Traffic offenders owe govt RM2.7b

Traffic offenders who were issued 16,529,848 summonses from 2000 to 2008 have not settled their summons totalling RM2.7 billion, Deputy Transport Minister Datuk Abdul Rahim Bakri told the Dewan Rakyat.

Of the summonses issued, he said on Wednesday, June 30 the largest number was issued by the police at 15,220,358, the Road Transport Department (470,983) and Dewan Bandaraya Kuala Lumpur (838,507), he said.

"Summons issued since last year are considered active," said Abdul Rahim when answering a question from Mohd Nor Othman (BN-Hulu Terengganu) in Dewan Rakyat.

Mohd Nor had wanted to know how many summons had not been settled until April 2010.

Abdul Rahim said to ensure traffic offenders promptly settled the outstanding summons, steps taken included barring the renewal of road tax and driving licences under Section 115 of the Road Transport Act 1987.

Other measures included allocating RM282 million to upgrade the RTD's computerised systems, to increase its capacity and efficiency to collect outstanding summons and compounds, effectively.

"We have also set up online systems to cancel blacklisted cases with links from other agencies, especially police, as well as set up a one-stop centre for settling summonses online and through credit cards," he said.

Meanwhile, in reply to a suggestion by Datuk Mohamed Aziz (BN-Sri Gading) that such summonses annulled, Abdul Rahim said the suggestion would not be considered.

"Settling summonses is not only a form of income to the government but will also serve as a reminder to traffic offenders that they should be more careful on roads," he said. - Bernama

When stock exchange issues unusual market activity queries do you BUY or SELL?

LATELY, Bursa Malaysia has issued unusual market activity (UMA) queries on some listed companies due to unusual price movement and trading activities.

Normally, companies that are being issued UMA queries have very high trading volumes and surge in stock prices within a short period of time without any significant corporate announcement.

Based on our observations, in most cases, the stock prices for companies affected will not go up after the UMA queries, as most investors might view these queries as negative event to the companies.

Even though the stocks are not being suspended for trading, most traders will try to avoid them as they may be suspended later.

According to the Main Board’s Listing Requirement (LR) Paragraph 9.11, UMA is referred to as unusual price movement, trading activity or both.

The listed issuer must immediately undertake a due enquiry to seek the cause of the UMA in its securities. They are required to determine whether the UMA are attributed to information that has recently been publicly disclosed, has not been publicly disclosed or is a market rumour.

Most of the time, the UMA queries are issued on companies with some possibility of trading on material non-public information.

According to LR Paragraph 9.15, insiders must not trade on the basis of material information which is not known to the investing public.

Besides, according to Section 188 of the Capital Markets & Services Act 2007, anyone who commits an offence under insider trading shall be punished on conviction to imprisonment for a term not exceeding 10 years and to a fine of not less than RM1mil.

Despite heavy fine and punishment for trading on insider information, each time Bursa Malaysia issues UMA queries on any listed companies, the general public may be able to predict the “standard” replies from them.

The “standard” replies from these companies are “To the best knowledge the Board of Directors of the Company is not aware of any other corporate developments, any rumour or report, any possible explanation on UMA or any material information ....”

It is very seldom that the listed companies will explain in detail on the UMA.

Even though we do believe that sometimes certain listed companies may not be aware of the sudden surge in stock prices and volumes, however, if the trading volumes per day accounted for a big percentage of the outstanding shares of the listed companies, the major shareholders may be aware of the reasons driving the heavy trading volumes.

This is because usually the key owners of the companies are, at any time, fully aware of the major shareholders of their companies.

Being retail investors who own a very small number of shares in these companies, we need to observe how these companies response to the UMA queries. If there is no other major corporate developments after the UMA queries, like what they claimed earlier that they were not aware of any major corporate developments, then we will consider their earlier “standard reply” as genuine.

Otherwise, if there are major corporate developments within the companies in the subsequent periods, we believe that there may be certain forms of insider trading during the UMA period.

