Tuesday 27 December 2011

Bumi Armada buys vessel for RM68m

KUALA LUMPUR (Dec 27): Bumi Armada Bhd has acquired a vessel "Rainbow River" for RM68 million cash as part of its fleet expansion.

The company said on Tuesday its unit Bumi Armada Offshore Holdings Sdn Bhd had exercised its option to purchase the vessel to a memorandum of agreement with Galaxy Naviera Maritime S.A. Panama signed on Sept 28 this year.

The vessel weighed a gross register tonnage of 57,943 tonnes and a summer dead weight tonnage of 107,160 tonnes.

Bumi Armada said the acquisition would be financed by its own funds and delivered in the first quarter of 2012.



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PNB sells 13m Heitech Padu shares, Amanahraya acquires

KUALA LUMPUR (Dec 27): Permodalan Nasional Bhd has ceased to be a substantial shareholder in HEITECH PADU BHD [] after disposing its 13 million shares in the company in a related development

A filing to Bursa Malaysia Securities Bhd on Dec 27 showed that PNB disposed the shares on Dec 15. The block of shares was acquired by Amanahraya Trustee Bhd on behalf of the Skim Amananah Saham Bumiputera and raised its stake to 27 million shares or 26.68%.

The other major shareholders in Heitech Padu are Padujade Corporation Sdn Bhd with 30.15% and Skim Amanah Saham Bumiputera with 13.84%.

Heitech was last traded on Dec 23, and fell one sen to RM1.05.



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Market Commentary

The FBM KLCI index gained 4.76 points or 0.32% on Tuesday. The Finance Index fell 0.11% to 13349.76 points, the Properties Index up 0.90% to 990.32 points and the Plantation Index rose 0.93% to 8041.71 points. The market traded within a range of 10.75 points between an intra-day high of 1500.91 and a low of 1490.16 during the session.

Actively traded stocks include PROTON-CH, PROTON-CG, SCN, MBFHLDG-WA, TMS-OR, ASUPREM, SANICHI, UTOPIA, JCY-CD and DRBHCOM-CI. Trading volume increased to 993.76 mil shares worth RM743.83 mil as compared to Friday’s 942.51 mil shares worth RM886.66 mil.

Leading Movers were TM (+20 sen to RM5.00), IOICORP (+7 sen to RM5.26), UMW (+38 sen to RM6.98), DIGI (+4 sen to RM3.78) and PETGAS (+26 sen to RM14.40). Lagging Movers were CIMB (-4 sen to RM7.05), PBBANK (-6 sen to RM13.12), TENAGA (-4 sen to RM5.80), HLBANK (-10 sen to RM10.84) and MAYBANK (-1 sen to RM8.34). Market breadth was positive with 378 gainers as compared to 341 losers. -- JF Apex Securities Bhd



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WCT to undertake mixed development in Vietnam

KUALA LUMPUR (Dec 27): WCT BHD's unit has been awarded an investment certificate to carry out a residential and commercial mixed development in Ho Chi Minh City, Vietnam.

The company said on Tuesday that WCT (S) Pte Ltd was granted the certificate for carrying out the project on a 46,577 sq metre site in the New Urban Development Area of Saigon South in Ho Chi Minh City.

WCT said it had also received approval to set up a 70%-owned subsidiary, WCT-DPN Co Ltd. The remaining 30% would be held by Southern Land Corp (SLC), a joint stock company of Vietnam.

WCT-DPN's principal business activity is the development and management of the project which is to build mid-high class residential apartments and commercial PROPERTIES [] which would be either for lease and/or sale. With a plot ratio of 6.0, the project would include shoplots and condominium units.

WCT said the duration of the project was 50 years from the date of receipt of the investment certificate.

The company said it would finance its investment in WCT-DPN through internally generated funds and/or bank borrowings. It said the project was expected to contribute positively to its future earnings.



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Wong Engineering 4Q losses declines

KUALA LUMPUR (Dec 27): WONG ENGINEERING CORPORATION [] Bhd narrowed its losses in the fourth quarter ended Oct 31, 2011 to RM384,000 from net loss RM2.13 million a year earlier, due mainly to better control on operating expenses.

The company said on Tuesday its revenue for the quarter fell 34.4% to RM8.05 million from RM12.28 million in 2010. Loss per share was 0.43 sen compared to loss per share of 2.37 sen a year earlier, while net assets per share was 70 sen.

For the financial year ended Oct 31, Wong Engineering posted net profit of RM140,000 compared to net loss RM2.64 million on the back of revenue of RM37.68 million.

On its prospects, Wong Engineering said the global economy remains volatile and unstable in the next financial year.

However, the group is optimistic that its performance will remain satisfactory as the group continues to diversify its revenue streams in industry and customer base.



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KLCI closes above 1,500 in late push, bucks regional trend

KUALA LUMPUR (Dec 27): The FBM KLCI bucked the regional trend on Tuesday and rose in late trade to close above the crucial 1,500-point level for the first time since Aug 18 this year.

The 30-stock index rose 4.76 points to close at 1,500.91, lifted by gains at select blue chips.

Gainers overtook losers by 378 to 341, while 289 counters traded unchanged. Volume was 993.76 million shares valued at RM743.83 million.

Meanwhile, Japan's Nikkei average dropped below a key support level in holiday-thinned trade on Tuesday, on track for a flat performance in December and double-digit losses for the year, according to Reuters.

With many overseas investors on year-end holidays, market participants said it had been difficult to buy risk assets though the re-opening of stock trading in the United States later in the day could provide more direction, it said.

China stocks fell 1.1% on Tuesday to their lowest close since March 2009, led by a drop in small caps, although trade remained light as investors were cautious over tight liquidity conditions ahead of the year-end, it said.

At the regional markets, the Shanghai Composite Index fell 1.09% to 2,166.21, South Korea’s Kospi lost 0.79% to 1,842.02, Japan’s Nikkei 225 was down 0.46% to 8,440.56, Taiwan’s Taiex shed 0.11% to 7,085.03 and Singapore’s Straits Times Index xxx

On Bursa Malaysia, Proton was the top gainer and rose 41 sen to RM4.79; UMW added 38 sen to RM6.98, KLK was up 36 sen to RM22.56, Petronas Gas 26 sen to RM14.40, BLD PLANTATION []s 23 sen to RM7.35, Batu Kawan and F&N added 22 sen each to RM17.50 and RM18.22, while Ta Ann and Nestle gained 20 sen each to RM5.25 and RM56.80.

Among the decliners, BAT lost 20 sen to RM49, Y&G 18.5 sen to 78 sen, Dutch Lady 16 sen to RM23.20, while JT International, Petronas Dagangan, Hong Leong Bank and Aeon fell 10 sen each to RM6.89, RM17.20, RM10.84 and RM7.10 respectively.

Meanwhile, the actives included Proton, MBF Holdings warrants, Astral Supreme, Sanichi and Utopia.



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OldTown’s old tradition in modern setting

OldTown Bhd
(Dec 23, RM1.11)

Not rated at RM1.09 with a fair value of RM1.25: OldTown operates 193 OldTown White Coffee kopitiam-based café outlets as at November 2011 (up from 75 outlets in FY07) across Malaysia, Singapore and Indonesia. Another growth engine is the manufacture of three-in-one instant beverages sold locally and exported to several overseas markets. In terms of pre-tax profit, its café chain operation is forecast to contribute 66% and beverage manufacturing contributes 34% in FY12F. We have assumed 224 outlets by end-12 and 14% year-on-year beverage sales growth.

As of end-September 2011, OldTown has RM66.2 million net cash. Given its high cash generating business model and stable capex requirement, we forecast net cash position to be around RM74.1 million (22 sen per share) by end-FY11 and RM89.3 million (27 sen per share) by end-FY12.

The strong cash flows means OldTown is in a position to pay regular dividends. Minimum dividend payout policy of 50% is set for FY11F to FY12F. We project dividend per share of 4.9 sen (2.5 sen already paid) this year and 5.3 sen next year yielding 4.5% and 4.8% respectively.

