HAPPY NEW YEAR 2010

Wishing everyone a Happy and Prosperous New Year 2010

AIRASIA,NSTP,DRBHICOM,HUNZA,HARTA

The proposed partnership between AirAsia Bhd (AIRA MK, Buy, TP: RM1.67) and Jetstar is nearing fruition after a yearof talks and the deal will be announced in the first week of January. A media conference has been scheduled for Jan 6 inSydney where both parties and Qantas will announce the details of a strategic agreement and how these parties will work“innovatively together” so as to drive greater cost efficiencies across AirAsia and Jetstar. AirAsia group CEO Datuk Seri TonyFernandes and Jetstar CEO Bruce Buchanan will be at hand to present the details. Jetstar’s parent, Qantas, will berepresented by its CEO Alan Joyce. (Starbiz)
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AirAsia (AIRA MK, Buy, TP: RM1.67) finished the last month of 2009 with “record sales” while forward bookings for thefirst 2 months of 2010 are looking very strong, said its group CEO Datuk Seri Tony Fernandes. “We cannot reveal our 4Qfinancial numbers yet but from a sales point, we have had record sales for December and it has been the best month ever inthe history of the airline in all the 3 countries (Malaysia, Indonesia and Thailand) that we operate in. “January sales are betterthan what we have seen before and sales in February, with the Chinese New Year (coming), are looking very strong,”Fernandes said yesterday. At the end of today, the budget airline would have carried a total of 24m passengers and whencombined with its sister airline AirAsia X, the total is over 25m. “That makes us one of the larger airlines in the region,” he said.Fernandes is bullish on 2010, saying it will be a “very promising year for us”. Fares will certainly go up as the economicrecovery lifts demand for air travel. “Even a RM10 rise in airfares will be good for us as we fly more than 25m passengers ayear,” Fernandes said. Fernandes also expects AirAsia X to break even this year, with the airline increasing frequencies toexiting destination and ply new routes such as New Delhi, Mumbai and Paris. (Starbiz)
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The New Straits Times Press (M) Bhd (NSTP) is selling non-revenue generating assets, including land in BukitJelutong near Shah Alam, as well as re-evaluating the commercial viability of other properties it owns to raise fundsfor future expansion. According to sources, management officials from Media Prima Bhd (MPR MK, Hold, TP: RM1.69),including group MD Datuk Amrin Awaluddin and NSTP, who were at a meeting yesterday to brief NSTP employees on MediaPrima’s revised offer to take NSTP private, gave out some details on the expansion plans. On Nov 12, Media Prima hadrevised its offer to NSTP shareholders, offering 1.2 Media Prima shares for every NSTP share held. The takeover offer datewas extended to Jan 4 with the revised offer. The sources said part of the proceeds from the sale of land would go towards thesetting up of printing plants in Sabah and Sarawak. They said Media Prima’s management also said that the future plans forNSTP would be revealed next month. Media Pima announced yesterday that it has to date received acceptance of more than92.9m shares or 42.77% from NSTP shareholders as a result of the proposed take over. This gives Media Prima a total of86.06% of the voting shares in NSTP, the group said. (Starbiz)
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DRB-Hicom Bhd aims to introduce its own hybrid car by 2012 in line with the government’s objective to promotehybrid and electric vehicles and development or related infrastructure. Group director of automotive Datuk Nik HamdamNik Hassan said the company was currently in talks with three potential partners to manufacture the car and hoped to finalisethe deal next year. “Besides the assemble, we want to have our own hybrid car that we can call the Hicom hybrid. It will take 18to 24 months to have this car to come on stream,” he said. Nik Hamdam, who declined to name the parties, said however thatone of them was DRB-Hicom’s existing partner. (Financial Daily)
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US car manufacturer General Motors Corp (GM) is in talks with several potential parties, including the Naza group, forthe exclusive distribution of Chevrolet vehicles in Malaysia and will have something to announce by the second week ofJanuary, according to an industry source. The source said GM had “excellent plans” for the Malaysian automotive market,adding that there would be new Chevrolet model launches for 2010, including the Chevrolet Cruze which was supposed tomake its debut in the 2H09. In the interim period, the source said GM had turned to listed Permaju Industries Bhd’s outfit,Cergazam Sdn Bhd, to manage the franchise until a new partner was found. DRB-HICOM Bhd group director for automotiveDatuk Nik Hamdan Nik Hassan said yesterday that the partnership between DRB-HICOM and GM ended mainly because bothparties had very different business models. (Starbiz)
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Hunza Properties Bhd is buying parcels of freehold land at Bayan Baru, Penang from two individuals for RM82.09mcash. Hunza had entered into a sale and purchase agreement with Ong Thye Peng and Ong Gaik Kee, both trustees of theestate of deceased Ong Joo Sun, for the proposed acquisition. The company said it planned to develop the parcels of land intoa multi-billion ringgit-integrated development, which would serve as a “mini city”. (Financial Daily)
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Malaysian glove makers, including Hartalega Holdings Bhd, could continue exporting to the US after the Court ofAppeals ruled in favour of the manufacturers over a patent tussle with giant firm Tillotson Corp. Hartalega told BursaMalaysia that on Dec 14, the US Court of Appeals had decided that there was no violation of Tillotson’s Trademark and that theTillotson patent was invalid, upholding the earlier decision made by the US International Trade Commission (ITC). (FinancialDaily)
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Selangor government has agreed to give state-controlled property development company Kumpulan HartanahSelangor Bhd (KHSB) a RM151.1m grant, with no repayment obligation. KHSB said Menteri Besar Selangor Inc (MBI)would distribute the grant to KHSB on behalf of the state “in order to ease KHSB’s burden”. The state own 69% of KHSB, withthe majority of 56.57% held by Kumpulan Perangsang Selangor Bhd. KHSB said the grant could include the transfer and/oralienation of state-owned land, as agreed and accepted by KHSB only, at no cost to KHSB. KHSB could forward all claimsmade by the state to MBI and MBI would undertake to immediately pay on KHSB’s behalf the applicable sums, provided thepayments made did not exceed the value of the grant. It added that the grant could also be in the form of a waiver by the stateon any land revenue, premium, or rent payable in respect of alienated land due or to become due to the state. (Financial Daily)
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Work on the multibillion Pahang-Selangor Raw Water Project has picked up pace with the government opening thetender for the Kelau Dam and related works. According to an advertisement by the Ministry of Energy, Green Technologyand Water, it is inviting bids from parties that had successfully carried out construction projects of a comparable size andnature. The lead partner or sole bidder for the job should have an average annual turnover of not less than US$30m (RM103m)in the last five years while other partners must have an average of US$15m. The bid documents will be available from Jan 5 to19, 2010 and the closing date is on March 9, 2010. (Financial Daily)

30.12.2009 local business news

CIMB Islamic Bank Bhd, a unit of the CIMB Group (CIMB MK, Buy, TP: RM15.00), has listed a RM2bn Islamic bond programme on Bursa Malaysia to promote the growth of Islamic finance in the country. This makes it the first ringgit sukuk to be listed on the local bourse. "Though not a retail offering as yet, we hope this listing will be a precursor to the development of a vibrant retail sukuk market tradable on Bursa Malaysia," CIMB Islamic chief executive officer Badlisyah Abdul Ghani said. Bursa chief executive officer Datuk Yusli Mohamed Yusoff said CIMB Islamic's sukuk listing signifies the relevance and appeal of Bursa to bigger players in the Islamic finance industry, as well as boosts investor confidence. (BT)
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Primus Pacific Partners Ltd, the major shareholder at the centrestage of a buyout tussle for EON Capital Bhd EONCap), is said to have made a last minute attempt to mount a counter bid to Hong Leong Bank Bhd’s (HLBK MK, Hold, TP: RM8.71) proposed takeover of EONCap. However sources indicated that Primus’ invitation to Temasek Holdings Ltd, which is the Singapore government’s investment arm, was not likely to materialise as Temasek had declined the offer for a joint bid as there was not enough time to do due diligence. Sources indicated that Temasek may also not be keen to get into a bidding war for what is essentially, in global terms, a very small bank whose bottomline is not likely to make a significant impact on its balance sheet. A source said that such a joint bid was not likely to materialise as it was a one-sided idea to protect
Primus which had paid RM9.55 per share (over its closing price of RM6.74 yesterday) for its stake in EONCap early last year. Pricing is said to be key to the success of the talks, as Primus had paid a very high price while Rin and Tiong are believed to have paid only about RM2 per share for their stake in EONCap. Hong Leong’s Tan Sri Quek Leng Chan has not been known to
overpay on his deals that is said to be offering at this juncture only RM5.50 to RM6 per share, which is less than 1.3 times the book value of EONCap. The board of EONCap is expected to meet tomorrow to decide if it wants to be engaged in a takeover talk with Hong Leong. (Starbiz & BT)
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DRB-HICOM Bhd and the US-based General Motors Corp (GM) have mutually agreed to discontinue their two-year-old joint venture to import and distribute Chevrolet vehicles in Malaysia effective Jan 1, 2010. No reasons were given for ending the partnership, DRB-HICOM said it will hold a press briefing today. A Business Times report in September quoted sources as saying that DRB-HICOM would lose the job as local Chevrolet importer as GM was scouting for a replacement, then widely believed to be the Naza group. (BT)
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Green Packet Bhd has fixed the issue price of its proposed private placement of 59.75m shares at RM1.15 per share. Green Packet said the issue price represented a discount of 5.57% to the five-day volume weighted average market price of RM1.2178 from Dec 21 to Dec 28. (Financial Daily)
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Hiap Teck Venture Bhd has entered into an agreement to acquire a 55% stake in dormant company Eastern Steel Sdn Bhd for RM110m cash, gaining access to the latter’s planned blast furnace project and strengthening its position in the steel industry, especially downstream sector. Hiap Teck said it entered into a share sale agreement with Datuk Law Tien Seng, Lau
Chin An and Lee Ching Kion to acquire 80.38m shares, representing a 55% stake in Eastern Steel that they owned. Eastern Steel owns two parcels of land measuring 242.8ha in the Teluk Kalung Estate in Kemaman, Terengganu, Hiap Teck said. The company had obtained approvals from the Malaysian Industrial Development Authority and the Ministry of International Trade
and Industry to set up and commission a blast furnace plant on the land. (Financial Daily)
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Perusahaan Otomobil Kedua Sdn Bhd (Perodua) is confident that its car sales will not be affected following the implementation of the Asean Free Trade Area (Afta) in January. Its managing director DatukSyed Hafiz Syed Abu Bakar said based on the present situation, orders for its latest model, the Alza, have reached 15,000 units this month. "More than 50% of Malaysians have an income of less than RM3,000 monthly. Even with the implementation of the Afta, I do not expect the price of a foreign car to fall, as its manufacturing cost is increasing. Apart from that, local cars are still able to fulfill local consumers' preference," he said. He said even when the Afta is implemented, the current unstable global economy will impact the foreign exchange rate, which is getting higher. (BT)
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Linear Corporation Bhd had clinched a RM1.66bn job to construct and commission a cooling plant in Manjung, Perak. Linear said its wholly-owned subsidiary LCI Global Sdn Bhd had accepted the project awarded by Republic of Seychellesincorporated Global Investment Group Inc on Dec 24, 2009 to build and commission a 350,000 refrigeration tonne (RT) plant for the King Dome project. Linear said a formal contract would be entered into within 180 days of the letter of award, while the duration of work would be 24 months from the date of approval of the development plan by Manjung District Council. (Financial
Daily)
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Ta Ann Holdings Bhd entered a sale and purchase agreement to acquire the entire stake of Europalm Sdn Bhd for RM20.5m. In an announcement to Bursa Malaysia, Ta Ann said its unit Multi Maximum Sdn Bhd had entered into an agreement to acquire 2m shares of RM1 each, representing the entire stake in plantation company Europalm, which has land measuring 1,500ha at Jemoreng Land District, Sarawak. (Financial Daily)
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Malaysia, Asia’s third-most trade-dependent economy, may grow 4% in 2010, helped by government spending. The economy, hit hard by the global economic downturn, is likely to shrink by 2% to 3% in 2009, said Mohamed Ariff Abdul Kareem, executive director of Malaysian Institute of Economic Research (MIER). The economy contracted by 1.2% in the 3Q from a
year ago. Ariff said he expects growth to remain lacklustre for the next two years due to volatile global conditions and rising budget shortfalls. (Financial Daily)

