KWAP's fund size increases to RM82.61b in 1Q2012

KUALA LUMPUR (May 10): The Retirement Fund Inc's (KWAP) fund size increased by 12% or RM8.85 billion to RM82.61 billion in the first quarter 2012 compared to RM73.76 billion in the same quarter of last year.

Its chief executive officer Datuk Azian Mohd Noh in announcing the first quarter 2012 unaudited financial results, said the company's gross investment income increased to RM1.20 billion in the first quarter, which is 6.8% higher than the RM1.13 billion over the corresponding period of 2011.

She said the KWAP achieved a gross return on investment of 1.50%, with net investment income totaling RM1.61 billion.

"The increase is mainly attributed to the strong stock market performance in the first three months of the year, as indicated by the FBM KLCI Index, which surpassed the 1,600-point level.

"In addition, the low interest rate environment also created opportunities for KWAP to intensify the trading activity of its fixed income portfolios, translating into higher capital gains," she in a statement here on Thursday.

She said fixed income assets, namely Malaysian Government Securities, Loans and Private Debt Securities and Money Market instruments, contributed RM299.19 million, RM273.29 million and RM119.18 million respectively, while the remainder came from alternative investments.

Azian said equity investment also contributed RM501.42 million or 42% from the total investment income.

"Some 96% of KWAP's fund are invested domestically with the remaining four%, internationally. International investments are distributed across various asset classes namely fixed income, equity and alternatives which consist of private equity and property," she added.

She said the KWAP has identified various strategies that will add more value to its investments.

"Among others, more funds shall be channeled to external fund managers under the international investment programme covering equities and fixed income. With the set-up of our UK Office, Prima Ekuiti (UK) Limited this year, KWAP's own in-house managers can take the opportunity to build up their expertise beyond the domestic market," she added.

Despite the difficult global environment, Azian said KWAP remains optimistic as domestic demand is anticipated to provide the necessary buffer.

"This, coupled with positive government policies and ample liquidity in the banking system, points towards a potential increase in KWAP's return on investments for 2012," she said. — Bernama



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Consultants appointed to study M'sia-S'pore rapid transit system

KUALA LUMPUR (May 10): Malaysia's Land Public Transport Commission (SPAD) and the Singapore Land Transport Authority (LTA) have appointed consultants to carry out architectural and engineering study on the proposed Malaysia-Singapore Rapid Transit System (RTS).

According to a joint press statement issued after the 9th meeting of the Malaysia-Singapore Ministerial Committee (JMC) for Iskandar Malaysia today, SPAD and the LTA had jointly awarded the tender for the RTS Link Joint Engineering study on May 2.

"The architectural and engineering consultancy study tender was awarded to the consortium of AECOM Singapore Pte Ltd, AECOM Perunding Sdn Bhd and SA Architects Sdn Bhd," it said.

It said the study would determine the technical parameters for the RTS Link between Singapore and Johor Bahru in order to achieve a convenient and cost-effective system that is well-integrated with public transport services on both sides.

The architecture and engineering consultancy consists of two phases.

In Phase I, which is expected to be completed by end-2012, the consultant will look into technical parameters and propose options for the RTS Link.

The JMC for Iskandar Malaysia will then decide on the option to be further studied in Phase II.

The statement said the 9th JMC for Iskandar Malaysia was jointly chaired by Malaysia's Minister in the Prime Minister's Department Tan Sri Nor Mohamed Yakcop and Singapore's Minister for National Development Khaw Boon Wan.

Present at the meeting held at Pulau Springs Resort, Johor Bahru were Johor Menteri Besar Datuk Abdul Ghani Othman and Singapore's Minister for Transport Lui Tuck Yew.

The establishment of the JMC for Iskandar Malaysia was first announced by the prime ministers of Malaysia and Singapore in Langkawi following their meeting in May 2007, with the aim of facilitating cooperation between the two countries in relation to Iskandar Malaysia.

At today's meeting, JMC agreed to the adoption of the terms of reference for a newly formed work group on industrial cooperation to promote mutually beneficial twinning of economic activities between Iskandar Malaysia and Singapore.

At the January 2012 Leaders' Retreat, the two prime ministers have directed that the new work group to be formed for the cooperation.

The statement said the work group would focus on facilitating high value added projects in manufacturing and services sectors which include among others advanced materials manufacturing, electrical & electronics, food processing and creative services.

