RHB and OSK Merger Update: RHB Capital and OSK Holdings receives approval from Securities Commission for merger

(OSK opening stock price today (25.5.2012) was RM 1.64)

(RHBCAP opening stock price today (25.5.2012) was RM 7.42)

RHB Capital Bhd and OSK Holdings Bhd have received approval from Malaysia's Securities Commission (SC) to merge RHB's banking group with OSK's investment bank, according to a filing with Bursa Malaysia.

"Further details on the possible merger will be announced upon the execution of a conditional share purchase agreement between OSK and RHB," OSK said yesterday.

The Finance Ministry gave its approval on April 28.

The merged entity will become the country's biggest domestic stockbroker, overtaking CIMB Group Holdings Bhd

Source: www.btimes.com.my

RHB and OSK earlier on 27 April obtained approval from Ministry of Finance for the proposed merger.

JT International (JTINTER) proposes special cash dividend of 62 sen per share (24 sen per share less 25 per cent tax and 38 sen per share, tax exempt)

(JTINTER closing stock price yesterday (24.5.2012) was RM 6.82)

JT International Bhd (JTI) is proposing a special cash dividend of 24 sen per share less 25 per cent tax and 38 sen per share, tax exempt, the company said in a statement to the stock exchange.

Meanwhile, for the first quarter ended March 31 2012, JT International posted a net profit of RM37.75 million versus a net profit of RM34.51 million in the same period a year ago.

Source: www.btimes.com.my

Thailand rubber exporters have started purchasing on the Tokyo and Shanghai Rubber exchanges to shore up prices of the Rubber commodity - Thai Rubber Association

Rubber exporters from Thailand, the world's largest producer, have started purchases on the Tokyo and Shanghai exchanges to shore up prices of the commodity used in tyres and gloves, according to the Thai Rubber Association.

"Exporters have bought the rubber on the exchanges as it is cheap," president Prapas Euanontat said by phone from the southern province of Nakhon Si Thammarat. He declined to specify the amount. Shippers will continue buying on overseas bourses "until local prices climb to 120 baht (US$3.80) a kilogramme, the level the government would like to see."

Futures have plunged 51 per cent from a record in February 2011, cutting costs for tyre makers such as Bridgestone Corp, Goodyear Tire & Rubber Co and Michelin & Cie.

Prices slumped as China, the biggest user, expanded last quarter at its slowest pace in almost three years and Europe struggled to contain its debt crisis. Chinese vehicle sales dropped 1.3 per cent in the first four months, the worst performance since 1998, according to the China Association of Automobile Manufacturers.

Thailand announced plans last week to buy more than 10,000 metric tonnes in Tokyo and Shanghai and to continue purchases from local farmers at above-market rates to drive prices higher. The country will also work with Indonesia and Malaysia to tackle the slump, according to Deputy Farm Minister Nattawut Saikuar. The three nations represent about 70 per cent of global supply.

"At current prices, producers in Malaysia and Indonesia don't want to plant new trees," said Pongsak Kerdvongbundit, the group's honorary president. "Currently there is no shortage. But when the world economy recovers there won't be extra supply to fill any gap," he said on Wednesday on the sidelines of the 2012 World Rubber Summit here.

Rubber for delivery in October lost as much as 3.9 per cent to 259.1 yen a kilogramme (US$3,261 a tonne), the lowest for the most active contract since January 5, on the Tokyo Commodity Exchange.

Global natural rubber consumption is set to expand 3.4 per cent to 11.3 million tonnes this year, while production climbs 3.2 per cent also to 11.3 million tonnes, the International Rubber Study Group said. Bloomberg

Source: www.btimes.com.my

Kuala Lumpur Kepong (KLK) quarterly earnings fell 42.5% to RM 214.91mil, Indonesian export duties reduced selling prices of CPO and PK in the Indonesian domestic market

(KLK closing stock price today (24.5.2012) was RM 22.16)

Kuala Lumpur Kepong Bhd's (KLK) earnings fell 42.5% to RM214.91mil in the second quarter from RM373.85mil a year ago due to higher operating expenses.