We attach a fair value of RM1.25 based on 12 times FY12F PE after considering its slow-but-stable growth outlook (three-year net profit CAGR at 4%). While there is no direct comparison, its closest peers, KFC Holdings (M) Bhd currently trades at CY12 PE of 19.1 times and Berjaya Food at 13.7 times. OldTown saw its share price tumble from a high of RM1.40 on listing day to a low of 89 sen on Oct 3 before recovering to RM1.09 currently. The stock offers investor exposure to resilient consumer spending in the competitive F&B market. — HwangDBS Vickers Research, Dec 23



This article appeared in The Edge Financial Daily, December 27, 2011.





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Outbreak of bird flu in Hong Kong boosts rubber glove sector

Rubber glove sector
Maintain neutral: Hong Kong last Thursday raised the city’s bird flu alert level to “serious” after three birds were tested positive for the deadly H5N1 virus strain. As a precautionary measure, the city’s health chief began culling 17,000 chickens at the city markets and imposed an immediate ban on all live poultry imports. The source of the outbreak has yet to be identified at this juncture.

During the H1N1 pandemic in March 2009 to August 2010, most glove makers experienced a surge in demand for gloves as governments of developed countries urged healthcare multinational corporations to stock up rubber gloves. Should the situation deteriorate and remain prolonged, we believe Top Glove would benefit most from any surge in demand given its excess capacity (average utilisation rate of 70% currently). Both Kossan and Hartalega, however, would not be able to reap the full benefits of the situation as both companies are running close to optimum capacity. As for Adventa (which primarily manufactures surgical gloves), the company may not benefit much from the outbreak as demand for medical examination gloves increases rather than that for surgical gloves.

The risks include: 1) sharp surge in raw material (latex) and/or energy (natural gas) prices, which may result in margin squeeze; and 2) appreciating ringgit against the US dollar.

We are keeping our earnings forecasts for the glove manufacturers unchanged for now.

We are keeping our “neutral” stance on the sector as it is still too early to determine the potential impact of the outbreak. Furthermore, the outlook over the next two quarters remains challenging given the oversupply situation and the approaching wintering period, which could see latex prices trend higher.

Hence, we are keeping our “underperform” call on Top Glove and “market perform” calls on the other glove manufacturers unchanged for now. —RHB Research, Dec 23



This article appeared in The Edge Financial Daily, December 27, 2011.




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Doubts over Felda Global’s IPO deadline

KUALA LUMPUR: Contrary to recent reports that the listing of Felda Global Ventures Holdings Sdn Bhd is on track despite management changes, the investing fraternity is doubtful the entity will be able to list by April 2012 as announced by the group.

“Since the land belongs to the settlers...The main issue is how the dispute between the settlers will be resolved (or the listing may be delayed),” said an analyst at MIDF Research.

Felda itself has almost 350,000ha of land, gazetted by state governments as tanah Felda, managed by Felda Plantations Sdn Bhd.

The 112,635 settlers own more than half a million hectares of land under the group.

The Felda Settlers’ Children Association (Anak) has been vocal in its resistance to the listing exercise. The association claimed the settlers will have to swap their current 51% stake in Felda Holdings for a 61% share in Felda Global Ventures, whose international subsidiaries have reportedly lost some RM500 million up to 2010.

The group functions more like a plantation management company.

“The question is will the settlers be made into shareholders, or will they receive a one-off payment in return for their land?,” she told The Edge Financial Daily.

“A one-off payment may not be the best choice for the settlers as it will make it harder for them to continue living off the land. Furthermore, the timing of the listing must also be taken into consideration given the concerns over the global economic front, as the company cannot just enter the stock market even if conditions are not suitable”, she continued.

To complicate matters, a source said that the group was having trouble identifying who should take up the top positions in the new listed company.

It has been reported that Felda general manager Datuk Dzulkifli Abd Wahab was asked to go on eight months’ leave, which news reports attributed it to differences in views between Dzulkifli and Felda Investment Co-operative’s (KPF) new chairman, Tan Sri Isa Samad, who replaced the former a few months ago.

A boardroom tussle has emerged within top management of the group after Isa was appointed the chairman of the Felda Investment Co-operative (KPF) and after Felda director-general, Datuk Dzulkifli Wahab was issued a letter by the prime minister to go on eight months’ leave.

Isa’s position as chairman of KPF has faced objection from the settlers themselves as his appointment is said to violate the by-laws of KPF.

According to reports, its by-laws state that nine of the committee members must be elected by delegates at its general assembly, while the Felda board appoints three additional members subject to confirmation in the general assembly of delegates.

However, the three appointed members of the committee must either be a Felda settler or children of the settlers, a Felda employee, his wife or child. It also states that a board member must also be a member of KPF for at least 10 years. The three appointed by Felda must either be a member of KPF or Felda employee’s co-operative.

Furthermore, he or she must be a co-operative member for at least two years and must come from the governing board of the co-operative he or she represents.
Meanwhile, some market observers said the issues ran much deeper than just a management tussle as reported in the press.

“We are currently having trouble consolidating the subsidiaries (which are to be under the new listed entity) under the Felda group, as many of these companies overlap each other,” a source familiar with the matter told The Edge Financial Daily.

The Felda group is a major player in the palm oil industry with 47 active companies, including Felda Holdings Bhd, Felda Plantations Sdn Bhd and sugar manufacturer MSM Malaysia Holdings Bhd to name a few.

The group has 70 mills, seven refineries, seven bulking installations and owns refineries in Indonesia, China, Turkey, the US, Canada and South Africa.

“Whatever profit obtained from the land (mostly with oil palm trees) is returned to Felda. In turn Felda uses the money to develop Felda settlements throughout Malaysia,” explained an observer.

The federal government does not give any allocation to Felda, it is self-funding, she said. In fact, Felda develops most of the basic amenities like water and electricity supply, roads, schools and public buildings on the settlements, she added.

In the case of the Federal Land Development Authority or Felda, under the scheme, settlers buy seeds, fertiliser and pesticides from other Felda subsidiaries. Any profit made as a result of working on their land are retained by the settlers. The settlers also sell their fresh fruit bunch (FFB) to Felda Palm Industries Sdn Bhd, which operates factories in the settlement areas.

While it is true that the group has some 880,000ha of land, it functions more like a plantation management company rather than a plantation company like Sime Darby or IOI Corp, explained the source.

However, analysts said this should be seen as a strength rather than a hindrance to how the group will perform after the listing exercise.

“In terms of operations, it shouldn’t be a problem for Felda as they have been in the industry for a long time and they have the knowhow in running a plantation company,” an analyst said.

He observed that the market is excited and confident of the group’s abilities, although the aforementioned issues are causing some apprehension among players.

Such strong debate towards the listing of Felda Global Ventures was last seen seven years ago after then prime minister Tun Dr Mahathir Mohamed announced plans to list the entity in the 2004 Budget.

The question that begs to be answered now is could these internal problems brewing in Felda halt the listing again? And if so, what will be the fate of the settlers’ “durian runtuh” as promised by the prime minister?



This article appeared in The Edge Financial Daily, December 27, 2011.




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UMW sees reduced losses from WSP in 3Q11

UMW Holdings Bhd
(Dec 23, RM6.60)

Maintain hold at RM6.45 with target price of RM6.10: WSP Holdings Ltd, a 23% China-based associate of UMW, continues to be loss making for the last nine consecutive quarters with net loss of US$17 million (RM53.7 million) in 3Q11 and US$50 million for 9M11. Against this backdrop, we have trimmed UMW’s 2011-12 earnings by 1% to 3% with a higher net loss assumption at WSP. Coupled with headwinds at the auto division, there are minimal catalysts to re-rate UMW, which is a “hold” with an unchanged RM6.10 target price, pegged at 11 times 2012 EPS.

