The Dow gained 7.7 percent in the month, making it the strongest September since 1939, at the dawn of World War II.
NEW YORK: Stocks ended a monthlong rally on a weak note, but still chalked up the best September in 71 years.
Indexes rose sharply at the open Thursday following some better news on the economy, but stumbled at midmorning and stayed lower the rest of the day as traders pulled out profits following a spectacular run for the market in September.
The Dow Jones industrial average closed down 47 points, having been up as many as 113 earlier in the day.
The Dow gained 7.7 percent in the month, making it the strongest September since 1939, at the dawn of World War II.
However that runup followed a dismal August, and the Dow is still only up 3.5 percent for the year and is 3.7 percent below its closing high for 2010 reached on April 26.
Technology shares, which have been among the best performers this month, led Thursday's pullback. Major technology companies like Apple Inc., Dell Inc. and Google Inc. were all down about 1 percent.
"You can't underestimate people taking profits," said T.C. Robillard Jr., a managing director at investment bank Signal Hill. Robillard said that like most reports throughout the month, Thursday's batch of data only confirmed that the economy is growing very slowly.
Major indexes have been surging all month on signs of incremental improvement in the economy, which have allayed worries that the country would fall back into recession.
Traders were initially upbeat Thursday after a reading on regional manufacturing in the Chicago area jumped in September. Economists had expected the Chicago Purchasing Managers Index to fall slightly. That regional manufacturing report bodes well heading into Friday's monthly report on national manufacturing activity from the Institute for Supply Management.
"The jump in Chicago PMI was nothing short of shocking," said Nick Kalivas, vice president of financial research at MF Global. "It was complemented by the drop in (unemployment) claims."
The Labor Department said Thursday that first-time claims for unemployment benefits fell more than economists had predicted last week. Applications are still at levels that indicate employers aren't necessarily ramping up hiring, but at least the pace of firings seems to be slowing.
The government also slightly raised its estimate on second-quarter gross domestic product, the broadest measure of the nation's economic activity. The government said GDP grew at a 1.7 percent pace in the second quarter, better than the 1.6 percent pace estimated a month ago.
The Dow Jones industrial average fell 47.23, or 0.4 percent, to 10,788.05. The Dow had risen 113 in the opening minutes of trading on improved economic news before pulling back.
Brett D'Arcy, chief investment officer at CBIZ Wealth Management Group, said traders might have also pulled back because the Dow was approaching the psychological barrier of 11,000. The Dow came within 52 points of that level Thursday morning. It has not touched 11,000 since May 4.
"We haven't broken out of that mental cycle that this market might be range bound," D'Arcy said.
The Standard & Poor's 500 index fell 3.53, or 0.3 percent, to 1,141.20, while the Nasdaq composite fell 7.94, or 0.3 percent, to 2,368.62.
Bond prices fell, driving interest rates higher, after the upbeat economic reports dampened demand for defensive investments like bonds. The yield on the 10-year Treasury note, which is used to set interest rates on many kinds of consumer and corporate loans, rose to 2.51 percent from 2.50 percent late Wednesday.
Rising stocks narrowly outpaced falling ones on the New York Stock Exchange, where volume came to 1.3 billion shares. - AP
Thursday, September 30, 2010
Wednesday, September 29, 2010
Tuesday, September 28, 2010
Gamuda, Jaya Tiasa, GPlus , Formis
KUALA LUMPUR: Stocks on Bursa Malaysia are likely to stage a mild rebound on Wednesday, Sept 29, tracking overnight gains on Wall Street and firmer regional markets including Japan.
On Wall Street, the Dow Jones industrial average gained 46.10 points, or 0.43 percent, to end at 10,858.14. The Standard & Poor's 500 Index rose 5.54 points, or 0.49 percent, to 1,147.70. The Nasdaq Composite Index advanced 9.82 points, or 0.41 percent, to 2,379.59.
Reuters reported latecomers jumped onto the September bandwagon, buying up sectors that have outperformed during the month.
The S&P 500 has risen 9.4 percent so far in September, historically the worst month for stocks.
At Bursa Malaysia, stocks to watch include Gamuda Bhd, Jaya Tiasa Holdings Bhd, Golden Plus Holdings Bhd, Formis Resources Bhd, Supermax Corp Bhd.
Gamuda’s earnings surged 77% to RM76.61 million in the fourth quarter ended July 31, 2010 from RM43.29 million a year ago, due to higher contributions from all divisions and expects to perform better in the next financial year
Revenue however declined 24% to RM714.78 million from RM942.24 million a year ago. Earnings per share were 3.79 sen versus 2.16 sen.
For the financial year ended July 31, 2010, earnings rose to RM280.69 million from RM193.69 million. Revenue was lower at RM2.45 billion compared with RM2.73 billion in FY09.
Jaya Tiasa posted stronger set of results for the first quarter ended July 31, 2010. Net profit was RM22.69 million versus only RM791,000 a year ago. Revenue rose 12% to RM185.5 million from RM166.3 million. Pre-tax profit jumped to RM30.1 million from RM2.1 million.
Better results in revenue and pre-tax profit were mainly due to improved proceeds from logs sales with 7% increase in average selling price; better margin of plywood sales with 16% reduction in costs of production due to higher production volume; and 66% increase in sales volume and 9% higher average selling price of fresh fruit bunches (FFB).
Bursa Malaysia has sought court action to force Golden Plus to compel it with the directives issued by Bursa Malaysia and consent order over the appointment of a special auditor.
The directives and consent order are with regards to the appointment of a special auditor (SA) to review the affairs of GPlus and its subsidiary companies. This was in relation to its compliance with the Listing Requirements, including proper and accurate disclosures to its shareholders.
Formis Resources Bhd, which is undertaking the RM69.0 million government e-courts contract, said the implementation is on schedule and is about 90% completed.
Formis executive vice-chairman and chief executive officer Datuk Mah Siew Kwok said Formis had a solid recurring income stream of RM61.0 million from maintenance and service contracts and an order book of RM194.3 million order as at Sept 15.
He said the group also has a strong pipeline of potential projects, having tendered for a total of RM1.36 billion worth of contracts.
Supermax expects to achieve nearly RM1 billion in annual sales by the end of the current financial year Dec 31, 2010 driven by world demand and good marketing strategy. This would be 20% above the previous annual sales of RM800 million.
On Wall Street, the Dow Jones industrial average gained 46.10 points, or 0.43 percent, to end at 10,858.14. The Standard & Poor's 500 Index rose 5.54 points, or 0.49 percent, to 1,147.70. The Nasdaq Composite Index advanced 9.82 points, or 0.41 percent, to 2,379.59.
Reuters reported latecomers jumped onto the September bandwagon, buying up sectors that have outperformed during the month.
The S&P 500 has risen 9.4 percent so far in September, historically the worst month for stocks.
At Bursa Malaysia, stocks to watch include Gamuda Bhd, Jaya Tiasa Holdings Bhd, Golden Plus Holdings Bhd, Formis Resources Bhd, Supermax Corp Bhd.
Gamuda’s earnings surged 77% to RM76.61 million in the fourth quarter ended July 31, 2010 from RM43.29 million a year ago, due to higher contributions from all divisions and expects to perform better in the next financial year
Revenue however declined 24% to RM714.78 million from RM942.24 million a year ago. Earnings per share were 3.79 sen versus 2.16 sen.
For the financial year ended July 31, 2010, earnings rose to RM280.69 million from RM193.69 million. Revenue was lower at RM2.45 billion compared with RM2.73 billion in FY09.
Jaya Tiasa posted stronger set of results for the first quarter ended July 31, 2010. Net profit was RM22.69 million versus only RM791,000 a year ago. Revenue rose 12% to RM185.5 million from RM166.3 million. Pre-tax profit jumped to RM30.1 million from RM2.1 million.
Better results in revenue and pre-tax profit were mainly due to improved proceeds from logs sales with 7% increase in average selling price; better margin of plywood sales with 16% reduction in costs of production due to higher production volume; and 66% increase in sales volume and 9% higher average selling price of fresh fruit bunches (FFB).
Bursa Malaysia has sought court action to force Golden Plus to compel it with the directives issued by Bursa Malaysia and consent order over the appointment of a special auditor.
The directives and consent order are with regards to the appointment of a special auditor (SA) to review the affairs of GPlus and its subsidiary companies. This was in relation to its compliance with the Listing Requirements, including proper and accurate disclosures to its shareholders.
Formis Resources Bhd, which is undertaking the RM69.0 million government e-courts contract, said the implementation is on schedule and is about 90% completed.
Formis executive vice-chairman and chief executive officer Datuk Mah Siew Kwok said Formis had a solid recurring income stream of RM61.0 million from maintenance and service contracts and an order book of RM194.3 million order as at Sept 15.
He said the group also has a strong pipeline of potential projects, having tendered for a total of RM1.36 billion worth of contracts.
Supermax expects to achieve nearly RM1 billion in annual sales by the end of the current financial year Dec 31, 2010 driven by world demand and good marketing strategy. This would be 20% above the previous annual sales of RM800 million.
High possibility of another recession in the US, says economist
KUALA LUMPUR: World-renowned economics professor, Dr Nouriel Roubini, sent out warnings of a “high probability of another recession in the United States” and that the global economy could suffer a “couple of financial crises over the next 10 years”.
Roubini, who is Professor of Economics & International Business at the Stern School of Business, New York University, also said that China, the world’s fastest-growing major economy, may face “greater headwinds should there be weak growth in the United States and Europe”.
Roubini said even if the world economy didn’t slip into a double-dip, the effects would still be felt.
He added that already now the situation felt like a recession, even if we were not technically in a recession. He warned that if macro-economic figures disappointed, “we’ll see a correction in stock markets, widening interest rate spreads in credit markets, higher volatility, growing investor aversion to risk – and all that can lead to economic shock.”
He added that austerity measures to cut debt in advanced nations were hurting consumer and business confidence, and households in some of the largest economies were holding back spending.
“Emerging economies may have to get used to relying on domestic demand in a period of subdued growth for developed countries,” Roubini said.
He also said that while emerging economies could expect their recovery to be more sustainable, there was a danger of asset bubbles.
“All this slosh of liquidity is going to be chasing assets and a lot of that liquidity is going to go from advanced economies in the form of dollar funded or yen-funded carry trades,” he said.
He added that the challenge for emerging economies was to manage that inflow of hot money over the next few years.
“Emerging economies should allow currencies to gradually appreciate, impose capital controls on hot money and supervise the financial system to control excessive credit growth,” he said.
Roubini believes that current financial reforms discussed in the United States and around the world are not enough and will not prevent additional crises. He said nothing had changed, calling US reforms “too little, too late”.
“We know the second half of the year is going to be worse than the first half of the year because of the tailwinds to growth from the fiscal stimulus” turning into austerity, he said. “The main scenario is an anemic recovery, but I don’t rule out that a double-dip will occur” in the United States, he said.
An American jobless rate hovering near 10% is shaking consumer confidence and limiting spending, the biggest part of the economy.
US policy makers said recently that growth in the country was likely to be modest in the near term. US expanded at a 1.6% annual rate, the Commerce Department said last month. A US growth rate of 1% would feel like a recession, Roubini said.
“The banks in the US are already sitting on US$1 trillion in excess of reserves, (yet) they are not lending. The problems of the economy are problems of solvency, of credit, of houses, of corporates, of banks and not a problem of liquidity. I don’t believe quantitative easing is going to make much of a difference.
Roubini believes the Obama administration needs to tackle the country’s high unemployment head-on, and suggests that the Obama administration adopt payroll tax cuts for a couple of years.
“That’s a fiscal cost but where I suggest to make it revenue neutral is to make sure that the expiring tax cuts for the rich are going to be used,” he said.
“So, it’s going to be revenue neutral, it is not going to be budget busting and it’s also going to stimulate demand for labour. That’s what we need in the US economy – if you don’t have labour income, you don’t have consumption. You don’t have consumption, you don’t have economic growth.”
On the ongoing dispute between the United States and China over the yuan exchange rate, Roubini disagreed with Chinese Premier Wen Jiabao’s view that a 20% appreciation will bankrupt many companies in its export sector. “(China is a) country that has productivity growth and excess of wage growth – (it) can afford an appreciating currency without the negative effects on economic growth,” he said.
Roubini, who is Professor of Economics & International Business at the Stern School of Business, New York University, also said that China, the world’s fastest-growing major economy, may face “greater headwinds should there be weak growth in the United States and Europe”.
Roubini said even if the world economy didn’t slip into a double-dip, the effects would still be felt.
He added that already now the situation felt like a recession, even if we were not technically in a recession. He warned that if macro-economic figures disappointed, “we’ll see a correction in stock markets, widening interest rate spreads in credit markets, higher volatility, growing investor aversion to risk – and all that can lead to economic shock.”
He added that austerity measures to cut debt in advanced nations were hurting consumer and business confidence, and households in some of the largest economies were holding back spending.
“Emerging economies may have to get used to relying on domestic demand in a period of subdued growth for developed countries,” Roubini said.
He also said that while emerging economies could expect their recovery to be more sustainable, there was a danger of asset bubbles.
“All this slosh of liquidity is going to be chasing assets and a lot of that liquidity is going to go from advanced economies in the form of dollar funded or yen-funded carry trades,” he said.
He added that the challenge for emerging economies was to manage that inflow of hot money over the next few years.
“Emerging economies should allow currencies to gradually appreciate, impose capital controls on hot money and supervise the financial system to control excessive credit growth,” he said.
Roubini believes that current financial reforms discussed in the United States and around the world are not enough and will not prevent additional crises. He said nothing had changed, calling US reforms “too little, too late”.
“We know the second half of the year is going to be worse than the first half of the year because of the tailwinds to growth from the fiscal stimulus” turning into austerity, he said. “The main scenario is an anemic recovery, but I don’t rule out that a double-dip will occur” in the United States, he said.
An American jobless rate hovering near 10% is shaking consumer confidence and limiting spending, the biggest part of the economy.
US policy makers said recently that growth in the country was likely to be modest in the near term. US expanded at a 1.6% annual rate, the Commerce Department said last month. A US growth rate of 1% would feel like a recession, Roubini said.
“The banks in the US are already sitting on US$1 trillion in excess of reserves, (yet) they are not lending. The problems of the economy are problems of solvency, of credit, of houses, of corporates, of banks and not a problem of liquidity. I don’t believe quantitative easing is going to make much of a difference.
Roubini believes the Obama administration needs to tackle the country’s high unemployment head-on, and suggests that the Obama administration adopt payroll tax cuts for a couple of years.
“That’s a fiscal cost but where I suggest to make it revenue neutral is to make sure that the expiring tax cuts for the rich are going to be used,” he said.
“So, it’s going to be revenue neutral, it is not going to be budget busting and it’s also going to stimulate demand for labour. That’s what we need in the US economy – if you don’t have labour income, you don’t have consumption. You don’t have consumption, you don’t have economic growth.”
On the ongoing dispute between the United States and China over the yuan exchange rate, Roubini disagreed with Chinese Premier Wen Jiabao’s view that a 20% appreciation will bankrupt many companies in its export sector. “(China is a) country that has productivity growth and excess of wage growth – (it) can afford an appreciating currency without the negative effects on economic growth,” he said.
Monday, September 27, 2010
Penang International Property Expo
Penang International Property Expo or PIP 2010 is an annual showcase that attracts quality exhibitors and genuine players in the property scene. The event is marked by focus marketing and sustain a steady flow or visitors through interesting and informative talks, forums, games and other interative activities. Most importantly, the show provides the ideal exchange between smart exhibitors and discerning visitors, leading to oppurtunities for quality sales leads and closing contracts.
Michael Geh of Raine & Horne speaks to CJ Jimmy Leow on what is installed visitors and home buyers. PIP Property Summit 2010 starts on this 24th and ends on the 26th Sept 2010.
Venue: PISA, Penang
Sunday, September 26, 2010
Hwang-dbs 27/9/2010 SP Setia (RM4.56; Buy; Price Target: RM5.40; SPSB MK)
Beneficiary of KL Transformation
• 3QFYOct10 results in line with expectations
• 10M FY10 sales has already hit RM2bn full-year target;
potential re-rating from KL Eco-City launch in Dec10
• Beneficiary of Greater KL transformation plan
• Maintain Buy, TP raised to RM5.40 (from RM4.80)
based on 10% discount to RNAV of RM5.95
• 3QFYOct10 results in line with expectations
• 10M FY10 sales has already hit RM2bn full-year target;
potential re-rating from KL Eco-City launch in Dec10
• Beneficiary of Greater KL transformation plan
• Maintain Buy, TP raised to RM5.40 (from RM4.80)
based on 10% discount to RNAV of RM5.95
Thursday, September 23, 2010
Citigroup eyes top 3 foreign broking spots
The stockbroking firm will target foreign institutional investors who want to invest in Malaysia as well as domestic institutions wishing to invest overseas
CITIGROUP Inc, the world's largest bank, officially entered Malaysia's stockbroking sector yesterday and said it aims to become one of the top three foreign brokerages in the country in two years.
"It's going to take time for us to build relationships with the institutions, to build the trust ... Nevertheless, we have a challenging and ambitious goal, and we are confident that we can achieve it," Citi Asia-Pacific head of equities Adrian Faure said.
Citigroup, via Citigroup Global Markets Malaysia Sdn Bhd, received Bank Negara Malaysia's approval to establish a stockbroking company in the country early this year. It now joins six other foreign players in the sector.
For Citigroup, having the stockbroking licence marks a significant milestone as it can now play a wider role in the Malaysian capital market.
