FBMKLCI 1565.06 DJ-43.25 RM 2.948

New stock listing

No.  Stock  Code    Stock Name     Reference Price      Lower Limit     Upper Limit

1.         5199             HIBISCS                      0.625                 3.12              0.325

Hibiscus Petroleum – a special purpose acquisition company – will make its debut on Monday. Its public issue of 10 million new shares at 75 sen each made available to the public was oversubscribed 3.8 times.

Petronas Gas Bhd is reported to be planning a RM1.2 billion fund raising exercise to finance its 300MW gas-fired Kimanis power plant in Sabah. This would be undertaken though project financing while the rest would be from equity financing. Petronas Gas is said to be looking at Sukuk bonds or a term loans for the 80% of the funding while the remaining 20% would be financed from equity.

Latexx Partners Bhd, a Malaysian rubber-glove maker, fell to its lowest level in seven weeks after its merger plan with the YTY group of companies collapsed. The stock slid 4.1 per cent to RM2.09 at 9:10 a.m. local time, set for the lowest close since June 2.

FBMKLCI 1582.94 DJ+168.43 CRUDE OIL 95.15 RM 2.9860

Tanjung Offshore was awarded RM50 million contract by Petronas Carigali Sdn Bhd to provide three offshore support vessels for periods ranging between one and three years. The contract would see it providing the ships for the primary period from June and July 2011 respectively with options to extend between one and two years.

Wah Seong secured a US$45 million (RM136.78 million) contract from Australia Pacific LNG Pty Limited to provide pipeline coatings for the Australia Pacific LNG project in Australia. The contract secured by its pipe coating business unit on June 29 involved coating of over 700 km of pipes.

Petronas Gas inked a shareholders’ agreement with NRG Consortium (Sabah) Sdn Bhd (NRG) to provide operation and maintenance services to a 300-Megawatt gas power plant and its related facilities and infrastructure in Kimanis, Kota Kinabalu. The service would be provided through a joint venture company.

Notion Vtec announced that the controlling shareholders of Notion Vtec had abandoned negotiations to dispose of their business/equity interest after talks with the interested party fell through, just two weeks after it said negotiations were still on-going. Analysts said pricing could be an issue due the difficulties which the hard-disk drive manufacturers are facing. Perhaps, Notion VTec could brace for a mild recovery and await better offers.

The Edge weekly reports that Asia Media is seeking a boost from its broadcasting licence. The company's huge margins and licence to provide free-to-air broadcasting services are an attractive proposition for bigger media players eyeing a piece of the electronic media market.

Tebrau Teguh Bhd is shifting its focus to high-end residential and commercial developments from low to medium cost residential projects previously. Executive vice-chairman Johar Salim Yahaya said it was a normal progression or transition for any developer to shift its focus to development projects that provided better yields. It has 413.53ha of undeveloped land and 12km water frontage within the Tebrau-Plentong river basin development with a net book value of RM591.93mil.

FBMKLCI 1562.52 DJ+108.98 CRUDE OIL91.09 RM 3.0265

New stock listing

No.  Stock  Code    Stock Name     Reference Price      Lower Limit     Upper Limit

1.         5202                   MSM                      3.50                         2.45                       17.50

AmResearch has valued MSM at RM4.53 per share based on a price earnings ratio (PER) of 10 times financial year 2012 earnings per share. Its PER of 10 times is about 23% below the regional average PER of 13 times ex-Japan and Australia. The research house said MSM was expected to be a high dividend-yielding stock. It added that the group’s estimated FY11 to FY12 dividend yields of 6% to 7% (based on the IPO price of RM3.50) would be higher than most of the consumer and numbers forecast operator companies. It said MSM plans to pay out 50% of its net profit as dividends every year.

Oil and gas services provider Bumi Armada has set a price range of RM2.80 to RM3.15 per share for its initial public offering (IPO) next month, raising as much as US$906mil (RM2.77bil), according to a term sheet seen by Reuters yesterday. Bumi Armada is an offshore support specialist, and is the only Malaysian company that owns floating production storage and offloading vessels, which carry a premium lease rate. Bumi Armada was privatised in 2003 by tycoon T. Ananda Krishnan, and a planned relisting in 2008 was delayed due to the global financial crisis.

Petroleum Nasional Bhd and its partner PetroVietnam have been successful in their drilling campaign via the Diamond-4X exploration well in offshore Vietnam. The Diamond-4X well, drilled to test the hydrocarbon potential in the prospect’s clastics reservoir and fractured granite basement, was spudded on April 27, 2011 and reached its final target depth of 4,564 m on June 1, the company said in a statement.

The well tested the flow rate of 5,200 barrels per day of oil.

Shandong-based Sozo Global Ltd intends to set up a halal processing facility in Malaysia within the next six to 12 months from now. Chief executive officer Shen Hengbao said the company had completed its feasibility study on the project and was currently identifying the potential locations for the plant. He said to date, it had shortlisted three states as the potential location for the plant but nothing was finalised. Sozo, according to him, aims to base the facility at a park dedicated for halal food products with good transportation and logistics network to facilitate distribution and export activities. Shen said Sozo would invest more than RM5mil in the plant which will cater halal Chinese cooked duck meat products for domestic and international markets.

