FBMKLCI: 1496.49 

New stock listing

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

1.    5183                PCHEM           5.200                         3.640               26.000

AirAsia Bhd posted a record net profit of RM327.29 million in 3QFY10 ended Sept 30, up 140% from RM136.26 million the previous corresponding quarter as it flew more passengers. 

Genting Bhd's 3QFY10 ended Sept 30 net profit grew 3.62% to RM765.92 million from RM739.17 million in the previous quarter with a deceleration of contribution from its Singapore and Malaysia leisure and hospitality operations.

JohorCorp (JCorp), the ultimate major shareholder of QSR Brands Bhd, has poured cold water on Tan Sri Halim Saad's bid for Malaysia's biggest fast food group on the same day that a much higher offer was made. Earlier yesterday, US private equity group Carlyle Group offered RM6.70 a share for QSR, its parent Kulim (M) Bhd told Bursa Malaysia. But JCorp's evening announcement provided a late twist to the tale and raised more questions as it did not comment on Carlyle's bid

DRB-HICOM Bhd  said net profit for the second quarter to September 30 grew 185.5 per cent to RM155 million, from RM54.3 million in the same period last year. Consequently, net profit for the six months was at RM355.2 million against RM114.8 million in the first half of last year.

The government is expected to award the jobs for the long-awaited light rail transit (LRT) extension project soon, and successful bidders have been short listed. Sources said. According to a source familiar with the matter, parties that had lobbied for the LRT extension jobs for the Ampang and Kelana Jaya lines include UEM Group, IJM Corp, Bina Puri and TRC Synergies. The contracts to be awarded will be building of LRT stations, laying groundwork and alignment before constructing the railway. The total extension length of the Kelana Jaya line is 17km and for the Ampang line 17.7km. Both extensions will see an additional 13 stations.

Construction work on the Penang Sentral Integrated Transport Hub in Butterworth is expected to begin next month, according to developer Malaysian Resources Corp (MRCB). MRCB executive director, Datuk Ahmad Zaki Zahid, said the company has solved all the land issues and the project could proceed as usual. "The first phase of the project is expected to be completed before 2013," he told a media briefing yesterday The hub, a component project of the Northern Corridor Economic Region, would be undertaken by a joint-venture between MRCB and Pelaburan Hartanah Bumiputra .  It was earlier reported that the first phase would be delayed due to some land issues.  Ahmad Zaki said the actual cost of the project was expected to increase to RM2.7bn

MAS posted operating profit of RM122.7 million for the third quarter ended Sept 30 (3Q2010) compared with an operating loss of RM77.4 million a year ago, which lifted the nine-month financial period solidly into the black. For the 3Q2010, the significant improvement was mainly due to higher operating revenue and improvement in its yield.

PROTON saw its earnings decline 19.6% to RM65.92 million in the second quarter ended Sept 30, 2010 from RM82.06 million a year ago, due to  one-off provision for stock obsolescence and branding cost. It said on Thursday, Nov 25 revenue was 6.6% higher at RM2.24 billion compared with RM2.10 billion. Earnings per share were 12 sen compared with 14.9 sen. Its net asset per share was RM9.83. Group profit before tax was RM81.26 million, a decline of 19% from RM100.65 million a year ago.

YTL Corp Bhd reported a 34.3% increase in its earnings at RM278.9 million for the first quarter ended Sept 30 from RM207.5 million a year ago, boosted by the strong performance in its major operating companies.

 

FBMKCLI: 1488.54 DJ+150.91 CRUDE OIL 83.97 RM 3.103

Stocks ended Wednesday on a positive note after a batch of economic reports offered hope that the U.S. economy was improving. Incomes rose last month and consumer spending climbed for a fifth month. That raised hopes that shoppers will hit the malls in droves the day after Thanksgiving, the start of the holiday shopping season.

Masteel, the country's third largest steel bar maker by market share, may see revenue hitting the RM1 billion mark this year on the back of robust demand for steel billets and bars as well as firm selling prices, said its managing director cum CEO Datuk Sri Tai Hean Leng.

