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)