IHH Healthcare IPO Update: IHH Healthcare Bhd IPO to offer 2.23 billion shares and set to be listed on 25 July under a dual listing on Bursa Malaysia and Singapore Stock Exchange

Khazanah Nasional Bhd’s IHH Healthcare Bhd is offering 2.23 billion shares under its dual listing on Bursa Malaysia and Singapore Exchange.

IHH is set to be listed on July 25 and will fix the prices for institutional and retail investors on July 12, according to its draft prospectus posted on the Securities Commission’s website

yesterday.

IHH’s initial public offering (IPO) will be Malaysia’s second largest this year after the planned US$3.1 billion (RM9.8 billion) listing of Felda Global Ventures Holdings Bhd and among the top three in Singapore.

Malaysia has become Asia’s top listing destination this year, bucking the IPO trend in other countries.

Singapore, for example, saw motor racing firm Formula One and Manchester United football club either postpone or cancel their multibillion dollar offering due to volatile markets.

IHH will be one of the largest listed private healthcare providers in the world based on market capitalisation upon listing, the draft prospectus noted.

The IPO entails a 1.8 billion public issue by IHH and an offer for sale of 434.65 million shares by major shareholder Khazanah.

Of the combined 2.23 billion shares, 1.39 billion are set aside for cornerstone investors and 498.01 million for local and foreign institutional investors including those approved by the Ministry of International Trade and Industry (Miti).

Under the 498.01 million portion, 360 million shares are meant for Miti investors, while the balance 138.01 million units are for global institutions.

A total of 208.51 million shares are allocated to retail investors and people who have contributed to the IHH group, including company staff and directors and business associates.

Rounding up the 2.23 billion shares, IHH and Khazanah are offering up to 140.64 million shares to retail investors in Singapore.

Khazanah owns 62.1 per cent of IHH.

Other shareholders are Japan's Mitsui & Co Ltd with a 26.6 per cent stake, Dubai-based Abraaj Capital (7.1 per cent) and Acibadem chief Mehmet Ali Aydinlar (4.2 per cent).

Blackrock Inc, Capital Group, Kuwait Investment Authority and Och-Ziff Capital Management Group are among cornerstone investors in IHH, according to the draft prospectus. Others include sovereign wealth fund Government of Singapore Investment Corp, Fullerton Fund Management, AIA Group and Hwang Investment Management.

The cornerstone investors among local funds include the Employees Provident Fund (EPF), Permodalan Nasional Bhd, Lembaga Tabung Haji, Tan Sri Chua Ma Yu's CMY Capital Markets Sdn Bhd, Eastspring Investments Bhd and CIMB-Principal Asset Management Bhd.

The institutional price will be determined by a book-building process that will start on July 4 and end on July 12.

The retail price will be determined after the institutional price is fixed.

IIH said its historical combined net asset (NA) per share before adjusting for the IPO as at March 31 2012 was RM11.54 billion, or RM1.86 per share.

The hospital company also noted that proceeds from the IPO will be partially used to pare down its debts. It did not disclose how much loans will be repaid but said that the move would save some RM120 million in interest payment.

For the year ended December 31 2011 and the three months ended 31 March 2012, IHH had combined revenues of RM3.33 billion and RM1.28 billion respectively.

Its assets include Turkish hospital group Acibadem AS, Singapore's Parkway Holdings, India's Apollo Hospitals Enterprise Ltd, Pantai Hospitals and International Medical University.

Source: www.btimes.com.my

Felda Global Ventures (FGV) stock price rose to as high as RM 5.46 on first day trading

Felda Global Ventures Holdings Bhd. (FGV), the world’s third-biggest oil palm planter, jumped more than 16 percent in its Kuala Lumpur debut, after raising $3.3 billion in the biggest initial public offering since Facebook (FB) Inc.

That was the best first day of all initial public offerings above $500 million globally this year, according to data compiled by Bloomberg. The stock surged to as high as 5.46 ringgit ($1.71), before paring gains to close at 5.30 ringgit.

“Foreign investors haven’t been allocated sufficient shares,” said Alan Richardson, who helps oversee about $87 billion as a money manager at Samsung Asset Management Co. in Singapore. “An over-demand situation is likely.”

Demand from institutions exceeded supply by more than 40 times during the IPO, Felda Chief Executive Officer Sabri Ahmad said in an interview on June 20. The plantations group priced the stock below the top of its indicative range, unlike Facebook which has slumped since its May debut.

State-controlled Felda could have received more than 4.55 ringgit per share from institutions, though decided not to after allocating 90 percent of the available stock to Malaysian subscribers, Sabri said. “We wanted to put something on the table for them to enjoy,” he said.

With a market capitalization of 19.3 billion ringgit, Felda will qualify to join the 30-member FTSE Bursa Malaysia KLCI Index. The benchmark closed 0.5 percent lower today.

Funds that track the gauge would be obliged to buy the shares in the open market if they failed to get allocation during the initial sale.

Resilient Market

“People who didn’t get the shares want to,” said Abdul Jalil Abdul Rasheed, who helps manage $3 billion as chief executive officer of Aberdeen Islamic Asset Management Sdn. in Kuala Lumpur.

Malaysia has withstood a global stocks sell-off brought on by Europe’s debt crisis, which has seen at least $12.3 billion of first-time sales scrapped or delayed globally since the start of this year, according to data compiled by Bloomberg.

The KLCI index touched an intraday record this week, after foreign funds were net buyers of shares for an eighth straight month in May, according to the stock exchange’s website. Felda Global is ranked the equivalent of buy with an average price target of 5.53 ringgit by four brokerages surveyed by Bloomberg, including Public Investment Bank Bhd.

“The food business is quite resilient to recession,” said Sabri in Kuala Lumpur. “As long as China and India keep on buying oils and fats, the demand is there. The debt crisis shouldn’t have a big impact.”

Cornerstone Investors

State funds including Permodalan Nasional Bhd., Lembaga Tabung Haji and the Employees Provident Fund Board were among so-called cornerstone investors for its share sale.

“The strength of the Malaysian IPO market is that you have a lot of domestic liquidity, which ensures that real demand cannot fully be satisfied,” said Samsung Asset’s Richardson.

IHH Healthcare Bhd., Asia’s biggest hospital operator, has similarly signed up local pension funds among its 22 cornerstone investors, for more than 60 percent of its share sale in Kuala Lumpur next month. IHH plans to raise about 6.4 billion ringgit, two people familiar with the matter said June 15.

Felda, which also produces rubber and sugar, reported a 46 percent drop in profit to 192.2 million ringgit for the three months ended March 31. This was partly because of accounting changes after a business structure revamp, Chief Financial Officer Ahmad Tifli Mohd Talha said in a phone interview.

Relative Value

The company remains “quite positive” it can still achieve its full-year profit target this year, Sabri told reporters in Kuala Lumpur today, without providing an earnings forecast.

The Felda shares were priced at 14.2 times estimated full- year earnings, a person familiar with the matter said June 14. This compares with 14.7 times at local rival Sime Darby Bhd. (SIME), the world’s largest palm-oil company by acreage, and 9.9 times at Singapore’s Golden Agri-Resources Ltd., data compiled by Bloomberg show.