GAMUDA, MEDIA PRIMA,PETRONAS,MAHB, ASTRO,CREST BUILD,PMCAP

Gamuda Bhd (GAM MK, Buy, TP: RM3.18) is not ruling out the possibility of cost increases caused by delays related to land acquisition for the electrified double-tracking project (EDTP), although the construction major is not planning any cost revision at the moment. The EDTP is valued at RM12.5bn and was awarded to MMC Gamuda Joint Venture Sdn Bhd, a joint
venture between Gamuda and MMC Corp Bhd, by the government in December 2007. ‘With the extension of time, the new completion date has been pushed to 2014. To date, only around 32% of the project has been completed, while based on the scheduled completion date (of early 2013) it should have reached at least 40% completion,” Gamuda group managing director Datuk Lun Yun Ling said. Gamuda also said it has been given an extension of 11 months to complete the EDTP due to delays in land acquisitions, mainly in Penang, Perlis, and Kedah. (Financial Daily)

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The acceptance rate from total voting shares for the takeover of The New Straits Times Press (M) Bhd by Media Prima Bhd (MPR MK, Hold, TP: RM1.69) has passed 79% and the delisting of NSTP will proceed. Media Prima group MD Datuk Amrin Awaluddin said the acceptance rate of the total voting shares would likely reach 80%. He also encouraged the swap of NSTP shares for Media Prima shares, while adding that as Media Prima now controlled more than 75% of NSTP, the delisting will proceed. Previously on Dec 17, after Media Prima’s EGM, Amrin said the delisting process would hopefully be completed by first quarter 2010. (Star Biz)

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Petronas wins rights to distribute 20,440 kilolitres of subsidised low-octane petrol in Sumatra, Indonesia next year. Indonesia’s PT Aneka Kimia Raya Corporindo will also distribute 56,500 kilolitres barrels of subsidised diesel oil in south Sumatra and Kalimantan. The Indonesian government planned to supply 21.4m kilolitres of subsidised petrol and 11.2m kilolitres of subsidised diesel in 2010. State oil firm Pertamina will supply the remaining subsidised petrol. Indonesia’s downstream oil regulator BPH-MIGAS decides each year on the rights to supply and distribute subsidised oil products such as low-octane petrol, kerosene and diesel. (BT)

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Malaysia Airports Holdings Bhd (MAHB) reported a 16.7% increase in international and domestic passenger traffic in October at Kuala Lumpur International Airport (KLIA). Data provided by MAHB showed an 18.8% increase to 1.76m international passengers for KLIA for this October compared to last October; while the number of domestic passengers was up
by 12.6% to 848,656. There was a total 15.7% increase in passenger traffic to 4.48m for other airports it operates in Malaysia and abroad for the month under review. Additionally, total cargo movement for KLIA increased by 11.1% to 57.53m kg with international cargo increasing by 10.7% to 52.65m kg while domestic cargo rose 15.9% to 4.87m kg. (Star Biz)

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Astro All Asia Networks plc will supply and license a content gateway software system to Saudi Bells Telecom Company LLC (SBC), as well as build and develop the system in the Middle East and North African territories. Astro said its subsidiary Digital Five Sdn Bhd (DFSB) had on the same day inked an agreement with SBC for the supply and licensing of the system on a non-exclusive basis to the latter. Astro said the total contract price was US$2.605m (RM8.9m) to be paid in three tranches. (Financial Daily)

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Crest Builder Holdings Bhd has been awarded a RM175.5m job to construct superstructure works of two 40-storey serviced apartment towers from Exceljade Sdn Bhd. Crest Builder said the high-rise residential project is located along Jalan Raja Muda Abdul Aziz here. “The contract period is 24 months from the date of site possession which has been set out on Jan 2, 2010, and the contract is expected to be completed by Jan 1, 2012,” the builder said. The project is expected to contribute positively to the earnings of the group for the financial years ending Dec 31, 2010 onwards. (Financial Daily)

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Pan Malaysia Capital Bhd, whose subsidiary PM Securities is involved in stockbroking, has failed in its application to obtain a merchant banking licence or restricted merchant banking licence. The company announced to Bursa Malaysia that Bank Negara said the Finance Minister had refused to grant the licence pursuant to section 6 (4) of the Banking and Financial Institutions Act 1989. The RM10m deposit with accrued interest was refunded. (Star Biz)
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CIMB, HONGLEONG, EON, PETRA,HOHUP

CIMB Group Holdings Bhd (CIMB MK, Buy, TP: RM15.00) says minority shareholders are key to whether it will delist
CIMB Thai Bank pcl after a dual listing in Thailand next year. Group CEO Datuk Seri Nazir Razak said it will consult the
small shareholders of its 93.2% owned CIMB Thai before a decision is made. The group bought into CIMB Thai, a Thai listed
local bank, last year. According to Nazir, Thailand doesn’t have a 10% squeeze-out rule, so the decision to delist will be in
consultation with the minority. A sample of opinion will be taken and action will be based on the feedback, he said. Investors in
Malaysia and Thailand reacted positively to the dual listing plan last month. The listing is expected to boost CIMB’s regional
profile, especially in Thailand, Nazir said. (BT)
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EPF may back a deal to merge the country’s sixth and seventh largest banking groups if it offered an attractive price.
EPF holds 10.7% of EON Capital Bhd, which is being eyed for a takeover by Hong Leong Bank Bhd (HLBK MK, Hold, TP:
RM8.71). Hong Leong already has the consent of Bank Negara to talk to Rin Kei Mei and the Tiong family about buying their
shares. Rin and the Tiong family own about 32% of EON Capital. Khazanah Nasional Bhd holds a tenth of EON Capital and is
said to support the deal. According to the latest annual report, as at Aug 28, EPF also holds about 10.86% in Hong Leong.
Since obtaining permission from Bank Negara to hold talks with EON Capital, Hong Leong will have to wait for the EON Capital
board to decide if it wants to talk and subsequently present any proposal from Hong Leong to shareholders. Primus Pacific
Partners Ltd is one of Eon Capital’s largest shareholders and is said to have control of the board, according to industry
sources. EPF and Khazanah do not have representatives on the board. (BT)
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Petra Perdana Bhd (PETR MK, Sell, TP: RM0.73) has received an interim ex-parte order by the High Court of Malaya
fixing an inter-parte hearing on Jan 11, 2010 on the application of Shamsul Saad to stop the sale of the remaining
29.59% stake in its associate, Petra Energy Bhd. Petra Perdana said the order had named the company, Tengku Datuk
Ibrahim Petra Tengku Indra Petra, his wife Datin Che Nariza Hashim, two other board directors Wong Fook Heng and Tiong
Young Kong and TA Securities Holdings Bhd as defendants. The order is to restrain Petra Perdana, Tengku Ibrahim, Nariza,
Wong, Tiong and any agents appointed by Petra Perdana as placement agent, from divesting the remaining shares in Petra
Energy until an extraordinary general meeting or the final disposal of the suit is held, whichever is earlier. Petra Perdana is now
awaiting further details of the suit and is seeking legal advice pending further announcements. (StarBiz)
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Kuwait Finance House (KFH) has pulled out of a RM237m deal to buy recently-completed The Icon, Jalan Tun Razak
(East Wing) from Mah Sing Group Bhd. The failed deal was announced by Mah Sing last Thursday, which means that the
RM42.67m, being an 18% upfront cost KFH paid earlier, has been forfeited. Mah Sing also said that it has found a new buyer
for the property in the form of T.S. Law Realty Sdn Bhd. Mah Sing, in its filing to Bursa Malaysia, said the deal was terminated
after Prompt Symphony Sdn Bhd, a special purpose vehicle (SPV) set up by KFH and an Australian firm, failed to pay the
balance of the agreed price. Mah Sing, through wholly-owned Star Residence Sdn Bhd, had signed the sale and purchase
agrement with Prompt Symphony in late November 2007. Prompt Symphony is an 80:20 SPV set up by KFH unit and Autron
Corp Ltd. It originally planned to buy The Icon, which measures 278,182 sq ft and will have 301 car park bays. Mah Sing said
that T.S Law Realty will pay RM226m for The Icon Jalan Tun Razak's 20-storey East Wing. (BT)
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Ho Hup Construction Bhd’s second-largest shareholder Low Chee & Sons Sdn Bhd (LCS) is opposing the board’s
proposed sale of two tracts of land. LCS, which holds a 24.7% equity stake, put up a notice to Ho Hup’s shareholders in 2
major newspaper urging shareholders not to support the proposed sale contending that the disposal price is “significantly
undervalued.” The first tract, measuring 5.5 acres located in Balakong, Selangor is proposed to be sold to Kentlee (M) Sdn Bhd
for RM7.2m cash, which is about RM30 psf. The second parcel of land held by 70%-owned subsidiary Bukit Jalil Development
Sdn Bhd, measuring 2.6 acres will be sold for RM5.67m or RM50 psf to Etnik Masyhur Sdn Bhd. Datuk Low Tuck Choy, one of
the owners of LCS, is of the opinion that the board fails to obtain the best prices for the land. The advertisement urged
shareholders to decide on what is “best for the proposals” at the coming EGM. Nonetheless, Ho Hup’s managing director Lim
Ching Choy disagreed with Low’s accusations. “The first plot of land in Balakong has no access from the main road. It is
actually lucky already that the adjacent landowner, who already has access to his own land, wants to buy it,” he said. (Financial
Daily)
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PROPERTY STOCKS -- OVERWEIGHT

FROM ECM LIBRA
A perfect Christmas gift
· Property tax only for sale within 5 years of acquisition
Prime Minister Datuk Seri Najib Tun Razak presented the perfect Christmas gift to the Malaysian property market when he announced yesterday that the real property gain tax (RPGT) of 5% will only apply to property sold within 5 years of the date of purchase. Recall that the government has re-introduced the RPGT during the 2010 Budget which imposes a flat 5% tax on gains from sale of property regardless of the year of acquisition with effect from 1 January 2010.

