Sealink rises on vessel contract

Sealink International Bhd, a Malaysian builder and operator of marine vessels, climbed the most in more than nine months in Kuala Lumpur trading after winning a contract to sell three offshore support vessels.

The stock added 6.6 per cent to 65 sen at 9:13 a.m. local time, set for its biggest gain since March 8. -- Bloomberg

Merry Christmas and Happy New Year ahead

I want to wish Merry Christmas and Happy New Year to all my blog reader. Please be more cautious when driven back home this holiday season....

KNM secures RM2bil biomass contract in UK

Guys look up for this stock.... sense it would go high in near term.....

Project represents firm’s drive into renewable, clean energy sector

PETALING JAYA: Oil and gas process equipment maker KNM Group Bhd's wholly-owned subsidiary KNM Process Systems Sdn Bhd (KNMPS) has secured a 450mil (RM2.196bil) engineering, procurement, construction and commissioning (EPCC) contract for a biomass and waste recycling centre project in England.

KNM told Bursa Malaysia that KNMPS yesterday entered the agreement for the EPCC of works towards the development of an 80MWe gross capacity energy from biomass and waste recycling centre project called EnergyPark Peterborough in Peterborough.

The contract with Peterborough Renewable Energy Ltd spans four years.

“This project represents KNM's drive into the renewable and clean energy sector,” KNM said.

The company said it was not expected to have any material impact to KNM Group's financial performance for this year ending Dec 31.

However, the project was expected to contribute positively to its earnings for the next four financial years.

“The project is subject to certain risks mainly in the power and renewable energy industries and legislation on clean energy in the United Kingdom.

“These include changes in general economic conditions such as, but not limited to, inflation, taxation, foreign exchanges, interest rates, labour and material supply, changes in business and operating conditions such as, but not limited to, government and statutory regulations and deterioration in prevailing market conditions,” KNM said.

KNMPS is mainly involved in the design, engineering, procurement and manufacturing of process equipment, including without limitation pressure vessels, reactors, columns and towers, drums, heat exchangers, air finned coolers, process gas waste heat boilers and specialised shell and tube heat exchangers.

It also provides technical and project management services in relation to process equipment, plant facilities and general facilities for the oil, gas, petrochemicals, minerals processing and renewable energy industries.

Last month, KNMPS won a RM680mil bid to supply technical documentation, equipment and services for the development of gas condensate fields in Uzbekistan.

Tanjung Offshore’s debt rating reaffirmed

Malaysia’s RAM Ratings has reaffirmed both the AA3 ratings of Tanjung Offshore Berhad’s (Tanjung or the Group) RM150 million Serial Bonds with warrants (2006/2014) and RM200 million Islamic Medium-Term Notes Programme (2008/2023).

At the same time, the negative outlook on the long-term ratings has been maintained.

Tanjung is an investment-holding company with subsidiaries involved in marine support services and the provision of engineering equipment, maintenance as well as drilling-rig and platform services to the oil and gas sector.

The negative rating outlook is premised on the group’s weakened cashflow-protection measures, which have been dampened by its aggressive debt-funded capital expenditure and weak engineering-equipment division.

Looking ahead, the group also faces heightened contract-renewal risk and potentially lower daily charter rates (DCRs) for its time-charter contracts, particularly amid stiffer competition and the current softer market conditions.

Meanwhile, Tanjung’s AA3 ratings remain supported by steady contributions from its time-charter contracts, under which the troup is paid fixed DCRs regardless of the vessels’ utilisation.

That said, Tanjung is vulnerable to contract-renewal risk, particularly when a significant portion of its contracts expire at around the same time. -- Reuters

Read more: Tanjung Offshore’s debt rating reaffirmed http://www.btimes.com.my/Current_News/BTIMES/articles/20101217112748/Article/index_html#ixzz18L8Ffzwi

Scomi Marine to dispose four companies for RM538.3 million

PETALING JAYA: Scomi Marine is proposing a disposal of four companies for RM538.3 million to its 80.54%-owned Indonesian subsidiary PT Rig Tenders Indonesia Tbk for RM538.3 million.

The disposal involves CH Logistics Pte Ltd, CH Ship Management Pte Ltd, Grundtvig Marine Pte Ltd and Goldship Private Ltd which collectively owned 27 tugs and 24 flat top barges.