WSP remained loss-making albeit with a lower net loss of US$17 million in 3Q11 (-14% quarter-on-quarter [q-o-q]). This brings 9M11 net loss to US$50 million (-25% year-on-year[y-o-y]). The reduced sequential net loss was mainly due to: (i) an increase in export sales volumes (+12% q-o-q), (ii) rise in blended ASP to US$1,196 per tonne (+14% q-o-q) and (iii) improved product mix as gross margins rose 5.4 percentage points q-o-q. This was partially offset by lower domestic sales of US$89 million (-17% q-o-q). Domestic sales volume fell 20% q-o-q, offset in part by an improved average selling price (+4% q-o-q to US$879 per tonne). WSP provided US$5.4 million for doubtful debts in 3Q11.



We expect WSP’s operating prospects to remain challenging, as trade disputes will continue to affect performance. The exports destined for US remain affected by anti-dumping and countervailing duties. We do not expect the situation to improve in 2012. For this, we have cut WSP’s 2011-12 earnings forecasts. Our WSP forecast imputes: (i) an 11 to 12 ppt cut in gross margin, and (ii) a 55% increase in interest expense on higher borrowings. This effectively lowers UMW’s net profit by 1% for 2011 and 3% for 2012.

Recall that private equity, H.D.S Investments LLC (HDS) has proposed to acquire WSP at 60 cents per share with the intention of taking it private. We expect an 8% rise in UMW’s 2012 earnings should this deal go through. In the event all proceeds are fully distributed, UMW’s shareholders could get a special dividend per share of eight sen. — Maybank IB Research, Dec 23



This article appeared in The Edge Financial Daily, December 27, 2011.




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KLCI to kick off year’s final trading week on cautious note

KUALA LUMPUR: The FBM KLCI goes into the final trading week of 2011 in what has been an eventful and volatile year for global equity markets, during which investor confidence has taken a severe beating.

Although analysts are comfortable with the notion that Malaysia will not be subject to a looming recession or falling back to recession-level valuations, they said the local equity market will continue to face volatility in the first half of 2012.

Also, many market participants are reluctant to believe in a “Santa Claus rally” this year, which refers to stocks’ seasonal tendency to gain in the final five trading days of the year and first two trading days of the New Year, according to Reuters.

Warnings from major credit rating agencies on a potential downgrade of several European nations have kept investors on edge. After Standard & Poor’s surprised financial markets back in August with a downgrade of the US’ triple A credit rating last Friday evening, investors worry a similar move could come at any time — even between Christmas and New Year’s, it said.

Affin Investment Bank vice- president and head of retail research Dr Nazri Khan said FBM KLCI was likely to trend higher towards 1,520 on improving global equity outlook following the European Central Bank’s aggressive funding operation, stronger US economic data, firmer commodity price as well as local banking optimism over liberalisation in the domestic financial services sector.

He said the stronger gains in commodities — light crude oil up 2.5%, crude palm oil up 4.2% and copper up 1.2% week-on-week — would benefit commodity-based exchange including FBM KLCI.

For the first time in two months, we see several KLCI heavyweight stocks, such as Genting, Sime, Public Bank and Axiata, showing good relative performance and breaking above their 200-day moving averages, he said.

Nazri said overall there was a probability that the FBM KLCI would trade higher and break-even year-on-year (FBM KLCI opening price on Jan 3, 2011 was 1,524.53).

He said FBM KLCI was only down 1.5% year-to-date (YTD), placing it among the most defensive markets and the top five best performer Asian indices in 2011 outperforming other major overseas markets such as China, Brazil, India and Hong Kong, all of which were down more than 10% YTD.

Also, local news flow including Boustead’s proposal to buy Exxon Mobil Asean oil asset, MAS-Airasia-Airasia X business model rationalisation, Muhibah’s RM1 billion venture in Australia and YTL Cement proposed buyout by the parent YTL Corp would spice up the final trading week of the year.

“As for strategy next week, we are recommending traders to chip into good financial stocks (such as CIMB, AMMB, BIMB, AFG, KAF and ECM) which may be good trading buys following the Second Financial Sector Master Plan.

“Having said that, we must still caution traders that lower volume ahead of the Christmas and New Year’s Day holidays may still leave the market susceptible to mild volatility over the next two weeks,” he said.

Among the stocks that are in focus today are Ingress Corp Bhd, Sunway Holdings Bhd, Yinson Holdings and Chin Well Holdings Bhd.

Ingress has received a letter of acceptance from Perusahaan Otomobil Nasional Sdn Bhd (Proton) with a total value of RM84.8 million over a period of five years to supply parts
for new Proton models.

Sunway’s unit has secured a contract worth RM27.57 million from Hap Seng Land Development (JTR) Sdn Bhd for the construction of pilings, basement and ground floor for one block of 43-storey serviced apartments at Jalan Tun Razak, Kuala Lumpur.

Yinson’s net profit for the third quarter ended Oct 31, 2011 jumped to RM8.07 million from RM2.5 million a year earlier, mainly due to its marine transport business and gain on disposals of subsidiary and properties.

Meanwhile, Chin Well expects to sustain overseas revenue contribution going forward, and focus on expanding its market share in Europe as well as emerging Asia and North America, said its managing director Tsai Yung Chuan.

He said while the company would take advantage of the European Union’s listing of Chin Well as one of the eight Malaysian companies exempted from import duty, it will not ignore markets in emerging Asia as well as North America.

Tsai said over the years, the company had exported to an increasing number of countries in Europe, Asia, and North America, and more than doubled its overseas revenues to about RM400 million in just five years.



This article appeared in The Edge Financial Daily, December 27, 2011.


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KLK focuses on three sectors

TEFD: What are your expectations for 2012, for your company and the industry? What impact, if any, do you expect from the euro crisis?
Lee: Plantation companies have had an outstanding year in 2011, with crude palm oil (CPO) and palm kernel prices at a buoyant and lucrative level. As we approach 2012, with the debt crisis in EU affecting market confidence, this has translated into a worrisome pressure on palm product prices, along with the other commodities.

Whether 2012 will bring further economic deterioration is highly uncertain and if so, it could drastically affect demand for our commodities. The European Union is among the largest consumers for palm products, both in the food and energy sectors.

Fortunately, fundamentals for the supply of oils and fats for 2012 are reasonably good with anticipated slower yearly growth from palm oil. Demand growth, save for the above exception, is expected to surpass growth in supply. On balance, our opinion is that palm prices should be in the RM2,800 to RM3,300 per tonne range, not as bullish as some had forecast.

Lee: Whether 2012 will bring further economic deterioration is highly uncertain.

What is your company’s plans and focus for the coming year?
KLK’s plans for 2012 in our three focused areas are:
Plantations — to ensure quality new plantings and replanting standards while improving the productivity per ha to our target of six tonnes of oil per ha in the near term. This is essential for our well-being due to the plantation industry being a cyclical price taker and to enable us to satisfy our workers’ aspirations for increasing wages cum better living standards.

Oleochemicals — we are enhancing our competitiveness through capacity expansion, de-bottle necking existing plants, developing skill sets and building espirit de corp in our organisations. This is to prepare for the foreseeable basic oleo over-capacities, resulting from Indonesia’s duty structure.

Coupled with the above strategies, we are also embarking on new refineries and a fatty acid plant in Indonesia. Finally, integrating further downstream into more complex oleo derivatives is our consistent focus.

Property — our maiden launch of KLK affordable homes in the 1,000-acre Bandar Seri Coalfields have been extremely well received. Integrating into this affordability theme is to have the necessary environment for a better living, quality and secured lifestyle.

What is your wish list for 2012?
Like all Malaysian corporations, we are stewards in a highly competitive world. We are trustees for the future generations and thus have a huge responsibility to ensure we are competitive, productive and efficient in our business. Our purpose must be to train our people well, ensure a meritorious system and be good corporate citizens benefiting the society where we operate.

For 2012, we wish that all organisations — be it commercial, political or others — will fulfil corporate governance, especially on corruption, with love for our nation foremost in our policies so that the future generations will look back with appreciation at the legacies we leave behind.



