Kurnia still in M&A talks

KUALA LUMPUR: Kurnia Asia Bhd (KAB) is still in talks with interested parties regarding a possible merger and acquisition (M&A) following news in the last few months that the company was looking at selling its insurance arm.

“There are negotiations going on. We are quite an attractive company now,” said Kurnia Insurans (M) Bhd (KIMB) chairman Datuk Dr Sharifuddin Wahab.

“Those who are interested, we are equally interested in them. Whether they are local or foreign, we are alright (for negotiations) as long as we are getting an attractive deal at the end,” he said.

Following a report in The Edge, KAB had on July 21 announced that it received expressions of interest from certain parties to explore the possibility of acquiring an equity interest in KIMB. It added that Bank Negara Malaysia said it had no objection in principle for KAB to commence preliminary negotiations with the interested parties.

Sharifuddin was speaking at a press conference after the official launch of KIMB’s second mobile application, Kurnia One Touch, yesterday.

KIMB started developing the application in June after a soft launch in August. A total of RM70,000 was invested in the application.

“KIMB has about 800,000 motor comprehensive policyholders and with the new mobile application, we plan to widen our new private car comprehensive policy customer base by 20% to 30%,” said its CEO Wong Kim Tech. He added that the increase in the customer base is expected within 12 months.

The application enables KIMB motor policyholders to send information on the location of the car accident through a GPS function to the Kurnia Auto Assist team who will get in touch with the user within minutes and will then send help.

Users are also able to report a claim by photographing and sending pictures of the damaged vehicle, accident scene, and third-party’s details to KIMB branches and workshops via emergency numbers. The application is the first to be launched by an insurance company in Malaysia.

Maxis, KIMB’s partner in the promotion, is offering KIMB policyholders a special bundled package that includes smartphones, tablets and data plans.

The application, which can be used on the iPhone, Android and Blackberry phones, is now available for free download from KIMB’s website.

For the six months ended June, KAB posted a net profit of RM29.46 million on RM573.98 million in revenue. In contrast to the corresponding period a year ago, net profits strengthened almost 9% while revenue gained 8.46%.

KAB said the better showing was a result of improved underwriting and investment performances.

Wijaya Baru seeks partner for Indonesian venture

Petaling Jaya: Wijaya Baru Global Bhd (WBG), which has clinched a deal to log and clear 80,000 hectare of land in Indonesia to make way for an oil palm plantation, will seek partners for the cultivation venture.

Chief executive officer Datuk Faizal Abdullah said the company is in talk with Malaysian entities for a possible joint venture.

Early this month, WBG signed two deals to buy Suffolk Pte Ltd (SPL) and Wealthgagte Pte Ltd (WPL) for US$40 million (RM124.4 million) each.

SPL has a joint-venture deal with PT Trimegah Karya Utama, where it has been granted exclusive rights to extract and sell timber in the district of Jair, Regency of Boven Digoel, Province of Papua, Indonesia on 40,000ha.

Similarly, WPL also has a joint-venture deal with PT Manunggal Sukses Mandiri where it will have rights to another 40,000ha of land adjacent to SPL's land.

Timber activities can only happen after it receives an approval letter from Indonesia's Forestry Ministry.

After issuing the approval letter, the National Land Authority will issue the rights to plant oil palm trees on the same land.

In June this year, WGB appointed Datuk Che Abdullah@Rashidi Che Omar to its board. He has some 37 years of experience in the plantation industry.

Faizal feels that his appointment will help steer the group in the right direction, in terms of roping in a partner and establishing WBG's expertise in oil palm.

WBG, which has 20 years of experience in the timber business, expects to set up a joint venture that will see the plantation company holding a majority stake in it.

Faizal said once WBG gains expertise in this field, it may consider venturing into oil palm cultivation on its own.

However, he added that since Che Abdullah is a non-executive director at Sime Darby Plantations, WBG is unlikely to form a joint venture with Sime as it would be a conflict of interest.

According to Faizal, the likely scenario could see WBG divide the land into few blocks of possibly 10,000ha each.

"The land is huge ... from the north to south it is about 30km and from east to west, roughly 60km," he said.

The entire clearing of the land has to be done within six years.

Ringgit falls on slow export concern

Malaysia’s ringgit fell after a report of a split among European leaders on a plan to resolve the region’s debt crisis dimmed the outlook for the global economy. Government bonds rose by the most in almost two weeks.

Luxembourg Prime Minister Jean-Claude Juncker, who chairs the group of euro-area finance ministers, said an impromptu meeting of European leaders in Frankfurt last night failed to resolve differences.

The Federal Reserve said yesterday U.S. companies reported more doubt about the strength of the economic recovery. The MSCI Asia-Pacific Index of regional stocks dropped 0.9 percent. “There’s no progress in Europe’s rescue fund talks,” said Akira Banno, a treasury adviser at Bank of Tokyo-Mitsubishi UFJ in Kuala Lumpur.

“Export growth may slow because of the deteriorating outlook for the global economy.” The ringgit weakened 0.5 percent to 3.1225 per dollar as of 9:32 a.m. in Kuala Lumpur, according to data compiled by Bloomberg.