As part of the related-party exercise, Scomi Marine would renounce all of the company's entitlement to Portside Offshore Inc and PT Revessel Indonesia while PT Rig Tenders would undertake a renounceable rights issue to partly fund the acquisition.

Scomi Marine's board said in an announcement to Bursa Malaysia Friday that the environment has become increasingly challenging for the marine logistics and offshore support vessel businesses in light of the changes to Indonesia's regulations relating to ownership, intensifying competition and pressures on charter rates.

In addition, significant capital expenditure outlay is expected to be incurred to replace vessels and to invest in new business opportunities, the board said.

The board added that a strategic investor was essential in growing the businesses, both from a financial and operational perspective.

Given the specialised nature of the businesses and the unique ownership criteria required, the board feels that Portside and PT Revessel will be in a better position to expand the business activities of the enlarged PT Rig Tenders, it said.

The board said Scomi Marine would continue to participate in the businesses' upside potential through its equity interest in PT Rig Tenders upon completion of the Proposals.

Apple may ship iPad 2 as early as Feb

NEW YORK, Dec 8 — Apple Inc’s next iPad tablet will start shipping as early as the end of February from electronics maker Foxconn Electronics’ factories in China, DigiTimes reported yesterday.

The report, citing unnamed sources from Taiwan-based components makers, said Apple originally planned to start mass production of the new device, known as iPad 2, in January.

Those plans were postponed since the device’s firmware, or set of software instructions that are programmed into the device’s hardware, was still being tested, according to the report.

The iPad 2 will mainly be supplied by plants in Shenzhen belonging to Foxconn, the parent company of Hon Hai, DigiTimes reported. An initial shipment of 400,000 to 600,000 units is expected.

An Apple spokesman declined to comment.

Apple sold 4.19 million iPads in the fiscal fourth quarter. That was lower than markets expected, but analysts expect sales to ramp up this holiday season as Apple resolves supply glitches. — Reuters

Love Michael Buble Song

RON95 prices up 5 sen to RM1.90 per liter

Looks like it’s confirmed – RON95 will be increased by 5 sen tonight making it RM1.90 per liter, according to a report by mStar citing Datuk Ruhaidini Abdul Kadir, Press Secretary for the Minister of Domestic Trade, Cooperative and Consumer Affairs. It’s official: in addition to RON95, diesel is up 5 sen to RM1.90, LPG up 5 sen to RM1.90/kg, and sugar up 20 sen to RM2.10/kg. RON97 remains at its recently hiked RM2.30 price

Penang properties the most expensive

Prices of properties on Penang island are the most expensive in Malaysia.

Socio-Economic and Environmental Research Institute (SERI) senior fellow Dr Michael Lim Mah Hui said the average house price last year was RM540,000 or eight times the average household income.

In comparison, the average house price in Kuala Lumpur was only RM390,000, or six times the average household income.

Lim said the average house price on the island has increased further this year.

A ratio of house price to household income of three to four times is internationally acceptable.

"If the situation persists, many Penangites, especially those in the middle and more so the lower classes, will not afford to own properties.

"The state government should address the issue before it gets worse," he told reporters in Georgetown on Thursday.

Lim said for a start, the authorities should stop encouraging construction of high-end properties that cater to foreigners.

He said data from the Malaysia's population and housing census indicated that there was a property glut, which suggests that many people bought property for speculative and investment purposes, thus pushing up the prices further.

In 2000, the vacancy rate in Malaysia was 15.6 per cent from the total of 5.547 million unit of houses, which amounted to nearly 750,000 houses.

He said the percentage was more than 20 per cent now.

"It is not that we do not have the houses. There are. It is just that the houses now are way too expensive and beyond many people's means.

"That is why I say the authorities should stop encouraging the contruction of high-end and luxurious properties," he added.

Meanwhile, Consumers' Association of Penang president S.M. Mohamed Idris said to make housing afforable to ordinary Penangites, the government should start a public housing policy, which provides affordable housing, particularly in urban areas, to cater to those below a certain level of income.

He said a good example worth studying was the Singapore Housing Board model, where the government spearheaded the building of affordable housing for a majority of its citizens.