This article appeared in The Edge Financial Daily, December 27, 2011.




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DiGi.Com Bhd

Henrik Clausen, DiGi.Com CEO, shares with The Edge Financial Daily his strategies and dreams for the company.

One of Malaysia’s leading telecommunications player, DiGi.Com Bhd was incorporated in March 1997. With a history of product and service innovation, DiGi provides mobile voice, Internet and broadband services for the Malaysian market. It is part of Norway-based Telenor Group, a leading provider of telecommunications services worldwide with a strong footprint in central eastern Europe and Asia, and a leading Nordic position in mobile, broadband and TV services.

TEFD: What are the company’s competitive strengths and advantages?
Clausen: DiGi has always been known as an innovator, not only within our industry but broadly in Malaysia. We have a history of being game changers —in the way we work, in how we engage with customers, and in collaborating with other players and stakeholders to continuously raise the bar for the industry.

Clausen: We have a history of being game changers.


We have a strong perspective on where we need to go to grow our position as a leading mobile Internet and mobile broadband player in the coming years. We will continue to leverage on this innovative strength to ensure DiGi remains a strong forerunner in the industry.

One other key advantage is that we can realise the full value from being part of Telenor Group — a frontrunner in mobile network rollouts in leading markets, with considerable experience in commercialising new technologies, services and coverage.

Specifically, we are leveraging off the competencies and scale of the Telenor Group in rolling out our brand new network, leading the industry in terms of infrastructure sharing experience (tapping one of the first commercial LTE RAN sharing partnerships in the world in Sweden) and gaining from group-wide device sourcing agreements with key device manufacturers and reputable PC manufacturers. The latter enables us to secure the latest devices at the most favourable pricing levels ahead of competition.

What have been the major achievements of the company in the past four years?
Since 2006, we have steadily grown our customer base by 66% to close to nine million customers today. Within three years of launching our 3G broadband and Internet service, we have reached 50% population coverage and made our services available in all key market centres nationwide.

Today, we have 4.6 million customers actively using our mobile Internet and broadband services in their daily lives.

DiGi continues to perform well since 2007. Improved commercial focus and execution resulted in a compounded annual revenue growth in excess of 5% in the four-year period between 2007 and 2010. Our revenue had grown to RM5.41 billion in 2010 from RM3.65 billion in 2006 while profit after tax had increased to RM1.12 billion from RM805.7 million.

Cost-focus efforts continue to show positive results resulting in continuous margin improvement in the past four years. Cash generation remained strong and this augurs well for the company as we continue to expand our business and grow our network substantially going forward.

The company is also committed to become a leader in sustainable and ethical business practices; from our product offerings to the well-being of our employees and the development of the communities that we serve through our products and services.

Since 2005, the company has returned in excess of RM6.8 billion in cash to all our shareholders as a result of our strong capital discipline in ensuring that we generate strong operational cash flow to fund our investment activities. Long-term shareholders would have enjoyed total capital returns close to 300% since 2005.

What are the major challenges your company faced over the years and how did it overcome them? Is there anything else you would have done differently?
DiGi obtained its 3G licence in 2008, two years later than the other players. Despite this, we commercialised our 3G broadband service within a year in 2009. Although a latecomer into the market with less coverage than our competitors and fierce competition, DiGi’s market share in the mobile broadband market in terms of subscribers grew to 14% by the end of March 2011.

Today, we have 50% 3G population coverage and 4.6 million customers using our mobile Internet and broadband services. East Malaysia (Sabah and Sarawak) were among the first states where we launched our broadband service and today we have 25% to 30% new broadband customers here. We plan to have more than 60% 3G population coverage by 2012 and over 80% by 2015.

How is the company positioning itself within your industry? What are your strategies to grow or gain market share?
Our proposition of being the smarter choice for customers remains as we drive to make the Internet accessible to all Malaysians. We believe the Internet is for everyone and the potential is tremendous once Malaysians have a device in their hands together with affordable price plans and relevant services on both small and big screens.

As over 80% of mobile phone owners in Malaysia are non-smartphone users, we would like to make smartphones available to every user with a wider range of phones including Androids and lower the barrier of entry though smart bundling. As part of the Telenor Group, we are able to benefit from group-wide device sourcing agreements with key device manufacturers to secure the latest models at the most favourable price levels, ahead of competition.

To drive further adoption of mobile Internet, we are also looking to provide good user experience, working with local and international partners to push Internet communications and entertainment interface like Facebook SMS, DiGi-Foursquare app, DiGi-Opera Mini browser and our very own homegrown music service, DiGiMusic Play, for smartphone users and DiGiMusic Pluz for non-smartphone users.

Our ambition is to be a top data provider. We believe we are well-positioned to be the customer’s smarter choice with our brand new LTE-ready network which we have commenced and due to be completed in 2012.

With network modernisation, we will have the best network in Malaysia capable of delivering high-speed broadband and next generation services with the introduction of a portfolio of bandwidths to market using smart network capabilities. Our LTE-ready network will ensure faster rollout of best-in-class broadband services to more Malaysians through larger coverage and enable us to deliver substantially higher speeds at affordable prices.

We are also modernising our entire IS/IT platform to deliver a complete high quality Internet and content experience, that will enable more effective integration of third party services to customers, businesses and developers, enabling advanced charging, and billing of data and content services.

On top of this, we are embarking on network collaboration with Celcom deemed as one of the most ambitious telecom partnerships in Asia; sharing of sites and backhaul transmission to ensure both parties are able to carry higher traffic volumes. The ultimate aim of all these initiatives is to ensure our customers continue to enjoy the highest standard of service from DiGi

What are your company’s plans for the future, short-term and long-term? What are your plans to compete in the increasingly globalised environment?
Making the Internet available for all Malaysians is part of our commitment to build a connected Malaysia. Our strategy is to make smartphones more accessible to every user with a wider range of phones across all platforms, and lowering barrier of entry though smart bundling.

Since our launch of 3G in mid-2009, we have proved our ability to grow the mobile broadband market by increasing our subscriber market share to 14% as at end-March 2011 despite a late start, less coverage than the competitors, and fierce competition. We have also shown our commitment to East Malaysia where we took 25% to 30% of new broadband customers despite a late start and substantially lower coverage.

Our tradition has been to provide innovative data pricing for customers, while always ensuring the highest quality of service. This is evidenced in our continuous promotions for Internet access at minimal cost through single sign-on service offering for seamless access to multiple devices, as well as bundling of complementary services such as WiFi.

Combining availability of device and good usage experience is key to accelerating adoption. We are striking the right partnerships and working with partners here and abroad to bring content and applications to customers.

The key priorities in the short to medium term are to expand the mobile Internet and broadband revenue base. We hope to achieve this by differentiating and growing our business in key segments; leveraging on the success of our cost focus initiatives to ensure good margin development going forward, as well as optimising network collaboration and modernisation to strengthen competitiveness. We aim to keep delivering strong returns to our shareholders.

What is your dream for the company? How would you like to see it in 10 years’ time?
My ambition is for DiGi to be the enabler of connectivity, be it voice or Internet, for every Malaysian. With the best network infrastructure, efficient processes and right talent pool, I am confident we are capable of becoming the leading mobile Internet provider in Malaysia.


This article appeared in The Edge Financial Daily, December 27, 2011.



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Felda's April listing plans on track

Felda Global Ventures Holdings Sdn Bhd's plans to list on the Main Market of Bursa Malaysia in April 2012 are on track.

In a statement today, its president/chief executive, Datuk Sabri Ahmad, said FGVH was firm in its mission to get the listing done within this time frame.

Sabri's response came in the wake of an outside group being formed to question the listing. The most recent was the Gabungan Peneroka Generasi Wawasan Felda Kebangsaan, which announced it had formed an evaluation committee to analyse the listing and would come up with a recommendation to be presented to Prime Minister Datuk Seri Najib Razak.

