Thursday, February 25, 2010

Fuel subsidy scheme shelved, originally set to be implemented on May 1

PETALING JAYA: The Government’s proposed fuel subsidy scheme based on the engine capacity of vehicles has apparently been shelved.

Sources indicate that the plan, which was originally set to be implemented on May 1, will not proceed even though a lot of the preparatory work has entered the final stage.

“We were so close to getting this off the ground,’’ said a source.

The Government had planned to introduce a tiered pricing system for petrol, depending on engine capacity, while foreigners would have to pay the market price.

According to reports, the plan called for the mandatory use of MyKad to differentiate Malaysians from foreigners, requiring the need for MyKad readers at petrol stations.

Subsidised petrol would be capped to a certain amount of litres a month per user for owners of vehicles with engine capacities of below a certain threshold. The reported upper limit eligibility for the petrol subsidy is 2,000cc. Owners of cars with bigger engine capacities would be exempted from the subsidy.

However, many had considered the proposed scheme to be very unfavourable and cumbersome to enforce and some have suggested that the subsidy itself should be removed.

RAM Holdings Bhd chief economist Dr Yeah Kim Leng said scrapping the scheme and moving to a “fully market-driven” system was a better option in the long run.

“The public has to realise the fuel subsidy scheme is not sustainable as it impacts the Government’s finances. Removing the subsidy would reduce over-consumption and promote more efficient use of our country’s resources,” he said when contacted by StarBiz.

Yeah said many countries, including Indonesia and Sri Lanka, were practising a free-float system, where fuel prices were based on global oil prices.

“This is the ideal but Malaysia is accustomed to subsidised prices. From an economic standpoint, it is not sustainable.”

Yeah said removing the fuel subsidy completely would create short-term strain on the lower income group as they would have difficulty coping with the sharp increase (in fuel prices).

“The best thing to do is to gradually reduce the fuel subsidy or it would create inflationary pressure.”

Yeah said the proposed tier system was unfair and vulnerable to abuse.

“It is unfair from the individual perspective because everyone is entitled to equal fuel subsidy levels.”

He also cited the case where some fishermen were purchasing diesel at subsidised prices and were selling it for profit.

“Owners of lower cc engine cars could sell their entitlement to owners of higher cc vehicles. This situation could crop up if the system is not watertight.

“Principally, it (the tiered fuel subsidy scheme) seems desirable but administratively, it is no go,” said Yeah.

An analyst from a local bank-backed brokerage said the tier system would be difficult to monitor and the Government should do away with the fuel subsidy scheme.

“The only way to become a high-income nation is to remove the fuel subsidy. There would be near-term implications but eventually the public will be able to adjust. The removal should however be gradual,” he said.

He also said the Government should improve its public transport infrastructure if it were to reduce or remove fuel subsidies.

“The Government could also do away with excise duties (for imported vehicles) but I don’t think that would happen any time soon.”

Mercedes-Benz Malaysia Sdn Bhd vice-president of sales and marketing for passenger cars Florian Mueller said he could identify with the Government’s decision to introduce a fuel subsidy scheme.

“In the long run, the Government is looking at how to reduce fuel consumption. I think the best thing to look at next is how we can encourage people to purchase vehicles with the latest technology or encourage the manufacturer to build car engines with lower fuel consumption.

“This would also encourage other players to introduce technology that encourages fuel saving. The Government could also make it mandatory for car owners to replace old engines if they are not fulfilling emission standards, just like they do in Europe.”

Wednesday, February 24, 2010

Wah Seong improves pre-tax profit to RM246m


Wah Seong Corporation Bhd posted a higher pre-tax profit of RM245.782 million for the financial year ended Dec 31, 2009 compared with RM152.913 million in the previous financial year.


In an announcement to Bursa Malaysia, the company said the increased profit was contributed by its specialised pipe coating and corrosion protection services business.


Revenue for the year, however, declined to RM1.95 billion against RM2.343 million previously due to a lower turnover in the engineering, infrastructure and building material businesses as well as from the impact of disposing of its pipeline contracting business.


On its prospects for the current year, Wah Seong said its oil and gas businesses were expected to benefit from the increase in activities in oil and gas projects especially in the second half of the year.

It said the increasing demand for gas in Asia and with improvement in crude oil price, major oil and gas infrastructure projects that had previously been in planning stages are being activated.
"This has resulted in an increase in request for bids and the award of contracts in recent months," the company said.

Wah Seong said its industrial services division will continue to benefit from the projects generated from the government stimulus packages implemented in the country and in the region. "Although the group may experience a slight slowdown in its operations in the early part of 2010, this is expected to reverse in the second half," it said. "The group's overall performance for the financial year 2010 is expected to be positive," the company said. -- Bernama

Edaran Tan Chong upbeat on growth


EDARAN Tan Chong Motor Sdn Bhd (ETCM), the sales and marketing arm of Nissan vehicles in Malaysia, is confident of maintaining its current growth momentum via core and proven models.

"We also plan to introduce two new models," said executive director Datuk Dr Ang Bon Beng at a media appreciation lunch held in conjunction with the Chinese New Year celebrations here Wednesday.

Ang described 2009 as "a very challenging year" for ETCM.

"This due to the effects of economic downturn and aggravated by the fact that we did not launch any new completely knocked down (CKD) model," he said.


"Nevertheless, I am pleased to announce that ETCM is one of the few auto players who have performed reasonably well under such difficult conditions." Ang said the total industry volume dropped 2.0 per cent last year compared to the previous year but Nissan sales increased by 5.0 per cent.

