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)

DUBAI'S related news

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

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

* * * * *

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

*******

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

30.11.2009 local business news

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

* * * * *

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

* * * * *

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

* * * * *

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

* * * * *

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

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

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

* * * * *

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

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