FBMKLCI 1560.40 DJ-41.59 CRUDE OIL100.73 RM 2.9955

Malakoff Corp Bhd, owned by MMC Corp Bhd, is expected to be awarded a contract to build a 1,000MW coal-fired power plant soon, said sources. According to sources, the plant will have a 15-year concession to sell the power at a rate of 25 sen per kwh to Tenaga Nasional Bhd (TNB).

Petroliam Nasional Bhd (Petronas), via its wholly-owned subsidiary Petronas International Corp Ltd (PICL), has signed an agreement with Canada-based Progress Energy Resources Corp to acquire 50% of the latter's interest in shale gas assets worth C$1.07bil (RM3.32bil). In a statement yesterday, Petronas said the agreement was signed to develop the Altares, Lily and Kahta shale gas assets in north-eastern British Columbia. “The assets included in the transaction cover approximately 150,000 gross working-interest acres of land with an estimated contingent gas resource of more than 15 trillion cu ft. The assets will be operated by Progress,” said Petronas.

MTD Construction Sdn Bhd (MTDC) has won its RM38.59mil suit against AXA Affin Assurance Bhd  involving a claim on a contractors’ All Risks Policy against the latter. In a note to Bursa Malaysia yesterday, MTD ACPI Engineering Bhd said the case was ruled in favour of MTDC on May 27, with the judge holding AXA Affin liable for the damages to be assessed before the Court Registrar.

The hike in electricity tariff and gas prices will impact the steel, cement and glove manufacturing sectors, according to research firms. HwangDBS Vickers Research said the full-year earnings projections of steel makers Southern Steel Bhd, Kinsteel Bhd and might be lower by between 17% and 25% while forecast earnings for glove manufacturers Top Glove Corp Bhd and Kossan Rubber Industries Bhd could drop by between 5% and 7%. CIMB Research said electricity accounted for 8% of total costs for steel maker Ann Joo Resources Bhd as well as 18% of those for cement producers Lafarge Malayan Cement Bhd and Tasek Corp Bhd.

Petra Energy Bhd’s wholly-owned subsidiary, Petra Resources Sdn Bhd (PRSB) has signed a memorandum of understanding (MoU) with Labuan Shipyard & Engineering Sdn Bhd (LSE) for the proposed utilisation of the latter’s shipyard facilities at Victoria Harbour, Labuan Island. Petra Energy told Bursa Malaysia yesterday that the MoU was for the purpose of PRSB’s fabrication activities.

Mobile virtual network operator XOX Bhd’s initial public offering (IPO) has been oversubscribed by 13.2 times. Its IPO atracted 6,652 applications for 106.5 million shares with a total value of RM85.2mil, for the public tranche of 7.5 million shares, the company, which slated for ACE market listing on June 10, said in a statement yesterday.

Genting Bhd could also be in focus given its overseas expansion plans in Miami, with expectations that the group would try to secure a gaming licence there.

FBMKLCI 1556.42 DJ-279.65 CRUDE OIL100.13 RM2.9770

The potential merger of either Malayan Banking Bhd (Maybank) or CIMB Group Holdings Bhd with RHB Capital Bhd would bring the new enlarged entity not too far behind some of the largest banks in the region. The top regional banks in Asean include three Singapore banks DBS Group Holdings Ltd, Oversea-Chinese Banking Corp Ltd (OCBC) and United Overseas Bank Ltd (UOB) with market capitalisation of US$27.7bil, US$25.7bil and US$24.5bil respectively. While in terms of asset size, the Singapore banks remain at the top, a Maybank-RHB Cap merger could overtake DBS Group in terms of combined market capitalisation with US$28.8bil. The potential merger of CIMB-RHB, on the other hand, would see a combined market capitalisation of US$27.3bil, just marginally below DBS but would overtake both OCBC and UOB. In terms of asset size, DBS, OCBC and UOB stand at US$238bil, US$198.4bil and US$178.8bil respectively.

Following the dismissal of Primus (M) Sdn Bhd's petition against the sale of EON Capital Bhd (EON Cap) to Hong Leong Bank Bhd (HLB), Primus now has to pay RM1.9mil in court costs. High Court Judicial Commissioner Varghese George Varughese ordered Primus to pay the sum to the 13 respondents in its suit EON Cap and nine of its board members, and three entities controlled by two of those board members.

Sarawak Energy Bhd (SEB), which will have the rights to the Bakun dam's power at a rate of 6.25 sen per kwh, has a firm utilisation rate of 50% from its four customers. The electricity from the Bakun dam which is priced at 6.25 sen/kwh with an annual hike of 1.5% under a power purchase agreement (PPA) between Sarawak Hidro Sdn Bhd and Syarikat Sesco Bhd confirmed a StarBiz report yesterday. StarBiz quoted sources saying the rate represented the cheapest tariff in Asian history but would be escalating at 1.5% per annum for 30 years.