As mentioned earlier, traders and speculators will try to avoid speculating stocks with UMA queries because they worry that if the stock prices continue to surge higher, the companies may be suspended from trading.

A good quality of management will try their best to explain the possible causes for the UMA whereas a bad quality of management will only provide minimal information with the “standard” reply and take advantage of higher share prices in the subsequent major corporate announcements.

Lastly, as one of Abraham Lincoln’s (America’s 16th President – 1861-65) famous sayings: “You may fool all the people some of the time, you can even fool some of the people all of the time, but you cannot fool all of the people all the time”.

We believe that sometimes even though some companies’ owners may be able to take advantage on investors, it will eventually be discovered by the public and resulted in a bad reflection on the quality of the management.

As investors, we need to be extra careful when considering buying into these companies in the future.

Personal Investing - By Ooi Kok Hwa 

# Ooi Kok Hwa is an investment adviser and managing partner of MRR Consulting.

Cisco to launch iPad-like tablet for office use

NEW YORK: Thanks to Apple Inc.'s iPad, tablet computers are finally a hot consumer item, after many false starts.

On Tuesday, Cisco Systems Inc. said it aims to take the tablet computer into the business world with its own device, to launch early next year.

Apple launched the iPad tablet computer in March but Cisco, the world's largest maker of networking equipment, said its own tablet, the Cius, has been in the works for a year and a half.

The Cius will have a 7-inch (18-centimeter) screen, making it smaller and lighter than the iPad.

This undated product image provided Tuesday by Cisco shows Cius, a tablet computer the company plans to release in 2011 with the ability to do video calls. The Cius stands in its docking station with handset. (AP Photo/Cisco)

 

While the iPad has no camera, the Cius will have two, facing both toward and away from the user.

Videoconferencing on the go will be a major focus of the product, according to Barry O'Sullivan, senior vice president of Cisco's Voice Technology Group.

The Cius will run Google Inc.'s Android software, which is popular in smart phones that compete with Apple's iPhone.

Android phones haven't been embraced by corporations, which usually prefer the security offered by Research In Motion Ltd.'s BlackBerrys, but O'Sullivan said Cisco's goal was to make the Cius as "IT friendly" as possible, giving information technology departments wide control over what applications get installed on the devices.

The tablet will come with the ability to connect to Wi-Fi hot spots and cellular broadband networks.

Cisco is in talks with six phone companies around the world who could provide service for it, O'Sullivan said in an interview.

The Cius will be able to use external monitors and wireless mice and keyboards, so it could even be used as a replacement for a desk computer by connecting to servers that run "virtualized" applications, Cisco said.

O'Sullivan said Cisco's goal was to sell the Cius for less than $1,000. - AP



Click here http://www.cisco.com/go/cius  for more details.

by thestar.com.my

MPHB diversifies into property development for additional income

Multi-Purpose Holdings Bhd (MPHB) will be announcing its joint venture (JV) with a public-listed developer in the next several weeks to mark its entry into the property development sector.


MPHB is known for its gaming business from which it generates about half of its profit via 51%-owned Magnum Corp, one of Peninsular Malaysia’s three legal number forecast operators,
Managing director Datuk Lau Kim Khoon @ Surin Upatkoon said the group was entering the property development sector in order to have an additional income stream and “to build a sustainable recurring income model.”

MPHB MD Datuk Lau Kim Khoon pointing the way forward for the company: It is in property development. He says ‘We do not have the expertise but we have the land'. So a joint venture with someone who has the expertise is the answer to increase profit.

Besides gaming, its other businesses are insurance, stockbroking, property and hospitality.

The group is starting from ground zero in property development as other than its two residential projects which it launched early this year in Penang, it does not derive any revenue from property development.

The group has two office buildings, Menara Multi-Purpose and Plaza Flamingo, and two hotels under the Flamingo brand as investment properties. Menara Multi-Purpose is 98% occupied and Plaza Flamingo, 90%.

“In the past, MPHB has been factoring in the recurring income from these assets but the contribution was not substantial. The current contribution to the group’s revenue from property development comes mainly from two residential developments in Penang which are expected to contribute a total of RM37mil in profit before tax when completed in the next three years,” said Lau.

