Malaysia's 30 per cent foreign ownership limit in local banks may be raised in the near future provided that there is reciprocity in the region - Prime Minister Datuk Seri Najib Razak

Malaysia's 30 per cent foreign ownership limit in local banks may be raised "in the near future" provided that there is reciprocity in the region, Prime Minister Datuk Seri Najib Razak said.

"We're willing to look (at it). At the moment, it's at 30 per cent ... it's possible that we might increase it in the near future. But it's also important within Asean to have reciprocity. I'd like to see more reciprocity," he said at an open dialogue session with fund managers and other investors at the start of the two-day Invest Malaysia conference here yesterday.

Najib's comments come as Indonesia mulls lowering the single ownership limit in its banks. Recent press reports from Indonesia suggest that the country will next month announce plans to limit the ownership in banks to less than 50 per cent for financial institutions.

This poses a major problem for Malayan Banking Bhd (Maybank) and CIMB Group as they each have controlling stakes in Indonesian banks. CIMB owns 97.9 per cent of CIMB Niaga, while Maybank owns 97 per cent of Bank Internasional Indonesia (BII).

"There are some voices of concern (about this), but I hope it won't materialise," Najib said, adding that any such move would be "regressive".

"I don't like to see countries within Asean changing the rules, being more regressive ... I think that's the wrong direction. If at all, stick to the existing rules, but don't go back and be regressive. That's the message we send.

"Because, if they do so, then other countries are going to do the same and that will undermine our efforts for greater integration within Asean," he remarked.

Maybank's president and chief executive officer Datuk Seri Abdul Wahid Omar, speaking to investors later, said Maybank is continuing to engage with the Indonesian authorities on the matter.

"It is our hope that should any percentage be imposed, that percentage should not apply to banking groups," he said.

He noted that if Indonesia's intention in lowering the limit was to improve corporate governance, in terms of limiting control by any single entity or individual, that concept was not new.

"That concept is being embraced by every country, including Malaysia, but it does not apply to banks," Abdul Wahid said, pointing out that OCBC Bank in Malaysia, for example, is fully owned by its parent company.

Last year, there was much speculation that Australia and New Zealand Banking Group (ANZ) may want to up its stake in lender AMMB Holdings Bhd after Najib, on a visit to Australia in March that year, said he was open to the foreign lender raising its stake to 49 per cent.

Najib later clarified that the limit may be evaluated on an individual merit basis.

ANZ, which became a shareholder in 2007, holds a 23.8 per cent stake in AMMB.

Source: www.btimes.com.my

Related post- 

Prime Minister Najib Razak jokes and says opposition's promises to reduce petrol price overnight, abolishing student loans, abolishing toll rates and increasing minimum wage to RM 4,000/month are too far fetched

Here is the link to the video- http://www.youtube.com/watch?v=JpUSkaDKgiY

Gas Malaysia IPO Update: Gas Malaysia's 25.60 million shares offered for sale to public oversubscribed by 21.64 times, retail offering price at RM 2.20

Gas Malaysia Bhd's offering of 25.68 million shares to the public under its listing exercise was oversubscribed by 21.64 times.

Malaysian Issuing House (MIH) said on Tuesday there were 44,561 applications for 581.39 million shares from the public for the 25.68 million shares.

Of the 25.68 million shares, MIH said 12.84 million offer shares were set aside for Bumiputera individuals, companies, co-operatives, societies and institutions. MIH said there were 15,034 applications for 175.62 million offer shares was received under the Bumiputera category, or an oversubscription of 12.68 times.

Under the public category, there were 29,527 applications for 405.76 million offer shares, representing an oversubscription of 30.60 times.

It also said the sole bookrunner Maybank Investment Bank Bhd had confirmed that the institutional offering of 303.31 million offer shares was completed.

"The institutional price was fixed at RM2.20 per offer Share. Accordingly, the final IPO price for the retail offering is fixed at RM2.20 per offer share," said MIH.

Maybank Investment Bank was also the principal adviser and joint underwriter for the IPO. The other joint underwriters were Bank Muamalat Malaysia Bhd and Kenanga Investment Bank Bhd.