MISC Bhd posted a jump in net profit to RM369.4mil for the second quarter ended Sept 30, 2010 against RM82mil a year ago due to improved performance in the restructured liner business and increased profitability in the heavy engineering business.

MMC Corp Bhd’s net profit for the third quarter ended Sept 30 surged 32% to RM117.8mil from RM88.7mil a year ago due to better performance from some divisions.

Axiata Group Bhd posted a 27% increase in net profit to RM639.13mil for the third quarter ended Sept 30, 2010 from RM503.66mil a year ago, driven by positive net profit contribution from Dialog Axiata Plc and Robi Axiata Ltd.

Sunway Holdings and SunCity will be merged under a proposed exercise undertaken by Sunway Sdn Bhd, which is controlled by Tan Sri Jeffrey Cheah Fook Ling. This would involve  RM4.5 billion in cash and share swap. The exercise entails Newco offering RM2.60 per Sunway share, RM1.50 per Sunway warrant and RM5.10 per SunCity share and RM1.29 per SunCity warrant.  

Naim Holdings’ earnings jumped 72% to RM36.94 million in the quarter ended Sept 30, 2010 from RM21.39 million a year ago mainly due to higher sales of PROPERTIES and substantial completion of certain CONSTRUCTION projects.

KNM Group Bhd saw its third quarter bottomline improve by 75% to RM56.09 million from RM31.92 million a year ago. Pre-tax profit was RM41.03 million while there was also tax incentive of RM19.54 million.

Bina Puri Holdings is teaming up with a Chinese association to develop a two acre site in Jalan Pasar, which guarantees investment return of RM40.6 million in 14 years.

Bina Puri will be investing RM16.0 million which is the estimated construction cost.

PLUS Expressways Bhd’s net profit for the third quarter ended Sept 30 rose 12% to RM349.7mil from RM311.6mil a year ago. The increase was primarily due to higher toll revenue mitigated by higher finance costs as well as amortisation and depreciation charges.

FBMKLCI 1487.53 DJ -142.21 CRUDE OIL: 81.23 RM: 3.081

Stocks fell Tuesday as a flare-up of tensions between North and South Korea combined with downbeat news on the economy gave investors plenty of reasons to sell ahead of the Thanksgiving holiday. The dollar and gold rose as investors sought safe places to park money. 

  

MRCB and IJM Land Bhd yesterday announced their proposed merger exercise, which will create the country's second largest property player after the enlarged UEM Land Holdings Bhd, with a market capitalisation exceeding RM7 billion and a land bank of over 9,000 acres. 

Market observers are speculating that a “marriage” of sorts is on the cards for SunCity and Sunway Holdings Bhd, after both companies had their shares suspended from trading for two days from yesterday, pending a material announcement on a corporate exercise. 

Gadang Holdings Bhd is bidding for several engineering and construction projects totalling more than RM2 billion and the company anticipates stronger earnings for the financial year 2011 ended May 31.

LionInd’ 1QFY11 net loss of RM18.8m. The poor results were mainly attributed to the arrival of expensive feed material, namely iron ore and scrap metal, which were mismatched with weakening selling prices.

Parkson Holdings announced that it is selling its 100% equity interest in Shantou Parkson to its 51.5% owned subsidiary - Parkson Retail (PRG).

Msports 9MFY10 earnings of RM49.2m. Production volume increased by 34% to 23.4m in 9MFY10 while average selling price improved by 4.4% to RMB18.9 per pair, mainly driven by the higher demand for EVA MD products.

MPHB posted net profit of RM86.49 million in the third quarter ended Sept 30, up 70% from RM50.73 million a year, boosted by its gaming and stockbroking operations. Revenue was 4.6% higher at RM850.7 million compared with RM813.24 million a year ago.

MUDAJAYA GROUP BHD net profit rose 31.8% to RM46.55 million for the third quarter ended Sept 30, 2010 from RM35.32 million a year ago, mainly due increased level of activities.