He said that Nissan managed to capture a 5.5 per cent market share, an improvement from 2008 when its market share was 5.2 per cent.
ETCM has been acknowledged by Japan's Nissan Motor Co Ltd as a "Nissan Champion Distributor", an honour earned by only seven out of 67 Nissan national sales companies in the overseas market.

"The Nissan Grand Livina was the top-selling non-national 3-row multi-purpose vehicle (MPV), commanding 38 per cent share of the non-national MPV market and 20 per cent overall MPV market share," Ang said.
He said the Nissan Urvan was the top-selling diesel window van, commanding 30 per cent share of the market.

"Our models earned various awards in their respective categories and also in terms of fuel efficiency," he added. According to him, the increased market share and numerous awards won by the Nissan range of new models signified the growing market acceptance of its products.

On the total industry volume, Ang said it was projected to be between 545,000 and 550,000 units this year, with the MPV expected to be the growth segment. He said that regionally, the company planned to expand its presence in the Indochina. "We have started operations in Cambodia and are taking necessary steps to penetrate other markets, in particular Laos," he added. - BERNAMA

Tuesday, February 23, 2010

CIMB Group 4Q net profit up 151% to RM802.9m


KUALA LUMPUR: CIMB Group Holdings Bhd reported a strong set of earnings in the fourth quarter ended Dec 31, 2009, recording net profit of RM802.89 million, up 152% from the RM318.59 million a year ago.

The group declared a dividend of 18.5 sen (single tier) amounting to a total net payment of RM653 million and proposed a one-for-one bonus issue.

It said on Tuesday, Feb 23 that for 4Q09, the net profit of RM803 million was 10.5% higher than 3Q09. Its revenue was RM2.78 billion versus RM1.88 billion. Earnings per share were 22.73 sen versus 9.19 sen.

Group chief executive of CIMB Group Datuk Seri Nazir Razak said: "The 2009 operating environment turned out much better than anticipated and our people excelled, posting our best ever financial performance and met or exceeded all our key targets set for the year."

"Investors who rode the year with us enjoyed a 123% total shareholder return, 74% higher than the KLCI benchmark."

For FY09, full year net profit was RM2.807 billion, up 43.8% year-on-year growth and equivalent to net EPS of 79.5 sen. The FY09 net return on equity (ROE) of 15.0% was above the original target of 12.5% and in line with the revised 14%-15% target for the year. Revenue was RM10.67 billion compared with RM7.74 billion.

CIMB Group’s FY09 revenues increased by 37.8% year-on-year to RM10.67 billion while profit before tax (PBT) grew by 40.4% to RM3.812 billion.

In 2009, the group’s Malaysian consumer “good” bank PBT grew 46.1% on-year on the back of an 8.9% growth in revenues and a 30.9% on-year drop in net loan loss provisions. The lower recoveries at Group Special Assets Management (or “bad” bank) brought about the relatively flat 1% on-year growth in PBT at the overall Malaysian consumer bank.

On the proposed one-for-one bonus issue, the plan would be to increase its number of shares in issue from 3,531.76 million to 7,063.53 million. The objectives of the bonus issue are to improve tradability of CIMB Group shares and to align its quoted share price with pricing conventions on the Stock Exchange of Thailand (SET) ahead of the group’s proposed listing later this year.

“We had a very good 2009, financially as well as in the overall development of our regional franchise. Our regional model remains “work-in-progress” and we are determined to realise its full potential over the next few years. In 2010, we anticipate navigating a quite different set of challenges – in particular, margin compression from more intense competition, turn in the interest rate cycle and new rules and conventions arising from global banking reform.

"The improved economic environment will nevertheless translate to higher demand for banking and capital market solutions and lower credit defaults. Therefore we are setting higher financial targets for this year,” said Nazir.

Among the various KPI targets for 2010, CIMB Group has set its sights on ROE of 16.0% and total region-wide loan and the current account and savings account growth of 12% and 18% respectively. Its dividend target remains at 18.5 sen but this will be reviewed after implementation of the FRS139 accounting standard and Basel II later this year.

Monday, February 22, 2010

The Sunway Pyramid Shopping Mall plans to be Malaysia's biggest mall by size within the next five years




The Sunway Pyramid Shopping Mall in Selangor is likely to overtake the Mid Valley Megamall in Kuala Lumpur as the country's biggest mall by size within the next five years as it adds two new phases to the mall.

Called "SP3" and "SP4", the two phases form part of Sunway City Bhd's (SunCity) planned development on a 2.35ha open car park land adjacent to the existing Sunway Pyramid and the Sunway Lagoon Theme Park.

Currently, Sunway Pyramid has a total gross floor area of 4.5 million sq ft, with a net lettable area (NLA) of 1.7 million sq ft.

Chief executive officer of Sunway Group of Shopping Malls, H.C. Chan, said SP3 will see 500,000 sq ft added to the gross floor area of the mall.


He did not say what the NLA will be, but typically 65 per cent to 70 per cent of a mall's gross floor area makes up the NLA.

"SP3 and SP4 have been planned and should be ready within the next five years ... it is a sizeable addition," Chan told Business Times in an interview.

He said timing of their launch would depend on economic conditions.

Phase SP3 of Sunway Pyramid features a small-office-home-office (SOHO) suites development to be built on 0.73ha.