The listing exercise involved the offer for sale by the vendors of 333.84 million shares, of which 147.67 million shares were to Bumiputera institutional and selected investors approved by the Ministry of International Trade and Industry.

The remaining 155.63 million shares were offered to institutional and selected investors; 4.84 million shares were reserved for eligible directors and employees of Gas Malaysia and 25.68 million shares to the public.

Source: www.thestar.com.my

OSK Holdings will maintain its listed status after the merger with RHB and look for other businesses - founder and major shareholder Ong Leong Huat

(OSK closing stock price yesterday (28.5.2012) was RM 1.74)

OSK Holdings Bhd plans to maintain its listed status and look for other businesses to embark on once it sells off its investment bank, its founder says.

The group will be without a core business once it sells off OSK Investment Bank Bhd to RHB Capital Bhd (RHBCap), which leaves it at risk of becoming a Prcatice Note 17 (PN17) company.

Still, founder and major shareholder Ong Leong Huat, 67, points out that the group will still have some other businesses remaining like property, property-management and money-lending.

"Along the way, my board and I - which also comprise a lot of good business people - will look at what other businesses we can embark on.

"Today, the (investment banking) deal is not fully completed, (so) we can't tell you what we are going to do next. As a businessman, if you have the resources, definitely you'll know what to do," Ong told reporters after the group inked a conditional share purchase agreement with RHBCap here yesterday.

The veteran stockbroker, which has a 32.1 per cent stake in OSK Holdings, is ranked the 30th richest person in Malaysia by Forbes, with a net worth of US$265 million (RM832 million).

According to a source, the group is looking to develop land next to its headquarters in Jalan Ampang here.

OSK Holdings is selling OSK Investment to RHBCap for RM1.95 billion and will be paid for it with 245 million new RHBCap shares and RM147.5 million in cash. The deal is expected to be completed in the final quarter.

"It is the intention of OSK Holdings to maintain the listing status... and apply to Bursa Securities for a waiver from being classified as an affected listed issuer pursuant to PN17 of the listing requirements," OSK Holdings said in a stock exchange filing yesterday.

Ong built up the group into a regional business with a revenue of over RM1 billion since taking it over in 1982. It now has about 80-90 outfits across eight countries.

"This (investment banking) is a very volatile business. The market can enter into a tsunami at any time, any moment... just look at how many such turbulences have occured in the last 10 years," he remarked.

OSK Holding's shares, which have shed 2.2 per cent so far this year, lagging the FBM KLCI's 1.6 per cent gain, closed four sen higher to RM1.74 at noon yesterday before they were suspended pending the announcement.

Source: www.btimes.com.my

Axiata's Celcom will launch Samsung Galaxy S3 (a.k.a. Samsung Galaxy S III) in Malaysia on 31 May

Celcom Axiata Bhd (Celcom) announced it will offer Samsung Galaxy S III to customers in Malaysia end of this month with a range of plans tailored for Celcom customers.

To celebrate the launch of this latest Samsung model, Celcom welcomes all customers to its launch that would be half on May 31 at South Court, Mid Valley Megamall at 10am.

The launch would also concurrently take place in the Shopping Complex at Sutera Mall, Johor Bharu and Aeon Station 18, Ipoh, Perak.

Those who dress in blue might walk away with Samsung Galaxy S III at the price of RM888.

“Backed by the widest most stable network coverage plus continuous network upgrades and armed with unbeatable competitive packages, customers will get to enjoy the best smartphone experience in Celcom Territory,” Celcom chief marketing officer Zalman Aefendy Zainal Abidin said in a press release yesterday.

The latest Samsung Galaxy S III cames with new intelligent features that were not only user friendly but also remarkably robust with maximised processing power, uninterrupted performance enriching users experience through its organic

design inspired by nature.

It is designed with 4.8 inches HD Super AMOLED display, the 8MP camera and 1.9MP front camera captures special moment instantly, 1.4GHz Quad-core application processor, 16GB internal memory and 50GB dropbox.