It said on Thursday its revenue rose 10.8% to RM2.624bil from RM2.368bil. Earnings per share were 20.18 sen compared with 35.10 sen. It declared an interim single tier dividend of 15 sen per share.

Its operating expenses rose to RM2.18bil from RM1.79bil.

In the notes to the accounts, KLK said the plantations sector registered a profit of RM300.7mil which was 20.7% below the RM379.1mil year ago.

The decline in profit was due to a reduction in commodity selling prices. The realised selling prices for CPO and PK were diluted by the Indonesian export duties which had effectively reduced the Indonesian domestic CPO and PK prices.

KLK also said it was impacted by rising cost of production due to inflationary factors such as higher wages.

Another factor was lower refinery contributions. Last year's quarter results was aided by the gain of RM70.2mil arising from the changes in fair value on outstanding derivative contracts.

In the first half, its earnings fell 18% to RM555.89mil from RM678.04mil in the previous corresponding period. Turnover was however higher by 15.7% to RM5.547bil from RM4.791bil.

Source: www.thestar.com.my

PPB Group's quarterly net profit fell 32.7% to RM 178.50 mil due to lower profit contribution from its 18.3% owned Wilmar International

(PPB closing stock price today (24.5.2012) was RM 15.70)

PPB Group Bhd's net profit fell 32.7% to RM178.50mil in the first quarter ended March 31, 2012 from RM265.23mil a year ago following lower profit contribution from its 18.3% owned Wilmar International Ltd.

PPB said on Thursday that the Singapore-listed Wilmar's profit contribution came in at RM141mil compared with RM216mil a year ago mainly to lower oilseeds and grains margins. PPB's earnings per share were 15.06 sen compared with 22.37 sen.

"Group profit before tax decreased by 30% to RM200mil in Q1, 2012 compared with RM283mil in Q1, 2011," it said.

PPB's revenue rose 20.2% to RM696.95mil in Q1, 2012 from RM580mil a year ago mainly due to higher revenue from the grains trading, flour and feed milling division.

The property division's revenue increased significantly due to the sale of its newly launched high-end residential properties in Bukit Segar, Kuala Lumpur.

All other divisions recorded higher revenue in the quarter under review with the exception of chemicals, livestock and investments divisions.

The grains trading, flour and feed milling, property, and investments recorded higher revenue.

On the oulook, PPB said the global economy continues to be uncertain in 2012, particularly with the Eurozone problems and slower growth reported by the advanced/emerging economies.

"The volatility of commodity prices and foreign exchange rates will continue to present challenges to the group's businesses," it added.

Source: www.thestar.com.my

Star Publications appoints Tan Sri Tony Fernandes as independent non-executive director

(STAR opening stock price today (24.5.2012) was RM 3.22)

AirAsia Bhd co-founder and group chief executive officer Tan Sri Tony Fernandes, 48, has joined the board of Star Publications (M) Bhd as an independent non-executive director with effect from yesterday.

In a statement to Bursa Malaysia, Star said Fernandes replaced Datuk Wira Syed Abdul Jaabar Syed Hassan, 72, who did not seek re-appointment after nearly 15 years as a non-executive director.

“Tony (Fernandes) is a far-sighted entrepreneur who has built a global brand in AirAsia and we hope to tap on his insights and exposure in the global stage to grow in Malaysia and beyond,” Star chairman Tan Sri Dr Fong Chan Onn said.

Fernandes, on the other hand, said he hoped to contribute in whatever way he could as Star sought to expand from a print to a multi-channel media company.

All the other existing directors had been re-appointed to the board at the company's 40th AGM held here yesterday.

Star's core business is its English daily The Star.

According to the Audit Bureau of Circulations, The Star was the only English newspaper in the country to register a growth in sales in the second half of 2011.