Facebook’s 28-year-old founder Mark Zuckerberg persuaded investors to pay about 107 times reported earnings, a higher price-to-earnings multiple than almost every company in the Standard & Poor’s 500 index.

Felda “won’t tank, it won’t be like Facebook,” Lye Thim Loong, who helps manage $500 million at Libra Invest Bhd. in Kuala Lumpur and subscribed for the Malaysian company’s shares, said before the debut. “It’s not as expensive.”

Felda, the largest shareholder of sugar refiner MSM Malaysia Holdings Bhd. (MSM), has 355,864 hectares (879,359 acres) of leased or managed palm and rubber plantations in the Southeast Asian nation.

It also has land in Indonesia, as well as overseas palm oil refining businesses, soybean and canola-crushing operations and a U.S. oleochemicals plant, the prospectus shows.

Global Ambition

“We want to be a global player,” Sabri said. The company intends to use part of its IPO’s proceeds to expand its palm oil upstream operations in Indonesia and venture into Africa. Cambodia and Myanmar are being targeted for rubber and sugar respectively, he said.

The group is part of the Federal Land Development Authority, a government agency formed in 1956 with World Bank funding to help steer the rural poor out of poverty by providing them with land to plant. Key to its creation was Abdul Razak Hussein, Malaysia’s second prime minister and father of current leader Najib Razak.

Najib, who must call elections by early next year, announced windfall one-off payments to plantation workers and their families, known as settlers, amounting to 1.69 billion ringgit on May 8. A trust will be set up to hold 20 percent of Felda shares for planters after the IPO so that they can reap dividends, he said.

“Political patronage will always be high as Felda has over 112,000 settlers who vote in many key rural constituencies,” Khor Yu Leng, an independent agribusiness analyst, said in an e- mail interview.

Source: www.bloomberg.com

Court of Appeal imposed jail term of 12 months and a fine of RM 1.3 million on Datuk Chin Chan Leong for market manipulation involving Fountain View shares, offence took place over a two-month period from November 2003 to January 2004 during which the price of Fountain View shares increased from RM1.99 to RM6.05, raising its market capitalisation from RM885mil to RM2.73bil

The Securities Commission (SC) has won another battle against market manipulators after the Court of Appeal decided in the regulator's favour to increase the punishment meted on former Fountain View Development Bhd director Datuk Chin Chan Leong.

“In a landmark decision, the Court of Appeal imposed a jail term of 12 months, and a fine of RM1.3mil on Datuk Chin Chan Leong for market manipulation involving Fountain View shares,” the SC said in a statement yesterday.

Chin, who pleaded guilty to shares manipulation two years ago, was initially given a one-day jail sentence and RM1.3mil fine for the offence.

“This is the third conviction for market manipulation which the SC has successfully prosecuted,” the regulator said. The other companies were Suremax Group Bhd and Actacorp Holdings Bhd.

The offence took place over a two-month period from November 2003 to January 2004 during which the price of Fountain View shares increased from RM1.99 to RM6.05, raising its market capitalisation from RM885mil to RM2.73bil.

Fountain View was listed on the Main Board of the stock exchange. The company was delisted on Sept 22, 2010 for failing to submit a regularisation plan to the SC or Bursa Malaysia within the prescribed timeframe.

Chin was charged in 2005 but had only pleaded guilty on Feb 5, 2010 to the offence of creating a misleading appearance of active trading in Fountain View shares by indirectly being concerned in transactions for the sale and purchase of those shares, which did not involve any change in beneficial ownership.

Chin was found to be trading with 20 central depository system accounts which he beneficially owned through the companies that he controlled.

The one-day jail sentence was affirmed by the High Court in September 2010 which led to an appeal by the Public Prosecutor .

The Court of Appeal held that the offence under section 84(1) of the Securities Industry Act 1983 was serious with adverse consequences on the stock market and the economy and that the earlier sentence did not reflect the gravity of the offence.

“In deciding to impose a 12-month jail term, the Court of Appeal took into account the fact that the offence committed was pre-planned and well thought out.

“The SC has been proactively pursuing this and other market misconduct cases (such as manipulation, market rigging and insider trading) because such activities severely undermine investor confidence and tarnishes the reputation of the Malaysian capital market,” the SC said, adding that it would continue to be vigilant and take whatever action necessary to protect investors and to maintain a fair and orderly capital market.

Over the years, there had been a number of account mismanagement and share manipulation court cases. Among them were Kenmark Industrial Co (M) Bhd, Granasia Corp Bhd, Kiara Emas Asia Industries Bhd, Idris Hydraulic (M) Bhd, Aokam Perdana Bhd and Ekran Bhd.

In the case of troubled furniture company Kenmark, its Taiwanese managing directors and key management personnel went missing in May 2010. In June 2010, one Datuk Ishak Ismail emerged as a 32% shareholder, but sold all his shares two weeks later. The SC alleged that he had committed insider trading.

In the case of Granasia Corp Bhd, in March 2010, the Kuala Lumpur Sessions Court convicted Chan Kok Suan, the former managing director of Granasia for submitting false statements to the SC, namely the revenue and profit after tax of the company for the year ended Dec 31, 2002.

The information was submitted in connection with Granasia's proposal to list on the main board of the stock exchange.

Chan was convicted under section 32B(4) of the Securities Commission Act and imposed a fine of RM500,000 in default, 10 months imprisonment, according to the SC. He was charged on Feb 9, 2006 and pleaded guilty on March 1, 2010.

According to reports, the prosecution had filed an appeal against the sentence to the High Court.

Source: www.thestar.com.my

KLCC Property Holdings Bhd (KLCCP)'s management to explore possibility of setting up a Real Estate Investment Trust (REIT) or equivalent to optimise shareholder value

KLCC Property Holdings Bhd (KLCCP) is exploring the setting up of a real estate investment trust (REIT) or equivalent to optimise shareholder value.

It said on Thursday it had authorised the management of KLCCP to explore a corporate structure including an appropriate REIT or equivalent.

"It is expected that any proposals arising from this exercise will be subject to the approvals of relevant authorities, the board of KLCCP, and shareholders," it said in a statement to Bursa Malaysia.

Shares of KLCC Property Holdings Bhd (KLCCP) rose to a high of RM4.32 on Thursday after it announced plans to look into the setting up of a real estate investment trust (REIT).

At 2.54pm, KLCCP was up 46 sen to RM4.32 with 1.99 million shares done. Its call warrants KLCCP-CA added 10.5 sen to 30.5 sen with 1.75 million unites done.

The FBM KLCI fell 5.26 points to 1,596.63. Turnover was 885.02 million shares valued at RM1.70bil. Losers beat gainers 413 to 193 while 313 counters were unchanged.

KLCCP announced earlier on Thursday that a REIT or equivalent would optimise shareholder value.

Its BOD authorised the management of KLCCP to explore a corporate structure including an appropriate REIT or equivalent.

"It is expected that any proposals arising from this exercise will be subject to the approvals of relevant authorities, the board of KLCCP, and shareholders," it said in a statement to Bursa Malaysia.

Source: www.thestar.com.my

Top Glove to buy 95% stake in PT Agro Pramata Sejahtera for RM 22 million, which holds 60 year license to operate rubber forest plantation covering 30,000 ha on two islands east of the southern Sumatra city of Palembang (around 20,000ha in Kabupaten Belitung and about 10,000ha in Kabupaten Bangka), acquisition expected to be completed within 15 months time

Analysts have mixed views on Top Glove Corp Bhd's move to acquire greenfield rubber plantation in Indonesia.