Source: www.theborneopost.com

RHB OSK Merger Update: RHB Capital to purchase OSK's Investment Banking business, to be settled via RM 174.3 million cash and 245 million new shares to be issued by RHB (10% stake)

(OSK closing stock price today (28.5.2012) was RM 1.74)

(RHBCAP closing stock price today (28.5.2012) was RM 7.40)

OSK Holdings Bhd (OSKH) is disposing of its investment banking business to RHB Capital Bhd for RM1.97bil to be satisfied via new RHB Cap shares and RM174.3mil cash, which would see OSKH getting a 10% equity stake.

OSKH said on Monday it would dispose of its 100% stake in OSK Investment Bank Bhd (OSKIB); 20% of OSK Trustees Bhd; 20% of Malaysian Trustees Bhd and 100% stake in OSK Investment Bank (Labuan) Ltd.

The total disposal consideration of RM1.977bil would be satisfied through the issuance of 245.0 million new RHB Cap shares to be issued at an issue price of RM7.36 per RHB Cap shares and cash of RM174.3mil, it said.

"The proposed disposal will enable OSKH to unlock the value of its investment in OSKIB Group, whilst the consideration shares to be received by OSKH will allow OSKH to equity account a prospective 10% stake in RHBC, which is a more liquid investment form compared to OSKIB," it said after entering into a conditional share purchase agreement with RHB Cap.

OSKH said the disposal consideration was based on OSKIB's unaudited consolidated net assets of RM1.102bil as at Sept 30, 2011 or at a price to book ratio valuation of about 1.77 times.

It added the issue price of the new RHB Cap shares of RM7.36 and the number of new RHB Cap shares to be received as part of the disposal consideration would be 10% equity interest in RHB Cap as at Dec 31, 2011.

"The issue price of RM7.36 represents a slight premium of 0.27% to the five-day volume weighted average market price of RHB Cap shares up to and including May 25, 2012 of RM7.34," it said.

OSKH added the cash portion of RM174.3mil would be used to defray the estimated expenses for the proposed disposal, repayment of bank borrowings of OSKH group and to fund OSKH's on-going businesses.

It also said the unaudited net assets of OSK Trustees, Malaysian Trustees and OSKIB Labuan as at June 30, 2011 were about RM5.13mil, RM9.15mil and RM21.61mil respectively.

Source: www.thestar.com.my

Integrated Healthcare Holdings (IHH) IPO Update: International Financial Corp (IFC) to take part in IHH IPO, amount of stake and price not determined yet

International Financial Corp (IFC), a member of the World Bank Group, is planning to take part in the planned $1.5 billion listing of Malaysia's Integrated Healthcare Holdings (IHH) in a move to help validate IHH's emerging markets strategy, according to IFC's official website.

The largest global development institution focused on the private sector in developing countries said the move would help the healthcare firm with its pan-Asia expansion strategy.

"Project cost and the amount and nature of IFC's proposed investment cannot be disclosed at this time due to confidentiality and regulatory requirements," IFC announced on its website, adding that the estimated date for board considerations was June 12.

IHH is the healthcare arm of Malaysia's state investor, Khazanah. Its assets include Turkish hospital group Acibadem AS, Singapore's Parkway Holdings, India's Apollo Hospitals Enterprise Ltd and Malaysia-based Pantai Hospitals and International Medical University.

The listing of IHH in Singapore and Malaysia was expected to be the fourth-biggest initial public offering in the city state's history and Malaysia's second-largest this year after the planned listing of Malaysian plantation group Felda Global Venture Holdings.

Southeast Asia has seen a burst of IPOs since the start of the year, despite the protracted euro zone debt crisis and the debacle over Facebook's recent market debut.

IHH, which is expected to debut on the Malaysian and Singaporean bourses by the end of July, has started to invite approved "Bumiputra" investors to submit expressions of interest in subscribing for its shares, according to the website of Malaysia's Ministry of International Trade and Industry earlier.

Premarketing is currently being held for a second tranche that will be open to institutional and other investors.

The IPO will be one of the first after elections in Malaysia that are widely expected to be held in June or July. Analysts and investment bankers have said Malaysia's IPO pipeline has slowed ahead of the poll because of concerns of market volatility.