· An affirmative signal of accommodative stance
While there is still a 5% RPGT for property sold within 5 years going forward, we believe the toning down by the government from its earlier proposal will provide a much needed relief to the property sector as it sends an affirmative signal that the government will adopt an accommodative stance to support growth in the property sector. Although the revised property tax regime will dampen speculative activities, we took comfort from the fact that the flat tax rate of 5% is minimal as compared to the reducing scale rate from 30% to 5% of the RPGT tax regime prior to its suspension on 1 April 2007 (refer to Figure 2 for comparison).

· Residential properties sales will be strong
Even with the RPGT, over the past few weeks, we have noticed very strong take-up rates for landed residential properties, especially super-link terrace houses, semi-detached houses and bungalows which cater to the upper-middle class. We attribute such strong buying interest on the low interest rate environment as well as improving sentiment on brighter economic outlook. With the relaxation of the RPGT regime, we believe buying interest to pick up pace especially among upgraders who need to sell their existing properties first.

· Maintain OVERWEIGHT
We have upgraded the property sector earlier this month from neutral to overweight due to the convergence of sustained property demand, despite the RPGT, and recent price correction affecting property stocks which led us to believe that the property sector will be an outperformer going into 2010. We believe developers with residential properties catering to middle to upper-middle class such as Sunway City and SP Setia to benefit from strong demand and hence, rate these two as our top picks for the sector. Among non-rated property stocks, we also like IJM Land and Mah Sing.

MAH SING, JETSON,MPCORP, PJI

Mah Sing Group Bhd plans to use the bulk of the RM97.6m raised in its recent private placement exercise that wascompleted on Dec 10 to subscribe for shares in a company in China. The company said it would use RM81.9m of theproceeds raised to meet the initial capital requirements to incorporate a 100% subsidiary in China as part of a deal to securethe land use rights in Wujin District, Changzhou City in China. Mah Sing said it would use only RM15.4m for working capitalrequirements and RM300,000 would be used for expenses of the exercise. The developer is involved in a mixed propertydevelopment project in the Wujin District with a joint venture partner, Danlong Realty (Beijing) Ltd. (Financial Daily)

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Naza Group has drafted Kumpulan Jetson Bhd as a partner to develop the country's largest exhibition centre on 62.45acres of prime federal land off Jalan Duta in Kuala Lumpur. Naza, through wholly-owned TTDI KL Metropolis Sdn Bhd, andKumpulan Jetson sealed a pact to form a 51:49 joint venture (JV) called TTDI Jetson Sdn Bhd. Kumpulan Jetson will eventuallyget a RM628m job to build the proposed Matrade Centre, which will have a 1m sq ft of gross floor area. TTDI Jetson will sign aproper development agreement with TTDI KL Metropolis once Kumpulan Jetson has obtained shareholders' nod for theproposed JV at an extraordinary general meeting to be convened soon. TTDI Jetson will then award Kumpulan Jetson thecontract to build the Matrade Centre for RM628m, the latter said. "The company will carry out the planning, design, constructionand complete the Matrade Centre," Kumpulan Jetson said. The company will build the Matrade Centre for the government at itsown cost. In return for the exhibition centre, TTDI KL Metropolis has the exclusive rights to develop the land into a mixedproject tentatively dubbed the "Naza KL Metropolis Development". The project will boast of hotels, offices, residences andshopping malls, with a gross development value of RM15bn over 15-20 years. Naza and Kumpulan Jetson have estimated thatthey would have to fork out some RM800m to render Matrade Centre functional plus the land premium for conversion of the25ha into commercial status. (BT)

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Malaysia Pacific Corp Bhd (MP Corp) hopes to start construction of the RM4bn Asia Pacific Trade & Expo City (APTEC)next year. The company was finalising joint-venture partners for various parcels of the project, which is expected to becompleted in eight years. President and CEO Datuk Bill C.P. Ch’ng said the intention was to build the whole project in one go.To do this APTEC will be broken up into 18 to 20 different parcels with each parcel to be funded separately, so that the variouscomponents will take off simultaneously without incurring heavy financial burden to the company. MP Corp pared down currentliabilities to RM5.6m as at June 30, compared to RM150m a year ago. The company also proposed a rights issue to raiseRM54m to enlarge its capital base. APTEC will accommodate 2.5m sq ft of exhibition space in four trade halls as well as retailmalls. Hotels including a 50-storey five-star property, as well as offices and commercial units are being planned on the 60-acresite in Iskandar Malaysia. (Star Biz)

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PJI Holdings Bhd is eyeing a contract to provide mechanical and electrical engineering services worth RM400m toRM500m at the new LCCT terminal. It plans to fund the job through private financing initiatives (PFIs). CEO Lim Chong Lingsaid that next year the company will also explore water-related projects. PJI is also waiting for details of the 10th Malaysia Planas it saw many opportunities in relation to its core business of mechanical and electrical engineering services. The companyhas tendered for jobs worth RM500m since June, mainly in mechanical and electrical engineering services and waterinfrastructure. PJI now has an orderbook of about RM150m and hopes to add RM150m to RM200m by June 2010. (StarBiz)

EONCAP, YTL,PETRA,E&O, KPJ,MRCB, TALIWORK

Two major shareholders of EON Capital Bhd (EON Cap) – Singaporean Rin Kei Mei through Kualapura Sdn Bhd andLintang Emas Sdn Bhd, and the Tiong group through RH Development Sdn Bhd – have received the green light fromBank Negara to negotiate the sale of their stakes in the banking group. EON Cap said its board had been notified by RHDevelopment Corp, Kualapura and Lintang Emas that they had received approval from Bank Negara to start negotiations withHong Leong Bank Bhd (HLB) (HLBK MK, Hold, TP: RM8.71). Based on past merger and acquisition (M&A) transactions, whichwere largely a combination of share swaps and some cash outlay, the potential merger could also enable EON Capshareholders to ride on HLB’s future growth and upside in share price. (StarBiz)
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The Penang Development Corp (PDC) and YTL Land & Development Bhd yesterday signed an agreement to developluxury apartments on a 1.38ha land in Lebuh Farquhar in Penang. Each party will hold 50% equity in the project and theycould start anytime soon, Penang Chief Minister Lim Guan Eng said. A hotel was originally to be built on the site by PDCHeritage Hotel Sdn Bhd, a joint venture between YTL Hotels & Properties Sdn Bhd,a wholly-owned subsidiary of YTL Corp Bhd(YTL MK, Buy, TP: RM8.00) and PDC. After the project was shelved due to the economic slowdown, PDC Heritage Hotelsought to change the type of development from hotel to luxury apartment. Subsequently, it applied to change the type oflandholding to freehold and the condition of land use to residential and business. "The state government approved PDCHeritage Hotel's application on June 3 2009 subject to three additional conditions," Lim said. He said the building height mustfollow the Unesco guidelines which was not more than 5 storeys and all costs pertaining to condition changes which exceededRM8.2m must be borne by YTL Hotels. The new project comprises three six-storey 76-unit apartment blocks including anunderground basement, a clubhouse and a restaurant. (BT)
* * * * *

Petra Perdana Bhd (PETR MK, Sell, TP: RM0.73) has made certain declarations in relation to its divestment of shares inPetra Energy Bhd, including saying that Tengku Datuk Ibrahim Petra will continue to helm both companies. “IbrahimPetra will continue to helm, post divestment, both Petra Perdana and Petra Energy in his capacities as executive chairman andCEO, and executive chairman respectively,” the company said in a statement. It also said Petra Perdana would continue tooperate its business in the offshore marine industry. In this regard, the company would continue to explore opportunities in thevessel charter business in line with the new deliveries and improving market conditions. (StarBiz)

* * * * *
Maybank Investment Bank Bhd and Mizuho Securities Co Ltd (MHSC) have formed a strategic alliance to worktogether in areas such as primary and secondary markets, mergers and acquisition advisory and Islamic markets. In ajoint statement yesterday, the two parties said they would leverage on their mutual expertise, experience and robust globalnetworks to further develop markets in Malaysia, Japan, and other regions. The statement preceded the signing of amemorandum of understanding between Maybank IB and MHSC. (Financial Daily)

* * * * *
Eastern & Oriental Bhd has proposed to dispose of a piece of freehold land in Kuala Lumpur to Menara Hap Seng SdnBhd for RM103m with the proceeds to be used as working capital and repay bank borrowings. The property developersaid in an announcement that its wholly owned unit, Radiant Kiara Sdn Bhd had entered into a sale and purchase agreement tosell the 0.46ha parcel of freehold land with preliminary construction works in KL to Menara Hap Seng. E&O said the proposeddisposal is expected to result in a one-off gain of RM31m. The proceeds would be fully used by 2010 as working capital andpare down its borrowings of RM1.03bn as of Nov 30, 2009. If the entire proceeds were used to pare down borrowings, theannual savings in interest is expected to be about RM5.8m based on average interest rate of 5.7% per annum. On March 31,2009 the net book value of the land stood at RM55.1m and was acquired for RM26.58m in May 2006. The proposed disposal isexpected to be completed in 1Q 2010. (Financial Daily)