He said while Felda Global Ventures was open to ideas that could improve the listing process or optimise valuations, its board was resolute in its mission to get the company listed by April next year.

"There is no wavering on our part and we are clear as to how this listing will bring benefits and create a win-win situation for all.

"Felda Global Ventures is fully owned by Lembaga Felda and the decision for Koperasi Permodalan Felda, the Felda cooperative, to own substantial shares in Felda Global Ventures prior to listing is designed to allow benefits to directly flow down to Felda settlers, all of whom are members of the cooperative," he said.

Sabri said the Felda Global Ventures' listing cannot be held up by outside parties who had no stake in the company nor any kind of standing in its governance.

"Our decision to list is well thought out. It is the culmination of a process started in 2009 as part of Felda’s five-year transformation programme," he said.

He said Felda Global's role was to expand Felda’s international business footprint and pursue new ventures to ensure steady growth.

"Outside parties cannot upturn these plans to serve their own agenda and the Felda Global Venture board is sticking to its plans for the listing," he said. -- BERNAMA



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FBM KLCI remains bearish at mid-afternoon

Shares on Bursa Malaysia were lower at mid-afternoon as market sentiment remained bearish amid the lack of buying interest, dealers said.

At 3pm, the underlying FTSE Bursa Malaysia KLCI (FBM KLCI) stood at 1,495.49, down 0.66 point after opening two points lower at 1,494.15.

A dealer said trading on the local bourse was light amid lack of strong leads as European and some Asian markets, including Hong Kong and Australia, were closed today in conjunction with the Christmas holidays.

The dealer said interest in plantation-related counters lent support to the local market and kept the key index steady at above 1,490 level.

On Bursa Malaysia, trading was moderate with a volume of 515.6 million shares valued at RM301.14 million, while decliners led advancers 311 to 285 and 295 counters were unchanged.

The Finance Index slipped 25.80 points to 13,338.77 and the Industrial Index eased 1.81 points to 2,676.68. The Plantation Index gained 20.53 points to 7,987.92.The FTSE Bursa Malaysia Emas Index rose 0.65 point to 10,254.17 and the FTSE
Bursa Malaysia Mid 70 Index added 14.25 points to 11,314.72.
The FTSE Bursa Malaysia Ace Index declined 17.11 points to 4,021.70.

Volume leaders, Scan was three sen higher at 13 sen, BF-Warrants rose four sen to 24 sen and Proton-Call Warrant gained 5.5 sen to 36 sen. Among heavyweights, Maybank erased one sen to RM8.34, CIMB dropped five sen to RM7.04 while Sime Darby was one sen higher at RM9.00. -- Bernama



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Metrod up on plan to dispose Austria-based unit

KUALA LUMPUR (Dec 27): Metrod (Malaysia) Bhd shares rose in the afternoon session on Tuesday after the company said it would realise a gain of about RM74.5 million from the disposal of its Austria-based units for RM202.2 million (€49 million).

At 4.20pm, Metrod was up five sen to RM1.95 with 14,000 shares traded.

The company had earlier announced that its wholly-owned subsidiary, Metrod (Singapore) Ptd had entered into an agreement with GEP II Beteiligungs GmbH to dispose ASTA Holdings GmbH and ASTA Elektrodraht GmbH.

ASTA Holdings was incorporated in Austria and is principally an investment holding company, and is a wholly-owned subsidiary of Metrod Singapore.

Meanwhile, ASTA Elektrodraht’s principal activities include functioning as a general partner of the limited commercial partnership, ASTA KG and leasing of premises to ASTA KG. The equity ownership of ASTA Elektrodraht is held by ASTA Holdings and Metrod Singapore in the proportion of 99%:1%.

On the rationale for the disposal, Metrod said it was timely given the challenges faced by Metrod in relation to the businesses of the ASTA Target Group in light of the current volatile and uncertain global economic conditions, increased market competition, threat of recession and deteriorating future outlook.

As for the utilisation of proceeds from the disposal, Metrod said it was still assessing and evaluating plans for the use of the cash proceeds from the Proposed Disposal with the objective of maximising shareholders’ value which may include, but not limited to, the acquisition of viable businesses/assets.



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Felda Global firm on its IPO path, says its president and CEO

KUALA LUMPUR (Dec 27): Felda Global Ventures Holdings Sdn Bhd (FGVH) president and chief executive officer Datuk Sabri Ahmad said plans are on track for its initial public offering in April 2012.

In a statement Tuesday he said the company was firm in its mission to get listed on the Main Market of Bursa Malaysia within this time frame.

Sabri’s statement followed the setting-up of Gabungan Peneroka Generasi Wawasan Felda Kebangsaan or GEMPAK, which announced it had formed an evaluation committee to analyse the listing of FGVH and would come up with a recommendation to be presented to the Prime Minister.

“While we are open to ideas that can improve the listing process or optimise valuations, the board of FGVH is resolute in its mission to get the company listed by April next year.

“There is no wavering on our part and we are very clear as to how this listing will bring benefits and create a win-win situation for all," he said.

Sabri said FGVH was fully owned by Lembaga Felda and the decision for Koperasi Permodalan Felda, the Felda cooperative, to own substantial shares in FGVH prior to listing was designed to allow benefits to directly flow down to Felda settlers, all of whom are members of the cooperative.

He also said FGVH's listing could not be held up by outside parties who had no stake in the company nor any kind of standing in its governance.

“"Our decision to list is well thought out. It is the culmination of a process started in 2009 as part of Felda’s five-year transformation programme. FGVH's role is to expand Felda’s international business footprint and pursue new ventures to ensure steady growth.

“Outside parties cannot upturn these plans to serve their own agenda and the FGV board is sticking to its plans for the listing," he said.



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QL Res, Padini are OSK's consumer top picks

OSK Research said consumer companies will fare better than on average, despite the tepid economic scenario in 2012, which is expected to dampen earnings.

In a research note today, OSK Research said this was mainly due to firm demand for their products, and the fact that the companies had taken appropriate measures while having learnt from the last crisis in 2008/09.

The research company also expects consumer spending to remain relatively stable as disposable income increases, amid the country's low unemployment of three per cent.

"The financial performance of food and beverage (F&B) companies depends mainly on fluctuations in food commodity prices and their ability to maintain low manufacturing costs," it said.

OSK Research is maintaining its overweight recommendation on the consumer sector, with its top picks being QL Resources Berhad, for its uninterrupted earnings growth, as well as Padini Holdings Bhd, for attractive valuation and good dividend yield. -- Bernama



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Acquisitions seen boosting Genting earnings

Genting Malaysia Bhd's (Genting) recent acquisition spree could potentially take the group's earnings to new heights, especially when the new assets commence operations.

In a research note today, OSK Research Sdn Bhd said the acquisition started with Genting UK, Aqueduct Racino in New York and the casino in Miami, Florida.

"These corporate moves would lift Genting's earnings the same way that Genting Singapore sprang an upside surprise with its maiden earnings," it said.

It said total visitor arrivals to Genting Highlands remained stable.

On the mass market domestic visitation, OSK said domestic day-trippers made up 72 per cent of total visitor arrivals, while Malaysian hotel guests contributed to 64 per cent of room occupancy.

"The mass market casino volume is still up two per cent year-on-year despite a single-digit decline in foreign visitation to the resort and a slight decline in total visitation.

"This is largely attributed to the management's success in driving further improvements in yield management," it said.

On the number forecast operator (NFO) segment, OSK said the introduction of the jackpot element in the 4-digit (4D) games has spurred Berjaya Sports Toto's (BToto) average sales per draw to RM1.5 million to RM2 million.

"However, due to some cannibalisation of its non-4D games, the bet impact from introducing the 4D jackpot games has not been as positive as that experienced by Magnum Corp Bhd via its version of the 4D jackpot, for which sales grew 11 per cent initially versus BToto's less than five per cent," it said.

OSK said in view of the relatively matured NFO market in Malaysia and waning of the novelty effect for 4D jackpot games, the overall NFO gaming growth was expected to moderate to a more sustainable three to four per cent.