While Chan declined to reveal details about Phase SP4 of expansion, it is understood that it will include retail, office blocks and residential units on 1.62ha.

"Integration and physical connection is our first priority," Chan said of the mall. The two new phases will be linked to the existing mall.

"We are building into the future, the mall is already big. So, we have to think of niche and innovative ways to attract consumers," Chan said of the concept the mall may have.

The new project will also increase the number of parking bays in the mall, hotel and theme park area by 2,000 to 9,500.

Today, Sunway Pyramid's larger rivals include the Mid Valley Megamall and the Gardens with a combined NLA of 2.5 million sq ft and 1 Utama Shopping Centre in Petaling Jaya at 1.85 million sq ft.

Its smaller rivals are One Borneo in Kota Kinabalu with a NLA of 1.5 million sq ft and Pavilion Kuala Lumpur at 1.37 million sq ft. Suria KLCC together with its upcoming space will have some 1.18 million sq ft of NLA.

Apart from Sunway Pyramid, SunCity also manages Sunway Carnival in Seberang Prai, Penang and Sunway Giza in Kota Damansara, Selangor.

Saturday, February 20, 2010

Post-CNY rally on Bursa expected

Stock market dealers are expecting a post-Chinese New Year rally on Bursa Malaysia next week with the return of investors from their long holiday.


However, they are also aware that investors would remain cautious after Europe's debt crisis which could impact the global economic recovery and the US Federal Reserve's move to raise the discount rate.


This week, the FTSE Bursa Malaysia Kuala Lumpur Composite Index gained 4.28 points to 1,257.67 from 1,253.39 previously.


"The index is likely to rally further to correct its battered down oversold situation in the near term. We expect 1,280 to 1,300 as the cap for the current rally with double top in progress," said MIMB Investment Bank in its research note.


Prudential Fund Management said in its research report that worries over sovereign default risk and aggressive central banks' policy tightening had dented market sentiment in recent weeks.

"Until a clearer picture emerges on this fronts, volatility looks set to remain a feature of equity markets," it added.

On a weekly basis, the Finance Index rose 55.9 points to 11,001.94, the Plantation Index surged 72.61 points to 6,277.11 and the Industrial Index increased 12.94 points to 2,601.01.

The FBM Emas Index went up 17.54 points to 8,453.87, the FBM Top 100 rose 18.79 points to 8,229.02 while the FBM ACE Index eased 1.69 points to 4,327.28.

This week also saw Homeritz making a debut on the Main Market with 3.5 sen premium over its offer price of 65 sen. The Johor-based upholstered home furniture manufacturer closed at 65.5 sen with 726,704 lots changed hands.

The weekly Bursa Malaysia turnover dropped to 1.767 billion shares valued at RM3.175 billion from 3.365 billion shares valued at RM5.685 billion previously as the bourse was closed on Monday and Tuesday for Chinese New Year celebrations.

Volume on the Main Market decreased to 1.475 billion worth RM3.103 billion from 2.875 billion shares valued at RM5.579 billion.

Call warrants declined to 94.302 million units valued at RM13.626 million from 153.079 million units valued at RM26.959 million.

The ACE Market volume fell to 178.72 million shares worth RM46.585 million from 226.190 million shares valued at RM48.175 million. -- Bernama

Friday, February 19, 2010

Genting Singapore FY09 net loss S$277.56m for FY09

KUALA LUMPUR: Genting Singapore plc posted net losses of S$277.56 million in the financial year ended Dec 31, 2009 versus S$124.80 million a year ago due to losses in derivative financial instruments, higher pre-operating expenses and lower contribution from the UK casino operations.

It told the Singapore Exchange on Friday, Feb 19 that consolidated revenue was S$491.2 million in FY09 compared to S$630.7 million in 2008. The reduction is mainly due to a decrease of S$141.8 million in revenue from the group’s UK casino operations.

It added revenue from the UK casino operations were depressed by lower business volume and lower win due to poor luck factor as compared to previous year. The reduction was further exacerbated by the weakening of the sterling pound against the Singapore dollar.

Group loss before taxation increased from S$148.5 million in the previous financial year to S$265.7 million in the current financial year.

The factors were:

a) Fair value loss on derivative financial instruments in the current financial year of S$108.3 million arising mainly from the valuation of the conversion option embedded in the group’s convertible bonds as compared to a fair value gain of S$37.2 million recognised in 2008;

b) Increase in pre-operating expenses incurred for the integrated resort in Singapore of S$103.4 million. The higher pre-operating costs is mainly in relation to staff costs incurred as the integrated resort begins to accelerate its recruitment, training, sales and marketing programs prior to its launch;

c) Lower interest income of S$3.8 million for the current financial year compared against S$13.2 million in 2008;

d) Share of losses from jointly controlled entities of S$8.9 million;

e) The estimated one-third share of after tax profits of the international betting division, which was disposed by the Group in 2007. The group had on March 22, 2007 completed the disposal of its 50% interest in international betting operations for a cash consideration of S$3.3 million (£1.0 million).

Fajarbaru Builder Group





STANDARD & Poor's Equity Research (S&P) upgraded Fajarbaru Builder Group (FBG) (7041) to a "buy" from "hold", citing the builder as a strong contender to win jobs in the upgrading of the low-cost carrier terminal (LCCT).


"We expect FBG's bid for parts of the new LCCT project, including the terminal building (third package) and on-going tenders for about RM300 million worth of local jobs, to provide potential earnings upside," it said in a report on February 10.