The Paya Terubong project is a six-acre joint venture comprising 116 units of town houses and 256 apartment units with a gross development value (GDV) of RM72mil. The Minden Heights project is another JV comprising 74 units of terrace houses under phase 1, launched early this year, and 95 units of terrace houses under phase 2, which will be launched at the end of this year. The GDV for this project is RM143mil.

The group is also converting Magnum Plaza into a three-star hotel to be part of its Flamingo chain. This is expected to open next year.

The jewel in the crown, Lau said, would be its RM3bil iconic integrated mixed development project at the junction of Jalan Sultan Ismail and Jalan Imbi near Park Royal Hotel, which is currently in the planning and designing stage.

It was reported last week that MPHB will launch a RM3bil project which will complement the Government’s proposed international financial district and Pasar Rakyat redevelopment in Imbi. The 2.4ha will have a retail podium, a 50-storey luxury condominium, a 35-storey four-star hotel and 30-storey office tower. The entire project will take several years.

“We believe our project in downtown KL is in line with the Government’s vision for KL. For this reason, we view the various ongoing projects by the Government and existing developers to be complimentary to our project, which would in turn strengthen other projects in the area.”

On the occupancy prospects of its KL integrated mixed development in view of the weak global economy and dwindling expatriate community, Lau said MPHB’s projects were not designed exclusively for expatriates but for the working class.

Only a small portion will be condominiums, as such occupancy and oversupply will not be an issue, he said.

“We do not have the expertise but we have the land. So we will work with the parties that have the expertise. It is not necessary to have our own property team to undertake these developments. The objective is to build a sustainable recurring income stream from our investment properties,” he said.

Lau said most of its land were bought and paid for years ago. Over the years, they have appreciated by three- or four-fold.

He said property development and investment is expected to contribute 10% to the group bottomline.

“Revenue from the property sector will contribute between 20% and 25% in about three to four years’ time,” he said.

“We are of the view that the local economy is stable and not directly affected by the fragile global economy. We are also taking a long-term view of the sector and the group will consider the overall economic climate and other factors when deciding on the timing of launches.”

He said the bulk of its landbank, which includes a 4,641-acre oil palm estate in Pengerang, Johor, which is near the third link to Singapore, are generally more suitable for the local market.

By THEAN LEE CHENG
leecheng@thestar.com.my

Glomac almost doubles earnings

Property developer Glomac Bhd’s net profit in the last quarter ended Apr 30 almost doubled to RM12.4mil from RM6.9mil a year ago on higher property sales and fair value gains on certain buildings held for investments.

The improved performance boosted its full year (FY10) net profit to RM40.7mil, up 27% from RM32mil in FY09. Full year revenue declined to RM318mil from RM345mil previously.

Glomac has proposed a final gross dividend of 4.5 sen a share, bringing its total payout for the year to 8.5 sen a share.


- by thestar.com.my

MTD Cap buying its 'undervalued' shares in open market

The share buyback thus far is reflective of the board and management's assessment of the company's valuation, says its managing director 
 
MTD Capital Bhd (9032), the country's second largest highway operator, has been buying its own shares from the open market as it feels they are undervalued, said its managing director Datuk Azmil Khalid.

"The share buyback thus far is reflective of the board and management's assessment of the company's valuation," Azmil told Business Times.

Based on the stock's closing price of RM4.30 yesterday, the group is valued at RM1.18 billion.

As at February 24 this year, MTD had 193,432 treasury shares or shares that it bought back in the open market. But it had since beefed it up significantly.
Filing to the stock exchange showed that as at June 28, MTD has 22.38 million treasury shares, or 8.14 per cent of the company's capital spread.

In Malaysia, public-listed companies are only allowed to repurchase up to 10 per cent of their shares.

MTD now has a paid-up capital of 275 million shares issued at par value, having twice this year reduced this by cancelling its treasury shares.

Azmil said the share buyback programme allows the group to undertake a more effective capital management.