From July to December 2011, The Star's daily editions (Monday to Saturday) marked a year-on-year increase of 8,243 copies or 3% to 287,204 compared with 278,961 copies in the previous corresponding period. Its weekly (Sunday) edition, however, registered a marginal decline of 1% or 2,722 copies to 289,979 copies from July to December 2011, compared with 292,701 copies in the previous corresponding period.

Meanwhile, for the first quarter (Q1) ended March 31, 2012, Star reported a lower net profit of RM32.45mil compared with RM40.27mil for the corresponding period last year. The lower net profit was attributable to higher operating expenses and finance cost.

Star's revenue for Q1 rose a marginal 0.9% to RM229.98mil from a year ago. Earnings per share stood at 4.39 sen for the quarter compared with 5.45 sen a year ago.

Star's pre-tax profit was RM44.79mil compared with RM54.92mil a year ago.

Of the four main business segments within Star, print and new media was the only one with positive results. The segment registered a pre-tax profit of RM53.58mil, down 9.7%, on revenue decline of 3.2% to RM188.93mil. This was attributable to lower advertising spending, as the close proximity of Chinese New Year in January and Christmas during the preceding month, and the holiday season resulted in a shorter window for promotions by advertisers.

Its broadcasting segment, on the other hand, was hit by higher expenses, especially after including the amortisation of Capital FM radio licence. Excluding the amortisation costs of the licence, the segment would have made a small pre-tax profit of RM250,000 for Q1.

Star's event, exhibition, interior and thematic segment, while seeing its revenue growing 32.4% year-on-year to RM26.38mil for Q1, was hit by higher cost of sales and operating expenses, resulting in a 36.9% decline in pre-tax profit.

Its television channel segment from Li TV Holdings Ltd saw a loss of RM380,000 due to higher operating, transmission and marketing costs. Revenue contribution from this division was RM1.87mil for Q1 2012.

Source: www.thestar.com.my

No interim dividend was declared for the quarter in review.

Star gained one sen yesterday to close at RM3.22.

AirAsia's 49% owned Thai AirAsia to list on Thailand Stock Exchange by end of this month, initial public offering (IPO) price has been set at 3.7 baht (37 sen) a share

(AIRASIA opening stock price today (24.5.2012) was RM 3.39)

The offer price for Thai AirAsia's initial public offering (IPO) has been set at 3.7 baht (37 sen) a share, said its major shareholder Asia Aviation Pcl, as the Thai affiliate of AirAsia Bhd prepares for a listing at the end of this month.

A total of 1.2 billion shares would be offered to investors during the subscription period from May 23 to May 25 for trading on the Stock Exchange of Thailand soon, Asia Aviation said in a statement.

Of the total public offering, 750 million are new shares and 462.5 million shares from existing shareholders, bringing the public float to 25% of its paid-up capital.

Reuters reported last week that the IPO, expected on May 31, would raise 4.5 billion baht (RM450mil).

Asia Aviation CEO Tassapon Bijleveld said the company planned to use part of the IPO proceeds to buy new shares in Thai AirAsia, which will raise its stake to 55% from 51% currently.

Subsequently, the equity held by AirAsia International, AirAsia's wholly-owned unit, would be pared down to 45% from 49%.

“Thai AirAsia aims to be the low-cost airline with the largest market share.

“Our strength is our cost control, which makes us the airline with the lowest operating cost while the service quality remains intact,” Bijleveld said.

“We offer the highest flight frequency for domestic and international routes that take less than four hours of flying.

“Today, we are ready to offer our shares to the public and will be listed on the Stock Exchange of Thailand.

“This is another crucial step that will stabilise Thai AirAsia's financial status and allow the company to march forward to its planned goal.

“We aim to grow at least 20% to 25% from 2011.

“This will be supported by our new fleet, new route plans and flight frequency increase on potential routes.”

Thai AirAsia will also utilise its listing funds to double its Airbus A320 fleet size to 48 aircrafts by 2016, as well as for working capital and operations.