At the meeting, JMC also agreed to further strengthen bilateral collaboration on the environment and tourism.

Officials from both sides have agreed to continuously collaborate in capacity-building programmes in enhancing the skills and knowledge of officials involved in environmental management, environmental awareness and river cleaning.

Both sides will also explore additional tourism collaborations given the number of new attractions in Iskandar Malaysia and Singapore that are almost ready. — Bernama



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Century Logistics 1Q net profit dips 33% to RM.429m

KUALA LUMPUR (May 10): CENTURY LOGISTICS HOLDINGS BHD []’s net profit fell 33% to RM4.29 million in its first quarter ended March 31, 2012 from RM6.44 million a year ago due to start-up losses from its double hull product tanker.

In a statement on Bursa Malaysia on Thursday, it said that revenue for the quarter decreased 2.19% to RM65.33 million from RM66.79 million.

Earnings per share were 5.32 sen compared to 8.18 sen a year earlier.

Reviewing its performance, the company attributed its decline in earnings to its new double hull product tanker, Onsys Century 1.

On its prospects, the company said it took cognizance of the current uncertain global economic environment and will ensure that it takes the necessary measures to remain resilient, including focusing on providing value-added logistics solutions as well as maintaining cost efficiencies.

“As a result, the Group remains confident of its business model,” it said.

It added that the group was interested to explore business opportunities in South Asia, South America and Africa due to the growing demand for procurement logistics services in those regions.

Century Logistics said it would be paying a seven sen final dividend in respect of the financial year ended Dec 31, 2011 on May 25, bringing the total single-tier dividend in respect of the year 2011 to 12 sen per share.



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Lingui 3Q net profit slumps 80.3% to RM13.59m

KUALA LUMPUR (May 10): LINGUI DEVELOPMENT BHD []’s net profit slumped 80.3% to RM13.59 million for its third quarter ended Mar 31 from RM69.11 million a year ago due to lower extraction volumes and weak demand from Japan.

In a statement on Bursa Malaysia on Thursday, it said revenue for the quarter fell 0.6% to RM374.15 million from RM377.39 million a year earlier.

Earnings per share were 2.06 sen compared to 10.48 sen, whiel net assets per share was RM2.51.

Reviewing its results, the company attributed the weak performance to lower extraction volumes as well as weak demand for timber for reCONSTRUCTION [] activities affected by the Japanese earthquake.

For the nine months ended Mar 31, the group’s revenue rose 11.97% to RM1.31 billion from RM1.17 billion while net profit plunged 81.38% to RM30.53 million from RM163.99 million.

On its prospects, Lingui said the short term outlook for timber industry was expected to be constrained due to more purchasers taking a cautious approach with the uncertain world economic conditions.

It said the timing of Japan’s major reconstruction activities in areas affected by the earthquake and tsunami would be a key impetus for an increase in plywood demand and hopefully selling prices.

“The demand from China for timber products has shown sign of slowing down with implementation of various macro-economic control measures by the Chinese government to curb the over-heating of the Chinese economy.

“Operating under a challenging environment with uncertain outlook and likely greater competition, as various producers strive to increase or at least maintain market share against a likely lower demand base, the Group will continue to manage its cost to remain lean and efficient,” it said.



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ESCAP: M'sia's economy to grow by a slower 4.5% this year

KUALA LUMPUR (May 10): Malaysia's economy is expected to grow by a slower 4.5% this year due to weaker external demand, according to the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).

This is in comparison to the 5.1% in 2011 from 7.2% in 2010.

ESCAP said the fiscal deficit remained at around 5.6% of the gross domestic product (GDP) in 2011 after declining from 7% in 2009 to 5.6% in 2010.

"This was largely due to wide ranging subsidies on the expenditure side and delayed introduction of the goods and services tax (GST) on the revenue side, which remains heavily reliant on oil revenue," it added.

International Centre for Education in Islamic Finance (ICEIF) Professor Emeritus Datuk Dr Mohamed Ariff Abdul Kareem said the local economy would be spurred by domestic demand. However, Mohamed Ariff said Malaysia's budget deficit is a major concern.

"There are already signs that Malaysia's credit rating is under pressure with the risk of downgrading.

"There is a need to rein in expenditure and increase tax revenue," he added, at the launch and briefing of ESCAP's Economic and Social Survey of Asia and the Pacific 2012 here on Thursday. Mohamed Ariff said Malaysia's fiscal deficit at above 3% is a concern.

