Monday, November 30, 2009

DUBAI'S related news

Stocks tumbled Friday afternoon as fears about the fallout from Dubai's debt problems rattled Wall Street in a thinlytraded half-day session following Thanksgiving. The Dow Jones Industrial average fell 1.5%, (-155 pts, close: 10,309.92), after closing Wednesday at a 13-month high. The S&P 500 (SPX) lost 1.7% (-19 pts, close: 1,091.49). The Nasdaq composite lost 1.7% (-37 pts, close: 2,138.44). All financial markets were closed Thursday for Thanksgiving, and the stock market closed at 1 p.m. Friday. Trading volume was very light with many Wall Street pros taking a five-day weekend. U.S. light crude oil for January delivery fell US$1.91 to US$76.05 a barrel on the New York Mercantile Exchange. (CNNmoney)

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The Dubai government shocked global investors late Wednesday by saying it needed at least a six-month defermenton the $60bn in debt owed by Dubai World and Nakheel. Dubai World is the government-owned holding company forDubai, the most populous of the seven Emirates that make up the United Arab Emirates. Nakheel is its real estate arm. Dubai'sconstruction boom has helped transform the Emirate into one of the world's financial centres, as well as a tourist hot spot. ButDubai has not been immune to the real estate collapse that has hit the rest of the world, with values plummeting even as priceyprojects continue to get underway. (CNNmoney)

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The United Arab Emirates’ central bank eased credit for lenders and said it “stands behind” the country’s local andforeign banks as they face losses from Dubai World’s possible default. Banks will be able to borrow money from the centralbank for half a percentage point above the three-month local benchmark interest rate, the Abu Dhabi-based regulator said inan e-mailed statement yesterday. Dubai World, a state-owned holding company struggling with US$59bn of debt and otherliabilities, said Nov. 25 it would seek a standstill agreement with creditors and an extension of loan maturities until at least May30, 2010. (Bloomberg)*


Malaysian construction companies are not likely to be hit by the debt crisis affecting Dubai, said industry players.Dubai has been struggling to ease fears of a massive debt default after it moved to delay repayments at twoflagship firms, which has shook confidence in the Middle East as a centre for investment. Master BuildersAssociation Malaysia president Ng Kee Leen said most of the Malaysian construction companies had either pulled out or were at the tail-end of completing their construction projects there. (StarBiz)

30.11.2009 local business news

Malaysian construction companies unlikely to be hit by Dubai’s debt crisis. Master Builders Association Malaysia (MBAM) president Ng Kee Leen said most of Malaysian construction companies had either pulled out or were at the tail-end of completing their construction projects there. IJM Corp Bhd (IJM MK, Hold, TP: RM4.60) CEO Datuk Krishnan Tan said the company had already completed the bulk of its projects in Dubai. Gamuda Bhd (GAM MK, Buy, TP: RM3.96) official said the company was not significantly exposed to the fallout in the Dubai construction sector. The Iskandar growth region is also not affected by the Dubai crisis. Johor MB Datuk Abdul Ghani Othman said this was because only one company from Dubai, Damac Properties, had invested in a real estate sector in IDR – namely a property project on a 8ha site. (Starbiz)

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Malakoff Corp Bhd, a unit of MMC Corp Bhd, is exploring the possibility of acquiring a substantial stake in the 1,400MW Jimah power plant and the company undertaking its operations and maintenance works. “It is carrying out due diligence on Jimah O&M Sdn Bhd and Jimah Teknik Sdn Bhd and will decide if these are feasible investments,” says a source. “The due diligence, which is expected to be concluded next month, will be on the financial affairs of both companies and include an assessment of the quality of their earnings as well as their cash flow and liabilities,” adds the source. (The Edge)

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DRB-Hicom Bhd is facing problems with Suzuki Motor Corp on its assembly, distributorship and import agreements for Suzuki vehicles in Malaysia, sources say. It is learnt that officials of Japan-based Suzuki Motor are unhappy with the way DRB-Hicom is running the Suzuki business in Malaysia and could look into terminating the agreements in the worst-case scenario. Suzuki Motor’s chief complaints are that DRB-Hicom has not developed and promoted the brand enough or built up the Suzuki network. (The Edge)

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Scomi Group Bhd’s oilfield services business under Scomi Oiltools was awarded a RM17.5m contract to supply specialty drilling fluid chemicals to clients in Malaysia. The contract is for a duration of two years. Scomi said the contract was awarded in August 2009 and to date Scomi Oiltools has started to supply the said product. Scomi Oiltools will supply the product from its plant at the supply base in Peninsular Malaysia. Scomi Oiltools also supplies the product to clients in Sudan, Turkmenistan, Indonesia, Venezuela, Thailand and India. (Financial Daily)

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Bina Puri in talks on RM200m Kota Kinabalu waterfront mall, condo project. Bina Puri Construction Sdn Bhd (BPCSB) MD Datuk Henry Tee Hock Hin said his firm is negotiating with Waterfront Urban Development (WUD) Sdn Bhd to construct a retail mall and condominium at the Kota Kinabalu City Waterfront (KKCW) in Sabah. KKCW is a RM500m JV between WUD and Kota Kinabalu City Hall, and is expected to be completed by 1Q 2011. BPCSB has an existing contract with WUD worth RM30m to lay the foundation for phase one of the development. The firm is also bidding for another contract to build a mall for around RM100m in Kuching, Sarawak. BPCSB already has a contract worth RM60m from the client to lay the foundation of the mall. (BT)

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Penang state government has given the nod to two local companies to build separate monorail test tracks on the mainland. Deputy Chief Minister II Prof P Ramasamy said that the state government has agreed to allow both companies to each build the one-kilometre test tracks, which would be located either in Batu Kawan or Nibong Tebal. Ramasamy said there was no tender called for the project but the two companies had on their own submitted proposals to undertake the project. However, he declined to reveal the names of the companies or other details of the agreement which he said would be unveiled in due course when things firmed up. He also said the state was not forking out any money but only allowing the companies to
build the test track on state land. (Financial Daily)

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Iskandar Malaysia in Johor has attracted RM9bn of new investments this year, exceeding the full year target of RM3bn. Iskandar Regional Development Authority (IRDA) CEO Harun Johari said the bulk of the RM9bn came from local investors and invested in property. Iskandar has drawn RM50.5bn in cumulative investments as at October this yea, more than the RM44.76bn it targeted for the full year. 35% of the RM50.5bn has already been spent on actual work on the ground, said Harun. Although Damac Group, a Dubai property developer, has pulled out of a deal to buy land from UEM Holdings Bhd for RM396.4m, Iskandar has found a “replacement” in the form of a South Korean investor. (BT)

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Enough time for GST implementation. Second Finance Minister Datuk Seri Ahmad Husni said the GST would replace the sales and service tax (SST), and would be implemented 18 months after the second reading of the GST Bill next March. The bill would be introduced in the current sitting of Parliament, ending Dec 15. The Government planned to introduce the GST at 4%, but selected essentials such as rice, sugar, cooking oil, flour and domestic transportation would be exempted. (Starbiz)

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Central Bank of Malaysia Act 2009 repeals the Central Bank of Malaysia Act 1958 to strengthen Malaysia’s resilience to financial crises in a globalised environment. The new Act provides comprehensive provisions to ensure swift and orderly resolution in the event of an imminent financial crisis to reduce its impact and costs to the domestic economy and to sustain public confidence. The Act says, “Provisions have been made for heightened surveillance, pre-emptive actions and resolution powers including the extension of liquidity assistance to entities not regulated by the central bank but which pose risks to overall financial stability.” The exercise of powers for purposes of achieving financial stability shall be decided by the Financial Stability Executive Committee (FSEC). Meanwhile monetary policies would be formulated and implemented by a Monetary Policy Committee (MPC); both committees will be established under the Act. (Starbiz)

Friday, November 20, 2009


CIMB Thai Bank Pcl surged by a record in Bangkok on speculation its Malaysian parent will delist its shares. Theshares jumped by the daily limit of 30% to close at 3.90 baht (39 sen), the best performer in the SET Index, which dropped 1%.The stock has more than doubled in three days and closed at its highest level since September 26, 2003. CIMB GroupHoldings Bhd (CIMB MK, Buy, TP: RM15.00), said on Nov 16 it will be the first overseas company to list its shares on the Thaiexchange. CIMB CEO Nazir Razak said it hasn’t been decided whether to end the unit’s separate listing. CIMB Group plans tosell as many as 35m shares to the public, to become the largest financial services group, and among the top three companiesonce it lists on the Thai exchange. “The news about the dual listing of CIMB Group is probably the main reason for the bank’srecent gain,” said CIMB Thai CEO, Subhak Siwaraksa. (Malaysian Reserve)

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Maxis Bhd (MAXIS MK, Fair value: RM6.10) seeks RM5bn debt, potentially via Islamic bonds. CFO Rosana AnnizahRashid said Maxis is in talks with banks over ‘the most effective cost of borrowing’ and appointed CIMB Investment Bank Bhdas one of its advisers. “The intention is RM5bn,” she said. Islamic bonds, or sukuk, are asset-based bonds that pay a profit rateto investors to avoid the Shariah prohibition on interest. (Malaysian Reserve)