On Monday, Top Glove announced that its wholly-owned sub-subsidiary, Best Advance Resources Ltd, would acquire 95% equity or 5,700 shares in PT Agro Pramata Sejahtera for RM22mil.

Agro Pratama holds a 60-year licence to operate a rubber forest plantation covering 30,000ha on two islands east of the southern Sumatra city of Palembang (around 20,000ha in Kabupaten Belitung and about 10,000ha in Kabupaten Bangka).

Top Glove said the proposed acquisition was expected to be completed within 15 months from the date of agreement or any later date as agreed by all parties.

Several research houses including Maybank Investment Bank Research and Affin Research view the acquisition positively.

“We are long-term positive on this latest development as it will reduce the volatility of its key input cost. Top Glove's operating environment remains conducive for now, amid declining latex prices and a strengthening US dollar,” Maybank Investment said.

Affin Research views the acquisition positively, as it is in line with Top Glove's aim of expanding upstream into the rubber plantation business.

“Previously, the company had focused on acquiring land in Cambodia, However, progress has been slow and there have been consistent delays in approvals. Consequently, we believe that management may abort its Cambodia plans, especially since it has been able to acquire land elsewhere.

“That said, the Indonesia land acquisition is a greenfield investment. Taking into account land acquisition (estimated at 15 months), planting and maturity requirements, we do not expect to see any earnings contribution within the next five to seven years,” Affin Research said.

CIMB Research has a contrarian view on this, saying Top Glove could be spending RM400mil, or RM50mil per annum over eight years, to clear land and fully cultivate the estate following its move to acquire Agro Pramata.

“We take a dim view of Top Glove's purchase of a 30,000ha greenfield rubber plantation in Indonesia's southern Sumatra, as the RM400mil that it may spend on developing it over the next eight years could be put to more efficient use to enhance manufacturing and brand equity,” CIMB Research said.

It added that hedging the variability of natural rubber prices, a financial instrument would be more prudent and less capital-intensive.

It said in the best-case scenario, the first planting could start by the second half of 2012, with first fruits by 2019 to 2020.

CIMB Research said the high capital expenditure was expected to be funded internally and the 30,000ha plantation could support a 12 billion-pieces-per-year glove-making facility.

“The acquisition is not a surprise as management has been talking about buying rubber plantation land for some time. Last quarter, it hinted that it may acquire land in Indonesia instead of Cambodia due to procedural difficulties there.

“We are negative on the acquisition as we believe that the capital allocated could be used to enhance Top Glove's manufacturing process and brand instead.

“Also, the rationale for diversifying upstream is to hedge the natural rubber price, which we believe is misguided. A less capital-intensive method would be to use the financial exchanges in Singapore and Japan,” CIMB Research said.

Source: www.thestar.com.my

DRB-Hicom's 32% owned Pos Malaysia on 80:20 joint venture with Bank Muamalat to roll out Islamic Pawn Broking (Pajak Gadai) service on its 700 plus outlets nationwide

Islamic pawn broking, otherwise known as Ar-Rahnu, is a concept not altogether familiar among the masses but that may change when Pos Malaysia Bhd rolls out the service at its 700 plus outlets nationwide.

After hinting two weeks ago that Ar-Rahnu was one of the businesses it would be launching “very soon”, the postal company on Monday took the wrapping off its new financial product.

At a briefing with analysts and the media on June 14, group chief executive officer Datuk Khalid Abdol Rahman had unveiled an aggressive five-year strategic plan that aimed to achieve double digit growth in revenue every year till 2017, significantly improve its current pre-tax margins of 12%, and explore new mergers and acquisitions opportunities.

A key thrust of the plan was to leverage on the group's extensive network of branches scattered across not only the state capitals and major towns, but also in small towns and rural areas.

At the same time, it wants to become a provider of one stop solutions for both physical and digital services.

The firm also stressed that it was trying to reduce its dependency on the core mail business, which made up 62% of its revenue in the 15 months ended March 31, to below 40% by end-2017.

The company reaped RM138.8mil in net profit on revenue of RM1.48bil during that period. It has changed its financial year end to March 31 from December 31 previously.

As it enters the second phase of its transformation, the group is looking to diversify its earnings base, whether through digital avenues, expanding its delivery channels and even providing supply chain management to third party companies.

For its Islamic pawn broking arm, Pos Malaysia will acquire a shelf company known as Pos Ar-Rahnu Sdn Bhd to be used as the operating entity, which is a 80:20 joint venture (JV) between itself and Bank Muamalat Malaysia Bhd.

The two are essentially sister companies courtesy of their common majority shareholder, the Tan Sri Syed Mokhtar Al-Bukhary-controlled DRB-Hicom Bhd, which has a 70% stake in Bank Muamalat and 32.2% in Pos Malaysia.

The JV will have an authorised share capital of RM20mil with the funding to be raised from financial institutions.

This may include Bank Muamalat, but shall be based on “the most favourable terms to the JV company,” Pos Malaysia said in a statement to the stock exchange.

It added that Pos Ar-Rahnu's principle activity would be the safekeeping of precious items, and it would, based on syariah principles, be able to lend money, negotiate loans; draw, accept, indorse and discount bills of exchange, promissory notes or other securities; act as auctioneer or dealers in gold, silver, precious stones, jewellery, coins and medals; and act as commission agents and general merchant.

“The collaboration would enhance the product offering at Pos Malaysia outlets, besides providing an alternative to distribute micro credit convenience to small time entrepreneurs who have difficulty to obtain financing from banks,” it said, adding that the company's existing network throughout the country was a crucial factor that would enable it to lower operating costs, spread the risk and generate higher returns.

Ar-Rahnu, where valuables such as gold or jewellery are offered as collateral for debt, is considered a source of short-term funds more commonly used by the lower income segment and small businesses who, by virtue of their backgrounds, are typically denied access to mainstream financiers.

Under this system, the creditor and borrower agree to a specific loan tenure, and if the latter fails to pay back his due after the stipulated time, the pawned asset is sold off to settle the debt, with any surplus returned to the owner.

In line with the religion's ban on interest, borrowers pay a safekeeping fee instead of a compounding interest, and this fee is based on the value of the asset rather than the loan itself.

It is for this reason that Ar-Rahnu is generally seen as the more cost-effective option for those with limited capital.

“We believe Pos Ar-Rahnu can be a sizeable business as it will leverage on Pos Malaysia's 700 outlets,” OSK Research said in a note to clients.

“This is based on the success of the existing Ar-Rahnu Pawn Broking Scheme currently provided via Agro Bank and Bank Rakyat, which have a much smaller network of 176 and 136 branches respectively nationwide.

“We think the Ar-Rahnu business will boost PosNiaga's earnings since there could be plenty of low-hanging fruits arising from the difficulties faced by small-time entrepreneurs in obtaining financing from banks in rural areas.”

Source: www.thestar.com.my

Puncak Niaga's 70% owned SYABAS suffers acute cash flow problem as a result from non-revision of water tariff rates starting from January 2009

The annual general meeting (AGM) of Puncak Niaga Holdings Bhd turned into a raucous affair as individuals claiming to be minority shareholders of the company carried placards urging the company to seek legal action to reclaim monies owned to it.