It believes FBG is a strong contender for the new LCCT given the group's involvement in the upgrade and extension works for the existing LCCT.

Despite the promising prospects, it lowered its 12-month target price for the group to RM1.30 from RM1.40 before, given its recent share price weakness. It closed at RM1.13 yesterday.
The stock is now trading on a projected price-earnings ratio of 8.2 times for the current fiscal year and 6.7 times for the next year, which in S&P's view is undemanding.

It believes FBG's "decent" dividend yield of 5.6 per cent in the current year should provide support to its share price.

The group's outstanding orderbook of RM370 million is expected to last it until 2012. Its healthy balance sheet of RM134.7 million net cash as at end-2009 will place it in a good position to secure larger projects and diversify into property development, S&P said.

Thursday, February 18, 2010

DiGi to spend RM350m on broadband expansion

BARCELONA: The country's third largest mobile operator DiGi.Com Bhd (6947) will spend at least RM350 million to expand its mobile broadband coverage, said its chief executive officer Johan Dennelind.

The company, which launched its mobile broadband services in April last year, has invested about RM400 million to expand its high-speed wireless Internet network.



So far, 29 per cent of the population have access to its third-generation (3G) and mobile broadband services. It wants to cover more than 60 per cent in five years.


"More than half of the RM700 million capital expenditure this year will go to mobile broadband," Dennelind told Business Times in Barcelona on Tuesday.


In 2009, 500,000 of its customers were actively using 3G services, including small screen users like those on BlackBerry and other smart phones, as well as big screen users, like those who surf the Internet on laptops using the USB (universal serial bus) dongle DiGi provides.
From the 500,000 3G users, about 10 per cent are big screen users. Analysts expect the firm to at least triple its big screen customer base this year. Dennelind, however, did not want to speculate on how big its subscriber base will be by year-end.


"Overall, we are satisfied with our mobile broadband push. In areas we are in, we are getting our fair share of the market or more," he said.

Friday, February 12, 2010

12 Feb 2010 FAJAR & FAJAR-WA CHART - seem like can break resistant



1H10 net profit of RM10.5m was at 33% and 43% of our forecast and
consensus, respectively.

It was up by 56% despite of lower revenue .
The stellar results were mainly due to lower operating cost and higher
project margin. Net margin doubled up to 13% despite of lower revenue
recognised during the period. The project in hand estimated around
RM370m to contribute to Fajarbaru’s topline for at least another one year.


YoY, 2Q10 net profit was up 49% on the back of lower revenue.

The
significant jump was mainly due to lower cost of sales and lucrative margin
secured for the ongoing projects namely, Electrified Double Track Railway
and Tampin Hospital. Furthermore, Fajarbaru’s EBITDA margin has also
improved by 7% due to stabilising building material cost. The net cash
position has also improved from 82 sen to 92 sen per share with zero bank
borrowings.


QoQ, ongoing project on track and net margin improves.

Despite of
being a small-cap contractor, it has continuously reported relatively strong
net margin around 11% to 15% for the past 3 quarters. For the quarter, the
company had reported 16% net margin which lead to 39% higher net profit
despite of flattish revenue .


Still bidding for LCCT building contract.

It was not a surprise that
Fajarbaru lost the two previous bids for the earthworks and runway
contracts for the new LCCT as the company is not going to sacrifice
margin for expertise. The tender for LCCT’s building (estimated to be worth
RM1b) is still ongoing and we believe it has very good chance in winning
the contract given its impeccable previous track record in building and
extending the existing LCCT.


Other government contracts in the offing.

Arising from the previous
stimulus package announced last year, more contracts are expected to be announced and given the size of the contracts between RM80m to
RM200m and the expertise required, mid-size contractors with strong
balance sheet are in a sweet spot to secure contracts.


Maintain BUY on lower tar get price RM1.61 (previously RM1.73) based

on 10x PER FY10.

We trimmed down our FY10 and FY11 net profit by 7%

and 4%, respectively, as we delay the assumption on securing of
contracts . Fajarbaru announced a second single tier dividend of 2sen per
share (cumulatively 6sen) which is higher than our expectations of 4 sen.
(Source : KENANGA RESEARCH)
http://www.fb.com.my/images/Kg_100210.pdf



FAJAR SHARE BUY BACK

Date of buy back from
:
05/02/2010
Date of buy back to
:
10/02/2010
Currency
:
Malaysian Ringgit (MYR)
Total number of shares purchased (units)
:
1,170,300
Minimum price paid for each share purchased ($$)
:
1.040
Maximum price paid for each share purchased ($$)
:
1.120
Total amount paid for shares purchased ($$)
:
1,286,382.07
The name of the stock exchange through which the shares were purchased
:
Bursa Malaysia Securities Berhad
Number of shares purchased retained in treasury (units)
:
1,170,300
Total number of shares retained in treasury (units)
:
3,891,270
Number of shares purchased which were cancelled (units)
:
0
Total issued capital as diminished
:

Date lodged with registrar of companies
:
12/02/2010
Lodged by
:
PCA Advisory Sdn. Bhd.






Thursday, February 11, 2010

FBMKLCI - FINANCE - LIVING ... WELCOME!: Fajarbaru wins contract

FBMKLCI - FINANCE - LIVING ... WELCOME!: Fajarbaru wins contract

Fajarbaru wins contract




FAJARBARU Builder Group Bhd said in filing to Bursa Malaysia yesterday that it had won a RM69.89 million contract from Blue Archipelago Bhd.
The one-year contract is for the earth, civil and infrastructure works for the first phase of an integrated tiger prawn farm in Setiu, Terengganu.

