TM has set up a task force to carry out an investigation over news that telecommunications equipment maker Alcatel-Lucent gave bribes to its staff to win a contract. On Tuesday, Alcatel-Lucent and 3 of its subsidiaries had to pay more than USD137m in fines and penalties to settle US charges.
According to court documents, Alcatel agents paid bribes to officials in Malaysia to obtain or retain a telecommunications contract worth USD85m. (Business Times)
Sealink International has secured contracts for the sale of 3 offshore support vessels for a total consideration of about RM70m. The 3 vessels are expected to be delivered within the first quarter of 2011. (Financial Daily)
Mitrajaya’s wholly owned subsidiary, Pembinaan Mitrajaya SB, yesterday was awarded a RM53.5m contract for the construction of a hangar at Subang Airport. Construction will commence from 1 Jan 2011 for a period of 10
months. (Financial Daily)
Honda Malaysia SB and UMW Toyota Motor SB have recorded combined bookings of nearly 1,500 units for their Honda Insight and Toyota Prius hybrid models respectively in the span of less than 3 months. The bookings, if they were to materialize into sales, would represent a significant jump compared with just the 297 total hybrid units sold in the whole of 2009. (StarBiz)
JAKS subsidiary gets RM201m building job
JAKS Resources’ subsidiary has won a RM201m construction contract for a commercial development in Petaling Jaya, Selangor, from MNH Global Assets Management SB. The commercial development of Phase 1-5 Commercial Block of 15-storey and 4-storey basements by JAKS SB (JSB) is due to be completed by March 2012. MNH Global Assets is wholly owned by Island Circle Development (M) SB, a major shareholder of JAKS Island Circle SB, which in turn is majority owned by JSB. (Business Times)
SunCity acquires land in Johor for expansion
Sunway City’s wholly owned subsidiary Asli Budimas SB has entered into an agreement with Bukit Ledang Development SB to purchase approximately 64.6 acres of land for RM134.52m in tandem with its expansion plan in Johor. According to its announcement to Bursa Malaysia, the acquisition will provide SunCity an estimated GDV of RM932m when the land in Plentong, which is strategically located within the Iskandar Malaysia development region, is fully developed. The land price works out to RM47.78 per sq ft. (Financial Daily)
Sime to build pilot bio-ethanol plant
Sime Darby Plantation SB is partnering Japan's Mitsui Engineering and Shipbuilding Co Ltd to build and operate a bio-ethanol demonstration plant, which will convert empty oil palm fruit bunches into bio-ethanol. Sime Darby officials said the plant would cost about USD10m (RM30.9m). Bio-ethanol is used as fuel for cars and unlike bio-diesel, which is a blend of palm oil and diesel, it is made from plantation waste. The bio-ethanol plant will use fruit bunches as the main raw material, which is abundant and available throughout the year, Sime said in a statement. The collaboration is being undertaken by Sime Darby Research SB, the research and development arm of Sime Darby Plantation. The joint-venture plant will be built next to Sime Darby Plantation's Tennamaram palm oil mill at Bestari Jaya in Selangor. (Business Times)
PNB mum on talk of potential mergers
Permodalan Nasional Bhd (PNB) was mum on speculation of mergers among its property companies or the relisting of its wholly-owned property group Island & Peninsular Group SB (I&P). "We will make the necessary announcements when the time comes," president and group chief executive Tan Sri Hamad Kama Piah Che Othman told reporters yesterday. There have been reports that major property groups like SP Setia and Sime Darby Property could be persuaded to merge. PNB is the single biggest shareholder in SP Setia and it also controls Sime Darby. As for the I&P group, it is the result of a merger with sister companies Petaling Garden and Pelangi. All three were once listed before being taken private by PNB in July 2007. The group now has a combined landbank of about 2,200ha in the Klang Valley and Johor, and has developed property projects over 35 townships such as Bukit Damansara, Bandar Kinrara, and Alam Damai (Business Times)
According to the OSK Research, its target price for Maxwell is RM0,82 and IPO note to Maximising All Option.
Based on their research, they the company, which has chalked up impressive revenue and earnings CAGR of 60% and 72.6% over the past 4 years, to achieve FY10/11 net profit of RM65.8m and RM71.5m respectively. They value Maxwell at RM0.82 based on 5xFY10 EPS.
For information, Maxwell is an OEM and ODM company involved in manufacturing and designing sports shoes and casual sports shoes for the domestic and export markets. As a testament of its product quality, Maxwell manufactures for global brands such as Yonex, Diadora, Kappa, Brooks and Fila.
BEIJING: China's central bank raised interest rates on Saturday, Dec 25 for the second time in just over two months, underscoring concerns that inflation may be entrenched and swift action is needed to get price pressures under control.
The intensification of policy tightening also reflects the government's belief that the economy is fundamentally in a good shape.
Below are some implications what the latest move means for monetary policy outlook and financial markets.CHRISTMAS SURPRISE
The rate rise shows China's top leaders have the task of taming inflation at the top of their agenda, as they had signaled in November, when they said they would intervene to control prices if needed.
Such language, alongside Beijing's official switch of its monetary policy to "prudent" from the previous "moderately loose" in early December, had laid market expectations for tighter policy.
But investors were not sure if the People's Bank of China (PBOC) would move this year given it only just raised banks' reserve requirements on Nov 19, ahead of data which showed inflation at a 28-month high of 5.1 percent.
The PBOC's Christmas Day rate rise is characteristic of its tendency to surprise investors with policy changes when they least expect it.
The move came amid tentative signs that price pressures were spreading beyond food and inflation and could be more stubborn than authorities had expected.
China's real interest rates are deep in negative territory. The one-year benchmark deposit rate is only 2.75 percent after the latest climb, well below November's inflation of 5.1 percent, highlighting the risk that price expectations may spin out of control.
All said, there have also been dovish signals from the government in recent days. Notably, it has raised its 2011 inflation target to 4 percent from this year's 3 percent.
RATE RISE CYCLE
Though announced by the central bank, the decision will have received approval from the highest echelons of power. Once a consensus has been forged in Beijing to raise or cut rates, past experience shows that moves often come in bunches.
This is the second rate rise in the current tightening cycle (the first was announced on October 19) and analysts think that another 50 bps of increases are on the way over the next year.
The PBOC made clear on Friday that it will deploy a range of policy tools to head off inflationary pressures and asset bubbles.
Interest rates are just one item in China's toolkit for mopping up the liquidity that is at the root of the country's inflation problem. Banks' reserve requirements and lending quotas are crude but effective shovels for removing cash from the economy as well.
So far, the PBOC has dragged its feet on jacking up rates, relying mainly on quantitative tightening measures, notably banks' reserve requirement ratio (RRR) and lending restrictions, which are less likely to dampen growth in the economy.
The PBOC has increased RRR six times this year but only lifted interest rates twice.
Some analysts thought China should have raised rates earlier in the year when the country was growing at a double-digit annual pace. But officials were worried at the time about sluggish external demand and uncertain about how the domestic economy would cope when government stimulus was withdrawn.
The view from Beijing now is that the economy has built up a momentum solid enough of its own and tightening is needed to keep it on a sustainable path of growth.
LIMITED MARKET IMPACT
Since the move was relatively mild, there could be a relief rally when the Chinese stock market opens on Monday.
After all, the market had already priced in more rate rises, with the main index in Shanghai down nearly 10 percent since mid-November.
Still, the specter of more tightening will hang over the market, limiting any gains. The government is determined to keep inflation under control, indicating there will be more tightening in the coming year.
The rate rise may suggest that the central bank is less concerned about hot money inflows, and is more willing to let the yuan appreciate at a faster pace and use the currency as another lever to rein in inflation.
In global markets, tighter Chinese policy could fuel investor concerns that growth in the world's second-biggest economy may falter, undermining stocks, commodities and high-yielding currencies.
But many analysts say China's resilient economy can withstand higher rates and they are a good thing for the country in the long run as they prevent the economy from overheating. - Reuters
The acquisition will be made through CapitaMalls Asia's subsidiaries and an asset-backed securitisation structure.
CapitaMalls Asia will buy about 90.7 per cent of the mall's retail strata area and all its car park spaces, the company said in a statement yesterday.
Queensbay Mall is Penang's largest mall located at Bayan Lepas along the southeastern shorefront of Penang island and about 20 minutes' drive from Penang International Airport.
It is a family-lifestyle mall located at the heart of a 29.57ha prime waterfront integrated development which comprises a hotel, a wide range of residential homes and planned office towers.
It is easily accessible from the north of the island via the Jelutong Expressway and from the south via the Bayan Lepas Expressway.
This will be CapitaMalls Asia's second mall in Penang and fourth in Malaysia.
The other three malls - Gurney Plaza in Penang, an interest in Sungei Wang Plaza in Kuala Lumpur and The Mines in Selangor - are owned through CapitaMalls Asia's stake in CapitaMalls Malaysia Trust.
"Gurney Plaza, which we already own through CapitaMalls Malaysia Trust, and Queensbay Mall are the two best malls in Penang.
"The acquisition of Queensbay Mall, the largest shopping mall in Penang, will substantially strengthen CapitaMalls Asia's market leadership in the state.
"This acquisition signals our ongoing commitment to invest in Malaysia's retail sector for the long-term, following our listing of CapitaMalls Malaysia Trust in July this year," CapitaMalls Asia chief executive officer Lim Beng Chee said in the statement. (Business Times)
Read more: CapitaMalls buys Queensbay Mall
Malaysian Airline System Bhd had its biggest two-day advance in 10 months after signing an agreement with Air France-KLM Group’s Dutch KLM unit to foster closer cooperation.
The stock climbed 4.9 per cent to RM2.13 at 10:16 a.m. in Kuala Lumpur trading, adding to yesterday’s 5.7 per cent gain. The two-day 11 per cent increase is the most since Feb. 23. The announcement was made yesterday.
“We are positive on this development as it could help Malaysian Air ride on KLM’s global network and possibly drive cost efficiency,” Wong Ming Tek, an analyst at HwangDBS Vickers Research Sdn Bhd said in a report today. -- Bloomberg
The FBM KLCI lost some momentum in early trade on Thursday, Dec 23 and slipped into negative territory at mid-morning, weighed by losses at key blue chips including DiGi, UMW, CIMB and Genting, as well as plantation stocks.
At 10am, the benchmark index, which had started the day on a promising note, fell 1.81 points to 1,513.24.