"The large deficit is attributed to wide-ranging subsidies (4% of GDP) and heavy reliance on oil revenue (40%).

"The saving grace is that debt is largely domestic (less vulnerable to external shocks). But a debt is a debt," he added.

Meanwhile, ESCAP economic affairs officer Dr Oliver Paddison said the Asia-Pacific region will experience slowing growth in 2012 amidst global turbulence.

He attributed this to spillovers of the eurozone turmoil, global oil price hikes, excess liquidity and volatile capital flows.

"The key long-term challenge is high and volatile commodity prices," he added, at a media briefing, on the ESCAP survey.

Paddison said growth is forecast to moderate to 6.5% in 2012 from 7% in 2011 in the Asia Pacific region, with downward pressure from subdued developed economies.

"Despite the slowdown, the region remains an anchor of stability and growth pole for the world economy," he added

He said a major concern is the insufficient job creation in formal sector in developing countries with a high young unemployment with the young three times more likely to be unemployed. — Bernama



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Dialog 3Q net profit rises 7.96% to RM41.39m

KUALA LUMPUR (May 10): DIALOG GROUP BHD [] net profit for the third quarter ended March 31, 2012 rose 7.96% to RM41.39 million from RM38.34 million a year earlier, due mainly to higher revenue and increase in Malaysian operations arising from its provision of specialist products & services, engineering & CONSTRUCTION [] activities and fabrication works.

It said on Thursday that revenue for the quarter jumped 39.5% to RM420.04 million from RM301.16 million in 2011, due consolidation of the revenue of the newly acquired fabrication and multi-disciplined engineering company, Fitzroy Engineering Group Limited, based in New Zealand contributed to the increase in the Group’s revenue.

Earnings per share was 1.75 sen compared to 1.79 sen previously, while net assets per share was 52.66 sen.

For the nine months ended March 31, Dialog’s net profit rose 18.5% to RM127.39 million from RM107.43 million on the back of revenue RM1.13 billion.

Dialog declared an interim 1.1 sen single tier cash dividend per share to be paid on June 29.

Reviewing its performance, Dialog said contribution from Malaysia and Asia operation such as Brunei, Thailand, Middle East and China, also increased significantly mainly due to higher revenue of Specialist Products & Services recorded.

It said its Singapore operation however registered lower revenue mainly affected by lesser works undertaken for its engineering and construction and plant maintenance activities.

On its prospects, Dialog said the development under Economic Transformation Programme in both upstream and downstream sectors would generate tremendous opportunities for the local oil and gas players.

“In this connection, being an integrated specialist technical services provider to the oil, gas and petrochemical industry, the Group will benefit from such opportunities,” it said.

Dialog said the development of the Independent Deepwater Terminal in Pengerang will not only bring in short to medium term contribution from engineering and construction activities in Malaysia, but also long term recurring income when the tank facilities are operational.

“In addition, the Group is investing in the upstream oil and gas opportunities, including the development and production of petroleum under the Small Field Risk Service Contract.

“The Group continues to grow its technical services, such as, its specialist products & services, engineering, procurement, commissioning & construction and plant maintenance services,’ it said.



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Glenealy Plantations 3Q net profit falls 52.97% to RM10.93m

KUALA LUMPUR (May10): Glenealy PLANTATION []s (Malaya) Bhd’s net profit fell 52.97% to RM10.93 million for its third quarter ended Mar 31, from RM23.24 million a year ago, due to lower production volume and higher production costs.

It said on Thursday that its revenue for the quarter decreased 13.19% to RM60.02 million from RM69.14 million a year earlier.

Earning per share were 9.58 sen compared to 20.37 sen, while net assets per share was RM5,40.

The group attributed the higher production costs to higher fertilizer costs.

In the nine months ended Mar 31, revenue rose 11.28% to RM202.32 million from RM181.81 million and net profit was down 11.17% to RM47.08 million from RM53.00 million.

On its prospects, Glenealy said the outlook for palm oil price remains well supported as palm oil production is expected to slow down as it enters a resting phase.

“Global oilseeds and vegetable oils supplies are at multiyear low due to drought induced production losses over the past few seasons in various countries.

“On the basis of the above factors, the outlook for the fourth quarter of the financial year is expected to remain positive, it said.



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Cuscapi 1Q net profit plunges to RM567,000

KUALA LUMPUR (May10): CUSCAPI BHD []’s net profit plunged 70.92% to RM567,000 for its first quarter ended Mar 31, from RM1.95 million a year ago, dragged down by delays in uncompleted projects.

