Sunday, January 31, 2010

TM reveals HSBB access rates

Telekom Malaysia Bhd (TM) (4863), the country's dominant fixed-line operator, has finally revealed the pricing for its High Speed Broadband (HSBB) access to industry players, more than one year after the project was first announced.

This means that service providers, including mobile operators, broadband service providers and pay-TV operators will now know how much it will cost them to ride on TM's fibre optics network to offer services like video-on-demand, Internet protocol television (IPTV), voice call and Internet surfing.

TM met with some 100 industry players in Kuala Lumpur yesterday evening, which lasted over two hours. Besides revealing the prices, TM also made its indicative terms and conditions (ITC) documents available to the players.

It is believed that most of the industry players came away feeling that the pricing offered by TM was "good" and "reasonable", but remained concerned on how the prices will affect them in the long run.
"I am concerned over the prices five years down the road. (That's because) the HSBB access pricing is not in the official access list under the Malaysian Communications and Multimedia Commission (MCMC). This means that TM may increase the pricing significantly in the future (if it wants to).

"If it was in the access list, then there's a little bit more control," said an industry player who declined to be named.

Meanwhile, TM executive vice-president Rafaai Samsi gave an assurance that the company would not abuse its "power".

"From our understanding, the government/regulator will only step in when there's a market failure. So it is in our best interest to keep the pricing reasonable to all, to avoid a market failure," Rafaai told Business Times in an interview yesterday.

Still, some industry players feel that the HSBB access pricing was complicated.

The pricing comes in two forms: a one-time charge and a monthly recurring charge.

It charges service providers one-time fees of between RM100 and RM200 for activation of each Internet port. On a monthly basis, it charges the service providers between RM50 and RM550 per megabit per second (Mbps) for bandwidth subscription. Different monthly charges are catered for different type of usage.

"The pricing we got was too broad. We will need another discussion with them (TM) personally to get more clarity on the pricing, the timeline as well as the roll-out locations," said an official from Packet One Networks Sdn Bhd.

Still, Rafaai believes that customers will see value in its pricing after studying it in detail.

TM held its first briefing with the industry players March last year to reveal the ITC of the HSBB Transmission service. However, it did not reveal its pricing then.

The launch of the HSBB consumer retail service is on schedule: in March this year in Bangsar, Taman Tun Dr Ismail, Shah Alam and Subang Jaya.

Saturday, January 30, 2010

Woman afraid nude photos will be posted online

KUALA LUMPUR: A consultant is worried that nude photos taken by her online boyfriend will be posted on the Web.

Annie, 32, had a relationship with the man, known as William Bobby Madoff, since March last year.

They got to know each other through Yahoo messenger.

Although they have never met, Annie claims to have fallen deeply in love with William, so much so that when he pestered her to pose naked in front of the webcam, she agreed.

Annie was speaking at a press conference organised by the MCA Complaints and Public Services Department here yesterday.

Two months later, Annie said she received an e-mail from William, asking how she wanted to settle the matter of the nude photos.

She decided to ignore it as she had broken up with William.

Last Wednesday, however, she received a message via Yahoo messenger from William.

He claimed to know her whereabouts and threatened to post the nude photos on the Internet soon.

Annie immediately lodged a police report and sought help from MCA Complaints and Public Services Department chief Datuk Michael Chong.

She said that in April last year, William told her to expect a package containing valuables such as a handphone, a laptop and some jewellery.

However, a week later, someone claiming to be from a billing department in Sabah called and asked her to pay RM3,880 for delivery of the package.

“I contacted William to clarify about the payment. He told me he had paid the charges in his country, but was unaware there were other charges to pay in Malaysia.

“He urged me to pay because the package was very valuable.”

She banked in the money but a few hours later, quickly cancelled the transaction.

Annie has since changed her phone number and e-mail address.

Chong urged chatroom users not to fall for the many scams on the Internet and advised victims to lodge police reports.

By SHARON CHEW

FDI impact on ringgit and stock market


DOES a drop in foreign direct investments (FDIs) have a negative impact on the currency and stock market? On the surface, it does not look like it for the stock market as the key barometer (then called KLCI index) had remained stable from 2001 to 2005, when there were net inflows.

The index rose steadily from the third quarter of 2006 before peaking in mid-January 2008 and then begin to decline to the most recent low in mid-March last year. There were net outflows from 2006 onwards although foreign investments picked up considerably in 2007 compared to 2006.

As for the ringgit, following its depeg from the US dollar on July 22, 2005, it steadily strengthened until the second quarter of 2008 when the currency started to weaken. The lowest was in early March last year before the ringgit strengthened again.

As far as the ringgit is concerned, what influences the currency’s movement is the interest rate, especially the benchmark overnight policy rate (OPR) set by Bank Negara, political stability and confidence in the economy with fluctuations in FDI having little direct impact.

The ringgit’s weakness was due to at least two factors – the March 2008 elections which saw the Government losing its two-thirds majority in Parliament and the loss of four states to a loose coalition of parties and the subsequent rate cuts in the OPR in November that year following the near collapse of the global financial markets.

Singular Asset Management Sdn Bhd managing director Teoh Kok Lin says fluctuations in investment by itself will not have a major impact on the currency or stock markets in the short to medium term.

“The currency and stock markets are influenced by other factors besides the flow of investment to the country and trying to pin FDI flows on the workings of both markets will be pretty tricky,” he tells StarBizweek.

However, Teoh says in the long-term, a persistent fall in FDI may have an impact on the stock market and the ringgit. “If a country is able to attract investments, its a reflection of its competitiveness,” he adds.

Teoh says this will help boost confidence and the long-term attraction of the stock market as more money enters the country.

Meanwhile, Inter-Pacific Asset Management Sdn Bhd chief executive officer Robbin Khoo says another way of making sense of foreign investments and how it relates to the stock market or currency is by looking at how decisions are made.

“Foreign firms may make a decision to penetrate the market here despite a currency exchange that may not be favourable to them,” he says.

Khoo says in general, most foreigners view Malaysia quite favourably but obstacles placed by Malaysians themselves are what is usually holding back competitiveness and therefore investments from abroad.

“Most foreigners are of the view that we’re not politically unstable (despite the current problems) but politically uncertain as we’re not consistent,” he says, adding that this does not go down well with trade relations much less investments.

fintan@thestar.com.my


Friday, January 29, 2010

Wah Seong's market leadership a plus point

OSK RESEARCH maintained its buy call on Wah Seong (5142)at a target price of RM3.35. It likes the company's market leadership in the provision of pipe coating and corrosion protection in Asia as well as its potential in taking over from Socotherm, the number 2 world ranking.

"During our January 15 Malaysia Day in Singapore, Wah Seong updated investors on three main areas. They were:

* Its merger and acquisitions in West Africa is at an advanced stage of negotiation; * The potential acquisition of a new business to provide recurring income, and
* Its order book is still RM1.4 billion-strong," OSK wrote in a report yesterday.

"We continue to like Wah Seong for its M&A news flow as well as commanding market leadership in the pipe coating business in Asia."

Wah Seong's management has indicated that its gas compressor business has not been doing very well amid stiff competition from American competitors, given an oversupply in their markets.

"Hence, management is looking to acquire a new business, which is the supply of E&P products and services, which will fulfill its need for recurring income as earnings from the group's pipe coating contracts are mostly one-off."

