measuring 169,281 sq ft in Menara MAA for RM40.20 million cash to Tanam Permai Holdings Sdn Bhd.

Mitrhil had also proposed to sell a unit in Menara MAA, measuring 1,890 sq ft to Tan Wai Seng for RM600,000.

It also proposed to sell a parcel of commercial office space, measuring 4,593 sq ft, also in Menara MAA to Madam Link Sdn Bhd for RM2.40 million.

“The proposed disposal of properties is proposed at this juncture as Mithril is compelled to repay in full the outstanding amounts owing to the RCSLS holders,” it said.

Mithril said the proposed disposal was crucial to avoid an event of default under the terms of the trust deed and deeds of assignment of the RCSLS.

Mithril said the RCSLS were issued on April 6, 2004 and secured by the MAA deed of assignment and security deeds of assignment on the Properties.

To recap, on April 5, 2011, the company had defaulted on its coupon payment obligations amounting to RM1.25 million for the RCSLS due and payable on that day.

On Oct 3, 2011, the RCSLS holders had given the company up to June 30, 2012 to meets its obligations as per the trust deed for the RCSLS and deferred the declaration of an event of default.

However, if Mithril and the purchasers of the properties fail to complete the deal, Mithril would be in default of its repayment to the RCSLS holders.

Hence, AmTrustee had full authority to demand the full repayment of the RCSLS to be immediately due and payable to the RCSLS holders.



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Update: Johor Corp, CVC Capital launch takeover of QSR, KFCH

KUALA LUMPUR (Dec 14): Johor Corporation and CVC Capital Partners Asia III Ltd have teamed up to take over QSR BRANDS BHD [] and KFC HOLDINGS (M) BHD [] (KFCH).

Johor Corp and CVC Capital had on Wednesday, made the offer via a special purpose vehicle Massive Equity Sdn Bhd (MESB) in which Johor Corp holds a 51% stake and CVC Capital 49%.

MESB offered RM6.80 for the shares in QSR Brands Bhd and RM3.79 for the warrants. At RM6.80, this is 80 sen above the closing price of RM6 on Tuesday while the offer price for the warrants was a premium of 77 sen from the closing price of RM3.02.

MESB also made an offer to KFCH of RM4 per share and RM1 per warrant. At RM4, this was 59 sen above the closing price of RM3.41 on Tuesday but five sen below the closing price of RM1.05.

The securities were suspended from trading on Wednesday and resume on Thursday.

Johor Corp owns 55.9% of KULIM (M) BHD [], which, in turn, owns 53.9% of QSR. QSR has a 50.93% stake in KFCH.

Analysts had earlier expected only Johor Corp to take over QSR and KFCH and this did not include CVC Capital’s participation.

“By taking QSR and KFC Holdings private, Johor Corp would have more control and direct ownership over the cash flows and dividends of the crown jewels, KFC and Pizza Hut. QSR and KFC Holdings generate strong operating cash flows of RM250m million to RM300 million per annum but Johor Corp only get to enjoy less than half of it given their current stakes.

“A buyout of QSR and KFCH would increase the amount of dividends and cash flows that Johor Corp enjoys from this top fast food operator,” a research house said.

In December last year, Johor Corp had stated it has no plans to sell its prized assets, QSR and KFCH, which are held through its subsidiary Kulim.

Its president and chief executive Kamaruzzaman Abu Kassim had then said JCorp entered the quick service restaurants business in 2006 (through Kulim’s investment in QSR) and since then has seen tremendous growth in revenue and profit before tax (PBT) at an average of 13.8% and 3.7% per annum respectively.

“The results from this segment had contributed significantly, making up 47.5% and 44.1% respectively to Kulim’s revenue and PBT in the financial year ended Dec 31, 2009.

“It does not make sense to sell our core business,” he had then said in a statement.



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Update: Johor Corp, CVC Capital offer RM6.80 for QSR shares

KUALA LUMPUR: Johor Corporation and CVC Capital Partners Asia III Ltd have made an offer of RM6.80 for the shares in QSR BRANDS BHD [] and RM3.79 for the warrants.

At RM6.80, this is 80 sen above the closing price of RM6 on Tuesday while the offer price for the warrants was a premium of 77 sen from the closing price of RM3.02.

QSR announced to Bursa Malaysia on Wednesday that it had received a letter from Massive Equity Sdn Bhd (MESB) which sets out MESB’s conditional offer to acquire the entire business and undertaking including all of the assets and liabilities of QSR

MESB shareholders are Johor Corporation’s unit Triple Platform Sdn Bhd which owns 51% stake, and CVC Capital Partners’ unit Melati Asia Holdings Ltd (49%).



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Flash: Johor Corp, CVC Capital make joint offer for KFCH at RM4 per share

KUALA LUMPUR (Dec 14): Johor Corporation Bhd and CVC Capital Partners Asia III Limited have made a joint offer for KFC Holdings Bhd (KFCH) at RM4 per share and RM1 per warrant.

At RM4, this is 59 sen above the closing price of RM3.41 on Tuesday but the offer of RM1 for the warrants was five sen below the closing price of RM1.05. The securities were suspended from trading on Wednesday and resume trading on Thursday

KFCH announced to Bursa Malaysia on Wednesday that it had received a letter from Massive Equity Sdn Bhd (MESB) which sets out MESB’s conditional offer to acquire the entire business and undertaking including all of the assets and liabilities of KFCH.

MESB shareholders are Johor Corporation’s unit Triple Platform Sdn Bhd which owns 51% stake, and CVC Capital Partners’ unit Melati Asia Holdings Ltd (49%).



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Mentiga’s 10m new shares to list on Thursday

KUALA LUMPUR (Dec 14): MENTIGA CORPORATION BHD []’s additional 10 million new shares of RM1 each will be listed and quoted on Thursday, Dec 15.

A Bursa Malaysia circular said on Wednesday the new shares arose from the conversion of 10 million redeemable convertible preference shares by Amanah Saham Pahang Bhd.



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KBB Resources publicly reprimanded, ex-directors fined

KUALA LUMPUR (Dec 14): Bursa Malaysia Securities Bhd has publicly reprimanded KBB RESOURCES BHD [] (KBB) and three of its former executive directors for failing to make an immediate, clear and accurate announcement on the defaults in payment of various credit facilities.

The directors were also fined a total of RM150,000.

The regulator said on Wednesday that KBB’s former Group Managing Director Datuk Ang Cho Teing, and former executive directors Datin Tai Chok Ping and Ang Chor Teng were publicly remanded and fined RM50,000 each.

Bursa Securities said KBB had breached paragraphs 9.03(1) and 9.04(l) of the Main Market Listing Requirements (Main LR) read together with paragraphs 2.1(d) and/or (e) of Practice Note 1 (PN1) for failing to make an immediate announcement on the defaults in payments of various credit facilities.

In addition, KBB’s announcement on July 26, 2010 breached paragraph 9.16(1)(a) of the Main LR as the announced date of the defaults (July 21, 2010) was not factual and was inaccurate in view of KBB’s confirmation to Bursa Securities that the credit facilities [i.e., Bankers Acceptances (BAs)] had expired as early as June 29, 2010, it said.

“Bursa Securities views the contraventions seriously and reminds KBB and its board of directors of their duty to uphold appropriate standards of responsibility and accountability to shareholders and the investing public,” it said.



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Kencana Petroleum 1Q net profit up 60% to RM83.5m

KUALA LUMPUR (Dec 14): KENCANA PETROLEUM BHD []’s earnings rose 59.5% to RM83.54 million from RM52.35 million a year ago, underpinned by the full contribution from Allied Marine & Equipment Sdn Bhd.

It said on Wednesday that its revenue increased by 69% to RM569.92 million from RM336.96 million while earnings per share were 4.2 sen compared with 3.16 sen.

Kencana said the better financial performance was also due to higher progress achieved for contracts in hand, bigger order book and better management of costs.

When compared to the preceding quarter, it said pretax profit jumped 48.4% to RM108.50 million from RM73.1 million.



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Market Commentary

The FBM KLCI index lost 2.27 points or 0.15% on Wednesday. The Finance Index increased 0.40% to 13059.67 points, the Properties Index dropped 0.15% to 950.72 points and the Plantation Index down 1.10% to 7897.2 points. The market traded within a range of 7.00 points between an intra-day high of 1466.45 and a low of 1459.45 during the session.

Actively traded stocks include TAKASO, SANICHI, ENVAIR, BIMB-CB, AMEDIA, UTOPIA, FLONIC, KNM-CK, VERSATL and COMPUGT. Trading volume decreased to 1494.84 mil shares worth RM1084.68 mil as compared to Tuesday’s 1829.66 mil shares worth RM1385.36 mil.

Leading Movers were PBBANK (+10 sen to RM12.78), MAYBANK (+6 sen to RM8.25), AXIATA (+2 sen to RM4.87), TM (+4 sen to RM4.62) and HLBANK (+14 sen to RM10.68). Lagging Movers were GENTING (-22 sen to RM10.42), KLK (-50 sen to RM22.60), AMMB (-10 sen to RM5.76), GENM (-5 sen to RM3.85) and IOICORP (-3 sen to RM5.09). Market breadth was negative with 309 gainers as compared to 412 losers. -- JF Apex Securities Bhd



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KLCI extends loss on gloomy external outlook

KUALA LUMPUR (Dec 14): The FBM KLCI closed lower on Wednesday, in line with the retreat at Asian markets and weaker opening at European markets following less than encouraging comments from the US Federal Reserve.