MTD cancelled 2.2 million treasury shares in February, and subsequently in May, it axed another 7.8 million treasury shares.

By Francis Fernandez

Business Times

SC slaps SJ Asset with restrictions

The Securities Commission (SC) has stopped SJ Asset Management Sdn Bhd (SJAM) from taking care of fresh funds after its examination of the fund manager raised concerns.

In a statement yesterday, the regulator said that with immediate effect, SJAM was prohibited from soliciting new mandates and to maintain and preserve all records in relation to clients' trades and payments.

"On-site examination as well as findings of BDO Consulting Sdn Bhd (BDO), which was appointed to assist in examining SJAM's books, accounts and records, have raised certain concerns," the SC said.

It did not say what the concerns were nor why it had asked BDO to do the job.

The SC has also instructed BDO to further examine, audit and report on SJAM's books, accounts and records, inclusive of assets held.
It said that over the last two years, it had intensified regulatory review and scrutiny over asset management companies.

SJAM, a licensed fund company incorporated in 1992 manages regional investments in Japan, Hong Kong, Singapore, Thailand, Indonesia, the Philippines, Taiwan and South Korea.

Its investment products include fund management, managed portfolio, investment services and private equity accounts.

Whai Onn Tan is the managing director of SJAM, while Datuk Kamaruddin Hamzah, who sits on the board of directors of a few public-listed companies, is the director of the company.

Whai is also the head of fund and portfolio management.

Both Whai and Kamaruddin are also the owners of SJAM Holdings Sdn Bhd, the parent firm of SJAM.

Based on the company's website, SJAM has authorised capital of RM10 million and paid-up of RM6.38 million.

Its investment portfolio targets active, quality-growth companies with reasonable prices.


- by Business Times

Understanding petty corruption

Corruption is now a major public concern in many countries. It is recognised by a number of economists that corruption and bribery are major impediments to development. 
 
Corruption results in a lack of public confidence in democratic processes. It entrenches the elite and slows economic growth and deepens economic inequality as money continues to trickle up.

Literature shows that corrupt behaviour appears to lower the level of ethical consciousness, economical consciousness and society's economic activities. Another literature shows that the intention to bribe positively correlates with an individual's attitude towards the need to succeed.

Notwithstanding, grand corruption like that associated with the arms deal receives most media attention, petty corrupt behaviour can be as damaging if left unchecked. In fact, in some countries, petty corruption is very prevalent.


Petty corrupt behaviour includes "baksheesh", "backhander", "coffee money", gifts, "mordida", "spiffs", or whatever term that is used by bribees (bribe takers). It also includes billing personal calls to the company, padding expense accounts and cheating on time cards.

Another example of petty corrupt behaviour to be focused upon here relates to bribery by traffic officials: traffic officials who receive petty bribes for not issuing tickets or for altering summonses for motorists to avoid fines.

Some motorists who run above speed limit and caught by traffic officials on the road, are willing to offer a small bribe to the officials to avoid a speeding ticket.

Despite being a petty bribe, a total amount of that in one country may not be small if a large number of the officials are receiving petty bribes. Although, such a bribe is petty, it may affect one nation's attitude towards larger ethical problems.

Employees in the public service, such as traffic officials, tend to be risk-averse. In some countries, employees in the public services are considered as long-term tenure holders. The employees are protected by the rule that they have the right not to be dismissed without cause and to keep staying in their office until retirement age. It follows that the employees would never run the risk of being laid off or unemployed without cause for the duration of their tenured period. Therefore, one may consider employees in the public service as risk-free in finding jobs.

Corrupt officials' past experiences may make them be known that some (or many) members of the public are likely to give petty bribes to facilitate services that can be withheld or denied.

Usually, tightwads will be processed, but at the back of the line. In some countries, obnoxious tightwads who like to make loud speeches about corruption may find themselves with insurmountable visa irregularities.

Receiving petty bribes for the corrupt official is said to be like kissing in junior high school. Both parties (public and the official) must be willing. However, if one party (the official) is brash or unwise and asks for bribes all the time, there's more risk of being monitored by the headquarters and severely rebuked for her/his corrupt behaviour.

