Media Prima, Puncak Semangat in early talks

KUALA LUMPUR: Media Prima Bhd is in preliminary talks with privately-held Puncak Semangat Sdn Bhd, which is looking at converting all analog televisions (TVs) into the digital ones by 2015.

Puncak Semangat, owned by tycoon Tan Sri Syed Mokhtar Al-Bukhary, has been bidding for the conversion job from the government for the last three years.

"We cannot comment much on that. It's still in preliminary talks. Actually what I am doing here is evading your question," Media Prima chief operating officer for television networks Ahmad Izham Omar said at a press conference after announcing the content line-up for four of its TV stations for next year.

The conversion of all analog TVs to digital is expected to cost about RM2 billion, a study done in 2000 revealed.

The government is expected to announce the winner next year, but industry sources said the government has more or less confirmed that the tycoon has got the job.

Puncak Semangat has gone on a recruitment drive, looking for talent through collaboration with private colleges and universities.

For next year's content line-up, Izham said that their four stations, namely TV3, NTV7, 8TV and TV9 are expecting an increase. He did not share any number.

This year, Media Prima's TV stations took the top spot with 49 per cent viewership, followed by Astro 38 per cent and RTM channels at 13 per cent.

"Media Prima is committed to screening high quality local content helps to encourage and nurture the local content development industry.

"We have continually developed multimedia and interactive content that resonates with the IT-savvy generation. We believe in changing. Therefore, we are changing the landscape of content to be more interactive and innovative," added Izham.

Earnings trip at Tenaga

The group's results were dragged down largely by the very poor fourth quarter results, a net loss of RM453.9 million

KUALA LUMPUR: Tenaga Nasional Bhd (TNB)'s net profit for the year ended August 31 2011 fell by 84.3 per cent to RM499.5 million, its lowest in 13 years, after the national utility company booked higher operating cost to buy energy-related commodities.

TNB had to spend more to buy oil, distillates and coal to cushion the limited supply of gas. Gas is the mainstay energy, accounting for 60 per cent of the country's power ge-neration capacity.

Last year, group level net profit stood at RM3.2 billion.

TNB president and chief executive officer Datuk Seri Che Khalib Mohamad Noh said the following quarter will be a challenge for TNB as it grapples with limited gas supply and more expensive alternate fuel and coal to ensure continued supply of electricity.

"There's nothing much we can do as gas volume is low and fuel costs five times more than gas. Electrici-ty demand in 2012 is expected to grow by four per cent but it will be a challenging year," Che Khalib told reporters yesterday at TNB's headquarters.

The group's results were dragged down largely by the very poor fourth quarter results, a net loss of RM453.9 million, compared with a net profit of RM555.2 million in the same quarter the previous year.

Quarterly revenue, however, climbed to RM9.1 billion from RM8 billion previously on higher sales of electricity.

TNB spent a total of RM3.3 billion on fuel costs last year, comprising gas, coal, oil and distillates.

Meanwhile, Che Khalib said talks between TNB and Petronas (Petroliam Nasional Bhd) on compensation issues due to the shortage of gas to TNB and industries are ongoing .

"The industry cannot sustain when the supply of gas is low. We just don't have enough gas. The stakeholders (the government, TNB, Petronas and the independent power producers) are having discussions but there is no solution yet," said Che Khalib.

He added that negotiations are ongoing on how it can assist TNB in relieving the utility's as well as other industries' burden.

KL tin price may surge to US$22,200

The Kuala Lumpur Tin Market (KLTM) is expected to stage a better performance next week, with higher demand from the Japanese, European and local buyers, dealers said.

A dealer said the metal's price is likely to surge to around US$22,200 a tonne next week.

“We expect tin price to move higher as the prices of all metals have spiralled due to the Eurozone agreement to help debt-laden Greece.

"We expect to see demand for the metal with active buying activities," he added. For the week just-ended, the metal closed US$300 higher at US$22,000 a tonne from US$21,700 a tonne yesterday.

The four-day week saw KLTM staging steady performance, recording gains on most of the days except on Thursday as there was no buying activity at all, partly due to the Deepavali public holiday on Wednesday. The KLTM opened the week with a US$150 gain to US21,850 a tonne and the metal was traded at US$22,400 high a tonne on Tuesday and US$21,850 low a tonne on the first day trading for the week.

Total turnover for the week dwindled to 176 tonnes from 205 tonnes last week.

The premium between the KLTM and the LME stood at US$285 a tonne compared to US$790 a tonne on Friday. -- Bernama

Rubber mart to improve on tight supply

The Malaysian rubber market is expected to improve next week as supply remains tight due to the rainy season and floods in Thailand, dealers said.

A dealer said the euro debt crisis will, however, continue to affect the market. "Traders are awaiting the solution to the eurozone debt crisis," he said.

During the four-day trading week, the market was mixed and its performance was affected by the rainy season and floods which as a result saw tight supply of the material. Traders were also monitoring the eurozone financial crisis.