"The NFO gaming market tends to reflect greater resilience in times of economic downturn than the casino market given the smaller average size of NFO bets," it said.

It has an "overweight" call on the gaming sector.

OSK has "buy" recommendations on both Genting Bhd and Genting while in the NFO segment, it had a "buy" call BToto as it remained a defensive high-dividend yield play. -- Bernama



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OSK 'overweight' on media sector

OSK Research expects media advertisement expenditure (ADEX) growth to close 2011 at double the in-house gross domestic product forecast of 5.2 per cent.

OSK Research in a research note today said the expectation is based on the strength in domestic consumption that can still be seen.

The research house said according to the AC Nielsen Media Research, the first nine months of 2011 saw ADEX grow by a robust 10.4 per cent year-on-year (y-o-y) shored up by resilient domestic consumer spending despite concerns of slowing recovery and weakening consumer confidence on the global economic front.

It said that advertisement spending on the three core divisions -- newspapers, television and radio channels -- made up a total of 94 per cent of the combined ADEX, rising by 10.7 per cent y-o-y to RM5.75 billion.



Meanwhile, the Internet segment remained the fastest growing, chalking up 34.4 per cent y-o-y growth but accounting for an insignificant 0.7 per cent share of total ADEX.

OSK Research maintains an "overweight" call on the sector as it believes that thematic factors such as an impending polls and the Euro 2012 football tournament would be the key catalysts in 2012.

OSK Research said that the top picks -- Media Chinese, Media Prima and Catcha Media -- are all pegged with a "buy" call and fair value at RM3.17, RM3.09 and RM1.21 respectively.

Meanwhile the research firm has rated a "neutral" call on Star with a fair value of RM3.34. -- Bernama



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'Room for consolidation in healthcare sector'

The merger and acquisition (M&A) momentum in the healthcare sector is expected to continue next year with investors capitalising on the growing demand for healthcare products and services in Malaysia and the region, a research house said.

OSK Research said there was ample room for consolidation within the private healthcare segment, driven by the tighter regulations and rising competition, which has made it more difficult for small and standalone private hospitals to remain competitive.

"The impending listing of Parkway-Pantai could spark a valuation re-rating of the sector in 2012 as this listing is expected to set a high valuation benchmark for the sector," it said in its Investment Strategy 2012 note today.

Among potential growth opportunities in the sector include addressing the outpatient, community-based care and living needs of the elderly.

Although it is still a novel concept in Malaysia, the long-term goal is to create a number of centres offering assistance to people who need help with daily living activities, yet wish to live as independently as possible, for as long as possible.

The research house said unlike nursing homes which focus on the final stages of care, "seniors living" promote active ageing and productive living.

The key services that can be offered under the umbrella of seniors living include integrated personal assistance, domiciliary and personal and medical care.

"Realising the growth opportunities inherent in this segment in view of the dearth of such business models in Malaysia, local companies like KPJ have started venturing abroad to acquire prerequisite expertise with the intention of replicating such business models locally," said OSK Research.

On medical tourism, it said Malaysia still lags behind its regional peers, Singapore and Thailand, despite offering services that are on par or of better value.

However, the research house said there was a potential for Malaysia to become a major player by developing a national medical tourism brand via effective marketing campaigns and joint efforts to promote Malaysia as a world-class medical tourism destination.

Citing the sector's huge growth potential and defensive nature, OSK Research has retained its "Overweight" outlook on the healthcare sector. -- Bernama



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'Neutral' call on Malaysia insurance sector

OSK Research Sdn Bhd expects more consolidation in the local insurance space in the future.

The research firm said that local insurance companies had become attractive mergers and acquisition targets for foreign players, after Bank Negara Malaysia raised the foreign ownership limit to 70 per cent from 49 per cent.

"The industry’s premium income has been on an uptrend and is likely to stay that way, whether in good or bad times, based on historical trends," OSK said in a statement today.

Overall, it said, premium income growth is positively correlated with the consumer sentiment index (CSI).

"When consumer spending weakens as economic activity slows, demand for insurance products will correspondingly be sluggish.

"However, the downside risk is likely be offset partially by the central bank's upward adjustment in motor insurance tariffs starting from 2012 to 2015, which will benefit the motor insurance players," it added.

OSK has maintained its "neutral" call on the insurance sector as there are no immediate catalysts.

"When the market sentiment turns sour, investors tend to look at more defensive plays. But when the market is bullish, they turn to the bigger blue chip stocks rather than insurance companies," it added. -- Bernama



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Ingress subsidiaries get Tenaga contracts worth total RM55m

KUALA LUMPUR (Dec 27): INGRESS CORPORATION BHD []’s subsidiaries via their joint venture have secured contracts worth a total RM55 million from TENAGA NASIONAL BHD [].

The company said on Tuesday that the unincorporated joint-venture between Multi Discovery Sdn Bhd and Ramusa Engineering Sdn Bhd had received letter of intents for the contracts.

The contracts are for the eestablishment of PMU 132kV Kota Setar AIS Rehab and 132kV Lines Diversion at PMU Kota Setar; and proposed 275kV Bulk Supply to Bahru Stainless (Extension of 2 x 275kV Overhead Line Bays at PMU275/132/22 kV Cahaya Baru).

The company said the projects would commence within the first quarter of financial year ending Jan 31, 2013.

Ingress said the projects were expected to contribute positively to its earnings.



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Maybank opens 11th branch in Cambodia

Malayan Banking Bhd (Maybank) has opened a new branch at Stung Meanchey, in Phnom Penh, to expand its network in Cambodia to 11.

Its Deputy President and Head of Global Wholesale Banking, Abdul Farid Alias said the opening of the Stung Meanchey branch, was timed to capture the medium and long-term growth in the country.

"Cambodia's economy is poised for a more than six per cent growth next year.

"The demand for financial sector products as well as services, has been increasing in the last few years, and is expected to continue in tandem with this economic growth," he said in a statement here today.

Abdul Farid added that Maybank will open at least one more branch in Cambodia to further expand its network in 2012.

Over the 12 months to October 2011, Abdul Farid noted that Maybank Cambodia had registered a 75.2 per cent growth in loans and advances, with four per cent growth for customer deposits.

Maybank is also pursuing a key initiative of applying for a local
incorporation licence from the National Bank of Cambodia.

This is to reflect Maybank's long-term commitment to that country and its standing as a regional bank.

Meanwhile, the new branch provides a full range of banking services, including trade finance, global automated teller machines (ATM) and loans to meet the financial and banking requirements of new and existing customers. - Bernama



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Asian markets ease ahead of US data, KLCI pares down losses

KUALA LUMPUR (Dec 27): Asian markets were mostly in negative territory at mid-day on Tuesday, ahead of home prices and consumer confidence data set to be released later in the day in the US.

The FBM KLCI was down 1.34 points to 1,494.81 at the mid-day break.

Losers beat gainers by 301 to 257, while 293 counters traded unchanged. Volume was 445.83 million shares valued at RM232.02 million.

The ringgit weakened 0.37% to 3.1592 versus the US dollar; crude palm oil futures for the third month delivery fell RM22 per tonne to RM3,148, crude oil added eight cents per barrel to US$99.76 while gold fell US$12.07 an ounce to US$1,594.88.

At the regional markets, Japan’s Nikkei 225 was down 0.43% to 8,442.73, South Korea’s Kospi fell 1.02% to 1,837.84, Taiwan’s Taiex lost 0.48% to 7,058.71 and Singapore’s Straits Times Index shed 0.15% to 2,672.54.

The Shanghai Composite Index edged up 0.05% to 2,191.23 while European and some Asian markets, including Hong Kong and Australia, were closed on Tuesday.

On Bursa Malaysia, Y&G fell 28.5 sen to 68 sen, BAT and Dutch Lady lost 20 sen each to RM49 and RM23.16, JT International and Hong Leong Bank down 12 sen each to RM6.87 and RM10.82, Petronas Dagangan 10 sen to RM17.20 while Petra Energy and EKIB was down eight sen each to RM1.05 and 46 sen.

