28.10.2009 some local business news

Tenaga Nasional Bhd (TNB) (TNB MK, Buy, TP: RM9.90) and Indonesia’s utility PT Perusahaan Listrik Negara may spend US$300m to build a power line connecting the two countries. TNB and Listrik plan to set up a venture that will build a power line connecting Malacca and West Sumatra with a capacity of 600megawatts., Listrik director Bambang Praptono told
reporters, Upon the line’s completion in 2015, Indonesia will sell 300MW of electricity at noon, Malaysia’s highest electricity consumption period, with a reverse 300MW trade taking place in the evening, during Indonesia’s peak electricity use, Praptono said.Both TNB and Listrik Negara would be evaluating financing options for the project, and TNB CEO Datuk Seri Che Khalib
Mohamad Noh. (Starbiz)

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The Malaysia Communications and Multimedia Commission (MCMC) has fined 3 of 4 WiMAX licensees in the country a total of RM3.8m for failing to cover 25% of the population in the areas given to them by end-March this year. However, it is understood that the regulator’s decision is being disputed by at least 1 player. It is learnt that among the 3 penalised, YTL E-Solutions Bhd (YTLe), the only 2.3GHz WiMAX licence holder that has yet to offer commercial services, was slapped with the largest penalty of RM1.9m. Asiaspace Sdn Bhd, which launched its “Amax”- branded WiMAX in Taman Tu Dr Ismail in August 2009 to kick off it service in selected townships in Klang Valley, was fined RM1.7m while REDtone International Bhd was hit
with a RM210,000 penalty. These figures could not be officially confirmed at press time. The trio had been given until end- March 2010 to fulfil their Year 1 and Year 2 coverage obligations, as per their respective detailed business plans.” In retrospect, Green Packet Bhd’s Packet One Networks (m) Sdh Bhd (P1), the only licensee not hauled up by the regulator, had on Oct 13 said it had been given the go-ahead by the MCMC to expand its coverage into East Malaysia. (Financial Daily)

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The funds under Public Mutual may decide to abstain from voting at the Tradewinds (M) Bhd extraordinary general meeting (EGM) today that will deliberate on the proposed acquisition of a controlling stake in Padiberas Nasional Bhd (Bernas). Public Mutual via its various funds has about 9.8% and is the 3rd largest shareholder in Tradewinds. During the EGM,shareholders will deliberate on Tradewinds’ proposed acquisiton from Hong Kong-based butMalaysian-owned Wang Tak Co Ltd’s 31.5% in Bernas. Shareholders will also deliberate on Tradewinds’ proposed acquisition of a 22% stake in Bernas from Gandingan Bersepadu Sdn Bhd. Both proposed acquisitons at RM2.08 per share will cost Tradewinds RM526m. Both acquistions, if approved, will trigger a mandatory general offer (MGO) for the rest of the shares that Tradewinds does not own in Bernas. The general offer will cost it another RM452m. (Financial Daily)

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The Ministry of International Trade and Industry is to release the National Automotive Policy (NAP) at 10am today. The review of the NAP would include fresh measures and incentives aimed at promoting the local automotive industry to higher level of competitiveness both regionally and internationally. The review would also focus on attracting new investments,
expansion on existing operations and also on research and development, with emphasis on new automotive technology such as low emission vehicles. The review may also refine existing automotive policies to bring the industry up-to-date with global standards. More rigorous vehicle testing standards and the improvement on of quality domestic fuel could be in progress. Other than that, Budget 2010 stated that the Government will charge RM10,000 for every open AP from next year onwards and the money will be channelled into the Bumiputera Development Fund in the sector. No big changes in car pricing is expected according to analysts. However, changes in the country’s automotive policy will have an impact on national car manufacturers,
Proton Holdings Bhd and its competitor Perusahaan Otomobil Kedua Sdn Bhd. (StarBiz)

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The government plans to spend within RM230bn under the upcoming 10th Malaysian Plan (10MP) as part of its aim to more than double the country’s per capita income within the next decade. The 10MP, which will span from 2011 to 2015, would need to sustain the economic growth at 5.5% annually for the next five years in order to achieve the status of high income
economy, according to the Economic Planning Unit’s (EPU) director general Datuk Noriyah Ahmad. “The main driver will be the private sector and the role of the government is to facilitate the development,” she said. (Malaysian Reserve)

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The decision whether to implement goods and services tax (GST) will be made before year-end after the Government completes a detailed study on the social impact of GST on the community. Second Finance Minister Datuk Seri Ahmad said while GST would be a more efficient system of tax collection, there was a need to seriously look at the implications of implementing GST across the board as it had a social cost and could adversely affect small businesses. “This two-month study on the feasibility of implementing GST is critical before a decision is made,” he said. (Starbiz)

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Quill Capita Management Bhd (QCM), the manager of commercial REIT Quill Capita Trust (QCT), is seeking renewals for the remaining 16% of its tenancy agreement expiring this year. This follows the renewal of its lease with HSBC Electronic Data Processing (Malaysia) Sdn Bhd, which is occupying Quill Building 2. QCT’s latest presentations notes indicate that tenancy agreements with BMW Malaysia Sdn Bhd and Electronic Data System IT Services (M) Sdn Bhd at Quill Building 3 will expire this November. (Financial Daily)

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Scomi Marine bhd, via its 80.54% unit PT Rig Tenders Indonesia TBk, has acquired a 5,380 bhp AHTS vessel for US$15m (RM51m). Scomi Marine said that PT Rig Tenders , via 70:30 JV with Marco Polo Ventures Pte Ltd, had entered into an agreement to acquire the vessel with a ship repair and maintenance agreement attached from Marco Polo Shipping Co. Pte Ltd. The new vessel is expected to be delivered in the first quarter of 2010 and will boost PT Rig Tenders fleet to 57 units. (Financial Daily)

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Malaysia Steel Works (KL) Bhd (Masteel) yesterday signed an off-take agreement with Stemcor Australia Pty Ltd for the export of RM120m worth of steel bars to Australia. CEO Datuk Seri Tai Hean Leng hopes that the alliance would pave the way for further working opportunities with Stemcor. Masteel said under the agreement, it would export substantial quantities of high tensile deformed bars annually, for the next 2 years to the Australian market. (Financial Daily)

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Datuk Seri Ahmad Husni Hanadzlah yesterday did not discount the possibility that petrol price at the pump could follow the market price or without subsidy once the subsidy management system is implemented early next year. The Second Finance Minister said the new structure will be more targeted to the groups that qualify to enjoy the subsidised petrol price. ”The price of petrol might be fixed at market rate but the targeted individuals will get the subsidy. There will be no subsidy for petrol price except for the targeted groups,” said Datuk Seri Ahmad. “The (subsidy management) system is being developed and it will start with petrol. It will be implemented between the 1Q and 2Q,” he added. The target groups are likely to involve the
lower income group or those at a specific salary scale and MyKad could also become one of the mechanisms for giving out subsidy, he also said. (Malaysian Reserve)
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