"It fills in the one gap we have in our product offering," said Sanjeev Nanavati, chief executive officer of Citibank Bhd and chairman and non-executive director of Citigroup Global Markets Malaysia.
The stockbroking firm will target foreign institutional investors who want to invest in Malaysia as well as domestic institutions wishing to invest overseas. A bulk of foreign interest is expected to come from the Middle East.
"Middle East funds are increasingly looking to invest in Malaysia. With a presence across that region with a team that covers more than 100 clients with assets under management of more than US$1 trillion (RM3.1 trillion), Citi is well placed to help facilitate some of these increased flows," said Sanjeev.
Citigroup's stockbroking business in Malaysia is also expected to help address the declining foreign participation in the local stock exchange.
As of the first half of this year, foreign investors own just 25 per cent of the market here against 35 per cent between 2005 and 2007.
The launch is also timely as there is an increasing emphasis on investing in Southeast Asian countries.
"Hong Kong and (mainland) China have had a tough year and we see rotation into the smaller markets," Faure said.
However, Faure warned that there was a risk of overheating in the market.
"Everyone now has got a religion, and that religion is emerging markets. And I see every day new funds coming into Asia.
"So the risk here is too much money, too much liquidity-chasing, where valuation becomes extreme. That being said, we don't see that being the case.
"The Asian markets, typically through the cycle, will trade in a valuation of around 1.3-3 times price to book, from the peak to the trot, and we are currently trading at about 1.6-1.7 times," he said.
Citigroup also expressed hopes of expanding its stockbroking presence to Vietnam by the end of this year. It may acquire a minority stake in a stockbroking firm in Vietnam.
Read more: Citigroup eyes top 3 foreign broking spots http://www.btimes.com.my/articles/citistock/Article/#ixzz10Ptdp5xE
CITIGROUP Inc, the world's largest bank, officially entered Malaysia's stockbroking sector yesterday and said it aims to become one of the top three foreign brokerages in the country in two years.
"It's going to take time for us to build relationships with the institutions, to build the trust ... Nevertheless, we have a challenging and ambitious goal, and we are confident that we can achieve it," Citi Asia-Pacific head of equities Adrian Faure said.
Citigroup, via Citigroup Global Markets Malaysia Sdn Bhd, received Bank Negara Malaysia's approval to establish a stockbroking company in the country early this year. It now joins six other foreign players in the sector.
For Citigroup, having the stockbroking licence marks a significant milestone as it can now play a wider role in the Malaysian capital market.
"It fills in the one gap we have in our product offering," said Sanjeev Nanavati, chief executive officer of Citibank Bhd and chairman and non-executive director of Citigroup Global Markets Malaysia.
The stockbroking firm will target foreign institutional investors who want to invest in Malaysia as well as domestic institutions wishing to invest overseas. A bulk of foreign interest is expected to come from the Middle East.
"Middle East funds are increasingly looking to invest in Malaysia. With a presence across that region with a team that covers more than 100 clients with assets under management of more than US$1 trillion (RM3.1 trillion), Citi is well placed to help facilitate some of these increased flows," said Sanjeev.
Citigroup's stockbroking business in Malaysia is also expected to help address the declining foreign participation in the local stock exchange.
As of the first half of this year, foreign investors own just 25 per cent of the market here against 35 per cent between 2005 and 2007.
The launch is also timely as there is an increasing emphasis on investing in Southeast Asian countries.
"Hong Kong and (mainland) China have had a tough year and we see rotation into the smaller markets," Faure said.
However, Faure warned that there was a risk of overheating in the market.
"Everyone now has got a religion, and that religion is emerging markets. And I see every day new funds coming into Asia.
"So the risk here is too much money, too much liquidity-chasing, where valuation becomes extreme. That being said, we don't see that being the case.
"The Asian markets, typically through the cycle, will trade in a valuation of around 1.3-3 times price to book, from the peak to the trot, and we are currently trading at about 1.6-1.7 times," he said.
Citigroup also expressed hopes of expanding its stockbroking presence to Vietnam by the end of this year. It may acquire a minority stake in a stockbroking firm in Vietnam.
Read more: Citigroup eyes top 3 foreign broking spots http://www.btimes.com.my/articles/citistock/Article/#ixzz10Ptdp5xE
SP Setia 3Q net profit jumps 104% to RM87.25m
KUALA LUMPUR: SP SETIA BHD [] posted a strong set of results, with earnings at RM87.25 million for the third quarter ended July 31, 2010 versus RM42.68 million a year ago.
It said on Thursday, Sept 23 revenue increased 13.5% to RM414.90 million from RM365.57 million. Earnings per share were 8.58 sen versus 4.2 sen.
SP Setia also said the group has achieved sales of RM1.95 billion as at Aug 31, achieving its full year FY2010 sales target of RM2 billion, two months ahead of its financial year ending Oct 31.
“The 10-months sales value has already exceeded the group’s highest ever sales value over one financial year of RM1.65 billion recorded in FY2009 by 18%,” it said.
SP Setia said sales had remained strong since the start of the year, with RM590 million achieved in the third quarter and cumulative nine-months sales of RM1.8 billion.
Projects that contributed to these numbers include Setia Alam and Setia Eco-Park at Shah Alam, SetiaWalk at Pusat Bandar Puchong, Setia Sky Residences at Jalan Tun Razak, Bukit Indah, Setia Indah, Setia Tropika and Setia Eco Gardens in Johor Bahru, Setia Pearl Island and Setia Vista in Penang.
SP Setia president and CEO Tan Sri Liew Kee Sin said the group’s proactive moves in 2009, aimed at capturing market share in the luxury high rise and integrated commercial sector, whilst further consolidating its lead in the landed residential segment, had borne much fruit.
It said on Thursday, Sept 23 revenue increased 13.5% to RM414.90 million from RM365.57 million. Earnings per share were 8.58 sen versus 4.2 sen.
SP Setia also said the group has achieved sales of RM1.95 billion as at Aug 31, achieving its full year FY2010 sales target of RM2 billion, two months ahead of its financial year ending Oct 31.
“The 10-months sales value has already exceeded the group’s highest ever sales value over one financial year of RM1.65 billion recorded in FY2009 by 18%,” it said.
SP Setia said sales had remained strong since the start of the year, with RM590 million achieved in the third quarter and cumulative nine-months sales of RM1.8 billion.
Projects that contributed to these numbers include Setia Alam and Setia Eco-Park at Shah Alam, SetiaWalk at Pusat Bandar Puchong, Setia Sky Residences at Jalan Tun Razak, Bukit Indah, Setia Indah, Setia Tropika and Setia Eco Gardens in Johor Bahru, Setia Pearl Island and Setia Vista in Penang.
SP Setia president and CEO Tan Sri Liew Kee Sin said the group’s proactive moves in 2009, aimed at capturing market share in the luxury high rise and integrated commercial sector, whilst further consolidating its lead in the landed residential segment, had borne much fruit.
Stocks to watch: SP Setia, DXN, Talam, HELP
Seem like my Sp-Setia is coming....
KUALA LUMPUR: Stocks on Bursa Malaysia are expected to open on a cautious note on Friday, Sept 24 after the market staged a pullback on Thursday, sending the FBM KLCI down 16.67 points to 1,458.08.
The pullback, which analysts said was not unexpected due to weaker external factors including the decline on European markets, saw the Malaysian market capitalization reduced to RM1.152 trillion from RM1.163 trillion on Thursday.
Year-to-date, the FBM KLCI is up 14.56% while in US dollars term, it is up 27.09%.
In Tokyo, Japan's Nikkei average fell 1.5 percent on Friday after a weak reading on the U.S. job market pushed down shares on Wall Street.
The benchmark Nikkei dropped 145.96 points to 9,420.36. The broader Topix index declined 1.3 percent to 835.88.
On Wall Street, U.S. stocks fell on Thursday after a weak reading on the labor market dropped stocks through a key technical level, validating the worries of those who thought the recent rally was flimsy, according to Reuters.
The Dow Jones industrial average was down 76.89 points, or 0.72 percent, at 10,662.42. The Standard & Poor's 500 Index was down 9.45 points, or 0.83 percent, at 1,124.83. The Nasdaq Composite Index was down 7.47 points, or 0.32 percent, at 2,327.08.
Adding to investor concerns, European data showed the pace of growth in the euro zone's services and manufacturing sector slowing more than expected. Existing-home sales rose in August by 7.6 percent from a 13-year low recorded in July, Reuters reported.
Stocks to watch on Bursa Malaysia are SP Setia, DXN HOLDINGS BHD [], Talam Corp Bhd and HELP International Bhd.
Also in focus would be cigarette companies including BRITISH AMERICAN TOBACCO (M) [] Bhd and JT INTERNATIONAL BHD [].
InsiderAsia reports cigarette companies are likely to be waiting for the upcoming Budget 2011 with some anxiety.
“This is typically the time the government announces additional taxes to be levied on the industry, and it has raised taxes every year since 2003,” according to the report which appears in The Edge FinancialDaily.
SP SETIA BHD [] posted a strong set of results, with earnings at RM87.25 million for the third quarter ended July 31, 2010 versus RM42.68 million a year ago.
It said revenue increased 13.5% to RM414.90 million from RM365.57 million. Earnings per share were 8.58 sen versus 4.2 sen.
SP Setia also said the group has achieved sales of RM1.95 billion as at Aug 31, achieving its full year FY2010 sales target of RM2 billion, two months ahead of its financial year ending Oct 31.
DXN Holdings Bhd has set a dividend policy of distributing at least 50% of the group’s net profit to shareholders with immediate effect. The dividend is to be paid on a quarterly basis.
Kumpulan Euro Bhd disposed of 100 million shares of Talam Corp Bhd, or 3.36%, for RM9.94 million on Sept 22 and 23.
The shares arose from the recent conversion of redeemable convertible secured loan stock-D which were acquired on June 25.
ZELAN BHD [] disposed of 7.03 million IJM Corp Bhd shares in the open market on Sept 21 and 23 for a total consideration of RM35.97 million.
It said the shares, or 0.52% of IJM’s paid-up capital, were disposed in the open market at an average price of RM5.13 per share.
The original cost of investment of the sale shares was approximately RM4.14 per share at group level and RM3.50 per share at company level.
HELP International Corp Bhd posted a strong set of earnings for the third quarter ended July 31 with net profit of RM3.23 million versus RM2.92 million a year ago. Revenue was RM23.38 million compared with RM21.59 million. Earnings per share was 3.6 sen versus 3.3 sen.
KUALA LUMPUR: Stocks on Bursa Malaysia are expected to open on a cautious note on Friday, Sept 24 after the market staged a pullback on Thursday, sending the FBM KLCI down 16.67 points to 1,458.08.
The pullback, which analysts said was not unexpected due to weaker external factors including the decline on European markets, saw the Malaysian market capitalization reduced to RM1.152 trillion from RM1.163 trillion on Thursday.
Year-to-date, the FBM KLCI is up 14.56% while in US dollars term, it is up 27.09%.
In Tokyo, Japan's Nikkei average fell 1.5 percent on Friday after a weak reading on the U.S. job market pushed down shares on Wall Street.
The benchmark Nikkei dropped 145.96 points to 9,420.36. The broader Topix index declined 1.3 percent to 835.88.
On Wall Street, U.S. stocks fell on Thursday after a weak reading on the labor market dropped stocks through a key technical level, validating the worries of those who thought the recent rally was flimsy, according to Reuters.
The Dow Jones industrial average was down 76.89 points, or 0.72 percent, at 10,662.42. The Standard & Poor's 500 Index was down 9.45 points, or 0.83 percent, at 1,124.83. The Nasdaq Composite Index was down 7.47 points, or 0.32 percent, at 2,327.08.
Adding to investor concerns, European data showed the pace of growth in the euro zone's services and manufacturing sector slowing more than expected. Existing-home sales rose in August by 7.6 percent from a 13-year low recorded in July, Reuters reported.
Stocks to watch on Bursa Malaysia are SP Setia, DXN HOLDINGS BHD [], Talam Corp Bhd and HELP International Bhd.
Also in focus would be cigarette companies including BRITISH AMERICAN TOBACCO (M) [] Bhd and JT INTERNATIONAL BHD [].
InsiderAsia reports cigarette companies are likely to be waiting for the upcoming Budget 2011 with some anxiety.
“This is typically the time the government announces additional taxes to be levied on the industry, and it has raised taxes every year since 2003,” according to the report which appears in The Edge FinancialDaily.
SP SETIA BHD [] posted a strong set of results, with earnings at RM87.25 million for the third quarter ended July 31, 2010 versus RM42.68 million a year ago.
It said revenue increased 13.5% to RM414.90 million from RM365.57 million. Earnings per share were 8.58 sen versus 4.2 sen.
SP Setia also said the group has achieved sales of RM1.95 billion as at Aug 31, achieving its full year FY2010 sales target of RM2 billion, two months ahead of its financial year ending Oct 31.
DXN Holdings Bhd has set a dividend policy of distributing at least 50% of the group’s net profit to shareholders with immediate effect. The dividend is to be paid on a quarterly basis.
Kumpulan Euro Bhd disposed of 100 million shares of Talam Corp Bhd, or 3.36%, for RM9.94 million on Sept 22 and 23.
The shares arose from the recent conversion of redeemable convertible secured loan stock-D which were acquired on June 25.
ZELAN BHD [] disposed of 7.03 million IJM Corp Bhd shares in the open market on Sept 21 and 23 for a total consideration of RM35.97 million.
It said the shares, or 0.52% of IJM’s paid-up capital, were disposed in the open market at an average price of RM5.13 per share.
The original cost of investment of the sale shares was approximately RM4.14 per share at group level and RM3.50 per share at company level.
HELP International Corp Bhd posted a strong set of earnings for the third quarter ended July 31 with net profit of RM3.23 million versus RM2.92 million a year ago. Revenue was RM23.38 million compared with RM21.59 million. Earnings per share was 3.6 sen versus 3.3 sen.
Dayang : In an industry sweet spot
New Coverage
- Miri-based Dayang Enterprise has been in the oil and gas services since 1980. It currently provides maintenance services, minor fabrication operations and offshore hook-up and commissioning. The company’s latest foray is into the charter of marine vessels via: 1) charter of one of its workboats to Brunei Shell; and 2) purchase of 40% stake in Borcos.
- Investment case. 1) Premium net margins of above 20%; 2) Few notable competitors improve Dayang’s chances of winning contracts; 3) Earnings lift from Borcos venture as the industry improves going forward to FY11; and 4) Potential regional expansion, to countries like Brunei.
- We forecast EBIT margins of 26% for the topside-maintenance division and 23% for marine charter, which would lead to FY10-12 EBIT earnings of RM63.6m, RM79.4m and RM89.8m respectively. For Borcos we are conservative and forecast FY10-12 net earnings to be RM20-45m respectively which will result in RM8-18m associate contributions for Dayang.
- We value Dayang Enterprise at RM2.61/share based on FY11 PER of 13x (inline with the target PER for Kencana Petroleum and Sapuracrest Petroleum). Our fair value estimate implies a 26.6% upside to the stock’s current share price of RM2.06.
- Miri-based Dayang Enterprise has been in the oil and gas services since 1980. It currently provides maintenance services, minor fabrication operations and offshore hook-up and commissioning. The company’s latest foray is into the charter of marine vessels via: 1) charter of one of its workboats to Brunei Shell; and 2) purchase of 40% stake in Borcos.
- Investment case. 1) Premium net margins of above 20%; 2) Few notable competitors improve Dayang’s chances of winning contracts; 3) Earnings lift from Borcos venture as the industry improves going forward to FY11; and 4) Potential regional expansion, to countries like Brunei.
- We forecast EBIT margins of 26% for the topside-maintenance division and 23% for marine charter, which would lead to FY10-12 EBIT earnings of RM63.6m, RM79.4m and RM89.8m respectively. For Borcos we are conservative and forecast FY10-12 net earnings to be RM20-45m respectively which will result in RM8-18m associate contributions for Dayang.
- We value Dayang Enterprise at RM2.61/share based on FY11 PER of 13x (inline with the target PER for Kencana Petroleum and Sapuracrest Petroleum). Our fair value estimate implies a 26.6% upside to the stock’s current share price of RM2.06.
Market Focus
Map of Malaysia’s tourism plays
• Tourist arrivals in Malaysia could increase from 24m to
36m with total receipts up 3-fold to RM168b by 2020.
• Tapping rising tourist dollars will be businesses like
leisure & hospitality services providers, airlines, airport
operator and retailers.
• This shopping guide highlights Genting, AirAsia,
Malaysia Airports, Sunway City and Parkson Holdings as
Malaysia’s best picks in the tourism landscape.
• Tourist arrivals in Malaysia could increase from 24m to
36m with total receipts up 3-fold to RM168b by 2020.
• Tapping rising tourist dollars will be businesses like
leisure & hospitality services providers, airlines, airport
operator and retailers.
• This shopping guide highlights Genting, AirAsia,
Malaysia Airports, Sunway City and Parkson Holdings as
Malaysia’s best picks in the tourism landscape.
Wednesday, September 22, 2010
Amazing Small Apartment Interior Design by Hong Kong Architect, Gary Chang
It’s a very common scene for most families in Hong Kong living in very tight space small apartments due to the sky-high property prices. Therefore, it’s important to fully utilize every inch of the built-up areas.
Below is the video clip shows you how Gary Chang, a Hong Kong architect transforms his 330 square feet tiny apartment in Hong Kong into 24 rooms:
High-end property market trend to stay firm
High-end property will sustain their current market trend despite concerns of overheating in hot spots such as Penang. according to Raine & Horne senior partner Michael Geh.