Losers led gainers by 207 to 181, while 245 counters traded unchanged. Volume was 271.09 million shares valued at RM243.01 million.
Regional markets were mixed, with the Shanghai Composite Index down 0.17% to 2,872.88 while South Korea’s Kospi shed 0.12% to 2,035.66.
The Singapore Straits Times Index added 0.50% to 3,160.10, Taiwan’s Taiex gained 0.42% to 8,897.46 and Hong Kong’s Hang Seng Index opened 0.3% higher at 23,117.67.
Japan’s Nikkei 225 was closed to observe a national holiday for the Emperor’s birthday.
Commenting on Bursa Malaysia, OSK Investment Research in a note Dec 23 said follow-through buying yesterday buoyed the market to a higher close for the second consecutive session.
It said that after the nearly 20-points gain over the last two sessions, the FBM KLCI was now trading further away from the uptrend line. Another positive development is that the index ended above 1,510 points for only the second time since Nov 12, 2010.
The research house said although the index closed above the 1,510 point-level yesterday, this breakout still needs to be confirmed, especially after it experienced a failed breakout attempt on Dec 9, 2010.
“Whether or not the market could continue to add more points from the current level would determine its immediate outlook. This is because another failed breakout attempt at the 1,510 point-level would also see the index continue to trade within the recent trading band ranging from 1,474 pts to 1,510 points
“The FBM KLCI’s historic high of 1,532 points is now the only resistance which we can detect. To the downside, the 1,510 point-level is the immediate support while another support is seen at the 1,485- 1,492-point area,” it said.
On Bursa Malaysia, the top loser at mid-morning was DiGi that fell 70 sen to RM25.20; Kulim lost 18 sen to RM12.56, Batu Kawan fell 16 sen to RM16.26, PPB lost 12 sen to RM17.72, while Keck Seng, Boustead, UMW and CIMB fell five sen each to RM6.70, RM5.36, RM7.05 and RM8.55 respectively.
Meanwhile, Genting and RHB Capital fell four sen each to RM10.76 and RM8.56.
Gainers included BAT, Dutch Lady, Adventa, Tan Chong, Padini, Media Prima, Nestle and MAS.
The actives included KNM shares and warrants, Land & General, KNM and MAS. (theedgemalaysia.com)
Bina Puri Holdings Bhd’s shares rose on Tuesday, Dec 21 following after its unit in Brunei landed a sub-contract worth RM158.36 million to undertake the project known as Skim Tanah Kurnia Rakyat Jati Kampung Lugu: Kerja-kerja Infrastruktur dan Perumahan in Brunei.
On Monday, Bina Puri also said that Bina Puri (B) Sdn Bhd had entered into a subcontract agreement with Chuon Tzu CONSTRUCTION Company Sdn Bhd on Dec 3 to undertake the project.
* Volume less than 1 billion shares
* Foreigners may buy Japan stocks next week
* Japan fund managers locked in profits in Nov-research firm
By Ayai Tomisawa
TOKYO, Dec 21 (Reuters) - Japan's Nikkei average rose 0.7
percent on Tuesday as investors hunted for bargains in recent
decliners, but volume was low due to an absence of foreign
participants before the Christmas holidays.
Analysts say the market is expected to see directionless
trading with thin volume this week, but may be re-energised next
week when foreign investors return from the holidays.
"We may see some window-dressing buying at the end of the
month, something of a trend every year," said Fujio Ando, senior
managing director at Chibagin Asset Management.
"They may buy large cyclical stocks at the year-end and the
Nikkei may rise further," Ando said.
Others said hedge funds were expected to be major buyers.
"Investors are expected to continue selling bonds and buying
equities, and hedge funds are likely to be the main players
behind such moves," said Masanaga Kono, chief strategist at
Amundi Japan.
Hedge funds remain on track to finish the year on a high
note, according to Eurekahedge, a hedge fund research company
based in Singapore. It said the Eurekahedge Hedge Fund Index
gained 0.40 percent in November, marking the fifth consecutive
month of positive returns.
It added that returns across most regional hedge funds were
muted, with the exception of Japanese managers who reported gains
of 2.57 percent. "Positive movements in the Japanese markets
provided managers with ample opportunities to lock in substantial
gains," Eurekahedge said.
In November, the Nikkei rose above 10,000 points for the
first time since June, and finished the month with an 8 percent
gain. The Topix ended the month 6.2 percent higher.
"The November rallies provided a good base for the coming
months," Amundi Japan's Kono said.
By midday, the benchmark Nikkei .N225 gained 75.27 points
to 10,291.68, while the broader Topix .TOPX rose 0.6 percent to
903.59. Volume stood at 656 million shares.
The Nikkei will likely trade between 10,150 and 10,300,
analysts said, after shedding 0.9 percent to 10,216 on Monday.
Analysts added that receding tensions in the Korean Peninsula
provided comfort to the market.
North Korea stepped back from confrontation over "reckless"
military drills by the South on Monday and reportedly issued a
new offer on nuclear inspections, drawing a cautious response
from Seoul and Washington.
(Reporting by Ayai Tomisawa; Editing by Chris Gallagher and
Joseph Radford)- Reuters
KUALA LUMPUR: The FBM KLCI rebounded in early trade on Tuesday, Dec 21 in line with the marginal gains at most key regional markets that advanced on bargain hunting, as investors picked up stocks battered in recent days.
However, it struggled to breach the psychologically-crucial 1,500-point level as gains were limited amidst light trading.
At 10am, the FBM KLCI was up 3.48 points to 1,499.36, lifted by gains including at Genting, Tenaga and PLUS Expressways.
Gainers led losers by 237 to 147, while 197 counters traded unchanged. Volume was 235.76 million shares valued at RM215.31 million.
Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in a note Dec 21 said that due to the mixed US markets last night, the FBM KLCI could be in a range trading mode today too, with profit taking activities that may by cushioned by later miniscule nibbling activities.
“The FBM KLCI remains trapped between the low of 1,474 and the high of 1,531 for now, with some further downside potential as we broke below the psychological 1,500-support level recently,” he said.
At the regional markets, Japan’s Nikkei 225 added 0.74% to 10,291.68, the South Korean Kospi was up 0.67% to 2,033.74, the Shanghai Composite Index gained 0.46% to 2,865.95, Taiwan’s Taiex rose 0.15% to 8,781.68, the Hong Kong Hang Seng Index opened 0.3% higher at 22,711.46 while the Singapore Straits Times Index shed 0.05% to 3,131.55.
On Bursa Malaysia, the top gainer at mid-morning was Nestle that added 98 sen to RM43; highway operators MTD Capital and PLUS advanced after both received separate buyout offers on Monday.
MTD was up 45 sen to RM9.35 while PLUS added 24 sen to RM4.60.
Mudajaya rose 28 sen to RM4.28, Hap Seng gained 19 sen to RM6.42, Jaya Tiasa added 17 sen to RM4.47, Lion Forest Industries up 13 sen to RM2.18, Genting gained 12 sen to RM10.46, QL Resources up 11 sen to RM5.65 while Tenaga rose nine sen to RM8.35.
Losers in early trade included BAT, DFZ Capital, Hai-O, Lafarge Malayan Cement, Batu Kawan, Tasek, Dutch Lady and IJM Land.
Actives included Timecom, PLUS, Baneng, DRB-Hicom and Hubline.(theedgemalaysia.com)
KUALA LUMPUR: OSK Research has raised its target price for IJM Corp to RM6.60 (from RM6.31 previously) after the company last Friday announced that it had won a RM461 million contract for Phase 3 of the Platinum Park development by Naza TTDI.
“Its job wins so far into FY11, totaling RM1.84 billion, have beaten our RM1.5 billion target. Potential jobs in the pipeline include high-rise buildings in KL, Kelau Dam, West Coast Expressway and LRT packages.
“We keep our FY11 earnings unchanged but raise the numbers for FY12-13 by 1%-6%. Maintain Neutral call on IJM given the limited 5.2% upside.(theedgemalaysia.com)
As I observe the shares trading monitor, I noticed around 9.35am something, the shares of Gamuda was up four sen to RM3.87. This is due to the cabinet has approved the RM36 billion KL mass rapid transit project.
MANILA: AirAsia Bhd (5099) has set up AirAsia Philippines with three local parties, in its latest venture overseas.
The low-cost airline, through AirAsia International Ltd, sealed a joint venture agreement to form AirAsia Inc (AirAsia Philippines) in Manila yesterday.
AirAsia will hold a controlling 40 per cent stake, while the other parties will each own 20 per cent of AirAsia Philippines.
The other owners are three prominent locals namely Antonio Ongsiako Cojuangco, Dr Michael L Romero and Marianne B Hontiveros.
Cojuangco and Romero are team owners of the Philippine Patriots, which is part of the Asean Basketball League mooted by AirAsia Bhd co-founder and chief executive officer Datuk Seri Tony Fernandes.
AirAsia will pay US$8 million (US$1 = RM3.14) for its stake in the airline, which will have an authorised share capital of US$25 million.
Hontiveros was also named chief executive of AirAsia Philippines.
"We will not cannibalise the market, we are looking to grow it. Of the 140 routes we fly to, 50 per cent are routes never before flown. You will see the same recipe in the Philippines," Fernandes told reporters in Manila yesterday.
He was speaking after announcing its sponsorship of Philippine Patriots.
The three-year deal will see AirAsia have branding rights of the team. Philippine Patriots are the reigning champions of the Asean Basketball League.
Fernandes said they are in the midst of obtaining the licence to operate an airline from the Philippines government.
AirAsia Philippines will will start out with two new A320s.
It is yet to decide from which airport it will fly out of but Fernandes said it is a toss-up between Subic International Airport and Clark International Airport.
Currently AirAsia flies daily to Clark International Airport and enjoys a load factor of 87 per cent.
On AirAsia's plans to start a joint venture in Vietnam, Fernandes said it is now on the back burner as it focuses on growing its operations in the Philippines.
"Eventually we want to be in every Asean country," Fernandes said. Another Asean country which looks promising is Cambodia, he added.(Business Times)
KUALA LUMPUR: SCOMI MARINE BHD []’s unit has proposed to dispose of four marine logistics companies to its subsidiary PT. Rig Tenders Indonesia Tbk (PTRT) for 323.1 billion rupiah (RM538.3 million) in a group-related corporate exercise.