SapuraCrest Petroleum Bhd (SapCrest) has signed an agreement with Real Mild Sdn Bhd and Labuan Shipyard and Engineering Sdn Bhd (LSE) for the subscription of 25 million new shares in LSE. The shares, according to SapCrest in a filing with Bursa Malaysia yesterday represented a 50% stake of the enlarged share capital of LSE.

Oil and gas services provider Dialog Group Bhd has entered into a joint-venture agreement with Vopak Terminal Pengerang BV, a unit of the Royal Vopak group, for the development of an independent deepwater petroleum terminal at Pengerang, Johor worth RM5bil. The company told Bursa Malaysia yesterday that both parties had set up a joint-venture company - Pengerang Terminals Sdn Bhd - in which Dialog would hold a 51% stake and Royal Vopak the remainder.

Water concessionaire Puncak Niaga Holdings Bhd is expected to register a loss this financial year following the adoption of a new accounting treatment that requires certain charges to be capitalised as intangible assets and amortised. Managing director Datuk Hashim Mahfar said in a statement yesterday that the IC Interpretation 12-Service Concession Arrangements, which were retrospective, had also resulted in a drop in shareholders' funds from RM1.5bil to RM35.6mil. However, Puncak Niaga has obtained a conditional waiver from being categorised a PN17 company until the announcement of its second-quarter results for the period ending June 30, 2012. (Under Bursa Malaysia rules, that would have been the case if a company's shareholders' funds fell below RM40mil).

Benalec expects to realise a net gain of RM34.93 million from the completion of separate agreements its units have entered for the disposal of land and joint venture for a mixed property development. Benalec on June 1 said its subsidiaries Sentosacove Development Sdn Bhd and Orientalcove Realty Sdn Bhd had entered into a sale and purchase agreement and joint venture agreement with Vista Selesa Development Sdn Bhd, respectively.

CBIP is selling its entire equity interests in Sachiew PLANTATION []s Sdn Bhd and Empressa (M) Sdn Bhd for a total of RM268.06 million. Sachiew is principally involved in the cultivation of oil palm and production of crude palm oil and palm kernel, while Empressa engages in the cultivation of oil palm and the operation of a palm oil mill. CBIP said the gross proceeds of RM268.06 million from the disposal would be utilised for its working capital including for financing receivables, inventories, and repayment of bank borrowings.

Bina Puri’s 80%-indirect owned subsidiary PT Megapower Makmur has received two contracts from PT PLN (PERSERO) to operate power plants in Indonesia.

FBMKLCI 1558.29 DJ+128.21 CRUDE OIL102.85 RM 2.9735

the biggest takeover battle in Malaysia's corporate history, banking heavyweights Malayan Banking Bhd and CIMB Group Holdings Bhd have declared their interest to wrest control of RHB Capital Bhd, which could cost over RM20bil. This development confirmed heated speculation in recent weeks that the country's largest and second largest banks, Maybank and CIMB respectively, were vying to take over RHB Cap, which is the fifth largest banking group. Sources said due to the rife market talk and “leaks”, Maybank and CIMB were directed by the central bank to disclose their interest to bid for RHB Cap to curb further speculation. Alongside this major takeover bid, is the sale of Abu Dhabi Commercial Bank's (ADCB) 25% stake in RHB Cap.

Investor sentiment towards Tenaga Nasional Bhd (TNB)'s stock immediately turned positive, following Monday's announcement of a long-awaited power tariff hike, as evident in the rise of the company's share price yesterday. The counter gained 59 sen, or 9%, to close at RM7.11 yesterday. It also topped the list of most actively traded stock on Bursa Malaysia, with 89 million shares changing hands. TA Research in its report explained that the impact on TNB's FY11 earnings would slightly be negative as the higher tariff would only have two months' impact on revenue, that is, for July and August, since June bill would still be reflecting usage in May, in which the previous tariff still applied. The higher gas price, on the other hand, will have three months' impact, that is between June and August. In addition, the revised tariff was still based on coal price of US$85 per tonne, and Tenaga still had to absorb the differential to actual market rate of around US$120 per tonne.

Hydropower from the 2,400-megawatt Bakun Dam project is likely to be sold, on an escalating basis, at 6.25 sen per kilowatt (KwH) to Sarawak Energy Bhd, the state utility arm. Sources told StarBiz this represented the cheapest tariff in Asian history but would be escalating at 1.5% per annum for 30 years. “The tariff is expected to be sufficient to pay off all Federal Government debts in 15 years,'' said a source, adding that in total, the valuation came close to RM8bil. The power purchase agreement (PPA) signing between the Federal and Sarawak state governments is expected to take place today.