Speaking to the media after the three-hour long AGM, executive chairman Tan Sri Rozali Ismail said shareholders had asked Puncak Niaga to take legal action against its 70%-owned subsidiary, Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), to claim an outstanding debt of RM1.09bil.

“All this while, we did not take any action as Syabas is majority owned by Puncak Niaga. But now we will be considering the options that had been suggested by the shareholders,” he said.

He said the matter would be brought up in Puncak Niaga's board meeting next week and would also be discussed with the group's lawyers.

“We respect the request from the minority shareholders who have been hoping to get their dividends, and this should be given consideration and we should take the next course of action,” he added.

Besides still owing an outstanding RM1.09bil to Puncak Niaga, Syabas also owes monies to two other water-treatment operators, namely Syarikat Pengeluar Air Sungai Selangor Sdn Bhd and Konsortium Abass Sdn Bhd.

The debt was accumulated as a result from the non-revision of water tariff rates starting from January 2009, which resulted in Syabas suffering from acute cash-flow problems that affected its ability to make full payment for water purchases from the three water-treatment operators.

Syabas was set up to undertake the privatisation of water-supply services in Selangor, Kuala Lumpur and Putrajaya. However, it is now entangled in a stalemate over the transfer of the state's water assets that has been ongoing since 2008.

Puncak Niaga and Syabas have been part of a tussle between the State and Federal Governments, with the State Government pressing to buy over Syabas in a bid to restructure it, before allowing it to be federalised under the Water Services Industry Act 2006.

To recap, Puncak Niaga owns 70% of Syabas while 15% is held by Kumpulan Darul Ehsan Bhd and the remaining 15% by Kumpulan Perangsang Selangor Bhd. The Federal Government, through the Minister of Finance Inc, holds one golden share in Syabas.

In its annual report, Puncak Niaga said the Government's decision to freeze the Syabas Capital Expenditure programme in July 2008 pending the restructuring in the water services sector in Selangor, Kuala Lumpur and Putrajaya had crippled its plans to refurbish, rehabilitate and enhance water distribution infrastructure.

Rozali said he hoped the deadlock could be resolved as soon as possible by the relevant parties.

“We don't want to repeat the water crisis that happened in 1998. There is always a solution for every problem. We need to talk and make sure that we can achieve a win-win solution. However, this is the difficult part to achieve,” he said.

He also said the company would be presenting a few suggestions to the National Water Services Commission (SPAN) to tackle a water crisis should it happened.

“We should know how to handle this and help consumers if there is a prolonged draught. We will be meeting up with SPAN to discuss ways to solve this issue on a short-term and also a longer-term basis,” he said.

Meanwhile, G. Parameswaran, who was representing the minority shareholders of Puncak Niaga, said should the chairman and board of Puncak Niaga choose to not take any action against Syabas, the minority shareholders would instead sue Syabas to protect their rights.

“For this, we will approach the other minority shareholders of Puncak Niaga and garner their support to requisite the board of Puncak Niaga to convene an EGM to approve the shareholders' resolution to empower Puncak Niaga to sue Syabas for the outstanding amount,” he said in a statement yesterday.

For its financial year ended Dec 31, 2011, Puncak Niaga recorded a net loss of RM83.72mil on revenue of RM2.59bil.

