FBMKLCI 1525.92 DJ-117.53 CRUDE OIL 105.93 RM 2.99

Land & General Bhd’s EGM will be at the Sri Damansara Club, KL at 10am. The company proposes to acquire 10 parcels of land with 27-hole golf course and clubhouse and several plots of vacant land in Seremban for RM25 million. MSWG said the proposed acquisition is a related party transaction involving at least four directors on the board and major shareholders.

OSK HOLDINGS BHD [] AGM will be at Plaza OSK, KL at 2.30pm. MSWG to raise questions about the reasons for the allowances of impairments losses on investments classified under Securities HTM of RM7.6 million and Securities AFS of RM38.7 million as disclosed in Note 37 on page 152 of the annual report. MSWG to also ask as the group loans and financing segment was the third biggest contributor, accounting for 23% of the group's pre-tax profit. In 2010, OSK loans and financing segment achieved pre-tax profit growth of 40% to RM45.5 million. What are OSK's plans to expand this segment, especially since the group was able to amass substantial deposit base of RM4.5 billion?

The Edge FinancialDaily reports the gaming sector is in the spotlight once again, with the focus on Berjaya Sports Toto Bhd (BToto).According to a Reuters report, tycoon Tan Sri Vincent Tan was mulling the sale of a 49% stake in BToto's unlisted numbers forecast operator (NFO) for about US$1 billion (RM3.03 billion).

ExxonMobil Exploration and Production Malaysia Inc has extended Handal Resources Bhd’s contract to provide crane services for a further one year, from May 1 to April 30, 2012.

Its unit Handal Offshore Services Sdn Bhd had received an extension of contract which it said would contribute to the group’s earnings for the financial year ending Dec 31, 2011. The contract was initially awarded to Handal Offshore in May 2006 for a five-year term expiring in April 2011.

Eastern & Oriental Bhd has received the Penang Government’s in-principle approval for its master plan to undertake a mixed integrated project on a proposed reclaimed site on the island. The company said the approval was for the development on the site, which is to be reclaimed under phase two of its Seri Tanjung Pinang in Tanjong Tokong, Penang.

Favelle Favco Bhd’s units have secured contracts worth a combined RM89.5 million for the supply of four offshore cranes. Favelle Favco Cranes Pte Ltd was to supply Keppel Fels Ltd with an offshore crane, which was expected to be delivered from end 2011 to early of 2012.

MAH SING GROUP BHD [] is buying nine parcels of land in Tanjung Kupang, Johor Bahru measuring 205.72 acres for RM54.7 million for an industrial park. The land was acquired at about RM6.10 per sq ft and it plans to develop into an integrated industrial and business park named Mah Sing i-Parc. “Based on preliminary plans, Mah Sing i-Parc will comprise semi-detached factories, detached factories and shop offices with an estimated gross development value of approximately RM610 million,” it said.

Press Metal Bhd and three foreign companies, which together plan to invest some RM9.5bil in energy-intensive industries in Samalaju Industrial Park, Bintulu, have signed separate power purchase agreement (PPA) term sheet with Sarawak Energy Bhd (SEB). SEB,Asia Minerals Ltd and Tokuyama Corp – would require a long-term supply of 1,300MW to power their plants. The electricity will be supplied by the 2,400MW Bakun hydroelectric dam, which is expected to produce its first 300MW in three months.

A matter of time before Maybank woos OSK?

THERE are compelling reasons for top lender Malayan Banking Bhd (Maybank) to take over OSK Holdings Bhd (5053) and analysts wonder if it may just be a matter of time before Maybank officially starts courting the regional investment banking and brokerage group.

Maybank has long wanted to grow its investment banking business regionally and OSK offers it the platform to do so.

A takeover will also enable Maybank to go regional with its brokerage business.

Unlike its closest rival CIMB Group Holdings Bhd, Maybank does not have a brokerage business outside Malaysia.
OSK has quietly but aggressively expanded beyond Malaysia in recent years, and now has a presence in Cambodia, Singapore and Indonesia.

Maybank's investment banking business including brokerage, contributes less than 5 per cent to the group's overall earnings and this is something it needs to improve on.

Maybank has neither confirmed nor denied a recent report that it is keen to buy OSK, saying only that it is always on the lookout for opportunities to be a regional player.

OSK, meanwhile, said it had not entered into any serious or exclusive talks with any party on equity or strategic partnerships.