South Korea scrambled fighter jets to North Korea

By Bomi Lim
    Nov. 23 (Bloomberg) -- South Korea scrambled fighter jets and returned fire after North Korea lobbed dozens of shells into its territory, injuring four soldiers, Yonhap News reported.
    A South Korean Defense Ministry official, who declined to be identified, confirmed the shelling, without giving any further details. The military has been put on high alert and will “respond strongly” to further provocation, he said.
    Tensions with nuclear-armed North Korea have risen this year following the sinking of a South Korean warship in March that the U.S. and its allies blamed on a torpedo attack. President Barack Obama dispatched his envoy on the country, Stephen Bosworth, to Asian capitals this week after reports by a U.S. scientist that North Korea had revealed to him a “stunning” new uranium-enrichment plant.
    The yen and Korean won weakened against the dollar, U.S. stock futures fell and Treasury futures rose as investors sought safe-haven investments following the report.
    South Korean President Lee Myoung Bak called an emergency meeting, his office said.

   The visit by to the nuclear plant this month by Stanford University professor Siegfried S. Hecker showcased technological advances that highlight the failure of sanctions to force Kim Jong Il’s regime back to disarmament talks.
    “The control room was astonishingly modern,” Stanford University professor Siegfried S. Hecker wrote in his Nov. 20 report of the visit eight days earlier to the main reactor site at Yongbyon. “We saw a modern, clean centrifuge plant of more than a thousand centrifuges,” he said, a reference to the high- speed spinning devices that enrich uranium.

FBMKLCI 1503.20 DJ -24.97 CRUDE OIL 81.75 RM 3.078

Key Asian markets including Bursa Malaysia are expected to start on a softer note on Tuesday, Nov 23, weighed down by the weaker overnight close on Wall Street due to the debt crisis in Europe and the FBI’s probe into insider trading.
Reuters reported risk aversion kicked in as stocks followed the euro's fall against the U.S. dollar after turmoil in Ireland's fragile coalition government overshadowed an agreed-on bailout of the country. Investors fear the crisis will spread throughout Europe, raising the spectre of losses by exposed U.S. banks.

PPB Group Bhd saw its 3QFY10 ended Sept 30 net profit plunge 51.6% year-on-year, or RM307.1 million, to RM288 million due to weaker contributions from 18.35%-owned associate Wilmar International Ltd.

The jury is still out on the preliminary offer made by Tan Sri Halim Saad to acquire the entire business and undertakings of QSR Brands Bhd, with analysts saying details are still too scant to judge whether the offer is fair. 

MRCB-IJM Land suspended, they are to announce potential corporate exercise today. Another GLC-private sector property merger appears to be on the cards, this time between Malaysian Resources Corporation Bhd (MRCB) and IJM Land Bhd, as has been speculated since last week. 

FTSE Group and Bursa Malaysia Bhd announced yesterday that Petronas Chemicals Group Bhd would replace Berjaya Sports Toto Bhd (BToto) in the FTSE Bursa Malaysia KL Composite Index (FBM KLCI).

Javace Sdn Bhd has extended the takeover offer for UBG Bhd shares to 5pm on Dec 17 from 5pm tomorrow, UBG Bhd told Bursa Malaysia yesterday.

Salcon Bhd has proposed to sell a 40% stake in its wholly-owned subsidiary Salcon Asia to Challenger Emerging Market Infrastructure Fund Pte Ltd (EMIF) for 238 million renminbi or RM112.26mil cash.


CIMB Group Holdings Bhd posted a 26% increase in net profit to RM916mil in the third quarter ended Sept 30 versus RM726.8mil in the same period a year ago. 

BHIC posted a slightly higher net profit of RM26.9mil for the third quarter ended Sept 30 versus RM24.75mil a year ago.

FBMKLCI: 1506.05 DJ +22.32 CRUDE OIL: 82.35 RM: 3.087

Dr M cautious about hot money, rising KLCI
Tun Dr Mahathir Mohamad has expressed caution over the rapid increases in the FBM Kuala Lumpur Composite Index and the entry of "hot" foreign money into the equities. He said just as increases in investments push up share prices and the KLCI, rapid or massive divestments will push down the share prices and index.