Source: www.thestar.com.my

List and Contact Information Of All StockBrokers in Selangor and Kuala Lumpur

LIST AND CONTACT INFORMATION OF STOCK BROKERS IN SELANGOR AND KUALA LUMPUR

SELANGOR

Name	Broker No.	Address	Contact Information
MALACCA SECURITIES SDN BHD	012	Principal Office No.1, 3 & 5, Jalan PPM9 Plaza Pandan Malim (Business Park) Balai Panjang 75250, Melaka	Tel: +606 337 1533 Fax: +606 337 1550 / 3371577 Email: support@mplusonline.com.my Website: www.mplusonline.com/contact-us/
FA SECURITIES SDN BHD	021	Principal Office A-10-1 and A-10-17 Level 10, Menara UOA Bangsar No 5 Jalan Bangsar Utama 1,Bangsar 59000 Kuala Lumpur.	Tel: +603 2288 1676 Fax: +603 2282 2571 Email: info@fasec.com.my Website: www.fasec.com.my/?cur=page/page&id=5&title=Contact_Us
BIMB SECURITIES SDN BHD (Shariah Compliant Broker)	024	Principal Office 32nd Floor Menara Multi-Purpose Capital Square No. 8, Jalan Munshi Abdullah 50100, Kuala Lumpur.	Tel: +603 2613 1600 Fax: +603 2613 1799 Website: www.bimbsec.com.my/contact
MIDF AMANAH INVESTMENT BANK BHD	026	Principal Office Tingkat 10, 12, 14, 15 & 18, Menara MIDF No. 82, Jalan Raja Chulan 50200, Kuala Lumpur	Tel: +603 2173 8888 Fax: +603 2772 1911 Website: www.midf.com.my/index.php/en/contact-us
UBS SECURTIES MALAYSIA SDN BHD	031	Level 7 Wisma Hong Leong 18, Jalan Perak 50450, Kuala Lumpur Kuala Lumpur	Tel: +603 2781 1100 Fax: +603 2161 7981 Website: https://www.ubs.com/locations.html#malaysia/en/ns/all/
MACQUARIE CAPITAL SECURITIES(MALAYSIA) SDN BHD	032	Principal Office Aras 10, Menara Dion 27 Jalan Sultan Ismail 50250, Kuala Lumpur	Tel: +603 2059 8833 Fax: +603 2381 3082 Website: www.macquarie.com/my/about/office-locations
CLSA SECURITIES MALAYSIA SDN BHD	033	Principal Office Bilik 20-01, Aras 20 Menara Dion2 7 Jalan Sultan Ismail 50250, Kuala Lumpur.	Tel: +603 2056 7888 Fax: +603 20567988 Website: www.clsa.com/global/asia/
J.P. Morgan Securities (Malaysia) Sdn Bhd	035	Principal Office Level 18, Integra Tower The Intermark 348 Jalan Tun Razak 50400, Kuala Lumpur	Tel: +603 2718 0500 Fax: +603 2164 0331 Website: www.jpmorgan.com/country/MY/EN/contact-us
CREDIT SUISSE SECURITIES (MALAYSIA) SDN BHD	036	Principal Office Suite 7.6, Level 7 Menara IMC8 Jalan Sultan Ismail 50250, Kuala Lumpur.	Tel: +603 2723 2020 Fax: +603 2026 9500 Website: www.credit-suisse.com
NOMURA SECURITIES MALAYSIA SDN BHD	037	Principal Office Suite 16.5, Level 16 Menara IMC, Letter Box 47 8, Jalan Sultan Ismail 50250, Kuala Lumpur	Tel: +603 2027 6811 Fax: +603 2027 6836 Website: www.nomuraholdings.com/company/group/asia/office.html
CITIGROUP GLOBAL MARKETS MALAYSIA SDN BHD	038	Principal Office Level 43, Menara Citibank 165 Jalan Ampang 50450, Kuala Lumpur.	Tel: +603 2383 3890 Fax: +603 2383 2825 Website: https://www.citigroup.com/citi/about/countries-and-jurisdictions/malaysia.html
IFAST CAPITAL SDN BHD	039	Principal Office Level 28, Menara AIA Sentral No. 30, Jalan Sultan Ismail Kuala Lumpur Wilayah Persekutuan	Tel: Tel: +603 2149 0660 Fax: Fax: +603 2149 1218 Email: clienthelp.my@fundsupermart.com Website: https://www.fsmone.com.my/
PUBLIC INVESTMENT BANK BHD	051	Principal Office 25th Floor, Menara Public Bank 146 Jalan Ampang 50450, Kuala Lumpur	Tel: +603 2166 9382 Fax: +603 2166 9362 Website: www.publicinvestbank.com/pbswecos/default.asp
KAF EQUITIES SDN BHD	053	Principal Office 11 th - 14 th Floor, Chulan Tower No. 3, Jalan Conlay 50450, Kuala Lumpur Kuala Lumpur	Tel: +603 2171 0228 Fax: +603 2171 0304 Website: www.kaf.com.my/#footer
INTER-PACIFIC SECURITIES SDN BHD	054	Principal Office West Wing, Level 13 Berjaya Times Square No. 1, Jalan Imbi 55100, Kuala Lumpur	Tel: +603 2117 1888 Fax: +603 2144 1686 Email: ipsec@interpac.com.my Website: www.paconline.com.my
M & A SECURITIES SDN BHD	057	Principal Office No. 45-1, 45-2, 45-3, 45-11, 47-1, 47-2, 47-11 and 43-6 The Boulevard, Mid Valley City Lingkaran Syed Putra 59200, Kuala Lumpur	Tel: +603 2282 1820 Fax: +603 2283 1019 Website: www.mnaonline.com.my/contact-us
TA SECURITIES HOLDINGS BHD	058	Principal Office Tingkat 13-15, 23,28-30,32,34 & 35 22, Jalan P Ramlee 50250, Kuala Lumpur	Tel: +603 2072 1277 Fax: +603 2031 6608 Website: www.tasecurities.com.my/contact/directory.html
PM SECURITIES SDN BHD	064	Principal Office 11th Floor, KH Tower No.8, Lorong P.Ramlee  50200, Kuala Lumpur	Tel: +603 2054 8000 Fax: +603 2054 8038 Website: www.pmsecurities.com.my/contact-us/branch-office/
CGS-CIMB SECURITIES SDN BHD (formerly known as Jupiter Securities Sdn Bhd)	065	Principal Office Level G, 1, 2-01, 3 & 6, Tropicana City Office Tower, No. 3, Jalan SS20/27, 47400 Petaling Jaya Selangor Darul Ehsan.	Tel: +603 2635 6666 Fax: +603 7710 0304 Website: www.itradecimb.com.my/index.php?tpl=contactus&tpt=itrade2
HONG LEONG INVESTMENT BANK BERHAD	066	Principal Office Level 27 & 28 Menara Hong Leong no. 6 Jalan Damanlela Bukit Damansara 50490, Kuala Lumpur.	Tel: +603 2083 1800 / 2083 1600 Fax: +603 2083 1990 Website: www.hlebroking.com/v3/contactus.aspx
AFFIN HWANG INVESTMENT BANK BHD	068	Principal Office Tingkat 22, 23, 24, and 27 Floor Menara Boustead 69, Jalan Raja Chulan 50200, Kuala Lumpur.	Tel: +603 2142 3700 Fax: +603 2142 3799 Email: securities@affinhwang.com Website: www.affinhwang.com/contactus/
KENANGA INVESTMENT BANK BHD	073	Principal Office Levels 10, 11 & 12 Kenanga Tower, 237 Jalan Tun Razak 50400, Kuala Lumpur	Tel: +603 2172 2888 Fax: +603 2172 2999 Email: kenanga@kenanga.com.my Website: www.kenanga.com.my/branches/
ALLIANCE INVESTMENT BANK BHD	076	Principal Office Level 17, Menara Multi-Purpose Capital Square 8 Jalan Munshi Abdullah 50100, Kuala Lumpur Kuala Lumpur.	Tel: +603 2604 3333 Fax: +603 2692 8787 Website: www.eallianceshare.com.my/aibbecos/contactus.asp
UOB KAY HIAN SECURITIES (M) SDN BHD	078	Principle Office Ground & 19th Floor Menara Keck Seng 203, Jalan Bukit Bintang 55100, Kuala Lumpur	Tel: +603 2147 1888 Fax: +603 2147 1889 Email: contact@utrade.com.my Website: www.utrade.com.my/public/contact_us
JF APEX SECURITIES BHD	079	Principal Office 3rd, 5th, 6th and 10th Floor Menara Apex Off Jalan Semenyih Bukit Mewah 43000, Kajang Selangor Darul Ehsan	Tel: +603 8736 1118 Fax: +603 8737 4532 Email: apexetrade@jfapex.com.my Website: www.apexetrade.com/en_GB/contact-us
AMINVESTMENT BANK BERHAD	086	Principal Office Tingkat 8-9, 11-18, 21-25 Bangunan AmBank Group 55 Jalan Raja Chulan 50200, Kuala Lumpur.	Tel: +603 2036 2633 Fax: +603 2078 2842 Website: www.amequities.com.my/gcAMShtml/contactus.html
RHB INVESTMENT BANK BHD	087	Principal Office Tingkat 10, Tower One RHB Centre Jalan Tun Razak 50400, Kuala Lumpur Correspondence Address Branch Level 9, Tower Three RHB Centre Jalan Tun Razak 50400, Kuala Lumpur	Tel: +603 9287 3888 Fax: +603 9287 8000 Website: www.rhbinvest.com/page/site/public/english/locate_us.html
MERCURY SECURITIES SDN BHD	093	Principal Office Ground, 1st - 3rd Floor Wisma UMNO Lorong Bagan Luar Dua Seberang Perai 12000, Butterworth Penang	Tel: +604 332 2123 Fax: +604 323 1813 / 331 2195 Email: mercury@mersec.com.my Website: https://www.mercurysecurities.com.my/locations
SJ SECURITIES SDN BHD	096	Principal Office 26, Jalan Pendaftar U1/54 Temasya Glenmarie  40150, Shah Alam Selangor Darul Ehsan	Tel: +603 5567 3000 (general line) Website: www.sjsec.com/en_GB/contact-us
MAYBANK INVESTMENT BANK BERHAD	098	Principal Office Tingkat 27, 31 to 33, Menara Maybank 100 Jalan Tun Perak 50050, Kuala Lumpur	Tel: +603 2059 1888 Fax: +603 2078 4194 Website: www.powerbroking2u.com.my/webcms/AboutUs/ContactInformation.aspx

Source: www.bursamalaysia.com  (29 March 2020)

Malaysia Airlines (MAS) comes out with business plan that focuses on cost cuts and initiatives to “sweat” the airline's assets to maximise revenues - CEO Ahmad Jauhari Yahya

Malaysia Airlines (MAS) has come up with yet another business plan that focuses on more cost cuts and initiatives to “sweat” the airline's assets to maximise revenues. In addition, the airline's expected return to profitability has been postponed from next year to 2014.

The plan, which MAS group CEO Ahmad Jauhari Yahya refers to as the “renewed business Labels plan”, was announced yesterday but had few details.