He admitted that issues over property bubbles and overheating were valid concerns though the scenario in the state was somewhat different.
“But as long as there are developers red-carpeting speculators, the danger remains,” he said when commenting on skyrocketing property prices that sparked concerns over asset bubble hitting Asian capitals such as Hong Kong, China and Singapore as well as Kuala Lumpur and Penang.
Certain governments have scrambled with tightening measures such as stricter mortgage loan policies and higher deposits on purchasers to cool the market down and prevent a collapse if prices were left unchecked.
Geh’s remarks came on the eve of the three-day Penang International Property (PIP) Summit 2010 which kicks off at the Penang International Sports Arena (PISA) in Relau starting Friday.
Organised by PIP Creation Sdn Bhd with support from Raine & Horne International and Penevents Sdn Bhd, the expo showscases properties from exhibitors such as S.P Setia, Ivory, DNP, Ideal Homes, Seal Incorporated, Plenitude and MTT.
Geh said Penang was experiencing unprecedented seafront developments and reclamation on the northern cape and eastern shore of the island, urban renewal in the city as well as resident development in Balik Pulau.
“There is strong resilience and prices of high-end properties are holding with keen interest from genuine home buyers,
“The bold initiative by the Penang Development Corporation to develop Bayan Mutiara will bolster the sustainability of high-end properties in the state,” said Geh, who is also FIABCI International secretary-general of the National Education Committee.
Among the highlights will be a three-day trade forum aimed at providing critical awareness of both local and regional trends in the property market.
Event director Ong Ban Seang said the forum would be an excellent networking event among exhibitors, industry practitioners, speakers and also the media.
He added that two state executive councillors, Wong Hon Wai and Abdul Malik Kasim, would speak on ‘Creating Affordable Houses in Penang’ and ‘Gearing Penang for Major Tradeshows and Events’ respectively, while Malaysia Property Incorporated chairman Datuk Richard Fong would share his thoughts on ‘Prospects of Foreign Investment in Malaysia’s Property Scene in The New Decade’.
Ivory Properties Group Berhad deputy chairman Datuk Seri Nazir Ariff will also chair a panel discussion on ‘Prospects in Heritage Real Estate in view of Penang’s World Heritage Listing’.
Geh, who is the trade forum’s event director, said the issue of overheating in Penang’s high end residential market would be debate at the forum by Malaysian Institute of Estate Agents.
The Institute of Surveyors Malaysia’s forum will delve into the re-development of stratified property while the Financial Planning Association of Malaysia will discuss about property investment as a retirement plan. - By Fong Kee Soon (The Star)
He admitted that issues over property bubbles and overheating were valid concerns though the scenario in the state was somewhat different.
“But as long as there are developers red-carpeting speculators, the danger remains,” he said when commenting on skyrocketing property prices that sparked concerns over asset bubble hitting Asian capitals such as Hong Kong, China and Singapore as well as Kuala Lumpur and Penang.
Certain governments have scrambled with tightening measures such as stricter mortgage loan policies and higher deposits on purchasers to cool the market down and prevent a collapse if prices were left unchecked.
Geh’s remarks came on the eve of the three-day Penang International Property (PIP) Summit 2010 which kicks off at the Penang International Sports Arena (PISA) in Relau starting Friday.
Organised by PIP Creation Sdn Bhd with support from Raine & Horne International and Penevents Sdn Bhd, the expo showscases properties from exhibitors such as S.P Setia, Ivory, DNP, Ideal Homes, Seal Incorporated, Plenitude and MTT.
Geh said Penang was experiencing unprecedented seafront developments and reclamation on the northern cape and eastern shore of the island, urban renewal in the city as well as resident development in Balik Pulau.
“There is strong resilience and prices of high-end properties are holding with keen interest from genuine home buyers,
“The bold initiative by the Penang Development Corporation to develop Bayan Mutiara will bolster the sustainability of high-end properties in the state,” said Geh, who is also FIABCI International secretary-general of the National Education Committee.
Among the highlights will be a three-day trade forum aimed at providing critical awareness of both local and regional trends in the property market.
Event director Ong Ban Seang said the forum would be an excellent networking event among exhibitors, industry practitioners, speakers and also the media.
He added that two state executive councillors, Wong Hon Wai and Abdul Malik Kasim, would speak on ‘Creating Affordable Houses in Penang’ and ‘Gearing Penang for Major Tradeshows and Events’ respectively, while Malaysia Property Incorporated chairman Datuk Richard Fong would share his thoughts on ‘Prospects of Foreign Investment in Malaysia’s Property Scene in The New Decade’.
Ivory Properties Group Berhad deputy chairman Datuk Seri Nazir Ariff will also chair a panel discussion on ‘Prospects in Heritage Real Estate in view of Penang’s World Heritage Listing’.
Geh, who is the trade forum’s event director, said the issue of overheating in Penang’s high end residential market would be debate at the forum by Malaysian Institute of Estate Agents.
The Institute of Surveyors Malaysia’s forum will delve into the re-development of stratified property while the Financial Planning Association of Malaysia will discuss about property investment as a retirement plan. - By Fong Kee Soon (The Star)
Tuesday, September 21, 2010
KL-S'pore high-speed rail link project may come back
Projects to kick-start nation’s high income quest
PETALING JAYA: Among the larger projects that could come about as a result of the Economic Transformation Programme (ETP) are the building of the mass rapid transit (MRT) system and the once-shelved high-speed rail between Kuala Lumpur and Singapore.
The ETP has also laid down plans to make Malaysia the number one Asian hub for oil field services, cleaning up and beautifying the capital city’s rivers, building a 7km shopping strip with covered walkways and identifying sites for the country’s first nuclear power plant.
These are some of the 131 “entry point projects” spanning 11 national key economic areas (NKEAs), ranging from electronics to agriculture, that would generate big results fast, the Performance Management and Delivery Unit (Pemandu) said.
Datuk Seri Idris Jala delivering his opening speech at the Putra World Trade Centre on Tuesday.
It added that the investments would be led by the private sector and the Government would play a facilitative role in ensuring that these projects get off the ground.
The oil, gas and energy NKEA alone is expected to raise its contribution to the total gross national income (GNI) to RM241bil by 2020 from RM110bil in 2009.
This will require about RM218bil in funding, most of which would come from the private sector.
Part of the plans for this sector is to consolidate all domestic fabricators to increase their likelihood of winning major contracts.
It is understood that this will entail a merger of existing oil and gas fabricators owned by companies such as Kencana Petroleum Bhd, Malaysia Marine & Heavy Engineering Sdn Bhd, Ramunia Holdings Bhd, Sime Engineering Bhd, Boustead Heavy Industries Corp Bhd, Oilcorp Bhd and Brooke Dockyard and Engineering Works Corp.
However, an analyst notes that it is not going to be easy to merge all these companies, considering their diverse shareholder base. A source familiar with the plans said Malaysian Investment Development Authority (Mida) would play a key role in overseeing this merger.
Another proposal for the oil and gas sector is to build a regional oil storage centre which hopefully will eventually be a hub.
In his opening remarks to a packed hall at the Putra World Trade Centre yesterday, Pemandu CEO Datuk Seri Idris Jala singled out the planned RM5bil deepwater oil storage project in south Johor by Dialog Group Bhd as an example of the kind of private sector investments that would boost the country’s growth.
The independent deepwater storage terminal for oil products in Pengerang, south-east Johor, is undertaken by Dialog and its partner, Vopak, via a 51:49 joint venture. The joint-venture company, Dialog Vopak JV, owns 90% of the project, with the Johor government holding the balance 10% stake.
Met on the sidelines of the ETP open day yesterday, Dialog managing director Ngau Boon Keat said his company hoped to receive all the necessary approvals, which include those from the Environment Department, for this project by year-end.
The energy sector would also see investments for the deployment of nuclear energy for power generation and building up the country’s solar power capacity.
According to Pemandu, the MRT project will be the largest infrastructure project in Malaysia – spread across 141km of three new corridors and integrated with existing rail systems such as the KTM Komuter, monorail and light rail transit.
The MRT project is also supposed to generate jobs for 130,000 people. While no figure had been revealed for the total project cost, it will be 66% privately funded, according to Pemandu.
It had earlier been reported that the MRT project would cost RM36bil, leaving some to question if the private sector can foot such a bill.
PETALING JAYA: Among the larger projects that could come about as a result of the Economic Transformation Programme (ETP) are the building of the mass rapid transit (MRT) system and the once-shelved high-speed rail between Kuala Lumpur and Singapore.
The ETP has also laid down plans to make Malaysia the number one Asian hub for oil field services, cleaning up and beautifying the capital city’s rivers, building a 7km shopping strip with covered walkways and identifying sites for the country’s first nuclear power plant.
These are some of the 131 “entry point projects” spanning 11 national key economic areas (NKEAs), ranging from electronics to agriculture, that would generate big results fast, the Performance Management and Delivery Unit (Pemandu) said.
Datuk Seri Idris Jala delivering his opening speech at the Putra World Trade Centre on Tuesday.
It added that the investments would be led by the private sector and the Government would play a facilitative role in ensuring that these projects get off the ground.
The oil, gas and energy NKEA alone is expected to raise its contribution to the total gross national income (GNI) to RM241bil by 2020 from RM110bil in 2009.
This will require about RM218bil in funding, most of which would come from the private sector.
Part of the plans for this sector is to consolidate all domestic fabricators to increase their likelihood of winning major contracts.
It is understood that this will entail a merger of existing oil and gas fabricators owned by companies such as Kencana Petroleum Bhd, Malaysia Marine & Heavy Engineering Sdn Bhd, Ramunia Holdings Bhd, Sime Engineering Bhd, Boustead Heavy Industries Corp Bhd, Oilcorp Bhd and Brooke Dockyard and Engineering Works Corp.
However, an analyst notes that it is not going to be easy to merge all these companies, considering their diverse shareholder base. A source familiar with the plans said Malaysian Investment Development Authority (Mida) would play a key role in overseeing this merger.
Another proposal for the oil and gas sector is to build a regional oil storage centre which hopefully will eventually be a hub.
In his opening remarks to a packed hall at the Putra World Trade Centre yesterday, Pemandu CEO Datuk Seri Idris Jala singled out the planned RM5bil deepwater oil storage project in south Johor by Dialog Group Bhd as an example of the kind of private sector investments that would boost the country’s growth.
The independent deepwater storage terminal for oil products in Pengerang, south-east Johor, is undertaken by Dialog and its partner, Vopak, via a 51:49 joint venture. The joint-venture company, Dialog Vopak JV, owns 90% of the project, with the Johor government holding the balance 10% stake.
Met on the sidelines of the ETP open day yesterday, Dialog managing director Ngau Boon Keat said his company hoped to receive all the necessary approvals, which include those from the Environment Department, for this project by year-end.
The energy sector would also see investments for the deployment of nuclear energy for power generation and building up the country’s solar power capacity.
According to Pemandu, the MRT project will be the largest infrastructure project in Malaysia – spread across 141km of three new corridors and integrated with existing rail systems such as the KTM Komuter, monorail and light rail transit.
The MRT project is also supposed to generate jobs for 130,000 people. While no figure had been revealed for the total project cost, it will be 66% privately funded, according to Pemandu.
It had earlier been reported that the MRT project would cost RM36bil, leaving some to question if the private sector can foot such a bill.
Stocks to watch: Dialog, Gamuda, GentingM, Glomac, Sunway
KUALA LUMPUR: Stocks on Bursa Malaysia may extend gains on Wednesday, Sept 22 after the government unveiled an ambitious multi-pronged plan to drive the economy while it had also identified investments worth US$444 billion over 10 years.
The strategy included a new mass transit system (MRT) to relieve congestion in Kuala Lumpur, to building a huge oil storage facility next to Singapore to form a regional oil products trading hub.
The government had identified investments worth US$444 billion over 10 years, of which 60% would come from the private sector, 32% from government-linked companies and 8% from government.
Stocks to watch include DIALOG GROUP BHD [], with its expertise in building terminals for oil storage, while GAMUDA BHD [] and IJM Corp Bhd could be in focus with their expertise in infrastructure projects.
The MRT will create spin-off projects for other players in the building material industries like Kimlun which makes claddings for tunnels for Singapore’s MRT.
On Wall Street, U.S. stocks ended flat to lower in an erratic session on Tuesday, Sept 21 after the Federal Reserve inched closer to further steps to spur the economy.
Stocks initially popped higher but gave back those gains quickly. Investors had hoped that with recent improvements in economic data, the Fed would issue a more upbeat outlook or clarify the measures it would take to stimulate demand.
The central bank nudged the door wider to pumping more money into the economy but kept overnight interest rates unchanged near zero, as expected.
The Dow Jones industrial average was up 7.41 points, or 0.07 percent, at 10,761.03. The Standard & Poor's 500 Index was down 2.93 points, or 0.26 percent, at 1,139.78. The Nasdaq Composite Index was down 6.48 points, or 0.28 percent, at 2,349.35.
At Bursa Malaysia, property stocks could come under focus after the government said lower loan to value ratio for property purchases was only applicable to speculative real estate deals.
Genting Malaysia Bhd’s acquisition of the casino business in the United Kingdom from Genting Singapore plc will be reduced to £351.5 million from £340.0 million.
Genting Malaysia said on Tuesday, Sept 21 the lower acquisition cost was due to the lower net debt position at £74.4 million as at June 20 compared with the net debt amount of £85.9 million as at May 31.
The purchase consideration will be revised by the net debt difference from £340.0 million to £351.5 million to reflect the reduction in net debt.
CIMB Group Holdings Bhd is seeking for an extension of six months up to April 6, 2011 for it to complete the proposed dual listing in Thailand.
CIMB submitted an application for the extension to the Securities Commission “and is currently pending the decision of the SC”.
GLOMAC BHD [] posted a strong set of results, with net profit up 88% to RM15.55 million in the first quarter ended July 31, 2010 versus RM8.34 million a year ago and the property developer expects its unbilled sales of RM585 million to sustain its earnings growth.
Revenue surged 114% to RM126.31 million from RM58.98 million while pre-tax profit rose 79% to RM29.5 million in the quarter. Earnings per share were 5.32 sen versus 2.99 sen.
Glomac said the RM15.55 million net profit was close to 40% of the full year profit after tax of RM40.9 million achieved in the group’s financial year ended April 30, 2010. Its net asset per share was RM1.94
InsiderAsia reports Green Packet (98 sen) is preparing for a fresh wave of sales and marketing activities, redoubling its efforts to gain new subscribers. P1, the company's WiMAX business unit, targets to grow its subscriber base to 280,000 by the end of the year from 196,000 at end-June 2010.
Handal Resoources Bhd has proposed a renounceable rights issue of 60 million new shares of 50 sen each.
It also planned to offer 60 million new free detachable warrants on the basis of two rights shares and two free warrants for every three existing Handal shares held.
It also proposed a bonus issue of 20 million shares on the basis of one bonus share for every three rights shares fully subscribed.
SUNWAY HOLDINGS BHD [] proposes to issue commercial papers and/or medium term notes of up to RM500 million in nominal value pursuant to a CP/MTN Programme.
HELP International said it is currently in preliminary discussion to tie up with a Singapore education provider to offer joint programmes in the Singapore market.
“As part of this collaboration, there is a right of option to invest into the Singapore entity. However, the company has yet to reach a concrete conclusion in relation to the abovementioned preliminary discussion,” it said.
HELP also said as part of the company's initiatives to embark on its internationalisation plan, HELP has been considering various fund raising options as to progressively raise capital for its business expansion.
The strategy included a new mass transit system (MRT) to relieve congestion in Kuala Lumpur, to building a huge oil storage facility next to Singapore to form a regional oil products trading hub.
The government had identified investments worth US$444 billion over 10 years, of which 60% would come from the private sector, 32% from government-linked companies and 8% from government.
Stocks to watch include DIALOG GROUP BHD [], with its expertise in building terminals for oil storage, while GAMUDA BHD [] and IJM Corp Bhd could be in focus with their expertise in infrastructure projects.
The MRT will create spin-off projects for other players in the building material industries like Kimlun which makes claddings for tunnels for Singapore’s MRT.
On Wall Street, U.S. stocks ended flat to lower in an erratic session on Tuesday, Sept 21 after the Federal Reserve inched closer to further steps to spur the economy.
Stocks initially popped higher but gave back those gains quickly. Investors had hoped that with recent improvements in economic data, the Fed would issue a more upbeat outlook or clarify the measures it would take to stimulate demand.
The central bank nudged the door wider to pumping more money into the economy but kept overnight interest rates unchanged near zero, as expected.
The Dow Jones industrial average was up 7.41 points, or 0.07 percent, at 10,761.03. The Standard & Poor's 500 Index was down 2.93 points, or 0.26 percent, at 1,139.78. The Nasdaq Composite Index was down 6.48 points, or 0.28 percent, at 2,349.35.
At Bursa Malaysia, property stocks could come under focus after the government said lower loan to value ratio for property purchases was only applicable to speculative real estate deals.
Genting Malaysia Bhd’s acquisition of the casino business in the United Kingdom from Genting Singapore plc will be reduced to £351.5 million from £340.0 million.
Genting Malaysia said on Tuesday, Sept 21 the lower acquisition cost was due to the lower net debt position at £74.4 million as at June 20 compared with the net debt amount of £85.9 million as at May 31.
The purchase consideration will be revised by the net debt difference from £340.0 million to £351.5 million to reflect the reduction in net debt.