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Maxis Bhd (MAXIS MK, Fair value: RM6.10) may pay higher dividend after IPO. “In the past, after the full-year results” themanagement raised final dividends “and I guess one can expect that mode to continue” said CFO Rossana Annizah Rashid.She declined to say how much the increase might be. Maxis Bhd gained 8.4% on its trading debut. Maxis may rely on dividendpayments and expansion in the Internet market to attract investors as mobile services revenue growth slows in Malaysia –where wireless phone subscriptions exceed the population by 4%. Rival Digi.Com Bhd (Digi MK, Hold, TP: RM20) said on Oct28 that it plans to raise dividend payout ratio to 80% from 75% this year. Maxis CEO Sandip Das says, “We’ve been a strongcashflow company. If you look at our strong cash flow and strong Ebitda margins, we have a strong case of a payout of aminimum of 75%.” The company aims to maintain Ebitda above 50%. (Malaysian Reserve)

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Malaysian Airline System Bhd (MAS) (MAS MK, Sell, TP: RM2.00) has aborted its planned acquisition of TransmileGroup Bhd’s engineering and maintenance unit pursuant to a letter of intent (LOI) signed between the parties on Aug19, 2009. Both parties had agreed not to extend the LOI that expired yesterday, but they “will continue to be in dialogue in theevent that opportunity arises for the parties to pursue the proposed transaction in the future”. They did not provide any reasons.(Financial Daily)

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Malaysian Resources Corp Bhd (MRCB) has priced its share rights issue with an entitlement basis of one-for-two atRM1.12 per share. It said the rights issue would raise gross proceeds of about RM540.7m and RM508.3m under the maximumand minimum scenarios, respectively. MRCB said the issue price was a 13.2% discount to the theoretical ex-rights price ofRM1.29 based on the five-day volume-weighted average market price up to Nov 18, 2009 of RM1.37. (Financial Daily)

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Proton Holdings Bhd will introduce a basic Exora MPV tomorrow, two days before the launch of the new Perodua MPV.The 1.6 litre Exora basic model with manual transmissions is available in three colours at 2 different prices. The solid whitemodel will be sold at an on-the-road price of RM57,548 in Peninsula Malaysia. For the genetic silver and tranquillity blackmodels, both are priced at RM57,998. In comparison, Perodua will sell its first 1.5 litre MPV from RM57,000 to RM65,000. (BT)

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UEM Land Bhd and United Malayan Land Bhd’s (UM Land) 50:50 joint venture, Nusajaya Consolidated Sdn Bhd(NCSB), is acquiring a 2.02 acre or 95,993-sq ft freehold land in Pulai from Bandar Nusajaya Development Sdn Bhd(BNDSB) and UEM Land for RM16.32m cash. UM Land said the Puteri Harbour land measuring 95,993 sq ft would bedeveloped into residential and retail components with an expected development period of four years. It said the grossdevelopment value (GDV) of the entire project was expected to be RM144m while the gross development cost was estimatedat RM112m. (Financial Daily)

Thursday, November 19, 2009


Maxis Bhd (MAXIS MK, Fair Value: RM6.10) has been assigned a weighting of 2.84% in the 30 stock FTSE Bursa
Malaysia KLCI index by FTSE Group, UK-based indices provider. Maxis, which begins trading today (Nov 19) will replace
Malaysian Airline System Bhd (MAS MK, Sell, TP: RM2.00) in the index series. Sector wise, the entry of Maxis into the FTSE
Bursa Malaysia KLCI index will result in the mobile telecommunications sector’s weighting to rise by 2.67% to 9.58% while
banks will see the largest fall, down 0.90% to 35.76% in the industry classification benchmark sector weightings adjustment,
FTSE Group said yesterday. (Malaysian Reserve)
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YTL Communications Sdn Bhd, a subsidiary of YTL Power International Bhd (YTLP MK, Buy, TP: RM2.50), has inked a
long-term agreement with Telekom Malaysia Bhd (TM) (T MK, Buy, TP: RM3.98) on technology collaboration to provide
the first 4G broadband services in the country. The 15-year agreement will allow YTL Communications to ride on TM’s
wholesale ethernet nationwide using the latter’s high-speed broadband (HSBB) infrastructure to provide the first of its kind 4G
ICT services. YTL Communications hopes to start the service by early next year, offering broadband connection with speed of
up to one gigabyte per second (GBps). TM is undertaking the nationwide rollout of the RM11.3bn HSBB project, of which the
government will fork out a total of RM2.4bn in a public-private sector partnership. TM will have up to 800 broadband-enabled
exchanges and 500 new telecentres once the project is competed in 2012. (Financial Daily)
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Axiata Group Bhd (AXIATA MK, Hold, TP: RM2.75) has entered into a memorandum of understanding (MoU) with
China’s Huawei Technologies Co Ltd for a strategic partnership, towards exploring cooperation opportunities and in
search of optimal and mutually beneficial solutions in areas of innovation, procurement and financing. Axiata said through the
partnership, it aimed to improve its revenue stream in the longer term via increased utilisation in terms of network traffic
simulation and faster time-to-market, while reducing costs for the group through significant savings in terms of capital and
operating expenditures. The collaboration on financing would enable it to gain a competitive advantage from having access to
facilities at lower cost, innovative financing structures and flexible financing tenure. The MoU will be valid for two years.
(Financial Daily)
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Wednesday, November 18, 2009


Puncak Niaga Holdings Bhd (PNH MK, Buy, TP: RM3.66) has decided not to pursue a proposed cooperation on water
management and related infrastructure sectors in Banten province, Indonesia. It said a memorandum of understanding
(MoU) it had signed with the provincial government had lapsed yesterday and it would not pursue the matter as not much
progress had been achieved in recent months on the MoU that was signed on Nov 18, 2008. (Financial Daily)
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Petra Perdana Bhd (PETR MK, Buy, TP: RM3.14) and subsidiary, Petra Energy Bhd, have denied reports that Datuk
Bustari Yusof was likely to emerge as a strategic shareholder in Petra Energy by acquiring a 30% stake in parent firm
Petra Perdana. In separate filings to Bursa Malaysia, both firms deny the report that the two firms could undertake a demerger
exercise due to alleged differences between shareholders. However, Petra Perdana was looking into plans to reduce bank
borrowings and other financial obligations, and to internally generate funds for medium term working capital requirements.
These plans included fund raising exercises like disposal of certain assets and investments. (Malaysian Reserve)
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Dialog Group Bhd has proposed a bonus issue of up to 568.3m shares to be credited as fully paid-up on the basis of 2
bonus shares for every 5 existing shares held on an entitlement date to be determined and announced later. Dialog
said the bonus issue was to increase the share capital to a level to better reflect the operations of the company and its
subsidiaries which were global and expanding and the group’s asset base. (Starbiz)
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Naza Group has entered into a building-for-land deal with the Government which will see it receiving 65 acres of prime
land in Kuala Lumpur for building a RM628m expo centre for Malaysia External Trade Development Corp (Matrade).
The centre and other projects planned on the land would have a combined estimated gross development value of RM15bn over
a 10-year period, said International Trade and Industry Minister Datuk Mustapa Mohamed. “We have four international
architects bidding for the master plan and it should be finalised in mid-December,” Naza Group joint group executive chairman
and Naza TTDI Sdn Bhd chairman S.M. Nasarudin S.M. Nasimuddin said. “We plan to build shopping malls, hotels and
offices,” he added. The site would be leased to Naza for 99 years. Naza TTDI, the property arm of the Naza Group, yesterday
signed a privatisation agreement via subsidiary TTDI KL Metropolis Sdn Bhd, with the Government and Syarikat Tanah and
Harta Sdn Bhd (a Minister of Finance Inc company) for the land-for-construction swap. Financing for the construction of the
expo centre would be via a combination of internal funds and bank borrowings and it is expected to begin in the 2Q10 for
completion in 2014. (Starbiz)
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Malaysia Resources Corp Bhd (MRCB) group managing director Shahril Ridza Ridzuan will resign from his current
post effective Nov 30. He will be succeeded by MRCB COO Mohd Razeek Hussain, who will assume the position of CEO
effective Dec 1. MRCB also announced its 3Q results ended Sept 30 yesterday, posting a net profit of R10m against a net loss
of RM26.8m in the corresponding quarter last year. Revenue for the period jumped 43.3% to RM257.1m. Accordingly, net asset
per share increased 72.7 sen as at Sept 30 against 70 sen as at Dec 31 2008. (Starbiz)
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Malaysia Airports Holdings Bhd (MAHB) senior management are to meet with the Board of Airline Representatives
(BAR-Malaysia) today to brief on its long-delayed new incentive scheme for airlines. MAHB managing director Tan Sri
Bashir Ahmad confirmed yesterday the airport operator's plans to brief the airlines today but declined to elaborate. This would
mark the second briefing session between MAHB and BAR-Malaysia this year on the new incentives plan for airlines. The new
incentive programme would be an enhancement of the present one and will take into account the prevailing situation in the
airline industry. "The airline industry has recognised MAHB's support by not only providing incentives, but also supporting
business improvement initiatives," a source said yesterday. It is understood that one of the main features would be a tiered
incentive system based on growth ranging from 15 to 20% and would be applicable across the board to all airlines. The
expected incentive programme is long overdue and will replace the current scheme, which expired in May 2007, but has since
been extended. (BT)
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LCL Corporation Bhd has terminated its S$43.1m (RM104.7m) contract at the Marine project in Singapore and has
accepted S$1.86m as the settlement sum from Marina Bay Sands (MBS) Pte Ltd. The parties mutually agreed to the
termination of LCL subsidiary LCL Furniture (S) Pte Ltd (LCLS) as the trade contractor for the interior fit-out packages, with
retrospective effect from Nov 13. LCL said the development was due to “inconceivable differences arising from financial
commitments with MBS”. (Financial Daily)
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Monday, November 16, 2009