IFC officials were not immediately available for comment. Japan's Mitsui & Co Ltd owns a 26.6 percent stake in IHH, Dubai-based Abraaj Capital holds 7.1 percent and Acibadem chief Mehmet Ali Aydinlar 4.2 percent. Khazanah owns the remaining 62.1 percent.

Bank of America-Merrill Lynch, Deutsche Bank AG and CIMB are joint global coordinators and book runners for the deal. Goldman Sachs, DBS and Credit Suisse are joint bookrunners, a source told Reuters in December.

Source: www.thestar.com.my

Property developers buying up land amid slowing real estate market in Malaysia

Research analysts and property consultants have mixed views about developers that have been buying sizeable parcels of land recently, as the real estate market has slowed down and prices are relatively reasonable.

“It is a good time to acquire land when the market is slow. Some property developers may just be able to get a bargain price for their purchases,” said property consultancy CB Richard Ellis (M) Sdn Bhd executive director Paul Khong.

Khong told StarBiz via e-mail that real estate sellers would also be more realistic concerning prices, as there were not too many buyers around.

He pointed out that the property sector was moving slowly back to a “buyer's market” and the principle of “cash is king” would rule again.

In recent months, property developers such as Mah Sing Group Bhd, SP Setia Bhd, WCT Bhd and Hua Yang Bhd have been actively expanding their land bank particularly in the Klang Valley.

Last week, Mah Sing announced that it was paying RM333.26mil or RM18.55 per sq ft for 412 acres targeted for a mixed township near Bangi, Selangor.

SP Setia recently acquired 21.3 acres freehold land in Penang for RM185.6mil, and said this was for a mixed residential development project with a gross development value (GDV) of RM1.1bil.

Meanwhile, WCT recently acquired two parcels of 468 acres and 57 acres in the Klang Valley.

WCT executive director Choe Kai Keong had told StarBiz that the land costing RM450mil has a potential GDV of RM5.2bil.

The 468 acres in Rawang, Selangor would be developed into an integrated township with an estimated GDV of RM1.2bil, while the 57-acre in Overseas Union Garden in Kuala Lumpur is planned for a mixed development worth RM4bil.

Hua Yang also has been acquiring small parcels of land in the Klang Valley since last year.

Hua Yang, which is known for developing residential properties in the affordable segment, recently agreed to pay RM15.2mil for 21 acres of freehold land in Ipoh, Perak.

“Prices and sales of properties have obviously slowed down in 2012 as the number of buyers has been halved, with stricter bank lending guidelines. This is rather sensitive in the mid-high and high-end segments (such as above the RM3mil category) of the residential market,” said Khong.

Khong said property developers were now moving quickly to look at larger land banks to develop new projects, and were looking at cheaper locations where there was still demand from the mass market in the mid and lower-mid sections.

“Landed properties especially in the RM2mil and below categories should still do relatively well, as investors will still continue their quest but at a slightly lower segments.”

He also noted that the recent land sales were centred in secondary locations outside the city centre, but were in reasonably “good locations” and were in respect of big parcels where the developers could develop the “evergreen” landed segments again.

Khong pointed out that regardless of market conditions, property developers needed to take a long term view about their land bank.

“They have to continue to acquire land and develop, to sustain their operations and cover overhead costs.”

However, one property analyst contacted by StarBiz said there were concerns that developers might be too aggressive in expanding their land bank.

“In good times, when the property market is hot, developers can increase their gearing without much worry as they can launch and sell properties quickly. Now, the market has cooled and they should be careful about increasing their gearing too much,” he said.

Maybank Investment Bank (IB) Research said in a recent report that it took a neutral view of SP Setia's recent land buy in Penang.

“Despite its strategic location, the RM200 per sq ft land cost (in Penang) appeared to be on the high side. It is 33% to 60% higher than the RM125 to RM150 per sq ft asking or transacted prices in the area.”

However, Maybank IB noted that SP Setia's net gearing was still very healthy, as this was expected to increase to 0.14 times post-acquisition of the Penang land (from 0.08 times as at January 2012).

Meanwhile, Kenanga Research said it took a neutral view of Mah Sing's recent land buy near Bangi as the deal is expected to result in the company's net gearing reaching 0.6 times (from the 0.3 times in the fourth quarter of 2011), based on an assumed 70:30 debt-equity financing.