In a statement on Bursa Malaysia on Thursday, the group said its revenue fell 21.34% to RM12.13 million from RM15.42 million a year earlier.

Earnings per share were 0.23 sen compared to 0.88 sen.

Reviewing its results, Cuscapi attributed the fall in its revenue to an order of over RM4 million for an upgrade project in the same quarter last year.

“However, delays in certain projects compounded the lower revenue during the quarter under review,” it said.

On its prospects, Cuscapi said that with international revenue showing continued growth, making up 38% of the Group’s revenue during the quarter under review, it remained optimistic of its financial performance for the current financial year.

“We expect this trend on the back of the Group’s enlarged geographical presence,” it said.



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Maybank issues RM2.1 billion subordinated notes

KUALA LUMPUR (May10): MALAYAN BANKING BHD [] said it had issued RM2.1 billion of Subordinated Notes with tenure of 12 years on a 12 non-callable 7 basis under its Subordinated Note Programme of up to RM7 billion in nominal value.

The banking group had on Feb 21 this year proposed to establish a subordinated programme of up to RM7 billion in nominal value.

In a filing Thursday, Maybank the Subordinated Notes were priced at 4.25% and would qualify as Tier 2 capital of Maybank subject to compliance with the requirements as specified in the Risk Weighted Capital Adequacy Framework and Capital Adequacy Framework for Islamic Banks (General Requirements and Capital Components) guideline by BNM.

“The net proceeds from the issuance of the Subordinated Notes will be utilised to fund Maybank’s working capital, general banking and other corporate purposes,” it said.



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Infineon invests RM4b in new Kulim wafer fabrication plant

KULIM (May 10): Infineon Technologies (Kulim) Sdn Bhd (Infineon), which specialises in power and logic chips for automotive and industrial power applications, today announced that it will invest RM4 billion in the Kulim Hi-Tech Park here over the next 10 years.

Its vice president Dr Thomas Reisinger said the company's new Kulim 2 wafer fabrication facility, which is under CONSTRUCTION [], is designed to be a state-of-the art manufacturing competence centre for the production of megatrend TECHNOLOGY [] products for the energy efficiency and automotive industries.

Kulim 2, which supports the technological complexity for 200mm wafers, can also produce 300mm wafers if there is market demand, he said.

Announcing the investment at the launch of Kulim 2 here, Reisinger — who is also Infineon Kulim managing director — said the company has invested RM350 million in the facility on a 30,000 sq m site, work on which commenced in August last year and is expected to be completed by the end of this year.

The launch was performed together by Ministry of International Trade and Industry secretary-general Datuk Dr Rebecca Fatima Sta Maria, Dr Reisinger and Infineon AG board member Dr Reinhard Ploss.

Once operational, Kulim 2 will employ 1,000 more staff, 40% of whom will be highly skilled, and production capacity is expected to double. Kulim 1, with a capacity of 120,000 wafers per month, employs 1,500 people.

"The decision to expand our operations in Kulim is a logical choice as it is a designated growth location for us, and is our first front-end wafer fabrication facility in Asia," he added.

Reisinger said the company runs 29 different base technologies and manufactures about 500 products simultaneously.

"We will retain our position at the forefront of the semiconductor industry by increasing the skills and capabilities of our employees and strengthening our innovative power.

"With the completion of Kulim 2, Infineon Technologies Kulim expects growth of more than 10% per annum in the markets we serve," said Reisinger.

He said the company has also complied with global standards while keeping to a zero defect mindset from day one of operations in 2006.

Infineon is the fourth largest foreign investment company in Malaysia. — Bernama



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Limited gains for KLCI

KUALA LUMPUR (May 10): The FBM KLCI reversed its earlier losses and closed higher on Thursday, but the gains were limited in line with the mixed regional markets still weighed by concerns the global economic outlook.

The FBM KLCI rsoe 3.16 points to close at 1,588.06. It had earlier risen to its intra-day high of 1,590.20.

Gainers edged losers by 376 to 358, while 325 counters traded unchanged. Volume was 1.4 billion shares valued at RM1.39 billion.

Asian shares were mixed, as weak Chinese trade data stoked fears of a growth slowdown, further undermining risk appetites already reduced by worries about the health of Spanish banks and deepening political chaos in Greece, according to Reuters.