AirAsia (AIRA MK, Buy, TP: RM1.80) sets record with 900,000 seats sold in 48 hours. The low cost airline set a new
international sales record with 402,222 seats snapped up in 24 hours after the launch of its “one million free seats” campaign
on Nov 11. The airline said it sold another 489,000 seats the second day. Regional commercial head Kathleen Tan said Air
Asia’s website registered over 300m hits in the first 11 hours of the campaign. The success of the campaign was attributed to
their powerful blog and social networking platforms. (The Star)
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TA Global Bhd, en route to a listing on the Main Market of Bursa Malaysia, has lined up a series of plans for next year,
including a possible dual listing abroad. Shareholders are looking to list the company either in Singapore or Hong Kong, a
year after its local debut, to build up the brand internationally. TA Global is due to list on Bursa Malaysia on Nov 23. (BT)
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Hektar Real Estate Investment Trust (REIT) expects “better” earnings prospects next year once it completes the
refurbishment of its mall in Melaka. The 15-year old Mahkota Parade, is presently undergoing a RM30m renovation exercise
since August this year and would be relaunched by the 2Q of 2010. “We hope that when Mahkota Parade is relaunched, it will
attract more and better shoppers that will help boost rental income,” Hektar Asset Management’s executive and chief financial
officer Zalila Mohd Toon said. A net profit RM9.59m, or 3 sen per share, was reported for the period between July and
September on the back of RM22.57m in revenue. (Malaysian Reserve)
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Perisai Petroleum Teknologi Bhd is in talks with parties in Australia, Indonesia and India to secure the first contract
for its award-winning mobile offshore production and storage unit (Mopsu). Perisai group CFO Yeo Pek Chin said it
looked forward to securing its first contract, which would keep it busy for “a few” years. He was not able to share any earnings
or revenue projection from these contracts. Yeo said the Mopsu, with a lifespan of 25 years, had the capability to operate water
depths of 80 to 120 metres, depending on its variant or type. It costs about US$70m (RM235.9m) to US$80m to fabricate a
Mopsu. To fund the deployment of the first Mopsu, Perisai recently raised funds via a US$10m redeemable convertible bonds
(RCB), which were fully taken up by a private equity fund in Singapore. As it takes 18 months to fabricate a Mopsu, it is safe to
assume that Perisai may only see earnings in the venture to trickle in from next year onwards. Nonetheless, Perisai had
projected a full-year net profit of RM61.1m for the year ending Dec 31, 2009 (FY09) and RM74m for FY10. (Financial Daily)
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A foreign investor has submitted a proposal for the RM10.24bn project to build an aluminium smelter complex in
Sabah and is awaiting positive response from the state government. Sabah Land Development Board (SLDB) chief
executive officer Jhuvarri Majid said the project vendors hoped to start construction of the complex, with an annual capacity of
620,000 tonnes per annum, by June 2010, provided all the approvals are obtained. “The investors have been engaged in
negotiations with SLDB over the last six months and are confident Sabah can become a major player in aluminium production
in South-East Asia,” he said. (Malaysian Reserve)
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Two-year review bodes well for construction, says Master Builders Association Malaysia (MBAM). MBAM president Ng
Kee Leen says the push by the Government under the 10th Malaysia Plan to monitor and review the construction industry’s
performance over two years instead of five years bodes well for the industry. This approach was supported by MBAM as it
would be more “current” for planning and allowed for better monitoring, thus increasing the prospects of the proposed projects
being achieved. With a shorter timeframe, the construction industry would be able to deliver its role more efficiently, cost
effectively and on time. (Starbiz)
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Exxon Mobil Corporation and Coca-Cola are expected to make substantial investments in the local beverage and gas
sectors soon. Prime Minister Datuk Seri Najib Tun Razak said Exxon expressed its intention to venture into high CO2 content
gas extraction while beverage giant Coca-Cola wanted to build a modern plant in Malaysia. He said, “For Exxon this will require
additional investment as it is a new form of technology,” while adding the project would be located in Kiminis Sabah. Coca-Cola
said the new bottling plant will be using advanced technology. The value of these investments will be announced later as the
Government was still working out details of the tax incentives requested by the companies. (The Star)
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Friday, November 13, 2009


DiGi.Com Bhd (DIGI MK, Hold, TP: RM20.00) believes its Internet division will act as a driver of growth in 2010 and2011, back by its expansion plan, said its CEO Johan Dennelind. He said the internet division, comprising data usage with3G and broadband, had to-date contributed at least RM40m to DiGi’s run rate – based on the amount of sales from its services.Dennelind said DiGi would invest RM300m – RM400m annually in capital expenditure for the 2009-2011 period to grow its 3Gnetwork and “ensure enough capacity to support data”. The company targets six to seven million Internet users from bothlarge-screen PCs and laptops using broadband, and small screen hand phones using 3G by year-end. Currently, DiGi’sbroadband subscribers for the large-screen segment alone number to 30,000. (Financial Daily)

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Genting Singapore plc, a unit of Genting Berhad (GENT MK, Hold, TP: RM7.61) which is the final lap of completing theSingapore casino project in Sentosa, registered a smaller loss of S$93.35m (RM227.48m) on the back of a decreasedrevenue of S$140.73m for the 3Q ended Sept 30, 2009. Genting Singapore said yesterday, revenue came in 19% lower thanthe S$174.65m recorded in the corresponding period last year. In tandem with the lower revenue, its losses were also lowercompared to the S$116.83m incurred in the 3Q last year. Genting Singapore said that so far it has, through its wholly ownedsubsidiary Resorts World at Sentosa Pte Ltd (RWSPL), invested S$6.59bn into the Singapore casino project. As at Sept 30,2009, RWSPL has awarded or committed more than S$5bn in project costs and remains on track for the integrated resort’s softopening by January 2010. (Financial Daily)

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Maxis Berhad (MAXIS MK, Fair Value: RM6.10), a unit of Maxis Communications Bhd, has upped the ante on thebroadband face-off among wireless broadband providers by launching the country’s first made-for-mobile movie.Dimensions, a science fiction movie that has been broken up in 11 five-minute episodes, was launched as a free serviceyesterday in a partnership between Maxis and Measat Broadcast network Systems Sdn Bhd, a subsidiary of Astro All AsiaNetworks plc. Presently, the extent of the partnership is limited to the launch of Dimensions. The movie was written and shotexclusively for the mobile market. This stands to contract to other rich mobile multimedia content, which is often repackaging ofexisting content to fit mobile limitations. Maxis’ CEO Jean-Pascal van Overbeke described the movie as an “investment” toshow Maxis users the full capabilities of their mobile devices through the use of mobile-specific content. The Dimensionsepisodes are available for free at its website. Maxis users and Maxis affiliates from around the globe would also be able toaccess the episodes through their mobile devices with no data or download charges. On the commercial aspects of thisenterprise, van Overbeke said it would depend on customer response to the movie. At this point in time, Dimensions will bemonetised through the availability of accompanying accessories such as wallpapers for download and other associatedmultimedia messaging services (MMS). ”It’s an investment, and we don’t expect to see payback right away.” Van Overbekesaid. “We want to showcase where and what (media streaming) could be like.” (Financial Daily)

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Eastern & Oriental Bhd (E&O) has raised a total of RM236m from its rights issue of irredeemable convertible securedloan stocks (ICSLS), which saw an oversubscription rate of 2.9 times above the minimum level. The ICSLS is expected to belisted on Nov 20, 2009. The ICSLS was issued at 65 sen each, offering a coupon of 8% per annum payable annually and issecured against certain assets of the group. ICSLS holders have the option to convert to E&O shares on a one-for-one basisanytime within the 10-year tenure while E&O has the option to convert after two years of issuance once E&O shares exceedRM1. (Financial Daily)

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Green Packet Bhd aims to reverse losses in its next fiscal year after net loss for the nine months ending 30 September2009 widened to RM81.94m from RM17.91m in the same period last year. Green Packet CEO Puan Chan Cheong said its 4GWiMax operator arm, Packet One Networks (Malaysia) Sdn Bhd (P1), is expected to report profits in the second half next yearafter suffering losses that were resulted by heavy investment in deployment of its wireless broadband. Green Packet incurredcapital expenditure of RM337m since 2008, and RM155m will be invested over the next three quarters. Puan said that resultswill start to be seen two years after their investment. After winning the WiMax license in Singapore recently, Green Packet islooking to bid for two more licences in South East Asia next year. (Malaysian Reserve)* * * * *

