HDBSVR sees KLCI moving sideways, expects profit taking

KUALA LUMPUR (March 6): HwangDBS Vickers Research said the key FBM KLCI, which has displayed resilience, is expected to gyrate sideways ahead amid profit-taking activity.

It said on Tuesday the immediate support and resistance levels for the benchmark FBM KLCI are presently pegged at 1,580 and 1,600, respectively.

Meanwhile, Asian equities will likely take a breather too after China guided for slower economic growth expectations this year. This also caused major U.S. stock indices to drop between 0.1% and 0.9% at the closing bell last night.

Against a fairly steady backdrop, stocks that may attract interest on Bursa Malaysia include: (a) Jaks Resources, which has accepted a letter of award for a building CONSTRUCTION [] contract valued at RM252m; (b) Media Shoppe, after announcing that it has decided not to accept the letter of award in relation to its subcontractor role to participate in certain portions of KTM’s automatic fare collection system project; and (c) Envair Holdings, following a news article saying that its new major shareholder would be injecting an oil & gas project worth RM1.5b into the company.



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Water stocks rally

KUALA LUMPUR: Water stocks, in particular those related to Selangor, saw a rally yesterday, and Puncak Niaga Holdings Bhd became the latest company to be issued with an unusual market activity query after its share price saw a 44 sen spike in heavy trading.

Puncak Niaga opened at RM1.45 and shot up by 44 sen to close at RM1.89 with 30.9 million shares traded.

In its reply to Bursa Malaysia yesterday, the company said it was unaware of any rumours nor did it have any corporate developments that have not been announced.

On Tuesday, Selangor Menteri Besar Tan Sri Khalid Ibrahim said in a statement Bursa Malaysia has yet to explain satisfactorily why Puncak Niaga was given a waiver from being listed as a PN17 company.

Also on Tuesday, the Selangor government said in a statement that it would continue to push ahead for the restructuring of the water industry, claiming the water concessionaires will continue to fail the rakyat. It added that Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) should not be retained as the water services operator in the state.

Kumpulan Perangsang Selangor Bhd also saw heavy trading yesterday with 23.8 million shares traded. Its counter opened at RM1.12 to close at RM1.39, up 27 sen.

Another Selangor state-linked company Kumpulan Hartanah Selangor Bhd saw its share price climb to 78 sen from 51 sen yesterday with 113.89 million shares traded.

Pipe maker Jaks Resources Bhd, which is involved in the Selangor-Pahang water transfer project, also saw a spike in its share price. The counter gained 14 sen to close at 72 sen with 45.6 million shares traded.


This article appeared in The Edge Financial Daily, February 10, 2012.



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Penny stocks see heavy trade, broader market firm

KUALA LUMPUR (Feb 10): The two-day rally on Bursa Malaysia took a breather on Friday, with the FBM KLCI slightly in the red but the broader market displayed some resilience, with heavy trading in penny stocks.

At 12.30pm, the KLCI was down 1.96 points or 0.13% to 1,563.36, which was line with the cautious key regional markets. Turnover was 1.96 billion shares valued at RM1.30 billion. Advancers led decliners 503 to 297 while 344 stocks were unchanged.

All the major regional markets fell, except Shanghai’s Composite Index which edged up 0.36% to 2,357.98.

Japan’s Nikkei 225fell 0.22% to 8,982, Hong Kong’s Hang Seng Index 0.58% to 10,888.60, Taiwan’s Taiex 0.6% to 7,863.49, South Korea’s Kospi 0.88% to 1,996.87 and Singapore’s Straits Times Index 0.27% to 2,973.

US light crude oil fell 33 cents to US$99.51. Brent crude slipped from a six-month high towards US$118 a barrel.

Market sentiment could have been affected by investors’ concerned about prospects of restructuring Greece's debt and global lenders demanded more steps even after it struck a long-awaited deal on fiscal reforms.

Reuters reported that Greek political leaders clinched a deal on severe austerity measures and reforms indispensable for a second international bailout in two years, but the country's lenders sought a parliamentary seal of approval before providing any aid.