Under the corporate exercise announced on Friday, Dec 17, Scomi Marine’s unit Scomi Marine Services Pte Ltd would dispose of four companies to PTRT. PTRT is a 80.54%-owned subsidiary of Scomi Marine Services.
The four companies which it was disposing of its entire equity interest were CH Logistics Pte Ltd, CH Ship Management Pte Ltd, Grundtvig Marine Pte Ltd and Goldship Private Ltd to PTRT. The marine logistics companies own and operate 51 vessels, comprising 27 tugs and 24 flat top barges.
Under the exercise, PTRT proposes to undertake a renounceable rights issue to partly fund the Disposal Consideration whereby Scomi Marine Services will undertake to renounce all of its entitlement to Portside Offshore Inc. and PT Revessel Indonesia.
“The business environment for the marine logistics and offshore support vessel businesses in Indonesia is increasingly challenging in light of changes to local regulations relating to ownership, intensifying competition and pressures on charter rates.
“In addition, significant capital expenditure outlay is expected to be incurred to replace vessels and to invest in new business opportunities,” said Scomi Marine.
Scomi Marine said a strategic investor is essential in growing the businesses, both from a financial and operational perspective.
Scomi Marine said given the specialised nature of the businesses and the unique ownership criteria required, the Board feels that Portside and PT Revessel Indonesia would be in a better position to expand the business activities of the enlarged PTRT.
It added that it would continue to participate in the businesses’ upside potential through its equity interest in PTRT upon completion of the proposals. (Joseph Chin, theedgemalaysia.com)
KUALA LUMPUR: The FBM KLCI stayed marginally higher at mid-morning on Wednesday, Dec 15 amidst cautious trading as most key regional markets remained mixed.
Asian markets, in particular Japan’s Nikkei 225, mostly stayed flat as investors took profits from earlier gains while technical signs still showed overheating in the market, according to Reuters.
The market rose in early trade, shrugging off news that the Bank of Japan's latest tankan survey showed sentiment among big manufacturers worsened for the first time in seven quarters, it said.
On Bursa Malaysia, the FBM KLCI was up 0.42 points to 1,511.00 at 10am, nudged up by gains including at RHB Capital, Maybank, CIMB and Petronas Chemicals.
Gainers led losers by 217 to 185, while 217 counters traded unchanged. Volume was 254.26 million shares valued at RM293.27 million.
At the regional markets, Japan’s Nikkei 225 was down 0.04% to 10,312.96, the Shanghai Composite Index lost 0.11% to 2,923.88, Taiwan’s Taiex slipped 0.19% to 8,724.02 and the Hong Kong Hang Seng Index opened 0.4% lower at 23,337.16.
Meanwhile, South Korea’s Kospi was up 0.20% to 2,013.07 and Singapore’s Straits Times Index added 0.04% to 3,178.19.
Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi said the FBM KLCI’s resistance areas at 1,512 and 1,531 may cap market gains, whilst its firm support areas are located at 1,495 and 1,510.
“Due to the marginally firm US markets last night, we may see the FBM KLCI in a range trading mode today too – with good buying activities that may see profit-taking in the later part of the day.
“The FBM KLCI created a new all-time peak at 1,531.99 on Nov 10. A temporary correction low had been formed at 1,474.02 on Nov 29,” he said in a note Dec 15.
The FBM KLCI remains trapped between the low of 1,474 and the high of 1,531 for now, with some possible upside potential, said Lee.
Among the gainers in early trade this morning, Tradewinds added 17 sen to RM5.95, CBIP rose 13 sen to RM3.71, Quality Concrete was up 10 sen to RM1.49, Supermax and IJM PLANTATION []s added nine sen each to RM4.44 and RM3.09, Kulim rose eight sen to RM13.10, Fima Corp and RHB Capital added seven sen each to RM5.60 and RM8.49, CIMB up six sen to RM8.66 while Maybank and Petronas Chemicals rose two sen each to RM8.50 and RM5.57.
KNM advanced in active trading after Maybank IB Research maintained its buy call on the stock and raised its target price to RM3.10 from RM2.20. The stock was up 14 sen to RM2.47 with 13.44 million shares done.
Other actives included Fitters, Olympia, Petronas Chemicals and Careplus.
Decliners at mid-morning included Tasek, KLK, Glenealy, MNRB, Tan Chong, Top Glove and PPB. (Surin Murugiah , theedgemalaysia.com)
NEW YORK: U.S. stocks eked out gains and U.S. Treasuries prices slumped on Tuesday, Dec 14 after the U.S. Federal Reserve showed no signs of curtailing its economic stimulus measures and U.S. retail sales data signaled an accelerating economic recovery.
The dollar edged higher against the euro and the yen after the Fed modestly upgraded its evaluation of the U.S. economic recovery and reaffirmed its commitment to purchase $600 billion in government bonds to boost the economy.
"The economic recovery is continuing, though at a rate that has been insufficient to bring down unemployment," the Fed said in a statement at the conclusion of a one-day meeting.
The Dow Jones industrial average touched a more than two-year high, and world stocks inched closer to overall two-year highs. Benchmark U.S. Treasury 10-year yields hit their highest levels in since May on signs of accelerating economic growth.
The government on Tuesday reported that U.S. retail sales rose for a fifth straight month, and the producer price index, a measure of business costs, increased more than expected, seen as a positive sign of demand.
"I'm slightly disappointed that the (Fed) doesn't see the world in the same light that investors do," said Andrew Wilkinson, senior market analyst at Interactive Brokers in Greenwich, Connecticut.
"The Fed continues to say that the outlook for employment and spending isn't as strong as the market perceives it."
Investors also kept their sights on a deal worked out between U.S. President Barack Obama and Republican lawmakers to extend tax cuts, jobless benefits and a payroll tax credit, which is expected to also boost the economy.
Wall Street did temporarily turn negative, weighed by declining bank shares after the Fed statement as hurt by a plunge in the stock of Best Buy Inc, the top U.S. electronics retailer that is seen a bellwether in consumer electronics. Best Buy shares fell 15 percent after it reported a drop in quarterly profit and sales and cut its full-year outlook, citing weak demand in its key U.S. market.
The Dow Jones industrial average was up 47.98 points, or 0.42 percent, at 11,476.54. The Standard & Poor's 500 Index was up 1.13 points, or 0.09 percent, at 1,241.59. The Nasdaq Composite Index was up 2.81 points, or 0.11 percent, at 2,627.72.
The S&P 500 index is up 6 percent since Nov. 29.
U.S. Treasuries extended losses after the Fed statement, adding to a sharp sell-off as the tax deal sparked concern over faster growth and a widening federal budget gap. U.S. Treasury 10-year yields, which influence consumer and corporate borrowing costs, rose to 3.44 percent from 3.28 percent late Monday.
GLOBAL OPTIMISM
European shares closed higher for a seventh straight session, reversing early losses after the U.S. retail sales data reinforced optimism about the pace of economic recovery. The FTSEurofirst 300 Index finished up 0.3 percent in thin volume.
The MSCI world equity index edged up 0.24 percent, nudging closer to a two-year high set in November. The Thomson Reuters global stock index rose 0.4 percent, and emerging stocks added 0.6 percent.
Currencies fluctuated throughout the day as the dollar temporarily slipped, bouncing back after Fed's announcement. The dollar gained 0.15 percent against a basket of major trading partner currencies and 0.35 percent against the Japanese yen to 83.69. The euro declined 0.07 percent to $1.338.
As the dollar strengthened, spot gold pared gains after rallying to its highest in a week, closing up $1.70, or 0.12 percent, at $1394.80 an ounce.
U.S. crude oil futures also slid after the Fed's announcement, settling down 33 cents, or 0.33 percent, at $88.28 per barrel on the New York Mercantile Exchange. - Reuters
TOKYO: Japanese manufacturers' business sentiment worsened for the first time in nearly two years in the three months to December, a Bank of Japan survey showed, as they felt the pinch from a strong yen and slowing exports, according to a Reuters report on Wednesday, Dec 15.
The headline index measuring big manufacturers' sentiment was plus 5 in December, worsening from plus 8 in September though above a median market forecast of plus 3. It was the first deterioration in sentiment in seven quarters.
The index for March next year was seen at minus 2, showing that companies expect business conditions to worsen over the next three months.
The tankan survey for the three months to December also showed big firms plan to increase capital spending at a slightly faster pace than expected in the year to March 2011.
Big firms plan to raise their capital spending by 2.9 percent in the current business year to March 2011, more than the market's median forecast for a 2.7 percent rise, the survey showed.
The sentiment indexes are derived by subtracting the percentage of respondents who say conditions are poor from those who say they are good. Negative readings mean pessimists outnumber optimists. - Reuters
I am sure those who held KNM shares, were in happy mood today especially when its shares goes up. At 9.45am, KNM was up 14 sen to RM2.47 while its call warrants, KNM-CE rose 1.5 sen to 16 sen with 20.12 million units done.
The FBM KLCI rose 0.31 of a point to 1,510.89. Turnover was 213.36 million shares valued at RM233.46 million. Gainers led losers 201 to 142 while 217 stocks were unchanged.
According to OSK Research, its still maintain trading buy on the stock with a higher target price of RM2.96 from RM2.22. The reason of maintaining on Trading Buy on call of KNM is based on a higher PER valuation of 12x (previously 9x) FY11 EPS.
Oh my. Look what I found when I read "The Edge Online Malaysia". A news flash reported by Joseph Chin around 7:54pm. It says The two Naza brothers -- Sheikh Mohd Faliq SM Nasimuddin Kamal and Sheikh Mohd Nasarudin have resigned as directors of KUMPULAN JETSON BHD.
It is believed that their resignations came into effect the same day that is Monday, 13th December 2010.
On Monday morning the FBM KLCI is up, perhaps this is due to the the increased of privatisations and acquisitions lately. Stocks on the volume and gainers list certainly reflected this sentiment.
When observe, DRB Hicom Bhd was up on 5 sen to RM1.85 since it was on talks that it has put in a bid for Khazanah Nasional Bhd's 32% stake in Pos Malaysia Bhd.
As for the Auto player MBM Resources Bhd, it was also up 22 sen to RM3.45 on talks of a possible tie up.
Meanwhile in the wake of stronger November loan data, the People's Bank Of China (PBOC) hiked the reserve requirement ratio (RRR) by 0.5% points, bringing the ratio for big banks to 18.5% and for mid- and small-sized banks to 15%, effective from Dec 20.