The FBM KLCI closed 2.27 point to 1,463.12, weighed by losses at select blue chips.

Losers led gainers by 412 to 309, while 289 counters traded unchanged. Volume was 1.49 billion shares valued at RM1.09 billion.

Asian and European stocks fell on Wednesday after the US Federal Reserve warned Europe's unresolved sovereign debt crisis could hurt the giant American economy, according to Reuters.

Another issue that weighed on investor sentiment were a survey by Singapore’s of private economists released on Wednesday that said that country’s would grow by 3% percent in 2012, slowing from an expected 5.2 percent in 2011 as the global economy and financial services sector cool.

Last Friday, India slashed its full-year growth forecast amid slowing domestic and global demand, with officials warning the government was facing a serious balance of trade problem and will have a tough time meeting its fiscal deficit target.

At the regional markets, Japan’s Nikkei 225 slipped 0.39% to 8,519.13, Hong Kong’s Hang Seng Index fell 0.50% to 18,354.43, the Shanghai Composite Index lost 0.89% to 2,228.53, South Korea’s Kospi fell 0.34% to 1,857.75 and Singapore’s Straits Times Index lost 0.50% to 2,672.39.

Meanwhile, Taiwan’s Taiex gained 0.38% to 6,922.57.

On Bursa Malaysia, Dutch Lady fell 52 sen to RM25.88, KLK down 50 sen to RM22.60, Genting 22 sen to RM10.42, Petronas Dagangan lost 20 sen to RM17.18, APM 19 sen to RM4.22, Asia File and Petronas Gas 18 sen each to RM3.60 and RM14, HELP 14 sen to RM1.61, Boustead 13 sen to RM5.29 and Far East 10 sen to RM7.

Nestle led the gainers and was up 48 sen to RM56.48, Carlsberg up 37 sen to RM8.83, F&N 28 and BAT 28 sen each to RM18.50 and RM48.98, GAB 20 sen to RM13.18, Keck Seng 17 sen to RM3.97, Top Glove and Uzma up 15 sen each to RM4.52 and RM1.70, while CI Holdings and Hong Leong Bank rose 14 sen each to RM1.31 and RM10.68.

Takaso was the most actively traded counter with 99.5 million shares done. The stock rose one sen to 20.5 sen.

Other actives included Sanichi, Envair, Asia Media, Utopia, Flonic, Versatile and Compugates.



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TNB ready to import gas by August 2012

BANGI: Tenaga Nasional Bhd is ready to import gas at market price to meet the shortfall of supply, once Petroliam Nasional Bhd’s (Petronas) new re-gassification terminal in Malacca comes online by August 2012, even though the price will be much higher than the subsidised price of RM13.70 per mmbtu.

Datuk Seri Che Khalib Mohammad Noh, TNB president and CEO, said the higher price will not necessarily be passed down to the consumers. TNB plans to sit down with all parties concerned, including the government and other industry players such as the independent power producers (IPPs), to work out the best solution.

“As you have seen in the past, all parties, including the government, ministry, the Securities Commission and all the players in the industry, will sit down and try to find the best solution. That best solution doesn’t mean that everybody will get what they want. So I think the solution is not necessarily to pass the cost to the consumers; there are many ways that we can overcome the problem,” he said during a visit to Universiti Tenaga Nasional in Bangi yesterday.

Analysts contacted by The Edge Financial Daily were sceptical that the import of gas at market price by TNB will not result in an electricity tariff hike. According to Chong Lee Len with Affin Investment Bank Bhd, based on the agreement between TNB and the government, every unit of gas purchased at market price by the national utility should be reflected in the tariff.

“Theoretically, the electricity tariff will be increased if TNB uses imported gas purchased at market price to generate electricity. However, this might not happen as the government would not want to allow TNB to increase electricity tariff. But if this happens, the government will have to bear the extra cost by subsidising the gas price imported by TNB,” she said.

Che Khalib said all TNB is interested in is to ensure an uninterrupted supply of electricity to consumers. In doing so, TNB had to incur additional costs of RM3.1 billion due to the shortage of gas supplied by Petronas.

The national oil and gas company had to shut down its production platforms due to planned maintenance between April and June this year.According to RHB Research Institute, Petronas can currently supply 950 mmscfd to 1,000 mmscfd to TNB due to the shutdown of its gas producing platforms.

The government, through the Economic Planning Unit (EPU), had earlier promised that TNB will secure 1,250 mmscfd of gas between 2008 and 2011, and 1,350 mmscfd from next year onwards.Che Khalib said the government, Petronas and TNB had agreed in principle on the cost-sharing mechanism proposed by the government, which will result in TNB getting a writeback of two-thirds of the RM3.1 billion it spent due to the shortage of gas. He said the group has written a letter to the government saying that it agrees to the mechanism, as has Petronas.

If TNB were to import gas, he added, it will look for the cheapest option to reduce the burden on consumers. He said the group is engaging a consultant to advise it on the process of importing gas. TNB has been talking with gas suppliers and traders, including Petronas, as well as multinationals such as ExxonMobil and Royal Dutch Shell, he added.
“It is our responsibility to ensure we secure imported gas at the cheapest price. What we are doing now is talking to all gas suppliers and traders and [we have] asked them to give us a solution ... if they are to import gas, what would be their terms and price.

“We are looking at all potential suppliers for gas, like Esso, Shell, Petronas and a few others. We are talking to as many as possible to ensure that whatever decisions made they will be for the benefit of the consumers,” he said.

According to an analyst with an investment bank, if TNB imports gas at market price, it is highly unlikely the group will absorb the cost. Ultimately, the government would have to subsidise electricity tariff because looking at TNB’s cash flow, it is in no position to absorb the higher cost as the difference between the market price of gas and the government’s subsidised price is so large, the analyst said.

As at Aug 31, TNB’s gross cash halved to RM3.95 billion from RM8.34 billion a year ago, while its total borrowings decreased by a smaller amount from RM21.26 billion to RM19.05 billion.

For the year ended Aug 31, the group’s net earnings fell to RM499.5 million from RM3.2 billion a year ago, despite a rise in revenue to RM32.2 billion from RM30.3 billion.

“Looking at it, it seems like they are trying to get the subsidy from the government. However, importing gas at market price is still a cheaper alternative to continuing to burn oil or distillates. For TNB, it is a case of choosing the lesser of two evils,” the analyst concluded.

TNB’s share price shed three sen yesterday to RM5.47. Year-to-date, it has lost 18.72% of its value from RM6.73 on Jan 3. The stock reached its highest this year at RM7.11 on May 31 and a low of RM4.99 on Sept 26. Since then, the stock has risen by 9.62%.



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Goldis proposes 9.625 sen dividend

KUALA LUMPUR: Private equity investment company Goldis Bhd has reported a spike in its 3QFY12 results ended Oct 31 with net profit of RM237.41 million, up from RM11 million in the previous corresponding period mainly due to the disposal of assets.

Given the sharp jump in earnings, Goldis declared a second net interim dividend of 9.625 sen for FY12 ending Jan 31.

With 610.37 million shares issued, Goldis’ dividend payout should see roughly RM58.75 million in equity returned to its shareholders.

Proceeds from the disposal of Goldis subsidiary, HOEPharma Holdings Sdn Bhd to Taisho Pharmaceutical Co, which was completed on Aug 1, boosted 3Q earnings by RM221.23 million. Revenue rose nearly 50% to RM75.82 million from RM50.64 million previously.

Adjusting for the disposal of its subsidiary, which should be recorded as an extraordinary item, Goldis’ profits actually stand at RM16.18 million for 3Q, a 35.68% improvement from a year earlier.

Net assets per share jumped to RM2.32 from RM1.93, which can be attributed to the proceeds from the disposal of HOEPharma that boosted cash and bank balances to RM252.32 million as at Oct 31, compared with RM65.26 million at the same time last year. The sale of HOEPharma recorded RM275.32 million in Goldis’ cash flow statements.



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The Proton saga continues

The Proton-DRB-Khazanah saga continued yesterday with Proton Holdings Bhd issuing a statement saying that Khazanah Nasional Bhd, “in its normal course of business, it regularly receives proposals, enquiries and expressions of interests in relation to its various investments and companies where it has interest in, including Proton. Khazanah will make necessary disclosure at the appropriate time”.

Khazanah neither denied nor confirmed the rumour of the sale of its 42.7% equity stake in Proton to DRB-Hicom Bhd.

This was the second statement from Proton in a week, although it sent a clearer signal that something may be brewing at the national carmaker.

On Dec 6, in a response to an article in The Edge, Proton had flatly denied any corporate development. It announced to Bursa Malaysia that “after making due enquiry with the board of directors and major shareholders, the company is not aware of any reason for the unusual market activity in its shares and that there is no material corporate development not previously disclosed”.

Meanwhile, DRB-Hicom did not acknowledge that it is keen on buying into the national carmaker. The conglomerate had last week denied the speculation of it acquiring an equity stake in Proton.