* * * * *
KPJ Healthcare Bhd has estimated a capital expenditure (capex) of RM150m for next year. Chairman Tan SriMohammad Ali Hashim said the money would be spent on upgrading its current medical facilities and building new hospitals inthe country. “The company usually spends around RM150m annually on capex but this also depend son the stability of theeconomy,” he said. “In spite of the economic slowdown, KPJ is confident that its performance for fiscal year 2009 would bebetter than the previous year,” he said. At the EGM, KPJ received approval from its shareholders to proceed with its proposedshare split, bonus and warrant issues. The exercise will involve the sub-division of one ordinary share of RM1 each in KPH into2 ordinary shares of 50 sen each, followed by a 1-for-4 bonus issue and a subsequent 1-for-4 free warrant issue. Uponcompletion of the exercise and full conversion of the warrants, KPJ will increase its share base to 660m from 211m. (Starbiz)

MalaysiaMalaysian Resources Corp Bhd (MRCB) has made an informal approach to buy or help develop thousands of acres offederal land in the Klang Valley. But its recently-appointed chief executive officer Mohamed Razeek Hussain stressed that noformal bid has been submitted. "We have expressed our interest. It's up to the government to whom it wants to allocate theland," Razeek said in response to whether MRCB had made a bid to the government for prime land in two areas. He wasspeaking after MRCB's extraordinary general meeting on its proposed rights issue in Kuala Lumpur yesterday. The governmentrecently announced plans to sell or co-develop its prized landbank in Cheras, Kuala Lumpur and Sungai Buloh in Selangor.The latter land is sited near an industry park in Kota Damansara, with an estimated market rate of RM30 per sq ft. Razeek saidMRCB is keen on increasing its landbank to turn it into mixed development projects. MRCB, he said, is unlikely to make anycash call in the next 5 years after its proposed renounceable one-for-two rights issue. Shareholders yesterday gave their nodon the exercise that will raise gross proceeds of between RM508m and RM541m. Meanwhile, the rights issue at RM1.12 ashare will raise MRCB's share capital to between 1.36bn and 1.44bn from the present 907.62m shares. (BT)

* * * * *
Taliworks Corporation Bhd has proposed to issue RM395m of secured bonds 2009/2024, which would partly financethe early redemption of its convertible bonds that will expire in 2012. It told Bursa Malaysia that the 2009/2024 bondswould be issued via its special purpose vehicle, Destinasi Teguh Sdn Bhd, which would act as a funding conduit to raise fundsfor the group. Funds raised from the proposed 2009/2024 bonds will be used to redeem 50% of the RM225m nominal value of2.25% convertible bonds 2007/2012. The statement also said that the funding exercise will suit the group’s long-term financingneeds and mitigate early redemption risk of the convertible bonds which will arise in 2010. On Dec 17, Taliworks also enteredinto a bond purchase agreement with the holders of the 2007/2012 bonds to purchase 50% of the bonds. Despite using part ofthe proceeds raised to redeem 50% of the 2007/2012 bonds it had offered to purchase the bonds to reduce financing costsbecause of a possible delay in the implementation of the private debt securities. (Financial Daily)

* * * * *
The government plans to compulsorily buy a piece of land measuring 0.38ha on Jalan Tun Razak, Kuala Lumpur, fromproperty developer IGB Corp Bhd. The land is near Megan Phileo Promenade and a stone's throw from the Petronas TwinTowers. Should the government pay the prevailing price of around RM1,200 per sq ft for the piece of land, the land may be soldfor some RM40m, a source said. It is understood that the government may build a fire station on that location. "IGB has alreadyreceived a development order to build 166 units of high-end service apartments with 200,000 sq ft of net saleable area," asource told Business Times. The source added that IGB hopes to get at least RM1,200 per sq ft, given that land prices invicinity of the Kuala Lumpur City Centre ranges from RM1,900 to RM2,200 per sq ft. Should IGB be paid RM1,200 per sq ft, itmay get some RM40m from the government. "The project is in the pipeline, but it has not been launched yet," another sourcesaid. (BT)

* * * * *
Car sales expanded for the second consecutive month in November indicating market conditions have improvedcompared with a year earlier. The Malaysian Automotive Association (MAA) said passenger and commercial vehicle salesvolume grew 23%, or 4,335 units, to 45,200 units in November from 40,865 a year earlier. Production of vehicles was 17.26%lower at 40,074 units from 48,431 units a year earlier. YTD, car sales volume fell 3.75% to 489,237 units from 508,290 units ayear earlier. Production also fell 10.77% to 444,755 units from 498,419 units. For December 2009, MAA said year-on-yearexpansion of car sales was expected although month-to-month volume was likely to be lower, as December was a vacationand it was normal for customers to take delivery of vehicles in 2010 instead of 2009 year-end. (Financial Daily)

CIMB, PETGAS,HONG LEONG,HONG LEONG,MAYBAN ,IOI,MAS

CIMB Bank Bhd, a subsidiary of CIMB Group Holdings (CIMB MK, BUY, TP: RM15.00), is in talks to sell down its stakein Southeast Asia Special Asset Management Bhd (Seasam) that manages its legacy non-performing loans (NPLs).CIMB said it would consider a cross-listing in Indonesia if rules permitted. “Logically, we would like to deconsolidate Seasam.(Selling) more than 51% would be nice,” CIMB Group chief executive Datuk Seri Nazir Razak told the media. A wholly ownedunit of CIMB, Seasam is a special purpose company that holds gross loans amounting to RM8.4bn and has a net book value ofRM928m. CIMB added that while the portfolio had been written down to RM928m, the total value of the collateral wasestimated to be RM2.1bn. Nazir feels Seasam would make a profit over time. (StarBiz)

* * * * *
Tenders called for Kimanis plant. Tenders for the purported RM900m Kimanis power plant from the consortium of PetronasGas Sdn Bhd (PetGas) (PTG MK, Buy, TP: RM10.90) and Yayasan Sabah are in the process of being given out to the shortlisted 12 companies, say sources. Pre-qualification for the project, which started in April, was only completed at the beginningof December and local parties in the running include Muhibbah Engineering (M) Bhd (MUHI MK, Sell, TP: RM0.74) and GadangHoldings Bhd. However, it’s unknown who the companies are partnering in this venture or whether they are spearheading aconsortium of their own. The usual practice is for local companies to joint venture with established multinationals forinfrastructure projects of this nature. The source says the shortlist includes Japanese firms Sumitomo, Marubeni, and Mitsuigroup. The final cost of the 300MW gas plant is yet to be finalised although Yayasan Sabah says the plant is expected to becompleted in 2013. Under the agreement, Kimanis Power Sdn Bhd was established to implement the project with PetGasholding 60% and Yayasan Sabah holding the rest. The power will be sold to Sabah Electricity Sdn Bhd, which is under theumbrella of Tenaga Nasional Bhd (TNB MK, Buy, TP: RM9.90). (The Edge)

* * * * *
Hong Leong Bank Bhd (HLB) (HLBK MK, Hold, TP: RM8.71) may acquire assets and liabilities, including equityinterests, in EON Capital Bhd. The banking group had received Bank Negara’s approval to commence negotiations withcertain shareholders of EON Cap. HLB did not disclose specifically which shareholders it would approach to start thenegotiation, saying it would make further announcements. Primus Pacific Partners Ltd, RH Development Corp Sdn Bhd,Kualapura (M) Sdn Bhd, the Employees Provident Fund and Khazanah Nasional Bhd are among the substantial shareholdersof EON Cap. (StarBiz)

* * * * *
Two shareholders of EON Capital Bhd, who hold a combined 32.57% stake, have dismissed speculation that they arewilling to sell their stakes in EON Capital at RM8.20 per share to Hong Leong Bank Bhd (HLBK MK, Hold, TP: RM8.71).Rin Kei Mei, who owns a 15.46% stake, and the Tiong family (17.11%) said in a joint statement last Saturday that they wouldnot be selling their stakes to Hong Leong Bank. (Financial Daily)

** * * *

Malayan Banking Bhd (Maybank) (MAY MK, BUY, TP: RM8.10) has completed the acquisition of 17.8m shares or 5% inVietnam’s An Binh Commercial Joint Stock Bank for about 356.3bn dong (RM66.4m). Maybank Investment Bank Bhd saidon behalf of Maybank that the bank currently held 60.56m shares in An Binh following its latest acquisition. Earlier, thecountry’s largest lender spent RM430m to acquire a 15% stake in An Binh Bank. With a 20% stake, Maybank’s holdings in theVietnamese bank are at the maximum allowed for a foreign partner in Vietnam. (StarBiz)

* * * * *
IOI Corp Bhd (IOI MK, HOLD, TP: RM5.21) will be focusing on new plantings on its Indonesian estates next year tohasten contributions from its foreign landbank. The group had added two new estates in Indonesia during the financial yearended June 30, 2009, bringing its total landbank to 172,980ha. According to its latest annual report, about 68% of the group’splantation holdings are in East Malaysia, 31% in Peninsular Malaysia and the remaining 1% in Indonesia. The report showsthat the group’s landbank in Indonesia measures about 2,110ha where most of its land is still undeveloped or are mostlyimmature oil palms. (Financial Daily)

* * * * *
Malaysian Airline System Bhd (MAS) (MAS MK, SELL, TP: RM2.00) will increase capacity next year to prepare for anindustry upturn, after a 12%-13% reduction this year. “When we increased capacity by 10%, there was a 20% increase in(passenger) traffic,” managing director and CEO Tengku Datuk Azmil Zaharudin said. Azmil said the airline had seen stronggrowth in passenger traffic in the 3Q and 4Q of the year, a sign that recovery might be under way for the air transport industry.(Financial Daily)

BERJAYA SPORTS TOTO ---BUY

FROM ECM LIBRA
Supplies lottery system to related party GAMING
· News
Berjaya Sports Toto Bhd (BToto) yesterday announced that International
Lottery & Totalizator, Inc (ILTS), an indirect subsidiary, entered into a
Purchase Agreement with Natural Avenue Sdn Bhd (NASB), a 65%-
owned subsidiary of Berjaya Assets Bhd (BAssets).
Under the agreement, ILTS will sell a lottery system comprising on-line
lottery terminals, central systems hardware, software and project services
for a total cash consideration of US$3.2m (RM12.67m). ILTS is a leading
supplier of computerized wagering systems for the online lottery and parimutuel
racing industries.
NASB is acquiring the lottery system to replace its existing 14-year old
betting system which has limited capacity.
The proposed sale is expected to be completed by 2H10. The cash
proceeds from the sale will be used by ILTS for working capital. (Bursa)
· Comments
We are neutral on this development given that while the proposed sale is
a related party transaction (RPT) since they share a common major
shareholder in Berjaya Corporation Bhd, the amount involved is relatively
small.
We note that BAssets has a gaming operation via NASB, which runs a
number forecasting operation in Sarawak. NASB’s gaming operations
contributed about 68% of BAssets total revenue in FY09.
As we expect minimal to BToto’s earnings, we have maintained our
earnings forecast. We reiterate our BUY call on BToto with a DCF-derived
(WACC: 7.5%, g: 2%) target price of RM5.30. Risks include (1)
intensifying competition from alternative jackpot games (2) higher than
expected prize payout and (3) lower than expected dividend payout ratio.