Given the strong loan growth in November and rising inflation pressure, the RRR hike was expected. Some analysts believe the PBOC will raise the RRR 2 to 3 times and hike interest rates 3 to 4 times by the end of 2011.
In the US. consumer confidence, as measured by the Thomson Reuters-University of Michigan survey, grew at a faster pace than expected, giving retailers encouragement as the holiday retail season carries on. The survey reached 74.2, its highest level since Jun and third highest since early 2008, before the housing bubble tipped the economy into recession.
At 10.33am, the FBM KLCI was up 3.51 points to 1,510.79. There were a total of 302 gainers and 196 losers with 219 stocks unchanged.
NEW YORK: The December rally may be reaching its climax, with just two weeks to go before Santa Claus makes his midnight run. Dwindling volume, excess optimism, and history all point to a stock market that could be running out of steam.
Investors appear to have grown complacent as the CBOE Volatility Index, or VIX, has fallen to levels not seen since April. Stocks have made new highs on almost a daily basis. The S&P 500 closed on Friday at its highest level since September 2008 and the Nasdaq scored its best finish since late December 2007, with many expecting gains to run through the end of the year.
But Cleveland Rueckert, an analyst at Birinyi Associates in Stamford, Connecticut, believes the year-end rally may be largely done.
"The majority of that gain may already have occurred," he said. "Most people are more likely to be closing out their books at the end of the month and looking for opportunities to open new positions at the start of the next month."
Rueckert said that over the last 65 years, when the S&P 500 has rallied at year's end, the average gain has been 3.4 per cent between Thanksgiving and New Year's. So far, the index has risen 3.5 per cent since the start of the period.
"A lot of stocks this year have had very big gains and it really wouldn't be surprising to see a lot of the managers close out positions and take some vacation time," he said.
When trading resumes on Monday, that will start the last five-day trading week before Christmas. The following week will be cut short by the holiday. With December 25th falling on Saturday this year, the US stock market will be closed on Friday, December 24th, in observance of the Christmas holiday.
Inflation data for November will dominate next week's economic calendar, with the US Producer Price Index due on Tuesday and the US Consumer Price Index set for Wednesday.
BULLS IN THE EGGNOG
Some see signs of the bulls getting into the eggnog.
The American Association of Individual Investors' latest sentiment survey shows bullish sentiment reached a four-week high. What's more, bullish sentiment has spent 14 weeks above its historical average -- its longest streak in six years.
That is often seen as a contrarian indicator.
This week, the S&P 500 has broken through closely watched resistance levels and has climbed for six of the last eight days to close at fresh two-year highs.
But gains have been accompanied by decreasing participation. Average volume during the last three days of the week was US$7.76 billion, well below this year's daily average of US$8.62 billion.
"We are entering now the beginning of the seasonal pattern where volume really dries up," said Nicholas Colas, chief market strategist at the ConvergEx Group in New York. "It seems like it's starting a little sooner than usual. -- Reuters
Berjaya Sports Toto Bhd, a Malaysian lottery-operator, was cut to “neutral” from “outperform” at Credit Suisse Group AG after reporting weaker fiscal-first half earnings.
The share price estimate was reduced to RM4.30 from RM4.60, Loke Foong Wai, an analyst at Credit Suisse, said in a report today. -- Bloomberg
SEOUL: South Korea is seeking to extend a long-term liquefied natural gas (LNG) import contract for stable supply with Malaysia as the contract is set to terminate in 2015, the Korean government said in a statement on Friday, Dec 10.
South Korea, the world's No.2 LNG buyer after Japan, imported 25.8 million tonnes of LNG last year. Of the total, Malaysia accounted for 23 percent, third after Qatar and Oman, industry data showed.
Figures were not available to show what proportion of total LNG imports from Malaysia the 2015 contract accounted for.
South Korean Minister of Knowledge Economy Choi Kyung-hwan had also sought Malaysian government cooperation in developing oil fields at a meeting on Friday with his counterpart in Malaysia, the statement added. - Reuters
At 9.10am, it was up 10 sen to RM3.89 while the call warrants, Gamuda-CD climbed five sen to RM1.67.
However, the FBM KLCI slipped 1.96 points to 1,519.33. Turnover was 65.65 million shares valued at RM67.25 million. Gainers led losers 116 to 67 while 116 counters were unchanged.
According the Hwang DBS Vickers,Gamuda remains on its high conviction list.
Since Gamuda is looking to bid for the Qatar MRT project next year worth US$45bn (RM141 billion). This target completion date is 2021, ahead of the FIFA World Cup in 2022.
It tells Bursa it’s not aware if Syed Mokhtar mulling privatising conglomerate
KUALA LUMPUR: DRB-HICOM Bhd yesterday announced it was not aware of any proposal to privatise the company after a report speculating such an action was being mulled by its controlling shareholder Tan Sri Syed Mokhtar Albukhary was published.
DRB-HICOM wishes to state that the company is not aware of such proposal nor have we received any notice whatsoever to that effect from our holding company, Etika Strategi Sdn Bhd, it said in reply to a query from Bursa Malaysia.
It was reported yesterday that Syed Mokhtar was considering privatising DRB-HICOM in a RM2bil exercise or between RM2.20 and RM2.70 a share. The report said he was being advised by Maybank Investment Bank Bhd.
Shares in DRB-HICOM Bhd rose marginally in the morning but closed down 5 sen at RM1.65 ahead of the statement by the company.
DRB-HICOM stock, however, has been rising steeply in recent days. Just this month alone, prior to the fall yesterday, the stock was up 28.8%.
For the past six months to its recent high on Wednesday, DRB-HICOM shares have appreciated by 66.7%.
The company is generally not tracked by analysts given the sprawling nature of its businesses that include primarily automobiles, property and services.
Recently, it announced net profit more than doubled to RM132.2mil for the second quarter ended Sept 30 compared with RM61.7mil in the previous corresponding period.
During the quarter, however, the company wrote back RM71.22mil in negative goodwill following the absorption of Edaran Otomobil Nasional Bhd as a wholly-owned subsidiary.
For the six months to end-September, DRB-HICOM's net profit improved 166% to RM290mil from RM109mil a year ago.
Its automotive business contributed RM1.84bil or 57.4% of the company's revenue for the six months under review, services contributed RM1.31bil or 40.9% while the property and infrastructure business earned RM53.9mil or 1.7%.
The company has announced plans for more balanced contribution from its divisions in the medium term as it rolls out strategies to improve the contribution of its services, which includes Bank Muamalat and concessions such as Alam Flora and Puspakom, and property arms.
In terms of immediate new businesses, the group had said it expected negotiations with Volkswagen AG regarding assembling cars at its Pekan automotive complex to be completed this month.
Regional distribution is part of the deal with Volkswagen and the group is also looking at hybrid and electric cars with the German auto giant. (The Star Online)
KUALA LUMPUR: DRB-HICOM Bhd yesterday announced it was not aware of any proposal to privatise the company after a report speculating such an action was being mulled by its controlling shareholder Tan Sri Syed Mokhtar Albukhary was published.
DRB-HICOM wishes to state that the company is not aware of such proposal nor have we received any notice whatsoever to that effect from our holding company, Etika Strategi Sdn Bhd, it said in reply to a query from Bursa Malaysia.
It was reported yesterday that Syed Mokhtar was considering privatising DRB-HICOM in a RM2bil exercise or between RM2.20 and RM2.70 a share. The report said he was being advised by Maybank Investment Bank Bhd.
Shares in DRB-HICOM Bhd rose marginally in the morning but closed down 5 sen at RM1.65 ahead of the statement by the company.
DRB-HICOM stock, however, has been rising steeply in recent days. Just this month alone, prior to the fall yesterday, the stock was up 28.8%.
For the past six months to its recent high on Wednesday, DRB-HICOM shares have appreciated by 66.7%.
The company is generally not tracked by analysts given the sprawling nature of its businesses that include primarily automobiles, property and services.
Recently, it announced net profit more than doubled to RM132.2mil for the second quarter ended Sept 30 compared with RM61.7mil in the previous corresponding period.
During the quarter, however, the company wrote back RM71.22mil in negative goodwill following the absorption of Edaran Otomobil Nasional Bhd as a wholly-owned subsidiary.
For the six months to end-September, DRB-HICOM's net profit improved 166% to RM290mil from RM109mil a year ago.
Its automotive business contributed RM1.84bil or 57.4% of the company's revenue for the six months under review, services contributed RM1.31bil or 40.9% while the property and infrastructure business earned RM53.9mil or 1.7%.
The company has announced plans for more balanced contribution from its divisions in the medium term as it rolls out strategies to improve the contribution of its services, which includes Bank Muamalat and concessions such as Alam Flora and Puspakom, and property arms.
In terms of immediate new businesses, the group had said it expected negotiations with Volkswagen AG regarding assembling cars at its Pekan automotive complex to be completed this month.
Regional distribution is part of the deal with Volkswagen and the group is also looking at hybrid and electric cars with the German auto giant. (The Star Online)
Well, looks like Property and CONSTRUCTION related counters, are getting advanced in early trade on Friday, Dec 10. This indeed shows a positive sentiment to the property sector.
At 9.51am, KYM was up 18 sen to RM2.60 while its warrants, KYM-WA added 20 sen to RM2.04. Landmarks gained 14 sen to RM1.51, Melati Ehsan added seven sen to 77 sen while YTL Land advanced seven sen to RM1.31.
The 30-stock FBM KLCI fell 1.92 points to 1,519.37, dragged by losses in Tenaga. Turnover was 265.52 million shares valued at RM353.93 million. There were 197 gainers, 193 losers and 220 stocks unchanged. (The Edge Online Malaysia)
The Dow Jones industrial average gained 13.32 points, or 0.12 percent, to 11,372.48. The Standard & Poor's 500 Index gained 4.53 points, or 0.37 percent, to 1,228.28. The Nasdaq Composite Index gained 10.67 points, or 0.41 percent, to 2,609.16.
At Bursa Malaysia, stocks to watch are Paramount Corp Bhd, BINA PURI HOLDINGS BHD, Dayang Enterprise, semiconductor-related companies and KEY WEST GLOBAL TELECOMM unications Bhd.
Paramount Corp Bhd has declared a special dividend of 40 sen per share.
