Tuesday, August 24, 2010

24-8-10 INGRESS

Friday, August 20, 2010

Kwong Hing buys Menara Pan Global

Property developer and manager Kwong Hing Group has bought Menara Pan Global, located within the Golden Triangle, for an estimated RM160 million from PanGlobal Bhd, sources say.

Menara Pan Global, a 38-storey building in Jalan Puncak, off Jalan P. Ramlee, houses 18 levels of office space with a total built-up of 400,000 sq ft.

The 18-year-old building also houses nine levels of hotel suites operated by Pacific Regency, while another eight levels have a total of 420 parking bays.

A source told Business Times that Kwong Hing paid a deposit for the purchase last week.

The group, whose prized assets includes Wisma Hamzah Kwong Hing in Lebuh Ampang, now has assets valued at RM600 million.An official from Kwong Hing declined to comment when contacted.

It is understood that Kwong Hing may invest further to upgrade both the office space and suites to better compete with offices in the Golden Triangle.

The office lots are said to have 70 per cent tenancy.

Similarly, Kwong Hing will do some work on the 153-suite Pacific Regency, famous for its rooftop Luna bar, to improve its average room rate.

This purchase will see the group venturing for the first time into the hospitality sector.

A source said that the management team and the staff of Pacific Regency will be maintained where possible.

However, the name of the building could change.

It is understood that the sale forms part of PanGlobal's restructuring exercise. The company was delisted from Bursa Malaysia in July last year.

The Kwong Hing group's properties include Wisma KH in Jalan Sultan Ismail, Plaza Pengkalan in Jalan Ipoh and Wisma Fui Chui in Jalan Cheng Lok.

It also owns shopping centres along Jalan Tuanku Abdul Rahman and Jalan Petaling and Bangunan HSBC in Medan Tuanku.


Thursday, August 19, 2010

19 Aug FBMKLCI

Wednesday, August 18, 2010

Malaysia economic growth to stay strong







The Malaysian economy, which enjoyed a spectacular performance in the first three months of 2010, is expected to ease in the second quarter.


Economists polled by Business Times forecast the economy to grow 7.93 per cent year on year in the second quarter, from 10.1 per cent in the first.

They also project full-year growth to average 6.83 per cent before slipping to 5.47 per cent next year.

Bank Negara Malaysia will announce the latest data today.

DBS Bank economist Irvin Seah said that although a moderation of gross domestic product (GDP) growth was expected - as the low base effect dissipates and external demand momentum slows - it would still be "a considerably strong pace of growth", with domestic demand as the key driver.


Private consumption growth may edge slightly higher to 5.3 per cent on the back of a brighter employment outlook.

Seah expects capital investment to bounce back after a sharp inventory destocking of about RM2.4 billion in the previous quarter.

"We could possibly see investment growth of about 7 per cent (from 5.4 per cent previously) as companies expand their production capacity along with this recovery," he said.

Seah, however, warned that strong domestic demand also implies that import growth will likely outpace the rise in exports and, thus, some drag can be expected from overall net exports.

US investment bank Citi attributed the slowing pace in the second quarter mainly to the services and agriculture sectors.

Within services, growth in electricity production, transport and storage, and tourism has moderated. The weakness in the rubber, crude palm oil and crude oil production sectors has dragged down agriculture and mining output.

Economist Kit Wei Zhang said that financial services saw faster household and business loan growth during the second quarter.

Manufacturing growth edged up to 15.6 per cent as both export- and domestic-oriented industries recovered.

"But with production running ahead of exports in recent months, the resulting increase in inventories signals a likely moderation in manufacturing output in coming quarters," Kit said.

He said that construction has also picked up, led by projects under the stimulus packages announced by the government. There was also renewed pick-up in housing construction.

Kit said the narrowing of trade surplus may be partly offset by resilient domestic demand.

"Decline in sales tax has eased significantly, while consumption credit accelerated, although motor vehicle sales moderated slightly.

Economists polled expect GDP growth to ease in the second half of the year to about 5.08 per cent from an average of 9.07 per cent in the first half, due partially to weaker external demand.

Seah said that while manufacturing would once again lead the other key sectors in terms of growth, its pace was slowing.

With the uncertainties surrounding US recovery and the euro zone, and Asia facing slower growth, the pace of expansion in manufacturing would continue to moderate in the quarters ahead, he added.

Kit sees inflation at benign levels.