He added that alternatively, the government could consider doing this in partnership with the private sector. "In short, the government's priority should be to put the needs of the majority of the people ahead of other things," he added. - By Audrey Dermawan (Business Times)

Penang Property Market Report First Half 2010

Penang property market recorded improved performance from the corresponding period of 2009. There were 11,858 transactions worth RM4.09 billion recorded, indicating an increase of 9.8% in volume and 37.3% in value against H1 2009 (10,798 transactions worth RM2.98 billion). However, the market activity showed a marginal decline of 0.6% from H2 2009 (11,926 transactions) but value of transactions registered 15.3% growth against similar period (RM3.55 billion). The residential sub-sector dominated the market activity, capturing 70.0% of the market share, followed by the commercial sub-sector with 11.3% share.

Market activity movements were on the uptrend across the board with isolated exceptions. Against H1 2009, all sub-sectors recorded gains. This was led by agricultural sub-sector at 36.4%, and followed by industrial (18.1%), commercial (12.4%), development land (10.4%) and residential (6.6%) sub-sectors. Three sub-sectors recorded positive growths over the last half-year. The agricultural sub-sector grew by 23.3% and followed by the development land (10.2%) and commercial (4.2%) sub-sectors. Conversely, residential and industrial sub-sectors recorded declines of 4.0% and 18.2% respectively. In terms of value, all sub-sectors recorded gains against both halves of 2009.

Major sales recorded in the review period comprised two office buildings. Mayban Trust Building in Lebuh Penang and RHB Building in Taman Mutiara changed hands in December 2009 and January 2010 respectively, with a combined worth of RM18.50 million.

Generally, prices, rentals and gross yields of residential property were stable across the board. However, there were continued price escalation of landed houses on the island side; breaching RM515,000 a unit for single storey terraces, more than RM700,000 for double storey terraces and exceeding RM1.0 million for two and a-half storey terraces. Double-digit rental hikes were noted throughout the state in established housing areas where ample employment opportunities are offered from nearby industrial developments.

On the island, single storey terraced houses in Green Garden peaked at RM515,000, recording an 8.4% price hike. Bandar Bayan Baru recorded 15.2% and 24.4% gains for both its single and double storey terraced houses respectively. This was due to the self-contained residential neighbourhood being complemented with Sunshine Square shopping complex, Suntech@Penang Cybercity office blocks, as well as adjacent to Penang International Sports Arena (PISA). Double storey terraced houses in Taman Sri Nibong registered a good growth of 14.2% to record a commendable price range of RM698,000 to RM720,000. Similar houses in Taman Saw Kit continued to firm at RM635,000 to RM680,000. Both schemes are located within reach of the hype Queensbay Mall, Eastin Hotel and served with efficient road linkages to Jalan Sultan Azlan Shah and the Jelutong Expressway. On the same tone, the long established Island Glades and Island Park experienced further price escalation, each by 11.6% and 11.2%, transacted at as high as RM680,000. Similar units in Taman Jerjak Indah also changed hands within similar price range, attaining a price hike of 10.7%.

In Seberang Perai, prices of landed residential units were largely stable with few exceptions. Single storey terraces in Taman Seri Rambai and Taman Merak Jaya increased by 25.9% and 17.0% respectively. The fact that both schemes were no longer subject to flood as well as served with good access contributed to the increase in prices. As for double storey terraced houses, Taman Intan and Taman Bagan Baru obtained favourable price range of RM268,000 to RM330,000.

Prices of stratified properties were on the upward trend, particularly on the island. Three-bedroom flats in Serina Bay and Azuria Condo fetched 14.1% and 7.8% higher to register between RM138,000 and RM200,000. Apartments also recorded gains of 2.9% to as high as 19.3% registered in Spingfield Condominium. N-Park apartments saw an increase of 9.2% as it has direct access to the Bayan Lepas Expressway and Jalan Sultan Azlan Shah. Luxury condominiums such as No.1 Persiaran Gurney firmed up by 7.8% to record price range of RM800,000 to RM880,000 whilst The Cove stabilised at a high RM1.30 million to RM1.75 million.

The residential rental market was generally stable with commendable upward movements recorded in selected neighbourhoods. Single and double storey terraced houses in Bandar Bayan Baru increased by 21.6% and 11.1% respectively, hand in hand with its capital appreciations. Double storey terraces in Taman Saw Kit noted a marked increase of 36.4% to register a monthly rental of RM1,500, the highest in the state. In Seberang Perai, a substantial increase of 18.8% was recorded for single storey terraces in Taman Merak, which is easily accessed from Jalan Paboi, which links up to the main trunk road of Jalan Bukit Tambun. The average gross yields for landed houses generally ranged from 2.0% to 4.0%.