Proton’s announcement came after the comments made by former prime minister Tun Dr Mahathir Mohamad that DRB-Hicom “is likely to win the bid for Khazanah’s equity interest in Proton” on Monday.

Interestingly, the announcements on Proton’s seemingly imminent sale — and even the likely buyer — are coming from Dr Mahathir, who is an adviser to Proton, rather than its major shareholder — Khazanah, which has been rather quiet throughout the episode.

The Edge weekly reported over a week ago that Khazanah might sell its stake in Proton to DRB-Hicom, which also assembles cars for Suzuki, Mercedes-Benz and global car maker Volkswagen AG (VW).

It is a well-known secret that Khazanah has been looking for a suitor for its majority stake in Proton, in which the the former does not have a board representative despite being the major shareholder.

In 2006, VW was interested in purchasing Khazanah’s stake in Proton, but the plan hit a snag due to what some said was nationalistic interest.

Three years later in 2009, DRB-Hicom approached Proton and submitted a bid to buy 32% of Proton shares. Again, the talks failed for reasons unknown.
Today, Proton is not exactly in the pink of health.

Proton’s net profit fell 76% to RM15.6 million for 2QFY12 ended Sept 30 from RM65.9 million a year earlier due to higher expenses incurred by Lotus Group.
Likewise, its 1HFY12 earnings took a sharp 86.6% fall to RM20.1 million from RM150 million a year earlier.

As at Sept 30, Proton had RM1.31 billion in cash, bank balances and deposits. Its short-term and long-term borrowings grew 158% to RM959.1 million compared with RM371.2 million six months earlier. Proton is in the second year of a five-year turnaround plan for Lotus Group that costs £480 million (RM2.35 billion).

However, if Khazanah didn’t sell its stake in 2006, one might wonder why the rush now, indeed? And why narrow the potential buyers to only a few local parties?

Would it not be better to have a tender exercise open to global auto players as well? Limiting the pool of buyers will not get Khazanah the best price, or a partner for Proton that will ensure it thrives.

Proton could definitely use a helping hand given its current weakening financial position, but certainly there should be no rush to make a transaction of such size and importance.

Recently, DRB-Hicom in an announcement to Bursa refuted claims that it is looking to secure a substantial stake in Proton and would later divest part of the stake to VW.

This wasn’t exactly a denial of the possibility that it could buy Khazanah’s stake and simply not sell it.
If VW had expressed interest in Proton five years ago, surely it has some ideas on how to turn the company around. Was it even approached now?

If Khazanah is indeed interested in potential buyers for its stake, the national sovereign wealth fund should open up the bids in a more transparent manner for a longer period of time.

This is especially since Proton is currently trading below its book value per share of RM9.81, net tangible assets per share of RM7.62 as well as Khazanah’s estimated cost of above RM8 per share.

Proton can rely on bigger automotive players to not only invest money in the national carmaker, but also to lend research and development (R&D) capabilities, something which DRB-Hicom can not offer.

When contacted by The Edge Financial Daily, Aberdeeen Asset Management fund manager Abdul Jalil Rasheed said: “A lot of the car manufacturing brands are owned by one company, where divisions like R&D are shared by all the different divisions within the company”.

If a significantly large auto player like VW were to have a stake in Proton, the local carmaker could stand to gain substantially from its R&D capabilities.

Back in its heyday from the mid-1980s to the mid-1990s, almost every Malaysian had a Proton car.

Fast forward to 2011 and Proton is seeing a decline in its market share, despite strong protectionist policies that result in hefty taxes and Malaysia having some of the highest car prices in the world.

Thanks to economies of scale and continuous investments in R&D, there are plenty of foreign carmakers that are selling much nicer cars, priced not much higher than Proton here and far cheaper overseas.

This is Proton’s biggest challenge. Jalil said the more pertinent question at this time is not if Khazanah were to sell its Proton stake to DRB-Hicom, but if Proton can just survive by being Proton.

With all three parties neither denying nor agreeing to the claims of the sale of Proton, it really is anyone’s guess how the saga will further develop.

Proton’s existing management is also said to have expressed interest in a management buyout, with the proposal spearheaded by its chairman Datuk Seri Mohd Nadzmi Mohd Salleh, and its CEO Datuk Seri Syed Zainal Abidin Syed Mohamad Tahir.

However, on a brighter note for Proton, the group has seen some interest in its shares of late.

Yesterday, Proton closed at RM4.27, four sen higher than Monday’s close.



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S P Setia’s proposed land buy hits snag

KUALA LUMPUR: S P Setia Bhd’s proposed acquisition of 1,010.5 acres (409ha) in Ulu Langat, Selangor for RM330.13 million hit a snag when the vendor did not agree to an extension of time for the transaction to fulfil certain conditions precedent to complete the deal.

The company, which is a target of an ongoing takeover exercise by Permodalan Nasional Bhd (PNB), told Bursa Malaysia yesterday the vendor did not agree to an extension of the period for the fulfilment of conditions precedent to the transactions that included the approval of the Estate Land Board to be obtained for the sale and transfer of the land.

The vendor in the transaction is another property development company, Ban Guan Hin Realty Sdn Bhd.

“The purchaser is currently seeking legal advice on its position under the SPA and will seek the appropriate relief from the court, if necessary,” S P Setia said.

S P Setia announced the proposed acquisition of the land from Ban Guan Hin Realty in August this year, two months before PNB launched a general offer for the rest of the shares in the property development company that it did not own. PNB was already the single largest shareholder in S P Setia and launched the takeover at RM3.90 per share after it crossed the 33% threshold.

S P Setia’s acquisition price valued the land at RM7.50 per square foot. It plans to undertake a mixed residential township development project with an estimated gross development value of RM3.5 billion.

According to its previous announcement to the local stock exchange, S P Setia said the proposed acquisition, which will be funded entirely in cash, offers a good opportunity to tap into strong demand for attractively priced homes by first-time owners and other home buyers in the Semenyih-Kajang corridor.

“The proposed acquisition also allows the group to further reinforce and expand its core business by replicating its proven township development model in an emerging growth corridor that is not presently served by the group’s more matured projects in the Klang Valley,” it said.

S P Setia pointed out that it had established a good reputation for delivering quality homes within its projects. S P Setia is known for its development of Setia Alam township project located at the Shah Alam-Klang corridor where prices have escalated since its development seven years ago.

On the proposed land that it is acquiring, SP Setia said the terrain of the land is generally undulating and is zoned for mixed housing development. According to S P Setia, the land is located midway between Semenyih, Bangi old town and Beranang. It is 12km south of Kajang town and 25 km south from here.

As at Oct 31, S P Setia had a total of RM1.44 billion cash and deposits and RM1.35 billion long and short-term borrowings as well as bank overdrafts. This translates into a net cash of some RM90 million.

The counter closed one sen or 0.26% lower at RM3.85 yesterday with a total of 2.3 million shares changing hands.



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S P Setia’s Liew is Malaysian E&Y Entrepreneur of the Year 2011

KUALA LUMPUR: Tan Sri Liew Kee Sin, president and CEO of S P Setia Bhd, has been honoured as the Malaysian Ernst & Young Entrepreneur of the Year (EOY) 2011. This was announced at the Ernst & Young EOY awards gala held at the JW Marriott Hotel in Kuala Lumpur last night.

International Trade and Industry Minister Datuk Seri Mustapa Mohamed, who represented the deputy prime minister, officiated at the gala.

Liew will represent Malaysia to join more than 50 winners from other countries to compete for the coveted Ernst & Young World Entrepreneur of the Year (WEOY) award in Monte Carlo, Monaco next year.

Ernst &Young Malaysia country managing partner Abdul Rauf Rashid said, “In E&Y, we believe entrepreneurship is fundamental and vital to every economy today. Entrepreneurs help generate employment and industry growth. They drive the economy and progress society. Indeed, driving entrepreneurship in Malaysia augurs well for the government’s Economic Transformation Programme that encourages and facilitates private sector initiatives to drive our economy to a high-income nation.”

In addition to the top honour, E&Y also presented four other awards for entrepreneurial excellence to the following individuals:

• Emerging Entrepreneur of the Year 2011 — Chan Kee Siak, CEO, Exabytes Network Sdn Bhd
• Technology Entrepreneur of the Year 2011 — Chu Jenn Weng, CEO/president, ViTrox Corp Bhd
• Woman Entrepreneur of the Year 2011 — Datin Chan-Low Kam Yoke, chairman/group CEO, HELP International Corp Bhd
• Master Entrepreneur of the Year 2011 — Tan Sri Liew Kee Sin, president and CEO, S P Setia Bhd

The award recipients were selected by an independent panel of judges guided by a set of globally benchmarked criteria.

On the selection of the Ernst & Young EOY 2011 Malaysia, the panel of judges commented that Liew stood out for his innovative thinking — embodying the true spirit of entrepreneurial excellence and commitment to continue making a difference to people’s lives, be it the community or his employees. In their view, he has demonstrated keen foresight and the entrepreneurial qualities of passion, vision, determination and innovation, with an emphasis on sustainability.