At Bursa Malaysia, traders were quick to cash out the Selangor related counters after the rally petered out in the absence of any significant news. Puncak Niaga fell 17 sen to RM1.72 with 15.63 million shares done, KPS 11 sen to RM1.28, KHSB nine sen to 69 sen and JAKS 5.5 sen lower at 66.5 sen.

Among the index-linked stocks, Genting fell 16 sen to RM10.30, IOI Corp 12 sen to RM5.48, Tenaga 11 sen to RM6.19, HL Bank eight sen to RM11.50 and Sime Darby two sen to RM9.68.

The top 10 most active counters were penny stocks. Metronic Global was the most active, with 82.74 million shares done, up 0.5 sen to eight sen.

Maybank rose four sen to RM8.51, Public Bank two sen to RM13.98 while MMHE was the top performer among the index stocks, registering a 13 sen gain to RM5.50.



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Stocks to watch: MMC Corp, Gamuda, Bursa Malaysia and HL Industries

KUALA LUMPUR (Feb 10): Stocks on Bursa Malaysia could extend their gains for the third day on Friday as investors could be emboldened after Greek leaders clinched a long-stalled deal on reforms and austerity measures needed to secure a bailout and avoid a messy default.

Reuters reported the deal was struck hours before the country's financial backers were to meet in Brussels on Thursday.

Athens' partners in the European Union and the International Monetary Fund have been exasperated by a lack of agreement on the sacrifices they demanded in return for a 130 billion euro ($172 billion) bailout, with time running out for Greece before a major March 20 bond redemption, said Reuters.

At Bursa Malaysia, MMC CORPORATION BHD [] and GAMUDA BHD [] would be among the stocks to watch as the joint venture will be appointed project delivery partner for the KL MRT project. MRT Corporation will be signing the agreement with MMC-Gamuda Joint Venture Sdn Bhd for the project on Friday afternoon.

Also in focus would be Bursa Malaysia and Hong Leong Industries following the release of their results.

Other counters which could see trading interest again are Selangor-related companies -- KUMPULAN PERANGSANG SELANGOR [], KUMPULAN HARTANAH SELANGOR BHD [], PUNCAK NIAGA HOLDINGS BHD [] and water pipe manufacturer JAKS Resources Bhd.

Bursa Malaysia’ earnings rose 29% to RM146.16 million for FY ended Dec 31, 2011 from RM113.04 million in 2010 and expects market volatility is expected to persist in 2012 unless there is more clarity on how the global economy will pan out. Its revenue increased 16.3% to RM420.14 million from RM361.05 million. It proposed a final dividend of 13 sen per share for the year under review, which was a distribution of 95% of its net profit.

For the fourth quarter, its earnings rose 5.2% to RM31.33 million from RM29.78 million. Revenue slipped 6.1% to RM95.67 million from RM101.91 million. Earnings per share were 5.90 sen compared with 5.60 sen.

Hong Leong Industries reported net profit of RM35.47 million for the second quarter ended Dec 31, 2011, down 39.6% from RM58.81 million a year ago.

Its revenue increased 14.5% to RM488.63 million from RM426.49 million a year ago. Its earnings per share were 11.51 sen compared with 22.48 sen.

HL Industries said that MALAYSIAN PACIFIC INDUSTRIES [] Bhd ceased to be a subsidiary of the group at the end of the previous financial year ended June 30, 2011.

BERJAYA LAND BHD [] (B-Land) recorded a net loss of about RM8.05 million at group level after it disposed of 18.301 million BERJAYA SPORTS TOTO BHD [] shares for RM79.61 million.

B-Land said the shares were disposed of on Thursday at an average selling price of RM4.35 and the shares represented about 1.37% of BToto.

“The disposed shares which were purchased since 1992, have a total carrying value of about RM87.66 million in the books of B-Land group. The net proceeds from the disposals will be utilised as working capital and repayment of bank borrowings of the B-Land group,” it said.