CIMB Group Holdings Bhd is seeking for an extension of six months up to April 6, 2011 for it to complete the proposed dual listing in Thailand.
CIMB submitted an application for the extension to the Securities Commission “and is currently pending the decision of the SC”.
GLOMAC BHD [] posted a strong set of results, with net profit up 88% to RM15.55 million in the first quarter ended July 31, 2010 versus RM8.34 million a year ago and the property developer expects its unbilled sales of RM585 million to sustain its earnings growth.
Revenue surged 114% to RM126.31 million from RM58.98 million while pre-tax profit rose 79% to RM29.5 million in the quarter. Earnings per share were 5.32 sen versus 2.99 sen.
Glomac said the RM15.55 million net profit was close to 40% of the full year profit after tax of RM40.9 million achieved in the group’s financial year ended April 30, 2010. Its net asset per share was RM1.94
InsiderAsia reports Green Packet (98 sen) is preparing for a fresh wave of sales and marketing activities, redoubling its efforts to gain new subscribers. P1, the company's WiMAX business unit, targets to grow its subscriber base to 280,000 by the end of the year from 196,000 at end-June 2010.
Handal Resoources Bhd has proposed a renounceable rights issue of 60 million new shares of 50 sen each.
It also planned to offer 60 million new free detachable warrants on the basis of two rights shares and two free warrants for every three existing Handal shares held.
It also proposed a bonus issue of 20 million shares on the basis of one bonus share for every three rights shares fully subscribed.
SUNWAY HOLDINGS BHD [] proposes to issue commercial papers and/or medium term notes of up to RM500 million in nominal value pursuant to a CP/MTN Programme.
HELP International said it is currently in preliminary discussion to tie up with a Singapore education provider to offer joint programmes in the Singapore market.
“As part of this collaboration, there is a right of option to invest into the Singapore entity. However, the company has yet to reach a concrete conclusion in relation to the abovementioned preliminary discussion,” it said.
HELP also said as part of the company's initiatives to embark on its internationalisation plan, HELP has been considering various fund raising options as to progressively raise capital for its business expansion.
RM217bil investment in oil and gas industry needed
KUALA LUMPUR: An estimated RM217.6bil will be needed from now until 2020 for the oil and gas and energy industry to continue contributing significantly to gross national income (GNI) as envisioned under the Economic Transformation Programme (ETP).
This were among the findings of 35 members in a lab held over eight weeks in June and July for the industry, which has been identified as one of 12 national key economic areas.
“The industry faces significant challenges in keeping up with the GNI targets as domestic oil and gas production declines,” lab members said.
They added that the industry was struggling to produce 600,000 to 700,000 barrels of oil equivalent per day in the recent past as large reserves were no longer easy to find.
Three main focus areas were identified by the lab to help the industry face the challenges: sustainability, growth areas and diversification.
In a breakout session held yesterday following the presentation of the ETP by Minister in the Prime Minister’s Department Senator Datuk Seri Idris Jala, the lab members said this would enable the industry to contribute to an incremental GNI of RM131.5bil and 52,000 jobs by 2020.
The industry has been contributing 20% to Malaysia’s gross domestic product annually over the last two years, of which 90% came from exploration and production.
The lab said 12 entry point projects (EPPs) and seven business opportunities would help boost GNI and jobs with 99% of the investment to come from the private sector, as was already the case. “Business opportunities” mean that these are projects that the private sector are open to pitch to the Government in a private-public partnership.
The EPPs were developed across four themes, namely sustaining oil and gas production, enhancing growth in downstream, making Malaysia the number one hub for oil field services and building a sustainable energy platform for growth.
Among the 12 EPPs are deploying nuclear energy for power generation, building up the country’s solar power capacity, attracting multinational companies to bring their global oil field service and equipment operations to Malaysia and consolidating domestic fabricators. Other projects include building a regional oil storage and trading hub, unlocking premium gas demand in Peninsular Malaysia, tapping Malaysia’s hydroelectrical potential as well as rejuvenating existing fields through enhanced oil recovery, developing small fields through innovative solutions and intensifying exploration activities.
This were among the findings of 35 members in a lab held over eight weeks in June and July for the industry, which has been identified as one of 12 national key economic areas.
“The industry faces significant challenges in keeping up with the GNI targets as domestic oil and gas production declines,” lab members said.
They added that the industry was struggling to produce 600,000 to 700,000 barrels of oil equivalent per day in the recent past as large reserves were no longer easy to find.
Three main focus areas were identified by the lab to help the industry face the challenges: sustainability, growth areas and diversification.
In a breakout session held yesterday following the presentation of the ETP by Minister in the Prime Minister’s Department Senator Datuk Seri Idris Jala, the lab members said this would enable the industry to contribute to an incremental GNI of RM131.5bil and 52,000 jobs by 2020.
The industry has been contributing 20% to Malaysia’s gross domestic product annually over the last two years, of which 90% came from exploration and production.
The lab said 12 entry point projects (EPPs) and seven business opportunities would help boost GNI and jobs with 99% of the investment to come from the private sector, as was already the case. “Business opportunities” mean that these are projects that the private sector are open to pitch to the Government in a private-public partnership.
The EPPs were developed across four themes, namely sustaining oil and gas production, enhancing growth in downstream, making Malaysia the number one hub for oil field services and building a sustainable energy platform for growth.
Among the 12 EPPs are deploying nuclear energy for power generation, building up the country’s solar power capacity, attracting multinational companies to bring their global oil field service and equipment operations to Malaysia and consolidating domestic fabricators. Other projects include building a regional oil storage and trading hub, unlocking premium gas demand in Peninsular Malaysia, tapping Malaysia’s hydroelectrical potential as well as rejuvenating existing fields through enhanced oil recovery, developing small fields through innovative solutions and intensifying exploration activities.
Monday, September 20, 2010
BToto 1Q net profit RM63.95m, down 36%
KUALA LUMPUR: BERJAYA SPORTS TOTO BHD [] posted net profit of RM63.95 million in the first quarter ended July 31, 2010, down 36% from RM100.45 million a year ago mainly due to the increase in pool betting duty.
It said on Monday, Sept 20 that revenue declined to RM835.4 million from RM826.16 million. Earnings per share were 4.78 sen versus 7.97 sen.
It declared dividend of 8.0 sen versus 49.5 sen a year ago.
BToto said Sports Toto, the principal subsidiary, registered an increase in revenue of 1.0% but recorded a decrease in pre-tax profit of 23.6% mainly due to the increase in pool betting duty from 6% to 8% with effect from June 1, 2010 coupled with the relatively higher prize payout in the current quarter under review.
It said on Monday, Sept 20 that revenue declined to RM835.4 million from RM826.16 million. Earnings per share were 4.78 sen versus 7.97 sen.
It declared dividend of 8.0 sen versus 49.5 sen a year ago.
BToto said Sports Toto, the principal subsidiary, registered an increase in revenue of 1.0% but recorded a decrease in pre-tax profit of 23.6% mainly due to the increase in pool betting duty from 6% to 8% with effect from June 1, 2010 coupled with the relatively higher prize payout in the current quarter under review.
Sunday, September 19, 2010
Water stocks, Dataprep, Proton, Naim
KUALA LUMPUR: Blue chips may start off the week on a cautious note on Monday, Sept 20 after the late profit taking last Friday which took investors by surprise but sentiment could be given a boost by the firmer close on Wall Street.
Late profit taking on Tenaga Nasional Bhd and Sime Darby pushed the FBM KLCI down nearly six points to 1,466.97.
Year-to-date, the 30-stock KLCI is up 15.26%, making it the fourth best performer in Asia. Over the past week, the KLCI had risen 29.19 points, underpinned by the strengthening ringgit and it is above analysts’ earlier forecast of 1,450.
On Wall Street, reassuring earnings and an upbeat outlook from Oracle nudged the Nasdaq up last Friday. Oracle Corp, the world's No. 3 software maker, jumped 8.3% to US$27.46, and led the Nasdaq higher after it posted better-than-expected results and gave an outlook that topped Wall Street's forecasts.
The Dow Jones industrial average gained 13.02 points, or 0.12%, to 10,607.85. The Standard & Poor's 500 Index added 0.93 points, or 0.08%, to 1,125.59. The Nasdaq Composite Index climbed 12.36 points, or 0.54%, to 2,315.61.
For the week, the Dow rose 1.4%, the S&P 500 gained 1.5% and the Nasdaq gained 3.3%.
At Bursa Malaysia, stocks to watch include water-related counters, Dataprep Holdings Bhd, Naim Holdings Bhd, Proton Holdings Bhd, MHC Plantations Bhd and Handal Resources Bhd.
Malaysian Trustees Bhd is convening a meeting for the Selangor water industry players and bondholders on Sept 24 in a move to resolve the current impasse in the sector and concerns of operating environment uncertainties.
Puncak Niaga Holdings Bhd (PNHB) said on Friday, Sept 17, it was informed by Malaysian Trustees the meeting was for all the Selangor water concessionaire holders, operators and bond issuers.
Also included in the meeting would be the term loan borrowers -- Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), Puncak Niaga Holdings Bhd (PNHB), Konsortium ABASS Sdn Bhd and Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (SPLASH)
Dataprep’ subsidiary has secured a RM34.99 million contract from Syarikat Prasarana Negara Bhd to implement a cashless bus ticketing system for Rapid KL Buses. Its 55% subsidiary Solsis (M) Sdn Bhd received the letter of award dated Sept 7.
Naim Holdings Bhd’s plans to set up a joint venture to design and build a 50-storey tower known the Gaddafi Tower in Tripoli, Libya has come to a halt after the memorandum of understanding (MoU) lapsed.
Its unit NCSB Engineering Sdn Bhd and Al-Waatasemu Charity Foundation (WCF) had signed the MoU on July 16 this year.
Proton adviser Tun Dr Mahathir Mohamad said the national car maker is financially stable and sees no hurry in merging with other car manufactures.
"“Financially, Proton is still okay. We too are not very anxious to merge at this moment,” he said, when asked to comment on Proton’s possible plan for merger after recent news report stated that DRB-Hicom was not actively looking to acquire a stake in Proton.
MHC Plantations Bhd has increased its stake in Cepatwawasan Group Bhd to 37.01% after it acquired 4.2 million shares or 1.99% on Sept 15 for a total of RM4.59 million.
Meanwhile, Handal Resources Bhd saw 11 million shares done off-market on Friday at an average price of 65 sen each. Stock market data showed the shares were transacted below the market price of 80 sen. The 11 million shares represented a 12.22% stake.
Late profit taking on Tenaga Nasional Bhd and Sime Darby pushed the FBM KLCI down nearly six points to 1,466.97.
Year-to-date, the 30-stock KLCI is up 15.26%, making it the fourth best performer in Asia. Over the past week, the KLCI had risen 29.19 points, underpinned by the strengthening ringgit and it is above analysts’ earlier forecast of 1,450.
On Wall Street, reassuring earnings and an upbeat outlook from Oracle nudged the Nasdaq up last Friday. Oracle Corp, the world's No. 3 software maker, jumped 8.3% to US$27.46, and led the Nasdaq higher after it posted better-than-expected results and gave an outlook that topped Wall Street's forecasts.
The Dow Jones industrial average gained 13.02 points, or 0.12%, to 10,607.85. The Standard & Poor's 500 Index added 0.93 points, or 0.08%, to 1,125.59. The Nasdaq Composite Index climbed 12.36 points, or 0.54%, to 2,315.61.
For the week, the Dow rose 1.4%, the S&P 500 gained 1.5% and the Nasdaq gained 3.3%.
At Bursa Malaysia, stocks to watch include water-related counters, Dataprep Holdings Bhd, Naim Holdings Bhd, Proton Holdings Bhd, MHC Plantations Bhd and Handal Resources Bhd.
Malaysian Trustees Bhd is convening a meeting for the Selangor water industry players and bondholders on Sept 24 in a move to resolve the current impasse in the sector and concerns of operating environment uncertainties.
Puncak Niaga Holdings Bhd (PNHB) said on Friday, Sept 17, it was informed by Malaysian Trustees the meeting was for all the Selangor water concessionaire holders, operators and bond issuers.
Also included in the meeting would be the term loan borrowers -- Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), Puncak Niaga Holdings Bhd (PNHB), Konsortium ABASS Sdn Bhd and Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (SPLASH)
Dataprep’ subsidiary has secured a RM34.99 million contract from Syarikat Prasarana Negara Bhd to implement a cashless bus ticketing system for Rapid KL Buses. Its 55% subsidiary Solsis (M) Sdn Bhd received the letter of award dated Sept 7.
Naim Holdings Bhd’s plans to set up a joint venture to design and build a 50-storey tower known the Gaddafi Tower in Tripoli, Libya has come to a halt after the memorandum of understanding (MoU) lapsed.
Its unit NCSB Engineering Sdn Bhd and Al-Waatasemu Charity Foundation (WCF) had signed the MoU on July 16 this year.
Proton adviser Tun Dr Mahathir Mohamad said the national car maker is financially stable and sees no hurry in merging with other car manufactures.
"“Financially, Proton is still okay. We too are not very anxious to merge at this moment,” he said, when asked to comment on Proton’s possible plan for merger after recent news report stated that DRB-Hicom was not actively looking to acquire a stake in Proton.
MHC Plantations Bhd has increased its stake in Cepatwawasan Group Bhd to 37.01% after it acquired 4.2 million shares or 1.99% on Sept 15 for a total of RM4.59 million.
Meanwhile, Handal Resources Bhd saw 11 million shares done off-market on Friday at an average price of 65 sen each. Stock market data showed the shares were transacted below the market price of 80 sen. The 11 million shares represented a 12.22% stake.
Saturday, September 18, 2010
Cooling down the market
The issue of whether an asset bubble is forming has become a hot topic in a number of countries in Asia these days.
Hong Kong, China and Singapore have sounded the alarm on skyrocketing property prices and are worried that a bubble could be building up and will lead to a market collapse if the north-bound prices are left unchecked.
When an asset bubble happens, prices for a broad spectrum of properties would have escalated beyond the affordability of many common folks. The price increases are not due to fundamental demand but are being artificially pushed up by speculators.
This is what is happening in the “hot” property markets in the region today, and their governments are scrambling to cool the market down with tightening measures such as stricter mortgage loan policies and higher deposits for purchasers.
While some parts of the world, notably the western countries, are still facing the likelihood of a double dip in their economies, Asia has made a notable recovery in the past one year.
The low interest rate environment, high liquidity and an under performing equity market are fuelling a growing appetite for property investment among Asians who are renowned for their high savings.
The danger is that when interest rates start to rise and affordability is affected, demand may start to shrink. The bubble will then burst and result in falling asset prices and a market collapse.
The same issue has been raised about the state of the local property market. Will the run-up in the prices of houses in some parts of the Klang Valley, Penang, and Johor, be a prelude for prices to jump in the other broader property sectors and other parts of the country?
Although the current price spike is still quite contained within the higher end landed residential sector in sought after areas, some concerned parties have voiced concerns that it may spell trouble for the local market if the situation persist and a contagion effect takes place.
Those who are pressing the panic button are pointing their fingers at the speculators for the huge price increases through “property flipping” activities. By buying and selling within a short time, the main aim of these speculators is to push prices up and pocket the profits.
They worry that the bubble will burst when it becomes too big and unsustainable.
The bursting of the bubble will send prices tumbling and property values will be washed down the drains, causing much unnecessary losses.
Those who say there is no immediate danger believes the price increases of housing in the country are not across the board but are contained in only the “hot” areas.
To them, some degree of speculation is actually quite healthy and will not harm the market.
Although there is no confirmed figure on the exact percentage of speculative buying in the local market, the prevailing low interest rates and easy financing schemes are indirectly churning out more speculators in the market.
Unlike genuine investors who usually keep their properties to be leased out for long-term rental income, speculators are those who flip (buy and sell) their properties within a short time for quick profits.
It is common knowledge that there is a growing number of people (with extra cash for investment) who are pooling their resources to buy up multiple housing units (both apartments and landed) for profit-making purposes. They are hoping that their “investment ventures” will yield substantial profits for them in the current market run up.
Excessive speculation is unhealthy as it will unnecessarily burden genuine property buyers who find themselves being priced out of the market.
It will be a good time for the respective state housing authorities to churn out more public housing projects to meet the needs of the lower income population.
National House Buyers Association honorary secretary-general Chang Kim Loong laments that with the steep prices, only the rich, especially foreigners, can afford to buy. He urged the Government to introduce some kind of a price-control mechanism for houses – a threshold to help curb speculation.
He also suggests a lower mortgage loan limit (below 90%) for subsequent purchasers.
It is undeniable that some first time house buyers may still need the financing assistance to make it affordable for them to own a property.
To ensure the new measures do not unnecessarily burden genuine buyers, especially first timers, some flexibility like allowing a loan limit of up to 95% should be extended to these buyers who meet the banks’ credit assessment criteria.
Buyers who already own at least one property should have to dig into their own pockets for a higher downpayment for their subsequent purchase.
The easy financing schemes offered by developers and their panel of bankers should be phased out for upper medium to high-end houses.
Those who are taking advantage of the facility to speculate in multiple properties should not be granted “the free hand” to manipulate the market for their own gains.
Deputy news editor Angie Ng believes all stakeholders – from house buyers to developers and the regulatory authorities has a role to play to upkeep the sanctity of the market. - By Angie Ng
Hong Kong, China and Singapore have sounded the alarm on skyrocketing property prices and are worried that a bubble could be building up and will lead to a market collapse if the north-bound prices are left unchecked.