1. INTRODUCTION

The Board of Directors of Fajarbaru Builder Group Bhd ("FBG" or "the Company") wishes to announce that a wholly owned subsidiary of the Company, Fajarbaru Builder Sdn. Bhd. (Company No. 27198-T)(“FBSB”) has on 10 February 2010 received the Letter of Acceptance dated 9 February 2010 from Blue Archipelago Berhad in respect of the tender on “Package BA/WP3 Earth Works, Civil and Infrastructure Works for Cadangan Fasa 1 Ladang Akuakultur Ternakan Udang Bersepadu Di Mukim Chaluk, Daerah Setiu, Terengganu Darul Iman” (“the Project”).


2. CONTRACT VALUE

The total contract value for the Project is RM69,888,643.28 (Ringgit Malaysia Sixty Nine Million Eight Hundred Eighty Eight Thousand Six Hundred Forty Three and Cents Twenty Eight) only.


3. CONTRACT PERIOD

The Commencement Date of the works is 22/02/2010 and the Contract Period is 12 (twelve) months.


4. FINANCIAL EFFECT

The Contract will have no material effect on the share capital of FBG.

Barring unforeseen circumstances, the Contract is expected to contribute positively to the earnings and net assets of FBG group for the financial year ending 30 June 2010 and 30 June 2011.



Wednesday, February 10, 2010

Gadang proposes rights issue


KUALA LUMPUR: GADANG HOLDINGS BHD [] has proposed a rights issue, involving two rights shares for every three held and one warrant for every four rights shares held. It said on Wednesday, Feb 10 the corporate exercise would entail the issuance of up to 78.67 million rights shares on the basis of two rights shares for every three shares held with up to 19.67 million warrants.

Gadang said the actual number of rights shares and warrants to be issued would be decided at the entitlement date based on the issued and paid-up capital of RM118.01 million comprising of 118.01 million shares.

"The board intends to raise minimum proceeds of RM25 million from the proposed rights issue to meet the working capital requirements of the group," it said.
It added the indicative issue price of RM1 per rights share will be payable in two calls.

The indicative first call price of 65 sen per rights share will be payable in full on application in cash. The indicative second call of 35 sen per rights share will be capitalised from the company’s share premium and retained profits accounts.


"The subscribing shareholders of Gadang will not be required to make any further cash payment after the payment for the first call," it said.

Tuesday, February 9, 2010

Goldman Sachs arranging funds for KNM takeover


KNM Group Bhd (7164), an oil and gas services provider, says Goldman Sachs (Singapore) Pte Ltd will be arranging debt and equity financing for its founder's RM3.6 billion takeover bid.




Bluefire Capital Group Ltd, a company controlled by KNM founder and managing director Lee Swee Eng, said last week that it wanted to work with two other firms in buying KNM's entire business for 90 sen a share.

Lee owns 24 per cent of KNM.
Its international adviser for the deal is Goldman Sachs, it told Bursa Malaysia last Thursday, providing little other information. The stock exchange later asked it to furnish more details on the buyout.

Bursa Malaysia wanted to know, among other things, how Bluefire planned to finance the deal as well as more information on the two firms Bluefire would be working with, namely GS Capital Partners VI Fund LP and Mettiz Capital Ltd.
KNM, in a reply late yesterday, said it had engaged Goldman Sachs as its adviser, arranger and manager for equity and debt financing on the deal.

"Goldman Sachs is prepared to arrange such financing, subject to satisfactory due diligence and agreeing terms," it said.
GS Capital Partners, a US$20.3 billion (RM70 billion) private equity fund of the Goldman Sachs Group Inc, and Mettiz Capital are potential providers of equity finance, it added.

It did not provide information on Mettiz Capital. On why Bluefire was making the takeover offer, KNM said it was because the company, which makes processing equipment for the oil and gas, petrochemical and mineral industries, would require more money and would have to gear up further to finance its restructuring and improve its position in the market.

As such, Bluefire intended to tap the funding resources and financial strengths of its equity partners.
Bluefire Capital, which currently has no equity interest in KNM, has yet to say if it intends to keep KNM listed, it added.

Analysts deemed the offer price of 90 sen "fair", but had been concerned as to how Lee would finance the deal given that he had previously made the same move before, only to be frustrated by the lack of available funds.

"We suspect he may be taking this opportunity to buy back the business at an attractive price, especially with the expected depressed performance in the coming quarters, with the possibility of selling it to other potential buyers at a higher price in future," OSK Research said in a note to clients last week.

Monday, February 8, 2010

WCT's 50% owned CWCT gets RM467m Bahrain job

KUALA LUMPUR: WCT BHD []'s 50% owned Cebarco-WCT W.L.L. (CWCT) has received a contract from MAF Investments Bahrain BSC for the Bahrain City Centre in Manama and the final value is RM467 million compared with the initial value of RM246 million.

WCT said on Monday, Feb 8 it had received the duly executed contract dated Feb 4 from MAF and the date of full completion and handover is Dec 16, 2010.

"The contract is expected to contribute positively to the earnings and net assets of the group for the financial year ending Dec 31, 2010," it said.

To recap, WCT had on Aug 23, 2007 announced CWCT had announced the letter of intent issued by MAF was for an initial value of about RM246 million.