"We also gather that this new business would not be bigger than its existing business," OSK said.

Thursday, January 28, 2010

Malaysia property market to ride on new wave of interest


CB RICHARD Ellis (Malaysia) Sdn Bhd (CBRE), a real estate services company, expects the number of property transactions in the country to improve this year, thanks to a new wave of interest from local and foreign institutional funds.

Executive chairman Christopher Boyd said there is strong buying interest from Singaporean, Hong Kong, Korean and Arab investors, looking for new office buildings in the Klang Valley and Penang.

"Interest comes from as far as Ireland. They (investors) are core funds looking for completed and well-tenanted buildings in recognised locations. This augurs well for the rental market," Boyd said after a ceremony to mark the change of name of Regroup Associates to CBRE in Kuala Lumpur yesterday.

He said there is a possibility that the value of property transactions in the Klang Valley will exceed RM4 billion this year as it expects more than 30 major deals.


There were 28 major transactions worth some RM3.5 billion in the second half of 2009, involving purchase of land, office buildings and residential towers.

A bulk of the buyers were local funds, including the Employees Provident Fund and Permodalan Nasional Bhd, and developers eyeing expansion.

"We have a few investors from overseas who are looking at some property deals. They are international funds with huge capital to spend," Boyd said.

Boyd also warned property developers to be cautious over the next six to nine months of over-launching their commercial projects as there is a strong possibility of a double dip in the West in the second half of 2010, which may impact the Southeast Asian market.

"Developers will be tempted to think it's all over but it's too soon to think that. While we don't anticipate a crash, we are also not expecting any major upturn. But overall, we expect the market here to be stable in terms of capital value and rental value," Boyd said.

He added that said average rental rates of commercial space in Kuala Lumpur remains stable at RM6 to RM6.50 per sq ft, although it is 15 per cent lower from a year ago. Rentals for Grade A offices stood at RM7 per sq ft as at the end of 2009.

Office capital values are expected to remain steady throughout 2010 at between RM800 and RM1,200 per sq ft.

Earlier, Regroup changed its name to CBRE after signing an affiliate agreement last December with CB Richard Ellis Group Inc, a US-based real estate corporation.

Wednesday, January 27, 2010

FRANKFURT (MarketWatch) -- Oil futures edged higher on Wednesday after an industry report showed that U.S. crude-oil inventories unexpectedly declined last week.

Crude oil for March delivery gained 22 cents, or 0.3%, to $74.93 a barrel in electronic trading on Globex.

Crude supplies fell by 2.2 million barrels during the week ended Jan. 22, the American Petroleum Institute reported late Tuesday after the close of regular trading on the New York Mercantile Exchange.

The drop in crude inventories is "largely attributable to lower oil imports on the back of fog in the Houston Ship Channel, which prevented the timely clearing of oil tankers," said analysts at Commerzbank AG in a note to clients.

Distillate stocks dropped by 1.9 million barrels, while gasoline inventories increased 916,000 barrels, the API said. Refinery utilization improved to 77.6% from 77.3% the previous week.

The Energy Information Administration will release its more closely watched data at 10:30 a.m. U.S. Eastern Time on Wednesday.

Analysts polled by Platts expect a 2-million-barrel increase in commercial crude-oil supplies for the week ended Jan. 22. They also project an increase of 1.7 million barrels in gasoline inventories and a decrease of 1.8 million barrels in distillate supplies.

"Market sentiment has become more bearish during the past several days, which may prevent a price increase," the Commerzbank analysts said. Hence, the EIA data "may, at best, keep oil prices from falling."

On the economic front, data on new-home sales for December will be released at 10 a.m. Eastern. Investors are also awaiting the monetary-policy statement of the U.S. Federal Reserve, which is due around 2:15 p.m. on Wednesday.

Economists expect the central bank to keep the federal funds rate unchanged at between 0 and 0.25% and confirm that rates will stay extraordinarily low for an extended period.

Crude-oil prices ended slightly lower on Tuesday, as concerns escalated about China's attempts to slow its economic growth and the consequent repercussions for its energy demand.

Sime Darby, Sunrise to develop RM1b project

The tie-up to develop a RM1 billion integrated commercial project in the Bukit Jelutong township means that both companies can take advantage of each other's strengths

Sime Darby Property Bhd (Sime Property) is partnering Sunrise Bhd to develop a RM1 billion integrated commercial project in the Bukit Jelutong township in Selangor next year.

It is the first tie-up between Sime Property and Sunrise. Sime Property is known for its landed properties, while Sunrise is well known for its high-end projects in Mont'Kiara, Kuala Lumpur.

The deal means that both companies can take advantage of each other's strengths, Sime Property managing director Datuk Tunku Putra Badlishah Tunku Annuar said.

"We are always looking at ways to accelerate the land development with reputable and like-minded developers like Sunrise. This partnership will further enhance the value of properties at the township," he said after signing the joint-venture agreement in Bukit Jelutong, Shah Alam, yesterday. Sime Property has 14,800ha in Greater Klang Valley.


The two firms will have equal stakes in the joint-venture company, Baywood Avenue Sdn Bhd. They plan to build retail, shop-offices, office-suites and serviced apartments on some 8.4ha.

The project, located opposite Sime Darby Pavilion, will be developed in five phases over seven years, beginning next year.

The joint venture will buy the land from a subsidiary of Sime Property for RM118.1 million, or RM125 per sq ft.

Sunrise executive chairman Datuk Tong Kooi Ong said the vision is to develop sustainable, or green, properties that will appreciate in value.

Sime Property and Sunrise may even do more projects together.

"We have completed the first part of the marriage today. This means, going forward, things will be easier for us as we have already built a base here. If the project goes well and the chemistry is there, the joint venture could be extended," Tunku Putra Badlishah said.

It is learnt that Sunrise may want to partner Sime Property to develop pockets of land along the Guthrie Corridor Expressway.

Tunku Putra Badlishah also said that the project will be the first of many joint ventures Sime Property will be forming with reputable developers. It is already in talks with several other developers and may ink a second deal soon.


Tuesday, January 26, 2010

Macquarie downgrades Malaysia planters



Macquarie has downgraded its recommendation on Southeast Asian plantation sector to "underweight" from "neutral".

Malaysia’s IOI, Sime Darby and Genting Plantations were cut to "underperform". Kuala Lumpur Kepong was reduced to "neutral".

"Stocks tend to outperform the underlying commodity for six to nine months on average, but the two subsequently converge. Given the likelihood of high soybean inventories, we are unable to build a case for CPO prices to rise in 2010 to match stock price performance," said Macquarie.

"Our top Underperforms are IOI Corp and Sime Darby, as they trade at 1-2 standard deviations above their historical averages and have the lowest earnings growth over the next three years," Macquarie added.


For investors who would still like exposure to this space, "our preferred stocks are KL Kepong, Indofood Agri Resources and Astra Agro Lestari on a relative basis, due to strong production growth. We rate these stocks "neutral". -- Reuters

Monday, January 25, 2010

HDBSVR sees fresh catalysts for MRCB

KUALA LUMPUr: Hwang DBS Vickers Research (HDBSVR) has a Buy on Malaysia Resources Corporation Bhd (MRCB) at RM1.60 due to fresh catalysts among which are a sizeable government land deal and more high margin environmental projects in the pipeline.