The airline had reportedly said that some 1.5 billion baht (RM150mil) would be used to finance the purchase of new aircraft in the near term, and it hoped to add five to six new aircraft annually for the next five years.

The financial advisor for the IPO, Thanachart Securities Pcl, also said the listing had drawn an overwhelming response from local and overseas investors, as evident in the oversubscription of the shares by 10 times.

Thanachart Securities and CIMB Securities (Thailand) are the co-lead underwriters for the domestic market while ten other brokerages are acting as co-underwriters including Maybank Kim Eng Securities (Thailand) Plc and UOB Kay Hian Securities (Thailand) Plc.

Analysts have noted that the listings of Thai AirAsia, Indonesia AirAsia and AirAsia X may be re-rating catalysts for AirAsia shares.

Source: www.thestar.com.my

Felda IPO Update: Felda forms joint venture (MyBiomass) with Sime Darby and Malaysia Industry Government High Technology to undertake biofuel research and development project

Federal Land Development Authority (Felda) has teamed up with fellow plantation giant Sime Darby Bhd to make industrial sugar from oil palm biomass.

Felda Global Ventures Holdings Bhd president and chief executive officer Datuk Sabri Ahmad said returns from the venture would be big if the total costs including logistics to convert the biomass is below US$100 (RM314) per tonne.

Oil palm biomass is agriculture wastes such as tree trunks, empty fresh fruit bunches and fronds.

Felda and Sime Darby have a formed a special purpose vehicle (SPV) with Malaysia Industry Government High Technology (Might) to undertake the venture.

Sabri said the groups are doing a feasibility study.

"The three parties are evaluating whether we can convert biomass into non-edible sugar. We are studying all aspects from logistics and systems in the field to transporting the biomass to a central collection centre and processing factory in Pasir Gudang, Johor.

"If all can be done under US$100 per tonne, then it is commercially viable and the returns are big," Sabri told Business Times in an interview yesterday.

If feasible, MyBiomass will set up a plant that is expected to require 60,000 tonnes of feedstock a day to produce 1.2 million tonnes of sugar a day.

Sabri said the parties had signed the pact during Prime Minister Datuk Seri Najib Razak's visit to New York on May 17.

Felda and Sime Darby will each own a 40 per cent stake in the SPV called MyBiomass Sdn Bhd. Might will take up the remaining 20 per cent stake.

Sabri said industrial sugar potentially to be produced by MyBiomass is meant for oleochemicals, paints and chemicals industries, with players such as Petronas Chemicals, Badische Anilin-und Soda-Fabrik, British Petroleum, Archer Daniels Midland and DuPont.

"This venture is not the first of its kind in the world as Thailand is converting tapioca into sugar and Brazil is converting corn into ethanol. But it is the first for oil palm. So it has to be done at below US$100 per tonne because otherwise it is not competitive compared to other countries.

"We hope this will generate a new business opportunity for the palm oil industry," Sabri said.

Malaysia's oil palm sector churns out 100 million tonnes of biomass a year. MyBiomass aims to take up 20 per cent or 20 million tonnes of the waste to be turned into industrial sugar, which is known as isobutanol, butanediol and ethanol.

Source: www.btimes.com.my

Ramunia Holdings (PN 17) expects to complete regularisation plan by end of July after obtaining approvals from shareholders yesterday, pre-tax profit of at least RM 28 million expect this year - Chairman Datuk Azizan Abd Rahman

(RAMUNIA opening stock price today (24.5.2012) was 39 sen)

Ramunia Holdings Bhd, partly owned by Lembaga Tabung Haji, expects to complete its regularisation plan by end-July, after which it hopes the stock exchange will remove its Practice Note 17 (PN17) status.

The offshore oil and gas fabricator also expects to return to the black this year with a pre-tax profit of "RM28 million to RM29 million", chairman Datuk Azizan Abd Rahman said.