In the high-rise segment, three-bedroom flats in Azuria Condo where majority of the occupiers are factory workers from the nearby Bayan Lepas Industrial Zone recorded the highest increase of 13.7%, On similar note, Pangsapuri Perai Utama on the mainland recorded gains of 9.1% due to demand from factory workers of the nearby Prai Industrial Estate. Gross yields for stratified properties generally ranged from 4.0% to as high 12.1%, recorded in Desa Pinang 2 two-bedroom flats.

Prices of shops were stable with isolated increases noted in choice locations. Double storey shops in Teras Jaya Commercial Park saw 6.4% increase due to the opening of Econsave Hypermarket nearby, which acted as the pull-factor into the area. In Bandar Sunway and Bandar PERDA, three storey shops were transacted at RM820,000 to RM990,000 and RM780,000 to RM800,000 respectively, denoting 14.7% and 16.2% increases respectively. The hype Bandar Sunway houses Sunway Carnival Mall, Sunway Hotel as well as banks branch offices whereas Bandar PERDA is equally busy with AEON Seberang Prai City shopping centre and several Government departments such as Jabatan Pendaftaran Negara, Majlis Perbandaran Seberang Perai and Lembaga Hasil Dalam Negeri. These factors along with the growing population caused the townships to be sought-after for commercial activities. Ground floor shops sustained last year’s stable rental with the highest recorded in Autocity at RM8,000 to RM14,700 per month. Rentals of office space in shops in Bandar Sunway recorded between 4.2% and 6.0% gains.

There were 400 new residential units launched in the review period, fewer than those recorded in H1 2009 (2,264 units) but more than H2 2009 (328 units). Sales performance was at 31.0%, higher than 6.9% recorded in H1 2009 but was down by more than half from H2 2009 (74.1%). Most of the newly-launched units comprised two to three storey terraced houses (140 units) and semi-detached houses (136 units).

The residential overhang stood at 509 units worth RM112.14 million. The overhang numbers were only 3.2% more from H1 2009 (493 units) but value dropped by 10.6% (H1 2009: RM125.46 million). Against H2 2009, the overhang numbers declined by 14.0% (H2 2009: 592 units) whilst value declined at a higher 21.4% (H2 2009: RM142.68 million). More than half of these overhang units were two to three storey terraced houses (255 units), of which 247 units have been in the market for more than 24 months. The unsold under construction was also on similar downtrend, recording a decline of 15.7% to 1,594 units (H2 2009: 1,891 units). However, the numbers were more by 13.7% than 1,402 units recorded in H1 2009. The unsold not constructed category was more insignificant as the numbers shrank from 79 units (H1 2009) and 74 units (H2 2009) to 26 units in H1 2010. Majority of the unsold units in both categories were condominiums/apartments.

The shop and industrial overhang remained minimal in numbers. There were 75 units of shop overhang worth RM21.75 million as at end-June 2010. This recorded an increase of 25.0% in volume and 16.5% in value against both halves of 2009 (H1 2009 and H2 2009: 60 units worth RM18.67 million). There were another 30 shops in the unsold under construction category, fewer than 62 units in H1 2009 and 46 units in H2 2009. In the industrial sub-sector, 40 overhang units worth RM12.19 million were recorded, higher than 25 units worth RM6.34 million recorded in both halves of 2009. On the other hand, the unsold under construction dropped to 43 units (H1 2009 and H2 2009: 64 units). Both sub-sectors did not witness any unsold in the not constructed category.

The performance of retail market recorded a slight improvement. The overall occupancy of shopping complexes inched up to 71.1% from 68.9% in H1 2009 and 70.8% in H2 2009. The take-up remained positive at 3,419 s.m. though lower than 60,594 s.m. (H1 2009) and 21,100 s.m. (H2 2009).

On similar note, the office market consolidated at 78.8% in H1 2010, better than 76.2% and 78.7% recorded in H1 and H2 2009 respectively. Take-up was lower at 1,297 s.m. (H1 2009: 17,562 s.m., H2 2009: 33,581 s.m.) with the absence of new completion.

The performance in leisure sub-sector moderated. The overall occupancy of the three to five star hotels was at 53.5%, picked-up slightly from 52.2% recorded in H1 2009. However, it was lower than 56.4% recorded in H2 2009 and the national average of 54.0%.