Zelan sinks deeper into red
Zelan Bhd sank deeper into the red with losses of RM35.1 million, surpassing its revenue of RM30.70 million in the second quarter ended Sept 30, 2010 following cost overruns at its overseas projects.

Tan Chong 3Q net profit up 43% to RM49.34m
Tan Chong Motor Holdings Bhd recorded a 43.3% increase in net profit of RM49.34 million for the third quarter ended Sept 30, 2010 from RM34.43 million a year ago but it was more cautious in the remaining part of the year.

MRCB said it is currently considering various corporate proposals, responding to a Business Times report the property developer may merge with IJM Land Bhd.Further announcements will be made in due course, the company said in a statement to the Kuala Lumpur stock exchange on Nov. 19. The company didn’t elaborate.
 

Kimlun  posted net profit RM8.39 million for the third quarter ended Sept 30, 2010 on the back of revenue RM119.41 million mainly due to a higher contribution from the CONSTRUCTION segment.

QSR reported net profit of RM26.20 million in the second quarter ended June 30.  It has cash and cash equivalent of RM121 million while receivables and deposits are RM173.86 million. QSR is a subsidiary of Kulim.

Sinotop posted net loss RM6.46 million in the third quarter ended Sept 30, 2010 mainly due to impairments and unrealised loss on foreign exchange.

 

Company Financial Result

WCT  reported  its  3Q10  earnings  of  RM30.56mn,  which represents a 9.5% decline in earnings sequentially. Consequently, 9M10 earnings decreased YoY by  13.3%  to  RM99.3mn.

IOI Corp reported 1Q FY11 results yesterday, -2.6%yoy to RM408mn, accounting for 19% of our FY forecast.  Results included forex translation gain on US$ debt and impact of FRS 139 accounting.

TSH Resources   9M10 net profit.  Earnings dragged by lower ASP of Indonesian CPO , lower yields from newly matured trees and higher tax expenses.  FY10F earnings cut by 12% 

CB Industrial Product 3Q10 net profit exceeded expectations

3Q10 was lifted by improved operating efficiencies and higher earnings from associates and JVs.  FY10F-12F earnings increased by 5-12%

Kossan Rubber Industries.  3Q10 net profit of RM28.6m (-5% q-o-q) and 9M10 of RM88.9m. Operating margins were lower at 14.4% due to cost pressures

XOX awaiting call

XOX Bhd is planning to raise about RM40 million in its initial public offering in a test of investors' appetite for MVNOs XOX Bhd is planning to raise about RM40 million in its initial public offering (IPO), making it Malaysia's first full-fledged mobile virtual network operator (MVNO) to be listed on the local stock exchange.

The IPO, which is awaiting the Securities Commission's (SC) final approval


Read more: XOX awaiting call http://www.btimes.com.my/Current_News/BTIMES/articles/xox15/Article/index_html#ixzz15gsaWBpQ

FBMKLCI: 1496.65 DJ: +173.35 CRUDE OIL: 82.84 RM: 3.113

KNM 100% subsidiaries, KnmPS won the bid for the supply of technical documentation, equipment and services for the development of gas condensate fields i.e. Adamtash, Gumbulak and Djarkuduk Yangi Kizilcha in the Republic of Uzbekistan amounting to about USD216 million (RM680m) for a duration of 2 years from Lukoil Uzbekistan Operating Company, starting now.

AirAsia X, will start flying to Paris from next Valentine's Day, more than a year after getting the rights to do so. The carrier will start four times weekly direct flights from 14 February 2011, between Paris-Orly International Airport and Kuala Lumpur International Airport's low cost carrier terminal. Yesterday, the airline announced that it would launch the route with an all-in-fare from RM499 one way. It is available for booking online from 22-24 Nov 2010. This will be the carrier's second European destination after London. The new route will be serviced by the Airbus A340 aircraft with 327 passenger capacity including 18 premium seats.