PN17 denotes companies that face financial difficulties and need to regularise their accounts to help justify their existence as ongoing business entities.

Ramunia yesterday obtained all the approvals needed from shareholders to implement its regularisation plan.

It involves the company buying a fabrication yard in Pulau Indah, Port Klang, from Oilfab Sdn Bhd for RM83.6 million.

"Now that we have got the approval, we will proceed as scheduled. We expect to have no further hitches, and hopefully (we) will complete (the plan) by end of July. Then, we will apply to Bursa Malaysia (for PN17 upliftment)," Azizan told reporters after the company's annual and extraordinary general meetings here yesterday.

The chairman was "optimistic" that Bursa Malaysia would lift the status as Ramunia would have already complied with all the conditions set by the stock exchange.

Ramunia slipped into PN17 in March 2010 after selling its Teluk Ramunia fabrication yard to Sime Darby Bhd for RM530 million in cash.

It submitted its regularisation plan in July last year, and Bursa Malaysia approved it in January.

Ramunia currently has projects valued at RM208 million in hand, either through letters of award or intent.

Its floating production, storage and offloading unit has yet to secure any international contracts but is pursuing three projects from three oil companies in Malaysia, the company's chief executive officer Nor Badli Mohd Alias said.

Part of the regularisation plan involves a rights issue that is expected to raise between RM106 million and RM150 million. It may also seek bank borrowings.

About RM62 million of the fund will be spent to upgrade the Pulau Indah fabrication yard, which will take up to 18 months to complete.

The move is considered crucial to increase its competitiveness in the industry, Nor Badli said.

Source: www.btimes.com.my

Axiata valued its 19% stake Idea Cellular at 120 rupees although the shares were traded at only 80 rupees over the past four months, no impairments necessary as Axiata takes long term future prospect into consideration - President and CEO Datuk Seri Jamaludin Ibrahim

(AXIATA opening stock price today (24.5.2012) was RM 5.44)

*Idea Cellular closed at 75 rupees yesterday.

Axiata Group Bhd said there is no need for the company to make further impairment charges on Idea Cellular Ltd for now, even though its investment's market value has shrunk by about one-third.

However, it does not discount the possibility of a further impairment in the future, depending on how the India telecommunications industry progresses.

Axiata, via a merger between Idea Cellular and Spice Telecoms in 2008, acquired 19 per cent stake in Idea Cellular for about 143 rupees (RM8.03) a share in 2008.

Unfortunately, Idea's share price has been on a declining trend since the merger.

Last year, Axiata decided to book a RM1.1 billion impairment on Idea. Post impairment, Axiata's 19 per cent stake in Idea is now valued at about 120 rupees (RM6.73) a share.

For the past 12 months, Idea shares have been trading at an average of about 90 rupees a share and for the past four weeks, Idea shares were traded at about 80 rupees a share.

"For now, there's no need for further impairments, but we will continue to evaluate periodically.

"When we evaluate, it's not over a short-term basis, it's a long-term basis where we look at the whole prospect of the company and industry," said president and chief executive officer Datuk Seri Jamaludin Ibrahim after the company's annual general meeting yesterday.

Some Indian mobile operators have written off part of their investments after the country's Supreme Court order to cancel 122 mobile permits in February this year.

Among the biggest "casualties" was Uninor - a company majority controlled by Norwegian firm Telenor ASA. Uninor has lost all its telecom licences as a result of the Supreme Court's decision.

As a result, Telenor has reported a 79 per cent fall in its first quarter net profit at 583 million kroner, due to a 3.9 billion kroner (RM2.14 billion) write-off.

UAE-based Etisalat Group also announced that it will write off about US$820 million (RM2.57 billion), as part losses incurred from its India operations.

On how Axiata plan to utilise its cash pile, the company said it is expected to use part of the cash to reduce borrowings that are incurring higher interest rates, and will continue to be prudent on how it spends the money.

Source: www.btimes.com.my