Maxis Bhd saw its first quarter net profit decline slightly by some 2% to RM539mil compared with RM552mil made a year ago due to higher borrowing costs. For the three-months ended March 31, Maxis made a revenue of RM2.13bil, or less by 1%, compared with RM2.15bil made a year ago. Revenue declined due to lower voice, interconnect and hubbing revenue. the company said the drop in interconnect revenue was due to reduction in mobile and fixed termination rates since July last year. Meanwhile, the decline in hubbing revenue was in line with the planned scale down in its hubbing business. Maxis declared a first interim single-tier tax exempt dividend of 8 sen per share in respect of the financial year ending Dec 31, 2011, to be paid on June 30, 2011.

Malaysia Airports Holdings Bhd (MAHB) recorded a 20% jump in net profit to RM88mil for the first quarter ended March 31, led by strong demand for air travel. This was despite uncertainties in the aviation sector due to political tensions in the Middle East and earthquake and tsunami in Japan. Revenue rose 22%, or RM118mil, to RM610mil from RM498mil a year ago. However, the airport operator's earnings before interest, tax, depreciation and amortisation (EBITDA) was marginally lower at RM189mil from RM190mil a year earlier.

Axiata Group Bhd reported a 40.5% year-on-year drop in net profit to RM548.4mil for the first quarter ended March 31. The lower net profit was attributed mainly to a 97.7% year-on-year dip in the group’s other operating income to RM7.5mil in the quarter under review. This was because there was a one-off gain from the disposal of shares in Indonesian unit PT XL Axiata Tbk of RM307.5mil recorded in the same period last year.

MMC CORPORATION BHD []’s net profit for the first quarter ended March 31, 2011 rose 29.5% to RM43.04 million from RM33.23 million a year earlier, due mainly to higher contributions from most of its divisions. Revenue for the quarter increased to RM2.23 billion from RM2.06 billion in 2010. Earnings per share was 1.41 sen while net assets per share was RM2.19.

Ajinomoto (Malaysia) Bhd net profit for the fourth quarter ended March 31, 2011 rose to RM5.39 million from RM1.48 million a year earlier, due mainly to lower sales and marketing expenses. Ajinomoto proposed dividend of 20 sen per share in respect of the FY ended Mrch 31, 2011 comprising a first and final gross dividend of nine sen; a nine sen tax-exempt dividend as well as special gross dividend of two sen per share. For the financial year ended March 31, Ajinomoto’s net profit rose to RM25.73 million from RM23.94 million, on the back of revenue RM316.17 million.

FBMKLCI 1542.84 CRUDE OIL 100.67 RM 2.9910

After several rounds of deferment and a long wait, Tenaga Nasional Bhd (TNB) has finally gotten the green light to implement new electricity tariff rates which will help it mitigate the effects of higher gas prices. “As a result of the gas price increase, TNB's gas bill will increase by about RM1.5bil per year. “Due to the gas price increase, TNB will have to increase the electricity tariff to cover for the additional cost,” TNB president and CEO Datuk Seri Che Khalib Mohd Nor said at a briefing yesterday. Tenaga has been allowed by the government to increase its base tariff by 2%. As a result, average tariff will increase by 7.12%; industrial consumers and commercial users will see an average hike of 8.3%, but Tenaga said there would be no increase to about 75% of households.

Boustead Heavy Industries Corp Bhd (BHIC) signed a joint-venture deal with Prokhas Managers Sdn Bhd (PMSB) yesterday to supply artillery propellants to the Malaysian Armed Forces. Under the joint venture, a new company, namely Pyrotechnical Ordnance Malaysia Sdn Bhd, will produce double base artillery propellants at a plant located on a 21-acre site in Bentong, Pahang. The plant is due to begin production in the third quarter of next year.

Analysts are confident that Sime Darby Bhd is making progress with the portfolio review and divestment of non-core assets after suffering massive losses in the oil and gas division a year ago. The share price has also moved up especially since the announcement of the non-binding memoranda of agreement to sell the Teluk Ramunia fabrication yard to Petroliam Nasional Bhd for RM296mil and the Pasir Gudang fabrication yard to Malaysia Marine and Heavy Engineering Holdings Bhd for RM399mil. The conglomerate posted a net profit of RM820.1mil for the third quarter ended March 31 after suffering a loss of RM308.6mil in the same corresponding period last year on higher contribution from plantation, motors, industrial, and energy and utilities divisions. Revenue for the period under review also rose to RM10.6bil from RM7.6bil previously.

Oldtown Bhd is pricing its issue/offer price at RM1.25 per share for its initial public offering (IPO) of 96.4 million shares of RM1 each,  The company, which owns and operates the Oldtown White Coffee chain, aims to list on Bursa Malaysia's Main Market on July 11. According to its prospectus draft, the company is offering 63.4 million new ordinary shares for application by the Malaysian public, directors, eligible employees and business associates of Oldtown and its subsidiaries.