It said on Monday, 25 it had a BUY on MRCB with a target price of RM1.80 (ex-right) and RM2.20 (cum-rights). Its recommendation on MRCB was for a leveraged proxy to the CONSTRUCTION [] and property sector.

"We think the completion of its rights issue by 1Q10 is a precursor to strategic land acquisitions. Besides the 3 sought after pieces of land (50-60 acres at Jalan Cochrane, 25 acres at Ampang Hilir and 3,400 acres at RRIM), we understand there is another 20-30 acres of land within the KL Sentral/Brickfields vicinity," it said.

MRCB is the strongest contender with monopoly of the maturing KL Sentral franchise with 12 acres remaining. A reasonable time line for award for these landbank is in June-2010 during the tabling of the 10MP.

"Assuming MRCB clinches just the 20-30 acres of additional KL Sentral land, our sum-of-parts value will rise by 28% to RM2.30 (ex-rights). Our assumptions impute a conservative plot ratio of 8 times and average selling price of RM700 per sq ft.

"We also like MRCB’s chances for the chunky Jalan Cochrane and Rubber Research Institute Malaysia land with its strong shareholder backing from EPF giving it an edge in terms of accessibility to funding," it said.

Sunday, January 24, 2010

Bank curbs, political fallout slam Wall St

NEW YORK: U.S. stocks capped their worst three-day slide in 10 months on Friday, Jan 22 on fears the White House's plan to curb bank risk-taking would cut profits, and tech shares slumped after Google Inc's disappointing results, according to Reuters.

Uncertainty about the Senate's confirmation of Ben Bernanke for another term as the Federal Reserve's chairman also rattled investors in a week when political squabbles helped erase stocks' gains for 2010.

"Between uncertainty over Bernanke, Obama's bank regulation proposal and the election in Massachusetts, the market is like a cork in the water and the Democrats just hit the flush," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. "It looks like we're headed really low."

Since the Democrats lost their 60-vote hold in the Senate with the election of a Republican in Massachusetts on Tuesday, there is a growing sense among investors that political uncertainty has all but ended the rally that began in March.

Financials and TECHNOLOGY [] shares endured the brunt of the selling, with JPMorgan off 3.4 percent at $39.16, Goldman Sachs down 4.2 percent at $154.12 and Google sliding 5.7 to $550.01, a day after the Web search company posted quarterly revenue that missed some forecasts.

The Dow Jones industrial average dropped 216.90 points, or 2.09 percent, to 10,172.98. The Standard & Poor's 500 Index slid 24.72 points, or 2.21 percent, to 1,091.76. The Nasdaq Composite Index fell 60.41 points, or 2.67 percent, to 2,205.29.

U.S. President Barack Obama unveiled his bank proposals on Thursday, saying banks should no longer be allowed to own, sponsor or invest in hedge funds for proprietary profit. Proprietary trading -- when a firm uses its own money to make bets on markets -- has been a profit engine for some major banks.

The proposals must receive congressional approval.

For the week, the Dow dropped 4.1 percent, the S&P 500 lost 3.9 percent and the Nasdaq tumbled 3.6 percent. It was the worst week for the S&P 500 and Nasdaq since October and the worst week for the Dow since March.

Stocks hit session lows late in the day on news that Britain had raised its international terrorism threat level.

The S&P 500 registered its worst 3-day slide since March 2009, around the start of the recent rally that sent both the S&P 500 and the Dow to 15-month highs as recently as Tuesday.

The Dow and the S&P 500 are now off more than 2 percent year-to-date, while the Nasdaq has shed almost 3 percent.

The selling of the past three days left the market's technical picture looking bleak after major indexes sunk below key support levels and their 50-day moving averages, a move considered a bearish signal.

In another sign of how rattled investors were, the CBOE Volatility index, a measure of Wall Street's sentiment, registered its biggest 3-day rise in nearly 3 years, increasing 55.4 percent.

Aside from worry about how the Obama proposals on banks, investors also fretted about China's efforts to prevent the world's third-largest economy from overheating.

Since China has led the nascent global economic recovery, any curbs it puts on lending threatens to slow demand that other economies rely on to spur their own growth.

Shares of multinationals and commodity-related companies also took a tumble, with Alcoa Inc off 6 percent at $13.40, Caterpillar Inc down 4.6 percent at $54.25. The S&P materials index declined 2.3 percent on the New York Stock Exchange.

On Nasdaq, Apple Inc was down 5.04 percent at $197.59, making it the biggest drag, followed by Google.

Other disappointing news on the technology front came from Advanced Micro Devices Inc, which warned that sales in the first quarter of 2010 will be down. Its shares tumbled 12.4 percent to $7.88.

The semiconductor index lost 5.3 percent.

Credit card company Capital One Financial Corp tumbled 12.1 percent to $37.53, a day after warning it faced tightening profit margins on loans it makes.

Capital One and American Express Co reported higher-than-forecast fourth-quarter earnings on Thursday but expressed concern about the growth outlook for credit cards.

AmEx shares were the Dow's top drag, falling 8.5 percent to $38.59. - Reuters

Saturday, January 23, 2010

Smokers with cancer could quit and double survival

LONDON (AP) - People with early lung cancer who quit smoking could double their chances of surviving, a new study says.

Until now, there has been little proof that quitting smoking after developing lung cancer makes any difference to survival.

British researchers analyzed previous data from 10 studies examining how long smokers survived after being diagnosed with lung cancer.

People with lung cancer who continued smoking had a 29 to 33 percent chance of surviving five years. But those who kicked the habit had a 63 to 70 percent chance of being alive after five years. The research was published Friday in the BMJ, formerly known as the British Medical Journal.

Lung cancer is the top cancer worldwide, and the prognosis is usually poor. Only about 7 percent of patients make it to five years, though about 20 percent of patients are diagnosed early enough to be treated.

"The message is you should never give up on giving up (smoking)," said Amanda Parsons, of the U.K. Centre for Tobacco Control Studies at the University of Birmingham, who led the study. "Even at the stage where you have been diagnosed with early stage lung cancer ... if you give up smoking, your body can still partially recover and your risk is reduced," she said.

While some doctors recommend lung cancer patients quit smoking, not all do. Some doctors and nurses "think it is inhuman to dwell on the matter - that it adds to feelings of guilt and takes away a lifelong comfort from the dying patient," wrote Tom Treasure of University College London and Janet Treasure of King's College London in an accompanying editorial in the BMJ.

They said patients and their families should now be told about the study results, "because the potential benefit is great."

The research might also provide some clues on how smoking causes cancer. Scientists aren't sure if tobacco smoke or nicotine affect lung cancer once it has developed, though there is some evidence they may speed up the disease. Knowing how cigarettes impact cancer could potentially lead to new treatments, Parsons and colleagues wrote.

The study was paid for by the British Heart Foundation, Cancer Research U.K. and other governmental bodies.

E&O Prop will soon launch RM1.8bil condo project

GEORGE TOWN: E&O Property Development Bhd will launch the RM1.8bil Quayside luxurious condominium at its sea-fronting Seri Tanjung Pinang project in Tanjung Tokong early next month.