However, a major proposed change that did emerge apart from pushing back the projected return to profitability by a year is that the latest plan does not involve housing the regional operations in a new entity. This will ease the staff unhappiness over the proposed separation of the regional and long-haul operations as outlined in the December 2011 business plan.

This latest plan was necessary for MAS to chart its future direction because the previous plan was crafted for both MAS and AirAsia Bhd to work together following a share swap between their owners. The deal has since collapsed.

At a press conference after a MAS AGM yesterday, Jauhari said the airline's aim was to push up revenue per seat km by 10% from 18.5 sen as at end of last year, and trim cost per available seat km by 20% or about 5 sen from 24.8 sen.

To do that, several “initiatives would need to be executed in the next six months to a year via optimising all the assets, implementing structural cost reductions for sustainability and leveraging on work efficiency”.

“We just have to sweat our assets more as under the previous network utilisation plan, the usage was low of our narrow and wide body aircraft. We also plan to make changes to the work practices to be more efficient and to drive productivity levels up,” Jauhari said.

Capacity cuts are not on the cards but MAS chairman Tan Sri Md Nor Yusof said that to grow revenues, there would be a need to realign capacity to match opportunities especially that within the six-hour flying radius.

MAS would focus on growing its business in the region as this is where the growth is, and Md Nor added that “we have the right mix of aircraft types that will enable us to build a better orientation towards capitalising on the region, particularly for the short-haul routes”.

Jauhari added that to “sweat” the assets, the B737 aircraft's flying hours would be extended from the current nine to 11, and MAS will look into frequency increases for some of its destinations. He, however, did not elaborate.

“The adding of the A380 (the new Airbus plane) would further help boost our fleet efficiency,'' he said. However, he said the A380 would only be used for the London sector and not for the KL-Sydney route as the aircraft was too big for the Sydney sector.

He also said the airline had appointed Duncan Bureau as head of sales and the airline had to rev up sales to bring in revenues because there was a mismatch in its cost and sales due to the airline spending more than what it made. The airline reported its worst net loss of RM2.5bil for 2011.

“We give ourselves up to 2014 basically to return to profitability, a change from our earlier target by 2013,” Jauhari said.

On cost cuts, Jauhari added that every aspect of cost, be it aircraft usage, procurement, maintenance, etc, will be looked into as part of the three-year initiative to bring cost down.

MAS has a staff base of 20,477 as per its 2011 annual report. When asked if there would be job cuts, he declined to address it, saying it was a sensitive matter but manpower costs would be dealt with.

Asked if there were plans to revive Firefly's jet operations, he said Firefly would concentrate on turboprops and maximise on point-to-point traffic.

To a question if MAS would set up low-cost airline or revive Firefly's jet operations for that purpose, he said “we are not closing our doors to (setting up a) new LCC model but we are not looking at it now. Our immediate focus is revenue growth.”

To a question if AirAsia will be using MAS maintenance, repair and overhaul (MRO) services following the collapse of the share swap agreement, Jauhari said that “we are ready to serve any customer.”

At the AGM yesterday, all the directors seeking election were voted in but Tan Sri Wan Azmi Wan Hamzah did not seek re-election as director.

Source: www.thestar.com.my

BLD Plantation Bhd currently has 25,100ha of oil palm estates, sold 543,300 tonnes of palm oil products last year

BLD Plantation Bhd, which has 25,100ha of oil palm estates representing 52% of the group's total land area, plans to develop the remaining landbank in five to seven years.

Executive chairman Datuk Henry Lau Lee Kong said the group could fully cultivate the undeveloped land within that timeframe if the conditions were right.

“Planting an average 3,000ha a year is reasonable. It costs about RM15,000 to develop one ha,” he told StarBiz after the company AGM here yesterday.

Lau said the group's total plantation area would increase to about 27,000ha by December (this year), of which about 90% would be in maturity stage. Most of the estates are in Miri and Sibu Divisions.

The group is also involved in joint-venture oil palm plantation development on native customary rights (NCR) land.

BLD, through wholly-owned subsidiary Kirana Palm Oil Refinery Sdn Bhd, is investing RM51mil to expand its palm oil refinery in Bintulu with the installation of a second plant.

The new plant, which would double existing capacity to 2,400 tonnes per day, is expected to commence operation in the fourth quarter this year.

The products from the refinery are exported mostly to China and India.

Lau said the existing plant was running at about its installed capacity. The group's kernel crushing plant, which has a capacity of 450 tonnes per day, is operating at about 76% of its installed capacity.

BLD refinery and kernel crushing plant have obtained ISO certifications in quality, environmental and food safety management systems.

He said the group's second palm oil mill at Kabang Land District in Sibu Division had started operations, with current processing capacity of 60 tonnes of fresh fruit bunches (FFBs) per hour.

The new mill also purchases FFBs from other plantations and smallholders.

Asked if there is any plan by BLD to acquire oil palm estates or increase its landbank through acquisition, Lau replied: “All the time we are on the look-out for opportunities and any business that is viable.”

As at Dec 31, 2011, BLD group had cash and bank balances of RM243.8mil, up from RM163.2mil in 2010.

Group pre-tax profit soared to RM125.8mil last year from RM77.1mil in 2010 while group revenue surged to RM1.89bil from RM1.32bil.

The increase in earnings was contributed mainly by a 21% increase in sales volume and 19% increase in average selling price of palm oil products.

The group sold 543,300 tonnes of palm oil products from its refinery and kernel plant last year.

At the AGM, shareholders approved a final single-tier dividend of 14sen per share to be paid on July 31.

Source: www.thestar.com.my

Automotive Sector Update: Vehicle sales in May 2012 rose by an impressive 27% year-on-year and 22% month-on-month to 58,299 units

Vehicle sales in May rose by an impressive 27% year-on-year and 22% month-on-month to 58,299 units, the highest since August last year's festive-driven sales of 58,382 units. The industry has not witnessed such a strong year-on-year monthly sales growth since January 2010.

While sales growth was seen across all vehicle segments, sales growth of the passenger car sub-segment was among the strongest.

With a market share of 30% in May, Perodua was still comfortably on top in terms of monthly vehicle sales. While its market share advanced by close to 6% percentage points year-on-year (y-o-y) due to supply recovery and sales contribution from the new Myvi, its market share was flat on a month-on-month (m-o-m) basis.

Unlike the sales of Viva which were affected by the stricter lending requirements, Myvi's sales were relatively unscathed.

In contrast, Proton's market share fell 6% percentage points y-o-y to 24%, suggesting some cannibalisation by the Myvi. But its market share inched up 3.4% percentage points m-o-m, thanks to a full-month contribution from Preve (2,771 units in May from 494 units April) and strong sales from core models like Persona, Saga (+12% m-o-m) and Exora.

After bouncing back 260% m-o-m in March and 73% m-o-m in April, Honda staged another impressive 49% m-o-m sales growth in May. We expect the upward momentum to persist due to continued supply recovery and the release of new models such as the Honda City facelift and all-new Civic.

Honda's market share in May rose 1% percentage point to 5.5%.

Relative to Honda and the industry's strong double-digit m-o-m sales growth, Toyota's 4% m-o-m sales uptick failed to excite. As a result, its market share fell by close to 3% percentage points to 16.6% in May.