A task to be assigned to economists is to analyse petty corrupt behaviour with respect to economic theories, such as theories on economics of "small decisions" and experimental economics.

One of the theories is concerned with the behavioural tendency, called "underweighting of rare events".

Economists would examine that petty corrupt behaviour by individual officials is caused by underweighting of rare events and its probabilities.

It seems that the common perception among the corrupt officials that the public largely interacts with traffic officials on the road where the actions of corrupt officials are difficult to be monitored and therefore penalised. Under this perception, the corrupt officials are likely to subjectively underweigh the probability that their actions are being monitored and severely penalised by supervisors/headquarters.

In fact, a research shows very few of all respondents in the survey vowed they ever tried to report corrupt officials to headquarters.

Behavioural phenomenon "underweighting of rare events" has been reported by researchers in experimental economics - a relatively new and rapidly expanding branch of economics.

An international academic association, The Economic Science Association, in the field of experimental economics was organised in 1986. In 1998, the first journal specialising in research in this field was published. Notwithstanding the fact that experimental economics has its short history, a number of researchers in diverse fields are presenting substantial work on experimental economics.

In 2002, Professor Vernon Smith, a prominent economist at Chapman University in the US, won the Nobel Prize in Economics for his pioneering and outstanding work in experimental economics.

Harvard professors have been conducting laboratory-based research on underweighting of rare events with a new method that attempts to develop theories based on the behaviour of experimental subjects - mostly undergraduates.

It is hoped that further experimental economics research can provide a useful arena to pursue an ongoing dialogue between economic theories and evidence of petty corrupt behaviour that is triggered and caused by underweighting of rare events.






By Takemi Fujikawa
The writer is a senior lecturer with the Graduate School of Business, Universiti Sains Malaysia

Kencana wins Petronas Carigali order

KENCANA Petroleum Bhd said its unit Kencana HL Sdn Bhd has won a RM33.9 million order from Petronas Carigali Sdn Bhd (PCSB) to supply the Kanowit CPP platform in offshore Sabah.

The work order is part of the contract from PCSB for the provision of hook-up and commissioning service of its facilities from 2007 to 2010.

Work is due to be done by November 2010.




- By Business Times

Berjaya plans to list food units by year-end

Malaysia conglomerate, Berjaya Corporation Bhd (BCorp), plans to list Berjaya Roasters (M) Sdn Bhd and Berjaya Pizza Company Sdn Bhd by year-end.

Chairman and Chief Executive Officer, Tan Sri Vincent Tan said both companies would be listed through Berjaya Food Bhd.

"After Berjaya Retail Bhd (B-Retail), we want to list Berjaya Food this year," he told reporters on the sidelines of the launch of B-Retail's prospectus, today.

B-Retail, which owns 7-Eleven Malaysia Sdn Bhd and Singer (Malaysia) Sdn Bhd, is scheduled for listing on the Main Board of Bursa Malaysia in mid-August this year.
Berjaya Roasters is the operator of the Kenny Rogers Roasters chain of restaurants while Berjaya Pizza operates Papa John’s restaurants.

On BCorp's plan to develop BYD Auto's F0 right-hand drive one-litre model for the Malaysian and the Asean markets, Tan said the group had submitted an appeal to the relevent Malaysian authority.

"We are still awaiting the approval," he added.

BCorp and Chinese auto maker, BYD Co Ltd, had in February this year signed a memorandum of understanding (MoU) to develop BYD Auto's F0 model.

However, the group's proposal did not meet the criteria set by the government.

In the revision of the National Automotive Policy (NAP),

Malaysia lifted a freeze on car manufacturing licences, but only for models above 1.8 litres.

International Trade and Industry Deputy Minister Datuk Mukhriz Mahathir has said that the NAP is very clear and there was no exception to the requirement of above the 1.8-litre capacity.