HONG LEONG, MAYBANK, BOUSTEAD

HSBC Holdings plc, Bank of Nova Scotia and Hong Leong Bank Bhd (HLBK MK, HOLD, TP: RM 8.71) are amongbidders for a stake in Siam City Bank Pcl. Thailand’s central bank is seeking about US$1bn (RM3.4bn) for its 47.6% stake,people with knowledge of the matter said last month. Thailand, wracked by violent political protests in the past two year, iseasing restrictions on foreign ownership of banks to encourage investment and boost competition in the financial industry.Yvonne Chia, managing director of Hong Leong Bank, didn’t respond to an email regarding the bid (Financial Daily)

* * * * *

Malayan Banking Bhd (MAY MK, Buy, TP: RM8.10) will raise its stake in Vietnam’s An Binh Bank to 20% from 15%, theVietnamese lender said yesterday. An Binh Bank will sell 17.8m shares today for 20,000 dong each. The share sale wouldraise its registered capital by 22% to 3.48trn dong (RM638.3m). (Financial Daily)

* * * * *

Boustead Holdings Bhd (BOUS MK, SELL, TP: RM3.05) has terminated a sale and subscription agreement to acquire a51% stake in Atlas Hall Sdn Bhd for RM8m and came up with a new agreement to acquire the stake at half the price. Ina statement to Bursa Malaysia, it said it would buy 400,000 shares, equivalent to a 20% stake in Atlas Hall from Tan Sri AbdulRashid Abdul Manaf for RM1.41m and subscribe to 1.27m new shares in the company for RM2.67m, or RM2.11 apiece,representing a share premium of RM1.11. It said the amount it would now pay for the acquisition, amounted to RM4.08m.(Financial Daily)* *

16.12.2009 local business news

Mah Sing Group Bhd has secured an en bloc sale of a 7-storey retail and office space known as Apex Tower to a
Taiwanese individual, Chen Ho-Yuen for RM63m cash. Mah Sing said Apex Tower, which has about a net floor area of
90,126 sq ft, formed part of the overall freehold commercial development project, Southgate, located at the intersection of
Jalan Dua and Jalan Sungai Besi, about 3km from KLCC. Mah Sing’s subsidiary, the registered owner, yesterday entered into
a sale and purchase agreement with Chen for the proposed transaction. Apex Tower is under construction. Mah Sing said the
proposed en bloc sale would provide funds for the development of Southgate while further improving its working capital
available for future business expansion. (Financial Daily)
* * * * *
Mudajaya JV gets RM241m job. Mudajaya Group Bhd’s joint venture with Bina Rezeki Sdn Bhd has received a letter of intent
from Boulevard Plaza Sdn Bhd, the owner of the proposed Boulevard Plaza development in Putrajaya, for the design and
construction of the project for RM241.29m. Mudajaya said its wholly owned subsidiary Mudaya Corporation Bhd had a 51%
interest in the JV with Bina Rezeki. The Boulevard Plaza development is expected to be completed by Dec 31, 2011. (Financial
Daily)
* * * * *

Petronas’ international oil reserves received a boost. Together with four consortiums, it secured four oilfield development contracts in Iraq – said to have the last and largest onshore oil reserves that can be tapped economically. The four new contracts will lift Petronas’ international crude oil reserves by an additional 3.6bn barrels of equity reserve to a total of 5.8bn barrels, exceeding the domestic crude oil reserve of 5.5bn barrels. Petronas chairman and president, Tan Sri Hassan Marican said the oil company bid with different partners for five contracts in Iraq’s second oil contract auction. Petronas has been granted the licenses through four partnerships to develop Majnoon, Halfaya, Badra, and Garaf oilfields, all of which are already in production. Hassan said production could take place immediately as the fields are proven crude oil reserves and no exploration is required. The contracts given were service contracts where Petronas earns fee income based on the production level measured in barrels. (Financial Daily)
* * * * *
Malaysia could lose billions of ringgit in palm oil export earnings if a serious labour shortage in Sabah continues, industry officials say. The plantation sector in Sabah, Malaysia’ most productive palm oil producer has seen its work-force fall
by a fifth recently, Malaysian Palm Oil Association (MPOA) chief executive Datuk Mamat Salleh said. Checks with plantation companies revealed that more than 10 sizeable oil palm estates in the state did not have enough workers because those who
had gone home to Indonesia for the Hari Raya Puasa and Haji holidays did not come back. The main reason was that estates in Kalimantan were paying the same wages offered in Sabah, Mamat said. “If foreign workers, comprising half of the 600,000
workforce in palm oil industry, are reduced by 30%, our country’s palm oil export earnings could shrink as much as RM10bn a year,” he said in an interview. Two months ago, East Malaysia Planters’ Association (Empa) chairman Othman Walat reportedly said that oil palm planters in Sabah and Sarawak might recruit workers from China, Bangladesh and the Philippines to make up for the shortage of Indonesian workers. However, industry officials felt that it was easier said than done as other
nationals did not prefer working on the estates, while Malaysians were under assumption the job does not pay well. (BT)
* * * * *
Dell Malaysia plans to lay off 700 employees in Penang in 2010 in line with its decision to shift its notebook production in Bukit Minyak to other locations. Dell has 4,500 employees at manufacturing plants in Bukit Minyak, Penang and
Cyberjaya. The downsizing exercise will involve mainly employees at the Bukit Minyak facility, which produces notebook computers for the US, Latin American and Canadian markets. Dell senior manager of corporate communications Jasmine Begum said all the affected employees were Malaysians and offered competitive severance packages in voluntary separation scheme (VSS). Jasmine said the move to offer VSS was in line with Dell’s plans to move up the value chain. The exercise would start in January 2010 and complete by July 2010 and involve front-line employees including board, operators, supervisors, and managers. Last March Dell cut 60 employees in Penang as part of its exercise to cut its global workforce by 10%, or 8,800 people and save up to US$3bn. (Financial Daily)
* * * * *

TENAGA, SIME, YTL

Tenaga Nasional Bhd (TNB) (TNB MK, Buy, TP: RM9.90) has no intention to sell its stake in Jimah Energy Ventures Holdings Sdn Bhd which controls the coal-fired 1,400 MW Jimah power plant and the concession for its operations and maintenance. “There is no reason why we should sell,” TNB president and CEO Datuk Seri Che Khalib Mohamed Noh said when asked if TNB was open to parties interested in acquiring its stake in Jimah Energy. Che Khalib said it had yet to be notified of such offers. “We have not been notified by Jimah. We are also a shareholder of Jimah. In fact, under the Jimah shareholder agreement, we have pre-emptive right and if they want to sell their stake to another party, they have to seek our consent,” Che Khalib said. (Financial Daily)

* * * * *
Tenaga Nasional Bhd (TNB) (TNB MK, Buy, TP: RM9.90) has short-circuited hopes for a reduction in power charges,saying it would not be feasible for the Government to cut both electricity prices and subsidies for utilities simultaneously. “Logically, you can’t reduce both subsidies and tariffs at the same time, CEO Datuk Seri Che Khalib
Mohamad Noh said. “I think the revision of gas (prices) in January 2010 by the Government and its impact is more crucial, rather than asking TNB whether we are going to increase the tariffs.” Che Khalib said. He added that any move by the
Government to lower electricity prices, even as natural gas costs rise, would not be feasible. He also said TNB expected electricity demand in the country to grow 3% in its FY10 on the back on an economic recovery. Meanwhile, Che Khalib said TNB was finalising 3 tenders it received for the 2nd phase construction of the Ulu Terengganu hydropower plant and expected to award the contract by February. He said the 3 parties that had submitted their bids were Loh & Loh Corp Bhd, which submitted a joint bid with Sinohydro Corp; Italian company Salini Construction; and Gamuda Bhd (GAM MK, Buy, TP: RM3.42), which also submitted a joint bid with a Chinese company. (BT)

* * * * *

Sime Darby Bhd (SIME MK, Hold, TP: RM8.10) is sticking to its acquisition price of RM530m for the Teluk Ramunia fabrication yard, despite independent valuation showedthat the assets are worth RM434.69m. Sime Darby said the final consideration price that it had agreed to pay Ramunia Holdings Bhd for the fabrication yard was agreed on Sept 3 on a willingbuyer- willing-seller basis. In September, Sime Darby and Ramunia had agreed on the price consideration for the latter’s shipyard and assets at RM530m, a reduction of RM30m from the RM560m earlier. (Financial Daily)

* * * * *

YTL Corporation Bhd (YTL MK, Buy, TP: RM8.00) has proposed to issue up to US$400m exchangeable bonds via wholly owned offshore subsidiary YTL SPV to refinance existing borrowings and pursue potential acquisition opportunities locally and abroad. YTL Corp said the up to seven-year guaranteed exchangeable bonds could be exchanged into new ordinary shares of 50 sen each in the group. CIMB Investment Bank Bhd has been appointed principal adviser. The proceeds from the bond issuance would be partly used to refinance its US$300m zero coupon guaranteed exchangeable bonds due in 2012 issued by YTL Corp Finance (Labuan) Ltd on May 15, 2007. YTL Corp said that despite the 2007/2012 bonds having a maturity date in May 2012, the exchangeable bonds have conditions that include a put option which enable bondholders to redeem all or part of the 2007/2012 exchangeable bonds on May 15, 2010.If all the bondholders exercise the put option, YTL Labuan will be required to meet the redemption amount of 108.7% of their principal amount, amounting up to
US$326.1m. The bond issuance exercise is expected to complete by second half of FY2010. (Financial Daily)