At the regional markets, Hong Kong’s Hang Seng Index fell 0.51% to 20,227.28, Japan’s Nikkei 225 lost 0.39% to 9,009.65, South Korea’s Kospi was down 0.27% to 1,944.93

Meanwhile, the Shanghai Composite Index added 0.07% to 2,410.23 and Taiwan’s Taiex gained 0.11% to 7,484.01, and Singapore’s Straits Times Index edged up 0.09% to 2,903.60.

On Bursa Malaysia, United PLANTATION []s was the top gainer and added 56 sen to RM26.50, Petronas Gas up 30 sen to RM17.28, Ajinomoto 27 sen to RM4.50, Southern Acids and Aeon Credit gained 24 sen each to RM2.45 and RM11.10, Tradewinds Plantations 12 sen to RM5.89, Hup Seng and AirAsia 11 sen each to RM2.36 and RM3.65, while KrisAssets added 10 sen to RM7.10.

Focus was the most actively traded counter with 146.46 million shares done. The stock gained 1.5 sen to 16 sen.

Other actives included Utopia, Ariantec, Permaju, Naim indah Corp, ManagePay, Astral Supreme and HWGB.

Decliners included BAT, The Store, Panasonic, Tahps, KLK, Aeon, Lafarge Malayan Cement, Dutch Lady, PPB and KESM.



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RAM Ratings: CIMB’s ratings unaffected by proposed acquisition of Philippines’ Bank of Commerce

KUALA LUMPUR (May 10): RAM Ratings said that CIMB Bank Bhd’s proposed acquisition of a 60%-stake in Philippines-based Bank of Commerce (BoC) from San Miguel Corporation had no immediate rating impact on the Bank’s AAA/Stable/P1 ratings.

The rating agency said On Thursday that The RM881 million deal, currently pending regulatory approval, would be entirely financed by CIMB Bank’s internal funds.

“Based on RAM Ratings’ assessment, the proposed acquisition is expected to have minimal impact on the Bank’s key financial indicators.

“CIMB Bank’s overall risk-weighted capital-adequacy ratio is likely to remain above 15% after the acquisition, which is anticipated to be completed sometime this year,” it said in a statement.

RAM Ratings said the proposed acquisition of BoC represented a strategic part of CIMB Group’s regional aspirations.

“BoC is a relatively small bank given its position as the sixteenth-largest commercial bank out of 38 universal and commercial banks in the Philippines; its assets are only equivalent to about 3% of CIMB Bank’s.

“As with all acquisitions, there could be potential challenges along the way, particularly with respect to aligning the best practices and policies of BoC and CIMB Bank. RAM Ratings will continue monitoring the pertinent developments relating to this proposed acquisition,” it said.



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MMHE gains on Maybank IB Research upgrade

KUALA LUMPUR (May 10): Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE) shares rose on Thursday after Maybank IB Research upgraded the stock to a Buy with a target price of RM5.70 and said the company's 1Q12 results 2 were on track (25% of Maybank IB's full-year forecast).

MMHE added three sen to RM4.91 in the morning session on Thursday with 486,500 shares traded.

In a note Thursday, the research house said MMHE's yard space had expanded and order book momentum is set to soar in 2H12.

"The improving outlook, coupled with a 44% fall in share price from its peak in 2011, makes MMHE's valuations much more attractive now, in our view.

"MMHE is a direct proxy to Petronas' domestic E&P programs," it said.



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OSK Research downgrades KKB To Sell, cuts fair value to RM1.34

KUALA LUMPUR (May 10): OSK Investment Research has downgraded KKB ENGINEERING BHD [] to a Sell and cut its fair value to RM1.34 from RM2 previously and said the company's 1QFY12 net profit of RM7.7 million (-60.8% y-o-y, +15.1% q-o-q) was 49.5% below its expectations.

The lacklustre performance was primarily due to weaker revenue from the engineering division which saw slower contract replenishment and heightened raw material costs, it said in a note Thursday.

"We think 2012 would be a challenging year in view of global economic and local political uncertainties and hence, we are tweaking down our earnings forecast and FV to RM1.34. We downgrade KKB to Sell," it said.



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KLCI pares down gains at mid-day as Asian equities turn negative

KUALA LUMPUR (May 10): The FBM KLCI rebounded at the mid-day break on Thursday but pared down its gains as some regional markets turned negative.