In conjunction with the 10th anniversary of the EOY awards in Malaysia, Ernst & Young also paid tribute to past Malaysian EOY winners who include Tan Sri Francis Yeoh (2002 and chairman of the World EOY 2011 judging panel); Datuk Seri Nadzmi Mohd Salleh (2003); Tan Sri Lim Wee-Chai (2004); Tan Sri Lim Kok Wing (2005); Tan Sri Tony Fernandes (2006);

Datuk Seri Edmund Santhara (2007); Datuk A K Nathan (2008); Datuk Seri Shahril Shamsuddin (2009) and Datuk Seri Stanley Thai (2010).



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More developers to build homes with PR1MA

SEREMBAN: More large developers are expected to work with the government to build afforable homes under the Projek Perumahan Rakyat 1Malaysia (PR1MA) housing scheme.

Prime Minister Datuk Seri Najib Razak, who launched PR1MA’s collaboration with Sime Darby Bhd to build 2,200 houses in Labu, Seremban yesterday, told reporters, “They are coming on board one by one. Sime Darby is the first because they have land and are prepared to launch. So we gave them the honour.”

The prime minister said PR1MA is scouting for land to undertake affordable housing projects.

The chairman of PR1MA is former minister and current ambassador to the US Datuk Seri Jamaluddin Jarjis and the chief executive is Datuk Abdul Mutalib Alias.

The first PR1MA housing project was launched in Putrajaya two months ago. But the project launched yesterday is the first development to be undertaken jointly by PR1MA and a private entity.

The project will have 2,200 houses on 62ha. The units are priced at RM200,000 to RM250,000 and the studio apartments will cost around RM140,000. Phase one will comprise 420 homes.

“This will fulfil the needs of those who earn RM2,000 to RM6,000 who are in need of housing but cannot afford houses at the high prices on the open market.
“With the cooperation between the government and private sector through a public private partnership, this programme will be able to provide quality and affordable homes for this group,” said the prime minister.

Najib said the partnership is a social business model where the developer does not make any profit or loss.

“The government can come in through the facilitation fund, where we can contribute to the cost of infrastructure. It will be a very small percentage of the overall cost,” he explained.

The project will begin early next year and is expected to be completed within 16 months as it will use the Industrialised Building System (IBS), which expedites the construction period. The houses will incorporate features such as a common solar system and rainwater harvesting system.

“The affordable and quality housing category is one of the strategic components of Sime Darby’s property development plans,” said chairman Tun Musa Hitam.

Sime Darby plans to build 21,120 units of affordable and quality homes, of which half will be landed properties. It has identified several areas for these projects, including Ara

Damansara in Petaling Jaya near Subang Airport, Bandar Bukit Raja in Klang, Putra Heights in Subang Jaya, Kota Elmina in Sungai Buloh, Elmina West in Shah Alam and Lagong Mas in Rawang, Selangor.



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Toyo Ink’s power venture fails to fuel share price rally

KUALA LUMPUR: Toyo Ink Group Bhd’s story on turning the ink maker into a power producer does not seem to sell well to the investing public.

The company, which announced the receipt of the letter of approval to build a US$2.5 billion (RM7.95 billion) power plant in Vietnam, succumbed to heavy selling pressure that pulled its share price to an intra-day low of RM1.53 yesterday, down 22.8% from its recent peak of RM1.88 recorded last Tuesday.

The stock managed to regain some lost ground in the last trading hour to end yesterday at RM1.70, with 35,900 shares transacted. Nonetheless, Toyo Ink’s share price has gained 37% from its year’s low of RM1.24.

To recap, Toyo Ink was granted a letter of award from the Vietnamese government for a power plant project in Hau Giang province in southern Vietnam.

According to the announcement to Bursa Malaysia, the approval letter from the Vietnamese government stated that it agreed to let Toyo Group (Malaysia) to conduct research and development of the Song Hau 2 thermo power plant project.

The power plant is expected to have a capacity of 2x1,000 MW.

The company’s venture has raised eyebrows as Toyo Ink is not in the power generation business, and the project will only see maiden earnings contribution in five years, at the earliest.

Its managing director Steven KC Song had indicated that it would take three to four years to build the plant and operations should begin in 2017 or 2018. If everything goes according to plan, Song expects return on investment in seven to nine years.

There are doubts on the venture as Toyo Ink has yet to be granted any power purchase agreement and to secure any financing facilities.

Toyo Ink’s balance sheet as at Sept 30 showed that the company’s borrowings were at about RM31.6 million, a large bulk being short-term debts. Its cash balance stood at RM1.78 million.

According to Song, the company will seek partners to raise capital and to bring in the expertise to build and operate the power station.

Song is optimistic about the prospects of undertaking the power plant project and said, “The Vietnamese are struggling with power supply issues.”
The company’s ink business has not fared well in the past two years.

For the six months ended Sept 30, Toyo Ink’s net profit fell more than half to RM402,000 from RM1.72 million in the previous corresponding period. Revenue shrank to RM48.3 million from RM57.4 million previously.

Toyo Ink’s net profit was down sharply to RM2.7 million or 6.35 sen per share from RM4.01 million or 9.38 sen per share for FY11 ended March 31, despite higher revenue at RM109.9 million compared with RM93.6 million the year before.

Even if the power project is a viable venture, shareholders will only see the benefits in 2017. Investors are probably more concerned over the company’s earnings prospect in the immediate future.



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Rebound expected this week

With the lack of news to spur market confidence, the market pulled back last week as it was at the short-term overbought zone in a sideways trend. Last week, I mentioned that the market is expected to continue sideways with a bearish bias. The FBM KLCI is now at the support level of this short-term sideway trend.

Since last week, the KLCI declined 1% to 1,465.39 points with a trading range between 1,456.71 and 1,482.99 points. Trading volume increased from a daily average of 1.7 billion shares compared with two billion shares two weeks ago.

Markets in the US and Europe were in a selling pressure as investors are worried about the prolonged eurozone crisis and possible downgrading of a few more European banks.

Recently, Standard & Poor’s cautioned that there may be more downgrades in the eurozone and Moody’s rating agency put eight Spanish banks on review for possible downgrade. The possible downgrades put pressure in the equity markets.

Global markets were mixed with a bearish tone especially in Europe. US Dow Jones Industrial Average declined only 0.5% in a week to 12,021.39 points on Monday after a strong rally two weeks ago. Also on Monday, London’s FTSE 100 index fell 2.5% in a week and Germany’s DAX plunged 5.2% to 5,785.43 points.

The European markets put pressure on the Asian markets as well. Yesterday, Hong Kong’s Hang Seng Index fell 2.6% in a week to 18,447.17 points while Japan’s Nikkei 225 index remains near the same level as the previous week at 8,552.81 points. Singapore’s Straits Times Index shed 2.3% to 2,685.74 points.

The US dollar gained strength last week with a strong rebound yesterday and put pressure on the ringgit and prices of commodities. The weakening commodities prices were also caused by the gloomy outlook of the global economy. The ringgit is currently at 3.178 against the dollar compared with 3.13 a week ago.

Crude oil on NYMEX fell to US$98 (RM311.60) per barrel after trading above US$100 two weeks ago. Price of gold in COMEX declined 3.4% in a week to US$1,664.10 an ounce. The price of crude palm oil (CPO) in Bursa Malaysia continues to decline after a rebound two weeks ago. The price of CPO futures declined 2.7% to RM3,002 per tonne.

After climbing above the moving averages two weeks ago, the KLCI is not back at the short- to long-erm 30- to 90-day moving averages range. The moving averages are diverging against one another and started to become flat. This basically indicates that the market is still in a sideway trend. The averages range between 1,440 and 1,468 points.

The Ichimoku Cloud indicator still indicate steady support and still bullish. The cloud range, which acts as the support level for the KLCI, is currently between 1,400 and 1,440 points. However, the extended cloud, which is plotted 26 days ahead, is getting a little thinner. The width of the cloud indicates the support strength in the uptrend and the wider the cloud, the stronger it is.

Momentum indicators are back at their neutral zone after being slightly bullish two weeks ago. The MACD, RSI and Momentum Oscillators are back at their middle levels. The longer term pattern shows a bearish divergence and this indicate strong resistance.

The Bollinger Bands, which were expanding two weeks ago, started to contract last week and move sideways and the KLCI is currently at the middle band. The indicator basically indicates that the KLCI is in a short-term correction.

Two weeks before the year ends and the anticipated window dressing, although there is a strong rally since October, may not be what most investors are expecting and that is the KLCI closing above 1,500 points.

The divergence in the momentum indicators and gloomy economic outlook strengthens the 1,500-point resistance level. Therefore, there is a low change of the index moving above 1,500 points this year. Even if the index is able to climb above this level, the sustainability is questionable.

This week, I am expecting the market to rebound as the index is near the immediate support level at 1,460 points. Immediate resistance in this sideway trend is 1,480 points with a stronger resistance level at 1,500 points. With the current technical readings, expect market to continue trading sideways.

There may be no stocks worth mentioning at this moment but there is this one stock that started to move strongly yesterday with high volume on speculative play.

Water treatment company Envair Holding Bhd’s share price rose 25.5% yesterday on higher than average volume. The strong price volume breakout may follow through in the next few days with a technical price target of 39.5 sen to 40 sen.