When an asset bubble happens, prices for a broad spectrum of properties would have escalated beyond the affordability of many common folks. The price increases are not due to fundamental demand but are being artificially pushed up by speculators.
This is what is happening in the “hot” property markets in the region today, and their governments are scrambling to cool the market down with tightening measures such as stricter mortgage loan policies and higher deposits for purchasers.
While some parts of the world, notably the western countries, are still facing the likelihood of a double dip in their economies, Asia has made a notable recovery in the past one year.
The low interest rate environment, high liquidity and an under performing equity market are fuelling a growing appetite for property investment among Asians who are renowned for their high savings.
The danger is that when interest rates start to rise and affordability is affected, demand may start to shrink. The bubble will then burst and result in falling asset prices and a market collapse.
The same issue has been raised about the state of the local property market. Will the run-up in the prices of houses in some parts of the Klang Valley, Penang, and Johor, be a prelude for prices to jump in the other broader property sectors and other parts of the country?
Although the current price spike is still quite contained within the higher end landed residential sector in sought after areas, some concerned parties have voiced concerns that it may spell trouble for the local market if the situation persist and a contagion effect takes place.
Those who are pressing the panic button are pointing their fingers at the speculators for the huge price increases through “property flipping” activities. By buying and selling within a short time, the main aim of these speculators is to push prices up and pocket the profits.
They worry that the bubble will burst when it becomes too big and unsustainable.
The bursting of the bubble will send prices tumbling and property values will be washed down the drains, causing much unnecessary losses.
Those who say there is no immediate danger believes the price increases of housing in the country are not across the board but are contained in only the “hot” areas.
To them, some degree of speculation is actually quite healthy and will not harm the market.
Although there is no confirmed figure on the exact percentage of speculative buying in the local market, the prevailing low interest rates and easy financing schemes are indirectly churning out more speculators in the market.
Unlike genuine investors who usually keep their properties to be leased out for long-term rental income, speculators are those who flip (buy and sell) their properties within a short time for quick profits.
It is common knowledge that there is a growing number of people (with extra cash for investment) who are pooling their resources to buy up multiple housing units (both apartments and landed) for profit-making purposes. They are hoping that their “investment ventures” will yield substantial profits for them in the current market run up.
Excessive speculation is unhealthy as it will unnecessarily burden genuine property buyers who find themselves being priced out of the market.
It will be a good time for the respective state housing authorities to churn out more public housing projects to meet the needs of the lower income population.
National House Buyers Association honorary secretary-general Chang Kim Loong laments that with the steep prices, only the rich, especially foreigners, can afford to buy. He urged the Government to introduce some kind of a price-control mechanism for houses – a threshold to help curb speculation.
He also suggests a lower mortgage loan limit (below 90%) for subsequent purchasers.
It is undeniable that some first time house buyers may still need the financing assistance to make it affordable for them to own a property.
To ensure the new measures do not unnecessarily burden genuine buyers, especially first timers, some flexibility like allowing a loan limit of up to 95% should be extended to these buyers who meet the banks’ credit assessment criteria.
Buyers who already own at least one property should have to dig into their own pockets for a higher downpayment for their subsequent purchase.
The easy financing schemes offered by developers and their panel of bankers should be phased out for upper medium to high-end houses.
Those who are taking advantage of the facility to speculate in multiple properties should not be granted “the free hand” to manipulate the market for their own gains.
Deputy news editor Angie Ng believes all stakeholders – from house buyers to developers and the regulatory authorities has a role to play to upkeep the sanctity of the market. - By Angie Ng
Wednesday, September 15, 2010
CM calls for abolition of Penang Bridge toll
(The Sun) Penang commemorated the 25th anniversary of the opening of the Penang Bridge today with the state government calling for the abolition of toll for its use.
Or watch video here: http://www.youtube.com/watch?v=cZdW0z51rEg
Chief Minister Lim Guan Eng said profits from the toll rates have far exceeded the original construction cost of about RM750 million.
"Since you have made up for the construction costs, we hope you can abolish the toll rate," he said at a press conference. I believe they (the concessionaire) have already made more than RM1 billion in profits."
Since Aug 15, 1993, Penang Bridge Sdn Bhd (PBSB), a subsidiary of UEM Group Bhd, has been managing, operating, upgrading and collecting toll for the bridge under a 25-year concession agreement that expires on May 31, 2018.
The bridge was built by UEM Bhd together with Hyundai Engineering and Construction Company (Korea) Ltd .
When the 13.5km bridge was opened in Sept 1985, it was the world’s third longest, and today it handles more than 100,000 vehicles daily, Lim noted.
Lim also hailed the contribution of "unsung local heroes" behind the bridge, like engineers Tan Sri Prof Chin Fung Kee and Liaw Yew Peng.
"The construction costs were initially budgeted at RM850 million but final costs were RM100 million lower," he said, crediting the engineers for their innovative measures.
"Prof Chin’s various innovative design features such as the use of rubber pads to take care of seismic loading were wisely adopted elsewhere," he added.
He also said the nine workers who lost their lives during the construction should be remembered for their work and sacrifice.
Earlier, Lim held a meeting with Tenaga Nasional Bhd CEO Datuk Seri Che Khalib Mohamad Noh on the incident last Saturday where three TNB cables under the bridge caught fire.
He said TNB had agreed to make public its findings on the cause of the fire.
He said the damaged 150m-long sections of the cables are expected to be replaced by November at a cost of RM5 million.
He added that there was a need for a crisis management plan in the event such an accident recurred, with increased coordination with the cross-channel ferry services run by Penang Port.
Or watch video here: http://www.youtube.com/watch?v=cZdW0z51rEg
Chief Minister Lim Guan Eng said profits from the toll rates have far exceeded the original construction cost of about RM750 million.
"Since you have made up for the construction costs, we hope you can abolish the toll rate," he said at a press conference. I believe they (the concessionaire) have already made more than RM1 billion in profits."
Since Aug 15, 1993, Penang Bridge Sdn Bhd (PBSB), a subsidiary of UEM Group Bhd, has been managing, operating, upgrading and collecting toll for the bridge under a 25-year concession agreement that expires on May 31, 2018.
The bridge was built by UEM Bhd together with Hyundai Engineering and Construction Company (Korea) Ltd .
When the 13.5km bridge was opened in Sept 1985, it was the world’s third longest, and today it handles more than 100,000 vehicles daily, Lim noted.
Lim also hailed the contribution of "unsung local heroes" behind the bridge, like engineers Tan Sri Prof Chin Fung Kee and Liaw Yew Peng.
"The construction costs were initially budgeted at RM850 million but final costs were RM100 million lower," he said, crediting the engineers for their innovative measures.
"Prof Chin’s various innovative design features such as the use of rubber pads to take care of seismic loading were wisely adopted elsewhere," he added.
He also said the nine workers who lost their lives during the construction should be remembered for their work and sacrifice.
Earlier, Lim held a meeting with Tenaga Nasional Bhd CEO Datuk Seri Che Khalib Mohamad Noh on the incident last Saturday where three TNB cables under the bridge caught fire.
He said TNB had agreed to make public its findings on the cause of the fire.
He said the damaged 150m-long sections of the cables are expected to be replaced by November at a cost of RM5 million.
He added that there was a need for a crisis management plan in the event such an accident recurred, with increased coordination with the cross-channel ferry services run by Penang Port.
Monday, September 13, 2010
Top Story : Property – MREITs – The wish list for the 2011 Budget
Sector Update
- For the upcoming Budget 2011, we expect withholding tax rate for local and foreign individual MREIT unitholders to be reduced/removed from the current level of 10%, vs. 0% in Singapore and Hong Kong. We believe this is a necessary move to attract foreign interest and gradually align MREITs with SREITs. Note that the tax structure has not been adjusted since 2008. Last year, RPGT was re-imposed (to curb speculative buying in real estate), but no announcement was made on the REIT sector.
- MREITs would also like to propose to regulators a further relaxation on REIT guidelines: i) To allow REITs with AUM under RM2bn to have multiple placement to grow their market cap, but rules can be enforced if AUM exceeds RM2bn; and ii) Faster process for rights issue exercise for REITs.
- We examined the performance of the two newly-listed REITs – Sunway REIT and CMMT. Performance of both REITs is generally in line with the sector. Given the size and the resulting higher liquidity, valuations of both REITs are higher with a yield of 7% vs. MREIT average yield of 8%. However, if we compare against Singapore retail-based REITs, valuations for both Sunway REIT and CMMT are still a tad lower, even with comparable asset size.
- We maintain our Overweight stance on the sector, due to: i) Continuous economic growth and hence stronger private consumption, industrial and economic activities; ii) Rising young population profile, which is the key driver of consumption; iii) Higher investibility of MREITs following the listing of the two sizeable REITs – Sunway REIT and CMMT; and (iv) REITs provide a good hedge against rising inflation.
- For the upcoming Budget 2011, we expect withholding tax rate for local and foreign individual MREIT unitholders to be reduced/removed from the current level of 10%, vs. 0% in Singapore and Hong Kong. We believe this is a necessary move to attract foreign interest and gradually align MREITs with SREITs. Note that the tax structure has not been adjusted since 2008. Last year, RPGT was re-imposed (to curb speculative buying in real estate), but no announcement was made on the REIT sector.
- MREITs would also like to propose to regulators a further relaxation on REIT guidelines: i) To allow REITs with AUM under RM2bn to have multiple placement to grow their market cap, but rules can be enforced if AUM exceeds RM2bn; and ii) Faster process for rights issue exercise for REITs.
- We examined the performance of the two newly-listed REITs – Sunway REIT and CMMT. Performance of both REITs is generally in line with the sector. Given the size and the resulting higher liquidity, valuations of both REITs are higher with a yield of 7% vs. MREIT average yield of 8%. However, if we compare against Singapore retail-based REITs, valuations for both Sunway REIT and CMMT are still a tad lower, even with comparable asset size.
- We maintain our Overweight stance on the sector, due to: i) Continuous economic growth and hence stronger private consumption, industrial and economic activities; ii) Rising young population profile, which is the key driver of consumption; iii) Higher investibility of MREITs following the listing of the two sizeable REITs – Sunway REIT and CMMT; and (iv) REITs provide a good hedge against rising inflation.
Stocks to watch: Jaya Tiasa, Boustead Holdings, Tenaga, Maemode
KUALA LUMPUR: Stocks are expected to continue to advance on Tuesday, Sept 14, after the FBM KLCI hit its highest since January 2008 on Monday on mild foreign fund buying on key index-linked stocks that pushed total value of trade done to nearly RM2 billion.
Sentiment will continue and may spread to smaller capitalised companies after US stocks advanced to their highest levels in five weeks on Monday, taking the S&P 500 index near the top of its summer range on upbeat Chinese factory data and new global banking rules.
Reuters reported the rally sent the S&P 500 above its 200-day moving average for the first time since early August, which was seen as a bullish sign. Investors are now looking to the 1,130 level, which has not been pierced since May, but if surpassed, could signal more gains on the horizon.
The Dow Jones industrial average gained 81.36 points, or 0.78 percent, to 10,544.13. The Standard & Poor's 500 Index climbed 12.35 points, or 1.11 percent, to 1,121.90. The Nasdaq Composite Index jumped 43.23 points, or 1.93 percent, to 2,285.71.
Global regulators agreed to force banks to more than triple their top-quality capital reserves in hopes of preventing another credit crisis. But the new rules, known as "Basel III," provide transition periods that could extend to January 2019 or later -- more time than many bankers expected.
Meanwhile, Standard Chartered Global Research said in its outlook report issued on Tuesday that Singapore, Malaysia and Thailand have tolerated currency appreciation in recent months.
“Terms of trade indices indicate Thailand’s and Malaysia’s export prices remain competitive. This should give authorities confidence to allow forex appreciation to stem imported inflation,” it said.
As for the new minimum capital requirements unveiled by the Basel Committee, which focuses on core Tier 1 ratio – effectively increased to 7% -- Standard Chartered Global Research said “the impact on Asian bank capital bonds is positive, in our view, but upside could be capped.”
At Bursa Malaysia, The Edge FinancialDaily reported that while the FBM KLCI hit a more-than-two-year high Monday, the CONSTRUCTION [] sector, which is virtually unrepresented in the 30-stock benchmark index, has also recorded a strong performance on renewed optimism ahead of the tabling of Budget 2011 next month.
Stocks to watch on Tuesday include JAYA TIASA HOLDINGS BHD [], BOUSTEAD HOLDINGS BHD [], TENAGA NASIONAL BHD [], Seloga and MALAYSIAN AE MODELS HOLDINGS [] Bhd.
The Edge FinancialDaily reported Jaya Tiasa which is historically known as a timber outfit, will see its earnings mix changed significantly over the next few years riding on a fast growing contribution from its PLANTATION [] division as more and more of its oil palms reach maturity.
The Edge FinancialDaily also reported that Boustead Holdings Bhd will be allowed to reclaim an area south of the Penang Bridge as compensation for scaling down its Royal Bintang Hotel project from 12 floors to five floors as required by Unesco for declaring George Town a World Heritage Site, according to sources.
Power giant Tenaga Nasional Bhd is expected to gain from a strengthening ringgit as it would have a positive impact from its foreign currency borrowings.
The Securities Commission has revised Selgoa Holdings Bhd’s proposed corporate exercise involving the issuance of rights shares. The revised exercise would involve a renounceable rights issue of up to 49.12 million rights shares with up to 73.68 million free detachable warrants.
This would be at a proposed issue price of 25 sen per rights share, on the basis of two rights shares together with three free warrants for every five ordinary shares of 25 each held after the proposed capital restructuring.
Malaysian AE Models’ unit has secured an RM81.82 million subcontract from the UEMC-Bina Puri JV to supply the baggage handling system for the proposed new-low cost carrier terminal at the KLIA.
Sentiment will continue and may spread to smaller capitalised companies after US stocks advanced to their highest levels in five weeks on Monday, taking the S&P 500 index near the top of its summer range on upbeat Chinese factory data and new global banking rules.
Reuters reported the rally sent the S&P 500 above its 200-day moving average for the first time since early August, which was seen as a bullish sign. Investors are now looking to the 1,130 level, which has not been pierced since May, but if surpassed, could signal more gains on the horizon.
The Dow Jones industrial average gained 81.36 points, or 0.78 percent, to 10,544.13. The Standard & Poor's 500 Index climbed 12.35 points, or 1.11 percent, to 1,121.90. The Nasdaq Composite Index jumped 43.23 points, or 1.93 percent, to 2,285.71.
Global regulators agreed to force banks to more than triple their top-quality capital reserves in hopes of preventing another credit crisis. But the new rules, known as "Basel III," provide transition periods that could extend to January 2019 or later -- more time than many bankers expected.
Meanwhile, Standard Chartered Global Research said in its outlook report issued on Tuesday that Singapore, Malaysia and Thailand have tolerated currency appreciation in recent months.
“Terms of trade indices indicate Thailand’s and Malaysia’s export prices remain competitive. This should give authorities confidence to allow forex appreciation to stem imported inflation,” it said.
As for the new minimum capital requirements unveiled by the Basel Committee, which focuses on core Tier 1 ratio – effectively increased to 7% -- Standard Chartered Global Research said “the impact on Asian bank capital bonds is positive, in our view, but upside could be capped.”
At Bursa Malaysia, The Edge FinancialDaily reported that while the FBM KLCI hit a more-than-two-year high Monday, the CONSTRUCTION [] sector, which is virtually unrepresented in the 30-stock benchmark index, has also recorded a strong performance on renewed optimism ahead of the tabling of Budget 2011 next month.
Stocks to watch on Tuesday include JAYA TIASA HOLDINGS BHD [], BOUSTEAD HOLDINGS BHD [], TENAGA NASIONAL BHD [], Seloga and MALAYSIAN AE MODELS HOLDINGS [] Bhd.
The Edge FinancialDaily reported Jaya Tiasa which is historically known as a timber outfit, will see its earnings mix changed significantly over the next few years riding on a fast growing contribution from its PLANTATION [] division as more and more of its oil palms reach maturity.
The Edge FinancialDaily also reported that Boustead Holdings Bhd will be allowed to reclaim an area south of the Penang Bridge as compensation for scaling down its Royal Bintang Hotel project from 12 floors to five floors as required by Unesco for declaring George Town a World Heritage Site, according to sources.
Power giant Tenaga Nasional Bhd is expected to gain from a strengthening ringgit as it would have a positive impact from its foreign currency borrowings.
The Securities Commission has revised Selgoa Holdings Bhd’s proposed corporate exercise involving the issuance of rights shares. The revised exercise would involve a renounceable rights issue of up to 49.12 million rights shares with up to 73.68 million free detachable warrants.
This would be at a proposed issue price of 25 sen per rights share, on the basis of two rights shares together with three free warrants for every five ordinary shares of 25 each held after the proposed capital restructuring.
Malaysian AE Models’ unit has secured an RM81.82 million subcontract from the UEMC-Bina Puri JV to supply the baggage handling system for the proposed new-low cost carrier terminal at the KLIA.
Sunday, September 12, 2010
SP Setia unit to buy land in Johor for RM169.26m, planned GDV RM1.5b
KUALA LUMPUR: SP SETIA BHD []’s unit is buying 259.1 acres of land in Johor for RM169.26 million cash to replenish its land bank as the Setia Indah Johor development was at its tail-end.
S P Setia said on Thursday, Sept 9 its unit Setia Indah Sdn Bhd had entered into a conditional sale and purchase agreement with from Kelana Ventures Sdn Bhd to acquire the land.