The letter was for the works relating to the fit-out phase of the hotels to be constructed under the project. The shell and core works for the hotels were earlier constructed by CWCT under a previous contract.


****************************************************************************************************************************************


FAJAR SHARE BUY BACK

9 FEB 2010
http://announcements.bursamalaysia.com/EDMS/edmsweb.nsf/LsvAllByID/6D226C7C6B86A937482576C50032036A?OpenDocument


8 FEB 2010





7047
Notice of Shares Buy Back - Immediate Announcement

Date of Buy Back : 08/02/2010
Description of Shares Purchased : Ordinary Shares of RM0.50 each
No. of Shares Purchased : 200,000 shares
Minimum Price Paid For Each Share Purchased : RM 1.040
Maximum Price Paid For Each Share Purchased : RM 1.070
Total Consideration Paid : RM 211,685.30
No. of Shares Purchased Retained in Treasury : 200,000 shares
No. of Shares Which Are Proposed To Be Cancelled : 0 shares
Cumulative Net Outstanding Treasury Shares As At To-Date : 2,941,370 shares
Adjusted Issued Capital After Cancellation : 0
Date Lodged With Registrar of Company :
Lodged By :

Remarks:
N/A

Submitted By:
TAN KOK AUN / WONG WAI YIN

08/02/2010 05:41 PM

Sunday, February 7, 2010

Reduce the effects of emotion and negative psychology

So how can you reduce the effects of emotion and negative psychology?

Discipline.......

Many investors will spend more time researching and analysing alternatives before spending $100 on an item of clothing than they do entering a trade which might cost them $1000. Be sure, that before you make a trade you are aware of all the parameters which could potentially cause you to suffer emotional pain. A sample checklist may comprise of:


Understand your maximum loss
- know what the maximum amount of money you want to put at risk on the trade. If need be, set a stop loss. Knowing the amount of maximum risk will remove any second thoughts you might have at the last minute. We have all heard the "should I sell, yes....... no .......yes" scenario. Don't let this be you.


Understand it's OK to take a loss - no investor will make correct decisions every single time. You need to understand that it's perfectly acceptable to take a loss on a trade. The crucial aspect is managing the loss. Remember the old saying we introduced earlier, "Cut your losses and let your profits run". This is true and you should make a solid effort to adhere to it.


Don't become emotionally attached to your trades - there is no point falling in love with your trades. The market does not love you, so you should not return the favour. When you become emotionally attached, you will start to make decisions with your emotions rather than with your head. Emotion in trading is dangerous. Don't become emotionally attached.


Take adequate position sizes - don't take large positions if you can't live with them. A large position size is great when it goes up, but you should never forget the opposite effect when position goes down. You should always take position sizes which enable you to get a good night's sleep. As the saying goes "Don't bet the farm."


Be in total control - there is no point contemplating serious trading/investing if you are not in total control. You are in control when you have total visibility of your performance, both current and historical. Having information readily available will sharpen you and enable you to make decisions a lot clearer.


The items listed above will enable you to trade/invest in a more secure way, void of emotion and highly effective.


Remember that your psychological mindset is one of the most important ingredients to your success in the market. Be disciplined and you will put yourself ahead of the majority of other traders/investors.


Friday, February 5, 2010

Lee, others in RM3.6b bid for KNM business

KNM Group Bhd (7164) says its founder and other investors have offered to buy all of its business, valuing the process equipment maker at RM3.6 billion.



The group has received a proposal from BlueFire Capital Group Ltd, which is controlled by Lee Swee Eng, to buy all of its business and undertakings for 90 sen per share.


Lee is the group managing director and major shareholder, with 23.4 per cent of KNM as at May 18 last year.

The offer is 20 per cent more than KNM's share price of 75 sen at yesterday's close.

KNM told Bursa Malaysia that BlueFire was working with GS Capital Partners VI Fund LP and Mettiz Capital Ltd and the international adviser was Goldman Sachs (Singapore) Pte Ltd.
GS Capital is a US$20.3 billion (RM69 billion) global investment fund set up by Goldman in 2007.

KNM's board has granted BlueFire a limited exclusivity period up to March 22 to complete due diligence.

KNM said it will engage its legal and financial advisers to assist the company and its board to evaluate and negotiate the definitive terms of any transaction. KNM's current order book stands at RM2.2 billion. It is bidding for contracts valued at RM14 billion.

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KNM Group Bhd rose the most in seven months after a Goldman Sachs Group Inc. private equity fund joined KMN’s founder in a takeover bid that values the Malaysian oil and gas services provider at about $1 billion.


The stock surged 9.3 per cent to 82 sen at 12:16 p.m. local time in Kuala Lumpur, set for the steepest gain since July 15.

GS Capital Partners VI Fund LP and a company controlled by KNM Managing Director Lee Swee Eng offered the equivalent of 90 sen a share, KNM said in a statement yesterday. Mettiz Capital Ltd. is also in the bidding group, it said. Goldman Sachs is advising the bidders on the takeover.

“We believe that the 90 sen offer price is fair to shareholders,” Bernard Ching, an analyst at ECM Libra Investment Bank Bhd, said in a report today. “Our view is to accept the offer should everything come into fruition.”


The offer is 20 per cent more than KNM’s closing price yesterday and values the company at RM3.6 billion, based data compiled by Bloomberg.

Shares of the company, which makes processing equipment for the oil and gas, petrochemical and mineral industries, have risen 93 per cent in the past year, more than twice the 42 per cent gain in the Malaysian benchmark stock index.