Among the gainers, Boxpak rose 29 sen to RM2.14, KLK 26 sen to RM22.46, F&N 20 sen to RM18.20, AIC and Top Glove 12 sen each to RM1.30 and RM4.86, Kretam, Far East and Ta Ann added 10 sen each to RM2.50, RM7.15 and RM5.15 respectively, while Nestle and BLD PLANTATION []s gained eight sen each to RM56.68 and RM7.20.

The actives included MBF Holdings warrants, Proton, Karambunai, Astral Supreme and Sanichi.



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Metrod to gain RM74.5m from disposal of Austria-based unit

KUALA LUMPUR (Dec 27): Metrod (Malaysia) Bhd is set to realise a gain of about RM74.5 million from the disposal of its Austria-based units for RM202.2 million (€49 million).

It said on Tuesday that its wholly-owned subsidiary, Metrod (Singapore) Ptd had entered into an agreement with GEP II Beteiligungs GmbH to dispose ASTA Holdings GmbH and ASTA Elektrodraht GmbH.

ASTA Holdings was incorporated in Austria and is principally an investment holding company, and is a wholly-owned subsidiary of Metrod Singapore.

Meanwhile, ASTA Elektrodraht’s principal activities include functioning as a general partner of the limited commercial partnership, ASTA KG and leasing of premises to ASTA KG. The equity ownership of ASTA Elektrodraht is held by ASTA Holdings and Metrod Singapore in the proportion of 99%:1%.

On the rationale for the disposal, Metrod said it was timely given the challenges faced by Metrod in relation to the businesses of the ASTA Target Group in light of the current volatile and uncertain global economic conditions, increased market competition, threat of recession and deteriorating future outlook.

As for the utilisation of proceeds from the disposal, Metrod said it was still assessing and evaluating plans for the use of the cash proceeds from the Proposed Disposal with the objective of maximising shareholders’ value which may include, but not limited to, the acquisition of viable businesses/assets.



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OSK keeps 'buy' call on Sunway

Sunway Bhd shares gained four sen to RM2.50 with 243,800 shares traded as at 10.20am today after its wholly-owned subsidiary, Sunway Geotechnics (M) Sdn Bhd, secured a RM27.57 million contract from Hap Seng Land Development (JTR) Sdn Bhd.

The contract is for the proposed construction and completion of earthworks and piling for basements one and two and ground floor reinforces concrete structures for a 43-storey service apartment at Jalan Tun Razak, Kuala Lumpur.

OSK Research viewed the contract positively although the size was small relative to the other contracts Sunway had secured earlier in the year.

"More importantly, it was in line with Sunway's intention to focus more on niche and specialised contracts for its construction division following the completion of its merger," it said in a research note today.

Sunway's construction orderbook valued at about RM2.8 billion will last it for at least another 1.5 years.

Nevertheless, it is continuously bidding for more contracts with an order book replenishment target of RM1.5 billion, annually.

"We believe it stands a good chance of securing more contracts from Iskandar Region for next year as well as potential contracts from the KL MRT project, further supported by its good track record," OSK Research said.

It maintained a buy recommendation on Sunway at an unchanged fair value of RM3.31 per share. -- Bernama



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KL shares easier at midmorning

At 10.30 am today, there were 197 gainers, 246 losers and 225 counters traded unchanged on the Bursa Malaysia.

The FBM-KLCI was at 1,493.77 down 2.38 points, the FBMACE was at 4,024.45 down 14.36 points, and the FBMEmas was at 10,235.98 down 17.54 points.

Turnover was at 230.029 million shares valued at RM94.755 million. -- Bernama



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KLCI kicks off year’s final trading week on tepid note

KUALA LUMPUR (Dec 27): The FBM KLCI started the final trading week of the year on a weaker note and fell 4.61 points to 1,491.54 at mid-morning, weighed by select blue chips.

Losers led gainers by 179 to 174, while 194 counters traded unchanged. Volume was 176.78 million shares valued at RM66.23 million.

Asian shares were steady on Tuesday in thin volume as investors took to the sidelines before U.S. markets reopen later in the day from a long weekend and data which could offer clues over growth prospects in the world's largest economy, according to Reuters.

European and some Asian markets, including Hong Kong and Australia, were closed on Tuesday, it said.

At the regional markets, Japan’s Nikkei 225 fell 0.52% to 8,435.63, the Shanghai Composite Index shed 0.06% to 2,188.82, Taiwan’s Taiex lost 0.52% to 7,055.82, South Korea’s Kospi fell 0.74% to 1,843.03 and Singapore’s Straits Times was down 0.26% to 1,492.21.

BIMB Securities Research in a note Dec 27 said the Eurozone enjoyed a temporary reprieve as traders and investors alike were in holiday mood ahead of Christmas and 2012, adding that global equities continued with their uptick as European bourses have all registered positive gains.

Buoyed by improved US economic outlook and absence of nasty news, the Dow Jones Industrial Average jumped 124 points to close at almost 12,300, it said.

However, the research house said that surprisingly, the feel good factor did not entirely cascade down to Asian bourses as the region markets ended rather mixed.

“As for Malaysia, the FBMKLCI continued with its uptrend and is within touching distant of the 1,500 mark.

“We reckon trading would be lacklustre over the next few days and will be interesting to see if the benchmark index is able to break the psychological 1,500 looking forward. We are sticking our necks out that it will,” it said.

On Bursa Malaysia, BAT was the top loser at mid-morning and was down 20 sen to RM49; PPB fell 18 sen to RM16.80, Genting PLANTATION []s down 16 sen to RM8.25, JT International 13 sen to RM6.86, Petra Energy and Hong Leong Bank fell eight sen each to RM1.05 and RM10.86, Harvest Court seven sen to RM1.06 while Daibochi and Shangri-La fell six sen each to RM2.58 and RM2.38.

Gainers included Nestle, HLFG, AIC, TDM, F&N. GAB, United Plantations, Kretam and Boustead, while the actives included Proton, Vastalux, Marco, Envair and Utopia.



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Sunway edges up on getting RM27.57m job from Hap Seng Land

KUALA LUMPUR (Dec 27): SUNWAY HOLDINGS BHD [] shares edged up on Tuesday after its unit secured a contract worth RM27.57 million from Hap Seng Land Development (JTR) Sdn Bhd for the CONSTRUCTION [] of pilings, basement and ground floor for one block of 43-storey service apartment at Jalan Tun Razak, KL.

At 9.48am, Sunway was up three sen to RM2.49 with 87,000 shares traded.

Sunway said on Friday that its wholly-owned subsidiary Sunway Construction Sdn Bhd’s unit Sunway Geotechnics (M) Sdn Bhd had been awarded the contract.

The company said the project was targeted for completion by Dec 12, 2012, and was expected to contribute positively to its earnings for the financial year ending Dec 31, 2012 onwards.



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Ingress Corp up on landing Proton contract

KUALA LUMPUR (Dec 27): INGRESS CORPORATION BHD [] shares advanced on Tuesday after it received a letter of acceptance from Perusahaan Otomobil Nasional Sdn Bhd (Proton) with a total value of RM84.8 million over a period of five years to supply parts for new Proton models.

At 9.35am, Ingress was up 3.5 sen to 78 sen with 109,400 shares traded.

The company said on Friday its 90%-owned subsidiary Ingress Precision Sdn Bhd had been contracted to supply door sash.

Meanwhile, its wholly owned unit Ingress Engineering Sdn Bhd (IESB) would supply roof drip moulding and beltline moulding, it said.



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Ingress rises on Proton parts supply deal

Ingress Corp, a Malaysian auto-parts supplier, rose to a six-week high in Kuala Lumpur trading after winning an RM84.8 million contract to supply parts for new Proton Holdings Bhd vehicles.