Construction activities were relaxed across the board. The residential sub-sector recorded fewer completions against H1 2009 but more than H2 2009. On the other hand, shop sub-sector recorded otherwise. Both sub-sectors recorded fewer starts and new planned supply against the respective half of last year. The industrial sub-sector saw more completions than in H1 2009 whilst the numbers equalised that of H2 2009. On the other hand, new planned supply recorded otherwise. No starts were recorded in the review period. Both the retail and office sub-sectors did not witness any new construction activity with the exception of two starts in retail sub-sector (H1 2009 and H2 2009:0). The former recorded nil completion (H1 2009: 3; H2 2009: 0), and new planned supply (H1 2009: 0; H2 2009: 3). Similarly, the office sub-sector did not record any completion (H1 2009: 2; H2 2009: 2), starts (H1 2009: 0; H2 2009: 1), and new planned supply (H1 2009: 1; H2 2009: 0). View Full Report

Source : National Property Information Centre (NAPIC)

Oil slips on US inventories, China policy

SINGAPORE, Dec 2 — Oil slipped today as traders focused on rising US crude inventories following a rally of 3 per cent in the previous session, when encouraging jobs data in top consumer the United States helped drive prices to their highest in almost three weeks.

Prices also responded to comments from a Chinese central bank adviser, who said the country’s monetary policy was sure to gradually tighten next year to counter excessive global liquidity and domestic inflation.

Optimism that the US would support debt-burdened euro-zone countries cemented oil’s gains of US$2.64 (RM8.18) yesterday. But today, the front-month contract retreated 18 cents to US$86.57 a barrel by 0426 GMT, staying slightly more than US$2 away from a 25-month peak of US$88.63 reached on November 11.

ICE Brent fell 11 cents to US$88.76, after surpassing US$89 yesterday.

“Yesterday’s rally was due to general risk on sentiment and positive economic data from China and the United States,” said Stefan Graber, a commodities analyst with Credit Suisse in Singapore.

“The latest data from the US showed that oil inventories actually rose amid weakening consumption. This could pose a risk for prices and limit the upside potential in the coming days, despite the general improvement in market sentiment.”

US crude oil inventories posted a surprise gain of 1.1 million barrels last week, the US Energy Information Administration said in a weekly report yesterday.

The EIA also reported US gasoline stockpiles rose in line with forecasts last week, while distillate stocks fell by less than 200,000 barrels, with projections for a drop of 1.1 million barrels.

But US East Coast gasoline stocks fell 937,000 barrels last week, one of only two regions where supplies of the motor fuel declined in that period, EIA data showed. That helped boost gasoline futures to an almost seven-month high yesterday.

Goldman Sachs says OPEC will increase oil production next year, gradually brining spare capacity on line, following a drawdown in global inventories this year as demand grows by 2.4 per cent, with prices for US crude at an average US$100 a barrel in 2011 and US$110 in 2012.

“We expect in 2011 and 2012 that the transition from a cyclical recovery to a new structural bull market will lead to new record annual average prices above the 2008 high of just under of US$100 a barrel,” Goldman said in the December 1 report.

US private sector payrolls rose by the most in three years in November, lifting optimism about the job market ahead of today’s weekly initial jobs claims reports and Friday’s monthly government employment report.

US non farm payrolls likely increased for a second straight month in November, up 140,000, a Reuters poll showed. The gain would point to an acceleration in economic activity and a recovery that is becoming self-sustaining.

Global manufacturing expanded strongly in China and major developed countries in November, boosting confidence the global economy can weather the debt crisis in the euro zone.

The European Central Bank (ECB) is under pressure to unveil new steps to stabilize the euro zone when it meets today as the currency bloc battles a crippling debt crisis that has stoked contagion fears in the United States and Asia.

Japan’s Nikkei share average hit a five-month peak and the euro stayed within sight of overnight highs today ahead of the ECB meeting. — Reuters

KNM climbs on South Africa pact (reverse split done at 2.08)??

KNM Group Bhd, an oil and gas services provider, advanced 1.4 per cent to RM2.11, its first increase in three days.

The company and Aveng Ltd agreed to form a joint venture related to the fabrication of steel products in South Africa.

The joint venture will allow KNM to tap Aveng’s marketing and networking relationship, the Malaysian company said in a statement. - Bernama