The dividend would go ex on Dec 21 and the entitlement date would be Dec 23
Paramount, had on Dec 1, completed the sake of its 20% stake in Jerneh Insurance Bhd to ACE INA International Holdings Ltd for RM130.8 million cash.
The Edge FinancialDaily reports the share price gyrations seen in Key West of late could just be the tip of the iceberg.
n response to a query from Bursa Malaysia Securities over the sharp fall in price and high volume of trading of the company’s shares, it said it was unaware of the factors.
It had on Nov 26, announced a proposed private placement of up to 10% of the issued and paid-up share capital.
Key West suffered two years of consecutive losses and the board had proposed several options to increase sales and profit margin coupled with effective costs management.
“The board will also look into various other options, which may include but not limited to possible disposal of loss-making subsidiaries or diversifying into new viable business,” it said.
Semicon-related stocks could benefit from the firmer close on Nasdaq after solid outlooks from Texas Instruments Inc and Novellus Systems Inc.
Dayang Enterprise has proposed to dispose of its 40% stake in Borcos for RM135m cash.(The Edge Online Malaysia)
Berjaya Sports Toto Bhd, a Malaysian gaming company, was upgraded to “buy” from “hold” at ECM Libra Capital Sdn Bhd after the government gave a green light to cut lottery prize money.
Its share forecast was raised to RM4.73 from RM4.53, ECM Libra analyst Yin Shao Yang said in a report today. -- Bloomberg
KUALA LUMPUR: Shares of InchKenneth Kajang plc inched up in active trade on Wednesday, Dec 8 after it agreed to dispose of two parcels of land for RM268.5 million.
At 9.11am, it was up 0.5 sen to 83.5 sen with 4.23 million shares done.
The FBM KLCI jumped 8.99 points to 1,510.73. Turnover was64.35 million shares valued at RM75.6 million. Gainers beat losers 173 to 41.
On Monday, InchKen announced it had agreed to sell the land in Semenyih to UEM Land Bhd for the latter’s proposed integrated township project.
Investors would also be awaiting details from InchKen about the proposed use of the funds after the disposal.(The Edge Online Malaysia,by Joseph Chin)
According to the OSK Research today, its still maintaining Neutral on Petronas Chemicals Group Bhd and retains its FY11-12 forecasts following the latest corporate development involving its parent Petroliam Nasional Bhd and BASF.
Based on the MoU last Friday, Petronas and BASF will undertake a joint feasibility study to produce specialty chemicals in Malaysia and are considering investing RM4.0 billion (€1.0 billion).
OSK Research target price for the company remains at RM5.51 based on a PER of 16 times FY12 EPS.
The research house said BASF is an established petrochemical company and it would also be more commercially viable to jointly undertake the investment since the specialty chemicals may need RM4.0 billion in investments.
It also said that the development of a new specialty chemical products portfolio is in line with Petronas Chemicals’ goal to further grow the downstream petrochemical business as part of its integrated plan to be a key player in the region as well as to spur domestic investment in the O&G and petrochemical industries.
SCOMI ENGINEERING BHD's subsidiary has accepted the contract price of RM494 million from Syarikat Prasarana Negara Bhd (SPNB) for the monorail fleet expansion project.
Scomi Engineering said on Monday, Dec 6 it had received the letter from SPNB dated Dec 3 notifying it of “SPNB’s intent to award to Scomi Rail the contract to perform the project for a contract price of RM494 million, subject to Scomi Rail accepting the said contract price”.
It said Scomi Rail had accepted the contract price and according to the SPNB Notice, a formal letter of award would follow.( The Edge Online Malaysia written by Joseph Chin)
(The Star) - One of the qualities of a great leader is his skill in delivering speeches, said Datin Seri Rosmah Mansor.
“Napoleon Bonaparte could move his tired and injured army to keep fighting regardless of the pain,” she said in her speech at the Malaysian Children’s Speech Competition 2010 yesterday.
She said Prime Minister Datuk Seri Najib Tun Razak hoped that the competition would produce Malaysians who were highly capable in leadership as well as public speaking.
“He understands the importance of public speaking in spreading effective messages or gathering the support of the community to shift society’s paradigm towards a dynamic way of thinking,’’ said Rosmah in her speech which was read by Yayasan Harapan Kanak-Kanak Malaysia (YHKM) media advisory board member Datuk Atiqah Adom.
Rosmah said multimedia presentations could be incorporated into traditional speech-giving methods for effectiveness.
Entering its sixth year, the competition was hosted by Universiti Putra Malaysia and organised by YHKM.
The winner of the Bahasa Malaysia category was Nurul Anis Amral, 12, who gave a speech about embracing independence in Malaysia.
Arathi Jeyaratnam, 12, from SK Marian Convent, Ipoh, was first in the English language category with her speech, “Our diversity, our strength”.
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“Great leaders make good speeches,” says Rosmah Mansor, Malaysia’s ‘First Lady’. I hope she was just pulling our leg although it is not yet 1st April. If she means what she says then her husband, Najib Tun Razak, is not a great leader because he makes awful speeches, as you can see below.
SEE VIDEO ON YOUTUBE HERE: http://www.youtube.com/watch?v=LwNLT428PqU
What kind of speech was that? It is the lowest class speech I have ever heard. He was patronising the crowd and treating them like country bumpkins.
If you judge a leader by the speeches he or she makes then Anwar Ibrahim can be considered a great leader. Even his enemies admit that he is a great orator, far superior to Najib. Would Rosmah admit that based on Anwar’s oratory skills he is a great leader?
Adolf Hitler was a great orator. He made wonderful speeches. According to Rosmah’s guidelines Hitler was a great leader. Well, tell that to the Jews, French, English, Dutch, Poles, and so on, and see whether they agree with you that Hitler was a great leader.
There were many ‘great leaders’ since time immemorial who were great orators and could move mountains with their oratory skills but were the worst leaders in history. They were cruel and violent. They conquered smaller countries that were helpless. They launched ethnic cleansing and exterminated entire populations. And much more.
To many Iraqis, Saddam Hussein was a great leader. His speeches could move people to tears. Closer to home, Sukarno of Indonesia was an example of a great leader. While Marie Antoinette, the French Queen, asked her people to eat cake, Sukarno asked his people to eat rats as long as they can ganyang (whack) Malaysia. And the Indonesians cheered and cried and treated Sukarno as a ‘God send’.
A great leader is not one who can talk or make wonderful speeches. It is one who is able to walk the talk or practice what he or she preaches. Talking is cheap. Anyone can talk. It is delivering what you say that really matters.
What kind of education is Rosmah subjecting the Malaysian youth to? She is teaching them that you must know how to talk, not how to walk the talk. Speeches must come from the heart. Only then will you mean what you say and say what you mean (bikin serupa cakap dan cakap serupa bikin, as the Malays would say).
We have had enough of talk-only leaders. The world is in a mess because of these talk-only leaders. The UN is a ‘talk shop’. NATO is ‘No Action Talk Only’ oganisation. The OIC is a ‘oh, I see’, another talk shop where the Muslims whack the ‘infidels’ and immediately afterwards Muslims make deals with the ‘infidels’ and sell out their brother Muslims. The OIC is the worst example of the hypocritical ‘Muslim Brotherhood’. But their leaders deliver great speeches.
We have had enough of leaders who are just great at talking but are not able to walk the talk. We want to see leaders who can deliver and who mean what they say and say what they mean. The entire world is in chaos because of leaders with great oratory skills. Malaysia too has its share of ‘great leaders’ who pandai cakap (clever at talking) but do not mean a word they say.
How can Najib be a great leader when he screams 1Malaysia in front of the Chinese and Indians and swears to uphold Ketuanan Melayu in front of the Malays? Maybe the fact that the Malays, Chinese and Indians all support him in spite of these contradicting signals is a mark of a great leader.
They say you can fool some of the people all the time, all the people some of the time, but not all the people all the time. And in Najib’s case he appears able to fool all the people all the time.
I suppose this makes him a great leader because not many are capable of doing this. But then with the rakyat Malaysia being bodoh (stupid) this is not that difficult to do.
UEM LAND HOLDINGS BHD [] is buying two parcels of agricultural land from INCH KENNETH KAJANG RUBBER PLC [] for RM268.5 million to be developed into a township in Bangi, Selangor.
UEM Land had on Monday, Dec 6 announced it was buying the 463.51 acres of land in Semenyih, Selangor for a cash consideration of RM13.30 per sq ft.
The indicative market valuation of the land as appraised by Messrs Raine and Horne International Zaki + Partners Sdn Bhd was of RM248.3 million or RM12.30 per sq ft.
UEM Land had stated "the scale of the Bangi land, with a total land area in excess of 450 acres, would provide the opportunity for UEM Land to develop a comprehensive and integrated township".
It also said the group has surplus cash of RM351.5 million as at Sept 30, 2010 and the board intends to fund the requirements through internally generated funds and/or bank borrowings.
It said the Bangi land is adjacent to the Alam Sari township and Universiti Kebangsaan Malaysia, and is within the vicinity of Bandar Baru Bangi.
“Whilst the Bangi land is currently classified for agricultural land use and is an oil palm PLANTATION [] estate, approval for conversion to mixed development status was obtained by IncKen in 2007,” it said.
UEM Land said the proposed acquisition was part of its strategic plan where one of the objectives was to secure at least one new township development outside Nusajaya by 2015.
This was to enable the group to diversify its development portfolio and revenue sources outside Nusajaya in order to achieve its long term growth strategy.
“The scale of the Bangi Land, with a total land area in excess of 450 acres, would provide the opportunity for UEM Land to develop a comprehensive and integrated township,” it said. (The Edge Online written by Joseph Chin)
The FBM KLCI slipped below the 1.500 level at mid-morning on Monday, Dec 6 amidst cautious trade after the marginally weaker close on Wall Street last Friday on the back of conflicting economic data, including higher retail sales but worse than expected unemployment claims.
At 10am, the FBM KLCI fell 1.45 points to 1,499.53, weighed by losses including at DiGi, MISC, Genting and Maybank. Gainers led losers by 195 to 174, while 193 counters traded unchanged. Volume was 143.75 million shares valued at RM152.37 million.
At the regional markets, Japan’s Nikkei 255 slipped 0.30% to 10,147.45 and South Korea’s Kospi was down 0.16% to 1,954.19.