Bursa Malaysia Securities Bhd has advised investors to be cautious following the recent sharp rise in the price and volume of Naim Indah Corporation shares.

Naim Indah shares closed 18 sen higher at 67 sen with 342.12 million shares done, off the day’s high of 75 sen. It fell to an intra-day low of 59.5 sen.



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KLCI stages late rally, banks advance on steadier economic outlook

KUALA LUMPUR: Blue chips on Bursa Malaysia staged a late push on Thursday, pushing the FBM KLCI closer its all-time high of 1,597 in mid-July 2011 as banks advanced on steadier outlook for the economy following the release of fresh economic data.

The KLCI closed up 12.14 points or 0.78% to 1,565.32 while volume was still strong at 3.31 billion shares valued at RM2.98 billion. Gainers led losers 446 to 456 with 309 counters unchanged.

December’s industrial production index expanded 3.0% on-year underpinned by the stronger manufacturing sector and electricity output, which was higher than expectations.

Meanwhile, Credit Suisse's Emerging Markets Economic Research expected Malaysia's real GDP growth to continue outperforming other small open economies in the region.

"Malaysia’s real GDP growth has outperformed industrial production growth since the global financial crisis, as the services sector has been the main contributor to real GDP growth during this period. Our real GDP growth forecasts for 2011 and 2012 remain unchanged at 5% and 4.8%, respectively, above the consensus forecast of 3.8% for 2012,” it said.

The growth would be underpinned by the strong domestic demand, high palm and crude oil prices, and the fiscal boost from the government, said the research house.

Despite starting the trading day on a weak note, the KLCI outperformed other regional bourses beating Shanghai's Composite Index closed up 0.09% to 2,349.59, South Korea's Kospi Index rose 0.54% to 2,014.62 and Taiwan's Taeix Index increased 0.52% to 7,910.78. Japan's Nikkei fell 0.15% to 9,002.24 and Singapore's Straits Index was down 0.16% to 2,977.31.

At Bursa Malaysia, among the lower liners and penny stocks which were the top performers were Selangor-linked stocks which were also involved in the water industry.

Dominating the top gainers’ list were KUMPULAN PERANGSANG SELANGOR [] and KUMPULAN HARTANAH SELANGOR BHD [] both up 27 sen to RM1.39 and 78 sen respectively. PUNCAK NIAGA HOLDINGS BHD [] was also up 44 sen to RM1.89, prompting an unusual market activity query by Bursa Malaysia. Water pipe manufacturer JAKS Resources climbed 14 sen to 72 sen.

Other index-linked stocks which closed higher include KLK up 56 sen to RM25.50, Carlsberg 29 sen to RM9.60, British American Tobacco 26 sen to RM50.26 and RHB Cap 20 sen to RM7.20.

Axiata gained 19 sen to RM4.97, pushing the index up 3.80 points, IOI Corp pushed the index up 1.97 points. Among the banks, RHB Cap added 20 sen to RM7.20, AMMB 14 sen to RM6.10, CIMB nine sen to RM7.20 and Maybank six sen to RM8.47.

Among actively traded stocks, Naim Indah rose 18 sen to close at 67 sen as a Bursa Malaysia Securities caution to investors saw it closing off the day’s best of 75 sen.

The worst performer was FarEast down 30 sen to RM7.00 followed by Maybulk 18 sen to RM2.01, Nestle 16 sen to RM55.52 and Aeon 15 sen to RM7.85.



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JAKS proposes two partners for Vietnam power project

KUALA LUMPUR: JAKS Resources Bhd is roping in China’s Meiya Power (HD) Ltd and Island Circle Investment Holding Ltd as joint venture (JV) partners in its coal-fired thermal power plant project in Vietnam.

Meiya Power is an indirect subsidiary of China Guangdong Nuclear Power Holding Corp while Island Circle is a wholly-owned subsidiary of Island Circle Development (M) Sdn Bhd.