Group general manager (marketing and sales) Lim Hooi Yen said the scheme on a 21-acre freehold land would resemble the home projects on Sentosa Island (Singapore) and Sovereign Island in the Gold Coast (Australia).
An artist’s impression of the RM1.8bil Quayside condominium to be launched at Seri Tanjung Pinang.

Speaking at a media briefing, she said the project would comprise seven blocks of high and low-rise condominiums, surrounded by 4.5 acres of water park and a 6.9-acre tropical garden.

“Next to Quayside is the Straits Quay, comprising a serviced suite component and a 250,000 sq ft of marina and retail space that will be leased to food and beverage outlets,” Lim said.

The serviced suite component had over 200 apartments, she said, adding the Straits Quay would be ready by the year-end.

The Straits Quay, and the size of both the water park and tropical garden, was what distinguished the Quayside condominium from other projects of its kind in Penang, she added.

“We will be going to Britain, Hong Kong, and Singapore to market Quayside where we expect some 30% of our sales will come from,” she said.

Lim said that on Feb 6, only the first block – a 26-storey building with 298 units – would be opened for sale.

“The other seven blocks will be launched in phases over a five year-period. The first block is targeted for completion in 36 months,” she said.

The Quayside is located within the first phase of the 908-acre Seri Tanjung Pinang housing project.

Lim said that to-date, only the first phase, comprising 240 acres of reclaimed land, had been developed.

“Over 500 landed residential properties have been developed and sold in the first phase.

“The estimated gross sales value for the first phase, which includes the Quayside and Straits Quay, is RM4bil,” she said.

Friday, January 22, 2010

Southern Steel earnings expand on higher demand

PETALING JAYA: Southern Steel Bhd recorded a net profit of RM59.73mil on revenue of RM588.63mil for the quarter ended Dec 31 due to higher steel demand from a recovering economy.

This was a drastic turnaround from a year ago when it posted a loss of RM259.84mil and revenue of RM488.42mil due to poor market conditions and a diminution of inventory values.

For the year ended Dec 31, the company recorded a net profit of RM16.2mil on revenue of RM2.03bil.

“For the year as a whole, 2009 became progressively better as the steel industry recovered from the financial crisis,” it said.

OSK Research Sdn Bhd analysts Ng Sem Guan and Law Mei Chi said in a Jan 20 report that demand for steel was set to surge after the Chinese New Year celebration, driven by real demand and improved buying sentiment.

“We expect steel prices to go up another level by 10% to 15% at end-February on the return of private and public construction, coupled with stocking up activities in anticipation of a potential price increase,” they said.

AmResearch Sdn Bhd analyst Mak Hoy Ken has maintained an “overweight” call on the industry due to its anchor reflationary theme, as steel demand would accelerate on the imminent roll-out of regional infrastructure projects and a weak US dollar.

AmInvestment upbeat on plantation, construction, property stocks

AMINVESTMENT Bank Group is upbeat on growth prospects of equities in sectors such as plantation, construction, properties and consumer products.

"At this moment, every indication seems to suggest that the global recession is ending (or about to end) and a recovery is under way. Even the export sector will probably see some rebound as evident from the rising US Institute for Supply Management manufacturing new order index," AmIslamic Funds Management Sdn Bhd executive director Mohd Fauzi Mohd Tahir said in a statement.

He said the situation will provide some help for the export-driven economies in Asia, which will take time to restructure their economies to be more consumer-driven.

"All these imply that the market uptrend will continue. We maintain our medium-term positive view, but believe that the near-term rally is capped until better macro clarity unfolds for the second half of 2010 and year 2011.


"We will accumulate stock on weakness and continue to trade on market volatility," Mohd Fauzi said, referring to AmIttikal, a fund that invests in syariah-compliant equities or debt securities.

The plantation sector is expected to gain from the overall bullish stance on commodities, while the construction sector is expected to benefit from the government's stimulus package and moves to boost the economy.

"We expect the weaker prices of crude palm oil to be short-lived. The prices are likely to hold above current RM2,100 per tonne and strengthen in the medium term due to low output season that will start from December 2009 up to the first quarter of 2010." He said tight soyabean supply until the first quarter of 2010 will spur demand for CPO.

The property sector is seen as a prime beneficiary of the wealth creation effect, resulting from the recovery in the economy and the stock market. The consumers sector will continue to pick up in line with higher demand from the economic rebound, while telecommunications firm are also attractive due to their strong free cash flow to pay out dividends.

Ministry proposes amendments to Direct Selling Act

PETALING JAYA: Amendments to the Direct Selling Act 1993 aimed at preventing scams in the industry will be tabled at the next Parliamentary sitting this March.

The amendments would be necessary to clarify the definitions of direct sales so there can be a clear distinction from legitimate direct selling methods and scams by certain people who operate pyramid-scheme type of recruitment, said Domestic Trade, Cooperatives and Consumerism minister Datuk Seri Ismail Sabri Yaakob.

"At the moment there is a thin line between direct sales and pyramid scheme. The revision will not only help us distinguish the two, but also empower the ministry to take effective actions against these (irresponsible) companies," he said at the official opening of the Amway headquarters here on Friday, Jan 22.

Previously, Ismail Sabri said direct selling was used as a front for get-rich-quick schemes, and there was a proliferation of such scams on the Internet.

He added that aspects of enforcement would be improved so that people who conducted pyramid schemes could be booked with higher penalties.

Despite the current revision to the act, the ministry approved licences for 32 new direct selling companies last year.

"We are still awarding licences to these companies but only after we have reviewed their business model and have found no discrepancies. Even then, we only approve new companies with licences of one year period, while established companies such as Amway can renew their licences for five years," he said.

He said that there are currently 497 licensed direct sales companies in Malaysia.

The Direct Sales Association of Malaysia (DSAM) reported that the direct selling industry was worth RM5.6 billion in 2008 with RM3.15 billion being contributed by 55 multinational and local companies who are members of DSAM.

Thursday, January 21, 2010

Sunway to buy 60% in Spanland

PETALING JAYA: Sunway Holdings Bhd, via wholly-owned unit SunwayMas Sdn Bhd, has signed a share sale agreement with Templer Forest Resort Sdn Bhd for the proposed acquisition of 60% equity interest in Spanland Sdn Bhd for RM13.8mil.

The agreement was signed on Tuesday by Sunway managing director Yau Kok Seng and Templer Forest managing director Datuk Kong Hon Kong.

Spanland has the development rights for a 98-acre plot in Gombak opposite the Templer Park Country Club. The site has been proposed for a project comprising 163 bungalows with an estimated gross development value (GDV) of RM500mil.

The three-storey bungalows with built-up areas of around 6,500 sq ft have an indicative price of RM3mil.

Sunway managing director Yau Kok Seng said with the proposed acquisition, Sunway’s land bank would be increased to 390 acres with potential GDV of some RM2bil.

The project is expected to be launched by October.

He said that for the financial year ending Dec 31, Sunway was targeting a 50% growth in its property sales and property development would contribute close to 25% of Sunway’s earnings.

The construction division is the biggest contributor at 45%; while the manufacturing, trading and building materials division contributes 20%; and quarrying activities the balance.

“Property development has big potential and we are looking to replenish our land bank via acquisitions and strategic alliances locally and regionally,” said Yau.

