KHAZANAH,EONCAP,PETRA,GREENPACKET,HONG LEONG & local business news

Khazanah Nasional Bhd saw a 34% rise in the value of its portfolio asset to RM92.2bn last year. It will continue to divest non-core holdings but adopt a more cautious investment strategy this year. MD Tan Sri Azman Mokhtar said Khazanah had divested some US$18bn (RM59.94bn) worth of non-core investments over the past five years. He said Khazanah averages about US$3.5bn a year of divestments, and a significant part of the divestment proceeds would be used for investment. Last year Khazanah made a total of eight divestments worth RM3.1bn, with gains of about RM1.2bn. The divestments involved stakes in Tenaga Nasional Bhd (TNB MK, Buy, TP: RM9.90), Malaysia Airports Holdings Bhd and PLUS Expressways Bhd. Asked to comment on this year’s market conditions, Azman said, “We are cautiously optimistic. Broadly recovery is still fragile.” He said the key investment focus in 2010 and the medium term would continue to be domestic investments that were “growth drivers” and had strong economic impact. Historically Khazanah undertakes RM5bn to RM7bn worth of investments a year.
(Financial Daily)
* * * * *
The board of EON Capital Bhd (EON Cap) is believed to be delaying a decision to apply to Bank Negara for permission to negotiate for the potential sale of its asset and liabilities to Hong Leong Bank Bhd (HLB) (HLBK, Hold, TP: RM8.71). Sources said among the reasons given were that apparently, this was not the right time for such a decision. Earlier, HLB had received the green light to talk to 2 major shareholders of EON Cap – Rin Kei Mei and Tan Sri Tiong Hiew King who own a combined 31.7% - on an individual basis. If EON Cap had decided yesterday to write to the central bank for similar permission to talk, HLB would then be able to negotiate with them on an institutional basis. “Even if they are willing to talk to HLB, that does not mean they cannot talk to other bidders,” a source said. “By doing this, they are not giving other shareholders a
chance to even look at the proposal from HLB although it is common knowledge that the boss, Tan Sri Quek Leng Chan, has not been known to pay high prices for his deals. By not allowing the proposal to surface, they may be robbing themselves ofthe chance to get another bidder to throw in the challenge.” (Starbiz)
* * * * *
Petra Perdana Bhd (PETR MK, Sell, TP: RM1.21), an offshore marine services provider, yesterday assured shareholders that business continues as normal despite the temporary suspension of 11 key executives. “We are now looking at the best possible plans and steps we can solidify and ensure Petra Perdana survives in the challenging 12 months” its executive chairman and CEO, Tengku Datuk Ibrahim Petra said in a statement. On the company’s move to sell its 25% stake in subsidiary Petra Energy Bhd, he said it was only decided upon full discussion with the board, the finance department and careful consideration examining all facts on the table as CEO. Petra Perdana intended to use the funds raised from the sale of Petra Energy to make payments on its financial obligations and meet its business operation responsibilities. Tengku
Ibrahim said the board gave him the mandate to sell the 54.6% block in PEB with the conditions that it was sold en bloc, through open tender, valuation done and not for less than RM1.80 per share net. (Financial Daily)
* * * * *
Greenpacket, the international arm of Green Packet Bhd, is targeting to be the world’s No 1 WiMAX modem vendor and connectivity solutions provider by year-end. Senior general manager Kelvin Lee said in just two years, Greenpacket had become the world’s No. 3 WiMAX modem vendor in terms of market share, totalling 14% in 2009. “Our connection management software is the preferred software solution in the Asia-Pacific region, and we have set out sights on taking leadership position globally in this market in the near future,” he said after the launch of the company’s New Horizons brand campaign yesterday. Lee said the campaign was aimed at changing the mindset of its workforce to enhance efficiency. Lee said Greenpacket had developed a full range of indoor, outdoor and USB modems for its sister company and 4G WiMAX
operator arm, Packet One Networks (M) Sdn Bhd. (Starbiz)
* * * * *
Hong Leong Company (M) Bhd’s (HLCM) wholly owned subsidiary Spectrum Arrangement Sdn Bhd is proposing to privatise Hume Industries Bhd at RM4.30 per share under a voluntary takeover. The notice came after HLCM transferred its 64.94% direct stake comprising 118.8m shares in Hume to Spectrum yesterday. Hume makes concrete and steel products and premix road surfaces, and holds a 41.46% stake in Southern Steel Bhd. As at Sept 30, Hume had net cash and cash equivalents translating to a net asset value of RM5.04 per share. In the notice to Bursa Malaysia, Spectrum said it did not intend to maintain Hume’s listing status and would not make arrangements to comply with the public shareholding spread it its interest exceeded the 75% mark. (Financial Daily)
* * * * *

New vehicle sales in Malaysia should rebound 4.5% to a record 555,000 units this year. The high 2010 sales would be due to the improved economic outlook and rising consumer sentiment, said Frost & Sullivan head of automotive and transportation, Kavan Mukhtyar. Multi-purpose vehicle would be the fastest growth segment. It should grow 12.7% y-o-y in 2010 to 68,000 units largely buoyed by Proton Exora and Perodua Alza. Mukhtyar said interest rates fluctuation would impact vehicle sales most. Other downside factors are global economic uncertainties, lower external demand and new fuel subsidy. There will be continued interest and development in electric vehicles and hybrids by carmaker, but local demand should be negligible. (BT)
* * * * *
The nationalisation of the country’s toll operators, should it materialise, will be expensive when now is the time for fiscal rectitude and discipline to reduce the fiscal deficit, says Khazanah Nasional Bhd MD Tan Sri Azman Mokhtar. Khazanah is the major shareholder of PLUS, the country’s biggest toll concessionaire. “In terms of financial operating performance and operating margin, the company (PLUS) is already in the top 10 toll-roads companies of the world and in terms of upgrading, toll-booth experience, rest-stops quality and cleanliness of its toilets, I think they are already running a very tight ship.” Azman said. (Starbiz)
* * * * *
Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) calls for quick resolution to restructuring issue in Selangor, KL and Putrajaya. This will ensure that the project of replacing old pipes, which has been long postponed, can be carried out again. Executive chairman Tan Sri Rozali Ismail said the delay in the project directly affected about seven million consumers as many services have been delayed as a consequence, especially the replacement of pipes. Pipes aged more than 40 years are the cause of polluted water supply problems. (Malaysian Reserve)
* * * * *