The Shanghai Composite Index gained 0.23% to 2,849.05, Taiwan’s Taiex rose 0.84% to 8.696.60, Singapore’s Straits Times Index was up 0.81% to 3,198.15 while Hong Kong’s Hang Seng Index opened 0.7% higher at 23,482.13.
On the Malaysian market, RHB Research Institute Sdn Bhd said Friday’s closing proved its concerns valid, as the FBM KLCI failed to earn a confirmation candle on Friday to secure further upside potential on the chart.
In fact, with a “dark cloud cover” candle on the board, plus the flabby technical readings overall, investors may continue to unload, fearing further deterioration on the technical layout, it said.
The research house said the immediate support levels near the 10-day and 40-day Simple Moving Averages of 1,494 and 1,498 should hold the index’s downside to avoid further profit-taking pressure.
“Otherwise, the index would head towards the recent low of 1,474 and the critical level of 1,450. Losing 1,450 will kick-start a major correction signal on the 20-month uptrend on the FBM KLCI, we fear,” it said.
DiGi fell 42 sen to RM24.38; MAHB fell 38 sen to RM5.86, EON Capital, Daibochi and Hong Leong Bank lost nine sen each to RM6.85, RM2.50 and RM9.40 respectively, MISC, QSR and KNM fell seven each to RM8.72, RM5.69 and RM1.93 respectively, Genting down six sen to RM10.60 and Maybank fell two sen to RM8.46.
Gainers included Nestle, PacificMas, BAT, Batu Kawan, KLK, Tadewinds, Dutch Lady and Kluang.
Careplus, which made its debut on the ACE Market today, was the most actively traded counter. The stock added three sen to 26 sen with 12.84 million shares done.
Other actives included Key West, K-Star Sports, Mithril, Baneng, MLabs, Tadewinds Corp, JCY, Scomi and LCL. (The Edge Online)
DiGi.Com Bhd, a Malaysian mobile-phone operator, fell to a seven-week low in Kuala Lumpur trading after terminating an agreement for domestic roaming with U Mobile Sdn Bhd.
Its shares fell 1.7 per cent to RM24.38 at 9:02 a.m. local time, set for their lowest close since Oct. 12. -- Bloomberg
Crude palm oil (CPO) futures on the Bursa Malaysia Derivatives are expected to be on uptrend this week amid bullish sentiments, dealers said.
A dealer said industry players and analysts were generally bullish about the market with improved sentiments.
Prices will remain fundamentally supportive amid concerns over supplies shortage.
Support levels will be at RM3,450 while there will be some resistance at RM3,600, he said.
Meanwhile, cargo surveyor Societe Generale de Surveillance said on Tuesday, exports of Malaysian palm oil products for November rose by 19.2% to 1.569 million tonnes from 1.316 million tonnes shipped during October.
CPO futures had rallied for five consecutive days previous week over improved sentiments and supply concerns.
On a Friday-to-Friday basis, December 2010 contract rose RM200 to RM3,560 per tonne, January 2011 contract surged RM256 to RM3,562 per tonne, February 2011 climbed RM242 to RM3,516 per tonne, and March 2011 increased RM232 to RM3,475 per tonne.
Volume for the week retreated to 97,458 lots from 99,615 lots previously, while the open position declined to 77,910 contracts on Friday from 79,077 contracts previously. As for the physical market, the CPO for December shipment was traded higher at RM3,560 per tonne on Friday versus the RM3,360 per tonne previously. Bernama
KUALA LUMPUR: Following a swift recovery in Asia, along with the prospects of capital inflows into the region, many Asian central banks have voiced concerns about the risk of inflation.
By Q2-2010, the level of economic activity in all Asian economies had returned to pre-crisis levels. In some countries, such as China and Singapore, the current level of activity is 15-20% above pre-crisis levels in real terms.
Meanwhile, although policy rates have been raised in some Asian economies, they mostly remain below long-term averages after adjusting for inflation, with many real policy rates still negative.
For Asian currencies, with the exception of the Hong Kong dollar (HKD), all major Asian currencies have appreciated on a nominal effective exchange rate (NEER) basis in 2010. However, the HKD, Korean won (KRW), Indonesian rupiah (IDR), Indian rupee (INR) and Taiwan dollar (TWD) remain below their average nominal effective exchange rate (NEER) levels between 2003 and 2008.
This implies that there is still plenty of scope for interest-rate tightening as well as currency appreciation, in order to pre-empt the risk of consumer- and asset-price inflation.
We also note that Asia is vulnerable to global commodity prices, in particular food and energy, even though we do not expect these to experience a similar short-term spike to that in 2008. Economies with lower GDP per capita are particularly exposed, since they spend a higher proportion of their income on these basic necessities.
China has already flagged the possibility of price controls on selected food and energy products, as well as subsidies for low-income groups. However, the experience of 2008 suggests that these measures will not be effective if global commodity prices are sustained.
Taking into account the current policy stance and historical inflation volatility, we believe that Indonesia, Vietnam, the Philippines and Thailand will be particularly vulnerable to a sudden pick-up in inflation.
Incidentally, Indonesia and Philippines have yet to tighten monetary policy in the current interest-rate cycle. Vietnam has been forced to hike its base rate to support the Vietnamese dong (VND). Such an inflation risk would force policy makers to become more hawkish in 2011.
From interest-rate normalisation to tightening
Taking stock of the current recovery, we note that all the Asian economies had made a full recovery from the global financial crisis by Q2-2010. In China, Singapore, India and Indonesia, the level of economic activity in Q2-2010 was 10- 20% above that of Q2-2008, the pre-crisis level.
That said, we note that growth momentum has slowed in some markets.
Malaysia, Singapore and Thailand contracted on a q/q basis in Q3; this was the second consecutive quarter of q/q contraction for Thailand. This weaker growth momentum is expected to extend into Q4-2010.
Meanwhile, Hong Kong, Taiwan and South Korea have managed to maintain positive q/q growth, but their growth rates have also eased considerably. China and Indonesia are the two economies that have shown some resilience in their recovery momentum.
The deceleration is not surprising, since the inventory restocking in H1-2010 is coming to an end, and we have warned for some time that this one-off boost to growth would fade in H2-2010.
This is being reflected in the moderation in export growth. The important point is that local consumption momentum is still relatively strong, which will still require tightening action by central banks to pre-empt the risk of inflation in quarters ahead.
Job markets in the region have enjoyed a strong recovery. While unemployment rates, as shown in Chart 4, have yet to return to their pre-crisis lows, we observe that all the jobs lost during the crisis have been re-generated.
The positive wealth effect from asset markets, including equities and real estate, has also boosted Asian consumers’ “feel-good” factor. Strong consumption has facilitated headline expansion, but also raised the risk of demand-driven inflation in the region.
Real policy rates in Asia remain accommodative
The current real policy rates for Indonesia, Malaysia and Taiwan are broadly in line with their long-term averages, but not significantly higher.
Hence, these economies can be considered to have neutral interest-rate policies.
For the rest of the region, with real policy rates in outright negative territory, or remaining below their long-term averages, current interest rate policy stances are still accommodative; further tightening is required for interest rates to return to normal.
This does not necessarily imply that Malaysia, Indonesia and Taiwan can sit back and leave their interest-rate policies at current levels. Rising inflation is also pushing real policy rates lower in many economies in Asia.
The year-to-date change in the real policy rate has been negative in Asia, except for India, Thailand, Malaysia and Taiwan.
The drop in real policy rates is driven by higher inflation as well as tepid tightening by the respective central banks. Furthermore, if growth momentum surprises on the upside in coming quarters, the closing of the output gap will accelerate, which would call for even more aggressive action by Asian central banks.
In 2008, many central banks argued that higher inflation, led by an exogenous rise in commodity prices, could not be effectively handled by interest-rate policy.
They believed that the local cost of borrowing would have little impact on calming domestic food and energy prices, owing to the low elasticity of these daily necessities against changes in interest rates.
Hence, core inflation, which excludes food and energy, could be a more effective policy objective for central banks.
Yet in practice, the Bank of Thailand (BoT) is the only central bank in Asia that explicitly targets core inflation. The Bank of Korea (BoK), Bank Indonesia (BI) and Bangko Sentral ng Pilipinas (BSP) are the other three regional central banks that have explicit inflation targets using headline inflation.
Moreover, wage demand, as a function of inflation expectations, is likely to be driven by headline inflation instead of core inflation.
As a result of the improving labour-market conditions, wages are gradually rising. Singapore’s average monthly earnings started to rise on a y/y basis in Q1-2010 after four consecutive quarters of decline. They rose 5.8% y/y in Q2-2010.
After contracting for three quarters between Q1-2009 and Q3-2009, Hong Kong’s nominal wage index has also been improving, recording 2.2% y/y growth in Q2-2010. In some economies, such as Indonesia and Vietnam, headline inflation, instead of core inflation, is important to maintaining local investor confidence in the local currency. Sell-offs in the IDR and VND in the past were often triggered by a rise in inflation expectations, with local interest rates not sufficiently high to protect local-currency asset values.
Therefore, we believe central banks will need to consider raising borrowing costs, even though headline inflation is largely driven by commodity prices, to maintain investor confidence in local currencies.
Currency appreciation will help too
In addition to interest-rate tightening, some central banks in Asia tolerated currency strength in the first three quarters of 2010 to help mitigate imported inflation.
Currency appreciation will also help to manage capital inflows. In particular, India, Thailand, Singapore, Malaysia and Indonesia have led the way in allowing their currencies to appreciate on a trade-weighted, or NEER, basis. These South East Asian currencies have also seen significant gains against the US dollar.
Currency appreciation in Asia did slow entering Q4-2010 as governments and central banks started to become concerned about the impact of currency strength on export performance, especially given the growing headwinds in the US and Europe.
From a historical perspective, the current NEER levels for the Singapore dollar (SGD), Thai baht (THB), Chinese yuan (CNY), Malaysian ringgit (MYR) and Philippine peso (PHP) are above their averages observed between 2003 and 2008 (Chart 8). Meanwhile, the current NEER levels of the IDR, INR, TWD, HKD and KRW remain below their long-term averages.
Taking into account prospects for capital inflows into Asia, we continue to expect Asian currencies to appreciate in 2011, although the extent of such appreciation will be determined by the appetite of central banks and governments. Observing the currency appreciation since the recovery and current levels versus historical averages, Taiwan and South Korea need to permit their currencies to play a much bigger role in fighting inflation.