BlueFire Capital Group Ltd, the company controlled by Lee that made the bid, has until March 22 to complete due diligence, including the “receipt of firm financing commitments,” the statement said. - Bloomberg


Thursday, February 4, 2010

Why is trading psychology so important?

We are all human beings, this is what makes us all equal. We have emotions which can hinder our control over everything we do in a positive and negative way. Emotions which we all have include, fear, greed, vanity, pride, hope, jealousy, ego and denial. These emotions, if not controlled can impact the way we invest, more importantly the decisions that we make surrounding our investments.

Your aim in the market should be to make as much profit as you can, while minimising the amount of risk you take. Doing this is sometimes easier said than done. We all value money and invest time and effort into each investment decision. What would happen if your investment started to go in the opposite direction to which you originally intended? How would you begin to feel?

Most undisciplined investors would watch as the value of their investment shrinks before their eyes. It's never easy to watch hard earned money disappear! Human emotion can cloud the decision making process at this stage and will commonly hinder the performance of many investors. Emotion persuades the trader to hold onto the position in the hope that it will one day come good, after all, you always hear that stocks go up in the long term. The belief will always remain strong that the position will one day become a winner!

This is an example of Loss Aversion. Humans place more value on a loss than on a gain, by this we simply mean, humans suffer almost twice as much pain losing $1 as they would feel in pleasure gaining $1 (Kahneman and Tversky, 1991). This is what motivates most investors to hold on to losing positions in the hope that the price will eventually recover.

This is clouded judgment which contradicts the old saying "Cut your losses and let your profits run". Preserving capital makes sure you trade another day. Many novice investors do not realise the importance of cutting their losses early rather than letting them get larger and larger. Emotion dictates that if we do not actually sell the position we have not realised the loss! Is this really the case?

Many investors suffer from the wrong psychological mindset for trading/investing. Your psychological mindset will play the most important factor to your success in the market. Understanding the importance of trading psychology and practicing correct trading discipline will ensure you are placed in the top percentile of all investors. You are increasing your chances of success.

It has been argued that humans behave in quite irrational ways, for example:

1. Many investors and traders hold onto positions long after they should have disposed of them as they view paper losses differently from realised losses.

2. Many investors and traders attribute success to skill and losses to bad luck, quite often they rate themselves higher than other investors regardless of whether they are actually better at investing and trading.

3. Many investors and traders too often believe that they know more than they actually do.

Correct discipline will assist to combat the negative effects of psychology on any trader. The best approach to take with the market is that of a robot. It may sound ridiculous but a robot has no emotion and does not suffer from those "whispers" in the head which seem to plague many investors.

Dutaland turns around to post 2Q profit

KUALA LUMPUR: DUTALAND BHD [] managed to turn around to register a net profit of RM598,000 for the second quarter ended Dec 31, 2009 (2QFY10) versus a net loss of RM12.77 million a year earlier, thanks to a higher profit contributed by the property division and PLANTATION [] division of RM3.8 million and RM2.8 million, respectively.

Dutaland said today the stronger profit was also due to higher forex gain of RM1.7 million and lower impairment loss on investments of RM1.8 million.

It posted a net loss of RM4.80 million on a revenue of RM12.48 million in 1QFY10.

2QFY10 revenue rose 7% to RM18.24 million from RM17.05 million a year earlier, while basic earnings per share (EPS) stood at 0.1 sen versus basic loss per share of 2.26 sen previously.

For the six months ended Dec 31, 2009, the company posted a net loss of RM4.20 million versus a net loss of RM16.60 million a year earlier.

Petra Perdana reports RM25.5mil owing to unit

PETALING JAYA: Petra Perdana Bhd told the exchange yesterday that consultant Ferrier Hodgson MH has confirmed that its subsidiary Intra Oil Services Bhd is owed RM25.5mil by Asia Marine Pte.

It also said that the company had taken legal action against Shamsul Saad and Asia Marine via a suit filed on Feb 2.

The suit, amongst others, contend that Shamsul has breached his fiduciary duties and obligations owed to IOS as payments have been made prior to the broker’s commission agreement dated March 9, 2009 was signed. Shamsul, together with a group of Petra Perdana shareholders, had requisitioned for the EGM today to initiate boardroom changes.

On the table is a resolution to remove four directors including the oil and gas company’s founder, executive chairman and chief executive officer Tengku Datuk Ibrahim Petra Tengku Indra Petra.

It was reported that the company’s plan to dispose of its stake in former subsidiary offshore marine services provider Petra Energy Bhd and sell three of its vessels, was the main cause for the split in the boardroom.

The board consists of Tengku Ibrahim, executive director Datin Nariza Hajjar Hashim, Ahmad Mohd Sharkan, Wong Fook Heng, Tiong Young Kong and executive director Shamsul Saad.

Tengku Ibrahim is a clear proponent of the deal, Shamsul, together with 10 shareholders who are also part of the company’s senior management, opposes the divestment plan.

Wednesday, February 3, 2010

Vincent Tan said to be selling 33% in U Mobile to STT

PETALING JAYA: U Mobile Sdn Bhd’s major shareholder Tan Sri Vincent Tan is said to have struck a deal to sell a 33% stake in the celco to Singapore Technologies Telemedia Pte Ltd (STT) in a deal that could be worth RM626mil or RM5 a share.

It is learnt that a term sheet was signed this week by Tan’s company, U Television Sdn Bhd, and STT, the parent of Singapore’s second largest telco, StarHub.