Based on a preliminary feasibility study and revised layout plan, the proposed development is expected to have a gross development value of RM1.5 billion. Development was expected to start by end of 2011 and span over eight years.
“However, it is currently too preliminary to ascertain the total development cost, the expected completion date of the development and the expected profits to be derived from the development of the land,” it said.
S P Setia said the acquisition would be wholly in cash from internally generated funds and/or external borrowings.
It said the acquisition would enable the company to continue to benefit from the strong branding it had achieved in that locality. It is also in line with the group's wider strategy of continuing to acquire strategically located prime land in Johor Bahru, it said.
The company said site was near other matured developments such as Taman Mount Austin and Taman Daya and hence also offered several important advantages, in particular the sustained potential demand from upgraders in the area desiring to move-up to larger, newer and better designed houses.
“Another source of demand is from young adults planning to move out of their parents' homes without having to leave the comforts of the local support network that they have grown accustomed to.
“Further, the existing population of the surrounding matured housing projects will also form the core catchment area for the proposed development's commercial components,” it said.
S P Setia was confident that the proposed development of mixed residential and commercial project on the land would be well received, and contribute positively to its future earnings and cash flow.
“The proposed development will also ensure S P Setia's continuing presence and efforts in building residential PROPERTIES [] in Johor,” it said.
S P Setia said on Thursday, Sept 9 its unit Setia Indah Sdn Bhd had entered into a conditional sale and purchase agreement with from Kelana Ventures Sdn Bhd to acquire the land.
Based on a preliminary feasibility study and revised layout plan, the proposed development is expected to have a gross development value of RM1.5 billion. Development was expected to start by end of 2011 and span over eight years.
“However, it is currently too preliminary to ascertain the total development cost, the expected completion date of the development and the expected profits to be derived from the development of the land,” it said.
S P Setia said the acquisition would be wholly in cash from internally generated funds and/or external borrowings.
It said the acquisition would enable the company to continue to benefit from the strong branding it had achieved in that locality. It is also in line with the group's wider strategy of continuing to acquire strategically located prime land in Johor Bahru, it said.
The company said site was near other matured developments such as Taman Mount Austin and Taman Daya and hence also offered several important advantages, in particular the sustained potential demand from upgraders in the area desiring to move-up to larger, newer and better designed houses.
“Another source of demand is from young adults planning to move out of their parents' homes without having to leave the comforts of the local support network that they have grown accustomed to.
“Further, the existing population of the surrounding matured housing projects will also form the core catchment area for the proposed development's commercial components,” it said.
S P Setia was confident that the proposed development of mixed residential and commercial project on the land would be well received, and contribute positively to its future earnings and cash flow.
“The proposed development will also ensure S P Setia's continuing presence and efforts in building residential PROPERTIES [] in Johor,” it said.
Stocks to watch: Loh & Loh, SP Setia, Mah Sing, water stocks
KUALA LUMPUR: Key regional markets could advance on Monday, Sept 13, following positive news from China’s latest economic data and firmer close on Wall Street.
The Dow Jones industrial average gained 47.53 points, or 0.46 percent, to 10,462.77. The Standard & Poor's 500 Index rose 5.37 points, or 0.49 percent, to 1,109.55. The Nasdaq Composite Index added 6.28 points, or 0.28 percent, to 2,242.48.
According to Reuters, the latest data from China showed its factories ramped up production in August and money growth easily topped expectations, showing that the economy remained buoyant despite government efforts to clamp down on bank lending and property speculation.
Last Thursday, the FBM KLCI closed up 3.64 points to 1,437.78 at midday, supported by positive industrial production index (IPI).
Industrial output for July rose 3.2% on-year, underpinned by stronger manufacturing growth while the June IPI was revised to 9.3% on-year. The increase in July was due to the increases in manufacturing (7.2%) and electricity (4.4%).
Stocks to watch on Monday, Sept 13 in another holiday-shortened week are Loh & Loh Corporation Bhd, SP SETIA BHD [], MAH SING GROUP BHD [] and water related counters.
Loh & Loh and its joint venture partner Sinohydro Corporation Ltd secured a contract from TENAGA NASIONAL BHD [] for the RM828.33 million Hulu Terengganu hydroelectric project.
Work on the project would be within 130 days after the receipt of the letter of acceptance.
Sinohydro Corporation Ltd-Loh & Loh CONSTRUCTION []s Sdn Bhd Joint Venture is an unincorporated joint venture between Sinohydro Corporation Ltd and Loh & Loh Constructions Sdn Bhd, a unit of Loh & Loh.
SP Setia’s unit is buying 259.1 acres of land in Johor for RM169.26 million cash to replenish its land bank as the Setia Indah Johor development was at its tail-end.
SP Setia said the proposed development is expected to have a gross development value of RM1.5 billion. Development was expected to start by end of 2011 and span over eight years.
Mah Sing Group Bhd has proposed to issue up to RM325 million nominal value seven-year redeemable convertible secured bonds which would be mainly to finance land acquisitions and working capital. It said the coupon rate is up to 3.50% per annum payable in arrears on a semiannual basis.
Water-related stocks could seen trading interest with some downside pressure after the Malaysian Rating Corp Bhd (MARC) and RAM Ratings Services Bhd (RAM) had last Thursday downgraded their ratings of debt issues by various private water entities in Selangor.
MARC downgraded the ratings of 10 Selangor water-related debt issues – with some falling as much as three notches. The affected issues include Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), Puncak Niaga (M) Sdn Bhd (PNSB), PUNCAK NIAGA HOLDINGS BHD [] (Puncak), RUN Holding SPV Bhd, Syarikat Pengeluar Air Selangor Sdn Bhd (SPLASH) and Viable Chip (M) Sdn Bhd.
RAM downgraded the debt ratings each for SPLASH, Destinasi Teguh Sdn Bhd and Sungai Harmoni Sdn Bhd from AA2 to BBB3.
Both the ratings agencies warned of a possibility of further ratings downgrades – should there be no concrete resolution to the protracted restructuring of Selangor’s fragmented water industry.
AmResearch said it was are not surprised by this development. Prior to this, several bondholders were believed to have been pushing for federal intervention in July to seek a solution to the long-standing water deadlock in Selangor.
More importantly, MARC’s downgrade of SYABAS’ long-term rating is reflective of the latter’s’ cash flow challenges and ability to meet its obligations to bulk water producers.
The research house said earlier reports indicated that SYABAS has only paid some 45% of its water invoices since January. This reaffirmed AmResearch’s earlier conviction that any further delays in payments would undoubtedly weaken the financial position of the water treatment operators as well – and raises the spectre of their ability to operate as a going concern over the medium to longer-term.
“While there have been fresh efforts to seek closure to water consolidation talks in Selangor by year-end, we caution that any deal would not be consummated unless the issue of control over water distribution rights in Selangor is resolved.
"Due to lingering uncertainties surrounding Selangor water impasse - we are inclined to maintain our NEUTRAL stance on the water sector. In line with our sector call, we continue to rate Puncak (FV=RM2.93) and KUMPULAN PERANGSANG SELANGOR [] Bhd (FV=RM1.61) as HOLDs,” it said.
The Dow Jones industrial average gained 47.53 points, or 0.46 percent, to 10,462.77. The Standard & Poor's 500 Index rose 5.37 points, or 0.49 percent, to 1,109.55. The Nasdaq Composite Index added 6.28 points, or 0.28 percent, to 2,242.48.
According to Reuters, the latest data from China showed its factories ramped up production in August and money growth easily topped expectations, showing that the economy remained buoyant despite government efforts to clamp down on bank lending and property speculation.
Last Thursday, the FBM KLCI closed up 3.64 points to 1,437.78 at midday, supported by positive industrial production index (IPI).
Industrial output for July rose 3.2% on-year, underpinned by stronger manufacturing growth while the June IPI was revised to 9.3% on-year. The increase in July was due to the increases in manufacturing (7.2%) and electricity (4.4%).
Stocks to watch on Monday, Sept 13 in another holiday-shortened week are Loh & Loh Corporation Bhd, SP SETIA BHD [], MAH SING GROUP BHD [] and water related counters.
Loh & Loh and its joint venture partner Sinohydro Corporation Ltd secured a contract from TENAGA NASIONAL BHD [] for the RM828.33 million Hulu Terengganu hydroelectric project.
Work on the project would be within 130 days after the receipt of the letter of acceptance.
Sinohydro Corporation Ltd-Loh & Loh CONSTRUCTION []s Sdn Bhd Joint Venture is an unincorporated joint venture between Sinohydro Corporation Ltd and Loh & Loh Constructions Sdn Bhd, a unit of Loh & Loh.
SP Setia’s unit is buying 259.1 acres of land in Johor for RM169.26 million cash to replenish its land bank as the Setia Indah Johor development was at its tail-end.
SP Setia said the proposed development is expected to have a gross development value of RM1.5 billion. Development was expected to start by end of 2011 and span over eight years.
Mah Sing Group Bhd has proposed to issue up to RM325 million nominal value seven-year redeemable convertible secured bonds which would be mainly to finance land acquisitions and working capital. It said the coupon rate is up to 3.50% per annum payable in arrears on a semiannual basis.
Water-related stocks could seen trading interest with some downside pressure after the Malaysian Rating Corp Bhd (MARC) and RAM Ratings Services Bhd (RAM) had last Thursday downgraded their ratings of debt issues by various private water entities in Selangor.
MARC downgraded the ratings of 10 Selangor water-related debt issues – with some falling as much as three notches. The affected issues include Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), Puncak Niaga (M) Sdn Bhd (PNSB), PUNCAK NIAGA HOLDINGS BHD [] (Puncak), RUN Holding SPV Bhd, Syarikat Pengeluar Air Selangor Sdn Bhd (SPLASH) and Viable Chip (M) Sdn Bhd.
RAM downgraded the debt ratings each for SPLASH, Destinasi Teguh Sdn Bhd and Sungai Harmoni Sdn Bhd from AA2 to BBB3.
Both the ratings agencies warned of a possibility of further ratings downgrades – should there be no concrete resolution to the protracted restructuring of Selangor’s fragmented water industry.
AmResearch said it was are not surprised by this development. Prior to this, several bondholders were believed to have been pushing for federal intervention in July to seek a solution to the long-standing water deadlock in Selangor.
More importantly, MARC’s downgrade of SYABAS’ long-term rating is reflective of the latter’s’ cash flow challenges and ability to meet its obligations to bulk water producers.
The research house said earlier reports indicated that SYABAS has only paid some 45% of its water invoices since January. This reaffirmed AmResearch’s earlier conviction that any further delays in payments would undoubtedly weaken the financial position of the water treatment operators as well – and raises the spectre of their ability to operate as a going concern over the medium to longer-term.
“While there have been fresh efforts to seek closure to water consolidation talks in Selangor by year-end, we caution that any deal would not be consummated unless the issue of control over water distribution rights in Selangor is resolved.
"Due to lingering uncertainties surrounding Selangor water impasse - we are inclined to maintain our NEUTRAL stance on the water sector. In line with our sector call, we continue to rate Puncak (FV=RM2.93) and KUMPULAN PERANGSANG SELANGOR [] Bhd (FV=RM1.61) as HOLDs,” it said.
Saturday, September 11, 2010
Tanjong PLC (RM21.52; TJN MK)
Extension of closing date for privatisation offer
Tanjong Capital Sdn Bhd has extended the closing date for
the acceptance of the conditional takeover offer of all
Tanjong’s voting shares by two weeks to 27 September
2010. The offer price at RM21.80/share and all other details
and terms and conditions of the offer remain unchanged.
We believe Tanjong’s shareholders should accept the offer
given the attractive valuations at 13x FY11F PE and 2.1x
P/BV, which are above its historical highs. The offer price is
also 12% above our SOP-derived target price of
RM19.50/share. We believe that the extension is to facilitate
the 90% acceptance level. Capital Group, which holds
c.10% shares in Tanjong will be the key party to determine
if the deal will go through smoothly.
Tanjong Capital Sdn Bhd has extended the closing date for
the acceptance of the conditional takeover offer of all
Tanjong’s voting shares by two weeks to 27 September
2010. The offer price at RM21.80/share and all other details
and terms and conditions of the offer remain unchanged.
We believe Tanjong’s shareholders should accept the offer
given the attractive valuations at 13x FY11F PE and 2.1x
P/BV, which are above its historical highs. The offer price is
also 12% above our SOP-derived target price of
RM19.50/share. We believe that the extension is to facilitate
the 90% acceptance level. Capital Group, which holds
c.10% shares in Tanjong will be the key party to determine
if the deal will go through smoothly.
Malaysia open to ringgit offshore trading
The Malaysian government is open to the idea of making the ringgit, which recently touched a 13-year high, tradeable offshore again, Prime Minister Datuk Seri Najib Razak said today.
“We are quite adaptive, and if we think that it’s going to help the economy, certainly we will review the situation,” he said in an interview with CNBC Asia’s Martin Soong aired today.
The ringgit, which traded at a 13-year high of RM3.11 versus the greenback on Sept 6, was reflecting the fundamentals of the country’s economy and would not bring a negative impact on the nation’s exports, he said.
“The government is monitoring the situation all the time, very closely,” he said in the interview.
He also said that the government was comfortable with the current level.
Najib, who is also the finance minister, said that most investors felt that the issue of whether the currency was tradeable overseas was not the key determinant in their investment decisions.
“Most importantly, there is no restriction in terms of repatriation of dividends and profits, for example, and bringing in currency through the banking system. So, it is not really a major factor,” he said. — Bernama
“We are quite adaptive, and if we think that it’s going to help the economy, certainly we will review the situation,” he said in an interview with CNBC Asia’s Martin Soong aired today.
The ringgit, which traded at a 13-year high of RM3.11 versus the greenback on Sept 6, was reflecting the fundamentals of the country’s economy and would not bring a negative impact on the nation’s exports, he said.
“The government is monitoring the situation all the time, very closely,” he said in the interview.
He also said that the government was comfortable with the current level.
Najib, who is also the finance minister, said that most investors felt that the issue of whether the currency was tradeable overseas was not the key determinant in their investment decisions.
“Most importantly, there is no restriction in terms of repatriation of dividends and profits, for example, and bringing in currency through the banking system. So, it is not really a major factor,” he said. — Bernama
Thursday, September 9, 2010
Poser on whether real property gains tax will be raised
PETALING JAYA: Hot on the heels of the possibility that Bank Negara will propose tightening the mortgage loan market to curb speculative buying in the upper medium to high-end housing market, questions have arisen whether the Government may also be looking at raising the quantum of real property gains tax (RPGT).
Some analysts have addressed this possibility in their recent research notes.
Hwang DBS Vickers Research, in a report on Monday, said the RPGT might be brought back in its entirety (5% to 30% for property disposal within five years of purchase from the present 5%) in Budget 2011.
Aimed at cooling off the rapid rise in housing prices, the full reintroduction of RPGT could further delay the return of foreign buyers that currently accounted for less than 5% of sales, it said.
Property development in Malaysia. Will real property gains tax be raised?
Prior to the exemption of the RPGT in April 2007, tax on gains from property disposal was on a progressive basis from 30% to 0% depending on the holding period of the property.
If one buys a property and disposes it for profit within two years of purchase, the profit will attract 30% tax; within the third year will be 20%; fourth year 15%; and fifth year 5%. A sale in the sixth year and thereafter will not be taxed.
When contacted, tax consultants and industry leaders expressed reservation that the Government would revert back to the full RPGT quantum so soon after it was re-introduced in January.
The Government had, under Budget 2010 (tabled last October), proposed to reintroduce the RPGT at a fixed 5% rate on all property disposal regardless of status and duration. The blanket 5% RPGT drew a lot of flak from the public who felt it was unfair and punitive on genuine property owners and investors.
In December 2009, the Government amended the policy, exempting all property disposals undertaken after five years from the RPGT.
PricewaterhouseCoopers Taxation Services Sdn Bhd tax leader and senior executive director Khoo Chuan Keat said that although there had always been the possibility of the Government reactivating the RPGT in its entirety, “the current situation does not warrant it as the property market has not gone off the roof unlike in some countries like Singapore.”
“There is no point in using an elephant to kill a rat. There will always be some speculative buying in the market, but as long as prices have not been inflated by artificial demand and there are no big surges in prices, some speculation is actually quite healthy,” Khoo told StarBiz.
He said the RPGT would not be an efficient tool to raise tax revenue for the Government, and pointed out that the Goods and Services Tax would do a better job for tax collection.
“Malaysia’s property market is at a different stage of development to that of Singapore’s. The city state’s economy is undergoing a strong boom and there are many more property buyers there, particularly foreign investors, which led to the sharp jump in property prices.”
Foreign buyers generally are involved in close to 30% of Singapore’s property sales.
Khoo said Singapore’s market had became too expensive and volatile for local Singaporean buyers and the government had to stabilise prices to ensure the locals were not priced out of the market.
Among the measures introduced are the imposition of a 70% mortgage cap for buyers with more than one property and the launch of 36,000 public housing units within one to two years.
Concurring with Khoo, Real Estate and Housing Developers’ Association president Datuk Michael Yam believes a higher RPGT would not be imposed in the upcoming Budget as there is little sign of high speculation or overheating in the local property market.
“Any such move will be counter-productive to the government effort to stimulate the property market, and it will be another flip-flop in its policy decision that will damage the consistency of government policies,” Yam said.
He added that a higher RPGT would dampen the market and result in a loss of revenue for the Government as revenue collected from property-related transactions, such as stamp duty and tax on profit of service providers including lawyers, estate agents and financiers, should be higher than the RPGT revenue.