Since we do not expect any change in the USD-HKD exchange rate link in the foreseeable future, macro-prudential measures, such as those aimed at cooling the domestic residential real-estate market, will have to lead the charge in combating asset-price inflation.
The current inflation picture in Asia: who is at risk?
Inflation across Asia has been generally stable, with the exception of China and Vietnam, where rising inflation trends are drawing the attention of local market participants.
In China’s case, food inflation led to above-average headline CPI inflation between July and October.
This has already led to greater guidance from the authorities on controlling prices, as well as hikes in reserve requirements and interest rates. Vietnam’s consumer price increase in September and October was also sizeable, with the food component contributing as much as 70% of headline inflation.
For the rest of the region, there is little immediate threat of inflation, but one should not be complacent over the speed of the inflation pick-up. In particular, headline inflation tends to correlate closely with food prices, because of the large share of food in household spending in the region. Higher inflation can also strain fiscal policy in the form of higher subsidy payouts and compensation for losses to state-owned enterprises if price controls are implemented.
Our commodity forecasts depict an orderly and modest rise in food and energy prices in 2011; these are factored into our inflation forecast for Asia. Yet, given the inflation spike in 2008 and the fact that underlying growth momentum in Asia continues to be robust, one needs to take into account the upside risk to inflation.
The volatility of inflation should also be noted. Vietnam, Indonesia, the Philippines and Thailand have significant volatility in their consumer-price inflation which implies that the current benign environment could deteriorate more rapidly than other Asian economies. Inflation can rise with a vengeance.
This is essentially because of the greater proportion of household spending by these economies on food and energy, which leaves them exposed to the volatility of global commodity prices.
We also note that price controls, which may be effective in the short run to limit inflation, can exacerbate inflation volatility if the rise in global commodity prices is sustained.
Pent-up price pressure will eventually force the authorities, possibly because of the rapidly expanding fiscal burden of subsidies, to permit price rises. Leakage and smuggling also undermine the efficacy of price controls. One-off price increases in such circumstances are typically large, in order to restore market equilibrium.
The pick-up in lending growth
The picture of credit growth in Asia is mixed. In Hong Kong and Singapore, persistently low local interest rates led to an acceleration in lending growth in Q3 especially for the real estate sector.
This suggests that macro-prudential measures aiming at cooling property speculation have yet to be fully effective. These two economies hence remain the most vulnerable to a further ris e in lending growth.
Meanwhile, China’s lending growth has decelerated, with Beijing scrutinising the quantity of new lending more closely. Lending growth in South Korea, the Philippines and Taiwan was modest in Q3, with less than 2% q/q growth in total credit outstanding.
Credit growth for India, Malaysia and Thailand stood at around 3%. Rising interest rates in these three economies, owing to monetary tightening by their central banks, have brought some moderation in lending growth relative to Q1 and Q2. Thailand’s contraction in credit in Q2 can be attributed to the political unrest in Bangkok in April and May.
Alternative cooling strategies
In addition to policy-rate increases and currency appreciation, Asian governments are also looking at alternative measures to supplement monetary tightening to pre-empt the risk of inflation.
This is particularly important for economies that do not have an active interest-rate policy or whose current interest rate policies are restricted by country-specific issues.
Hong Kong and Singapore are the two economies where monetary policy is conducted via exchange rates instead of interest rates; this monetary policy framework has led to exceptionally low domestic borrowing costs.
Both governments have implemented measures to cool down their residential real estate markets.
FX implications
The FX implications of higher CPI inflation in Asia will depend on the policy response. The key question is wheth er the authorities will tighten monetary policy and allow currencies to appreciate to deal with higher CPI inflation. As a reference, we look at the period from September 2007 to June 2008, when food and energy prices rose sharply.
During this period, all Asia ex-Japan (AXJ) central banks, apart from Bank Negara Malaysia (BNM), raised interest rates. Chart 15 lists the performance of AXJ currencies during this period. The SGD, CNY and TWD were the best performers, whereas the KRW was the worst performer. It should be noted that the sharp depreciation of the KRW from September 2007 to June 2008 was primarily driven by measures to curb short-term foreign borrowing.
In our view, higher CPI inflation will be most positive for the SGD, as Singapore’s FX policy e xplicitly takes account of CPI inflation.
We expect the Monetary Authority of Singapore (MAS) to maintain its current tight exchange-rate policy in 2011, and see a 40% chance that the MAS will opt for further tightening, most likely via a one-off appreciation of the SGD by re-positioning the policy mid-point.
Faster CPI inflation should also be a positive for the CNY, TWD and KRW, as the authorities are likely to combine monetary tightening with exchange-rate appreciation to deal with imported inflation. In 2011, we expect the CNY, KRW and TWD to catch up with the strong 2010 performance of South East Asian currencies.
In contrast, we view upward surprises in CPI inflation as a negative for the VND, INR, PHP, IDR and THB. Vietnam’s rampant CPI inflation, too-low interest rates and widening trade deficit will continue to put upward pressure on USD-VND in 2011.
There is a risk that Bank Indonesia (BI), BSP, the BoT and the Reserve Bank of India (RBI) will fall behind the curve in terms of raising interest, as they are concerned about driving further capital inflows. This will hurt local asset markets and hence currencies.
However, this is not our base case, as we forecast that CPI inflation will remain relatively muted in Indonesia, the Philippines, Thailand and India, whereas we expect Indonesia and the Philippines to raise interest rates in Q1-2011. Hence, for now, we maintain our short-term Overweight FX ratings on the IDR, PHP, THB and INR.
We see the currency implications of sharply rising CPI inflation as broadly neutral for the MYR and HKD. We expect BNM to raise interest rates in Q1, taking the policy rate to 3.50% by end-2011, which should dampen concerns that the central bank will fall behind the curve.
Rates implications
The two key factors to consider when gauging how inflation will impact Asian bond markets are: real yields and the dependence on foreign funding.
Real yields
From a valuation perspective, the lower real yields are, the less cushion they provide against an inflation shock. For example, if real yields are already close to zero, an inflation shock should urge investors to demand higher nominal yields to compensate. Conversely, if real yields are already very high, an inflation shock may have less of an impact, as investors may not necessarily demand higher yields, as returns are still attractive.
In most countries, real yields are lower than long-term averages, which is not surprising given the flood of global liquidity and the flow of funds into EM debt markets. In addition, real yields in developed market such as the US, the UK and Germany are also lower versus long-term averages. We provide a further analysis on individual Asian markets below.
Dependence on foreign funding
The more dependent a market is on foreign funding, the more vulnerable the market will be to an abrupt foreign exodus caused by an inflation shock. Asian local-currency bond markets have seen strong inflows in 2010. The two countries that have seen the strongest inflows are Indonesia, where foreign holdings as a percentage of the total outstanding rose from 14.6% to 30.3%; and Malaysia, where the share rose from 12.4% to 26.8%. In both cases, foreigners accounted more than 100% of the increase in debt stock year-to-date.
Indonesia is Asia’s most vulnerable bond market to an inflation shock.
The real yield in Indonesia of 1.3% is lower than its long-term average of 3.2%; coupled with the fact that the bond market is very dependent on foreign funding, this makes Indonesia the most vulnerable bond market to inflation, in our view.
An inflation shock should result in locals demanding higher nominal yields to compensate for higher inflation. If there is an exodus of foreigners from the market, prompted by higher yields, there is no natural large domestic buyer, as banks (which have historically been the largest holders of Indonesian bonds) have been buying fewer government bonds at the margin amid robust credit growth over the past three years.
Korea and Malaysia are also vulnerable to an inflation shock, but to a lesser extent than Indonesia
Real yields in Korea are very low, at around 0.5% versus the long-term average of 2.2%. Foreign holdings as a percentage of the total outstanding have also been creeping higher this year, to around 15% from 11%.
These two factors put Korea at risk, although to a lesser degree than Indonesia. In Malaysia, foreign participation is very high, which makes the market vulnerable. However, current real yields of around 2% are higher than the long-term average of 1.3%, which will provide some buffer in the event of an inflation shock.
Despite inflation risks in the Philippines and Thailand, dependence on foreign funding is low
The Philippines does not provide data on foreign holdings, but we estimate that they are fairly low at around 6-7% of total holdings, based on custody holdings data.
In addition, onshore liquidity is extremely flush, with banks placing over PHP 1trn daily with the central bank in deposit and repo facilities. So even if foreigners leave the market after an inflation shock, there should still be plenty of demand from local banks, which are the largest players in the market, with around 45% of total holdings.
In Thailand, real yields are very low, which presents a risk. However, foreign participation in the bond market is also considered low, with foreigners owning just 7.5% of total LBs (government bonds) outstanding.
In addition, Thai bond yields have already adjusted significantly higher after withholding taxes were introduced on 13 October. As in the Philippines, even if foreigners flee the market, we believe that sizeable local demand would help to absorb foreign selling. (The Edge Online Malaysia written by Standard Chartered Global Research)
Well.. after watching the market in up and down trend early in this morning. Finally FBM KLCI start to move higher at midday. The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) rose 12.26 points or 0.83% to 1497.68 points at 12.30pm.
According to Hwang DBS Vickers Research, it said that the reason that causing the stocks in region to drive higher is due to the powerful overnight rally on Wall Street. Its key equity indices jumping on 2.0% and 2.3% at the closing bell on the improved sentiment.
KUALA LUMPUR: Shares of K-Star Sports Ltd extended their losses in late morning on Thursday, Dec 2 after hitting limit-down on Wednesday in the absence of negative news.
At 11.41am, it was down three sen to 54 sen with 15.5 million shares done.
The FBM KLCI rose 12.18 points to 1,497.60. Turnnover was 427.83 million shares done valued at RM679 million. Gainers beat decliners 410 to 197 while 272 stocks were unchanged.
K-Star, in response to a query from Bursa Malaysia Securities on Wednesday, said it was not aware of the unusual market activity in relation to the sharp fall of prices of the shares.
The company said it on Nov 26 announced a proposed sponsorship of a Depository Receipts Programme in Taiwan.
It had also proposed to issue up to 75.60 million new shares in K-Star, at an issue price to be determined later, which would be part of the underlying shares for the Taiwan Depository Receipts (TDRs) to be issued and alloted in Taiwan in connection with the proposed TDR programme.
K-Star had proposed to offer up to 24.40 million existing shares, at an offer price to be determined later, by certain existing shareholders of K-Star.(The Edge Online Malaysia)
Malaysia is the fastest growing market for mergers and acquisitions in the Asia-Pacific region as companies seize on record valuations and relaxed takeover rules to catch up with rivals in India and Singapore.