In a filing with Bursa Malaysia yesterday, JAKS said the proposed JV would be facilitated by a shares sale in a subsidiary, and two shareholder agreements.

At present, JAKS’ wholly-owned unit JAKS Power Holding Ltd wholly owns JAKS-MPC (HD) Ltd and JAKS Pacific Power Ltd.

JAKS Pacific Power is the holding company for JAKS Hai Duong Power Ltd which is licensed by the Vietnam government to undertake the design, engineering, construction, operation and maintenance of the 2 x 600MW coal-fired thermal power plant in the Hai Duong Province.

On Jan 6, JAKS Power entered into an agreement to divest a 50% stake in JAKS-MPC to Meiya Power for US$5 million (RM15.8 million) cash.

JAKS-MPC and Island Circle will respectively subscribe for an 80% and 10% equity interest in JAKS Power for HK$800 (RM324.90) and HK$100 cash respectively.

Upon completion of the proposed JV, the effective interest of JAKS Power, Meiya Power and Island Circle in JAKS Pacific Power would be 50%, 40% and 10% respectively.

Simultaneously, JAKS Power, Meiya Power and JAKS-MPC will enter into a shareholders’ agreement to regulate their relationship as shareholders of JAKS-MPC, as will JAKS Power, JAKS-MPC, Island Circle and JAKS Pacific Power.

“The agreements were entered into to formalise the entry of Meiya Power and Island Circle as equity partners in the proposed joint venture,” JAKS said in its announcement to the local bourse.

JAKS said the proposed JV would enhance JAKS Pacific Power’s ability to raise funds for the projects.

“The proposed joint venture will also provide JAKS an opportunity to gain expertise and generate opportunities for transfer of technology from its partners in operating and maintaining the power plant,” the company said.

The proposed JV is subject to shareholders’ approval at a forthcoming EGM, JAKS said.

According to JAKS, it had invested about US$26.8 million in the project up until Oct 31, 2011.

Trading in JAKS shares was suspended from 10.10am pending this announcement late yesterday. Over the last two trading days, its stock was heavily traded while its share price rose 12.38% from 56.5 sen on Jan 5 to 63.5 sen yesterday prior to the suspension.

Trading in JAKS shares resumes today.


This article appeared in The Edge Financial Daily, January 10, 2012.




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HDBSVR: KLCI may stage pullback

KUALA LUMPUR (Jan 10): Hwang DBS Vickers Research (HDBSVR) said the FBM KLCI, after staging a run-up in the last few minutes of trading on Monday, could pull back when trading resumes on Tuesday.

“Still, we expect the benchmark index to show a fairly resilient performance, possible treading above the resistance-turned-support level of 1,515 ahead,” it said.

HDBSVR said on Wall Street, major U.S. equity indices were marginally up Monday night – by between 0.1% and 0.3% at the closing bell – as investors have hopes that the U.S. corporate would show better earnings in the ongoing reporting season and Europe would make progress in resolving its debt mess.

As for Malaysia, it said in terms of local news flows, the index of industrial production (IPI) for Nov and the Dec monthly PLANTATION []s statistics are due for release later Tuesday.

HDBSVR said on the corporate front, we may see share price actions in: (a) Gamuda, following a local media report saying that it has been roped in to be part of a consortium which is the frontrunner to bag the RM8 billion Gemas-Johor Bahru electrified double-tracking project; and (b) Jaks Resources, which has entered into a shareholders’ agreement to formalise a joint venture vehicle to undertake a power plant project in Vietnam.



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KL shares firmer at mid-morning trade

Shares on Bursa Malaysia were traded firmer at mid-morning Monday, boosted by gains in selected heavyweights and supported by interesting local corporate developments, dealers said.

At 11.03am, the FTSE Bursa Malaysia KLCI (FBM KLCI) was 3.03 points higher at 1,517.16, pushed up by gains mostly seen in Petronas Gas, which contributed 1.16 points, to the increase in benchmark index. Earlier, the FBM KLCI opened 0.93 of a point to 1,515.06.