Meanwhile, asked if Ascot Sports Sdn Bhd was making losses after the government decided not to issue the licence for sports betting, Tan said: "It is very long answer. But, I am not in the mood to give any answer now." - Bernama

IE sees better performance in 6 months

Intelligence Edge Technologies Bhd (IET), is confident of seeing an improvement in its financial position once it undertakes a restructuring exercise.

IET's Chief Executive Officer, Anil Chet Karamsingh said the company, currently under the GN 3(Guidance Note 3) status in Bursa Malaysia, is in the process of looking for a sponsor as part of its restructuring exercise.

Talking to Bernama here today, after the company's annual general meeting, Anil said the company was also looking at a new line of business that would uplift the company from its GN 3 status.

The company, a player in the telecommunication industry, through its subsidiaries, namely Intelligent Edge Marketing Sdn Bhd, IE Ventures Sdn Bhd, Intelligent Edge Systems Sdn Bhd and Advance Convergent Sdn Bhd, provides consultancy services, design and development of business application software solutions, and telecommunications products.
For the financial year ended Dec 31, 2009, the company recorded a revenue of RM570,688 with a net loss of RM5.12 million. In its annual report, its Executive Chairman, Datuk Hj Nabil B.Abd Kadir cited the challenging operating environment including competition and declining revenues from its Voice services business as factors for the performance.

Anil said changes in the regulatory environment had contributed towards the decline from its Voice services business.

Moving forward, he said the company was "looking at primarily broadband distribution services or related to broadband distribution services," but added that it was still premature to comment on the new business.

Anil said while the company's market share was significantly impacted by the GN 3 status, it was confident of a recovery and expected to announce positive news in the next three to six months. -- Bernama

Tradewinds advances on tower plan

Tradewinds Corp, a Malaysian hotel, building and plantations group, rose to a one-week high in Kuala Lumpur trading after a newspaper reported it will spend RM450 million refurbishing a Kuala Lumpur office building and construct a new 40-floor tower.

The company, controlled by billionaire Syed Mokhtar Al- Bukhary, will refurbish an existing building called Menara Tun Razak in Malaysia’s capital and construct a neighboring office tower, Tradewinds Director Poh Pai Kong said in a telephone interview today.

“This is truly the appetizer,” he said. “We’ve got a main course that’s almost ready to unveil,” said Poh, referring to a later project.

Malaysian developers have stepped up building plans to tap rising demand amid an economic recovery. Southeast Asia’s third- largest economy has emerged from its first recession in a decade and may expand by between 4.5 per cent and 5.5 per cent this year, Bank Negara Malaysia said in its annual report on March 24.
Tradewinds rose 3.6 per cent to 58 sen in Kuala Lumpur trading at 10:48 a.m. local time, set for its steepest gain since June 21.

The new office tower will have a net rentable area of 440,000 square feet, compared with the Menara Tun Razak’s 296,000 square feet, said Poh.

Property currently contributes around 6 per cent of Tradewinds revenue, according to data compiled by Bloomberg. This is likely to overtake hotels as the group’s biggest earner in future years, said Poh.

Tradewinds owns nine hotels in Malaysia, including the Crowne Plaza Mutiara Kuala Lumpur, Hilton Petaling Jaya and Hotel Istana. About 66 percent of its revenue was derived from the division in 2009, Bloomberg data shows. -- Bloomberg

UMW clarifies oil & gas unit losses

The UMW Group said it viewed the losses in its Oil & Gas Division as a temporary setback, as it has a number of greenfield projects which are expected to generate income and show positive results upon commencement of operations in the second half of this year.

As such, it considers a recent news article by a local paper quoting a source and referring to large losses or provisions for losses being required in its O&G unit, as not only inaccurate and baseless but misleading to investors.

In a statement, the group said the O&G Division suffered a loss of RM19.234 million in the first quarter, which was duly disclosed and reasons explained in an announcement on May 20, 2010.

The losses were attributed to decreased drilling activities worldwide which resulted in a significant drop in demand for Oil Country Tubular Goods (OCTG), while the countervailing and anti-dumping duties on seamless pipes made in China imposed by the United States, had affected the profitability of its associated company in the country.
UMW maintained that it has good corporate governance standards and transparent reporting methods.