Asian shares fell on Thursday, as a weak Chinese trade data stoked fears of a growth slowdown, further undermining risk appetites already reduced by worries about the health of Spanish banks and deepening political chaos in Greece, according to Reuters.

The FBM KLCI gained 3.51 points to 1,588.41 at the mid-day break, lifted by select blue chips. It had earlier risen to its intra-morning high of 1,590.20.

Losers edged gainers by 332 to 256, while 309 counters traded unchanged. Volume was 722.32 million shares valued at RM493.12 million.

The ringgit strengthened 0.11% to 3.0681 versus the greenback; crude palm oil futures for the third month delivery rose RM25 per tonne to RM3,349, crude oil fell 37 cents per barrel tp US$96.44 while gold rose US$4.18 an ounce to US$1,593.75.

At the regional markets, Japan’s Nikkei 225 fell 0.11% to 9,035.48, Hong Kong’s Hang Seng Index lost 0.93% to 20,141.90, the Shanghai Composite Index shed 0.18% to 2,404.15, Taiwan’s Taiex was down 0.16% to 7,487.42, South Korea’s Kospi down 0.10% to 1,948.35 and Singapore’s Straits Times Index fell 0.20% to 2,895.11.

ON Bursa Malaysia, BAT was the top gainer in the morning session and rose 36 sen to RM54.74, Petronas Gas added 30 sen to RM17.28, United PLANTATION []s and Ajinomoto were up 24 sen each to RM26.18 and RM4.47, Petronas Dagangan 16 sen to RM19.86, KrisAssets 12 sen to RM7.12, whiel Hup Seng, RHB Capital and GAB added 10 sen each to RM2.35, RM7.43 and RM13.64.

Focus was the most actively traded counter with 103.8 million shares done. The stock rose two sen to 16.5 sen.

Other actives included Utopia, Ariantec, ManagePay, Naim indah Corp, Astral Supreme, SuperComNet and Permaju.

Decliners included Tahps, The Store, Tradewinds, Panasonic, Dutch Lady, Ekovest, Shell, PPB, KESM and Fiamma.



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Petronas's US$20b RAPID project to meet burgeoning demand for energy and petrochemicals

KUALA LUMPUR (May 10): The US$20 billion (RM61.4 billion) refinery and petrochemical integrated development (RAPID) project to be undertaken by Petronas in southern Johor will be timely in meeting burgeoning demand for energy and petrochemical products especially in Asia in the next 20 years.

To be launched by The Sultan of Johor Sultan Ibrahim ibni Almarhum Sultan Iskandar on Sunday, the project would also enhance both Malaysia's and the region's petrochemical industry, attracting investments from world class oil, gas and petrochemical firms.

It would transform southern Johor into a refining and petrochemical centre, complementing existing complexes in Malaysia's eastern corridors and in Singapore.

More importantly, the sprawling 2,000 hectare RAPID complex would also trigger economic activities for Pengerang, creating thousands of jobs in view of the massive spin-offs from ancillary and supporting services.

Petronas chief operating officer Datuk Wan Zulkiflee Wan Ariffin said timely implementation of RAPID would be crucial as global energy demand was set to increase between 38% and 39% in the next 20 years.

"This is the largest complex Petronas would be undertaking, with the refinery, earmarked for commissioning by end-2016, able to refine 300,000 barrels of crude oil per day while petrochemical plants would come on stream in 2017," he told Bernama.

It would be bigger than that of Petronas' Melaka, Kertih and Gebeng complexes combined in a single location.

As far as end products and applications for petrochemicals are concerned, "we take for granted day-to-day living conveniences such as plastics and food wrapping".

"(But) their demand growth would be significant in Asean given its proximity (to Malaysia) and its combined population in excess of 600 million," he said.

Wan Zulkiflee, who is also Petronas executive vice-president for downstream business, said RAPID would be able to meet this demand.

Demographic changes in China and India, including a rising middle-income populace, urbanisation, lifestyle changes plus rising demand from the auto CONSTRUCTION [] and electrical industries, would impact the petrochemical market positively.

RAPID would also be able to meet the government's requirements for higher emission standards for petroleum products to be imposed in the near future.

"We want to be prepared for this,” Wan Zulkiflee said, adding that gasoline and diesel to be produced by RAPID's refinery would meet the Euro 4 and 5 fuel specifications.

The refinery will be designed to process imported crude oil, including Petronas' equity crudes from some of its overseas upstream ventures.

"We can't totally depend on local crude to feed our refinery to meet demand, so diversification of feedstock leads to security of energy supply in the local market," he said.