Yau sees good potential in Singapore’s property market and is confident of good response to its latest condominium development there. To be launched by the middle of this year, the project will comprise 500 condominiums in eight 12-storey blocks. The 1,100 to 1,300 sq ft units will be priced at around S$1,000 per sq ft for a total GDV of more than S$450mil.

Sunway has launched and sold two public housing projects under the design-build-sell scheme totalling close to 2,000 units in Boon Keng and Toa Payoh. With built-up areas of 1,100 to 1,300 sq ft, the units were priced from S$520 to S$540 per sq ft.

“There is huge potential in Singapore’s medium range housing market and we will be looking for more opportunities there together with our 70% joint-venture partner, the Hoi Hup Group,” Yau said.

Sunway is also looking to launch its maiden project in China in the second quarter this year. The condominium project in Jiangying near Shanghai will have a GDV of close to RM500mil.

The 26:39:35 project between Sunway, Sunway City Bhd and Guanghou, will pave the way for more projects in China.

In the Klang Valley, a mixed development on 111 acres will be launched in Sungei Long. The project will have GDV of more than RM550mil.

Poh Kong: Performance to track nation's GDP growth

JEWELLER Poh Kong Holdings Bhd expects its performance in the current fiscal year to grow in tandem with the country's gross domestic product, which is projected to grow at 5 per cent.

The company reported a marginal rise in net profit and a 6 per cent rise in revenue for the year ended July 31 2009.

Executive chairman and group managing director Datuk Eddie Choon said the group is cautiously optimistic on its outlook for the rest of the financial year.

He said there are still challenges ahead, domestically and globally, but at the same time demand for gold jewellery is still there although people may buy less during uncertain times.


"We foresee growth... we are still expanding and we'll make sure we are efficient," he told reporters after the group's shareholders meeting in Kuala Lumpur yesterday.

"We are also diversifying our products into different retail brands to meet customers' preferences," he added.

Poh Kong's first-quarter net profit was down 5 per cent to RM9.9 million from RM10.4 million a year ago. Revenue also declined by 6 per cent to RM152.4 million in the quarter ended October 31 2009, from RM162 million a year ago.

The group plans to open up to three more outlets in the current fiscal year. One each in Malacca and Cheras, while the third has yet to be confirmed.

The group has 95 outlets throughout the country.

Poh Kong directors, Dr Choong Tuck Yew and Fazrin Azwar Md Nor said the group has managed to declare dividend for its shareholders amid the global economic downturn, thanks to sales growth.

Most companies, however, faced negative growth and a lot of them are unable to pay dividend, they said.

For the financial year ended July 31 2009, Poh Kong announced a first and final single tier tax exempt dividend of 1.40 sen per share of 50 sen each.

Wednesday, January 20, 2010

Lion Industries jumps on steel sector upgrade

KUALA LUMPUR: Shares of Lion Industries rallied in morning trade on Wednesday, Jan 20 after analysts upgraded the outlook for the sector.

At 11.38am, it was up 17 sen to RM1.77 with 8.22 million shares done.

The FBM KLCI rose 2.88 points to 1,303.23. Turnover was 563 million shares valued at RM664 million.

OSK Investment Research was overweight on the steel sector on rising steel prices and expectation of expanding margins, particularly for iron making.

It said demand was set to surge after the Chinese New Year celebration, driven by real demand and improved buying sentiment on positive price trends.

"We have BUY calls on Lion Industries,Southern Steel and Masteel, a Trading BUY on Perwaja, but a NEUTRAL call for Kinsteel and a SELL on Ann Joo," it said.

Higher Q1 earnings seen for TNB on strong demand


PETALING JAYA: Tenaga Nasional Bhd’s (TNB) results for the first quarter ended Nov 30, to be released today, are expected to show improvement in net profit to about RM500mil on the back of stronger power demand.

According to HwangDBS Vickers Research’s latest report, the better earnings would be led by sustained power demand growth since March last year together with a broad-base recovery in the industrial segment.

“We estimate that every 1% increase in power demand would raise TNB’s first-quarter net earnings by 8%,” the report noted.

TNB registered a net profit of RM917.9mil on the back of RM28.8bil revenue for the financial year ended Aug 31, 2009 (FY09).

CIMB Research also expects TNB’s core net profit to come in at RM450mil to RM500mil, which is 11% to 23% higher quarter-on-quarter.

“We expect results to be broadly in line if core net profit comes in around 19% to 21% of its full-year projection, as the remaining quarters should be better due to stronger pick-ups on the demand front,” the brokerage said in a report.

Meanwhile, Kenanga Research said the results would be within expectation based on its net profit forecast of RM2.82bil for FY10.

It also noted that higher coal generation costs would not erode TNB’s first-quarter earnings as seen in the previous quarters because average coal prices remained at US$85 per tonne during the quarter.

Analysts generally concurred that the results announcement would likely be relatively uneventful as the focus would be on the Government’s impending decision on the scheduled January 2010 tariff review.

Kenanga Research said the best-case scenario should result in a 13.9% increase in tariffs to 35.7 sen kwh, raising its profit forecast by 47%.

However, there was a possibility of tariff remaining a status quo as it may negate pump-priming multiplier effect, it added.

Meanwhile, HwangDBS expects low earnings risk for TNB, going forward, as a potential increase in subsidised gas cost (currently at RM10.70 per million British thermal units) was likely to be compensated by tariff hike. This is evident in the informal cost-pass-through that TNB has enjoyed since 2006.

Tuesday, January 19, 2010

Dayang secures RM70mil contract for time charter workboat


KUALA LUMPUR: Dayang Enterprise Holdings Bhd's wholly- owned subsidiary, DESB Marine Services Sdn Bhd, has secured a RM70 million contract for the time charter of its workboat for three years.

In an announcement on Bursa Malaysia's website, Dayang said DESB received the Letter of Award (LOA) from Nautika Sdn Bhd yesterday, for the time charter of the Dayang Zamrud for well reservoir management to Brunei Shell Petroleum Company Sdn Bhd.

It said the contract is expected to contribute positively to the earnings and net assets of the Group for the financial years ending December 31, 2010 to December 31, 2012. There are no significant risks involved in fulilling the contract obligation, it added. - Bernama

Fajarbaru eyeing Klang Valley land for property venture

KUALA LUMPUR: Construction outfit, Fajarbaru Builder Group Bhd, is looking to acquire landbank in the Klang Valley towards venturing into the property development business, besides bidding for larger and more sophisticated construction projects.

Its managing director and CEO Datuk Low Keng Kok said these were part of a two-pronged strategy the company had in place after the completion of its capital-raising exercise through a private placement at the end of last year.“We are now in talks with several parties for land within the Klang Valley for housing project development, as the area is still the magnet for natural migration that will create demand for housing,” he told The Edge Financial Daily.

At the moment, the group has an 80ha land in Port Dickson, Negri Sembilan. While work has yet to commence, Fajarbaru plans to use the land for medium- to high-end property development.
Fajarbaru in October last year announced the completion of its private placement exercise with the listing of 14.1 million new shares that were issued at RM1.13 each.