15.12.2009local business news

Malaysia’s largest lender Malayan Banking Bhd (Maybank) (MAY MK, Buy, TP: RM8.10) yesterday denied news reports
that it would bid for a stake in Siam City Bank Pcl (SCIB), Thailand’s 7th largest bank in terms of asset size. It was
reported that HSBC plc, Maybank, Standard Chartered plc, Australia & New Zealand Banking Group, Thanachart Capital and
Bank of Nova Scotia were among the banks expected to make bids for a stake in SCIB today. Speculation was rife that
Maybank was among the potential buyers of the stake after the Financial Institutions Development Fund (FIDF), the rescue
arm of Thailand’s central bank completes the sale of its 47.58% stake in SCIB in 1Q10. “Maybank wishes to emphasise that
our regional growth strategy remains focused on organic growth in our key markets and in creating synergies to extract best
value from our regional acquisitions,” the bank said. (Financial Daily)
* * * * *
Magna Prima Bhd’s hopes of acquiring a piece of land in Bukit Jalil from Ho Hup Construction Bhd were rekindled
when the High Court ruled in its favour an application to grant an injunction to stop the sale of the land by the
construction company to third parties. In an announcement on Monday, Magna Prima said that the court granted its wholly
owned subsidiary Permata Juang (M) Sdn Bhd an injunction to stop and/or restrain Bukit Jalil Development Sdn Bhd, a 70%
subsidiary of Ho Hup, or their servants and agents from disposing of the parcel of land via a tender and or in any other manner
until the completion of the trial. The land in contention was to be sold for RM19.4m. (Financial Daily)
* * * * *
Permodalan Nasional Berhad (PNB) is looking at the possibility of developing a 100-storey building near Stadium
Merdeka and Stadium Negara in Kuala Lumpur if the project is viable. Group chief executive and president Tan Sri Hamad
Kama Piah Che Othman said the board of directors of PNB will study all possibilities before making any decision. The report,
quoting sources, said construction work on the building was expected to commence in the first quarter of next year. It said the
proposal on the building had been also submitted to the Ministry of Finance and that it was being studied in detail. PNB is
planning to develop the 72 hectare area surrounding the country’s oldest stadiums into a mixed development project.
(Malaysian Reserve)
* * * * *
Permodalan Nasional Bhd (PNB), Malaysia’s biggest state asset manager, said it is seeking ways to “maximise”
returns on its newly merged property unit, including a possible initial share sale. “It depends on the market conditions
and the value that we create.” PNB CEO Tan Sri Hamad Kama Piah Che Othman said. PNB, which manages more than
RM100bn of assets, has completed the merger of its 3 property companies, Island & Peninsular Bhd which was bought for
RM670.5m, Petaling Garden Bhd for RM477m in 2007 and Pelangi Bhd 2 years earlier, after taking them private, Hamad Kama
Piah said. PNB “hopes” the Malaysian stock market would do better next year as the government pushes through its efforts to
revive the economy, he said. (Financial Daily)
* * * * *
John Master Industries Bhd (JMI), a clothing and property developer, obtained regulatory approval to transform into a
China-based textile fabric maker. The Securities Commission (SC) had given permission to inject the assets of fabric-maker
Be Top Group Ltd and its subsidiary Top Textile (Suzhou) Co Ltd, which it plans to buy for RM393.2m, into the group. The SC
also approved a rights issue which allows JMI shareholders to re-invest in the company’s new China-based business. JMI also
plans to change its name to Sinotop Holdings Bhd. All these plans are subject to JMI’s shareholders’ approval. (BT)
* * * * *
Power utility giant State Grid Corp of China (SGCC) plans to invest US$6bn to US$8bn to set up one of the world’s
largest aluminium smelter plants and three hydroelectric dams in Sarawak through a joint cooperation with 1Malaysia
Development Bhd (1MDB). 1MDB is a strategic development company wholly owned by Minister of Finance Inc, and will coinvest
in the project via cash or “assets” or both. The investment in the smelter plant is estimated to be around US$3bn.
According to a source, “The Chinese partner has technical expertise and considerable capital. 1MDB can help facilitate the
investment from the standpoint of the state and federal governments and power through all the bureaucracy.” SGCC is ranked
third in China’s Top 10 Enterprises by Forbes, and its investment will boost the Sarawak Corridor of Renewable Energy
(SCORE). (Star Biz)
* * * * *

Dubai gets $10B from Abu Dhabi to cover debt---GOOD NEWS?!

DUBAI, United Arab Emirates (AP): Dubai's government says it has received $10 billion in emergency funds from oil-rich neighbor Abu Dhabi that will go toward paying debts owed by its struggling Dubai World conglomerate.
Some $4.1 billion of the money will be used to pay off a pile of debt from Dubai World's Nakheel property division that comes due Monday.
Dubai's ability to repay those funds had been seen as a key test of the debt-laden emirate's creditworthiness.
The UAE central bank, based in the federation's capital Abu Dhabi, also says it is prepared to provide support to local banks.

14.12.2009 local business news

Khazanah Nasional Bhd sold 86.75m shares or a 2% stake in Tenaga Nasional Bhd (TNB) (TNB MK, Buy, TP: RM9.90)for RM702.7m in a placement last Friday. The placement price of RM8.10 per share represents a 3.6% discount to theclosing market price on Dec 10 of RM8.40. After the deal, Khazanah remains the biggest shareholder in the utility firm with35.75% of total equity interest, followed by the Employees Provident Fund (EPF) with 16.76% and Skim Amanah SahamBumiputera with 9.05%. The sale is seen as part of a series of economic reforms being undertaken by Prime Minister DatukSeri Najib Razak which included the lifting of ethnic quotas in selected sectors of the economy and capital markets earlier thisyear. (Malaysian Reserve)
* * * * *
Petrolium Nasional Bhd (Petronas) together with bid partners won contracts to develop 4 oil fields in Iraq that hold atotal reserves of about 17.7bn barrels of oil. The national oil company and Royal Dutch Shell plc, won the contract todevelop the giant Majnoon field estimated to be holding some 12.5bn barrels in reserves last Fridays, beating offers from aTotal and China National Petroleum Corp (CNPC) and the country’s own Oil Ministry. The Majnoon field, loacated in SouthernIraq, currently produces 45,900 barrels per day (bpd). Petronas will hold a 40% and Shell 60% in the Majnoon field won with abid of US$1.39 per barrel remuneration fee with production peaking at 1.8 bpd. Petronas and consortium partners, CNPC andTotal of France also won the bid to develop the 4bn barrel Halfaya oil field, targeting to produce 535,000 bpd from the current3,000 bpd at a remuneration fee of US$1.40 per barrel. Petronas and partner Japex of Japan won the bid to develop the Garraffield estimated to be holding about 900m barrels of oil, which Petronas controls a 60% in this venture and hopes to raiseproduction to 230,000 barrel a day at a fee of US$1.49/ barrel. It also was a part of the Gazprom led consortium that won theright to develop the Badra oil field reported to be holding estimated 100m barrels of oil reserve with a fee of RM5.50/barrel withproduction expected to be raised to 170,000 a day. (Malaysian Reserve)

* * * * *
Tan Sri Halim Saad may make a comeback to the local business scene. He is part of a group of investors seeking topurchase the coal-fired 1,400MW Jimah power plant and the company with the concession for its operations andmaintenance, say sources. The bid made by Halim and his associates is said to be more than RM700m, which beats all otherbids, including the one made by Malakoff Bhd, a unit of MMC Corp Bhd. (The Edge)

* * * * *

Astro All Asia Networks plc is targeting 1m household subscribers for its newly-launched Astro B.yond, a multiphasedinnovative service, starting with the country’s first high-definition (HD) broadcast. “Our target is 30% of ourcustomer base, which is expected to reach 3m by year-end. We should be able to secure at least half of the 1m in the next 12to 18 months,” said Astro TV CEO Datuk Rohana Rozhan after the launch of Astro B.yond. Rohana said about 1.2m of Astro’scustomers were HD-ready, adding that according to an industry report, 59% of all televisions sold in 1H09 were HD-ready andsales in this segment were growing. On Astro B.yond, Rohana said it offered customers more innovative services which wouldbe introduced in phases. Customers can sign up for Astro B.yond and access to HD services for an additional RM20 per monthfor a 12-month period. (Starbiz)

* * * * *
Tan Chong Motor Holdings Bhd, a distributor of Nissan cars in Malaysia, received approval to set up a plant inVietnam to manufacture and assemble buses, trucks and passengers cars. The total investment of the project wasUS$15m, Tan Chong said. (Starbiz)

* * * * *
Dialog targets 20-30% profit growth. Dialog Group Bhd has set a long-term target to maintain 20% to 30% expansion of itsbottom line. Chairman and group MD Ngau Boon Keat said revenue and profit growth would be underpinned by its diversifiedbusiness model in oil and gas support services based on a recurring income stream, including in the provision of specialisedservices, specialist products, catalysts handling and plant maintenance. Recurring income accounts for 70% to 80% of Dialog’sbottom line, he said. The group posted a net profit of RM26.93m in 1QFY10, 43% higher than the corresponding period theprevious year. Ngau also said that two thirds of future revenue would come from international sources. However forinvestments, Dialog’s strategy is to focus on Malaysia where the objective would be to have balanced growth and ageographical spread of the projects or businesses. Dialog has been occupied with the Tanjung Langsat centralised terminalfacilities, Pengarang deepwater petroleum terminal in Johor and an integrated logistics services supply base in Saudi Arabia.(Financial Daily)*

BERJAYA SPORTS TOTO

• FROM ECM LIBRA
  Berjaya Sports Toto
  (RM4.20 BST MK)
  2QFY10: Earnings growth stalls GAMING
• · Below expectations
  BST’s 6MFY10 results were generally below expectations. Revenue came
  in at 42% and 44% of full-year house and street estimates respectively,
  while net profit stood at 44% and 46% respectively.
• · 6MFY10 revenue –4.8% y-o-y, net profit -1.5%
  BST’s 6MFY10 revenue declined due to the benefit of strong sales from
  high jackpot in the Mega Toto 6/52 game in 2QFY09. The decline in
  revenue was offset by improved revenue from Prime Gaming Philippines
  Inc.
  Net profit saw a smaller drop than revenue mainly due to lower prize
  payout.
  On a more positive note, there has been sequential improvement in
  revenue and earnings.
• · No dividends declared
  No dividends were declared by BST for the quarter.
  
• · Maintain BUY, TP revised to RM5.30
  We reiterate our BUY call, while our DCF-derived (WACC: 7.5%, g: 2%)
  target price is revised from RM5.80 to RM5.30 as we cut our earnings
  forecast by 7-15%. While BST will benefit in 3QFY10 from the introduction
  of its new game Power Toto 6/55, we are wary of the risks posed by
  Magnum’s 4D Jackpot which has received good response while eroding
  some of BST’s market share. Nonetheless, we expect 2HFY10 to be
  stronger due to Chinese New Year festivities. Risks include (1)
  intensifying competition from alternative jackpot games (2) higher than
  expected prize payout and (3) lower than expected dividend payout ratio.