"With both output and inflation gap near neutral levels, a more subdued external outlook, and renewed easing by the (US) Federal Reserve (Fed), we maintain our view that Bank Negara Malaysia will stand pat till end-2010 and early 2011," he said.

Kenanga Investment Bank economist Wan Suhaimie Saidi said the slowing pace in the second half of the year was already evident as intra-regional trade showed signs of slowing on weaker export demand.

Tuesday, August 17, 2010

IJM or Gamuda may join FBMKLCI: OSK


Construction companies IJM Corp or Gamuda Bhd could replace power and gaming firm Tanjong Plc in Kuala Lumpur’s benchmark FTSE Bursa Malaysia KLCI (FBMKLCI) index at its next review, OSK Research Sdn Bhd said in a report today.

Billionaire Tan Sri T. Ananda Krishnan has offered to privatize Tanjong, so the stock could be dropped from the index at its next review, OSK said.

Berjaya Sports Toto Bhd, another gaming company, is currently the 37th biggest listed Malaysian firm by market capitalization and therefore also risks being dropped from the 30-member index, OSK said.

IJM and Gamuda are on the index’s reserve list so are potential replacements, it said. - Bloomberg


Read more: IJM or Gamuda may join FBMKLCI: OSK http://www.btimes.com.my/Current_News/BTIMES/articles/20100817091244/Article/index_html#ixzz0wvTnp3wP

Monday, August 16, 2010

MAS reports RM534.7m loss for Q2

Malaysian Airline System Bhd, the country’s largest carrier, slumped to a second-quarter loss after betting wrongly on the price of jet fuel.

The net loss totaled RM534.7 million (US$168 million), or 16 sen per share, in the three months ended June 30, compared with a net income of RM874.9 million, or 42.61 sen, a year ago, the national airline said in an exchange filing today. The flag carrier also said it agreed with Airbus SAS for compensation for delays in delivering the super-jumbo planes.

Malaysian Air had paper losses of RM217.2 million on derivatives trading in the second quarter, chief executive officer Tengku Azmil Zahruddin told reporters in Kuala Lumpur today. That masked an increase in passenger numbers, which has prompted the airline to order three turboprop aircraft for its low-fare unit.

“The volatility of the fuel price remains a key challenge for the industry,” Tengku Azmil said.


Malaysian Air rose 6.5 per cent to close at RM2.28 in Kuala Lumpur trading ahead of today’s announcement, its biggest gain since May 26. The benchmark index gained 0.8 per cent.

Revenue rose 26 per cent to RM3.2 billion as passenger numbers returned to pre-crisis levels, the airline said.

ATR Order

Malaysia Air will target an operating profit of between RM100 million and RM523 million this financial year, the company said in the statement. The global airline industry is expected to post its first profit in three years in 2010 after the worst recession in more than six decades hurt travel last year, according to the International Air Transport Association.

The Southeast Asian carrier’s first-quarter net income was boosted by RM329 million in compensation from Airbus SAS for delays in delivering six A380 super-jumbo planes.

Malaysian Air has agreed additional compensation for a further delay, Tengku Azmil said in today’s statement, without disclosing any figure. The first A380 is now expected to arrive in April 2012, it said.

The company also firmed up orders for three additional Avions de Transport Regional aircraft for Firefly, its budget carrier. These planes will be delivered around the end of this year bringing Firefly’s ATR fleet up to 10, Tengku Azmil told reporters, without disclosing a purchase price. -- Bloomberg

Thursday, August 12, 2010

Gadang eyes 20pc of RM2b project bids


Gadang Holdings Bhd, a builder and property developer, is aiming to secure 20 per cent of the RM2 billion projects it tendered for, managing director and chief executive officer Tan Sri Kok Onn said today.

Currently, the group's construction and engineering division is actively participating in tenders worth more than RM2 billion, he told reporters after the group's extraordinary general meeting today.

Among the tenders are the proposed Kimanis power plant in Sabah worth US$300 million, the proposed 1,000-megawatt Manjung power plant and the Pahang-Selangor water transfer project.

The proposed Kimanis power plant project is expected to be awarded before end of this year, Kok said, adding that it will be a joint venture project with a China party.


Currently, he said, the division has ongoing contracts amounting to about RM930 million and the balance of contract works to date is RM470 million.

Among the projects are the proposed construction and completion of the Hospital Rehabilitasi Cheras (Baru) project worth RM342 million and earthworks package for the proposed development of new Low-Cost Carrier Terminal at Kuala Lumpur International Airport, Sepang, worth RM292 million.