With the completion of the private placement exercise, Fajarbaru has a total of 164.34 million shares outstanding, while free float stands at 52.72% or 86.64 million shares, according to Bloomberg data.In terms of construction jobs, Low said the group had submitted bids for the RM2 billion new low-cost carrier terminal (LCCT) near the Kuala Lumpur International Airport.

Fajarbaru’s order book balance stood at RM505 million as at end-March 2009.The group has vast airport-related experience, having previously been awarded a RM124 million contract for the expansion of the current LCCT in Sepang in 2008.

The contract was a follow-up job from its previous RM108 million contact for the LCCT in May 2005, which was the group’s first major project.Since then, Fajarbaru has secured at least two key construction contracts worth a total of RM440 million in the financial year ended June 30, 2008 (FY08), including a RM316 million subcontract for the Seremban-Gemas electrified double-tracking project from India’s Ircon International, the main contractor for the southern stretch.

For FY09, Fajarbaru recorded a net profit of RM18.12 million, up 32.7% from 13.65 million in the previous year, while revenue rose 110.7% to RM184.6 million from RM87.61 million.The stock rose four sen or 3.64% to RM1.14, with 1.63 million shares done last Friday. The shares have gained by 9.62% so far this year and are trading at 7.51 times price-to-earnings ratio compared with the industry average of 13.33 times.

This article appeared in The Edge Financial Daily, January 18, 2010.

Monday, January 18, 2010

TM 18 Jan 10

Toyota Lexus launch

KUALA LUMPUR: A face-lifted Lexus LS 460L and LS 460 Sport were launched at Saujana Resort, Subang, last week.

Both cars come with new headlights with a 4.6-litre engine and eight-speed automatic transmission, new bi-xenon headlights with LEDs, restyled grilles and air suspension system.

The LS 460L and LS 460 Sport luxury variants come with on-the-road with insurance prices of RM851,135 and RM738,275 respectively .



Singapore exports jump 26% in December

SINGAPORE: Singapore's exports jumped in December for the second straight month as global demand for the city-state's electronics surged.

Exports excluding oil rose 26.1 percent from a year earlier to 13.2 billion Singapore dollars ($9.5 billion), according to Trade and Industry Ministry figures released Monday.

The ministry said sales abroad rose a seasonally adjusted 1.7 percent from November.

Electronics - which account for 40 percent of non-oil exports - rebounded strongly, rising 25.2 percent from a year earlier after falling 6.1 percent in November.

Singapore's economic recovery slowed last quarter as gross domestic product fell by an annualized seasonally adjusted 6.8 percent.

The government expects the economy to grow up to 5 percent this year after contracting by 2.1 percent last year. - AP

Sunday, January 17, 2010

TM's high speed broadband launch on track for late 1Q

KUALA LUMPUR: TELEKOM MALAYSIA BHD []'s high speed broadband (HSBB) project is on track for its commercial launch in the later part of the first quarter this year.

TM said on Friday, Jan 15 that infrastructure development was extending beyond the inner Klang Valley and into Putrajaya and Iskandar Malaysia primarily in Nusajaya.

"TM can disclose that it has completed 100 percent of the work in the four exchanges of Taman Tun Dr Ismail, Subang Jaya, Shah Alam and Bangsar, the target areas for its initial service roll-out and is now rolling out the HSBB network in Nusajaya and Putrajaya," it said.

At end-2009, it had established 152, 000 premises passed.

To recap, the RM11.3 billion national HSSB is a public-private partnership agreement between TM and the government which was signed in September 2008.

By end 2012, about 1.3 million premises nationwide will have access to HSBB services. Zone one included the Inner Klang Valley, Iskandar Malaysia, and key industrial sites around the nation.

The financing arrangement will see TM investing RM8.9 billion and the government is contributing RM2.4 billion on an incurred claims basis based on project milestones reached by TM.

"TM's total capital expenditure related to the HSBB project as of Dec 31, 2009 reached RM1.9 billion -- covering last mile access, IP core deployment and capacity expansion for international links," it said.

TM is on track for a progressive plan to roll out commercial HSBB services in the four initial areas by the end of the first quarter of this year. It is conducting user trials in selected households in the four areas.

The HSBB "beta testers' are experiencing and enjoying network access speeds of 15Mbps as part of the related triple-play service package of voice, video and high speed Internet which will eventually make up the complete HSBB commercial retail package to be announced by TM nearer to the launch date.

Over the next three months, another 2,000 to 2,500 households in the four initial HSBB launch areas will be involved in the user trials for retail HSBB services.

In December 2009, TM announced that about 123 households in Bangsar, Taman Tun Dr. Ismail, Subang Jaya and Shah Alam were involved in the HSBB retail service trial as part of TM's progressive plan to roll out commercial HSBB services in the four areas by the end of the first quarter.

Wah Seong keen to invest in Italy’s Socotherm


OIL and gas services provider Wah Seong Corp Bhd is interested in buying a stake in troubled Italian pipe-coating company Socotherm, a Wah Seong executive said yesterday.

“Yes, there is some interest on our part to look at acquiring a stake in this company (Socotherm) but we are not yet at the stage of talking about numbers,” Wah Seong deputy managing director Giancarlo Maccagno said.

An unsourced report in Italian business weekly Il Mondo said yesterday Wah Seong, Malaysia’s third-largest oil and gas services provider, is ready to invest ?50 million-?100 million (?1 = RM4.98) to help save Socotherm.

“The ?50 million-?100 million is pure speculation on the part of the writer. It’s far too early to talk about numbers and what equity is available to us,” Maccagno said.
At the start of August, Socotherm, which specialises in coatings for petrol, gas and water pipes, filed for creditor protection.


In the first half of the year, Socotherm reported a net loss of ?57.2 million, widening from ?14.9 million a year earlier, , with sales of ?84.2 million, down 42.1 per cent. Socotherm shares have been suspended from trade since the start of August. — Reuters

http://www.wahseong.com/nonflashsite/businessactivities/oil&gasdiv.asp

Fajar 15 Jan 10

Friday, January 15, 2010

CIMB Research: Tenaga Trading Buy at RM10.90

KUALA LUMPUR: Tenaga Nasional is scheduled to release its 1QFY8/10 results on Jan 20 and CIMB Equities Research expects core net profit to come in at RM450 million to RM500 million, which is 11%-23% higher quarter-on-quarter but up to 10% lower on-year.

THe research house said on Friday, Jan 15 that it would regard the results to be broadly in line if core net profit came in around 19%-21% of its full-year projection as the remaining quarters should be
better due to stronger pick-ups on the demand front.

"We retain our FY10-12 earnings projections pending the results release. The upcoming 1QFY10 results announcement is likely to be relatively uneventful as the focus will be on the government’s impending
decision on the scheduled Jan 2010 tariff review. Tenaga remains a Trading Buy with an unchanged P/BV-based target price of RM10.90," it said.

Thursday, January 14, 2010

IGB 27 August 2009

AmResearch is maintaining its Buy call on IGB Corp (IGB) at revised fair value of RM2.80 per share (previously RM2) based on 30% discount (previously 50%) to its net asset value (NAV) estimate of RM4. IGB currently trades at a narrower discount of 55% to its NAV given renewed interest in property.

In a research note issued on Aug 27, it said IGB posted earnings of RM43 million for 2QFY09, bringing 1HFY09 earnings to RM77 million. This accounted for 48% and 56% of the research house and consensus estimates respectively.