Given that Nissan's market share held up on a m-o-m basis, Honda's market share gains seemed to be at the expense of Toyota. But its 53% y-o-y vehicle sales jump was among the strongest in the industry, courtesy of new models such as Avanza (launched in January, Prius C and Prius facelift (both launched in February).

We expect sales to pick up on the back of the newly launched Camry this month. Initial response to the new model has been positive, with over 2,000 units booked so far.

Nissan's vehicle sales rose 12% y-o-y and 15% m-o-m, lagging behind the industry growth of 27% y-o-y and 22% m-o-m. The Teana continued to fall short of our monthly sales target of 350 units and management's 500 units.

Even the new NV200 failed to boost Nissan's overall sales. Monthly sales for the NV200 have been quite disappointing at 71 units in May, way below the company's target of 200 to 300 units per month. Nissan's market share slipped 0.3% percentage points m-o-m and 0.7% percentage points y-o-y to 5% in May.

Source: www.thestar.com.my

Mulpha International Bhd's shareholders approved plans to undertake a dividend reinvestment plan to allow shareholders to reinvest their dividend in new ordinary shares, board of directors exploring ways to close gap between NTA and market price - executive chairman Lee Seng-Huang

Mulpha International Bhd, which is trading at a large discount to its net tangible assets (NTA), is looking at narrowing this gap, according to executive chairman Lee Seng-Huang.

“We are very frustrated with the share price performance. The market price and NTA gap is very large. The board (of directors) is exploring ways to close the gap,” he said after the company's AGM.

As at March 31, Mulpha International's NTA stood at RM1.32 while its share price was 41 sen at the close yesterday.

Lee said the group would close the huge gap between its share price and NTA either through a share buyback programme or assets disposal that was above NTA.

“We are also looking at acquisition opportunities in the region but so far have not seen anything that was compelling in terms of value. Thus, we see more value in our share buyback exercise,” he said, adding that Mulpha had bought back 3% to 4% of its shares.

Mulpha is one company which believes in rewarding shareholders through share buybacks rather than dividend payment. The company had made numerous share buyback exercises to boost its share price.

The company started buying back its shares in 2001 when the share price was trading below 40 sen for most of the time. It continued its buyback effort in 2002 and 2003 until it reached the maximum 10% of share capital allowed.

The exercise saw its share price appreciate. Subsequently, the company repeated the share buyback exercises over the past few years.

Lee explained that by selling land it could unlock the NTA and use the proceeds to buy another piece of land which was more value accretive.

Asked if its options included privatisation, Lee said: “That's not a decision of the board. The board cannot take the company private. Certain shareholders may have to consider the options.”

Meanwhile, he said the company was “pretty much done” in terms of disposing of its non-core business, adding that the company had sold off the crane and paint business.

According to reports, Mulpha recently sold its 31,516 sq ft land in Jalan Sultan Ismail for RM104mil, or about RM3,300 per sq ft.

At the AGM, shareholders also approved Mulpha's plans to undertake a dividend reinvestment plan to allow shareholders to reinvest their dividend in new ordinary shares of 50 sen each.

Separately, Lee said it was “not high priority” for the company to enter a new market, especially new developing markets like Vietnam. He said the company still had 2,000 acres of undeveloped land in Malaysia.

Source: www.thestar.com.my

Nasim Sdn Bhd launches four new variants for the Peugeot 508, price for Peugeot 508 standard is at RM155,888 on the road with insurance, Peugeot 508 premium (RM169,888), Peugeot 508 SW (RM179,888), Peugeot 508 GT (RM199,888) and Peugeot 508 SW GT (RM209,888)

Nasim Sdn Bhd, the local distributor of the Peugeot brand of vehicles, aims to sell up to 200 units of the expanded 508 model.

Peugeot Malaysia sold 5,400 units of all models last year and expects sales of 9,300 units this year.

Nasim, a member of the Naza group, introduced four new variants of the Peugeot 508, namely the diesel-powered 508 GT and 508 SW GT, 508 SW and 508 Standard.

The variants joined the 508 sedan now named 508 Premium which was introduced to the Malaysian market in October 2011.

Both the 508 GT and 508 SW GT are the first diesel-powered Peugeots sold by Nasim since its appointment as the official distributor for the French marquee in 2008.

The 508 SW and 508 Standards are petrol-powered.

Nasim chief operating officer Datuk Samson Anand George said the launch is a milestone for both Nasim and Peugeot in Malaysia as this is its maiden entry into the diesel segment which offers consumers more torque but lower fuel consumption.

Both the 508 GT and 508 SW GT are powered by a four-cylinder 2.2-litre diesel engine which is a newly developed engine by Peugeot.

The engine features sophisticated technology such as lightweight titanium turbocharger impeller, optimisation of friction, piezo-electric injectors with eight apertures and optimised combustion chambers to deliver superior performance.

Both variants are fitted with a six-speed auto adaptive gearbox with paddle shifters, Tiptronic functionality and sports mode.

To enhance the road-holding and drivability of the 508 GT and 508 SW GT, both variants feature a double wishbone suspension system with drop-link hub carrier and anti-roll bar at the front.

Fuel consumption on the 508 GT is 5.7-litres per 100 km on a mixed cycle while the 508 SW GT achieves a consumption of 5.9-litres per 100 km.

Other premium features include an intelligent keyless entry with push-start ignition, automatic quad-zone air-conditioning, 8-way electric front seats with massage and memory functionality for the driver's seat, a 10-speaker hi-fi system with a 500 watt surround sound amplifier with Arkamys audio processing, colour head-up display and 5-dial instrument panel with colour liquid crystal display.

The 508 standard is priced at RM155,888 on the road with insurance, 508 premium (RM169,888), 508 SW (RM179,888), 508 GT (RM199,888) and 508 SW GT (RM209,888).

Source: www.btimes.com.my

Mudajaya is expecting its 26% owned Indian associate company RKM Powergen Private Ltd to be profitable from 2013 after the coal-fired power plant there starts operations, income will be substantial to the bottomline due to secured tariffs - Group MD and CEO Anto Joseph

Mudajaya Group Bhd is expecting its 26% owned Indian associate company RKM Powergen Private Ltd to be profitable from 2013 after the coal-fired power plant there starts operations, said group managing director and chief executive officer Anto Joseph.

“The power plant is under construction and the full completion of the power plant is expected progressively in year 2013. Cashflows will be very positive and this will contribute substantially to the bottomline,” Anto said.

He added that a 20% contribution to its bottomline from this associate company would be possible because the plant was constructed on the build, own and operate (BOO) model, with substantial recurring income from the operations of the power plant.

“The initial power purchase agreements that we have signed is for 20 years but beyond that there will be recurring income for us. The income will be substantial to the bottomline due to the tariffs that we have secured,” he said.

To recap, the company's Indian associate RKM Powergen had recorded a loss of RM12.21mil in the FY2011 ended December 31 because the plant has not started operations. RKM Powergen had recorded profit of RM1.92mil in FY2010, their annual report showed.

“Till you start selling power - you wil find that there is a pre-operating expense. This is why it is showing a loss. Revenue starts coming in only when you start selling power. The previous years, we had surplus cash which we managed to invest while awaiting expenditure. Last year, the money has been invested for activities so there is a pre-operating expense loss,” Anto explained.