Tax expert Dr Veerinderjit Singh has always believed that “since the RPGT was not abolished or repealed, it is likely that it may be brought back when the need arises and the timing is appropriate especially to curb excessive speculation and rise in property prices”.
He said a proper study needed to be conducted on whether the market was under control and if there was a need for new measures such as raising the RPGT to curb speculation.
“If the study shows that the market has regained its footing and there is no need for the low RPGT to be maintained as a support measure, there may be a need for the rates to be lifted. After all the whole purpose of the RPGT is to tax speculative gains and rein in speculation in the market,” he added.
Some analysts have addressed this possibility in their recent research notes.
Hwang DBS Vickers Research, in a report on Monday, said the RPGT might be brought back in its entirety (5% to 30% for property disposal within five years of purchase from the present 5%) in Budget 2011.
Aimed at cooling off the rapid rise in housing prices, the full reintroduction of RPGT could further delay the return of foreign buyers that currently accounted for less than 5% of sales, it said.
Property development in Malaysia. Will real property gains tax be raised?
Prior to the exemption of the RPGT in April 2007, tax on gains from property disposal was on a progressive basis from 30% to 0% depending on the holding period of the property.
If one buys a property and disposes it for profit within two years of purchase, the profit will attract 30% tax; within the third year will be 20%; fourth year 15%; and fifth year 5%. A sale in the sixth year and thereafter will not be taxed.
When contacted, tax consultants and industry leaders expressed reservation that the Government would revert back to the full RPGT quantum so soon after it was re-introduced in January.
The Government had, under Budget 2010 (tabled last October), proposed to reintroduce the RPGT at a fixed 5% rate on all property disposal regardless of status and duration. The blanket 5% RPGT drew a lot of flak from the public who felt it was unfair and punitive on genuine property owners and investors.
In December 2009, the Government amended the policy, exempting all property disposals undertaken after five years from the RPGT.
PricewaterhouseCoopers Taxation Services Sdn Bhd tax leader and senior executive director Khoo Chuan Keat said that although there had always been the possibility of the Government reactivating the RPGT in its entirety, “the current situation does not warrant it as the property market has not gone off the roof unlike in some countries like Singapore.”
“There is no point in using an elephant to kill a rat. There will always be some speculative buying in the market, but as long as prices have not been inflated by artificial demand and there are no big surges in prices, some speculation is actually quite healthy,” Khoo told StarBiz.
He said the RPGT would not be an efficient tool to raise tax revenue for the Government, and pointed out that the Goods and Services Tax would do a better job for tax collection.
“Malaysia’s property market is at a different stage of development to that of Singapore’s. The city state’s economy is undergoing a strong boom and there are many more property buyers there, particularly foreign investors, which led to the sharp jump in property prices.”
Foreign buyers generally are involved in close to 30% of Singapore’s property sales.
Khoo said Singapore’s market had became too expensive and volatile for local Singaporean buyers and the government had to stabilise prices to ensure the locals were not priced out of the market.
Among the measures introduced are the imposition of a 70% mortgage cap for buyers with more than one property and the launch of 36,000 public housing units within one to two years.
Concurring with Khoo, Real Estate and Housing Developers’ Association president Datuk Michael Yam believes a higher RPGT would not be imposed in the upcoming Budget as there is little sign of high speculation or overheating in the local property market.
“Any such move will be counter-productive to the government effort to stimulate the property market, and it will be another flip-flop in its policy decision that will damage the consistency of government policies,” Yam said.
He added that a higher RPGT would dampen the market and result in a loss of revenue for the Government as revenue collected from property-related transactions, such as stamp duty and tax on profit of service providers including lawyers, estate agents and financiers, should be higher than the RPGT revenue.
Tax expert Dr Veerinderjit Singh has always believed that “since the RPGT was not abolished or repealed, it is likely that it may be brought back when the need arises and the timing is appropriate especially to curb excessive speculation and rise in property prices”.
He said a proper study needed to be conducted on whether the market was under control and if there was a need for new measures such as raising the RPGT to curb speculation.
“If the study shows that the market has regained its footing and there is no need for the low RPGT to be maintained as a support measure, there may be a need for the rates to be lifted. After all the whole purpose of the RPGT is to tax speculative gains and rein in speculation in the market,” he added.
Tuesday, September 7, 2010
Hot property market still grabbing attention
PROPERTY, especially the hot housing market, has become a favourite topic these days. Malaysians are generally quite savvy investors and their penchant for viable investment instruments have contributed to the current run-up in the housing market.
The availability of easy housing facilities, including the 5:95 and 10:90 packages, is also fuelling the strong buying interest.
According to the National Property Information Centre in its latest property market report, average house prices have risen 19% to RM273,000 in the first half of this year, from RM220,000 in the same period last year.
In Kuala Lumpur, prices rose about 35% to more than RM700,000 in the first half of the year, up from RM523,000 last year.
The strong jump in house prices in the past six months in some parts of the Klang Valley and Penang have raised concerns that unchecked speculative buying may cause overheating and result in a property bubble.
Bank Negara is keeping a close watch on the market and is engaging with banks on possible measures to curb excessive speculation on properties. It may consider imposing a 80% loan-to-value ratio (LVR) cap for mortgages to avert the risk of a potential property bubble.
The news have caused concern among industry and consumer groups over its dampening effect on affordability level and buying sentiment.
They worry that if the loan limit is brought down to 80%, many first-time house buyers, including those who have just joined the work force and the lower income group, may not be able to fork out the 20% downpayment for a house.
Their contention is that the proposed mortgage loan limit should not be imposed across the board and should give due consideration and flexibility to first-time buyers and those buying lower priced units priced below RM500,000.
Bank sources said Bank Negara’s aim of imposing the 80% mortgage loan cap was to reign in on speculative buying by certain quarters and the measure would be targeted at the high-end and non-owner occupied houses.
A blanket LVR cap will unlikely be imposed given the differing level of speculation in the various housing segments.
Given that houses of less than RM500,000 still constitute the bulk of transactions, accounting for 94% of the total number of units sold and 68% of sales value last year, the mass housing market may be spared. First-time house buyers may also be exempted from the proposed measure.
Should the proposed LVR cap materialise, houses priced from RM500,000 may be affected the most.
The mortgage loans market is now quite liberalised as the central bank does not impose any standard policy on mortgage loans but leaves it to the banks to manage.
Most banks have traditionally provided loans of up to 90% of the value of the property until about two years ago when market sentiment was impacted by the global financial crisis.
To stem the weak property sales, developers and their panel of bankers came out with different variants of housing loan packages that allow buyers to sign up for a house with just a 5% downpayment of the property value. Some even go as far as doing away with any downpayment and eligible buyers are granted the maximum 100% loan.
Although it has been almost two years since the introduction of these easy financing facilities to raise the affordability level for house buyers, these packages are still around in various forms today.
In fact, banks are still flushed with liquidity and are competing to get a bigger slice of the mortgage loan market. The stiff competition among banks has resulted in a mortgage price war with lending rates dropping to as low as base lending rate minus 2.3%.
But things have changed substantially in the past six months or so, and it should be time to review these housing packages.
If house buyers are made to pay higher downpayments for their purchases, the risk of their loans turning bad will be lower compared with if they have paid lower or zero downpayments.
We must not forget that the massive sub-prime housing debts in the United States that turned bad had triggered the global financial crisis two years ago and the world is still paying a heavy price for it today.
Although the LVR cap could dampen property market, demand for quality products in prime locations is expected to remain strong although buyers will be more selective.
Ultimately, if the proposed mortgage cap succeeds in cooling off the rapid rise in prices, especially for landed upper medium to high end residences, it should ensure a more sustainable and resilient property market.
Monday, September 6, 2010
Ringgit climbs to 13-year high
Malaysia's ringgit climbed to the strongest level in 13 years as better-than-expected growth in US employment brightened the outlook for exports to the world's biggest economy.
The currency strengthened for a fourth day and benchmark stock indexes rose across Asia after a US government report showed private payrolls increased 67,000 in August, more than the 40,000 forecast in a survey of economists.
Malaysia's trade ministry last week reported a 13.5 per cent gain in July exports, an eighth straight advance.
"The market is getting back its confidence, especially if the US comes out with more fiscal or monetary stimulus," said Godwin Chan, a foreign-exchange trader at OSK Investment Bank Bhd. in Kuala Lumpur.
"We see this benefiting stocks and risk currencies."
The ringgit gained 0.3 per cent to 3.1115 per dollar as of 9.57am in Kuala Lumpur, taking this year's gain to 10 per cent, according to data compiled by Bloomberg.
It earlier touched 3.1098, the strongest level since October 1997. The ringgit may reach 3.05 this year, Chan said.
Overseas investors held RM102 billion of ringgit-denominated debt at the end of July, 47 per cent more than at the start of this year, central bank data show. They boosted their holdings of government bonds by 51 per cent to record RM62 billion. - Bloomberg
Read more: Ringgit climbs to 13-year high http://www.btimes.com.my/Current_News/BTIMES/articles/ringito06/Article/#ixzz0yov0I6jW
The currency strengthened for a fourth day and benchmark stock indexes rose across Asia after a US government report showed private payrolls increased 67,000 in August, more than the 40,000 forecast in a survey of economists.
Malaysia's trade ministry last week reported a 13.5 per cent gain in July exports, an eighth straight advance.
"The market is getting back its confidence, especially if the US comes out with more fiscal or monetary stimulus," said Godwin Chan, a foreign-exchange trader at OSK Investment Bank Bhd. in Kuala Lumpur.
"We see this benefiting stocks and risk currencies."
The ringgit gained 0.3 per cent to 3.1115 per dollar as of 9.57am in Kuala Lumpur, taking this year's gain to 10 per cent, according to data compiled by Bloomberg.
It earlier touched 3.1098, the strongest level since October 1997. The ringgit may reach 3.05 this year, Chan said.
Overseas investors held RM102 billion of ringgit-denominated debt at the end of July, 47 per cent more than at the start of this year, central bank data show. They boosted their holdings of government bonds by 51 per cent to record RM62 billion. - Bloomberg
Read more: Ringgit climbs to 13-year high http://www.btimes.com.my/Current_News/BTIMES/articles/ringito06/Article/#ixzz0yov0I6jW
RHB Cap shares fall in early trade
KUALA LUMPUR: RHB Capital Bhd’s shares eased in Tuesday’s early trade after its major shareholder, the Employees Provident Fund, denied reports that there were merger talks.
At 9.23am, the stock was down 10 sen to RM7.03.
On Monday, RHB Cap shares rose to a 13-year high on speculation that it might merge with a local lender. The potential suitors cited were AmBank Group, Malayan Banking Bhd and CIMB Group Holdings Bhd.
RHB Cap shares jumped 29 sen to close at RM7.13 with 3.8 million shares traded on Monday.
At 9.23am, the stock was down 10 sen to RM7.03.
On Monday, RHB Cap shares rose to a 13-year high on speculation that it might merge with a local lender. The potential suitors cited were AmBank Group, Malayan Banking Bhd and CIMB Group Holdings Bhd.
RHB Cap shares jumped 29 sen to close at RM7.13 with 3.8 million shares traded on Monday.
Heat attracting attention• A hot property market could lead to potential
Property
Heat attracting attention• A hot property market could lead to potential
introduction of mortgage cap and full return of RPGT
(5-30%).
• Potential negative knee-jerk reaction if this materializes,
but impact may be temporary and not as bad as
feared.
• Measures targeted at speculators, mass residential
should be less affected.
• Maintain positive view on sector. Top pick: SP Setia.
Heat attracting attention• A hot property market could lead to potential
introduction of mortgage cap and full return of RPGT
(5-30%).
• Potential negative knee-jerk reaction if this materializes,
but impact may be temporary and not as bad as
feared.
• Measures targeted at speculators, mass residential
should be less affected.
• Maintain positive view on sector. Top pick: SP Setia.
Sunday, September 5, 2010
No to 80% mortgage cap on housing
PETALING JAYA: Several groups are up in arms over a proposal to cut housing loans by 10% from the current cap of 90%, saying that the move will only discourage Malaysians from buying houses.
National House Buyer’s Association (HBA) and Federation of Malaysian Consumers Associations (Fomca) cautioned that the proposed home loan reduction to 80% would only be a burden to potential house buyers.
HBA honorary secretary-general Chang Kim Loong said the proposal would go against the Government’s plans to encourage home ownership.
“Young professionals who are just starting out will be deprived of buying a home for themselves. How are they going to get the 20% upfront payment?
“That does not include the legal fees and stamp duties house buyers have to pay,” said Chang when contacted yesterday.
He said the move would only be good if it targeted high-end buyers, as an effort to deter speculation.
On Sept 2, StarBiz reported that Bank Negara was engaging with banks on possible measures to curb excessive speculation on property prices.
One of the measures discussed was whether the central bank will be capping the loan-to-value ratio (LVR) for mortgages at 80% in order to avert the risk of a potential property bubble.
Currently, most banks provide loans of up to 90% of the value of the property.
Fomca secretary-general Muhd Sha’ani Abdullah urged the Government to ensure there was enough affordable housing available first before implementing such proposals.
“40% of the workforce earn up to RM1,500 a month. If this proposal were to be implemented across the board, how are they going to afford houses?” he asked.
Gerakan vice-president Datuk Mah Siew Keong said that if the proposal was applied across the board, the property market, construction industry, housing and real estate industry, and economic growth would slow down.
“Bank Negara must study the plan carefully, as the present limit of home loans of 90% has helped the housing and real estate industry,” said Mah, who is also the party’s economic development bureau chairman in a statement.
Housing and Local Government Minister Datuk Chor Chee Heung, however, said the measure would not dampen the housing market as in the long-term, it would actually be a healthy growth for the industry.
Banking sources said Bank Negara might consider discontinuing the 5:95 and 10:90 housing loan packages and impose higher downpayment for property purchasers.
This was due to a surge of between 10% and 30% in the price of landed properties in some parts of the Klang Valley and Penang.
National House Buyer’s Association (HBA) and Federation of Malaysian Consumers Associations (Fomca) cautioned that the proposed home loan reduction to 80% would only be a burden to potential house buyers.
HBA honorary secretary-general Chang Kim Loong said the proposal would go against the Government’s plans to encourage home ownership.
“Young professionals who are just starting out will be deprived of buying a home for themselves. How are they going to get the 20% upfront payment?
“That does not include the legal fees and stamp duties house buyers have to pay,” said Chang when contacted yesterday.
He said the move would only be good if it targeted high-end buyers, as an effort to deter speculation.
On Sept 2, StarBiz reported that Bank Negara was engaging with banks on possible measures to curb excessive speculation on property prices.
One of the measures discussed was whether the central bank will be capping the loan-to-value ratio (LVR) for mortgages at 80% in order to avert the risk of a potential property bubble.
Currently, most banks provide loans of up to 90% of the value of the property.
Fomca secretary-general Muhd Sha’ani Abdullah urged the Government to ensure there was enough affordable housing available first before implementing such proposals.
“40% of the workforce earn up to RM1,500 a month. If this proposal were to be implemented across the board, how are they going to afford houses?” he asked.
Gerakan vice-president Datuk Mah Siew Keong said that if the proposal was applied across the board, the property market, construction industry, housing and real estate industry, and economic growth would slow down.
“Bank Negara must study the plan carefully, as the present limit of home loans of 90% has helped the housing and real estate industry,” said Mah, who is also the party’s economic development bureau chairman in a statement.
Housing and Local Government Minister Datuk Chor Chee Heung, however, said the measure would not dampen the housing market as in the long-term, it would actually be a healthy growth for the industry.
Banking sources said Bank Negara might consider discontinuing the 5:95 and 10:90 housing loan packages and impose higher downpayment for property purchasers.
This was due to a surge of between 10% and 30% in the price of landed properties in some parts of the Klang Valley and Penang.
Stocks to watch: RCE Cap, AZRB, Jetson, EON Cap
KUALA LUMPUR: Key regional markets including Bursa Malaysia are expected to kick off the new week, Monday, Sept 6 on a firmer note after Wall Street climbed as anxiety of a double-dip recession eased.
On Wall Street, stocks jumped and commodities rose on Friday, after data showing fewer U.S. job losses than expected reinforced other reports this week to ease fears the American economy is on the cusp of a new recession.
According to Reuters, the US Labor Department said non-farm payrolls fell 54,000 in August. Private employment, considered a better gauge of labour market health than government hiring, added 67,000 jobs after an upwardly revised 107,000 gain in July.
The Dow Jones industrial average closed up 127.83 points, or 1.24%, at 10,447.93. The Standard & Poor's 500 Index gained 14.41 points, or 1.32%, at 1,104.51. The Nasdaq Composite Index added 33.74 points, or 1.53%, at 2,233.75.
At Bursa Malaysia, stocks to watch on Monday include RCE CAPITAL BHD [], AHMAD ZAKI RESOURCES BHD [] (AZRB), KUMPULAN JETSON BHD [], EON CAPITAL BHD [] and Mudajaya Corp Bhd.
The Edge Weekly reports that though more financial institutions are entering the niche market of providing loans to government servants via civil service cooperatives but RCE Capital is confident it will maintain its market share.
RCE posted net profit of RM23.63 million in the first quarter ended June 30, 2010 versus RM18.53m a year ago. The group recorded a higher profit before tax of RM33.7 million the 1Q, up 12.4% or RM3.7 million from RM30.0 million in the preceding quarter.