“This has exceeded our comfort level of 0.5 times net gearing,” said the research unit.

However, Kenanga Research said Mah Sing's expected net gearing of 0.6 times is manageable amd should fall below 0.5 times over the next two quarters, on the back of continuous billings.

Source: www.thestar.com.my

Weekly Stock Picks Commentary Report (21-25 May 2012)

Malaysia Stock Picks

Week 21 (21-25 May) Stock Picks Commentary

Hi! Welcome to Malaysia Stock Picks site. We have officially clocked in more than 10,000 page visits since the blog’s inception slightly more than a month ago. Thank you for your continuous support.

We have the Weekly Stock Picks Commentary archive section if you would like to view our previous commentary

Here is the stock picks commentary for Week 21 (21-25 May).

Stock Pick #1

Multi Purpose Holdings (MPHB)

Week high : RM 3.27 (Up 39 sen – 11.9%)

To recap last week- “On 8 May, MPHB's finance executives (who are involved in the corporate plan) told TheEdge that Datuk Lim Tiong Chin is negotiating for a management buyout for MPHB's stockbroking firm AA Anthony which analysts estimates to worth around RM 170 million.

On 9 May, Kenanga Research initiated coverage on MPHB and estimated its non-gaming assets to worth RM 1.44 billion (equivalent to RM 1.77 per share).

Their analysis showed that if the entire non-gaming assets are disposed under their asset rationalisation exercise, the proceeds is enough to repay their entire debts and borrowings to a net cash position of RM 805 million. This position gives them the ability to pay a special dividend of up to 56 sen per share.

Kenanga Research favours MPHB’s move to become a pure NFO play citing that this will trigger the market to re-assess MPHB’s valuation to be up to par with current favourite Berjaya Sports Toto Bhd’s valuation.

MPHB is currently traded 23% discount in terms of valuations against Berjaya Sports Toto. Market reacted positively on MPHB’s ongoing asset rationalisation exercise where non-gaming assets are planned for disposal to enable MPHB fully focus on its Number Forecast gaming business and proceeds from sale of assets will enable MPHB to pare down its borrowings or to be repaid to its shareholders.

It currently has a 100% stake in Magnum, which is one of the largest Number Forecast Operator (NFO) in Malaysia. MPHB stock rose 4.9% (14 sen) since 8 May to week’s highest RM 3.02 on the same day and closed at RM 2.91 at the end of this week.”

Subsequently this week, Multi-Purpose Holdings (MPHB) announced a proposal to list its non-gaming business on Bursa Malaysia stock exchange. Managing director Datuk Surin Upatkoon said that the demerger will allow MPHB to position itself as a "gaming-dividend" stock with a sustainable dividend payment policy of at least 80 per cent of its profit annually.

Market took this news as positive as the listing of MPHB non-gaming assets may potentially realise the value of its assets.

Take note that even though Kenanga Research estimated its non-gaming assets to worth RM 1.44 billion, the exact valuation of the assets and how much each shareholder will get from the deal are not finalised and known yet and the demerger is subject to shareholders approval.

MPHB stock price had a total surge of 11.9% from 8 May to three week high of RM 3.27 on 25 May and closed at RM 3.19 for the week.

Click Here for all latest posts on MPHB

Stock Picks #2

AirAsia Berhad (AIRASIA)

Week high : RM 3.60 (Up 21 sen – 6.2%)

On 24 May, TheStar reported that Thai AirAsia will go for an initial public offering (IPO) exercise to list on the Thailand Stock Exchange. The listing is expected to complete by end of May.

AirAsia currently owns a 49% stake in Thai Airasia and its stake will reduce to 45% after the IPO. The IPO will raise RM 450 million, offering 1.2 billion shares valued at 3.7 baht (37 sen) a share, out of which 462.5 million shares are from existing shareholders.

Market is positive on this because if the listing goes through, AirAsia has the opportunity to cash out part of its stake in Thai AirAsia. The additional funds raised in the IPO for Thai AirAsia itself is encouraging.

AIRASIA stock price rose 6.2% since 24 May to week high of RM 3.60 on 25 May and closed at RM 3.60 for the week.