Other petroleum products from the refinery would include jet fuel, while a naptha cracker would churn out three million tonnes of products such as ethylene, propylene, C4 and C5 olefins to feed the petrochemical plants in the complex.

A stand-alone crude oil refinery would be a tough business, Wan Zulkiflee said, which was why coupling it with a petrochemical complex in an integrated development promised higher economic returns on investment.

More than that, RAPID is not just about a refinery and petrochemical plants, but would create a new industry spawning tremendous spin-offs down the value chain offering opportunities for other companies.

"Like in Kertih, we foresee end-product manufacturers like cable and plastics producers, and even specialty products like vitamins, personal care products and perfumes, to take advantage of the complex's output," he said.

Providing a progress update on the project, he said the detailed feasibility study was completed end-2011 and "we are now in the front end engineering design (FEED) stage while land acquisition has already started".

Concurrently, the national oil corporation was screening potential joint venture partners who can bring in technologies, as well as, expertise in project management, plant operations and marketing to form partnerships for various facilities within RAPID.

The equities that joint venture partners will take in RAPID's various facilities would determine how much they invest in the US$20 billion project, with Petronas expected to take up majority portions. — Bernama



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KKB retreats on weaker 1Q earnings

KUALA LUMPUR (May 10): KKB ENGINEERING BHD []'s shares retreated on Thursday after its net profit for the first quarter ended Mar 31, 2012 fell 60.82% to RM7.71 million from RM19.68 million a year ago,

At 9.40m, KKB fell three sen to RM1.62 with 54,700 shares done.

The company atrributed the fall in earnings to the completion of major projects in 2011 and the absence of new projects for both its CONSTRUCTION [] and steel fabrication divisions.



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Maybank IB Research maintains Buy on Petronas Chemicals, target price RM7.50

KUALA LUMPUR (May 10): Maybank IB Research has maintained its Buy rating on Petronas Chemicas Bhd with a target price of RM7.50 and said the company's 1Q12 results, to be released on the third week of May, was expected to be highly profitable, buoyed by high plant utilization rates of ±85% (1Q11: 83.6%) with no major maintenance shutdowns, and strong product margins.

In a note Thursday, the research house said worldwide manufacturing numbers were strong in 1Q12 which prompted heavy buying for re-stocking and inventory buildup ahead of the traditional maintenance shutdown period of March.

"BUY, with an unchanged TP of MYR7.50 on 12x 2013 PER, the industry's historical mean PER," it said.



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Sime Darby up on mall plan with CapitaMalls

KUALA LUMPUR (May 10): SIME DARBY BHD [] shares rose on Thursday after its unit Sime Darby Property and CapitaMalls Asia Ltd sid they would jointly develop a RM500 million shopping mall in Taman Melawati in the Klang Valley.

At 9.22am, Sime Darby was up four sen to RM9.81 with 65,800 shares done.

In a joint statement Wednesday, the two companies said they had entered into a conditional agreement to form a 50:50 joint venture to develop the mall on a freehold site in Taman Melawati.

Sime Darby up on mall plan with CapitaMalls



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Maybank IB Research upgrades MMHE to Buy, target price RM5.70

KUALA LUMPUR (May 10): Maybank IB Research has upgraded Malaysia Marine and Heavy Engineering Holdings Bhd to a Buy with a target price of RM5.70 and said the company's 1Q12 results 2 were on track (25% of Maybank IB's full-year forecast).

In a note Thursday, the research house said MMHE's yard space had expanded and order book momentum is set to soar in 2H12.

"The improving outlook, coupled with a 44% fall in share price from its peak in 2011, makes MMHE's valuations much more attractive now, in our view.

"MMHE is a direct proxy to PETRONAS' domestic E&P programs," it said.



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GDex up on solid 3Q earnings

KUALA LUMPUR (May 10): GD EXPRESS CARRIER BHD [] shares advanced on Thursday afer its net profit jumped 61.07% for its third quarter ended Mar 31 to RM2.11 million from RM1.31 million a year ago, due to an increase in business volume and growth in its customer base.

At 9.08am, GDex rose three sen to RM1.04 with 8,000 shares done.

In a statement on Bursa Malaysia on Wednesday, it said that its revenue for the quarter increased 24.49% to RM28.77 million from RM23.11 million.

Earnings per share were 0.82 sen compared to 0.51 sen a year ago, while net assets per share was 19 sen.