Thursday, November 12, 2009


Media Prima Bhd (MPR MK, Hold, TP: RM1.69) is expected to revise upwards its offer for The New Straits Times Press(Malaysia) Bhd (NSTP) shares it does not own by improving the swap ratio. “They are upping the offer from its original oneMedia Prima share for every one NSTP share. The improved offer of 1.1 Media Prima shares for every one NSTP share willvalue NSTP at RM2.20 per share compared with RM2 previously. The revised offer could even go up to 1.2 Media Primashares for every one NSTP share. Regardless, the offer will be upped to at least RM2.20 per NSTP share,” said a source.Apart from a direct swap of shares, Media Prima in its proposal to privatise NSTP is also offering one Media Prima warrant forevery 5 NSTP shares held. In a further move to appease minority shareholders, sources said NSTP could also declare aspecial dividend. Media’s Prima’s proposed privatisation of NSTP is not well received by the minorities of the latter as it is lessthan half its book value and at 18.7% discount to its last traded price of RM2.46. (Financial Daily)

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Bursa Malaysia announced yesterday that Maxis Bhd (MAXIS MK, FV: RM6.10) will be eligible for fast entry into theFTSE Bursa Malaysia Kuala Lumpur Composite Index in accordance with the FTSE Bursa Malaysia Index groundrules. This is because Maxis’ full market capitalisation is expected to exceed 2% of the full capitalisation of the FTSE BursaMalaysia Emas index, it said in a statement. It said that several changes in the FTSE Bursa Malaysia Index series will takeeffect on Nov 20, subject to the listing of Maxis on Nov 19. On the changes, Bursa Malaysia said Maxis will be added to theFTSE Bursa Malaysia KLCI with a shares in issue total of 7.5bn and an investability weighting of 30%. Malaysian AirlineSystem Bhd (MAS) (MAS MK, Sell, TP: RM2.00) will be removed from the index, it said. (BT)

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Malaysia Airlines (MAS) (MAS MK, Sell, TP: RM2.00) is investing a total of RM480m in its Passenger Services System(PSS) over the next 10 years. “We believe that over a period of 10 years, this will provide us benefits worth over RM2bn,” saidmanaging director and CEO Tengku Datuk Azmil Zahruddin. “This is both in terms of revenue for customers due to theenhancement that we are providing as well as better efficiency that we expect to procure from the system,” he said. Theprogramme is divided into five streams – reservation, ticketing, departure control, revenue integrity, and fares management.The system had saved MAS more than RM300m last year. (Malaysian Reserve

Wednesday, November 11, 2009


YTL Communications Sdn Bhd, a subsidiary of YTL Power International Bhd (YTLP MK, Buy, TP: RM2.50) yesterday announced a 4G innovation network that will see the company head a consortium of major industry players. YTL Communications signed agreements with technology players Cisco, Clearwire, GCT Semiconductor and Samsung to develop new products and applications for YTL’s 4G WiMAX network, expected to be rolled out some time in the 2H10. The innovation partnership will help develop key products for YTL’s WiMAX network, such as handsets featuring mobile voice-over-IP (VOIP), a technology that is being pioneered by Samsung. Presently, YTL is planning a launch that will cover the entire nation, which
will make it the first company in the world to do so. The cost of investment is expected to be about RM2.5bn. (Financial Daily)

* * * * *
Maxis Bhd set the price of its IPO shares at RM4.75 each while institutional and cornerstone tranches are at RM5 per share, collectively raising RM11.2bn from listing 2.25bn shares. The market capitalisation at institutional price amounts to RM37.5bn with enterprise value of RM42.5bn. The institutional offering book, excluding the offering to cornerstone and
approved bumiputra investors, was 3.7 times covered (equivalent to RM19.3bn), comprising 500 global investors. The IPO attracted orders over RM26.5bn with strong demand from international and Malaysian investors. Foreign interest came from nstitutional investors familiar with Malaysia, 10 institutional investors new to Malaysia with orders of RM1.3bn, as well as
sovereign wealth funds. The institutional offering will raise RM5.3bn, of which US$800m will be from foreign investors. Bumiputra investors and cornerstone tranches attracted RM5.2bn for 1bn shares. Cornerstone investors include Employees Provident Fund, Fidelity Funds-Malaysia Fund, Kumpulan Wang Persaraan (Diperbadankan) and Permodalan Nasional Bhd. The retail offering of 212.3m shares was oversubscribed by 180% for 381.2m shares worth RM2bn. Upon its listing on Nov 19 Maxis will become a component part of the FTSE Bursa Malaysia Composite Index, and increase capitalisation of the market by 4%. (Star Biz)

* * * * *
Scomi Engineering Bhd and its Brazilian partner CR Al-meida SA Engenharia De Obras have made it past the prequalification stage of the US$1.35bn (RM4.56bn) Sao Paulo monorail job in Brazil. Other companies pre-qualified for the job include Bombardier of Canada, Siemens of Germany and Hitachi of Japan. The next stage for the pre-qualified companies will be submitting of proposals, which has to be done by Dec 21.The pre-qualified companies are required, among others, to design and build the monorail system, and purchase 54 trains with a minimum passenger capacity of 1,000 persons each. The first 2.4km stretch will connect the future stations of Vila Prudente and Oratorio, with testing due by end-2010. The second stage, to be ready in 2011, involves a 10.4km stretch that will continue on to the Sao Mateus station. The complete line to the Cidade Tiradentes neighbourhood is expected to be ready in 2012. (Financial Daily)

* * * * *
Green Packet Bhd (GPB) is proposing a 10% private placement of up to 84.8m new shares of 20 sen each towards raising additional funds expeditiously and strengthening its balance sheet position without incurring interest costs as opposed to bank borrowings. Green Packet group managing director CC Puan said the exercise may also broaden its institutional investor base. Green Packet said the issue price would be determined and fixed by the board once approval had been sought from the relevant authorities. It said both its major shareholders, Green Packet Holdings Ltd (GPHL) and OSK Technology Ventures Sdn Bhd, had indicated their intention to participate in the proposed placement. It added that the placement shares were also proposed to be placed out to independent third-party investors to be identified later. (Financial Daily)

* * * * *
Malaysian Resources Corporation Bhd (MRCB) has made a foray into the Australian property development market, through its wholly-owned subsidiary Bitar Enterprises Sdn Bhd which acquired 70% equity interest in Australian company Yes 88 Pty Ltd. MRCB is forking out some A$6.57m (RM20.64m) for the Australian venture, entering into a shareholders and subscription agreement with 3 individuals and shareholders of Yes 88 – Chong Kai Wai, Tam Cheok Wing
and Chang Chai Kin – who are Malaysians involved in the property development business in Australia. MRCB and the existing shareholders of Yes 88 are planning to jointly develop 2 four-storey buildings to be utilised as residential dwellings and student accommodation on the parcel of land. The estimated gross development value is A$54.8m. MRCB said that this acquisition,
“will provide an inroad for MRCB to expand its property business in Australia”. (Financial Daily)
* * * * *

Tuesday, November 10, 2009

TALAM in trouble? Water stocks in deadlock again

The Selangor government has given Talam Corporation 3 months to settle a total of RM391m in debts owning and dueto the state for its failure to deliver on a number of projects, said Menteri Besar Tan Sri Khalid Ibrahim. Simultaneously,the state assembly yesterday approved a supplementary budget of RM391m to Menteri Besar Inc (MBI) pursuant to the debtrecovery exercise. MBI will buy the debt from the state government and assume responsibility to recover the debt owning fromTalam. Khalid said the RM391m debt owning from Talam stemmed from several real estate development joint ventures withstate subsidiaries over the past 10 years. The debt collected will be injected into the state consolidated funds. Khalid said thestate would undertake an audit of the state subsidiaries accounts and had determined that over RM500m was owing to Talam,which disputed the figure. He added that both parties settled for RM391m. (Financial Daily)

After several failed attempts, the Selangor government has finally given up on its planned acquisition of the state’swater assets and is now in discussions with Pengurusan Aset Air Bhd (PAAB) to consolidate the water industry.Selangor Menteri Besar Tan Sri Khalid Ibrahim said the contentious issues expected would be the valuation of the water assets(an estimated price between RM7bn and RM11bn) and control over distribution rights. Asked what his asking price is, Khalidreplied: “RM11bn.” The Pakatan Rakyat-led state government had wanted to undertake the exercise itself, before selling theassets to PAAB, to have a better control of distribution rights. Khalid said the state had to concede to the operators sellingdirectly to PAAB after Puncak Niaga Holdings Bhd (PHNB) rejected the state’s latest offer to take over its water assets andliabilities, although Gamuda Bhd and Konsortium Abass Sdn Bhd had accepted the offer. Khalid is confident that PAAB wouldwant to “work together” with the state on the water consolidation exercise, as they too had to cooperate with each other,particularly on the supply of water from Pahang whereby the acquisition of land would be an issue. (Financial Daily)

Monday, November 9, 2009


Sime Darby Bhd (SIME MK, Hold, TP: RM8.10) which owns 220,000ha of oil palm estates in Liberia, plans to strengthen its presence on the African continent and is eyeing more land in Cameroon, Congo and South Africa. Sime Darby Plantation Sdn Bhd managing director Datuk Azhar Abdul Hamid said the conglomerate's plantation arm had received many invitations to Africa. "But nothing has been formalised and we are still at the early stage. In Liberia, we already have a team on the ground," Azhar said. Azhar said the expansion is part of a long-term strategy to double planted areas to one million hectares and be nearer to the growing markets of Europe and the US. (BT)