The stock closed at 32 sen yesterday. As this would be speculative, a tight stop of 30 sen immediate support level should be in place, if you decide to trade this stock.

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Dr M confirms DRB-Hicom-Proton deal, questions price

DRB-Hicom Bhd
(Dec 13, RM2.12)

Maintain outperform with target price RM3.95: Tun Dr Mahathir Mohamad has not only confirmed DRB-Hicom Bhd’s acquisition of Proton Holdings Bhd but is in favour of a lower selling price. This should ease the task of absorbing Proton in the immediate term and put DRB-Hicom in a stronger position to reap the long-term benefits of the deal.

The support of Volkswagen AG (VW) is another key factor as the removal of all government research and development grants will be an issue. We believe the DRB-Hicom/VW relationship will be strengthened by a Proton deal. We maintain “outperform” and target price basis of 10% discount to revalued net asset value (RNAV).

Mahathir, a special adviser to Proton, has said sovereign wealth fund Khazanah Nasional Bhd is selling its 42.7% stake in Proton to DRB-Hicom. “I worry about the buyer having enough money to inject into Proton. The shares it will be buying are above market price which will make profitability difficult,” he said. “But I believe in DRB-Hicom’s capabilities.”

Mahathir’s statement obviously lends credence to reports of such a deal though he seems concerned the price is too high because of its future investment commitments. A general offer at the higher end of the range reported in the press of RM7 per share would entail RM3.8 billion investment from DRB-Hicom. Capital expenditure thereafter in Proton is estimated at RM900 million a year.

The removal of R&D benefits would increase this to RM1.2 billion. A cash call would be needed both at DRB-Hicom and Proton levels.

We believe that DRB-Hicom will only be able to absorb Proton fully if it merges it with its own auto assets into a special purpose vehicle and then sells a stake or invites an equity injection into the SPV by VW. This would allow for a valuable spin-off of the SPV in an amalgamated listing at a later date.

Mahathir seems to to be lobbying for a more favourable price which should ease post-M&A earnings risk. While the situation remains fluid, it looks like DRB-Hicom’s bargaining position in the acquisition of a strategic asset has been strengthened. — CIMB IB Research, Dec 13


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Mah Sing’s JV development of Pekeliling stalled

KUALA LUMPUR: Mah Sing Bhd has been informed by Asie Sdn Bhd that the joint venture agreement (JVA) for the development of a tract of land in Jalan Tun Razak has lapsed following the failure to meet an outstanding condition.

The property developer announced to Bursa Malaysia that Asie and its subsidiary Usaha Nusantara Sdn Bhd, through their solicitors, have taken the position that the JVA has lapsed and is of no effect from Dec 2, 2011.

However, Mah Sing views it differently. “Mah Sing takes a different position and maintains that the JVA has not lapsed. Mah Sing’s solicitors have today [yesterday] issued a letter to Asie and Nusantara’s solicitors maintaining this position,” the company told Bursa Malaysia in the same announcement.

A deposit comprising 10% of the total cash payment payable to Nusantara, amounting to RM6.4 million with interest, was refunded to Mah Sing. However, Mah Sing returned the money, saying it was unable to accept the refund.

“Mah Sing has exercised its rights as provided in the JVA to waive the condition precedents and proceed with the transaction. We shall make further announcements when more details are available,” a company official told The Edge Financial Daily.

According to a previous announcement to Bursa, Grand Pavilion, Mah Sing’s wholly-owned unit and representative in the JVA, is entitled to proceed with the agreement by waiving any of the conditions if they are not fulfilled within the entitlement period.

The disagreement comes after both parties mutually agreed to extend the original deadline by a month and waive four out of five of the conditions in the JVA.

The remaining condition is the receipt by Grand Pavilion of the original issue documents of the title to the JV land with Nusantara endorsed as the legal and registered owner or an alternative arrangement accepted by Grand Pavilion.

Mah Sing announced in August it had secured the land, which formerly housed the Pekeliling flats, to develop a project called M Sentral that had a potential gross development value (GDV) of RM900 million.

Based on the preliminary plans, M Sentral involved “flexible-sized and more affordable serviced residences” catering for executives and expatriates, in addition to a few retail units.
Under the JVA, Mah Sing has to fork out RM106.6 million, of which 60% or RM63.96 million in cash and the remaining 40% through the issuance of shares in Grand Pavillion to Nusantara.

By paying RM63.69 million cash, Mah Sing will have an effective 60% stake in the prime piece of land in the city centre. This works out to about RM600 per sq ft (psf), which many see as a very low price considering land in the city is valued at above RM1,000 psf.

Industry observers said that a point of contention may be the price of the land, which appears to be quite low given that land is getting scarce in Kuala Lumpur. The net book value of the land was not disclosed as Mah Sing was not privy to the information.

Recent land transactions in the KLCC vicinity have been upwards of RM2,000, excluding the Lai Ming school land situated in Jalan Ampang which was sold to Magna Prima Bhd at about RM1,500 psf.

An earlier deal, which failed to pan out between UDA Holdings Bhd and Nadayu Properties Bhd, had priced land in Jalan Sultan Ismail at RM1,400 psf.
Asie was granted concession rights and approvals for a mixed development on 24ha, under the largest privatised urban regeneration project in KL with an estimated GDV of RM9 billion.

“The potential for this JV is good because of the 24ha size of the whole development. We will be able to tap that opportunity. And this land is one of the last few sizable land parcels in Kuala Lumpur,” said Tan Sri Leong Hoy Kum, Mah Sing group managing director and chief executive, in August.

The cancellation of M Sentral would have little effect on Mah Sing, though possessing land in such a coveted location would have been good for the company in the longer term. The company, however, has a solid stable of ongoing projects and valuable landbank.

With 36 projects in its current portfolio, Mah Sing has more than RM15 billion in unbilled locked-in sales and remaining GDV.

As at mid-November, it had sales exceeding RM2 billion, its sales target for the full year.



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Petronas awards two RSCs for marginal oilfields

Oil & Gas sector

Following the new tax incentives on Nov 10 to enhance the viability the development of marginal oilfields, Petroliam Nasional Bhd (Petronas) has awarded two unprecedented marginal field risk service contracts (RSC) in 2011 — Berantai (US$800 million [RM2.5 billion]) in January and Balai fields (US$900 million) in August.

The RSCs guarantee recoverable capital expenditure and are estimated to command an internal rate of return (IRR) of 11% to 20%. Potentially, a company with 30% stake in a nine-year US$800 million RSC could rake in more than RM150 million cash flow per year.

The incentive-driven RSC will drive development of new oil and gas (O&G) resources to sustain increasingly challenging production from mature basins.

With the remaining 22 identified marginal oilfields to be developed, the next RSC will probably be awarded by mid-2012 since potential bidders will have submitted their proposals by 1Q12.

Petronas does not restrict the development plan to marginal oilfields but qualified foreign players with technical know-how and sound financials must rope in local listed partners with at least 30% equity ownership.

O&G players with a proven track record are set to benefit given the expertise-sharing requirement. We believe this is the game-changing plan for local players to move up the value chain.

We rate Bumi Armada Bhd as a strong contender for upcoming RSCs given its healthy balance sheet, outstanding track record and synergistic oilfield services that just fit the criteria for an RSC.

Bumi Armada is probably the best candidate for foreign oil players to jointly bid for marginal oilfields given its impeccable floating production, storage and offloading expertise, strong fleet of 43 offshore service vessels and transport and installation services.

Large-cap players like Dialog Group Bhd, Kencana Petroleum Bhd and SapuraCrest Petroleum Bhd could participate in a second RSC given their solid balance sheets and good track records, though timely delivery for their first RSC remains the priority for now. — HwangDBS Vickers, Dec 13




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New projects underpin Magna’s growth

We remain sanguine about Magna Prima Bhd’s (81 sen) earnings outlook for the next few years based on the company’s current roster of projects in hand.

Although the company’s latest earnings results for 3QFY11 were weaker than expected, due primarily to some provisions, it is still on track to record a strong turnaround for the full year and going forward. It has unbilled sales totalling RM387 million.

Magna Prima’s net profit for 3QFY11 came in at RM400,000. While this represents a reversal from the RM5.5 million net loss in 3QFY10, earnings were lower than the RM2.2 million reported in 1QFY11and RM4 million in 2Q. This was despite turnover improving to RM64.3 million in 3QFY11, compared with the total of RM54.2 million in 1HFY11.

The weaker earnings can be attributed primarily to some RM6 million in provisions made in the quarter. About half of the amount was for impairment on development costs for the D’Sierra Anggun project in Selayang.

Magna received a notice in June that the entire piece of land on which it had started earthworks had been gazetted for compulsory acquisition by the government. The final compensation offered was RM16.8 million, resulting in a RM3 million writeoff. Magna has filed an appeal on the compensation amount. The company also made about RM3 million provisions for legal costs in 3QFY11.

Turnover in 3QFY11 mainly consists of contributions from the One Sierra and Alam d’16 projects, which were launched in 2HFY10 and 1HFY11.

The current quarter should see maiden contributions from two new projects — a mixed commercial/residential development called the Boulevard Business Park in Jalan Kuching, Kuala Lumpur, and the gated and guarded residential development, Seri Jalil in Bukit Jalil. Both projects were launched in early 4QFY11 but were delayed in construction starts due to the excessive wet weather in recent weeks. However, we expect both projects will start to contribute in the current month.