In 1HFY09, earnings dipped 3% on-year on the back of 13% decline in turnover - mainly due to no new presales. Despite that, property development’s operating margin was stable at 19% on-year (up 1%) due to larger mix of high-end product recognised in the current quarter.

Property investment and especially its hotel segment showed solid numbers with operating profit growth of 6% and 35% on-year to RM203 million and RM68 million respectively.

Amresearch saud the strong performance for its hotel segment was due to its Gardens Hotel and Serviced Apartments.

It added IGB's unsold stocks had fallen to RM50 million (from RM100 million to RM150 million in April) with liquidation mostly from Laman Sierramas West and Hampshire 2. All 49 units at Laman Sierramas West were sold recently for a total RM37 million - where units are priced between RM560,000 and RM800,000 per unit or at an average of RM300 psf.

"Encouraged by the improved demand for residential properties, we believe IGB will be looking to launch 50-60 low-rise condo units in Ampang Hilir in early FY10F. Pricing would be between RM800 psf-RM1,000 psf and we believe demand should be strong for these niche developments normally associated with IGB," it said.

AmResearch raised its estimates for FY10F and FY11F by 4% and 7% to RM179 million and RM236 million respectively because it had included its low-rise condo development in Ampang Hilir (estimated gross development value of RM80 million to RM90 million) into its model.

MegaMall remains fully tenanted given its strategic location and easy accessibility with current average rental at RM9.60psf. South Tower’s occupancy remains at 90% with stronger tenancy at North Tower (circa 50%) at an average rental of RM6.00 psf-RM6.50 psf.

"Our BUY call remains on conviction that IGB will soon ascend to its next growth phase - where the focus will gravitate towards realising the deep embedded value of its attractive portfolio of investment properties via an establishment of a REIT with MidValley City as cornerstone," it said.


IGB-CA 14 Jan 10

MUHIBAH (5703) 14 Jan 10



Wednesday, January 13, 2010

LIONCOR 13 Jan 10

Gadang gets work on new LCCT


Construction company Gadang Holdings Bhd (9261) has won a RM291 million contract to build a runway and taxiways for the RM2 billion new low-cost carrier terminal (LCCT) at the KL International Airport (KLIA) in Sepang, Selangor.

The contract includes site preparation, earthworks and main drainage for the 4km Runway 3.
Gadang beat seven companies, including WCT Bhd and Sunway Holdings Bhd, for the job. It told Bursa Malaysia yesterday that it would start work next month and complete it by December.

Gadang expects the contract to contribute positively to its earnings and net assets in financial years ending May 31 2010 and 2011.
"This is a fast-track contract. We are proud to win it after losing out on an earlier bid," Gadang managing director Tan Sri Kok Onn told Business Times.

It is the second contract awarded by Malaysia Airports Holdings Bhd (MAHB) under the RM2 billion project. Last month, the airport operator awarded WCT a RM363 million contract for works that include site preparation, earthworks and main drainage. A third contract to build the main terminal building is in the tender stage.

Kok said Gadang was working to submit a bid for the third contract, worth some RM1.2 billion. The job involves design, construction, testing, commissioning and maintaining the main terminal building, skybridge and piers. The new LCCT is the single largest private finance initiative building project under the infrastructure allocation of the second stimulus package.

Other companies which submitted bids for various packages were IJM Corp Bhd, Ireka Corp Bhd, Fajarbaru Builder Group Bhd, Bina Puri Holdings Bhd and Mudajaya Group Bhd.

PJI Holdings Bhd plans to provide mechanical and electrical engineering services for RM500 million. The new LCCT will be 1.5km away from KLIA's main terminal compared with 20km for the existing LCCT. It will be linked to KLIA's main terminal building via the Express Rail Link.

The new LCCT, scheduled to be completed by the third quarter of next year, will cater for 30 million passengers a year, with potential to expand capacity to handle 45 million passengers.

Tuesday, January 12, 2010

Oil palm shell in concrete making

EXPONENTIAL growth of population, development of industry and technology, and the growth of social civilisation can be considered as the underlying factors that have significantly resulted in building demand in rural, estate and urban sectors.

As concrete is used as one of the main building materials, it has inevitably caused serious depletion of non-renewable natural stones used in concrete production.

In Sabah alone, the annual aggregate usage has reached about 12 million tonnes. Thus, it is an important agenda to architects, engineers and researchers to provide a proper building system.

"It must be noted that nearly 80 per cent of the resources used today in construction industry are non-renewable.


"Due to the scarcity of conventional raw materials, there is a great opportunity to explore the alternatives of renewable resource, particularly the oil palm shell (OPS) solid waste from the agricultural sector," said Universiti Malaysia Sabah Associate Professor Dr Md Abdul Mannan.

He said the country, being the largest palm oil producer in the world produces more than 4 million tonnes of OPS annually, from which about 1.5 million tonnes are generated in Sabah.

Abdul Mannan said in a typical modern building made of reinforced concrete, the conventional concrete floor system consumes the highest concrete volume at up to 44 per cent compared to other structural building components such as beam, column, staircase and foundation.

"The floor is the main usage place in a building. The floor slabs can be made of cast in situ reinforced concrete or precast concrete. Precast floors have several advantages over the cast in situ concrete floors," he said.

Abdul Mannan said a major challenge for the aggregate and construction industries is finding various alternative aggregate sources to overcome shortages.

"These alternative sources will need to be developed, researched, and successfully applied. It includes industrial waste products, agricultural solid waste and recycled aggregates, particularly from the demolition and building waste," he said.

"When OPS is used for concrete production, more buildings can be built as alternative for various groups of people. It can be used to replace natural course aggregate in concrete production," he said.

He said the C-Channel, a precast reinforced concrete product, was made using conventional concrete (normal weight concrete) and lightweight concrete using oil palm shell, the solid waste discharged from palm oil mill.

"It is structurally efficient and is recommended for use in modern buildings," he said.

Abdul Mannan said C-Channel is environmentally friendly for concrete production and could be considered as a renewable resource for the construction industry.

WHAT IS CONCRETE?

Concrete is a construction material composed of cement , aggregate ( such as gravel ), sand, water, and chemical admixtures.


HOW CONCRETE FORM?

Concrete solidifies and hardens after mixing with water and placement due to a chemical process known as hydration. The water reacts with the cement, which bonds the other components together, eventually creating a stone-like material.


WHAT USE OF CONCRETE?

Concrete is used to make pavements, pipe, architectural structures, foundations, motorways/roads, bridges/overpasses, parking structures, brick/block walls and footings for gates, fences and poles.


CONCRETE GRADE IN MALAYSIA

Grade 10 = Load Force = 10MPa - Pavement
Grade 15 = Load Force = 15MPa - Pavement

Grade 20 = Load Force = 20MPa - Car porch
Grade 25 = Load Force = 25MPa - Building structure (Double story link house)
Grade 30 = Load Force = 30MPa - Building structure (Bunglow)
Grade 35 = Load Force = 35MPa - Building structure (High rise building)
etc.

CONCRETE MIXER TRUCK








Monday, January 11, 2010

Global Offshore tipped to win Petronas deal

The RM350 million contract is to lay oil and gas pipelines between platforms in shallow waters across Malaysia from March this year.