For the week just ended, the Malaysian Rubber Board's official physical price for tyre-grade SMR 20 rose 13.5 sen to 1,231 sen per kg while latex-in-bulk fell 5.5 sen to 793.5 sen per kg.

The unofficial closing price for SMR 20 gained 22.5 sen to 1,226 sen per kg while latex-in-bulk dropped 3.5 sen to 794.5 sen per kg. -- Bernama

KL bourse expected to strengthen next week

Share prices on Bursa Malaysia are expected to extend gains next week on heightened global risk appetite boosted by good news from Europe and the US economic outlook, dealers said.

“Going forward next week, we expect investors to price in the stronger US and Europe economy as well as the reduced banking crisis risk in both continents,” Affin Investment Bank's Head of Retail Research, Dr Nazri Khan told Bernama today. The private sector investors recently agreed to make a 50 per cent cut in Greek bonds and it is expected to boost the firepower of the eurozone rescue fund to US$1.4 trillion (US$1=RM3.13) while the US third quarter gross domestic product data rose 2.5 per cent. “These will push the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) index to a possible 1,524 level, which is FBM KLCI high made in 2008 before the subprime crisis,” he added.

In line with the positive trend on regional markets, Nazri said the traditional year-end rally has started and is likely to last before Chinese New Year 2012.

Meanwhile, TA Securities senior technical analyst Stephen Soo said the benchmark index is expected to strengthen next week, boosted by rising appetite in riskier assets.

“We foresee the positive sentiment globally will further help properties and construction stocks to slightly recover after their recent losses,” he added.

However, OSK Research director/research head Chris Eng said the market is still in defensive position and investors remain cautious amid the uncertain global economic outlook.

"There is a possibility the market will dip if the index reaches the 1,500 level, due to selling pressure," he added. Meanwhile, during the whole trading week, the local bourse was in a positive movement with the benchmark index ending Friday's trade with 10.89 points at 1,481.82.

Bursa Malaysia was closed on Thursday for the Deepavali holiday.

On a week-to-week basis, the FBM KLCI advanced 42.99 points to 1,481.82 compared to last Friday's closing at 1,438.83.

The Finance Index gained 339.47 points to 13,420.59 while the Plantation Index rose 177.75 points to 7,494.68 and the Industrial Index added 77.35 points to 2,714.66.

The FBM Emas Index rose 310.41 points to 10,117.36, the FBM70 Index advanced 418.94 points to 10,959.65, the FBM Ace Index gained 112.46 points to 4,072.95 while the FBMT100 added 307.83 points to 9,935.99.

Total weekly volume declined 6.033 billion shares worth RM7.097 billion from 7.391 billion shares worth RM6.584 billion last week.

Main Market turnover fell 4.674 billion units worth RM6.941 billion from 5.491 billion units worth RM6.362 billion on Friday.

Warrants turnover slipped to 471.509 million units valued at RM30.039 million from Friday’s 659.107 million units valued at RM32.675 million.

Volume on the ACE market dwindled to 775.248 million units worth RM111.181 million from 1.194 billion units worth RM164.173 million last week. -- Bernama

Price set for Parkson Asia IPO, but size smaller

KUALA LUMPUR: Parkson Holdings Bhd has priced its regional retail arm Parkson Retail Asia Pte Ltd (PRA) at an IPO price of S$0.94 (RM2.33) per share.

The IPO valued the whole of PRA at S$636.7 million, which is a decent 18.2 times its net profit of S$35 million for FY11 ended June 30. However, the size of the IPO that will comprise the issuance of 80 million new shares is smaller than previously anticipated.

In a statement to Bursa Malaysia, Parkson Holdings said PRA’s listing on the Singapore Exchange (SGX) will involve an offering of 147 million shares — 80 million new shares to be issued by PRA and 67 million existing shares by the vendors Parkson Holdings and its Indonesian partner PT Mitra Samaya.

Note that in a circular to shareholders recently, Parkson Holdings had said PRA would issue new shares representing up to 18.9% of the company’s enlarged capital. But now with only 80 million new shares to be issued, as announced yesterday, this works out to only 11.8% of PRA’s enlarged capital of 677.3 million shares. PRA’s shares base before IPO was 597.3 million.

PRA — 90.1% owned by Parkson Holdings and 9.9% by Mitra before the IPO — is a department store operator with operations in Malaysia, Vietnam and Indonesia.

According to Parkson Holdings, 136.15 million or 92.6% of the PRA IPO shares will be offered by way of an international placement to investors, which includes institutional and other investors in Singapore. The remaining 10.85 million shares, excluding up to 3.5 million shares reserved for the directors, management and employees of the Parkson Asia group, will be offered to the public.