* * * * *
Pelikan International Corp Bhd (PELI MK, Buy, TP: RM2.21) has agreed to acquire a 66% stake in Herlitz AG from global private equity firm Advent International Corp for RM227.25m. Herlitz offers some 15,000 products in the stationary and papetarie assortment across the European market under the ‘Herlitz’, ‘Falken’ and ‘Susy Card’ brands. The company reported a turnover of 301.9m euros in financial year 2008 and earnings before interest and tax of 3.7m euros. Pelikan late last month accnouned a proposal to hold a rights issue to raise as much as RM188.74m for working capital purposes in a release to the exchange. (Malaysian Reserve)

* * * * *
YTL Communications Sdn Bhd (YTL Com) which Is planning a commercial nationwide roll-out of its WiMAX wireless service in July next year, will also use its network as a test bed for WiMAX-enabled devices and applications. YTL Power Bhd (YTLP MK, Buy, TP: RM2.50) unit is slated to sign agreements with several partners, including US-based chipmaker GCT Semiconductor Inc to fund a global programme to get innovators and creators from all over the world to develop applications for WiMAX. This move may also see device makers using Malaysia as their springboard to test their WiMAX-enabled devices. “What we are building is a new 4G highway that would be available nationwide and this will enable people to ride on a higher plane with our mobility solutions,” YTL Com executive director Datuk Yeoh Seok Hong said. YTL Com is investing RM2.5bn for the nationwide roll-out and has teamed up with several international partners to deploy its network. Asked about the pricing for the services, Yeoh said it was not ready yet, but added: “From a pricing point of view, it has to be relevant even though we are investing and our shareholders will demand that we make money.” (Starbiz)

* * * * *
Packet One Networks (M) Sdn Bhd (P1), a unit of Green Packet, plans to allocate RM200m to RM300m for capital expenditure (capex) next year to expand its coverage, which will include Sabah and Sarawak, CEO Michael Lai said. He said P1 had spent RM300m over the past 13 months to roll out its WiMAX programme and was on track to achieve network coverage of 45% of Peninsular Malaysia’s population by 2010, and 65% by 2012. Currently, P1 has 35% network coverage in the peninsula. Lai said to achieve network coverage of 65% or more, the company would need to invest between RM1bn and RM1.5bn. “The target is to work within RM1bn to cover 65% of the population but ideally, we want to reach 75% to 85% coverage of the population, then top up with RM500m investment, if needed,” he said. He also said the company expected to break even on its investment outlay for WiMAX by end-2010. (Starbiz)
* * * * *
Berjaya Retail Bhd (BRetail) group expects its 7-Eleven convenience-store chain to record substantial cash inflow of about RM12.5m and RM25m for financial years ending Dec 31, 2009 and 2010 respectively from its franchise scheme. BRetail is seeking to list on Bursa Malaysia. On a draft prospectus posted on the Securities Commission website, BRetail said the cash inflow would be from the franchise fee, license fee and deposits. “With a cash inflow of RM250,000 from each franchised store, 7-Eleven group plans to reinvest the amount to set up a new convenience store costing about RM260,000. This will help accelerate new store growth without substantial net cash outflow from the 7-Eleven group,” it said. BRetail also plans to provide services including bill collection for utility companies, telcos, and others. 7Eleven (M) Bhd and Singer (M) Sdn Bhd are the two companies injected into BRetail. The group plans to expand its 7-Eleven network by planning to open 100 new stores in 2010. BRetail also said, “Singer plans to increase the number of Singer branches and sales agents to 1,000 within the next five years.” (Financial Daily)

* * * * *
Chemical Co of Malaysia Bhd (CCM) is planning a series of restructuring exercises to strengthen its financial position going forward following a downgrade in the outlook of the long-term ratings for its bond issue. Finance director Ahmad Mustaffa Abdul Manaf said the group would be looking at appropriate restructuring of its balance sheet as well as improving
returns and margins from its businesses in order to improve its immediate and mid-term liquidity. “In terms of the group’s debt portfolio, with the scheduled refinancing of the RM200m bond at the end of this year, our borrowings will be restructured and spread into longer-term duration in order to improve liquidity,” Ahmad Mustaffa said. The group was also proceeding with disposals of its non-core (property) assets as part of its commitment to strengthen its financial position. Going forward, CCM would continue to pursue a high-growth strategy by focusing on regional expansion, according to Ahmad Mustaffa. (Starbiz)
* * * * *
Damansara Realty Bhd (DRB) is planning a corporate restructuring to carve out its unprofitable businesses and streamline revenue streams to benefits its shareholders. It has proposed to exchange its entire paid-up share capital with shares of its wholly-owned subsidiary, Insan Kuality Sdn Bhd (IKSB), with cash payment to existing DRB shareholders. The proposal will involve exchanging 250.14m DRB shares of 50 sen each with 150.08m shares of 50 sen each in IKSB and a cash payment amounting to RM80.05m. The cash payment is 0.6 new IKSB share and payment of about 32 sen in exchange for everyone DRB share. It also proposed for the IKSB to buy from Johor Corp (JCorp) entire equity in Tanjung Langsat Port Sdn Bhd (TLP) for about RM249.05m and the entire equity in TPM Technopark Sdn Bhd (TPM) for RM54.8m. The total acquisition price of about RM303.85m will be paid for by issuing 229.73m new IKSB shares at 80 sen each and the remaining RM120.10m to be set off against an amount due from JCorp. The corporate restructuring will eventually involve the transfer of DBB’s listing on Bursa Malaysia to IKSB. (BT)
* * * * *
KPJ Healthcare Bhd, the healthcare unit of Johor Corp, expects revenue to swell to RM2bn within 5 years by
expanding its hospital reach in the local market. “KPJ crossed its first billion after 26 years in the business. With the speed
the company is at right now, I am confident we can cross the next billion in less than 5 years,” managing director Datin Paduka
Siti Sa’diah Sheikh Bakir said. Under the expansion plan, KPJ wants double sales by either organic expansion or via mergers
and acquisitions. It is targeting to add between 2 and 3 hospitals a year. (BT)
* * * * *

Friday, November 6, 2009

LITYAN'S BOSS selling all,watchout!

Lityan Holdings Bhd group managing director and CEO Nor Badli Mohd Alias has disposed of his entire stake in thecompany. The stake, comprising 1.25m shares or 1.98% of the issued shares was disposed of at RM3.13 per share at a totalvalue of RM3.91m on Tuesday. Nor Badli had purchased the shares en bloc on Oct 27 at RM1 per share. According to asource familiar with the restructuring of Lityan, the stake acquired and then sold by Nor Badli was part of the company’srestructuring scheme. He added that as part of the restructuring plan, 17.2m shares were issued to creditors of which 16.8mwere successfully placed out and issued on Oct 27 at a reference price of RM1 per share. (Starbiz)

so clever this MD cum CEO!

speculators be careful!


CIMB Group Holdings Bhd (CIMB MK, Hold, TP: 12.18) group chief executive Datuk Seri Nazir Razak denied the bankshad met and agreed to end the mortgage war but that the upward revision of mortgage rates was the result of eachbank’s decision to act “rationally”. He stated that rationality has returned to the pricing of domestic residential mortgagesafter being gradually driven to “uneconomic levels” in recent times. (Financial Daily)

* * * * *

GENTING Bhd (GENT MK, Hold, TP: RM7.61) said the bulk of RM1.5bn raised from the sale of medium-term notes willbe used for strategic investment globally. “We are looking at a few investment deals but can’t disclose them now. Some ofthe proceeds will go towards this Genting Singapore rights offer,” said group head of strategic investments and corporateaffairs, Datuk Justin Leong Ming Loong. Genting’s unit, Genting Singapore Ltd (GSL), plans to raise S$1.63bn (RM3.99bn)from a cash call. Genting via its unit GB Services Bhd, priced its inaugural issue of RM1.5bn nominal amount of 10-year MTNunder its RM1.6bn MTN programme. It is the largest 10-year corporate bond issue from the gaming sector in Asia Pacific sincethe start of the global financial crisis in 2008. The issue was priced at 5.3% per annum, payable semi-annually. Genting wantedto raise RM900m initially but strong investor demand led to the issue being raised by 1.7times, said chairman and CEO Tan SriLim Kok Thay. The MTN is guaranteed by Genting and carries a “AAA” rating by RAM Ratings Services Bhd. (Financial Daily)

* * * * *

Genting Bhd (GENT MK, Hold, TP: RM7.61) has ruled out speculation that its integrated resort, Resorts World atSentosa, will open earlier than its January deadline. Chairman and chief executive Tan Sri Lim Kok Thay said the companywas “on track” to opening the resort in Singapore in January. The S$6.6bn project was expected to attract 12m to 13m visitorsin the first full year of operation, he said. (Starbiz)


Green Packet Bhd expects to form strategic partnerships with the more dynamic legacy players as well as servicingits own end-user subscribers with a differentiated and customised connectivity option. It group CEO and managingdirector C. C Puan said that the group as both an operator and a solutions developer, had an exceptional understanding of howto secure and manage its own subscribers and thus grow as an independent operator model. (Financial Daily)* * * * *