The Finance Index rose 25.8 points to 13,413.51, the Plantation Index added 8.29 points to 8,445.22, while the Industrial Index advanced 12.99 points to 2,769.84.

The FBM Emas Index gained 23.851 points to 10,440.66, the FBM 70 Index jumped 30.399 points to 11,613.43, the FBMT100 Index was 21.771 points higher at 10,246.61 and the FBM Ace perked 19.33 points to 4,149.25.

Gainers thumped losers by 302 to 191 while 268 counters were unchanged, 727 untraded and 24 suspended. Turnover stood at 617.079 million shares worth RM377.513 million.

Two counters -- Jaks Resources Bhd and Inari Bhd -- were suspended during trading this morning. Jaks Resources, suspended from 10.10am, is expected to announce a proposed joint venture for an independent power plant project in Vietnam, while Inari, halted from trading since 10.42am, will also be making an announcement.

Leading the actives' list is Kumpulan Hartanah Selangor, tipped to be taken private by its major shareholder, Kumpulan Perangsang Selangor, saw its shares surging 10.5 sen to 47 sen, followed by Nextnation Communication Bhd, which earned one sen to 12.5 sen.

Meanwhile, Proton-CG:CW was up 7.5 sen to 55.5 sen after news on DRB-Hicom and General Motors Corp are keen on the national automaker's stakes.

Heavyweights, Maybank added one sen to RM8.24, Sime Darby was unchanged at RM9.06, while CIMB Group rose five sen to RM7.23 and Petronas Gas gained 30 sen to RM15.10. -- Bernama



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JAKS Resources requests trading halt pending material announcement

KUALA LUMPUR (Jan 9): Trading in the securities of JAKS Resources Bhd has been halted with effect from 10.10am on Monday at the request of the company pending a material announcement.

“The request for suspension is made under subparagraph 3.1(b) of Practice Note 2 on the Main Market Listing Requirement in view that JAKS Resources intends to make a material announcement on the proposed joint venture for the independent power plant project in Vietnam,” the company said on Jan 9.



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JAKS Resources declines 1.8%

JAKS Resources Bhd, a pipe maker, fell 1.8 per cent to 55.5 sen, on course for its lowest close since Oct 12.

The company had a fourth-quarter net loss of RM25.1 million, compared with a profit of RM1.2 million a year earlier, it said in a stock exchange filing. -- Bloomberg



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Stocks to watch: MAS, Boustead, Cypark, SMR, VS Industry

KUALA LUMPUR (Jan 1): The local stock market could see some profit taking in the first week of the trading year day after the recent run-up and last-minute window dressing activities. The rally was underpinned by local funds and pushed the FBM KLCI into positive territory for 2011.

The 30-stock index rallied more than 45 points over a seven-day trading period to end 2011 at 1,530.7. Total market capitalisation increased by RM11.38 billion over the same period to end the trading year at RM1,284.55 billion.

Among the stocks which could see trading interest following corporate developments include MALAYSIAN AIRLINE SYSTEM BHD [] (MAS), Boustead Holding Bhd, environmental TECHNOLOGY [] and engineering specialist CYPARK RESOURCES BHD [], SMR TECHNOLOGIES BHD [], VS Industry Bhd and SILVER BIRD GROUP BHD [].

Last Friday, MAS unveiled its new management structure which included several new business units, the entry of two senior aviation experts and the departure of several top officials.

Focus would be on MAS' long-haul business, with its group chief executive officer Ahmad Jauhari Yahya taking on the role as CEO of long-haul. His deputy, Mohammed Rashdan, who is CEO of short-haul, would head the short-haul, group finance, aircraft finance & management, and in the interim helm commercial.

BOUSTEAD HOLDINGS BHD []’s 51% owned MHS Aviation Bhd is acquiring 16 aircraft for RM586.20 million from DRIR Equities Sdn Bhd. DRIR owns the other 49% of MHS.