Parkson Holdings said the IPO is expected to raise total gross proceeds of S$138.2 million. Based on the 80:67 ratio of the new shares and offer for sale shares, S$75.2 million of the total proceeds will go towards PRA for business expansion with the rest going to Parkson Holdings and Mitra.

PRA proposes to utilise a total of S$69.2 million in net proceeds to open new stores in Malaysia, Indonesia, Vietnam and Cambodia (S$60 million), information technology investment (S$5 million), and part of maintenance capital expenditure in Malaysia, Vietnam and Indonesia (S$4.2 million).

Parkson Holdings, which stand to receive S$56.7 million from the IPO proceeds, has yet to announce how it would utilise the money. The company said it would inform shareholders at a latter date.

In a Bloomberg report yesterday, it said PRA plans to pay dividends of between 40% and 50% of its distributable profits, according to the IPO prospectus.

PRA posted a S$35 million net profit in the 12 months through June, up from S$22.4 million a year earlier.


This article appeared in The Edge Financial Daily, October 28, 2011.

Ramunia awarded RM13m contract

KUALA LUMPUR: Ramunia Holdings Bhd has received a letter of award from Petrofac (Malaysia) Sdn Bhd for the supply of driven piles for the Cendor Phase 2 Development Project worth RM13.13 million.

In a filing with Bursa Malaysia yesterday, Ramunia said the letter of award was given to its wholly- owned subsidiary Ramunia Fabricators Sdn Bhd on Oct 20 and accepted yesterday.

“The letter of award shall be subject to a formal contract being executed within 90 calendar days from the effective date Oct 20 or such extended period as may be mutually agreed by the parties,” said the statement.

The duration of the contract is 23 weeks from Oct 20 while the project is expected to contribute positively to the group’s earnings for the financial period of 2011/12

The statement also announced that Ramunia Fabricators has successfully completed the contract to supply mooring piles for Berantai in September. The contract, which was valued at about RM 2.7 million, was also from Petrofac.


This article appeared in The Edge Financial Daily, October 28, 2011.

MBM Resources to take over Hirotako

KUALA LUMPUR: MBM Resources Bhd has proposed to take over Hirotako Holdings Bhd to expand its automotive manufacturing division, at a cost of RM412.5 million.

MBM which has stakes in Perusahaan Otomobil Nasional Kedua Sdn Bhd (Perodua) and Daihatsu (M) Sdn Bhd among others, had offered 97 sen per Hirotaka share and five sen per Hirotako warrant.

The offer was at a premium of nine sen or 10.23% above Hirotako’s pre-suspension price of 88 sen on Oct 25.

Hirotako is principally involved in the manufacture and sale of automative components which includes airbag modules, seat belts, steering wheels, noise and heat reduction materials as well as insulator parts.

According to an MBM statement to Bursa Malaysia yesterday, the company had obtained an irrevocable undertaking from Hiro-Dapat Holdings Sdn Bhd to accept the offer in respect of its entire holding of 99,871,112 shares, representing 23.8% of the total voting shares in Hirotako.

Assuming full acceptance of all offer securities, the acquisition would cost MBM approximately RM412.5 million. MBM is expected to fund the acquisition through internally generated funds and borrowings, and has obtained sufficient credit facilities.

MBM Resources says Hirotako's business will complement its existing auto manufacturing division and subsidiaries.

Explaining its rationale for the acquisition, MBM said it is continually looking for opportunities to expand its automotive manufacturing division. “The proposed offer is in line with the company’s business expansion plan and is undertaken with the objective to enable MBM to expand its automotive manufacturing division.

“The proposed offer is also expected to enable the company to fast track its business expansion by acquiring an existing matured business rather than via organic growth,” said MBM, adding that Hirotako’s group business will complement its existing automotive manufacturing division and subsidiaries.

It is also expected to enable the sharing of common resources between the MBM group and Hirotako group to have better co-ordination of business planning and resources deployment, MBM added.

“As a result, it may give rise to potential operational cost efficiency and cost savings. This in turn is expected to contribute positively to MBM’s financial performance in the future,” said the statement.

MBM also owns Precision Press Industries Sdn Bhd which manufactures precision metal stamped parts and components and the design and fabrication of tool and die for the metal stamping industry. Its other company is Tekun Asas Sdn Bhd which manufactures loud speaker grilles and hard board panelling.

An analyst said Hirotako is a well managed company that would provide integration synergy for MBM.

For the financial year ended Dec 31, 2010, Hirotako posted a net profit of RM36.4 million and had net assets of RM195.1 million. At RM412.5 million, he noted that MBM would be paying 2.1 times book and a trailing price-to-earnings ratio of 11.3 times, which he thinks is fair, although not particularly cheap.

MBM shares closed three sen higher at RM3.10 yesterday. Hirotako shares were suspended yesterday and will resume trading today.

They were last traded at 88 sen on Tuesday and have gained 57% since hitting a 12-month low of 56 sen on Sept 26.


This article appeared in The Edge Financial Daily, October 28, 2011.