Thursday, November 5, 2009

HARTA ( present price 5.28)-----OUTPERFORM BY CIMB

Set to top expectations; maintain OUTPERFORM. Hartalega is scheduled to release its 2QFY3/10 results on 10 Nov. If the recent results posted by other gloveplayers such as Top Glove (TOPG MK, Outperform), Supermax (SUCB MK,Outperform) and Latexx Partners (LTX MK, Outperform) are anything to go by, thereis a high chance of similarly strong results from Hartalega. Annualised 1H10 earningsare likely to exceed our full-year estimate of RM108.1m by about 10%, largelybecause of stronger-than-expected sales, especially from the nitrile segment. Pendingthe release of the results, we make no change to our earnings forecasts. However, aswe are now in the final quarter of 2009, we roll forward our target price to end-10 whileretaining our valuation basis of 13.5x P/E, based on an unchanged 10% discount toTop Glove’s 15x target P/E. This lifts our target price from RM7.32 to RM9.62. In viewof the favourable outlook for the company, we maintain our OUTPERFORM call.Potential re-rating catalysts include its improving quarterly earnings, coming in fromhigher demand and ongoing capacity expansion
------full report get it from cimb

Some local business news of importance 5.11.2009

It may be too early to say who will eventual top service provider for mobile data, but Norwegian firm Telenor ASA is confident its 49%- owned DiGi.COM Bhd (DIGI MK, Hold, TP: RM20.00) and the latter’s rivals – Maxis Bhd and Celcom (M) Bhd – can fend off competition from new 3G and WiMAX licensees and continue to dominate the marketplace as the window to shake market positioning has close. The 3 largest operators, Telenor group executive vice-president and
head of Asia Region, Sigve Brekke said, would continue to dominate the lucrative voice and growing mobile data market by leveraging on the huge competitive advantage they had built for themselves over the past decade. He said the big players, with their dominant market positions, would always have more money to invest and competitive advantages such as branding, an
existing customer base, and more importantly better understanding of the marketplace and customer behaviour. “We are in Asia for the long run especially after we made the decision of entering India. It is not just one more country. Asia is going to be the biggest part of Telenor with India,” Brekke said. (Financial Daily)

* * * * *

With China’s President Hu Jintao visiting Malaysia next week, speculation is swirling the Malaysian government may finally seal a deal to sell 10% of planter Sime Darby Bhd (SIME MK, Hold, TP: RM8.10) to a Chinese group. It was reported that Malaysia had offered China the stake in Sime, the country’s biggest palm plantation firm by land ownership, first emerged in September, but were dismissed by Prime Minister Datuk Seri Najib Razak as pure speculation. The chatter about the agreement that could be worth about US$1.6bn (RM5.47bn) is back, with one investment bank spelling out likely
implications of the possible deal. China’s strategic backing will enhance Sime’s business in the country, where it involved in
motor and heavy equipment distribution, water treatment services, port operations, property development and palm oil sales
and marketing. The deal, if it materialises, is expected to serve the national interest of both countries as well as Sime’s which
has invested US$1bn in 6 business segments in China. (Financial Daily)
* * * * *
Hong Leong Bank Bhd (HLB) (HLBK MK, Hold, TP: RM6.30) has entered into a finance development coorperation
agreement with China Development Bank Corporation (CDB). HLB said the agreement set the platform for the group, including Hong Leong Islamic Bank Bhd and CDB to collaborate in various areas including funding financing opportunities, currency swaps, personnel exchange and training as well as information exchange. “This agreement effectively enables HLB to work closely with CDB, one of three policy banks and one of the largest banks in China. It forms the basis to coordinate with each other for CDB to expand and extend its funding capacity, financing support and financing channels into our local economic projects and financial system,” said HLB group managing director and chief executive Yvonne Chia. (Financial Daily)

* * * * *

Perusahaan Otomobil Kedua Sdn Bhd (Perodua) has appointed Aminar Rashid Salleh as its new managing director with effect from Nov 16, 2009 to replace Datuk Syed Abdull Hafiz Syed Abu Bakar, who will complete his term on Dec 31, 2009. Perodua said yesterday Aminar Rashid, was currently the executive director and the head of strategic marketing group at UMW Toyota Motor Sdn Bhd, a subsidiary of UMW Holdings Bhd (UMWH MK, Hold, TP: RM5.52). (Starbiz)

* * * * *

Berjaya Land Bhd (Bland) will start development work on its US$6.3bn (RM21.8bn) integrated property development prject in Vietnam in 2012 the company told Bursa Malaysia yesterday. The Nhon Trach New City (NTNC) township project was scheduled for completion in stages from 2015 to 2030. BLand says the estimated investment cost is US$400m (RM1.4bn). NTNC will be developed and managed by Berjaya NTNC Ltd, a newly incorporated company of BLand’s wholly owned subsidiary Berjaya Leisure (Cayman) Ltd (BL Cayman). BL Cayman received the investment certificate from the Vietnamese licensing authority for the NTNC project. NTNC is a 600ha project in the heart of Nhon TrachCity, about 30km from Ho Chi Minh City. (Starbiz)

* * * * *

Industrial and Commercial Bank of China (ICBC), will get a licence to open in Malaysia when Chinese President Hu Jintao visits on Nov 10-11 and a raft of commercial deals will be signed. Citing an unnamed sernior Malaysian government official said yesterday that ICBC would get an operating licence and be allowed to open 4 branches. “We hope to get the approvals ready for the visit,” the official said. “There will be other economic initiatives, which will include invitations to
Chinese companies to participate in infrastructure ventures and take strategic stakes in Malaysian companies and projects.” (Financial Daily)

Wednesday, November 4, 2009

Some local business news of importance

The Sarawak Corridor of Renewable Energy (SCORE) has already attracted interest from investors, especially those in the heavy capital and energy intensive industries, despite its infancy stage said Daputy Chief Minister Tan Sri Dr George Chan. He said that 80% or RM267bn of the total proposed investment totaling RM334bn, which would spread over the next 20
years came from the private sector. Dr Chan said a few MNCs have decided to invest in SCORE and works were progressing smoothly and on schedule to meet the tight timelines set by its investors, particularly in the Samalaju Industrial Park, Tanjung Manis and Mukah Industrial Estate. (Malaysian Reserve)

* * * * *
The Government’s proposal to impose a real property gains tax (RPGT) of 5% from Jan 1 may just be a temporary measure, says Taxand Malaysia Sdn Bhd managing director Dr Veerinderjeet Singh. “We feel that it is a temporary imposition. We think that in the long term, the original scale rates of 30%, 20%, 15%, etc will be coming back, he said. Prior to the
exemption of the RPGT in April 2007, tax on gains from property sales was on a progressive basis from 30% to 0% depending on the holding period of the property. Veerinderjeet however, said that total exemption from RPGT would be unlikely. “What would probably not change is the 5%,” he said. He added that property owners should be thankful that the RPGT was capped
at 5% and not higher. (Starbiz)

* * * * *
New home buyers are expected to make higher payments for their loans with some banks increasing their mortgage rates early this month. Various banks showed lenders like Maybank, Public Bank, Standard Chartered Bank, Alliance Bank and EON Bank had revised upward their mortgage rates. Some have even scrapped the moving-cost element- legal fees, stamp duties and other disbursement fees for loan documentation by the banks – from their home-loan offerings. It is learnt that existing home loans would still be maintained at previous rates depending on the terms and condition of the contract. “Loan growth for the commercial banking sector has been subdue during the first 9 months at an annualised rate of 6.9% compared to the growth rate of 13.4% in 2008. However, deposits have been growing at a faster annualised rate of 20.5% during the same period. This invariably exerts pressure on the banks’ interest margins and eventually profitability,” Malaysian Rating Corp Bhd vice-president and head of financial institution ratings, Anandakumar Jegarasasingam said. The above banks have revised their rates to BLR minus 1.8% from BLR minus 2%-2.3%. (Starbiz)

* * * * *
Prime Minister Datuk Seri Najib Razak said the outlook of Malaysian economy for Q3 has brightened. The improvements in the national economic outlook have come about “not by chance, but by choice”, he said. Prime minister said the government’s RM67bn fiscal stimulus packages have helped the economy through a global recession and generated muchneeded
economic activity to make up for a slowdown in private sector demand. (BT)


Sime Darby Bhd (SIME MK, Hold, TP: RM8.10) aims to complete infrastructure work for its groundwater project in Perak by end-2012 and start supplying 500m litres a day (mld) to Selangor by January 2013. Dr Azuhan Mohamed, the head of water management at Sime Darby’s energy and utilities division said the foreign technology providers are likely to tie up with local players to make the bid for the project in Batang Padang more competitive. A South Korean company, Da Joo Construction Co Ltd, will bid for the consultant contract. Sime Darby’s total investment in the project is estimated at around RM1.3bn. The company is seeking a long-term supply contract of up to 60 years, Sime Darby chief executive officer Datuk Seri Ahmad Zubir Murshid previously said. (BT)

* * * * *

Malayan Banking Bhd (Maybank) (MAY MK, Buy, TP: RM8.10) is not looking to expand its business in Turkey but is open to collaboration with its counterparts there, says president and CEO Datuk Seri Abdul Wahid Omar. “We are open to collaboration in terms of trade finance and products. The collaboration does not have to be in the form of equity,” he said. Second Finance Minister had said Bank Asya representatives had expressed the bank’s interest to tap the
expertise of Maybank and CIMB Bank Bhd to jointly establish Islamic banking operations in Turkey. On this, Wahid said Maybank would meet with the Finance Ministry to get more information. (Starbiz)