AZRB has initiated legal actions against Saudi Arabia’s Alfaisal University over the latter’s decision to liquidate the performance and advance bonds totalling 52.56 million riyals (RM43.94 million).
The dispute arose over the contract agreement with the university for the Alfaisal University campus development project, phase one and two, in Riyadh.
Last Friday, Kumpulan Jetson Bhd said the Naza Group’s TTDI KL Metropolis Sdn Bhd (TKLM) has terminated the shareholders’ agreement with Jetson to build a new trade exhibition centre for the Malaysia External Trade Development Corporation (Matrade) on a joint-venture basis.
Jetson said on Friday, Sept 3 the termination arose from disagreements on certain commercial terms relating to the project costs for the Matrade centre in Jalan Dutamas which was expected to cost RM628 million.
However, though the shareholders’ agreement has been terminated, Jetson could probably play a role as the contractor to undertake the project.
In EON Capital, the High Court judge has fixed Monday to deliver his decision on certain interlocutory applications filed by the parties to a petition.
Primus (Malaysia) Sdn Bhd had filed a law suit against the board members and certain shareholders of EONCap.
The suit was to seek various court declarations and orders as well as some RM1.12 billion in damages from EONCap directors should HONG LEONG BANK BHD [] (HLBB) succeed in acquiring EONCap’s assets and liabilities.
Mudajaya could continue to see trading interest after its share price could retreat after the price surge last Friday.
The latest development was the appointment of Asgari Mohd Fuad Stephens as its chairman and there are expectations he would help put Mudajaya on firmer footing after the recent controversy over its Indian independent power plant project.
Asgari is the director and founding member of Intelligent Capital Sdn Bhd. According to Mudajaya, he has extensive experience in both public and private equity investing in Malaysia. He was former chairman of Leighton Asia (southern), part of the Leighton Group, Australia’s largest project development and contracting group.
The share price surged 53 sen to RM4.48 with 9.65 million shares done, as interest in the stock was also spurred by a share buyback. Mudajaya also disclosed that it had bought back 100,800 shares for a total of RM394,584 at prices ranging from RM3.86 to RM3.90.
On Wall Street, stocks jumped and commodities rose on Friday, after data showing fewer U.S. job losses than expected reinforced other reports this week to ease fears the American economy is on the cusp of a new recession.
According to Reuters, the US Labor Department said non-farm payrolls fell 54,000 in August. Private employment, considered a better gauge of labour market health than government hiring, added 67,000 jobs after an upwardly revised 107,000 gain in July.
The Dow Jones industrial average closed up 127.83 points, or 1.24%, at 10,447.93. The Standard & Poor's 500 Index gained 14.41 points, or 1.32%, at 1,104.51. The Nasdaq Composite Index added 33.74 points, or 1.53%, at 2,233.75.
At Bursa Malaysia, stocks to watch on Monday include RCE CAPITAL BHD [], AHMAD ZAKI RESOURCES BHD [] (AZRB), KUMPULAN JETSON BHD [], EON CAPITAL BHD [] and Mudajaya Corp Bhd.
The Edge Weekly reports that though more financial institutions are entering the niche market of providing loans to government servants via civil service cooperatives but RCE Capital is confident it will maintain its market share.
RCE posted net profit of RM23.63 million in the first quarter ended June 30, 2010 versus RM18.53m a year ago. The group recorded a higher profit before tax of RM33.7 million the 1Q, up 12.4% or RM3.7 million from RM30.0 million in the preceding quarter.
AZRB has initiated legal actions against Saudi Arabia’s Alfaisal University over the latter’s decision to liquidate the performance and advance bonds totalling 52.56 million riyals (RM43.94 million).
The dispute arose over the contract agreement with the university for the Alfaisal University campus development project, phase one and two, in Riyadh.
Last Friday, Kumpulan Jetson Bhd said the Naza Group’s TTDI KL Metropolis Sdn Bhd (TKLM) has terminated the shareholders’ agreement with Jetson to build a new trade exhibition centre for the Malaysia External Trade Development Corporation (Matrade) on a joint-venture basis.
Jetson said on Friday, Sept 3 the termination arose from disagreements on certain commercial terms relating to the project costs for the Matrade centre in Jalan Dutamas which was expected to cost RM628 million.
However, though the shareholders’ agreement has been terminated, Jetson could probably play a role as the contractor to undertake the project.
In EON Capital, the High Court judge has fixed Monday to deliver his decision on certain interlocutory applications filed by the parties to a petition.
Primus (Malaysia) Sdn Bhd had filed a law suit against the board members and certain shareholders of EONCap.
The suit was to seek various court declarations and orders as well as some RM1.12 billion in damages from EONCap directors should HONG LEONG BANK BHD [] (HLBB) succeed in acquiring EONCap’s assets and liabilities.
Mudajaya could continue to see trading interest after its share price could retreat after the price surge last Friday.
The latest development was the appointment of Asgari Mohd Fuad Stephens as its chairman and there are expectations he would help put Mudajaya on firmer footing after the recent controversy over its Indian independent power plant project.
Asgari is the director and founding member of Intelligent Capital Sdn Bhd. According to Mudajaya, he has extensive experience in both public and private equity investing in Malaysia. He was former chairman of Leighton Asia (southern), part of the Leighton Group, Australia’s largest project development and contracting group.
The share price surged 53 sen to RM4.48 with 9.65 million shares done, as interest in the stock was also spurred by a share buyback. Mudajaya also disclosed that it had bought back 100,800 shares for a total of RM394,584 at prices ranging from RM3.86 to RM3.90.
Proton P390A based on Mitsubishi Lancer previewed on TV3
Proton decided to give Media Prima’s TV3 a scoop on the new Proton Waja replacement “P390A” model based on the current generation Mitsubishi Lancer. A TV3 program earlier this week had shots of a covered Proton-badged Lancer with a red paintjob.
OSK bets on Malaysian property boom
Malaysia’s property sector is set to see its biggest residential boom in a decade, led mainly by medium- to high-end landed properties, says a research firm.
The sector may peak sometime in 2012/13 before going into a potential slump, OSK Research Sdn Bhd said.
OSK Research said a major mass housing boom will likely occur in the first half of this decade.
It added that the sector was already entering the early stage of a property “super cycle”.
“Although the expected peak in 2012/13 may have dire consequences, the phenomenal boom that immediately precedes it gives investors an excellent opportunity to profit from the trend for at least the next 12 months.
“We, therefore, seize the opportunity to upgrade our property sector call to overweight from neutral,” OSK Research said in its research note to investors yesterday.
Although location is key to identifying real estate opportunities, what is equally important but often overlooked is timing, it added.
It noted that the current 20-year boom in the medium- to high-end residential properties since the early 1990s might peak in 2012/13, after which mass affordable housing could dominate the real estate industry around 2015/16.
Stocks with focus in the medium- to high-end segment, such as Sunrise, YNH Property, IGB Corp and Bandar Raya Developments, are some of the best bets for the next 12 months.
“Mass housing developers, especially the ‘fallen angels’ such as LBS Bina and MK Land, may come to the fore as another major investment theme after that,” OSK Research noted.
For “best of all worlds” exposure during this period, OSK Research recommends buying SP Setia.
It said the country’s current boom in higher-end residential properties is probably in its longest “bull run” ever, spanning almost two decades since the early 1990s.
“This, unfortunately, has also given rise to the illusion of the infallibility of properties. We are now entering the final phase of this secular boom, which will be characterised by a period of fast-rising property prices in the medium- to high-end residential segment, particularly landed ones.”
OSK Research observed that those born in the 1950s had become more risk-averse in their investments since 2003/04.
“As they approach retirement, they will divert a significant portion of their wealth into savings and traditionally perceived defensive asset classes such as real estate.
“However, their eventual absence may bring an end to the boom if there is no credible demand force to fill the void.”
Emkay Group senior general manager Mazrita Mazlan said the wealthy do not mind paying a little bit extra as long as the properties are away from congested towns.
“As an example, MK Land (MK Land Holdings Bhd) will launch its Rafflesia high-end project, which has units starting at RM2 million apiece.
“Already the project has sold 100 units even before its launch,” Mazrita claimed.
Mercury Securities head of research Edmund Tham said the boom will only benefit certain areas and selected developers.
“When it comes to the so-called boom, it depends on who you talk to. I believe there is a property overhang project in Mont’Kiara and some buyers are facing financing problems.”
Independent property valuation surveyor Sharizal Supian said the trend right now is to go for boutique projects complete with gated communities and modern facilities and townships, such as UEM Land’s Symphony Hill which saw units snapped up within days of its launch.
“The boom, however, only benefits the rich and does not benefit the general public,” Sharizal said.
An Island & Peninsular Bhd executive said that only foreigners will benefit from Malaysia’s property boom due to the cheaper ringgit.
- Malaysia Property Boom
The sector may peak sometime in 2012/13 before going into a potential slump, OSK Research Sdn Bhd said.
OSK Research said a major mass housing boom will likely occur in the first half of this decade.
It added that the sector was already entering the early stage of a property “super cycle”.
“Although the expected peak in 2012/13 may have dire consequences, the phenomenal boom that immediately precedes it gives investors an excellent opportunity to profit from the trend for at least the next 12 months.
“We, therefore, seize the opportunity to upgrade our property sector call to overweight from neutral,” OSK Research said in its research note to investors yesterday.
Although location is key to identifying real estate opportunities, what is equally important but often overlooked is timing, it added.
It noted that the current 20-year boom in the medium- to high-end residential properties since the early 1990s might peak in 2012/13, after which mass affordable housing could dominate the real estate industry around 2015/16.
Stocks with focus in the medium- to high-end segment, such as Sunrise, YNH Property, IGB Corp and Bandar Raya Developments, are some of the best bets for the next 12 months.
“Mass housing developers, especially the ‘fallen angels’ such as LBS Bina and MK Land, may come to the fore as another major investment theme after that,” OSK Research noted.
For “best of all worlds” exposure during this period, OSK Research recommends buying SP Setia.
It said the country’s current boom in higher-end residential properties is probably in its longest “bull run” ever, spanning almost two decades since the early 1990s.
“This, unfortunately, has also given rise to the illusion of the infallibility of properties. We are now entering the final phase of this secular boom, which will be characterised by a period of fast-rising property prices in the medium- to high-end residential segment, particularly landed ones.”
OSK Research observed that those born in the 1950s had become more risk-averse in their investments since 2003/04.
“As they approach retirement, they will divert a significant portion of their wealth into savings and traditionally perceived defensive asset classes such as real estate.
“However, their eventual absence may bring an end to the boom if there is no credible demand force to fill the void.”
Emkay Group senior general manager Mazrita Mazlan said the wealthy do not mind paying a little bit extra as long as the properties are away from congested towns.
“As an example, MK Land (MK Land Holdings Bhd) will launch its Rafflesia high-end project, which has units starting at RM2 million apiece.
“Already the project has sold 100 units even before its launch,” Mazrita claimed.
Mercury Securities head of research Edmund Tham said the boom will only benefit certain areas and selected developers.
“When it comes to the so-called boom, it depends on who you talk to. I believe there is a property overhang project in Mont’Kiara and some buyers are facing financing problems.”
Independent property valuation surveyor Sharizal Supian said the trend right now is to go for boutique projects complete with gated communities and modern facilities and townships, such as UEM Land’s Symphony Hill which saw units snapped up within days of its launch.
“The boom, however, only benefits the rich and does not benefit the general public,” Sharizal said.
An Island & Peninsular Bhd executive said that only foreigners will benefit from Malaysia’s property boom due to the cheaper ringgit.
- Malaysia Property Boom
Thursday, September 2, 2010
Ratings of SP Setia, IGB upgraded
I have keep Sp-Setia for quit some time....Now the OSK have a buy call on this..Please pay some note on this stock guys...
SP Setia Bhd, Malaysia’s biggest property developer, and IGB Corp had their stock ratings upgraded at OSK Research Sdn Bhd to reflect their growth prospects.
SP Setia was raised to “buy” from “take profit” while its share price estimate was increased to RM6.31 from RM3.59, OSK said in a report today.
IGB was raised to “buy” from “neutral” and its target price revised to RM2.41 from RM1.94. -- Bloomberg
SP Setia Bhd, Malaysia’s biggest property developer, and IGB Corp had their stock ratings upgraded at OSK Research Sdn Bhd to reflect their growth prospects.
SP Setia was raised to “buy” from “take profit” while its share price estimate was increased to RM6.31 from RM3.59, OSK said in a report today.
IGB was raised to “buy” from “neutral” and its target price revised to RM2.41 from RM1.94. -- Bloomberg
Samsung to challenge iPad with own tablet
BERLIN: Samsung Electronics' first tablet computer will go on sale in two weeks, it said on Thursday, Sept 2, joining the hunt to challenge Apple's iPad.
Global handset vendors and PC makers including Nokia, LG Electronics and Hewlett-Packard Co are moving into the new category of devices, between traditional PCs and smartphones, taking a cue from Apple.
Dell Inc said last month it was launching its new tablet device called the Dell Streak to US customers.
"We see huge potential for this kind of product," YH Lee, head of marketing at Samsung Mobile, told Reuters in an interview on sidelines of the IFA consumer electronics fair. The new Galaxy Tab, with a 7-inch screen, will go on sale in European markets in mid-September. The device, which uses Google's Android software, offers access to books, films and music.
"Samsung is betting big on the tablet category with this device," said Ben Wood, research director at CCS Insight, adding the success of Galaxy Tab — which is clearly smaller than iPad with its 9.7-inch screen — will depend on pricing.
"If positioned carefully the Galaxy Tab could emerge as an operator-friendly alternative to Apple's iPad as it could be subsidised to extremely low price points in the run-up to the lucrative holiday sales season," he said.
Samsung declined to give the price of Galaxy Tab, saying it will depend on operator packages in different countries.
YH Lee said most European operators selling Samsung phones were set to also sell the Tab to their clients, and several operators would sell it in the United States.
Last week research firm iSuppli forecast the iPad will likely account for nearly three-quarters of worldwide tablet shipments this year, and hold at least 70% of the market in 2011 and 62% by 2012.
Samsung said the market was far from fixed yet.
"The market opportunity is wide open. We believe our Galaxy Tab will fill the big white space," said YH Lee.
Privately held British firm Binatone unveiled at IFA several Android-powered tablets, with prices starting from €170 (RM680.41). — Reuters
Economic Highlights (Global)
1 US Consumer Spending Experiencing Slowing Growth
2 Euroland’s Inflation Moderated And Unemployment Rate Held Stable At A high Level; Consumer Confidence Improved And Business Confidence Held Stable In August
3 India’s Economy Strengthened To 8.8% Yoy In the 2Q
4 Thailand’s Economic Activities Moderated In July
5 Singapore Tightened Mortgages To Cool Property Market
6 Japan Expanded Loan Programme To Ease Its Policy
2 Euroland’s Inflation Moderated And Unemployment Rate Held Stable At A high Level; Consumer Confidence Improved And Business Confidence Held Stable In August
3 India’s Economy Strengthened To 8.8% Yoy In the 2Q
4 Thailand’s Economic Activities Moderated In July
5 Singapore Tightened Mortgages To Cool Property Market
6 Japan Expanded Loan Programme To Ease Its Policy
Semiconductor:
¨ Jul chip sales up mom.
¨ Neutral call on the sector.
¨ Unisem: Maintain forecasts, fair value of RM2.31. Market Perform.
¨ MPI: Maintain forecasts and fair value of RM6.35. Market Perform.
¨ JCY: Maintain forecasts, fair value of RM1.32. Market Perform.
¨ Notion Vtec: Maintain forecasts, fair value of RM1.54. Underperform.
¨ Neutral call on the sector.
¨ Unisem: Maintain forecasts, fair value of RM2.31. Market Perform.
¨ MPI: Maintain forecasts and fair value of RM6.35. Market Perform.
¨ JCY: Maintain forecasts, fair value of RM1.32. Market Perform.
¨ Notion Vtec: Maintain forecasts, fair value of RM1.54. Underperform.
Wednesday, September 1, 2010
Smartphone makers wave hello to feature phone users
SAMSUNG is joining a growing number of smartphone makers in their quest to expand the once niche market of high performance devices to a broader demographic of consumers.
The company's latest device, the Samsung Wave 723 (also known as GT-S7320E), is an application-centric smartphone based on Samsung's Bada operating system.
"The Wave 723 reflects our relentless pursuit of the best in mobile technologies by optimising the application and social media experience. In new and innovative ways, the Wave 723 delivers on Samsung's goal to give a rich, connected smartphone experience to everyone," said J.K. Shin, president and head of the mobile communications business, Samsung Electronics, in a press release.
Smartphone makers are encouraging consumers to make the switch from feature phones to smartphones by dropping handset prices or adding smartphone features to existing form factors in a trend that Nokia likes to call, "making the familiar new."
Both RIM and Nokia have recently opted to blend smartphone features such as a touchscreen, apps, WiFi and 3G connectivity with an older-styled 12-button keypad, resulting in a fusion that allows for powerful devices at pocket friendly prices.
An August 23 study by Frost and Sullivan predicted that by 2015, smartphone sales would make up more than 50% of the Asia-Pacific mobile market, up from just 5% in 2009.
The 11.8mm thin Wave 723 comes with a 3.2in TFT-LCD display, a 5-megapixel camera with autofocus and flash, access to Samsung's Social Hub and mobile application store, WiFi, and a leather flip cover.
The Samsung Wave 723 is due to be released this month in Europe with releases in South-East Asia, the Middle East Asia and Africa expected to roll out shortly after.
Handset pricing is yet to be announced. - Relaxnew
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