Singapore Exchange-listed StarHub is a info-communication company that delivers a full range of information, communications and entertainment services over fixed, cable, mobile and Internet platforms in the republic.

Tan Sri Vincent Tan

It operates a 3G network in additional to GSM and given its expertise and knowhow in the telecoms sector, StarHub is seen as the logical choice to drive U Mobile once the deal is formalised in the next few weeks.

Sources said talks with STT began last September and a due diligence on U Mobile is said to have been completed.

As at September last year, the paid-up share capital of U Mobile was 379.403 million RM1 shares and 33% of that works out to 125.203 million shares.

If the deal is formalised, it would put an end to the search for a strategic investor for U Mobile that had last September witnessed the departure of two strategic foreign investors, Japan’s NTT DoCoMo and South Korea’s KT Freetel.

Since the departure of NTT and KT, Tan has been looking out for a strategic investors with the right expertise and technical knowhow to jumpstart the smallish celco that has about 4% share of the country’s mobile market.

U Mobile is one of four 3G spectrum holders; the others being Maxis Communications Bhd, Celcom Axiata Bhd and DiGi.Com Bhd. It would be interesting to see how STT via StarHub shapes U Mobile in a competitive market which is controlled by established players.

NTT and KT sold their combined 33% stake in U Mobile to U Television for US$200mil (RM680mil) in September, citing differences with management for their exit.

U Television’s acquisition raised its stake in U Mobile to 96.04% from 63.04%.

It was reported then that U Mobile shares were pledged to AmBank as part of a fund raising exercise for Tan to buy out NTT and KT.

Since U Mobile is a loss-making concern, there was a put option arrangement offered by Multi-Purpose Holdings Bhd (MPHB) that acted as a sort of guarantee against any loan default. This option was for 41.63% block in U Mobile at RM280mil which was for 13 months, starting September 2009. In the process, MPHB also bought a 3.96% stake in U Mobile.

If the deal goes as planned, this would be the second attempt by a Singaporean telco to enter Malaysia’s telco market via an equity stake purchase.

A few years ago Singapore Telecommunications tried to buy about 30% in Time dotCom Bhd but the deal could not be concluded as too many parties objected to the entry of a Singapore telco in Malaysia.

Tuesday, February 2, 2010

RM1b construction jobs awarded in January

A total of RM1.05 billion worth of construction contracts have been awarded in January, according to ECM Libra Investment Research.

In its research note, ECM Libra said they included the oil terminal engineering, procurement and construction works valued at RM593.3 million awarded to Singapore-listed PEC Ltd by ATT Tanjung Bin Sdn Bhd and the second package of Low-Cost Carrier Terminal contract worth RM291.1 million to Gadang Holdings Bhd.

Other jobs involved the RM134.2 million contract to Bintai Kinden Corp Bhd by National University of Singapore and the RM35.8 million contract to Hock Seng Lee by Public Works Department, it said.

ECM Libra said the construction sector's mid-term outlook would depend on the 10th Malaysian Plan which would be unveiled in June this year.


"As such, we maintain our neutral stance on the construction sector and advise investors to take profit on news of jobs win," it said.

It said the expected road jobs worth RM68.6 billion to be awarded by the Indian government by June this year would be a positive news for the Malaysian construction companies which had significant exposure in the country.

Among construction companies that were expected to benefit were IJM Corp Bhd, Sunway Holdings Bhd and Mudajaya Group Bhd, it said. - BERNAMA

Monday, February 1, 2010

Bukit Kiara Properties makes foray into Ampang



KUALA LUMPUR: Bukit Kiara Properties Sdn Bhd (BKP) is moving beyond its home turf of Mont’Kiara to develop The Ambangan in the vicinity of Embassy Row in the U-Thant area of Ampang.

The exclusive freehold five-storey condominium project will have only 19 units and will be sited on slightly less than an acre in Persiaran Madge, according to BKP group managing director N. K. Tong.

Each unit will have a built-up area of about 3,000 sq ft. The area is home to several small boutique developments which have sprung up in the last 10 years.

Malaysian, South Korean and Singaporean developers had in the early part of the millennium converged on the U-Thant/Madge area because it was seen as offering an alternative to the Kuala Lumpur City Centre (KLCC) site.

Divided by Jalan Tun Razak, the U-Thant area’s land prices were trailing that of the KLCC area, and because the authorities had a height restriction for the U-Thant area, the financial outlay was also reduced without compromising on exclusivity.

Rental yields in the KLCC area have of late come under pressure, while those in the highly populated Mont’Kiara have dropped since the fall of Lehman Brothers in September 2008.

N. K. Tong is the son of “Condo King” Datuk Alan Tong of the Sunrise-Mont’Kiara fame.

It was Alan Tong who saw the potential of what was then known as Segambut and renamed it Mont’Kiara. That location turned out to be a hit. When Alan Tong subsequently left Sunrise, his son set up BKP in 2000 but remained on what was then his father’s home turf. BKP has three projects, all at Mont’Kiara.

It is currently selling Verve Suites, a four-tower development, of which two towers have been fully sold, while 85% of the third tower has been sold. The fourth tower will be launched in the second half of the year.

N.K. Tong’s foray into Ampang is significant in more ways than one. Sunrise Bhd, one of the first developers in Mont’Kiara, is also beginning to go beyond the area into the city centre and Bukit Jelutong, with a new strategy to offer multiple products in multiple locations.

leecheng@thestar.com.my

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