* * * * *

IJM Corp Bhd (IJM MK, Hold, TP: RM3.64) and Scomi Engineering Bhd are eyeing new projects in India. Malaysian Property Inc (MPI), an initiative of the private and public sectors set up a year ago to project Malaysia as a property investment destination overseas, is also targeting India for the sale of local properties. IJM deputy CEO Teh Kean Ming said the group was
now bidding for projects with an estimated value of RM500m in India and are mainly highway and elevated infrastructure projects he said. Teh said the group was targeting to increase its order books in India to over RM1bn next year. Meanwhile Scomi International Pte Ltd president Kanesan Veluppillai said it was interested in bidding for new monorail projects in 7 Indian
cities. These projects involve constructioning 30km to 40km of monorail tracks. On its RM1.6bn monorail project in Mumbai, Kanesan said the group had completed about 25% of the 19km track. On Oct 30, Scomi Engineering signed an agreement with Geodisic Techniques Pvt Ltd, an India-based design and structural company to bid for a 59km monorail project in Bangalore.\

* * * * *

Sunrise Bhd (SUN MK, Buy, TP: RM3.30) and CIMB Group, unit of CIMB Group Holdings (CIMB MK, Hold, TP: RM12.18) has launched a joint customer loyalty scheme that leverages on each others branding prowess to secure recurring business from existing clients. The Sunrise-CIMB Preferred Recognition Card offers cardholders discounts for their subsequent real estate purchases from Sunrise, besides local and regional priority privileges from CIMB Preferred. Some 1,300 cards have already been issued to existing customers. (Financial Daily)

* * * * *

Mah Sing Group Bhd’s proposed en-bloc sale of “The Icon @ Mont Kiara” commercial property project for RM285.4m hit a snag yesterday, as the supposed purchaser failed to meet the conditions stipulated in the sale and purchase agreement signed 2 years ago. To recap, Maxim Heights Sdn Bhd, a wholly owned subsidiary of Mah Sing entered into a tripartite SPA on Nov 27, 2007 with Majlis Agama Islam Wilayah Persekutuan (MAIWP) and Prompt Symphony for RM285.4m. MAIWP is the owner of the proposed development site. The termination of the SPA would not have any impact on Mah Sing’s financials, the company said. Rather, it has come up with a fresh concept. Mah Sing now intended to develop services suites and market the project as “luxury garden terraces in the sky”. (Financial Daily)

* * * * *

Paramount Corp Bhd is purchasing a 21.7 acre piece of land in Shah Alam, Selangor from The Titular Superior of the Brothers of Saint Gabriel for RM62.39m or RM66 per sqft. Paramount said that the master title of the land includes the premises of Monfort Boys Town, while its northern boundary abuts onto the NKVE. Part of the land measuring 10 acres has been designated for the building of a new campus for KDU College and another 11.8 acres designated for mixed development consisting of commercial development and condominiums. (Financial Daily)

Tuesday, November 3, 2009

Plenty of good news for US and UK, so can it last till the year end?

After seesawing through the session, stocks staged a rally to end higher Monday, with financial, technology andcommodity shares leading the charge. Stocks rallied in the morning after a key manufacturing index spiked to its highest levelin three and a-half years in October. An upbeat reading on pending home sales and Ford Motor's big profit report also added tothe morning bounce, giving investors a reason to jump back into stocks after last week's sell-off. But the morning rally turnedsour in the afternoon as weakness in financial, tech and transportation shares spearheaded a broader retreat. By the last hour,short-term investors used the selling as an opportunity to jump back in and scoop up a variety of shares. The Dow Jonesindustrial average gained 0.8% (+76.7 pts, close 9,789.4). The Nasdaq gained 0.2% (+4.1 pts, close 2,049.2) and the S&P 500gained 0.7% (+6.7 pts, close 1,042.9). U.S. light crude oil for December delivery gained US$1.13 to settle at US$78.13 a barrelon the New York Mercantile Exchange. (CNNmoney)

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Manufacturing in the U.S. expanded faster than anticipated in October, easing concern the economic recovery will be cutshort once government aid wanes. The Institute for Supply Management’s factory index rose to 55.7, a three-year high andexceeding every estimate of the 70 economists surveyed by Bloomberg News, data from the Tempe, Arizona-based group showed yesterday. Stocks rose as the data showed the world’s largest economy may be gaining momentum after growing lastquarter at the fastest pace in two years. More than US$2trn in global stimulus and a cheaper dollar may also lift salesoverseas, ensuring assembly lines keep humming into 2010 as factories rebuild depleted stockpiles. (Bloomberg)

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The number of contracts to buy previously owned homes in the U.S. rose in September for an eighth straight month asAmericans rushed to meet a deadline for a home-buyer tax credit. The index of signed purchase agreements, or pending homesales, rose 6.1% after a 6.4% gain in August, the National Association of Realtors said in Washington. Compared with a yearearlier, pending sales rose 19.8%, without adjusting for seasonal variations. Foreclosure-driven price declines and lowmortgage rates have also pushed sales up this year. Home sales may cool in coming months unless the credit is extendedunder a deal worked out by Senate Democrats. (Bloomberg)

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Spending on U.S. construction unexpectedly rose in September as residential builders rushed to finish projects inanticipation of a possible end to the first-time home-buyers tax credit. The 0.8% increase, the biggest since September 2008,followed a revised 0.1% drop in August that was previously reported as a 0.8% gain, Commerce Department figures yesterdayshowed. Spending on residential and government projects climbed, while outlays on private commercial construction slumpedfor a fifth consecutive month. Low borrowing costs, price declines and the government’s US$8,000 tax credit for first-timebuyers stabilized sales and spurred the biggest increase in residential construction in 26 years in the third quarter. Lawmakersare working on extending the credit, which may help support construction even as commercial real estate falters. (Bloomberg)

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President Barack Obama said the U.S. economy has pulled “back from the brink” and the government must now “getserious” about reducing debt and helping spur job growth. Addressing a panel of economists and business and labour leaders,the president said the government and private industry must take “bold, innovative action” to bring the unemployment ratedown and lay the foundation for future growth. This was the second time the full board has met to brief the president on ways tocreate jobs and encourage economic growth. Obama formed the advisory panel in February to provide an “independent voiceon economic issues.” Yesterday’s meeting focused on creating jobs through innovation. Obama said if “entrepreneurship” and“dynamism” are encouraged by the government “there’s no reason why we’re not going to be able to not only create jobs, butthe kind of sustainable economic growth that everybody is looking for.” (Bloomberg)

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Europe’s manufacturing industry expanded for the first time in 17 months in October, adding to evidence the region ispulling out of the worst recession in more than six decades. An index of manufacturing in the 16-nation euro area rose to 50.7from 49.3 in September, London-based Markit Economics said yesterday, confirming an Oct. 23 estimate for the gauge, whichis based on a survey of purchasing managers. The last time the index was above 50, indicating expansion, was in May 2008.Euro-area confidence in the economic outlook is at the highest since Lehman Brothers Holdings Inc. collapsed, and theInternational Monetary Fund last month forecast that the global economy will expand next year at a faster pace than previouslyprojected. (Bloomberg)

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U.K. manufacturing unexpectedly expanded in October at the fastest pace in two years, a sign factory production isrecovering from the economy’s longest contraction on record. A gauge based on a survey of companies rose to 53.7 from 49.9in September, the Chartered Institute of Purchasing and Supply and Markit Economics said yesterday in London. Economistspredicted 50, the median of 30 forecasts in a Bloomberg News survey showed. Readings above 50 indicate expansion.Yesterday’s figures will make the Bank of England’s task tougher as it gauges this week whether the economy needs furtherstimulus. While surveys of manufacturers and services companies have indicated the economy is recovering from the worstrecession since World War II, a report two weeks ago showed it unexpectedly contracted in the third quarter. (Bloomberg)

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U.K. house prices rose for a third month in October as increased demand for homes and a lack of properties for salepushed up values, Hometrack Ltd. said. The average cost of a home in England and Wales climbed 0.2% from September to156,400 pounds (US$258,000), the London-based property-research company said in an e-mailed statement yesterday. Houseprices fell 4.2% y-o-y. “The last six months has seen a continued improvement in housing market sentiment on the back ofrising demand and a lack of housing for sale,” said Richard Donnell, director of research at Hometrack. “Prices have firmed andthe discount between sales and asking prices is back to the same level it was at the start of the credit crunch over two yearsago.” Buyers are returning to the property market after home values dropped as much as a fifth from their 2007 peak andinterest rates fell to a record low. (Bloomberg)


Putting an end to weeks of market rumours, Public Bank Bhd (PBK MK, Buy, TP: RM12.80) said yesterday its nonexecutive chairman Tan Sri Dr Teh Hong Piow has recovered from a minor operation and will not be selling his stake in the bank. “Tan Sri Teh, the founding and single largest shareholder who owns total interests of 24.08% in Public Bank, has stressed that he has absolutely no intention of selling his stake in Public Bank”, the bank said in a statement. This overdue statement will perhaps finally and effectively put an end to rumours that have been circulating that Teh’s exit from Public Bank was imminent following news that he had been admitted to hospital for an operation in July. (Financial Daily)