Malayan Flour Mills Bhd (MFM) has proposed a share split of every one existing ordinary share of RM1 each in the company into two new ordinary shares of 50 sen each. Based on the issued and paid-up capital of MFM of RM107.6mil comprising 107.6 million shares as at May 27, the share split would result in an issued and paid-up capital of RM107.6mil comprising 215.3 million shares. 

CIMB Group's first quarter results came in slightly below expectations but the second half will likely be boosted by stronger capital market activities, higher domestic net interest margin (NIM) and impact from various economic transformation projects. CIMB reported net earnings of RM917mil, representing an increase of 9.3% for the first quarter (Q1) of financial year (FY) 2011.

PLUS Expressways Bhd’s net profit for its first quarter ended March 31 rose by 75.3% to RM495.1mil as it received RM364mil of compensation in accordance with the terms in the current concession agreements.

PLUS said RM364mil of compensation was included in the current quarter under review.

TIME dotCom Bhd net profit for the first quarter ended March 31 surged 21.8% to RM22.9mil from a year ago due to higher revenue and improved margins. Revenue for the quarter increased 7.7% from the same quarter last year to RM70mil as a result of higher data earnings within its wholesale and corporate segments. TIME’s data business posted a 16% growth to contribute RM51.1mil in revenue. Earnings per share for the quarter also increase to 90 sen from 74 sen a year ago.

Proton unit Group Lotus plc has won the right to use the name “Lotus” within Formula 1, and entitled to race in its historic black and gold livery. Proton said the Chancery Division of the English High Court had on last Friday, May 27 had also ruled that 1MRT was in breach of the Licence granted to them by Group Lotus to race in Formula 1 under the name Lotus Racing and had awarded Group Lotus damages in respect of that breach.

Brem Holding Bhd net profit for the fourth quarter ended March 31, 2011 surged to RM26.72 million from RM2.12 million a year earlier, due mainly to the reversal of allowance for impairment of RM21.5 million.

The company proposed a gross dividend of five sen per share for the financial year ended March 31.

FBMKLCI 1548.69 DJ+38.82 CRUDE OIL100.46 RM2.9910

Sime Darby posted net profit of RM820.12 million in the third quarter ended March 31, 2011 compared with net loss of RM308.63 million a year ago. Revenue increased by 39.8pct to RM10.59 billion compared with RM7.57 billion. Earnings per share were 13.66 sen.

Land & General posted losses of RM3.22 million in the fourth quarter ended March 31, 2011 compared  with net profit of RM12.91 million a year ago mainly due to losses in quoted investments. “The loss for the current quarter arose mainly due to  fair value loss of RM3.5 million recognised on its quoted investments, net interest expenses of RM1.1 million recognised from FRS 139 implementation, and share of losses from its jointly controlled entities of RM1.7 million,” it said.

Alam Maritim posted net losses of RM7.38 million on weaker performance by it offshore support vessels segment. Net loss for 1Q ended March 31, 2011 was a stark contrast of RM20.51 million a year ago.

Revenue fell 48% to RM34.68 million from RM66.87 million. Loss per share was 0.9 sen compared with earnings per share of 4.0 sen.

Kulim’s earnings jumped 105% to RM127.10 million in the first quarter ended March 31, 2011 (1QFY11) from RM61.89 million a year ago. Its revenue climbed 34% to RM1.657 billion from RM1.234 billion while earnings per share were 10.12 sen compared with 16.40 sen a year ago.

IJM Corp swung into the red in the fourth quarter ended March 31, 2011 with net loss of RM20.19 million versus a net profit of RM111.04 million a year ago due to its overseas operations. The losses were expected by the market as it would have to make provisions and losses in its international operations. Its operating profit before tax fell by 53.9% to RM75 million compared to RM163 million a year ago “following the provision made against contractual claims, recovery of receivables and project losses in some of the group’s overseas projects”. Its revenue rose 20.9% to RM1.047 billion from RM866.46 million mainly due to the CONSTRUCTION [], property, industry and infrastructure divisions. It announced an interim dividend of 7.0 sen a share.

KUB Malaysia Bhd, a telecommunications services provider, fell to its lowest level in more than two months after posting a first-quarter loss of RM5.04 million. The stock slid 2.1 per cent to 69.5 sen at 9:09 a.m. local time in Kuala Lumpur trading, set for its lowest close since March 18.

Malayan Flour Mills Bhd proposed a share split and special dividend of 62 sen per share, according to a company statement in Kuala Lumpur today. The company also proposed to raise as much as RM200.2 million from a rights offer, it said.