SIME, PETRA,AFFIN,LCL,KENCANA, MAGNA,NESTLE

Sime Darby Bhd’s (SIME MK, Hold, TP: RM8.10) unit Sime Darby Property Bhd is selling Caring Skyline Sdn Bhd to
Green Ridge Enterprises for RM68m. Caring Skyline was an investment holding company with a 49% stake in PT
Bhumyamca Sekawan, whose principal activity was in the renting of commercial and industrial space. (Financial Daily)( sell loh)
* * * * *
Petra Perdana Bhd (PETR MK, Sell, TP: RM1.34) may have found a buyer for a block of its 55% stake in Petra Energy
(PEB). PPB stated that it had appointed TA Securities Holdings Bhd as the placement agent for the disposal of its entire
54.62% shareholding in PEB, comprising 106.5m shares at 50 sen each. PPB added that TA Securities had advised that it
procured a purchaser for up to 58.5m PEB shares (30%) and expected to effect a direct business transaction either yesterday
or today with a local investment bank in which PPB had a term loan facility. PPB would undertake to remit the proceeds of the
share placement into an account kept with the local investment bank. PPB has two term loan facilities with the bank. (Financial
Daily)( big sellloh)
* * * * *
Affin Bank Bhd expects to maintain loan growth of between 8 to 10% next year. The country’s second smallest lender will
focus on consumer banking and SME lending. The bank also expects its non-performing loan (NPL) ratio to fall in line with the
industry average of 2.5% by the end of the year. Affin’s NPL ratio stood at 2.96% as at June 30 2009, from 3.3% at the end of
last year. Executive director (operations) Shariffudin Mohamad said currently 40% of the bank’s asset is consumer banking,
while the remaining 60% is corporate banking. He also said that its plan to start Islamic banking operations in China, is still
being discussed with its substantial shareholder, Bank of East Asia Ltd, on how best to penetrate the market. (BT)(worth to have look)

* * * * *
LCL Corp Bhd’s subsidiary has defaulted RM72m of bank loans following the collapse of property prices in Dubai,
making it the first casualty on the local stock exchange in the aftermath of the Dubai debacle. LCL said yesterday it
received notice of demand from Affin Bank Bhd for RM22.76m owed in general lines and RM46.66m owed in blanket contract
financing. Its subsidiary LCL Furniture Sdn Bhd has also defaulted RM2.63m of murabahah working capital financing provided
by Bank Islam Malaysia Bhd. “LCL has been severely impacted by the recent financial turnmoil in Dubai, where property prices
have plunged resulting in delay and non payment of its receivables. Hence, LCL and its subsidiaries have been unable to meet
its repayment obligations,” the company said. LCL added that prior to the notices of demand, it has been in regular
negotiations with the banks to reschedule its loan payment. However, the defaulted bank borrowings will have a consequence
on the on-going bank borrowings of the LCL, which will also be declared default by 12 other banks under the cross default
clause. (Malaysian Reserve)( a gone case,major shareholder already "cabut" !)
* * * * *
Kencana Petroleum Bhd is bidding for RM4bn worth of projects around the world, says its group chief executive officer,
Datuk Mokhzani Mahathir. He said the company had submitted bids for 15 projects in resource-rich locations such as Malaysia,
India, Australia, the Middle East and Indochina, and expected the results of those bids to be revealed in four months. He said
the integrated solutions and services provider for upstream oil and gas players now had an order book totalling RM800m that
would keep it busy until 2010. (Financial Daily)( wait!)
* * * * *
Magna Prima Bhd (Magna Prima) unit Twinicon (M) Sdn Bhd has entered into a sale and purchase (S&P) agreement to
acquire a 22,280 sq m parcel of land in Bukit Jalil from Santari Sdn Bhd (Santari) for RM10.7m cash. The acquisition is
part of Magna Prima group’s plan to acquire the premium 10,587.5 sq m plot of land in the centre of the city where wellregarded
national-type Chinese school Lai Meng is currently situated. The Bukit Jalil plot is the new site for the relocation of Lai
Meng Primary School and Lai Meng Kindergarten. (Financial Daily)( sound good)
* * * * *
Nestle Bhd will replace Parkson Holdings Bhd in the FTSE Bursa Malaysia KLCI (FBM KLCI) following the semi-annual
review approved by the FTSE Bursa Malaysia Index Advisory Committee yesterday. FTSE group and Bursa Malaysia Bhd said
that would take effect from Dec 21, and the next review would take place in June 2010. They said the reviews ensured that the
indices accurately reflected the markets they represented. (Financial Daily( good conservative stock to invest)

SIME,MAS,AIRASIA,PARKSON, MTD CAP

Sime Darby Bhd’s (SIME MK, Hold, TP: RM8.10) acquisition of Teluk Ramunia fabrication yard and assets for RM530m is a premium of 21.92% over an independent valuation of RM434.69m in the open market. Ramunia Holdings Bhd said yesterday Irhamy & Co Chartered Surveyors was appointed by the company to carry out an independent valuation exercise on
the yard, with all moveable and immoveable assets under the proposed disposal to Sime Darby. “Irhamy & Co’s valuation
reflects the open market value of the assets as a specialised property which is rarely sold in the market and the fact that the
yard was initially reclaimed from the sea,” it said. Ramunia said the estimated open market value of the assets was based on
the recent transactions of industrial properties. It added that adjustments were made to reflect the advantages and
disadvantages of the assets against the prevailing value. It added that the replacement cost approach was used to determine
the current cost of replacement of a similar yard. (Financial Daily)
* * * * *
Malaysian Airline System Bhd (MAS) (MAS MK, Sell, TP: RM2.00) expects to rake in an incremental revenue of RM2bn
from the deployment of SITA’s IT system, including the newly launched MHmobile-flymas.mobi service, over the next
10 years, said MAS managing director and CEO Tengku Datuk Azmil Zaharuddin. He said the national carrier had earmarked
investments of RM480m over the next decade for its integrated IT platform to provide customers with seamless service
delivery. Developed together with SITA lab, flymas.mobi allows customers to book, pay and check in using their mobile
phones. Tengku Azmil said the main objective of flymas.mobi was to provide convenience to its 14m customers rather than
cost-savings for MAS. He said MAS would not impose convenience fees on its customers. All major operating systems and
most phone manufacturers support the flymas.mobi applications. (Financial Daily)
* * * * *
AirAsia (AIRA MK, Buy, TP: RM1.67) has set its sights on the US market. Datuk Tony Fernandes, a member of the
entourage accompanying the Prime Minister Datuk Seri Mohd Najib Razak to the city, said that he was “working” towards
establishing a regular service to the east coast. “We are very keen to enter the US market which has good business potential,”
he disclosed. He hoped to start flights to an east coast airport, either New York or New Jersey, in 2010. According to
Fernandes, the airline also plans to start services to San Francisco, Los Angeles and Hawaii. However, things need to be
sorted out first, at the government-to-government level. (Malaysian Reserve)
* * * * *
Parkson Corporation Sdn Bhd to further expand in Malaysia. The retail arm of Lion Corporation Bhd will focus on new store
openings and maintaining its leadership position in the local retail market, said Parkson Retail Group MD Alfred Cheng. He
said, “We plan to expand, adding 15% more space each year and our venture into Setia City Mall as an anchor retailer fits
perfectly into our strategy. We have reinvested around RM200m for the past five years to increase market share…it is likely
that when Parkson Setia City Mall opens at the end of 2011, it will be our 40th store in Malaysia and 105th store globally.”
According to Cheng, the retailer is expected to invest between RM10m to RM12m for store refurbishment, while indirect
investment from its merchant stores are expected to be RM25 to RM30m. The group manages 86 stores in three countries –
Malaysia, China, and Vietnam – and is expected to open its first store in Cambodia in early 2011. (Financial Daily)
* * * * *
MTD Capital Bhd’s partnership with the Philippine National Construction Corp (PNCC) in the South Luzon Expressway
(SLEX) has run into problems after an entity controlled by the Malaysian company was prevented from taking over the
management of the highway. According to a news report from the Philippines, 30 employees of Manila Toll Express System
(MATES), in which MTD and PNCC hold a 30% and 40% direct equity stake, respectively, were stopped by PNCC from taking
over management of the SLEX, including toll collection, which was to commence on Monday. In a turn of events in which MTD
is understood to be currently “taking action to protect its rights,” PNCC reportedly detained the employees for 4 hours and took
their mobile phones away, a move they said was to protect the interest of their own workers. According to PNCC, it had taken
the action as it had not received any instruction that MATES had been allowed to take over the expressway, although MATES
was reported to have received the green light from the Philippine government to do so. PNCC’s concession agreement to
operate and manage SLEX is said to have expired in May 2007. PNCC said, however, they would turn over the management of
SLEX when MATES presented them with the appropriate documentation regarding the takeover. Under the agreement, MATES
was to take over operations of the expressway, following the completion of the project. (Financial Daily)

BOUSTEAD, AXIATA,PLUS,HEKTAR REIT, MAHB,FABER,KPJ

Boustead Naval Shipyard Sdn Bhd, a unit of Boustead Holdings (BOUS MK, Sell, TP: RM3.05), is currently negotiatingwith 3 oil majors over ‘big contracts’. Group MD vice admiral (R) Datuk Seri Ahmad Ramli Mohd Nor said, “The 3 oil majorsare talking to us currently. They are visiting and auditing our facilities. Boustead Naval had previously completed ahead ofschedule two projects with Exxon Mobil. Datuk Ramli also said that a floating hotel the company was constructing for a foreignclient was near completion and due for delivery in June next year. He added, “The company is actively pursuing opportunitieslocally and on the foreign front.” Boustead Naval has 4 shipyards, Lumut for its military and naval projects, Penang for oil andgas fabrication, Langkawi for leisure yacht and fast boat, and Ghana for maintenance. (BT)

* * * * *

Celcom (M) Bhd, a unit of Axiata (AXIATA MK, Hold, TP: RM3.13), is gearing up to double the number of its mobilebroadband customers to 1m next year. CEO Datuk Seri Shazalli Ramly said Celcom had 475,000 mobile broadbandcustomers as at Sept 30 and he was confident of breaching the 500,000 mark by year’s end. “Operators including Celcom willbe under pressure next year as well given that we have to achieve the Government’s target of having a 50% internetpenetration rate,” he said, adding that mobile broadband would be the company’s major focus next year. (Starbiz)