The stock advanced 4.7 percent to 78 sen at 9:02 a.m. local time, set for its highest close since Nov. 14. -- Bloomberg



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SCAN advances after buying 2 firms

SCAN Associates Bhd rose the most in seven months in Kuala Lumpur trading after agreeing to buy two companies for RM98 million as part of a reverse takeover.

The stock gained 35 percent to 13.5 sen at 9:07 a.m. local time, set for its steepest increase since May 13. -- Bloomberg



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Crescendo rises after Q3 income doubled

Crescendo Corp, a Malaysian property developer, rose the most in almost nine months in Kuala Lumpur trading after third-quarter net income more than doubled to RM21.7 million from a year earlier.

The stock gained 6.1 percent to RM1.56 at 9:04 a.m. local time, set for the steepest increase since April 1. -- Bloomberg



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Metrod to sell ASTA for €49m

Metrod Holdings Bhd, a Malaysian maker of copper wires and rods, rose the most in more than a month after agreeing to sell ASTA Holdings GmbH to GEP II Beteiligungs GmbH for 49 million euros (US$64 million).

It will also sell a 1 percent stake in ASTA Elektrodraht GmbH as part of the deal, the statement said.

The stock climbed 2.6 percent to RM1.95 at 10:15 a.m. local time in Kuala Lumpur, set for its steepest increase since Nov. 17. -- Bloomberg



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Yinson gains on tripling Q3 net income

Yinson Holdings Bhd, a Malaysian transportation services provider, climbed to the highest level in more than four months in Kuala Lumpur trading after third- quarter net income tripled to RM8.1 million.

The stock gained 3.7 percent to RM1.98 at 9:12 a.m. local time, set for the highest close since Aug. 17. -- Bloomberg



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Yinson rises on firmer 3Q earnings, positive outlook

KUALA LUMPUR (Dec 27): YINSON HOLDINGS BHD [] shares rose on Tuesday after its net profit for the third quarter ended Oct 31, 2011 jumped to RM8.07 million from RM2.5 million a year earlier, due mainly from its marine transport business and gain on disposals of subsidiary and PROPERTIES [].

At 9.25am, Yinson was up four sen to RM1.95 with 300,500 shares done.

The company said on Friday that its revenue for the quarter rose to RM194.48 million from RM156.19 million in 2010.

For the nine months ended Oct 31, Yinson’s net profit rose to RM20.69 million from RM11.72 million in 2010, on the back of revenue RM549.91 million.

Maybank Investment Bank Bhd Research in a note Dec 27 said Yinson was an emerging 'under the radar' O&G play, and that its results yielded no surprises.

“The business transformation into an O&G floating solution operator is well on the way and should act as a catalyst for this small-cap stock with undemanding valuations. Yinson is Not Rated,” it said.



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Plantations, blue chips weigh on KLCI in early trade

KUALA LUMPUR (Dec 27): The FBM KLCI fell in early trade on Tuesday, weighed by losses at key blue chips and PLANTATION []-related stocks.

At 9.10am, the FBM KLCI lost 5.45 points to 1,490.70.

Gainers led losers by 100 to 70, while 115 counters traded unchanged. Volume was 61.3 million shares valued at RM14.84 million.

Among the early losers were PPB, KLK, Sime Darby, BAT, Genting, KPJ, Maybank, Petronas Chemicals and Envair.



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Petronas Gas advances in early trade

KUALA LUMPUR (Dec 27): PETRONAS GAS BHD [] shares advanced in early trade on Tuesday after MIDF Research maintained its Buy call on the stock and raised its target price to RM15.60 (from RM14.40).

At 9.05am, Petronas Gas rose 10 sen to RM14.24.

MIDF Research in a note Dec 27 said that taking into account Petronas Gas’ future prospectus, potential earnings upgrade and good dividend yield, the research felt it more justifiable to raise its valuation to its historical mean since 2007of 18.4 times, from a conservative 16.5 times PER (1-SD below) implied previously.

“We like Petronas Gas’ sole-ownership of Peninsular Malaysia’s gas pipelines system and the up-coming re-gasification facility in Melaka, leveraging on the gas sector liberalisation initiatives,” it said.



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Stocks to watch: Ingress, Sunway, Yinson, Chin Well

KUALA LUMPUR (Dec 25): The FBM KLCI goes into the final trading week of 2011 on Tuesday, Dec 27 in what has been an eventful and volatile year for global equity markets, during which period investor confidence has taken a severe beating.

Also, many market participants are reluctant to believe in a "Santa Claus rally" this year, which refers to stocks' seasonal tendency to gain in the final five trading days of the year and first two trading days of the New Year, according to Reuters.

Warnings from major credit rating agencies on a potential downgrade of several European nations have kept investors on edge. After Standard & Poor's surprised financial markets back in August with a downgrade of the United States' triple-A credit rating on a Friday evening, investors worry a similar move could come at any time - even between Christmas and New Year's, it said.

Among the stocks that could be in focus on Tuesday are INGRESS CORPORATION BHD [], SUNWAY HOLDINGS BHD [], Yinson Holdings and CHIN WELL HOLDINGS BHD [].

Ingress has received a letter of acceptance from Perusahaan Otomobil Nasional Sdn Bhd (Proton) with a total value of RM84.8 million over a period of five years to supply parts for new Proton models.

Sunway’s unit has secured a contract worth RM27.57 million from Hap Seng Land Development (JTR) Sdn Bhd for the CONSTRUCTION [] of pilings, basement and ground floor for one block of 43-storey service apartment at Jalan Tun Razak, KL.

Yinson net profit for the third quarter ended Oct 31, 2011 jumped to RM8.07 million from RM2.5 million a year earlier, due mainly from its marine transport business and gain on disposals of subsidiary and PROPERTIES [].

Meanwhile, Chin Well expects to sustain overseas revenue contribution going forward, and focus on expanding its market share in Europe as well as emerging Asia and North America, said its managing director Tsai Yung Chuan.

He said whilst the company would take advantage of the European Union’s (EU) listing of Chin Well as one of the 8 Malaysian companies exempted from import duty, it will not ignore markets in emerging Asia as well as North America.

Tsai said that over the years, the company had exported to an increasing number of countries in Europe, Asia, and North America, and more than doubled its overseas revenues to about RM400 million in just 5 years.



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OSK Research: 2012 Outlook – be nimble in the “way of the market”

KUALA LUMPUR (Dec 25): OSK Investment Research has a Neutral outlook on the Malaysian market going into 2012 as the combination of uncertain growth outlook in the US and Asia coupled with a positive recession in Europe cloud the prospects for strong earnings growth locally.

Its director Chris Eng in his 2012 market outlook strategy report on Dec 23 said that while Malaysia would likely avoid slipping into a recession, the deficit reduction exercises undertaken by Eurozone economies may well tip their slow growing economies into a recession.

“In any case, for Malaysia, we see earnings growth slipping to between mid single digits and low double digits, a pale shadow of what it was in 2006, 2007 and 2010 when earnings growth came in between 20 to 30%,” he said.

Eng said newsflow on developments surrounding the handling of sovereign debt in Europe and the US would also likely lead to volatile markets worldwide, adding that in the short term, volatile markets will likely give way to a dampened economic outlook.

“We advise investors stay cautious into mid 2012 and focus on Defensive sectors such as Consumer, Telco, Healthcare and Media.

“Our 2012 KLCI fair value is 1,466 points based on a PER of 13.5 times or 1 standard deviation below the historical average of 16.6 times given the uncertain market conditions,” he said.

At the same time, when trading opportunities present themselves, Banks, O&G and CONSTRUCTION [] should come into play, he said.

Eng said OSK Research was Overweight on 7 sectors, Neutral on 9 and Underweight on 2 sectors.

“In terms of our Top Buys, they reflect this overall strategy.

“Six of our Top Buys, namely Axiata, PetGas, Telekom Malaysia, QL Resources, KPJ Healthcare and Media Chinese reflect our Defensive Strategy while 2 others are from our Alternative Defensive Buys namely AirAsia and TRC Synergy,” he said.



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