"This is still preliminary at this stage as there are no formal approvals to commence negotiations, but at face value, the deal looks compelling for Maybank if it intends to spruce up its broking business regionally," noted HwangDBS Vickers Research' banking analyst, Lim Sue Lin, in a report yesterday.

A takeover would also immediately catapult Maybank to become the country's top broker by value and volume.

OSK ranked top in terms of trading volume as at October this year with an 11 per cent market share, compared with Maybank's 5.5 per cent share.

OSK booked a RM112 million net profit last year, and while the earnings enhancement to Maybank would be relatively small, in terms of ranking and regional presence, "Maybank would be charting new territories," Lim noted.

Still, while there are strong reasons for Maybank to buy OSK, it remains to be seen if the latter's controlling shareholder and group managing director Ong Leong Huat, who has a 31.5 per cent stake, will want to sell.

Given that he has steadily built up the business and is grooming his son, who already works with OSK, to takeover and grow it further, indications are that he will not let go unless there is an irresistible offer.

If the transaction is priced at two times the book value, the total price tag for OSK would be around RM2.2 billion, said Lim. (OSK's book value as at June this year was RM1.68 a share.)

OSK's share price, which has been on the rise of late, surged 5.4 per cent to RM1.97 yesterday, its highest close in 39 months. Maybank fell 1.8 per cent to RM9.10.

The last investment banking transaction in Malaysia, in 2007, was done at one-time book value. This was when Hong Leong Investment Bank bought Southern Investment Bank from CIMB for RM65 million.

Investment banking transactions before that were done at between 1.2 times and 1.4 times book value, analysts said. But the targets, including Southern Investment Bank, were small whereas OSK is a regional franchise.

Apart from Ong's 31.5 per cent stake, OSK's shareholding structure is fragmented, with shareholders each holding less than5 per cent.

Analysts believe a hostile bid for OSK is unlikely. "It isn't Maybank's style. Also, it does not make sense to make a hostile bid for an investment bank as it is the people that you want, not the assets and liabilities," said one, pointing out that OSK's staff may leave in the event of a hostile takeover.

Read more: A matter of time before Maybank woos OSK? http://www.btimes.com.my/Current_News/BTIMES/articles/mayosk/Article/#ixzz15370G4Oq

Latexx partners Bhd reported a set of stronger earnings in the third quarter at RM17.62 million, up 23.5% from RM14.27 million a year ago. It said on Wednesday, Nov 10 revenue rose 60.7% to RM129.87 million from RM80.84 million. Profit before tax rose 41.3% to RM20.16 million from RM14.27 million. Earnings per share were 8.19 sen compared with 7.33 sen. It declared an interim dividend of 2.5 sen per share.

Symphony House Bhd posted net loss of RM4.57 million in the third quarter ended Sept 30, 2010 when compared with net profit of RM2.23 million a year ago. It said on Wednesday, Nov 10 that revenue dipped 2% to RM40.36 million compared with RM41.17 million mainly due to the lower transaction volume in the cheque processing business unit further to client attrition in 2009. Loss per share was 0.72 sen.

Kulim, which controls KFC HOLDINGS (M) BHD [] and QSR BRANDS BHD, could continue to see trading interest following the surge in crude palm oil prices. Kulim has interests in PLANTATION via a 50% stake in London-listed New Britain Palm Oil Ltd which owns 6,300ha of matured palm oil plantations in Papua New Guinea.

OSK Holdings has not entered into any serious and exclusive negotiations with any party for any form of equity and strategic partnerships.

Proton Holdings Bhd plans to export Inspira components next year, says managing director Datuk Syed Zainal Abidin Syed Mohamed Tahir.

Today's company notes: fbmklci 1526.98

• IJM bags RM690m cancer institute contract

• Salcon secures RM52m contract in Kelantan 

• Biport hires boats for two companies 

• PLUS accepts UEM-EPF offer

• SUPERMX  Shifting to Higher Margin Gloves 

• YTL Power’s 11% share price spike yesterday reflects excitement ahead of its WiMAX network launch next week rather than privatisation speculation. Earnings impact of this venture is still difficult to quantify, thus we make no changes to our FY11-13 EPS forecasts which already factor in RM60m-80m WiMAX start-up losses.   
  

• The Edge FinancialDaily reported on Wednesday Maybank is rumoured to be keen on acquiring OSK Holdings Bhd, which is on an expansion trail in the Asean region, in a move to beef up the former's investment banking arm.

• Hartalega posted net profit of RM47.09 million in the second quarter ended Sept 30, 2010 from RM33.1 million a year ago as it benefited from an increase in demand and larger production capacity.