Malaysia Airlines (MAS) does not rule out the possibility of taking the company private or spin off its other divisions, according to chairman Tan Sri Dr Munir Majid. “No options are off the table. It's the shareholders' call. We can put the option on the table but it is still the shareholders call,” he said after the company AGM that lasted for three hours yesterday. On Monday, StarBiz reported that Maybank Investment Bank suggested that MAS be privatised but list Firefly Sdn Bhd, MAS Engineering, MasKargo and even its terminal services. The research house in its report said the privatisation of MAS was not an outlandish idea and the shareholders might just warm up to the idea. More so since the analyst community had an overwhelming “sell” call on the carrier after the airline reported RM242mil in net loss for the first quarter ended March 31, 2011.

Kim Loong, its earnings jumped 49% to RM19.91 million from RM13.36 million a year ago boosted by its PLANTATION []s business, underpinned by the strong crude palm oil (CPO) prices. Revenue rose 37.9% to RM175.15 million from RM127 million while earnings per share were 6.52 sen versus 4.39 sen a year ago. Pre-tax profit rose 68% to RM35.16 million from RM20.89 million. “The 38% and 68% increases in revenue and PBT respectively were mainly due to higher CPO and palm kernel oil prices which were about 38% and 91% respectively higher than the corresponding period last year,” Kim Loong said.

FBMKLCI 1551.10 DJ-21.87 CRUDE OIL101.42 RM2.964

Petronas reported net profit attributable to shareholders of US$17.46 billion in the financial year ended March 31, 2011 (FY11), which was a 50% increase from the US$11.64 billion in FY10.Revenue increased to US$76.82 billion, up 26.1% from US$60.92 billion. President and CEO  Datuk Shamsul Azhar Abbas said Petronas will be spending RM300 billion in capital expenditure for the next five years, this was an upward revision from the RM250 billion mentioned a few months ago. For the fourth quarter, its earnings increased 49.8% to US$3.49 billion from US$2.33 billion the year before on the back of higher realised prices for petroleum products, crude oil and condensates, as well as other energy commodities.  Its revenue increased 22.8% to US$21.45 billion from US$17.47 billion.

Latexx Partners  accepted a lower offer of RM1.25 billion from the YTY Group of companies in a proposed merger instead of RM1.365 billion earlier. The glove maker said 30% of the purchase consideration or RM375 million would be in cash. The balance of RM875 million would be in the form of 350 million new shares at an issue price of RM2.50 per share.

MAA Holdings has obtained the Minister of Finance’s (MoF) approval to dispose of its 100% stake in Malaysian Assurance Alliance Bhd (MAAB) for RM344 million to Zurich Insurance Company Ltd.

Tenaga Nasional Bhd (TNB) is buying power from Singapore-based PowerSeraya Ltd, a unit of YTL Power International Bhd, as a shutdown of Petroliam Nasional Bhd-owned gas production platforms for maintenance work made worse a dwindling gas supply situation. Chief executive officer Datuk Seri Che Khalib Mohd Noh said in a reply to a StarBiz query that the purchase was made to ensure supply security. “We're buying 180MW only, which represents 1.5% of total demand,” Che Khalib said. The report said the purchase was made following an approach by TNB in April to Singapore's Energy Market Authority and the generating companies for electricity supply needed to tide over capacity shortages “for a few months”. This was caused by natural gas feedstock shortages faced by TNB's power stations due to the maintenance shutdowns, which could further reduce by 30% in the May to June period.

The “very substantial transaction” that United U-Li Corp Bhd (Ulicorp) is expected to announce tomorrow is likely to be the signing of a deal with a foreign party. The management has remained tight-lipped about the details, but observers believe that the agreement will be for a major joint venture. In addition, sources close to the company have ruled out the possibility of the company being taken private. The proposed joint venture is primarily to open doors for business expansion, and not so much about funding, because the company's balance sheet is fairly sturdy.”

UOA Development Bhd closed at RM2.59, one sen lower than its reference price of RM2.60 per share, after the stock made its debut on the Main Market of Bursa Malaysia yesterday.chief operating officer (development division) David Khor said UOA would work towards integrating more green building components in its commercial development. On its recent acquisition of a RM50mil land in Sri Petaling, Khor said the company planned to build high-end condominiums there but the details had yet to be finalised. “The company has about RM8.6bil worth of properties to be launched over the next seven to 10 years,” he said. Khor said about 70% of the properties developed by UOA were for commercial purposes while the rest were residentials. “We hope the ratio will change in two years, with residential projects contributing more (to the volume),” he said.

With the emergence of Malaysia’s pilgrim fund board Lembaga Tabung Haji (LTH) as one of major shareholders of Faber Group Bhd, chances of the latter securing renewal of crucial contracts and new projects, especially in the local and the United Arab Emirates (UAE) markets, will seem brighter now. According to analysts, investors over the past few months have been particularly concerned about the uncertainty of Faber’s 15-year concession in providing health support services to government hospitals in Malaysia being renewed. “But with LTH backing now, the prospects of the concession being renewed have certainly improved, and this would certainly enhance investor confidence in the integrated facilities management and property solutions company,” MIDF Amanah Investment Bank Bhd analyst Belford Chang told StarBiz.