Acquisitions of Malaysian companies almost tripled so far this year compared with all of 2009 to US$21.3 billion, the highest in three years, according to data compiled by Bloomberg. In November alone, Malaysian real estate developers announced three mergers worth almost a combined US$3 billion.
“This is a year of M&A for Malaysia,” said Chay Wai Leong, managing director of Kuala Lumpur-based RHB Investment Bank Bhd, the top-ranked adviser on takeovers of Malaysian companies this year, according to Bloomberg data. “The sentiment is good and there is a recognition of the need for scale.”
The deal rebound came after Prime Minister Datuk Seri Najib Razak last year eased rules governing takeovers, initial public offerings and property purchases as Malaysia faced its first economic contraction in a decade. Najib, 57, is pushing for consolidation after finding during a 2009 trip to New York that the relatively small size of Malaysian companies deterred US investors.
Malaysian mergers have outpaced investment in the Asia- Pacific region, where the US$435 billion of deals announced in 2010 marks a 7 per cent gain from last year, Bloomberg data show.
Carlyle Group, the world’s second-largest private equity company, made a RM1.9 billion (US$602 million) takeover offer for Malaysian fast-food chain operator QSR Brands Bhd, according to a statement on Nov. 25 by Kulim Malaysia Bhd, QSR’s biggest shareholder Kulim rejected the bid on Nov. 29.
‘Off the Radar’
Domestic consolidation has powered Malaysian deals this year, with mergers between local companies accounting for about three-quarters of total acquisitions, Bloomberg data show. The country’s main stock index closed at a record 1528.01 on Nov. 10, and has since lost 0.9 per cent.
Even after the FTSE Bursa Malaysia KLCI Index rose 17 per cent this year, the average company on the gauge has a market value of US$4.9 billion, data compiled by Bloomberg show. That’s 60 per cent smaller than in neighboring Singapore and 57 per cent below counterparts in India. All three countries’ benchmarks include 30 stocks.
“The consolidation is partly driven by the need to boost capacity,” said Tengku Zafrul Tengku Abdul Aziz, chief executive officer of Maybank Investment Bank Bhd. in a telephone interview. “You need scale to compete in Malaysia and to go abroad. Malaysian companies have fallen off the radar of foreign investors for years because they are too small.”
Property Deals
Malaysian tycoon Jeffrey Cheah said on Nov. 24 that he’s merging Sunway Holdings Bhd and Sunway City Bhd, two property and construction companies he controls, in a transaction valued at US$2 billion. IJM Land Bhd and Malaysian Resources Corp Bhd earlier said they planned to swap shares valued at US$2 billion, while state-controlled UEM Land Holdings Bhd made a US$447 million bid for Sunrise Bhd.
“When you have a bigger sized company, of course you can take in bigger jobs and bigger projects,” Sunway’s Cheah told reporters on Nov. 24.
RHB Capital Bhd’s RHB Investment Bank overtook CIMB Group Holdings Bhd to become the No. 1 adviser on acquisitions of Malaysian companies for the first time since at least 2005, working on US$11.5 billion of deals, Bloomberg data show. RHB ranked 7th last year. CIMB, the country’s biggest bank by market value, has arranged US$11.2 billion worth of deals, the data show.
Banks ‘Flush’
Adding to the M&A surge, quantitative easing by the US Federal Reserve has resulted in money flowing into Asia, boosting share prices and making deals more attractive for both buyers and sellers, said Ho Weng Yew, Royal Bank of Scotland Group Plc’s head of banking in Malaysia.
“It’s pent-up demand,” Ho said in a telephone interview. “There haven’t been that many M&A deals in the last three years. Liquidity is not a problem to finance transactions. Asian banks are still very flush.”
Foreign direct investment in Malaysia tumbled 81 per cent to US$1.4 billion in 2009, according to the United Nation’s World Investment Report. Since Najib’s New York trip in November last year, the government has announced an economic transformation program and liberalization measures, including steps to roll back some policies that favored the country’s ethnic Malays and indigenous people.
Najib also dropped a requirement that the country’s Foreign Investment Committee must approve all acquisitions by overseas companies.
Malaysia attracted RM5.1 billion of foreign direct investment in the first quarter of this year, almost matching the total for 2009, International Trade & Investment Minister Mustapa Mohamed said in July. The government forecasts economic growth of up to 7 per cent in 2010, the fastest pace in a decade. -- Bloomberg
“This is perhaps the beginning of a private sector transformation program, catalyzed by what the government has been doing,” CIMB Chief Executive Officer Nazir Razak said in a text message to Bloomberg News. -- Bloomberg
A Malaysian court may have stopped Carrefour from leaving the country following a suit by its local Bumiputera partner, Tan Sri Aziz Shamsuddin.
Aziz, who holds 30 per cent of Carrefour through Hartajaya Harmoni Sdn Bhd, claims he is being oppressed by the French retailer that wants to cash out of Malaysia, court documents show.
The former minister of rural and regional development managed to get an injunction on November 12 from the Shah Alam High Court. This prevents Carrefour from buying his 30 per cent stake.
Six days later, the French retailer cancelled plans to sell its Malaysian business due to low bids and promised to invest and expand instead. That was also the same day that Carrefour, which wanted to remove the injunction, decided to withdraw its application.
Instead, it is appealing but a hearing date has yet to be fixed.
Carrefour, which operates under the name Magnificient Diagraph Sdn Bhd (MDSB), sold a 30 per cent stake in the company to Hartajaya in January 26, 2010. Under Malaysian rules, a foreign retailer must have a 30 per cent local partner.
Hartajaya is majority owned by Tan Sri Aziz Shamsuddin.
Court documents obtained by Business Times revealed that Aziz bought the stake for RM23 million using a RM23 million 10-year loan from Carrefour. The shares were used as security.
On November 4, Carrefour decided to exercise a call option to buy back the stake for the same amount.
Aziz claimed that as an investor, it would not make sense for Hartajaya to buy 30 per cent in MDSB for no return on investment. The remaining 70 per cent is owned by Carrefour Netherland BV (CNBV) (26.06 per cent) Carrefour Malaysia Sdn Bhd (9.33 per cent) and Mildew BV (34.61 per cent).
Aziz, who was made Carrefour’s consultant in 2008, was also instrumental in helping Carrefour grow its business in Malaysia. In 2008, the retailer only had nine stores. Since Aziz came on board, it has doubled the number and has submitted for five new hypermarket sites and seven hypermarket licences.
He argued that Carrefour’s call option is an act of oppression against a minority shareholder. This is the main legal suit. (Business Times)
Read more: Carrefour caught by court order?
Alam Maritim Resources Bhd, a Malaysian oil and gas services provider, was cut to “neutral from “buy” at OSK Research Sdn Bhd on concern that the company may make provisions for doubtful debts.
The share-price estimate was reduced to RM1 from RM1.46, Jason Yap, an analyst at OSK, said in a report today. -(Bloomberg)
Read more: Alam Maritim downgraded to 'neutral'
The FBM KLCI advanced in early trade on Thursday, Dec 2 in tandem with the strong gains at key regional markets following the firm overnight close at Wall Street.
US stocks rose yesterday as several factors, including reports on improving US payrolls and manufacturing, as well as a 17% rise in November auto sales, pointed to a gradual but steady return in consumer demand.
The Institute of Supply Management’s factory index was fairly little changed at 56.6 in November from 56.9 in October, signaling growth was still intact.
Investor sentiment across the region had since earlier yesterday given a slight nudge upwards as China, the UK and Germany also showed marked improvements in their respective purchasing managers’ index, indicating growth in factory output.
The FBM KLCI rose 11.86 points to 1,497.28 at 10am, lifted by gains including at BAT, Petronas Gas, PPB and Petronas Chemicals.
Gainers led losers by 377 to 90, while 171 counters traded unchanged. Volume was 218.88 million shares valued at RM304.35 million. (The Edge Online Malaysia)
iPAD users who use Yes, said to be the fastest mobile internet service with voice, will be able to save RM50 on their Yes ID activation when they buy the Yes Huddle and Apple iPad.
The purchase can be made at the iPad showcase located at the Yes flagship store in Lot 10 , Kuala Lumpur until December 31.
Those who sign-up for a Yes ID between now and December 19 will also get 10 gigabytes of data use for free.
Yes Huddle allows up to five devices - like the iPad, iPhone, and iPod - to connect to the Yes 4G network via WiFi.
YTL Communications Sdn Bhd said the Yes Huddle costs RM399 outright and when combined with the cost of an iPad with WiFi, is still RM50 cheaper than getting an iPad with 3G and WiFi while delivering five times the speed of 3G.
Global trends show that iPad users consume more data, in some instances up to three times more than iPhone users who are already amongst the highest data consumers in the mobile industry.(Business Times)
Well.. market seems still unstable for Wednesday. FBM KLCI was down 6.11 points, or 0.41% at 1,479.12 in early trade on Wednesday, alongside a decline seen among some regional peers due weaker investor sentiment. Turnover was 226.30 million shares done valued at RM281.08 million. There were 121 gainers, 360 losers and 222 stocks unchanged.
Petronas Chemicals Group Bhd, which listed on the Main Market of the local stock exchange last Friday, saw its share price down 4 sen to RM5.31 per share with 10.6 million shares done. QSR Brand Bhd shed 13 sen to RM5.80 per share. Meanwhile, regional peers were mixed in their early trade with Shanghai SE Composite down 0.6% to 2,803.35, Kopsi gained 0.21% to 1,908.66 and Singapore's STI down 0.5% to 3,128,98. The ringgit against the US dollar was quoted at 3.1596 against yesterday's close at 3.1635. Crude oil was up at US$84.27, from yesterday's close of US$84.11. Palm oil futures on the Malaysia Derivatives Exchange was up RM46 to RM3458 per tonne.(Star Online)
Wah Seong Corp, a Malaysian pipe-coating company, was cut to “sell” from “hold” at AmResearch Sdn Bhd to reflect its weak earnings outlook after third-quarter net income slid 60 per cent from a year earlier.
The stock’s fair value was reduced to RM1.80 from RM2.20, Alex Goh, an analyst at AmResearch, said in a report today. -- Bloomberg
Read more: Wah Seong cut to 'sell' at AmResearch
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