Cypark’s earnings fell 21.5% to RM4.11 million in the fourth quarter ended Oct 31, 2011 from RM5.24 million a year ago due to lower profit margins than the previous quarter. Gross profit margin was 25%, a decline from the 36% a year ago when it benefited from design income fee and good material rate negotiated in the quarter.

SMR’s unit SMR HR Group Sdn Bhd has secured a RM14 million contract from the Human Resources Ministry. The one-year contract is to implement a trainining programme known as Accelerated Skills Enhancement Training Programme (ASET).

VS Industry Bhd’s earnings fell 10.9% to RM11.59 million in the firstquarter ended Oct 31, 2011 from RM13.01 million a year ago due to stiffer competition and losses from its China associate. Its revenue increased 14.1% to RM282.43 million from RM247.39 million while earnings per share were 6.39 sen compared with 7.27 sen.

Silver Bird called off its proposed placement exercise and a subscription commitment of up to RM100 million with GEM Global Yield Fund. It had to abort the proposals as Bursa Malaysia Securities Bhd rejected its waiver from complying with all the requirements to undertake back-to-back placements.

Malaysian Rating Corp Bhd (MARC) lowered its rating on MNRB Holdings Bhd’s (MNRB) RM200 million Islamic medium term notes (IMTNs) to A+IS from AA-IS after the reinsurer suffered two consecutive years of losses and thin cash flow coverage measures.

The ratings agency said while the outlook for the debt notes was stable, the downgrading reflected weakened holding company level financial metrics after losses for FY ended March 31, 2010 (FY2010) and FY2011.

JAKS Resources Bhd posted net losses of RM25.13 million in the fourth quarter ended Oct 31, 2011 from a net profit of RM1.19 million a year ago due to goodwill impairment adjustment of RM25.90 million.

Its revenue rose 9% to RM93.24 million from RM85.74 million mainly due to higher revenue recognition of works done for projects in the CONSTRUCTION [] division. Loss per share was 5.73 sen compared with earnings per share of 0.27 sen.

For the financial year ended Oct 31, 2011, it swung into net losses of RM22.89 million compared net profit of RM2.28 million in the previous financial year.



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JAKS Resources posts RM25.13m net losses in 4Q on goodwill impairment

KUALA LUMPUR (Dec 30): JAKS Resources Bhd posted net losses of RM25.13 million in the fourth quarter ended Oct 31, 2011 from a net profit of RM1.19 million a year ago due to goodwill impairment adjustment of RM25.90 million.

It reported on Friday revenue rose 9% to RM93.24 million from RM85.74 million mainly due to higher revenue recognition of works done for projects in the CONSTRUCTION [] division. Loss per share was 5.73 sen compared with earnings per share of 0.27 sen.

For the financial year ended Oct 31, 2011, it swung into net losses of RM22.89 million compared net profit of RM2.28 million in the previous financial year.

Its revenue was 26.9% higher at RM326.68 million from the RM257.26 million a year ago. The higher revenue led to an increase in pretax profit of RM6.60 million from RM4.40 million due to the goodwill impairment adjustment of RM25.90 million.



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New generation of IPPs to draw familiar names

KUALA LUMPUR: The Energy Commission’s notice for the pre-qualification of prospective bidders for the development of a combined cycle gas turbine (CCGT) power plant in Peninsular Malaysia, representing the start of the fourth generation independent power producers (IPPs), is expected to attract bids from familiar names along with some new players.

In a statement on its website, the commission is inviting applicants with previous experience in implementing power projects to submit their expressions of interest by Jan 12. The commission will then conduct a pre-qualification process, in accordance with the criteria in the request for proposal document, which will be sent out
later.

In line with government policy, foreign participation in a consortium is capped at 49%.

Analysts are expecting all the country’s current crop of IPPs to bid for these upcoming projects along with some of the smaller players.

“The first generation IPPs would undoubtedly participate in these projects. They currently have the option to re-use their existing equipment for these new plants, as long as it has been refurbished or after they have invested some additional capital expenditure,” said OSK Research head Chris Eng.