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 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 1523.37 DJ+75.68 CRUDE OIL104.52 RM2.9570

Investors can look forward to two large initial public offerings (IPOs) coming on board the Main Market of Bursa Malaysia in the second half of this year. One is UOA Development Bhd, which is expected to be listed in June, with a potential market capitalisation of RM3bil. The other is Axis Global Islamic Real Estate Investment Trust (REIT), a unit of Axis REIT Management Sdn Bhd. It is set to be the world's largest Islamic REIT, also valued at some RM3bil once it is listed.

Dialog Group Bhd said it was still bidding with potential Australian partner Roc Oil Co Ltd for contracts pertaining to Petroliam Nasional Bhd's (Petronas) marginal oilfield developments. The company told Bursa Malaysia yesterday that Roc Oil was its business partner and was presently tendering for upstream oil and gas prospects in Malaysia with the possibility of a joint venture between the two companies if the tender was successful. “To date, Dialog and Roc Oil are still in the bidding process and have not entered into a joint-venture agreement and neither parties have received any letter of intent for marginal oilfield projects from Petronas,” it said.

Maybank is raising its deposit and base lending rates effective Wednesday. Its deposit rates will be revised upwards by up to 30 basis points, while its base lending rate (BLR) will be increased by 30 basis points from 6.30% per annum to 6.60% per annum.

RHB Bank Bhd is also raising the BLR from 6.30% per annum to 6.60% per annum, effective Wednesday.

Petroliam Nasional Bhd (Petronas) will announce on Friday plans to invest around RM50bil in an integrated downstream oil and gas complex in Pengerang, Johor, reliable sources said.

Shell Refining posted net profit of RM135.54 million in the first quarter ended March 31, 2011, up 131% from RM58.61 million a year ago. Revenue increased by 29% to RM3.20 billion from RM2.48 billion while earnings per share were 45.18c versus 19.54 sen a year ago. Shell Refining reported after tax stockholding gains of RM153 million for 1Q11.

Hartalega’s net profit for the fourth quarter ended March 31, 2011 rose 12.9% to RM52.39 million from RM46.41 million a year ago, driven by continuous expansion in production capacity, increase in demand, effective cost control and improvement in production processes. Revenue for the quarter was up 17.8% to RM192.52 million from RM163.39 million. Earnings per share were 14.41 sen while net assets per share was RM1.36.

HONG LEONG BANK BHD [] has proposed to increase the size of the renounceable rights issue by RM1 billion from RM1.6 billion to RM2.6 billion to further strengthen its capital base and for working capital purposes. HONG LEONG FINANCIAL GROUP BHD [] is providing a RM2.3 billion loan Hong Leong Bank to assist it with its risk weighted capital adequacy ratio (RWCAR).

FBMKLCI 1485.42 DJ +249.76 CRUDE OIL 86.57 RM 3.13

Time dotCom Bhd (TdC) has extended its high-speed fibre connection to another 30,000 premises in a bid to expand its existing broadband subscription base of around 10,000 in the corporate and retail segment.

KNM Group Bhd’s wholly-owned subsidiary, KNM International Sdn Bhd, has entered into a shareholders agreement with Aveng (Africa) Ltd set up a joint-venture company in South Africa.49.9%:50.1% basis.

Perodua remains unconvinced a merger with rival Proton Holdings Bhd would be in its best interest after a study of a possible merger of both national car companies was completed. Managing director Datuk Aminar Rashid Salleh, who said Perodua had not been briefed on the findings of the study undertaken by Frost & Sullivan, reiterated the stance of the company it's not keen to pursue a merger.

Petronas Gas has signed a heads of agreement with its parent company Petronas to develop liquefied natural gas (LNG) re-gasification facilities and supply LNG to the latter. In an announcement to Bursa Malaysia yesterday, PGas said the re-gasification facility would be located in the vicinity of Sungai Udang Port in Melaka encompasses two floating storage unit (FSU) to receive and store LNG, an island jetty and re-gasification units and subsea and onshore pipelines to pipe the gas to the Peninsular Gas Utilisation (PGU) pipeline network.


Cahya Mata Sarawak, through 51%-owned subsidiary CMS Land SB, has signed a joint-venture agreement to build, own and manage a four-star hotel and service apartments at the Kuching Isthmus in Sarawak. The building, comprising 381 hotel rooms and 96 service apartments, will cost about RM380m, including outfitting, furniture, fittings and equipment, but excluding financing costs and contingencies.

 

Dialog Group is acquiring a 90% stake in Fitzroy Engineering Group (FEGL), one of New Zealand’s largest heavy fabrication and multi-disciplined engineering companies, for RM31.7m (NZD13.5m) cash. The company said yesterday that its wholly-owned subsidiary, Dialog System (Asia) (DSAPL), had entered into a conditional sale and purchase agreement with Peter Clayton White-Robinson to acquire a 90% stake representing 2.38m shares.