The RM198 million One Sierra project is expected to complete by mid-2012 while the other three projects have a combined gross development value (GDV) of roughly RM1 billion and are expected to complete in stages between now and 2014.

Both the Seri Jalil and phase 1 of the Alam d’16 projects are fully sold. The Seri Jalil project, which consists of 107 units of 2½-storey superlink terraced and semi-detached houses, is expected to finish by 1H13.

Construction on Alam d’16 started in July and the first phase of 177 units of double-storey link homes is slated to complete by 1H13. The second phase, consisting of medium-cost apartments, is targeted for launch early next year and is expected to be completed by 2014.

The Boulevard Business Park will also be developed in two phases. The first phase, consisting of 4-storey shop offices, is about 80% sold and construction is expected to start soon. The next phase will consist mainly of serviced apartments and is targeted for launch next year.

Magna is also dipping its toes into the overseas property market for the first time. Depending on performance, the company may seek more of such projects in the future.
The current project involves plans to develop a 25-storey apartment block in the heart of Melbourne, Australia. The project, called Dynasty Living, is already 62% sold in the local market. Magna intends to launch the remaining units to Malaysians by early 2012.

The project has an estimated GDV of A$210 million (RM675 million). Profit will be recognised upon completion in accordance with the IFRIC 15 (International Financial Reporting Interpretation Committee). Hence, we expect to see a sharp bump in net profit in 2014, the target project completion date. Construction is expected to commence very soon now that the acquisition has been completed.
These projects will underpin Magna’s earnings for the next three years, up till 2014.

Expect strong earnings turnaround

The strong turnaround will start this year, from a net loss of RM12.4 million in 2010 to our estimated net profit of about RM20.1 million. Earnings in 2012/13 will be even stronger, with all the projects in full swing. We estimate net profit of roughly RM56 million in each of the next two years. In 2014, net profit will be further boosted by lump sum contributions from Dynasty Living, upon the project’s completion.

By end-2014, we estimate Magna’s book value will rise to about RM1.08 per share from the current 47 sen per share, a 34% upside from the current share price of 81 sen.

This is assuming a higher dividend payment of 1.5 sen per share in 2011 and 3.4 sen per share in each of the next two years, in line with the company’s earnings expansion. This translates into fairly decent net yields of 1.9% in 2011 and 4.1% for 2012/13.

However, should dividends remain at last year’s level, of one sen per share, Magna’s book value will rise to RM1.18 per share or 46% higher than the prevailing share price.
Note that the company’s share capital is now enlarged to 332.9 million shares with the conversion of all its outstanding warrants, which expired end-September this year.

Two more projects on the drawing board and looking to replenish landbank

Magna is actively looking to replenish its landbank for projects beyond 2014. It already has two projects on the drawing board.

The first will be located on the 2.8ha plot of land in Jalan Gasing, Petaling Jaya, which was acquired last year for RM48.5 million.

The other is expected to be a huge mixed development in the heart of Kuala Lumpur’s business district. Magna is in the process of acquiring a 1.06ha piece of land in Jalan Ampang where the Lai Meng Girls School is situated.

The plan includes the relocation of the school to Bukit Jalil, where a piece of land has been acquired for RM10.7 million. Construction of the new school is expected to start soon.

Note: This report is brought to you by Asia Analytica Sdn Bhd, a licensed investment adviser. Please exercise your own judgment or seek professional advice for your specific investment needs. We are not responsible for your investment decisions. Our shareholders, directors and employees may have positions in any of the stocks mentioned.


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BToto surprises with another dividend

Berjaya Sports Toto Bhd
(Dec 13, RM4.22)

Maintain buy with target price RM4.85: Net profit for 2QFY12 of RM105.7 million (+62% year-on-year [y-o-y], +15% quarter-on-quarter [q-o-q]) brought 1HFY12 net profit to RM197.8 million (+53% y-o-y), within expectations at 49% of our FY12 estimate.

Revenue of RM1.7 billion (+2% y-o-y) for 1HFY12 was also in line at 48% of our FY12 estimate. Although it surprised with another interim net dividend per share (DPS) of eight sen (16 sen year-to-date), representing a net dividend payout ratio (DPR) of 108% (assumption: 75%), we still hold out for a major capital management exercise. Maintain “buy” with a target price (TP) of RM4.85.

Net profit for 2QFY12 was 62% higher y-o-y and 15% higher q-o-q largely due to an estimated prize payout ratio of 61% which was five percentage points (ppts) lower y-o-y and 2 ppts lower q-o-q. Net profit for 1HFY12 was 53% higher y-o-y largely due to an estimated prize payout ratio of 62% which was 4 ppts lower y-o-y.

Principal subsidiary Sports Toto’s 2QFY12 revenue was 1.8% higher y-o-y. Given that 2QFY12 had one or 2.2% fewer draws y-o-y, Sports Toto’s 2QFY12 revenue/draw was 4% higher y-o-y. Sports Toto’s 2QFY12 revenue was also 2.3% higher y-o-y.

Given that 2QFY12 had also one or 2.2% fewer draws q-o-q, Sports Toto’s 2QFY12 revenue per draw was 4.5% higher q-o-q.

A second interim net DPS of eight sen (+100% y-o-y, +0% q-o-q) brought 1HFY12 net DPS to 16 sen (+33% y-o-y) which represented a net DPR of 108% (assumption: 75%). That said, we still hold out for a major capital management exercise to “assist” its major shareholder, Berjaya Land Bhd, which assumed bridging loans to redeem its RM695.4 million exchangeable bonds on Aug 15.

We maintain our “buy” call and RM4.85 target price (TP). We leave our earnings estimates unchanged. Our TP is discounted cash flow-based and implies 16 times one-year forward price earnings ratio (13-year historical average: 15 times).

We like BToto for its positive earnings reversal from 4D Toto Jackpot, defensive earnings profile, high net dividend yields of 6% and potential for capital management. This stock is one of our top picks for 2012. — Maybank IB Research, Dec 13



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Jaya Tiasa’s strong earnings growth driven by plantation

Jaya Tiasa Holdings Bhd
(Dec 13, RM6.67)

Maintain outperform with revised fair value RM7.28 from RM6.71: High log prices (about US$250 [RM795] per cu m in 1QFY11) were mainly due to an acute shortage of logs during the early part of 2011, as production was hampered by extremely wet weather conditions in Sarawak.

Log prices have since eased as log production volume normalised over the past few months. Hence, we expect Jaya Tiasa to report lower earnings for its log division in 2QFY12, with average log prices of about US$220 per cu m.

Jaya Tiasa typically produces lower grade, general plywood, but there has been a shift to produce higher grade plywood recently to take advantage of the higher demand from Japan after the March earthquake and tsunami.

We believe Jaya Tiasa is likely to continue to produce more higher-grade plywood in the near term, as current prices for general plywood have been weak due to oversupply, while prices for higher-grade plywood have been holding up quite well.

Nevertheless, Jaya Tiasa’s plywood average selling price (ASP) is still expected to fall in 2QFY12 given the decline in plywood prices over the past few months.

According to management, Jaya Tiasa’s fresh fruit bunch (FFB) production volume is set to grow significantly by 30% to 45% annually over the next few years as more oil palm trees come into maturity.

Hence, this will drive Jaya Tiasa’s earnings growth going forward, despite our relatively flat CPO price assumptions of RM3,100 per tonne in 2012 and RM2,900 per tonne in 2013.
Jaya Tiasa’s cost of production (about RM1,500 per tonne currently) is still higher than other plantation companies’ RM1,100 to RM1,300 per tonne due to the young age profile of its trees.

Risks include: (i) a fall in timber and CPO prices; (ii) a slower than expected recovery in the global economy; and (iii) significant increase in crude oil-related glue and logistics costs.
We raise our FY11 to FY13 ending April net profit forecasts by 4% to 9.6%, after adjusting for higher FFB production forecasts (of 2% to 4%) and a lower cost of production (from RM1,500 per tonne to RM1,400 to RM1,500 per tonne).

Our target price for Jaya Tiasa is revised to RM7.28 (from RM6.71 previously), at a 10% discount to sum-of-parts-based fair value, which is based on target price earnings ratio of 8 times CY12 earnings for the timber division and 12 times CY12 earnings for the plantation division.

We continue to like Jaya Tiasa as there will be a significant boost to its earnings from plantation due to increasing FFB production volume and favourable CPO prices.
In our view, this could provide “earnings comfort” to investors and also help to cushion the more volatile earnings from timber. — RHB Research, Dec 13


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UOB buys Innosabah

PETALING JAYA: Singapore’s third largest banking group United Overseas Bank Ltd (UOB) is gaining a foothold in the local stockbroking scene with its proposed acquisition of east Malaysia-based Innosabah Securities Bhd.

The banking group’s stockbroking unit UOB-Kay Hian Holdings Ltd has proposed to acquire Innosabah from Kretam Holdings Bhd for RM56.68 million, which includes a RM15 million premium over its net assets.