Gadang will continue to bid for government and private finance initiative (PFI) projects, Kok said, adding that the construction and engineering division will continue to be the major revenue driver.

Currently, the division was contributing 69 per cent to the group's revenue, he said.

On the company's property division, Kok said Gadang Land Sdn Bhd planned to launch three projects by the end of this year with a gross development value of RM200 million.

The projects are located in Salak South in Kuala Lumpur, Tampoi in Johor Baru and Pokok Sena in Kedah, he said, adding that the company was also looking to launch RM110 million worth of property projects over next year.

On the proposed joint venture in Vietnam's Long An Province to undertake a waterworks project with 300,000 cubic metres of water a day, Kok said this was still at the feasibility stage.

In November 2008, Gadang's unit Green Water Investment Pte Ltd signed a memorandum of understanding with the Long An People's Committee for the proposed project.

The delay was due to the change in the local government there, he said.

On the plantation division, Kok said Gadang was also looking to expand its new business segment in Sabah via joint ventures with landowners.

The division was in negotiations with landowners for another 10,000 acres land for oil palm plantation development on a joint venture basis and was also looking to acquire land or engage in joint ventures, he said.

Currently, Gadang is developing two parcels of land, totalling 5,181 acres in Ranau, Sabah, into an oil palm plantation.

Total investment for the development will be more than RM30 million for next three years, Kok said, adding that the unit was expected to start contributing five to 10 per cent to the group''s revenue in the financial year ending May 31, 2013.

The entire area is forecast to generate a yearly turnover of about RM20 million upon full maturity.

At the extraordinary general meeting, Gadang obtained shareholders' approval for the proposed rights issue, involving two rights shares for every three held and one warrant for every four rights shares held.

Gadang expects to raise at least RM25 million from the exercise which will be used for working capital as well as reposition the group for the next level of growth. -- Bernama

Tuesday, August 10, 2010

Rehda: Residential property prices on the rise

Prices of residential properties will rise 10-20 per cent over the next six months because of cost and inflationary pressures, says Real Estate and Housing Developers' Association Malaysia (Rehda) president Datuk Michael K.C. Yam.

"The current housing market is simmering. There is no boom or bust, but property prices will rise. The increase will be in high-rise and landed properties in all price categories across Malaysia," Yam said at a half-year property market briefing in Kuala Lumpur yesterday.

He said it was still a good time to buy property as the market was heading upwards, noting also the liquid banking sector and improvement in credit facilities for construction players.

According to Yam, developers are planning more launches in the second half and each project will comprise more than 150 units.


He also said that there was pent-up demand for semi-detached houses, bungalows and terraced houses priced more than RM800,000 each, especially in the Klang Valley and Penang.

"There are a lot of upgraders who want to move from a terraced house to a semi-D or bungalow because of security and to live in a green environment."

Yam said that key challenges for the sector would be higher interest rates, implementation of the Goods and Services Tax and removal of subsidies that would affect the lower-income group.

"We need government support and accommodative policies to ensure the market is simmering. The government should also be more firm in their policies to attract foreigners to buy properties here.

Sunday, August 8, 2010

Wah Seong unit buys into Petro-Pipe


KUALA LUMPUR: Wah Seong Corp Bhd said yesterday its indirect wholly-owned subsidiary Asiana Emas Sdn Bhd has signed a share sale agreement with Detik Gaya Sdn Bhd to acquire 20% of Petro-Pipe (Sabah) Sdn Bhd for RM10.5mil cash.

This would not have any effect on the share capital and shareholdings of the substantial shareholders and would not have any significant impact on the gearing, earnings and net assets of the Wah Seong group, it said in a statement. — Bernama

Friday, August 6, 2010

Malaysia O&G firms may win RM15b jobs

Malaysia's oil and gas service providers are expected to secure at least RM10 billion-RM15 billion worth of jobs in the next 18 months, said ECMLibra Investment Research.

It said the oil and gas service industry looked promising and vibrant given the line-up of jobs ahead which were expected to be completed between 2013 and 2015.

"The jobs are related to enhanced oil recovery projects, deepwater, onshore downstream and also marginal fields.

"Petronas has already clearly indicated that it was time to step up investments at home given the declining local production and we believe redevelopment projects like Tapis will be the first to go ahead," ECMLibra said in its research note today.


The research house added that the Tapis would likely take off soon followed by deepwater projects and then the front-end engineering and design jobs..

"That said, we believe the major fabrication jobs for the central processing platform, topsides, jackets, well head replacement and pipeline replacement will be out as well soon after," said the research house.