It strengthened 0.9 percent yesterday, the biggest advance since Oct. 10. The currency has climbed 2.3 percent so far this month after slumping 7 percent in September, the worst monthly loss since June 1998. Malaysia’s exports grew at the fastest pace in four months in August, rising 10.9 percent from a year earlier after gaining 7.1 percent in July, the trade ministry reported Oct. 7.

“Overall economic activity continued to expand in September, although many districts described the pace of growth as ‘modest’ or ‘slight,’” the Fed said in its Beige Book survey released yesterday in Washington. “Contacts generally noted weaker or less certain outlooks for business conditions.”

The yield on the 3.434 percent notes due August 2014 dropped six basis points, or 0.06 percentage point, to 3.13 percent, according to Bursa Malaysia. -- Bloomberg

Bursa's price estimate cut at Maybank

Bursa Malaysia Bhd, the nation’s stock exchange manager, slid 1.1 percent to RM6.34.

The stock’s share estimate was cut to RM6.55 from RM8.30 at Maybank Investment Bank Bhd, which said earnings may be hurt by the “weak” market. -- Bloomberg

'Take profit' froom JCY rally: CIMB

JCY International Bhd, a Malaysian disk-drive components maker, fell in Kuala Lumpur trading after CIMB Group Holdings Bhd advised investors to “take profit” after the stock jumped 27.5 percent yesterday.

Its shares fell 1.7 percent to 57 sen at 9:07 a.m. local time.

CIMB downgraded the JCY to “trading sell” from “trading buy,” following yesterday’s price rally which it was triggered by expectations that the company may benefit from increased orders after its Thai competitors were hit by floods. -- Bloomberg

McDonald's joins sustainable CPO group

McDonald’s Corp, the world’s largest restaurant chain, became a member of the Roundtable on Sustainable Palm Oil following its announcement to source food from certified sustainable sources, the industry group said in an e-mailed statement.

McDonald’s uses palm oil in the Asia Pacific, Middle East and Africa, and Latin America regions, it said.

Tenaga to miss earnings estimates

Tenaga Nasional Bhd, Malaysia’s biggest power producer, fell 1.6 percent to RM5.46.

The company’s full-year earnings due on Oct. 28 will miss consensus estimates on higher fuel costs, CIMB Holdings Bhd wrote in a report today.

Tenaga will report a loss for the second straight quarter and may post a loss in 2012 for the first time in more than a decade, Chief Executive Officer Che Khalib Mohamad Noh said in an interview on Oct. 18. -- Bloomberg

Weaker external sentiment weighs on KLCI

KUALA LUMPUR: The FBM KLCI remained in negative territory at mid-morning on Thursday, Oct 20 as the opaque global economic outlook continued to keep investors at bay.

Asian stocks fell on Thursday, as growing investor caution about taking risks ahead of a key European leaders' summit at the weekend weighed on riskier assets across the board and supported safe-haven government bonds, according to Reuters.

The FBM KLCI was down 7.36 points to 1,442.89 at 10am.

Losers led gainers by 229 to 164, while 167 counters traded unchanged. Volume was 311.28 million shares valued at RM142.33 million.

At the regional markets, Hong Kong’s Hang Seng Index fell 1.38% to 18,057.44, Japan’s Nikkei 225 lost 0.87% to 8,696.65, the Shanghai Composite Index was down 0.71% to 2,360.52,Taiwan’s Taiex lost 0.62% to 7,308.13, Singapore’s Straits Times Index fell 0.31% to 2,711.71 and South Korea’s Kospi edged down 0.21% to 1,851.98.

BIMB Securities Research in a note Oct 20 said it was a case of news indigestion for many investors as developments in Europe, the economic progress and earnings reporting in the US had overwhelmed the markets.

In the end, investors preferred to pay heed to the reported earnings figures which are deemed not too sanguine by most, it said.

It said that as a result, the Dow Jones Industrial Average dipped 72 points to close the session a tinge above the 11,500 level.

Meanwhile, the prolonged bailout package for Europe was still being deliberated and further delays would aggravate investors’ prevailing uneasiness, it said.

Nonetheless, major European indices all ended on a high with the Asian counterparts closed at a mixed, it said, adding that locally, the FBM KLCI closed just above the support level of 1,450, up 10.31 points.

“However we noticed that institutional participation was rather subdued with bulk of yesterday’s volume dominated by the lower liners.

“Today we believe the index may gravitate to the south with the 1,440 as the immediate support,” it said.

On Bursa Malaysia, the top loser at mid-morning was Dutch Lady that fell 34 sen to RM18.30; Malayan Flour Mills fell 21 sen to RM7.43, Petronas Gas 16 sen to RM12.94, MISC 15 sen to RM6.58, Shell 14 sen to RM9.32, PPB 12 sen to RM16.58, IJM Corp 11 sen to RM5.28, Petronas Dagangan 10 sen to RM16.10 and Lafarge Malayan Cement eight sen to RM7.12.

Hard disk drive maker JCY continued to be actively traded with 26.2 million shares done. The stock added 1.5 sen to 59.5 sen.

Other actives included Sinotop, Asia EP, Jotech and Uli-Corp.

Gainers at mid-morning included AIC, BAT, Aeon, CI Holdings, Batu Kawan and IJM PLANTATION []s.