“The purchase consideration shall be equivalent to the net asset value of Innosabah as at Dec 31, 2011, but without taking into account excluded assets comprising receivables of or indebtedness to Innosabah, and excluding goodwill and intangible assets plus a premium of RM15 million,” Kretam announced to Bursa Malaysia yesterday.

The price tag is equivalent to 1.36 times the adjusted unaudited net assets of Innosabah as at Sept 30, 2011, after accounting for the disposal of the excluded assets of RM41.68 million.

This acquisition follows a string of recent mergers and acquisitions (M&A) among local stockbrokers and investment banks, and would allow the UOB group to offer services ranging from equity trading to corporate advisory services.

It also leaves OCBC Bank as the only Singapore-based bank that does not yet have a presence in the local stockbroking industry.

DBS Bank Ltd, which is the largest bank in Southeast Asia, has a 27.7% stake in Hwang-DBS (M) Bhd, one of Malaysia’s top investment banking and brokerage groups.
It is understood that Innosabah, which was put under restricted trading at the height of the 1998 Asian financial crisis, has been up for sale for a while now as Kretam has been shifting its focus to plantations.

Kretam has seen a strong improvement in its financial performance over the past year, with net profit doubling to RM64.14 million for the nine months ended Sept 30, 2011 compared with RM30.09 million a year ago.

Its shares gained one sen to RM2.45 yesterday and are trading near a 12-month high of RM2.50.

After a series of M&A in the industry, Innosabah was left as one of the seven standalone stockbroking companies in the country, according to the Securities Commission’s website.

The other six are BIMB Securities Sdn Bhd, FA Securities Sdn Bhd, Jupiter Securities Sdn Bhd, KAF-Seagroatt & Campbell Securities Sdn Bhd, Malacca Securities Sdn Bhd and SJ Securities Sdn Bhd.

Although it is a standalone broker, Innosabah was granted approvals by the SC in January 2011 to undertake activities accorded to a “1+1” stockbroking company,

The 1+1 status, previously accorded to players who have merged with at least one other party, allows the stockbrokers to open branches, provide electronic access facilities and undertake structured product offerings, without resorting to further mergers.

With Asia seen as the main driver of global growth in the coming years, it is not surprising to see financial institutions and stockbrokers expanding their presence in the region.

A few Malaysian players have forged partnerships with stockbrokers in neighbouring countries, enabling them to offer an array of cross-border products and services and tap Asian’s domestic wealth.

Other foreign entities that are rumoured to be looking for stockbroking assets in Malaysia are OCBC Bank and Phillip Capital.

On the domestic front, the local stockbroking sector has seen a series of policy changes over the past decade to facilitate more consolidation within the industry.

Back in the 1990s, the authorities required all stockbroking firms to merge with at least one other party to consolidate the industry post Asian financial crisis.

To attain the universal broking status, there had to be a merger of three parties to undertake corporate finance advisory job.

Since 2000, some of these universal brokers have moved on to become full-fledged investment banks, which require an even higher minimum paid-up capital of RM500 million.

According to SC’s website, there are currently 14 investment banks, six stockbrokers with 1+1 mergers, seven standalone stockbrokers, seven foreign stockbrokers under special licence and one universal broker — PM Securities Sdn Bhd.

The six 1+1 stockbroking firms are A A Anthony Securities Sdn Bhd, Inter-Pacific Securities Sdn Bhd, JF Apex Securities Bhd, M & A Securities Sdn Bhd , Mercury Securities Sdn Bhd and TA Securities Holdings Bhd.

In 2009, the stockbroking industry was further liberalised to allow foreign ownership of up to 70% in the local players, from 49% previously.

There are seven foreign stockbroking firms here. These players, including the likes of CLSA Securities Malaysia Sdn Bhd and Credit Suisse Securities (M) Sdn Bhd, were granted free licences as part of the liberalisation process.

Ever since the relaxation, M&A in the industry have picked up with some of the notable ones like the marriage of Malayan Banking Bhd and Kim Eng Securities.

This came after Kim Eng ended talks with Berjaya Corp Bhd (BCorp) over BCorp’s proposed sale of Inter-Pacific Securities Sdn Bhd’s stockbroking business.

CIMB Group Holdings Bhd had earlier taken over Singapore-based GK Goh Holdings Ltd for a regional stockbroking and investment banking platform.

A merger between RHB Capital Bhd and OSK Holdings Bhd is also being finalised.



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KL shares lower at mid-afternoon

Share prices on Bursa Malaysia were lower at mid-afternoon today, led by consumer and plantation counters, dealers said.

At 3pm, the FTSE Bursa Malaysia KLCI lost 0.84 point, or 0.06 per cent, to 1,464.55 on a lack of market-moving factors.

The overall market sentiment was weak with losers outpacing gainers by 347 to 254 counters with 294 unchanged and 589 others untraded. Turnover stood at 946.9 billion shares worth RM560.21 million.

The Finance Index rose 35.01 points to 13,042.62, Plantation Index lost 62.29 points to 7,923.09 and the Industrial Index declined 2.99 points to 2,649.45.

The FBM Emas Index decreased 4.88 points to 10,034.59, FBM Mid 70 Index rose 2.141 points to 11,005.2 and the FBM Ace Index increased 7.25 points to 4,148.52.

For the actives, Takaso gained 1.5 sen to 21 sen and BIMB-CB rose one sen to 10 sen. Sanichi, however, fell half sen to 22.5 sen.

Among heavyweights, Maybank gained six sen to RM8.25 and CIMB rose one sen to RM6.86. Sime Darby was flat at RM8.94 despite news that its industrial division bought a portion of the former Bucyrus distribution business for RM1.1 billion. -- Bernama



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Seadrill, SapuraCrest in venture talks

Seadrill Ltd said today it’s in talks on potential investments with SapuraCrest Petroleum Bhd in Brazil.

The company is looking at a joint investment with SapuraCrest, which recently entered into agreements with Petroleo Brasileiro SA for five-year charters of three pipe laying support vessels to be built for operations in Brazil. -- Bloomberg



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Baneng to be delisted on Friday after lenders back out

KUALA LUMPUR (Dec 14): BANENG HOLDINGS BHD [] will delisted on Dec 16, Friday after its lenders decided to discontinue the proposed debt restructuring, which had started in April 2009.

It said the trading in the securities was suspended on Wednesday and will be de-listed on Friday.

Baneng said it regretted that the company, the Corporate Debt Restructuring Committee (CDRC) and all lenders failed to agree on the proposed debt restructuring scheme drawn up before it was admitted as an affected listed issuer under the Practice Note No. 17 of the Main Market Listing Requirements of Bursa Securities on Nov 30, 2010.

Baneng said the CDRC had convened a meeting with the company and its all lenders on Monday to deliberate on the final proposed revised schemes as proposed by Baneng.

“After the meeting, CDRC had on the same day informed the company that the lenders had decided to discontinue with the proposed debt restructuring which the company embarked together with the lenders on April 2009,” it said.



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Sime Darby buys Bucyrus distribution business

Caterpillar Inc today announced Sime Darby Bhd's industrial division has acquired a portion of the former Bucyrus distribution business, which was included in Caterpillar’s Bucyrus purchase.

The US$360 million (RM1.1 billion) transaction encompasses Sime Darby Industrial Cat dealership operated by Hastings Deering in Queensland and Northern Territory of Australia, Papua New Guinea and New Caledonia.

"Cat dealers have a proven track record in helping customers realise the highest productivity and lowest owning and operating costs, and many mining customers have told us how important the dealers are to their success.

"Wherever there is mining, Caterpillar and our dealers will be there to serve our mining customers," said Caterpillar Group president (resource industries) Steve Wunning in a statement today.

This deal marks the first of several which are expected to transfer product distribution and support for former Bucyrus machinery to Cat dealers who support mining customers worldwide.

Caterpillar also intends to start selling former Bucyrus mining products through Sime Darby's other Cat dealerships.

Following Caterpillar’s Bucyrus' acquisition, the company made two key strategic decisions; utilise the Cat brand, and dealers would be best suited to sell and support former Bucyrus mining products.

Hastings Deering, Sime Darby Industrial's principal Australian subsidiary, has a significant field population of former Bucyrus machines in its territories.

As part of the deal, nearly 400 former Bucyrus employees are expected to be transferred to Hastings Deering, bringing the dealer’s total employment to over 4,000 employees, with a continued focus on providing uninterrupted service to customers.

"We are very excited to be the first Cat dealership to take on the former Bucyrus distribution business. "The addition of former Bucyrus product line is a unique and exciting opportunity to grow Sime Darby Industrial’s presence in the region and offer mining customers an unparalleled range of products and services," said Scott Cameron, Sime Darby's executive vice-president, who heads Sime Darby Industrial.

Caterpillar is currently holding discussions with other Cat dealers who have mining operations in their territories. Caterpillar will continue to operate Bucyrus' distribution business in a given dealer’s territory until the transitions have taken place. -- Bernama



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FBM KLCI up 0.4 point at midday

Share prices on Bursa Malaysia were mixed at the end of the morning session today, amid the bearish sentiment on key regional markets, dealers said.

At 12.30pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 0.4 of a point or 0.03 per cent to 1,465.79.