Mudajaya expects the power plant to generate a double digit internal rate of return higher than what can be expected in Malaysia on the backdrop of possibly rising interest rates expected in India.

“India is a difficult market but if you can overcome the issues there, then I think the returns are very good. Among the issues: India's currency - the Rupee has dropped quite substantially against the US Dollar. India's coalition government are facing internal issues as well but it should not impact the power sector because it is the main driving force for the economy,” Anto said.

Mudajaya was also aiming to secure additional power plant projects whether through construction or acquisition of power plant assets in India which has a deregulated power industry.

“We are looking at another power plant bigger than this current one. In India there is a supply shortage of power - a brownout situation unlike in Malaysia where we have a surplus (of power supply)). From 2012 - 2017, India aims to build another 75,000 MegaWatts (MW) of power plant,” Anto said.

“For us, (any additional investments) the lenders must be convinced of your balance sheets and it should be healthy enough. For us, in 2013 and 2014 we will have full recognition of the sale of power and we will have surplus cash and we will try to reinvest it to create even more income,” he added.

Meanwhile, the company was eyeing additional power plant, highway construction and water treatment opportunities in India, Vietnam and the Middle East and with bids for an additional RM3.6bil worth of projects aiming to top up its current outstanding orderbook of RM5bil.

Anto said the company was confident of securing about RM500mil to RM1bil of these bids and that a bulk of the bids would come from major local infrastructure projects.

Mudajaya currently derives 60% of revenue from overseas but aims to derive at least 60% to 70% of revenue from overseas recurring income in order not to rely on the cyclical construction sector.

On another matter, Anto said the company could likely be involved with a Chinese based company for the construction of the Prai Combined Cycle Gas Turbine (CCGT) power project.

“We are supporting some of the companies that is bidding for the Prai power - we are supporting for the EPC (engineering, procurement and construction). With the government talking about 4,500 MW of gas fired and another 1,000 MW of coal fire - I think that is good for us because we should get a piece of the action for the construction,” he said.

Source: www.thestar.com.my

Currently, Kenanga's three largest shareholders are Cahya Mata Sarawak Bhd with a 25.1% stake, Deutsche Asia Pacific Holdings Pte Ltd with 16.6%, and Tengku Datuk Paduka Noor Zakiah with 16.5% but their equity will be diluted to 21% for the former and 13.8% for the latter two shareholders after the merger

Pity the small banks. Since consolidation began in the sector, and coupled with its obsession for ever larger, more regional banking empires, the standalone financial institutions have had to shout to be heard.

It was perhaps for this reason that the merger between the investment banks (IB) of K&N Kenanga Holdings Bhd and ECM Libra Financial Group Bhd flew under the radar somewhat, unlike the high-profile takeover of OSK Investment Bank Bhd by RHB Capital Bhd.

The transaction amount was also comparably lower, valuing ECM Libra Investment Bank Bhd at 1.27 times price-to-book, versus the 1.77 times and near RM2bil RHB Cap agreed to pay for OSK IB.

There is also the niggling criticism among industry watchers about Kenanga-ECM Libra that two small players do not a strong team make.

Nonetheless, one industry source is of the opinion that Kenanga may have gotten away with the better deal.

“Not all their (OSK) international operations were profitable. The Hong Kong and Cambodian markets for instance made pre-tax losses of RM11mil and RM4mil in the 2011 financial year.

“Hence the price tag was expensive, especially when you have 600 plus brokers in Hong Kong. It costs less than RM5mil to buy a (stockbroker's) seat there,” he said.

In any case, Kenanga has reason to be pleased about its soon-to-be member of the family. The merger will catapult it to the position of the country's No. 1 independent IB with a market share of 12.4% and 8.9% respectively in trading volume and value.

It will overtake HwangDBS Investment Bank Bhd on both those counts and come in just behind RHB-OSK in volume and RHB-OSK and CIMB Securities in value.

Further, Kenanga is poised to double its total branches as well as the number of states it is operating in to 31 and 10 respectively.

“We have come a long way,” group managing director Chay Wai Leong said at a briefing to announce the merger on Friday.

“Kenanga has been around for 40 years, and for the most part we have been a mid-sized player. We and the board have looked at what our plans should be going forward and decided that for the business to be meaningful, we need to be a top three player.

“At the rate things are going, there won't be many of us (independent IB) left. Who knows, there may yet be more mergers and acquisitions.”

He also related to StarBiz in an interview last week that this was not a complex transaction, saying: “We are not going into a totally different business, just vastly increasing the scale of it.

“We have a team that is able to complete this integration, and if there are opportunities in the future, we will make another acquisition. For us, it is about scale.”

Kenanga will pay RM875.1mil for ECM Libra's IB and stockbroking businesses via a combination of cash, shares and loan stocks.

The cash portion stands at RM659.6mil, while the remaining RM215.5mil will be settled by 120 million new shares of RM1 each and RM95.5mil in redeemable non-convertible unsecured loan stocks.

Chay said the merger would not be a strain on finances as the bank is well-capitalised and would retain a capital adequacy ratio of 25% post-acquisition.

As at March 31, Kenanga's cash and short-term funds came up to RM1.48bil compared to its total assets of RM4.43bil and liabilities of RM3.67bil.

It was reported earlier that both parties opted for a mixture of cash and shares as Kenanga did not have the financial appetite to digest an all-cash deal.

The banks plan to call their EGMs next month to seek shareholder approval for the merger to be completed by end-December.

Earnings-wise, the acquisition is expected to boost Kenanga's revenue by 10% to 15% annually within three years and result in cost savings in its branch network, IT expenses, back office and support functions.

To a question on whether any staff cuts would take place, Chay replied that the Boston Consulting Group had been hired to evaluate the cost and manpower aspects of the transaction.

Asked how its major shareholders figured in the deal, Chay said they were supportive. “We did not have to ask them for a single ringgit.”

Kenanga's three largest shareholders are Cahya Mata Sarawak Bhd with a 25.1% stake, Deutsche Asia Pacific Holdings Pte Ltd with 16.6%, and Tengku Datuk Paduka Noor Zakiah with 16.5%.

Their equity will be diluted to 21% for the former and 13.8% for the latter two shareholders.

In terms of strategy, the bank has set its sights on two niche areas: it wants to galvanise the currently dismal participation of retail investors in the market as well as gain a leadership position in independent advisory.

As for ECM Libra, the disposal will allow its major shareholder, Tan Sri Azman Hashim, to comply with regulations that prohibit a single individual from holding substantial stakes in more than one IB.

Besides his 16.18% stake in ECM Libra, Azman also holds 17% in AMMB Holdings Bhd, which owns Ambank.

The deal leaves ECM Libra's asset management and unit trust operations intact, and it will have 12 months to look for a new core business if it intends to stay listed.

However, finance executives familiar with the situation said that while ECM Libra had held on to its asset management unit in a bid to keep its listing status, this may not be good enough.

“They (major shareholders of ECM Libra) may still have to sell it and eventually exit the business,” one of the people said.

Meanwhile, its shareholders stand to receive a distribution of up to 68 sen per share, a notable sum considering the company's last transacted share price of 86.5 sen prior to its suspension on Friday.

ECM Libra shares have gained 12% so far this year. The company is also planning a share split and share consolidation.

Source: www.thestar.com.my