GDex attributed its strong performance to an increase in both business volume and growth of its customer base.

It added that the completion of a transshipment hub upgrading at the end of its first quarter had also helped support the increased business volume and handling capacity increased almost three fold in its third quarter.



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Europe anxiety drags Asian equities, KLCI falls in early trade

KUALA LUMPUR (May 10): Anxiety over teh uncertainties over the economic and political future of the troubled euro zone weighed on Asian stosks in early trade on Thursday, and equity assets on Bursa Malaysia were not spared either.

The FBM KLCI opened1.34 points lower at 1,583.56, weighed by losses at key blue chips.

Gainers trailed losers by 41 to 49, while 105 counters traded unchanged. Volume was 13.58 million shares valued at RM8.75 million.

Asian shares fell for a sixth straight session on Thursday, with sentiment taking a further hit from mounting worries about the health of Spanish banks while deepening political chaos in Greece seemed to put it at risk of insolvency and a euro exit, according to Reuters.

MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.1 percent, touching its lowest in nearly four months. Global shares slid for a sixth day while safe-haven U.S. and German government debt rose on Wednesday, it said.

Among the early decliners on Bursa Malaysia were Genting PLANTATION []s, AMMB, PPB, MBF Hodings, Telekom, RHB Capital, Petronas Dagangan, Orient, Kulim and Kumpulan Europlus.



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Stocks to Watch Southern Steel, Sunway, TRC Synergy, Malayan Flour Mills, KKB Engineering, Sime Darby, MMHE

KUALA LUMPUR (May 10): Investor sentiment at Bursa Malaysia on Thursday may remain weak in line with the gloomy sentiment at most global markets, as political uncertainties in Greece and the rising costs of fixing Spain's banks ignited worries that the eurozone's debt crisis was worsening.

The concerns over Europe added to worries about the impact of softer growth in the US on the global economic outlook, causing a broad retreat from risky assets with world shares falling, oil prices down for a sixth straight session and the commodity-linked Australian dollar hitting new lows, according to Reuters.

The market's immediate attention was on Athens where efforts to form a government were expected to fail, putting its ability to meet the terms of its bailout deal in doubt and raising the possibility of Greece being forced out of the euro, it said.

Among the stocks that could be in focus on Thursday are SOUTHERN STEEL BHD [], Sunway Bhd, TRC SYNERGY BHD [], MALAYAN FLOUR MILLS BHD [], KKB ENGINEERING BHD [], SIME DARBY BHD [] and Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE).

Southern Steel has entered into a joint venture (JV) agreement with Belgium-based NV Bekaert SA (NV BK) to form a JV company in Singapore to manufacture specified steel wires in the Asean region. It said in a filing on on Wednesday that it would hold 45% in the JV, with NV BK holding the remaining 55%.

Sunway Bhd's unit Sunway CONSTRUCTION [] Sdn Bhd and TRC Synergy Bhd's subsidiary Trans Resources Corporation Sdn Bhd were among the companies that secured four additional construction packages worth RM3.22 billion for the Sungai Buloh-Kajang MRT.

Sunway Construction was awarded package V4 worth RM1.17 billion, for works between Section 17, Petaling Jaya and the Semantan Portal, while Trans Resources was awarded the Depot package worth RM458.98 million for works related to the Sungai Buloh depot in an open tender category.

Malayan Flour Mills is allocating some RM120 million to expand its flour factory and poultry operations in Malaysia over the next two years. Managing director Teh Wee Chye said the capital expenditure will be financed with the firm's internal funds and bank loans. It has also earmarked US$15 million (RM46.05 million) to expand its two flour factories in Vietnam, he said.

KKB Engineering's net profit for the first quarter ended Mar 31, 2012 fell 60.82% to RM7.71 million from RM19.68 million a year ago, due to the completion of major projects in 2011 and the absence of new projects for both its construction and steel fabrication divisions.

Sime Darby Property and CapitaMalls Asia Ltd will jointly develop a RM500 million shopping mall in Taman Melawati in the Klang Valley. In a joint statement Wednesday, the two companies said they had entered into a conditional agreement to form a 50:50 joint venture to develop the mall on a freehold site in Taman Melawati.

MMHE's net profit for the first quarter ended Mar 31, 2012 fell 39.16% to RM78.27 million from RM128.64 million a year ago, due to the completion of contracts under its engineering and construction arm as well as its marine conversion and repair arm.



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