Dealers said plantation stocks continued to drag the benchmark index down as palm oil stocks declined by 1.52 per cent to 2.068 million tonnes in November.

HwangDBS Vickers expects the index to continue to swing sideways with a marginal downward bias due a dearth of positive developments abroad.

Investors were disappointed when US policymakers did not mention fresh measures to stimulate the American economy at the Federal Open Market Committee meeting last night.

In reaction, major stock indices on Wall Street lost between 0.6 per cent and 1.3 per cent at the closing bell, the research house said.

The Finance Index rose 32.109 points to 13,039.72 but the Plantation Index tumbled 55.38 points to 7,930 and the Industrial Index fell 5.14 points to 2,467.3.

The FBM Emas Index gained 1.37 points to 10,040.84, the FBM Mid 70 Index lost 1.479 points to 11,001.58 and the FBM ACE Index advanced 7.43 points to 4,148.7.

Market breadth was negative, with losers leading gainers by 320 to 232, while 293 counters were unchanged. Turnover stood at 808.93 lots worth RM455.72 million.

For the actives, Takaso gained 2.0 sen to 21.5 sen, BIMB-CB rose 1.0 sen to 10 sen but Sanichi fell half sen to 22.5 sen.

Among heavyweights, Maybank gained 6.0 sen to RM8.25, Sime Darby was flat at RM8.94 and CIMB rose 2.0 sen to RM6.86. -- Bernama



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SapuraCrest-Kencana plans RM1.4b capex for expansion over 2 yrs

KUALA LUMPUR: SAPURACREST PETROLEUM BHD [] has received overwhelming support from its shareholders for the proposed merger with KENCANA PETROLEUM BHD [] during the EGM on Wednesday.

SapuraCrest group president and chief executive officer Datuk Seri Shahril Shamsuddin said the merged entity would allocate RM1.4 billion as capital expenditure over the next two years.

The capex would be used to expansion into Australia, Brazil and the Middle East, he said a media briefing. The merged entity will have an order book of about RM13 billion upon the merger, he added.

Shahril said the merger will create a fully integrated oil and gas services group, which will rank among the top five globally.

SapuraCrest also receivedshareholder's approval for the proposed acquisition of Clough Ltd's marine CONSTRUCTION [] and offshore engineering operations in Australia, the UK, and the US for a total consideration of RM409 million. This would enable SapuraCrest to establish its presence in Australia.



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Update Sime Darby buys part of Caterpillar distribution biz for RM1.1b cash

KUALA LUMPUR: SIME DARBY BHD []’s industrial division buys Caterpillar Inc’s former Bucyrus distribution business involving mining machinery, in Australia, Papua New Guinea and New Caledonia for US$360 million (RM1.1 billion) cash.

Sime Darby said on Wednesday the acquisition would enable its industrial division to strengthen its position in the mining industry by offering a wider range of mining equipment and services to its customers.

“The acquisition will also allow Sime Darby's industrial division to leverage its position in Australasia’s rapidly growing mining industry (Queensland, Northern Territory and Papua New Guinea),” it said.

Sime Darby said the Bucyrus distribution assets were mainly in Queensland, Australia and comprises of owned and leased PROPERTIES [], plant and equipment, inventories, maintenance contracts, order book.

In a separate statement, Caterpillar said this deal marked the first of several that are expected to transition the product distribution and support of former Bucyrus machinery to Cat dealers that support mining customers around the world.

“While not part of the transaction, Caterpillar also intends to start selling former Bucyrus mining products through Sime Darby's other Cat dealerships,” said Caterpillar.

Hastings Deering, the principal Australian subsidiary of Sime Darby Industrial, has a significant field population of former Bucyrus machines in its territories.

Meanwhile Sime Darby executive vice president who heads Sime Darby Industrial, Scott Cameron said: “We are very excited to be the first Cat dealership to take on the former Bucyrus distribution business.”

He added the addition of the former Bucyrus product line would enable Sime Darby Industrial to expand its presence in the region and offer mining customers an unparalleled range of products and services.



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KLCI nudges up at mid-day as Asian markets pare down losses

KUALA LUMPUR (Dec 14): The FBM KLCI nudged up marginally at the mid-day break on Wednesday as most key Asian markets pared down their losses.

At 12.30pm, the FBM KLCI gained 0.03% or 0.40 point to 1,465.79. The index had earlier slipped to its intra-morning low of 1,459.45.

Gainers trailed losers by 232 to 320, while 293 counters traded unchanged. Volume was 808.93 million shares valued at RM455.72 million.

The ringgit weakened 0.19% to 3,18677 versus the US dollar; crude palm oil futures for the third month delivery fell RM12 per tonne to RM2,995, crude oil shed 23 cents a barrel to US$99.91 while gold fell US$7.35 an ounce to US$1,638.93.

At the regional markets, Japan’s Nikkei 225 was down 0.53% to 8,507.11, Hong Kong’s Hang Seng Index fell 0.18% to 18,413.79, the Shanghai Composite Index shed 0.13% to 2,245,57, South Korea’s Kospi lost 0.41% to 1,856.40 and Singapore’s Straits Times Index was down 0.20% to 2,680.26.

Meanwhile, Taiwan’s Taiex added 0.13% to 6,905.00.

On Bursa Malaysia, Nestle led the gainers and was up 48 sen to RM56.48; F&N added 24 sen to RM18.46, GAB 16 sen to RM13.14, Suria 15 sen to RM1.75, CI Holdings 14 sen to RM1.31, P.I.E. added 12 sen to RM3.96, BIMB 11 sen to RM1.84, Goldis nine sen to RM1.88 while AIRB was up eight sen to RM1.64.

Among banking stocks, RHB Capital gained eight sen to RM6.94, Maybank six sen to RM8.25 while CIMB and Public Bank added two sen each to RM6.86 and RM12.70.

PLANTATION []-related stocks were among the decliners this morning, with KLK down 40 sen to RM22.70, BLD Plantations 16 sen to RM7.14, PPB 14 sen to RM16.22 and Boustead 11 sen to RM5.31.

Other losers included Dutch Lady that fell 40 sen to RM26, Asia File 28 sen to RM3.50, BAT 16 sen to RM48.54, HLFG 12 sen to RM11.58, while Far East and Petronas Dagangan lost 10 sen each to RM7 and RM17.28.

Takaso was the most actively traded counter with 74.8 million shares done. The stock added two sen to 21.5 sen.

Other actives included Sanichi, Envair, Versatile, Kurnia Asia and Flonic.



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Public Mutual to launch new Islamic fund

Public Bank’s wholly-owned subsidiary, Public Mutual is launching a new Islamic fund, Public Islamic Savings Fund (PISVF) tomorrow.

PISVF is an Islamic equity income fund that seeks to provide income over the medium- to long-term period by investing in a diversified portfolio of primarily syariah-compliant Malaysian stocks which offer or have the potential to offer attractive dividend yields. The fund will focus on investing in companies that have demonstrated consistency in rewarding their shareholders via dividend payouts.

PISVF may also invest in syariah-compliant growth or recovery stocks that have the potential to eventually adopt a dividend payout policy.

Public Mutual’s chief executive officer Yeoh Kim Hong said, “As PISVF focuses its investments mainly in the domestic market, the fund offers investors an opportunity to capitalise on Malaysia’s resilient economic growth prospects in the medium to long-term. The performance of selected syariah-compliant sectors of the Malaysian economy is expected to remain supported by sustained consumer and investment spending over the longer term.”

PISVF allows investors the opportunity to participate in a diversified portfolio of syariah-compliant blue-chip stocks, growth stocks and fundamentally undervalued stocks which distribute or have the potential to distribute reasonably attractive dividends. Due to the sharp retracement in equity markets at the end of third quarter 2011 on concerns over the slowing pace of global economic growth and the European sovereign debt crisis, selected stocks listed on the domestic equity market are currently trading at below trend valuations and offer attractive investment opportunities for medium- to long-term investors.

To achieve increased diversification, the fund may also invest up to 30 per cent of its net asset value (NAV) in selected foreign markets which include Singapore, Taiwan, South Korea, Japan, Hong Kong, Thailand, Indonesia, Philippines, Luxembourg and other permitted markets.

The equity exposure of PISVF will generally range from 75 per cent to 98 per cent of its NAV. PISVF is suitable for investors with moderate risk-reward temperament and have preference for receiving income while capital growth is secondary.

The initial issue price of PISVF is RM0.2500 per unit during the 16-day initial offer period from 15 to 30 December 2011. The minimum initial investment is RM1,000 and the minimum additional investment is RM100. During the offer period, special promotional service charge of 5 per cent of initial issue price per unit are extended to the purchase of units of PISVF.

Investors who opt for Direct Debit Instruction with PISVF during the offer period will enjoy a special promotional service charge of 5.25 per cent of NAV per unit for as long as the Direct Debit is active. Terms and conditions apply.

PISVF is distributed by Public Mutual’s unit trust consultants. Interested investors can contact any Public Mutual unit trust consultant or call its customer service hotline at 03-6207 5000 for more details of the funds.

Public Mutual is Malaysia’s largest private unit trust company with 91 funds under management. It has 2.6 million accountholders and as at 31 October 2011, the total net asset value of the funds managed by the company was RM43.7 billion. -- Bernama



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