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Hong Leong Bank Bhd (HLB) (HLBK MK, Hold, TP: RM6.30) is venturing into the consumer lending business in China through a 49:51 joint venture (JV) with Bank of Chengdu Co Ltd. This marks HLB’s further inroad into China’s financial services sector after its maiden foray in October when it acquired a 20% stake in Bank of Chengdu. According to an announcement yesterday, HLB and Bank of Chengdu will form a licensed consumer finance company known as Sichuan Jincheng Consumer Finance Ltd Liability Co (SJCF). “The business of SJCF will principally be in consumer financing. The registered capital will be 320m yuan (about RM160m), while HLB’s contribution shall be 156.8m yuan (RM78.4m), which will financed from internally generated funds,” said HLB. For its latest venture in China, HLB will provide SJCF with personnel, technical expertise and support in areas such as product development, risk management and information technology. (Financial Daily)

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One of Turkey's largest banks, Bank Asya, has expressed interest in working with Malaysian lenders Malayan Banking Berhad (MAY MK, Buy, TP: RM8.10) and CIMB (CIMB MK, Hold, TP: RM12.18) to develop Islamic banking in the republic. Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said a joint venture may be possible, although this would ultimately depend on how strict Turkish regulations are in terms of foreign equity ownership in a bank. He hopes that at least one of the two banks will explore potentials for collaboration with Bank Asya. (BT)

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Boustead Holdings Bhd (BOUS MK, Buy, TP: RM3.94) is buying a 51% stake in Atlas Hall Sdn Bhd for RM8m. 20% of the stake was from vendor Tan Sri Abdul Rashid Abdul Manaf who is also a director of Atlas Hall. Boustead said that the stake buy-in was part of a group strategy to become a player in the oil & gas industry. The deal, which was slated for completion this
month, still required the green light from the respective boards of the two companies. (Malaysian Reserve)

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Puncak Niaga Holdings Bhd (PNH MK, Buy, TP: RM3.66) told the exchange yesterday that it has formed a 60:40 jointventure company with India’s Lanck Infratech Ltd to participate in a bid for a water supply and drainage tender in India. The project was identified as Hogenakkal water supply and flourosis mitigation Project-Package 1 called by Tamil NaduWater Supply and Drainage Board, India. (Starbiz)

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Malaysian budget carrier AirAsia (AIRA MK, Buy, TP: RM1.80) and subsidiary AirAsia X, which last month stunned the aviation market by offering short-haul international flights out of Kuala Lumpur priced from RM1 to RM11 (HK$2.27 to HK$25), have opened a new battlefront in the cargo market. Azran Osman Rani, the chief executive of AirAsia X’s target isto double the contribution of cargo revenue to 8% of the total for the two airlines in two to three years. To reach this target, the absolute increase in cargo revenue would have to be more than double the growth in revenue from passenger tickets, which would also be increasing over the same period, Azran said. To achieve its aim, AirAsia had launched a pricing strategy in the cargo market that was even more aggressive than its campaign on rock-bottom passenger fares, so that it could build up its brand name among exporters, he said. But agents said freight rates to Europe from Kuala Lumpur would be prices at a 30% discount to the average market price, which would be aimed at overcoming the disadvantage to shippers of a longer transit time for trucking shipments from London’s Stansted Airport, which AirAsia X started serving in March, to Heathrow Airport. (Financial Daily)

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Malaysia Airports Holdings Bhd (MAHB) expects passenger traffic growth to hit 4 to 5% next year in light of the positive trends in the global industry in the last few months. The industry is expected to fare better next year as the global economy is predicted to show recovery and hence boost air travel, MAHB managing director Tan Sri Basir Ahmad said. The airport operator had projected passenger volume to reach between 3 and 4% this year compared to last year. In 2008, total passenger volume at 39 airports operated by MAHB in the country rose 5% to 47.45m. (BT)

Monday, November 2, 2009


Sime Darby Bhd (SIME MK, Hold, TP: RM8.10) has priced its RM2bn three-, five- and seven-year Islamic medium-termnotes (IMTN) issued under the Islamic medium-term note programme of RM4.5bn and Islamic commercial paper/IMTNprogramme of RM500m with a combined master limit of RM4.5bn. The IMTNs were issued under the Islamic principle ofMusyarakah and carries a semi-annual profit rate of 3.55% per annum for the three year tranche with a nominal value ofRM300m, 4.38% per annum for the five-year tranche with a nominal value of RM700m, and 4.75% per annum for the sevenyeartranche with a nominal value of RM1bn. (StarBiz)

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AirAsia (AIRA MK, Buy, TP: RM1.80) will defer delivery of another eight Airbus A320 aircraft due in 2010 by four yearsto 2015 because of infrastructure constraints at its Kuala Lumpur air terminal. Until a new Low-Cost Carrier Terminal wasconstructed, the current overcrowded budget terminal would not be able to accommodate AirAsia’s fleet expansion plans, itsaid. The decision to further scale down on deliveries would allow AirAsia to avoid the costs of having idle or under-utilisedaircraft, it said. (StarBiz)

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Muhibbah Engineering Bhd (MUHI MK, Sell, TP: RM1.11) has commenced arbitration against Gerbang Perdana Sdn Bhdin respect of a claim amounting to about RM32.7m. Muhibbah said that the main contractor, Gerbang Perdana, hadappointed it to undertake the road bridge-marine approach subcontract but, when the overall project was cancelled in 2006,Gerbang Perdana had ordered a cease of works on the subcontract but, to date, has not fully paid the company. Muhibbahsaid it has since commenced mediation and followed by arbitration in respect of claim against Gerbang Perdana. It said that,should the arbitration be successful, it was expected to have positive financial effect to the group. (Malaysian Reserve)

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The investment vehicle set up jointly by 1Malaysia Development Bhd (1MDB) and PetroSaudi International Ltd islooking at acquiring a “strategic” stake in IJM Corp Bhd (IJM MK, Hold, TP: RM3.64). The joint venture (JV) may acquirethe IJM stake from Zelan Bhd, which holds 82.33m shares or an 8.77% stake in IJM as of June 30. The stake was valued atRM395.2m based on IJM’s share price that closed at RM4.8 last Friday. The JV’s intention for the acquisition is to tap IJM’sconstruction expertise, which could be useful for some of the projects it plans to invest in, and not to take over the constructionoutfit. (The Edge)

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The study paper on the review of the national five fuel policy is almost completed, Prime Minister Datuk Seri MohdNajib Razak said yesterday. “We are in the process of reviewing the country’s fuel mix. This will not change in the immediateterm but in the medium and long term” he said. The Energy, Green Technology and Water Ministry and Tenaga Nasional Bhd(TNB) (TNB MK, Buy, TP: RM9.90) are fine tuning the study paper before submitting it to the government, he said afterlaunching the 60th anniversary celebrations of Lembaga Letrik Negara/TNB in Kuala Lumpur. Mohd Najib said the countryneeded to reduce reliance on natural gas and coal as energy sources and look at other sources like hydro-electricity andrenewable energy. Asked whether nuclear energy was covered, Mohd Najib said it was being studied and that nuclear energygeneration required a long period with process of planning to the first nuclear reactor for initial energy generation taking 12 to15 years. He also said that TNB needed to be sensitive in supplying electricity as even a disruption of one or two minutes couldcause losses amounting to billions of ringgit. (Malaysian Reserve)

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PPB Group Bhd has proposed to dispose of its 100% equity interest in Malayan Sugar Manufacturing Co Bhd (MSM) toFelda Global Ventures Holdings Sdn Bhd (FGVH) for RM1.22bn. It also proposed to sell 50% of its equity interest in KilangGula Felda Perlis Sdn Bhd and land in Chuping, Perlis, to FGVH for RM26.3m and RM45m respectively. The purchaseconsideration represents price-to-earnings ratio of 9.78 times and price-to-book ratio of 2.46 times. PBB’s cost of investment inMSM was RM50.8m, which was made over the period from 1976 to 1999. The proposed disposal of MSM will result in gains ofRM1.17bn at company level and RM723.81m at group level. (StarBiz)* * * * *

And suddenly the bad news surface.....

Stocks tumbled Friday, more than erasing the previous session's gains, as investors dumped a variety of shares at the end ofa rough week and choppy month on Wall Street. Bond prices rallied, sending yields lower, in a classic flight-to-quality. Thedollar was mixed versus other major currencies. Oil and gold prices fell. The Dow Jones industrial average lost nearly 2.5% (-250 pts, close 9,712.73). The Dow lost as much as 278 points earlier. It was the Dow's biggest one-day selloff on a point basissince April 20. The S&P 500 index fell 2.8% (-30 pts, close 1036.19) and the Nasdaq composite shed 2.5% (-52 pts, close2045.11). U.S. light crude oil for December delivery retreated US$2.87 to settle at US$77 a barrel on the New York MercantileExchange after rallying 3% in the previous session. (CNN Money)

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Americans cut spending for the first time in five months and a gauge of confidence weakened, signaling consumers willmake a limited contribution to the recovery without government incentives. Consumer spending fell 0.5% in September after a1.4% jump in August, Commerce Department figures showed in Washington. The Reuters/University of Michigan final index ofconsumer sentiment decreased to 70.6 in October from 73.5 the month before. Mounting jobs losses, stagnant incomes andthe expiration of programs such as the cash-for-clunkers auto rebates threaten to hold back household spending as the nationemerges from a recession. (Bloomberg)

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