LHH has received an offer from Emerging Glory s/b to acquire the company's entire business, including all assets and liabilities, for RM318.6mil. Based on the issued and paid-up capital of Leong Hup as at Nov 18, the purchase consideration worked out to RM1.80 per share, Leong Hup told Bursa Malaysia yesterday. According to Emerging Glory's offer letter, it planned to pay RM169.7mil in cash while RM148.9mil would be considered as debt due to Leong Hup. In a separate filing with Bursa, Emivest Bhd has also received similar takeover offer from Emerging Glory for RM108mil which is inter-conditional with the Leong Hup's offer.

Shares of MRCB and IJM Land perked up amid a weak broader market yesterday after a popular finance blog speculated on a possible merger. The rise comes as retail investors have become more active in the market recently. Last month, they accounted for almost half of the volume traded. IJM securities, namely the mother share and the warrants, were among the top 10 most-actively traded securities yesterday. Meanwhile, MRCB, the master developer for the KL Sentral development in Brickfields, ended the day 9 sen higher at RM2.10 with more than 11m shares traded. The Malaysia-Finance Blogspot, under a post headlined "Does a MRCB-IJM Land merger make sense?” noted that "the word had switched from an IJM Land privatization to a merger with MRCB. Something along the lines of a UEM Land-Sunrise deal it seems". Early this month, UEM Land Holdings launched a RM1.4bn conditional takeover offer for Sunrise.

Buy Media Prima: OSK, ECM

OSK Research and ECM Libra have maintained a "buy" call on Media Prima Bhd following the company's better than expected nine-month financial performance.

"The company registered a core net profit of RM110 million for its nine-month financial period, which was above our expectation and accounted for 83 per cent of our net profit forecast for financial year 2010," said OSK Research in a research note today.

"Without consolidating the revenue from NSTP and Kurnia Outdoor, Media Prima reported a 22 per cent year-on-year increase in revenue supported by revenue growth from all of its other media platforms such as television, radio and outdoor media," it said.

OSK Research has revised the company's financial year 2010 and 2011 earnings forecast by 18 per cent and 12.9 per cent respectively, with a higher target price of RM3.30.

Meanwhile, ECM Libra mentioned in a research note, that Media Prima had revised its dividend policy and going forward, paying twice a year.

"Assuming a 75 per cent net dividend payout ratio (DPR), investors can expect another six sen net dividend per share (DPS) or three per cent dividend yield at year. -- Bernama

Read more: Buy Media Prima: OSK, ECM http://www.btimes.com.my/Current_News/BTIMES/articles/20101118122728/Article/index_html#ixzz15cLStcDa

ECONOMIC HIGHLIGHTS

Malaysia: Slower 2Q GDP growth see

China: Yuan’s Hong Kong premium shrinks 77% on HKMA swap

China: May impose temporary price controls as inflation surges

Australia: Wage growth accelerates by most in almost two years

UK: Jobless claims unexpectedly fell in October

EU: Crisis causes retreat from dollar bonds: credit markets

US: Economy prices cool, backing fed inflation view

The cost of living rose less than forecast in October and housing starts dropped, validating Federal Reserve Chairman Ben S. Bernanke’s decision to give the US economy another dose of monetary stimulus. Consumer prices excluding food and fuel, the gauge followed by central bankers, increased 0.6% from October 2009, the smallest gain in y-o-y data going back to 1958, the Labor Department said. Builders began work last month on the fewest homes since a record low reached in April 2009, according to figures from the Commerce Department.

US: Consumer prices in US probably rose in October on gasolin
The cost of living in the US probably rose for a fourth month in October, led by higher gasoline and food pricesthat aren’t filtering through to other goods and services, economists said. The consumer-price index increased 0.3% after a 0.1% gain the prior month, according to the median forecast of economists surveyed by Bloomberg News before the Labor Department report. Excluding food and fuel, so-called core costs may have increased 0.7% from October 2009, matching a record low. Another report may show housing starts last month fell to the lowest level since July. 