The projects are valued in excess of US$1 billion and Malaysian Marine and Heavy Engineering Holdings (MMHE) Bhd, Kencana and Sime Engineering should be in the running as fabricators," it added.

Similar to Tapis, SapuraCrest could be bidding for installation works and Wah Seong could pitch for coating jobs.

Petra Perdana could also see respite from these fields given their new fleet of deepwater capable vessels.

"With the line-up of jobs ahead, we see 2011 as vibrant for the industry. We maintain our overweight stance on the sector with top picks as SapuraCrest, Wah Seong and Dayang," said ECMLibra.

It added the upcoming listing of MMHE could also be the catalyst for announcement of new jobs in the industry. -- Bernama

Tuesday, August 3, 2010

Property stocks gain favour

Investors might also have been persuaded by a new housing withdrawal scheme from the Employees Provident Fund, Penang's plans to sell prime land, and the fact that they have not caught up with the broader market's rise.

A look at the 10 most active stocks yesterday showed that half were property developers like Talam Corp Bhd, Eastern & Oriental Bhd (E&O), Equine Capital Bhd, Malton Bhd and Land & General Bhd.

Stocks of E&O rose 2.5 per cent to RM1.21 yesterday, driven mainly by speculation of a possible privatisation. However, it told Bursa Malaysia that it was not aware of any such plan.

Shares of Malton Bhd, which aims to raise its sales from RM550 million in 2011 to RM800 million in 2013, rose 5 per cent to 52.5 sen.


Analysts are expecting Malton to perform well for the year, which may see the company making its highest net profit since 2003.

"I think this is just a knee-jerk reaction to the EPF scheme. The market has been pretty dead for some time. I think investors are just looking at some (themes) to buy," Kenanga Investment Bank Bhd research head Yeonzon Yeow said.

The Kuala Lumpur Property Index has gained 3.46 per cent to 860.57 points over the past six days, outperfoming the benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index, which has risen 1.3 per cent to 1,363.6 points.

Both indices ended yesterday at their highest this year. Other analysts, however, were less convinced.

"I think it's more of a rotational play rather than being driven by changes in fundamentals, especially if you look at those heavily traded penny property stocks.

"Although property stocks in general have been underperforming the benchmark index in the first half and are still trading at undemanding valuations, the sharp gains seen in some counters over the past two weeks may not be sustainable," ECM Libra Investment Bank Bhd research head Bernard Ching said.

Monday, August 2, 2010

MPHB plan for investors to own Magnum shares

Multi-Purpose Holdings Bhd (MPHB) (3859) may offer its shareholders the opportunity to participate directly in its gaming outfit, Magnum Corp Sdn Bhd, by way of restricted offer for sale (ROS), its chief said.

Managing director Datuk Lau Kim Khoon @ Surin Upatkoon said the plan will allow MPHB's 5,000-odd shareholders to own Magnum shares.

MPHB is looking to relist Magnum on the Main Market of Bursa Malaysia.

Lau said the timing will depend on the exit strategy by CVC Capital Partners, a global private equity firm which holds 47 per cent of Magnum.
He said CVC had indicated that it wanted to make an exit, but no time-frame was given.

MPHB holds a 51 per cent stake in Magnum, which operates 485 gaming outlets nationwide.

"We are ready to list Magnum as we have the cash and track record. The best way to do it is to make a restricted offer to the existing shareholders of MPHB," Lau said in an interview with Business Times in Kuala Lumpur.

The cash-rich MPHB has RM1 billion reserves. Its shareholders' fund is RM2.1 billion.

"It would be a good time to list Magnum as it is now worth over RM6 billion. The enterprise value will be more than that when we list and CVC will be able to make a handsome profit when they exit," he said.

Magnum was taken private in 2008 in a deal worth RM4 billion as CVC wanted to invest in the company.

Gaming is MPHB's main core business, contributing 80 per cent of its revenue.

Lau said MPHB has no plans to take the gaming business overseas as it wants to focus on growth in Malaysia.

"Malaysia alone is a big market for us. We are looking at organic growth now," he said.

Magnum, set up in 1968, is the largest four-digit (4D) gaming operator in the country. It was the first private company to get a licence to promote, operate and manage 4D numbers forecast betting in Malaysia.

Magnum reported revenue of RM3 billion last year.

In the first quarter ended March 31 2010, the gaming business recorded pre-tax profit of RM93.5 million, up 32.23 per cent from the previous corresponding quarter. Revenue was RM919.1 million.

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