New York-listed Global Industries, a US$3 billion (RM10 billion) oil company, is expected to get a contract worth RM350 million from Petroliam Nasional (Petronas) Bhd, breaking an area dominated by SapuraCrest Petroleum Bhd (8575) for the last five years.

Sources said the contract is to lay oil and gas pipelines between platforms in shallow waters across Malaysia, from March this year.

Business Times understands that the contract will be awarded to Global Industries' local subsidiary, Global Offshore Malaysia Sdn Bhd, sometime this month.

The duration is for three years up to 2012, with options for two further extensions of one year each. The value of US$100 million (RM338 million) is for works for the first year.
Global Offshore will use the derrick lay barge DLB 264, owned by its parent company, for the works.

It is also believed, Kencana Petroleum Bhd, controlled by Datuk Mokhzani Mahathir will get a share of the pie as it will take a stake in Global Offshore.

"Kencana will buy 45 per cent of the company and the vessel. They are ironing out the details with Global Offshore to strike a deal soon," industry sources said.

Industry estimate for a vessel of similar specification and age like the DLB 264 is around US$50 million (RM169 million).

This is one of five transportation and installation packages to be awarded by Petronas.

Last month, SapuraCrest's wholly-owned unit, TL Offshore Sdn Bhd, won three packages worth a combined RM1.5 billion.

TL Offshore was awarded a joint contract by 11 of Petronas' Production Sharing Contractors (PSCs) for the transportation and installation of offshore oil and gas facilities and structures for the PSCs, which include Shell Sarawak, Shell Sabah, Newfield, Murphy Oil, Nippon Oil, Talisman and ExxonMobil.

The duration for the SapuraCrest contract is similar to the one offered to Global Offshore.

"SapuraCrest has been dominating the market for five years. Its monopoly is broken with the entry of Global Offshore and Kencana Petroleum," the sources said.

The fifth package, which Petronas will award within the next two to three weeks, is expected to go to Master Offshore Sdn Bhd, a unit of Target Resources Sdn Bhd.

The contract is believed to be also worth around US$100 million and the scope of works will be similar to the one offered to Global Offshore.

The five packages attracted six bidders, including J Ray McDermott Inc-Bumi Armada Bhd, Sigurros Sdn Bhd-Sime Darby Bhd and PBJV Group Sdn Bhd.

Saturday, January 9, 2010

THE residential property market should see a pick-up this year if buying interest remains sustainable and developers offer more creative and well planned projects.

Take-up rates have gradually picked up since the first quarter of 2009 and by the second quarter, newly launched properties recorded take-up of 31.7% – the highest over the past three years.

The strong take-up is especially evident for landed properties, including super-link terrace houses, semi-detached houses and bungalows, which cater to the upper-middle class.

Prices are also expected to rise in tandem with the economic rebound and landed residences have generally seen price increases of between 10%-15% to RM250 to RM300 per sq ft. While the high-end condominium market is still bleak because of an over supply situation, the outlook for landed residences in premium locations is much brighter.

Developers are more confident of rolling out new projects this year to capitalise on the buoyant sentiment among property buyers.

Mah Sing Group Bhd group chief executive Tan Sri Leong Hoy Kum says with the brighter economic outlook, more Malaysians will be willing to spend on big-ticket items like property.

“We believe this will lead to a strong demand recovery in mid-tier to high-end landed properties,” Leong says, adding that these segments should rake in stronger sales.

He says residential properties that cater to the middle to upper middle market stand to benefit from the rebound in property demand.

GuocoLand Bhd director of marketing and sales KC Chong concurs that landed properties, particularly gated enclaves in good locations, command a strong following.

“They appeal to both owner-occupiers, as well as investors as there is a willing pool of tenants which prefer landed properties complete with security, management and common facilities.”


SP Setia Bhd president and chief executive officer Tan Sri Liew Kee Sin says developers will have to plan their launches carefully and understand market needs if they expect good take-up rates.

“Many developers today are selling an aspirational lifestyle rather than just a house. Innovative ideas and designs are important factors in selling properties today coupled with a strong brand name,” Liew notes.

ECM Libra analyst Bernard Ching says more positive consumer sentiment and current low mortgage rates will sustain demand for residential properties going forward.

“Based on historical data, we see a strong correlation between consumer sentiment index (CSI) and demand for residential properties. Since hitting a low of 70.5 in the second quarter of 2008, the CSI has rebounded above the 100-point neutral level since the second quarter of last year,” he says.

Ching says the Government’s decision to impose a 5% real property gains tax (RPGT) only on property sales within the first five years of purchase instead of a blanket tax irrespective of date of purchase (as announced under Budget 2010) will boost buying interest.

“This is certainly a positive measure that will provide a much needed relief to the property sector. With the relaxation of the RPGT, we believe buying interest will pick up pace, especially among upgraders who need to sell their existing properties first,” he adds.

Source : CEIC

He says another catalyst for the property sector will be the impending announcement by the Government to allow Employees Provident Fund contributors to utilise their current and future savings in Account 2 for property purchases.

“This is likely to boost housing affordability, especially among first time home buyers, and benefit the mass residential segment,” he notes.

According to DBS Group Research Equity analyst Yee Mei Hui, a strong appetite for upper mid-high end properties has seen recent launches breaching 70% take-up within the first weekend.

“Developers are increasingly confident and have set higher sales targets, bringing forward launches and replenishing their landbank. Demand is expected to pick up further on the back of an improving economic outlook,” she says.

Yee adds that given the threat of rising inflation caused by higher mortgage rates and the impending introduction of the goods and services tax, more Malaysians are also buying property as a hedge against inflation.

Waterco plans super-sized fibreglass filters

WATERCO Ltd, an Australian water filtration company, plans to manufacture super-sized fibreglass filters used in water desalination plants at its manufacturing site in Malaysia.

Waterco's group chief executive officer and founder Goh Soon Sinn said this is part of its expansion plan into the water desalination industry.

As a new entrant into the segment, such an innovation will give it an edge over its competitors.

With more countries building water desalination plants to address the problem of water scarcity, Goh said there is a need to find ways and means for the plants to be more efficient.


"An average plant will need around 20 filters. With something like this, we could bring it down to 18," he said.

The group is already supplying 2.5-metre wide filters for water desalination plants.

The company has committed RM1 million to research and develop the super-sized filter, which will be bigger than a 20-foot container and take about one year to complete.

Waterco, a company listed on the Australian Stock Exchange, is involved in the manufacture and distribution of pool and spa equipment, pool and spa chemicals, domestic water filters, softeners and purifiers and commercial water treatment equipment and Aqua culture water treatment.

Currently, most of its filters are for the swimming pool and spa market.

Its filter business make up 20 per cent of the group's revenue, which hit A$72.32 million (RM225 million) for the financial year ended June 30 2009.

Its manufacturing plant here makes pumps and filters for the commercial and residential sectors.

The group has manufacturing locations in four other countries, namely Australia, China, the US and Canada.

Goh said he expects revenue to grow by at least 10 per cent for the current financial year, contributed by its filters and pumps business.

One of its notable jobs for the current financial year has been the supply of water filters to one of the theme parks being developed in Sentosa, Singapore.

"It's all very hush-hush, even we were not told the exact location of delivery," Goh said.

>BTimes

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