FBMKLCI: 1503.54 DJ: -15.52 CRUDE OIL: 81.49 RM: 3.116

YTL Communications is seeing “dramatic” demand for its WiMAX service in Malaysia, with pre-registrations for the product exceeding expectations three times, said executive chairman Tan Sri Francis Yeoh. Yeoh declined
to give a specific target for the “yes” wireless Internet and voice service.

 

MEDIA, the country's leading newspaper publisher and broadcaster, broke the RM1 billion sales barrier for the first time in its history, posting RM1.13 billion in sales for the nine months ended September 2010. Media Prima plans to pay an interim single-tier dividend of 4 sen per share to shareholders before year-end to reflect the significant rise in earnings and profits, as well as an acknowledgment of shareholders' support.

Carrefour has suspended the sale of its Malaysian and Singapore stores after bidders, including Japan's Aeon Co Ltd, offered too little to persuade the French retailer to part with the operations, two sources said. Carrefour rejected offers in a second round of bidding that closed on 5 Nov and informed the potential buyers that the sale process has been put on hold, according to sources.

Proton, which is set to take a 25% stake in Renault Formula One team, is seeking to expand its relationship with the Renault-Nissan alliance into passenger cars and potentially as a strategic partner to the national auto
company. Plans are afoot to have Renault-Nissan involved in the Proton global car, named Emas, which is slotted for production by 2012.

17 Nov 2010: Public Holiday - Malaysia, Singapore & Indonesia

Tomorrow (17 Nov 2010) is public holiday for Malaysia, Singapore and Indonesia for celebrating Hari Raya Aidiladha. Market will be resume on 18 Nov 2010, Thursday. Selamat Hari Raya for all Muslims.

ECONOMIC HIGHLIGHTS 

Singapore: Singapore’s retail sales excluding motor vehicles rose at a slower pace in September after the economy contracted last quarter. The index measuring purchases excluding automobiles climbed 5.3% y-o-y after gaining a revised 6.4% in August. Including vehicles, which are sold subject to government caps, total retail sales rose 0.3%, less than the median forecast for a 1.5% increase. Adjusted for seasonal factors, overall retail sales fell 2.4% m-o-m. 

Japan: Economy grew 3.9% in third quarter  

India: Inflation slowed to nine-month low in October  

EU: Greece’s budget deficit largest in EU 

Jakarta: stocks loss 9.4 points or 0.3%, closed at 3,656.5 on Monday, led by loss in Bank Rakyat Indonesia, Bank Central Asia, and Astra International. Today, we expect JCI to be traded in range of 3,653.31 – 3,691.00.

US: Retail sales increased 1.2% in October  
US: Inventories increase 0.9% in September, more than forecast as companies stocked shelves ahead of the holiday season. sales rose 0.5 percent, led by retailers. Companies had enough goods on hand to supply 1.27 month's worth of sales at Sep's pace, the same in the prior month.

FBMKLCI: 1501.56 DJ: +9.39 CRUDE OIL: 84.87

KENCANA subsidiary Kencana Hl has secured project from Sarawak Shell for the fabrication of compression modules and tie-in modifications -worth RM275m.

TimeCom plans to buy Global Transit Communications (GTC) for RM106m, Global Transit Ltd (GTL) for RM105m and AIMS Group for RM128m. All three are profitable and are expected to enhance TdC's earnings immediately upon purchase. GTC -wholesale Internet service and backhaul provider, GTL -owns 10% in the much-coveted trans-Pacific submarine cable, Unity North Cable System. AIMS Group -owns one of the region's leading network-neutral data centres. 

P&O insurance business is believed to still be on the radar of other foreign parties despite Prudential Holdings Ltd dropping out of the acquisition talks for the local general insurer.

GPacket posted net losses of RM13.71 million in the third quarter ended Sept 30, 2010, a decline from the net loss of RM31.84 million a year ago. Revenue rose 60% to RM100.89 million from RM63.03 million. Loss per share was 2.1 sen versus eight sen. Green Packet’s total borrowings as at Sept 30 totalled RM237.01 million. Its total turnover was the nine-month period was RM277.71 million compared with RM160.99 million while loss per share was RM56.82 million compared with RM81.93 million.