Hence, it is likely that the list of bidders for the new CCGT plant will include the usual suspects — YTL Power International Bhd, Malakoff Bhd and Tanjong plc. The only exceptions might be Genting Bhd and Sime Darby Bhd according to analysts. It has been reported previously that Genting was mulling over the disposal of its power operations.

Alongside the big boys, Eng said it is likely that smaller players might take their chances in bidding for the project. This might include the likes of Jaks Resources Bhd, which is in the business of pipes and has clinched a RM5.96 billion power plant project in Vietnam. Other possible names include Toyo Ink Group Bhd, which also has a power plant project in Vietnam, and Leader Universal Holdings Bhd, which was involved in a plant in Cambodia.

“However, you might not see Mudajaya [Group Bhd] take part as the company is still sorting out issues with its IPP in India,” said Eng.

Association of Water and Energy Research Malaysia president S Piarapakaran was quoted as saying that opening up the bidding to foreign parties would help increase the number of players which could invest in more efficient technology. Piarapakaran also urged the Energy Commission to blacklist first generation IPPS that did not renegotiate their power purchase agreements from this bid.

The Edge weekly has earlier reported that the government will call for tenders for eight gas-fired power plants, where the players would possibly pay market rates for the fuel.

According to the Energy Commission’s 2010 annual report, listed under electricity supply plan for West Malaysia are five CCGTs due to come onstream between 2017 and 2019. Each of the plants has a generation capacity of 750MW.

The only other new plant mentioned in the commission’s annual report is a 1,000MW capacity coal-fired plant that is scheduled to be commissioned by 2020, as well as Tenaga Nasional Bhd’s two hydropower plants in Hulu Terengganu and Ulu Jelai, due to come online in 2015 and 2016 respectively. TNB’s additional 1,000MW from its Janamanjung coal-fired plant is targeted to start contributing from 2015 onwards, while Malakoff’s Tanjung Bin 1,000MW extension will come onstream by
2016.

It has been previously stressed by a number of players that the country could face a power crunch if the planning doesn’t start now. The Energy Commission estimates that based on November 2010’s electricity demand, the country will require an additional 7,372MW between 2015 and 2020, with another 15,724MW needed from 2021 to 2030.



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China group awarded US$1.5b JAKS contract

NANNING (China): JAKS Resources Bhd has awarded a US$1.5 billion (RM4.74 billion) contract to build a 1,200 megawatt (MW) coal-fired power plant in Vietnam to China's CNTC-TEPC Consortium.

JAKS Resources managing director and chief executive officer Ang Lam Poah said construction of the first unit of 600MW is due to begin in the second quarter of next year. The second unit will be built in the second quarter of 2017.

"The first unit will start contributing to the group's revenue by the fourth quarter of 2016 when it begins commercial operation," he told Malaysian media here yesterday.

JAKS Resources, had in July, secured an investment licence from Vietnam to build a US$2 billion (RM6.3 billion) coal-fired power plant in the northern part of the country.

The project will be financed by a mix of debt and equity.

"We are in the process of finalising the funding. We are targeting to finalise it by middle of next year," he said.

The contract signing was witnessed by Prime Minister Datuk Seri Najib Razak, who had a roundtable dialogue with China's captains of industry. The dialogue was held in conjunction with the 8th China-Asean Business and Investment Summit.

The US$2 billion power plant, the biggest in 80 million-population Vietnam, will be located in Hai Duong province, about 80km east of Hanoi. It will be developed under a build-operate-transfer structure.

Ng said the plant will operate as an independent power plant with a 25-year power purchase agreement with Electricity of Vietnam.

China National Technical Import and Export Corp (CNTIC), the first state-owned foreign trade corporation specialising in technology trade, has completed plants for over 5,000 projects with total contract value of US$100 billion (RM316 billion).

Tianjin Electric Power Construction Co (TEPC), a subsidiary of China Energy Engineering Group Co Ltd, is a Class 1 electric power contractor.