* * * * *

PLUS says 20% toll reduction not feasible. PLUS Expressways Bhd is not able to match Asas Serba Sdn Bhd’s offer of a20% discount on the toll rate, considering the high investments needed in upkeeping highway facilities and safety conditions. Inits proposal to acquire PLUS and the country’s other toll concessionaires, Asas Serba claimed that it will reduce toll rates by20%. PLUS MD Noorizah Abd Hamid said the proposal is not feasible as PLUS reinvests 45% of toll collections to keephighways and facilities in good condition. She added, “For every RM1 collected, 24 sen is spent on operations andmaintenance, 21 sen on upgrade of rest areas and repair pavements, 38 sen for debt repayment and the balance is dividendfor shareholders.” Asas Serba had previously announced plans to buy all 22 toll concessions nationwide, and is awaiting theEconomic Planning Unit’s toll study, due at year-end. (Malaysian Reserve)

* * * * *

Hektar REIT in talks to buy new assets and plans to sell more units to fund future purchases. Hektar Asset ManagementSdn Bhd Chairman and CEO Datuk Jaafar Abdul Hamid said, “We are in the midst of negotiating for new acquisitions.” Most ofthe potential buys are in Peninsular Malaysia and Hektar was in talks with township developers and other asset managers, headded. “The typical shopping acquisition is quite significant, starting from RM100m and above, and will definitely require us toraise equity-financing to place that acquisition in the REIT,” he said. Hektar REIT owns the Subang Parade shopping centre inSubang Jaya, Makhota Parade in Malacca, and Wetex Parade in Muar, Johor. (BT)

* * * * *
Malaysia Airports Holdings Bhd (MAHB) expects passenger volumes to grow between 4% and 5% in 2010 by‘conservative estimates’. Passenger volume may hit 49m for this year after MAHB offered cash perks to airlines amidstindications that economic recovery would boost air travels, according to MD and CEO Tan Sri Bashir Ahmad. “We expect anincrease in tourist arrivals to Malaysia despite the difficult year. We have seen indications of economic recovery and we think itwill improve,” he said. Passenger movements at end of September hit a total of 36.8m while for the quarter between Augustand September there were 13.21m passengers at all of its airports. (Malaysian Reserve)

* * * * *
Faber Group Bhd is toying with the idea of venturing into the healthcare business by owning hospitals in the future tobroaden its income streams, said its managing director Adnan Mohammad. The group intends to diversify into newbusinesses as well as to grow its overseas revenue in the Gulf region and India, according to Adnan. According to Adnan, thefirm is bidding for a 3 year hospital facilities management job in Abu Dhabi. In India, Faber has a presence in New Delhi,Hyderabad and Chenai (Financial Daily)

* * * * *

KPJ allocates RM100m to grow hospital network. KPJ Healthcare Bhd plans to spend up to RM100m next year to grow itschain to cater to expected rise in demand for healthcare services. The expansion exercise may entail the acquisition of anexisting business or the construction of new hospitals to bolster the 19 hospitals currently under its network. MD Datin PadukaSiti Sa’diah Sheikh Bakir said, “We are looking at organic growth as well as potential acquisitions. We are inviting others to joinus to enjoy the economies of scale.” She also added, “The target is to grow by one or two hospitals every year.” (MalaysianReserve)

US GOOD NEWS 2.12.2009

Stocks rallied Tuesday as worries about Dubai's debt problems eased, gold hit a record above US$1,200 and GE andComcast moved closer to a deal on NBC Universal. Investors also kept an eye on auto sales, which were down from Octoberbut mostly higher from a year ago, and the day's better-than-expected economic readings on construction spending andpending home sales. The Dow Jones industrial average added 1.2% (+126.74 pts, close 10,471.58), closing at the highestpoint since Oct. 2, 2008. The S&P 500 index gained 1.2% (+13.23 pts, close 1,108.86), and closed just short of a 14-monthhigh. The Nasdaq composite rose 1.5% (+31.21 pts, close 2,175.81), and remained short of a 14-month high hit a week ago.U.S. light crude oil for January delivery rose US$1.47 to US$78.75 a barrel on the New York Mercantile Exchange.(CNNMoney)

* * * * *

U.S. manufacturing expanded in November for a fourth consecutive month, propelled by gains in orders and exports thatsignal growth will be sustained. The Institute for Supply Management’s manufacturing index fell to 53.6, lower than forecast,from October’s three-year high of 55.7, according to the Tempe, Arizona-based group. Readings above 50 signal expansion.Stocks extended gains, sparked by a report showing factory output in China rose at the fastest pace in five years, liftingearnings prospects at U.S. exporters including Caterpillar Inc. Growing demand from overseas and lean inventories may keepAmerican assembly lines running into 2010, when government stimulus efforts begin to wane. (Bloomberg)

* * * * *

U.S. construction spending was unchanged in October after declining five straight months as rising office and retailvacancies deterred the building of commercial projects. Spending in September, previously reported as an increase, fell 1.6%,according to Commerce Department data released in Washington. Construction spending declined on office buildings andcommercial projects, while homebuilding increased. Construction will be hard-pressed to contribute to the economic recoverywith commercial property vacancy rates rising and builders limiting starts of new homes to help deplete inventories. Privateresidential construction spending rose 4.4% after a 2% decrease in September. Compared with a year earlier, it was down24%. Non-residential construction, including public projects, declined 1.5%. It was down 11% from 12 months before. Publicconstruction decreased 0.4% in October, led by declines in housing, transportation and utility projects. (Bloomberg)

2.12.2009 LOCAL BUSINESS NEWS

Scientists in Singapore have discovered a natural compound in palm oil that can kill breast cancer cells. The
compound, called gamma-tocotrienol, which is extracted in its natural form from palm oil, demonstrated powerful cancer-killing
properties, according to findings by Davos Life Science Singapore, unit of Kuala Lumpur Kepong (KLK MK, Hold, TP:
RM15.22). The centre said the compound could be found at low levels in food sources such as palm oil barley and rice bran.
This was the first tocotrienol study to identify the key upstream regulators that mediated breast cancer progression and
invasion, the centre said. (Starbiz)
* * * * *
Mah Sing Group Bhd has fixed the issue price of its proposed private placement at RM1.55 per share. Mah Sing said
yesterday the issue price represented a 9.9% discount to the volume weighted average market price for the 5 market days
preceeding Dec 1 of RM1.72. (Financial Daily)
* * * * *
Proton Holdings Bhd plans to export its Exora model to Australia and Middle East next year, launch its first model in
India in 2011 and export 50% of its total production within 3 years, said managing director Datuk Syed Zainal Abidin Syed
Mohamed Tahir. He said Proton expected to export 26,000 cars or about 24% of its production by the end of its current
financial year in March 2010 and hoped to raise it to 40,000 units in FY2011. They plan to achieve the 50% export and 50%
domestic market ration within 3 years as the economy is recovering, Datuk Syed Zainal said. He also said Exora had received
25,000 booking since its launch in April and 1,500 bookings in Indonesia. In Thailand, Proton expects to sell 150 units of Exora
each month. As for India, Syed Zainal said Proton hoped to announce a local partner early next year and launch their first car
within a year. (Financial Daily)
* * * * *
Kim Loong to buy firm to expand oil palm landbank. Kim Loong Resources Bhd, plans to buy a 60% stake in Sarawak’s
Tetangga Akrab Pelita (Pantu) Sdn Bhd for RM25m, to increase its landbank for oil palm plantation. It announced to Bursa
Malaysia that it would buy Tetangga Akrab Sdn Bhd’s entire stake or 2.02m shares of RM1 each in Tetangga Akrab Pelita. The
remaining 40% is owned by state agency Pelita Holdings Sdn Bhd. The deal is expected to be completed by January 2010.
(BT)
* * * * *
Malakoff Corp Bhd CEO denies Jimah plant stake purchase. The Jimah power plant is an independent power producer in
Port Dickson, while Malakoff is the largest private power producer in Malaysia. CEO Ahmad Jauhari Yahya says Malakoff is
always looking for opportunities to expand its operations and doesn’t rule out possible mergers and acquisitions in the future.
However he stressed the key issue within the company was ensuring its operational competitiveness remained intact. (StarBiz)
* * * * *
SC released an issuer eligibility guidelines for structured warrants, which helps the regulator assess the suitability of
structured warrants issuers. The guidelines take effect immediately, and state that structured warrants issuers must submit a
declaration to SC confirming they comply with the requirements pertaining to the issuer’s risk management measures, sales,
and marketing practices and internal control procedures. The declaration has to be submitted at least a month before the
prospectus for the structured warrants issues is submitted for registration by the SC. The approval for issuance and listing of
structured warrants has moved to SC from Bursa Malaysia. (BT)
*

MAXIS, MAS, PROTON

Maxis Communications Bhd (MCB), the holding company of Maxis Bhd (MAXIS MK, Buy, TP: RM6.10), is planning toinvest up to US$6bn (RM20.46bn) in the next few years to grow its market share in India. The bulk of investments will beused to build a network of communications towers around the world’s second most populous country. India’s mobile market isexpected to grow from about 415m subscribers to 1bn by 2015. MCB’s 74% owned Indian subsidiary Aircel subscriber base isexpected to rise to more than 30m by January from 27m, according to Financial Times. Aircel is currently operating in 18 of the23 telecom circles in India and is also the market leader in Tamil Nadu, Chennai, Assam and North East. (Malaysian Reserve)

* * * * *
Malaysian Airline System Bhd (MAS) (MAS MK, Sell, TP: RM2.00) said the first deliveries of its Airbus A380 superjumboplanes have been delayed at the manufacturer’s request. The planes are now slated to start arriving in August 2011at the earliest. The first of the airline’s six A380s were supposed to arrive in Kuala Lumpur in January 2011, with additionalplanes being delivered at one-month intervals. (Malaysian Reserve)

* * * * *

Proton Holdings Bhd expects to sell 6.5% more cars in Thailand next year, fuelled by the Exora multi-purpose vehicle(MPV), which it is launching at the Bangkok International Motor Expo today. It is launching the Saga 1.3 in 3Q10, as itexpects the Savvy to be phased out by then, said Lee Weng Yew, the area manager for the company’s export division. Leesaid the gameplan for Thailand will be similar to Malaysia where it will continue to offer affordable cas in the market. He saidthe Exora and Saga will drive car sales for Proton in Thailand. Thailand is expected to contribute 10-12% to Proton’s totalexport market for the financial year ending March 31, 2010, Lee said. Lee added that Proton will spend up to RM9m onroadshows, mainstream media and marketing campaigns in Thailand next year. (BT)