Amway (Malaysia) Holdings Bhd net profit for the third quarter ended Sept 30, 2010 rose marginally to RM21.51 million from RM20.48 million a year ago due to increase in sales revenue.Amway declared a third interim single tier dividend of 9 sen net per share and special interim single tier dividend of 30 sen net per share for the financial year ending Dec 31, 2010.

Mas expects its newly launched Eastern hub in Kota Kinabalu to contribute between RM60m and RM100m to net profit by June 2011. The hub will be developed over three stages from 15 November 2010 to 3 June 2011. A total of six aircraft, two new B737-800 and four B737-400 as well as 150 pilots and 250 cabin crew will be based in Kota Kinabalu by June 2011.

Scomien  has  struck a deal with Engineering Projects (India)  Ltd  to  jointly  venture  into  monorail  projects  in fast-urbanising Indian cities and in South Asia region.

FBMKLCI: 1499.81 DJ: -90.52 CRUDE OIL: 85.73 RM: 3.067

Maybank's 1Q earnings at RM1b
Malayan Banking Bhd's earnings were RM1.028 billion in the first quarter ended Sept 30, 2010, up 16.6pct from RM881.80 million a year ago. It said on Friday, Nov 12 revenue rose to RM5 billion from RM4.56 billion. Earnings per share were 14.53 sen versus 12.46 sen.

AMMB earnings up 38.6pct to RM332.8m
AMMB Holdings Bhd's earnings rose 38.6pct to RM332.87 million in the second quarter ended Sept 30 (2QFY11), from RM240.15 million a year ago, boosted by an increase in interest income. It said on Friday, Nov 12, revenue rose 11.9pct to RM1.77 billion from RM1.584 billion. Earnings per share were 11.09 sen compared with 8.29 sen. It declared an interim dividend of six sen per share.  

BNM keeps OPR unch 2.75pct, vigilant of volatile capital flows
Bank Negara Malaysia maintained the overnight policy rate (OPR) at 2.75pct and said monetary policy would continue to remain accommodative and supportive of economic growth. However, it remained vigilant of large, volatile capital flows.

BRDB, a commercial and residential developer, is planning a RM652m joint development in Seri Kembangan, Selangor, with Country Heights Land SB. The project, with an estimated gross development profit of RM170m, would comprise 310 units of semi-detached houses and 13 units of bungalows sprawled over 192,561 sq m within the so-called Bluwater Estate. The construction for the proposed development is expected to commence in the last quarter of 2011 and completed within five years. Under the JV Bandar Raya and Country Heights Land will take up 75% and 25% stake respectively in an SPV purpose vehicle to undertake the development.   (Malaysian Reserve) 

TCHONG last Friday announced it will invest RM285m to build cars in Sabah after it received an approval letter from the International Trade and Industry Ministry for its application of a licence to manufacture and assemble luxury passenger vehicles and commercial vehicles. Tan Chong said the approval letter was on condition that the manufacturing and assembly activities would be for luxury passenger cars with 1,800cc and above and costing no less than RM150,000. The licence is for Tan Chong to conduct manufacturing of vehicles at the Kota Kinabalu Industrial Park (KKIP), Sabah, which was built to establish Sabah as the gateway to the Brunei-Indonesia-Malaysia-Philippines-East ASEAN Growth Area (BIMP-EAGA). (StarBiz) 

Kencana and its technical partner London-based Petrofac Ltd have emerged as front runners to bag a USD250m (RM780m) engineering, procurement, construction and commissioning (EPC)job at Block PM313, the Sepat oil field. The Sepat oil field is a marginal field in offshore of Terengganu under the purview of the National oil company Petroliam Nasional Bhd (Petrogas). According to industry players, Sepat has large oil reserves that have yet to be fully recovered. With the high crude oil prices and increasing difficulties in exploring new oilfields, Petronas intends to improve oil recovery in the brown fields. Apart from Kencana and Petrofac, there were two other JV companies vying for the job, namely (MMHE) together with its partner, France-based Technip SA, as well as Australian company Roc Oil forming a partnership with local player Griffin Energy Ltd. (Financial Daily)