Click Here for all latest posts on AirAsia

Stock Picks #3

JT International Berhad (JTINTER)

Week high : RM 7.34 (Up 52 sen – 7.6%)

On 24 May, JT International announced a special dividend totaling 62 sen (24 sen per share less 25 per cent tax and 38 sen per share, tax exempt)

Market took this news as positive on anticipation of the windfall cash payout to JT International shareholders. The ability to payout cash dividends goes a long way in demonstrating robust cash flow management of JT International.

JTINTER stock price surged 7.6% since 24 May to week high RM 7.34 on 25 May and closed at RM 7.27 for the week.

Click Here for all latest posts on JT International

On Other stocks:

JCY International-

“To recap, on last week commentary, we wrote that On 17 May, JCY International quarterly earnings surged 1,209% to RM 163 million on better HDD component selling prices and higher sales volume due to shortages in supply from Thailand floods

Take note that even though JCY net profit recovered strongly compared to previous year, current quarter’s net profit (RM 163 million) is rather flattish if compared with its preceding Q4 2011’s net profit (RM 162 million).

Surge in net profit from Thailand floods had started since Q4 of 2011. Market talk has it that the benefit from this event could have peaked and whether or not such robust results can be sustained and replicated for the next quarters ahead is questionable.

JCY stock price dropped 2.6% since 17 May to a week low of RM 1.47 on 18 May. Nonetheless, JCY stock price had surged by 268% since Oct 2011 when Thailand’s flood took effect from around 40 sen in Oct 2011 to RM 1.47 closing on 18 May.”

Click here to read Week 20’s stock picks commentary report

Subsequently, this week on 21 May, CIMB reports that JCY's competitors revealed that their capacity in Thailand will be back in full swing by the end of the third or fourth quarter 2012.

Market took this news negatively as they earlier questioned whether the benefit from the Thailand flood event could have peaked and whether or not such robust results can be sustained and replicated for the next quarters.

As a result, JCY stock price dropped further this week to a total drop of 18% since they announced their quarter results on 17 May to RM 1.33 closing and week low on 25 May.

FAQ: Why and when do stock prices get automatically adjusted?

Have you ever wondered why stock prices get automatically adjusted?

I get asked this question many times before so I figured its best to share this information on this site.

In general, stock prices are automatically adjusted for rights issue, bonus issue, share consolidation and share split. The stock prices are adjusted retrospectively, which means that all historical stock prices before the ex date is adjusted.

As for the case of regular dividends, previous stock prices on the historical chart will not be adjusted, instead, the stock price will automatically adjust upward to the amount of dividends per share when declared. As soon as the stocks reaches its “Ex” date, the stock price automatically drops by the same amount it increased earlier on.

In contrast, special dividends warrant a historical price adjustment because it is ought to be one-off and non-recurring.

Take note that the above only applies to the Malaysia stock exchange or Bursa Malaysia. It may not be applicable to other stock exchanges elsewhere in the World.

Maxis launches Loker, Malaysia's first personal cloud storage service, free 5GB storage and priced at RM15 a month for 10GB and RM 25 a month for 25GB

Maxis Bhd has launched Loker, Malaysia’s first personal cloud service which is available on multiple devices.

The company said in a statement yesterday that Maxis customers who signed up for Loker would received free 5GB of storage space, allowing them to sync, store and share their digital content including pictures, videos, music and contacts from their mobile phones, tablets or PCs. Customers will also be able to share their content on social networking sites and via email.

Product, device, innovation & roaming head T. Kugan said recent trends had shown Malaysians were one of the most active in sharing their experiences online using pictures and videos and that Maxis customers had led the way in this area.

“With Loker our customers will have the freedom to store a much higher volume of digital content. A 5GB storage space is equivalent to 5,000 pictures or 2,500 songs, so you can imagine the sheer size of it,” he said.

Maxis Loker is available on Android and BlackBerry devices and tablets, as well as PCs and Macs, with more device platforms to be made available soon. There is also an option to upgrade the 5GB storage space at any time to 10GB at RM15 a month or 25GB at RM25 a month.

Source: www.thestar.com.my