Petronas Chemicals Group Bhd has fixed the price of its initial public offering (IPO) at RM5.04 a share for the portion reserved for retail investors and at RM5.20 apiece for shares to be sold to institutional investors. The IPO would raise RM12.8bn, of which RM9.2bn was to be accrued to parent company Petroliam Nasional Bhd (Petronas), the company said in a statement yesterday. Based on the institutional price, Petronas Chemicals’ market value will be RM41.6bn, making it one of the largest petrochemical producers in South-East Asia. (StarBiz) 

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

ECONOMIC HIGHLIGHTS

• Malaysia: Seeks world bank help to cut spending, trim deficit
• China: Inflation surge prompts expectations of rate hike: Reluctance to take yuan ‘medicine’ hampers G-20 progress
• Japan: Growth probably peaked as yen gains weighed on expansion
• Australia: October jobless rate unexpectedly jumps
• Jakarta stocks loss 12.3 points or 0.3%, closed at 3,744.6 on Thursday led by
  loss in Astra International, Bank Central Asia, and United Tractors. 

• US stocks fell on Thursday after Ciscco Systems warned that profit will miss analyst estimates sending its stock down 16%, the most in more than 16 years. The DJIA tumbled 73.94pts (-0.65%) to 11,283.10 while the S&P500 slid 5.17pts (0.42%) to 1,213.54. Cisco’s forecast triggered a sell-off in other technology stocks, the group that has propelled the S&P500 to a 16% rally since end August. Disney also fell 2.9% after reporting fourth quarter profit that missed analyst expectations. 
• Hong Kong shares rose 0.82% as traders welcomed data showing inflation rose at its fastest pace in more than two years in October. The benchmark Hang Seng Index added 199.69 points to 24,700.30 on turnover of HK$122.79bn. Offshore oil producer CNOOC (883 HK) rose 3.4% to 17.84 Hong Kong dollars and PetroChina (857 HK) rose 3.3% to 10.50. Chinese lenders rose on bargain hunting after the previous day’s losses caused by the central bank in Beijing hiking lenders’ reserve requirement ratio. China Construction Bank (939 HK) rose 0.8% to 7.72, and Bank of China (3988 HK) gained 0.6% to 4.67.

FBMKLCI: 1513.70 DJ: -73.94 CRUDE OIL: 87.56

Khazanah Nasional has sold 6% of its shareholding in Malaysia Airports Holdings (MAHB) for RM396m. The exercise cuts Khazanah Nasional's holding in MAHB to 54%, maintaining its controlling stake. The statement did not identify the buyers of the placed out shares. HSBC and Nomura Singapore Ltd were agents of the deal too. MAHB's shares were sold for RM6 a piece, representing a 2.9% discount to the three-day volume weighted average price. (BT)

Proton offers Mitsubishi platform to widen tie-up. It is understood that the Japanese carmaker will then use the platform to build and sell cars for its export markets. While the Persona and Exora were among several models built from ground up by Proton, the national carmaker is developing a brand new car to replace the current Persona. Mitsubishi was the strategic foreign partner for Proton when the national car project was set up in the mid-1980s. (BT)

Boustead Holdings plans to sell for RM189.23m its Sabah’s Sutera estate, Taiping rubber plantation and Trong oil mill to Al-Hadharah Boustead REIT, and then lease back these assets. The move will result in a cash inflow for the group and its subsidiaries, which will be used to reduce bank borrowings by the group and potentially save RM9.5m interest expense per annum for the group. This exercise will expand the fund’s plantation assets by 3,580ha to 19,984ha with a gross asset value of more than RM1bn. (Starbiz)

MBMR earnings rose 52% to RM34.2 million from a year ago, underpinned by stronger vehicle sales. Revenue rose 30.3% to RM388.7 million on-year.

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.