However, the news article had implied that the group had incurred huge losses which had not been accounted for and which need provisions in the next few years.

"We view this as a baseless allegation as we were not able to provide our perspective or input on the matter," it added.

Meanwhile, the UMW Group is involved in four core businesses - Automotive, Equipment, Manufacturing and Engineering, and Oil and Gas. -- Bernama

Genting unit bids for New York lottery project

Malaysian gaming group Genting Bhd said today that its subsidiary, Genting New York, had formally bid to develop and operate a video lottery facility in New York.

In a filing with the stock exchange, Genting said it had submitted a US$1 million entry fee to the New York State Division of Lottery on June 1 to allow it to participate in the bidding process. - Reuters

UEM stake sale won't impact Faber: OSK

The potential disposal by UEM Group Bhd of a stake in Faber Group Bhd will only involve changes in the latter's shareholding structure without impacting its existing business direction.

In a note released today, OSK Research said the potential disposal was in the pipeline as it was within UEM'S restructuring plan to focus on its core business.

"The market seems to have unjustifiably over-reacted to the rumour, especially since the company's fundamentals and future prospects remain intact," it said.

OSK said the disposal was not likely to happen soon as the decision whether or not Faber's concession was renewed by the government would only be known in October.
"The concession renewal will probably be a requirement before a buyer agrees to the pricing.

"We believe that in the event UEM decides to dispose of its stake, it will be in 'as is' form, and not a partial sale of certain divisions of Faber's business," it said.

It said concerns that UEM would only sell Faber's concession business and keep the property business were overblown.

OSK said with Faber's diversified business comprising integrated facilities management for health concessions and non-healthcare as well as property development, it would be rather difficult for UEM to find a strategic buyer.

"We believe the disposal would most likely attract passive buyers," OSK said.

OSK said with Khazanah Nasional Bhd as the indirect major shareholder of Faber, there was a possibility the disposal might be a related-party transaction, whereby it could involve the transfer of equity interest from UEM to Khazanah. -- Bernama

MAHB: New LCCT to be completed early 2012

The new Low Cost Carrier Terminal (LCCT) here, is expected to be completed by early 2012, Malaysia Airports Holdings Bhd's (MAHB) Managing Director, Tan Sri Bashir Ahmad said.

He said the LCCT is taking longer to complete as CONSTRUCTION [] is being undertaken on the basis of a tender exercise.

"Also, we are currently redoing the design, as the new building is much bigger than the original concept. So, all this has resulted in more time being taken for completion," he told a press conference after the KLIA's 9th anniversary celebration here on Wednesday, June 30.

Bashir, however, declined to give more details on the project, saying further announcements would be made later.

Commenting on the celebration, MAHB Chairman Tan Sri Aris Othman said KLIA has flourished, to become one of world's best known airports in a space of just 12 years of its operations.

"In the first half of 2010 alone, KLIA managed to rope in three Middle Eastern airlines in Mahan Air, Oman Air and Royal Jordanian.

"Last year, the airport handled 29.6 million passengers, an increase of 7.8 per cent compared to previously," he added.

He also attributed the outstanding performance to all agencies at the KLIA.

The KLIA has this year bagged three awards, namely for Best Airport Immigration Service, Staff Service Excellence in the South East Asia category at the Skytrax 2010 World Airport Awards and as the Best Brand in Transportation from Brand Laureate 2009-2010. - Bernama

PAC to table report on Pos Malaysia losses

The Public Accounts Committee (PAC) will soon table its report on the alleged losses suffered by Pos Malaysia, PAC chairman Datuk Seri Azmi Khalid said.

"We have listened to the explanation given by Khazanah Nasional and today we called in former Pos Malaysia chairman Tan Sri Adam Kadir to give his account on he issue.

"We are studying the findings and should be able to table the report during he current Dewan Rakyat sitting," he told reporters after meeting the former Pos Malaysia chairman on Wednesday, June 30.

Adam had recently revealed that Pos Malaysia, a government-linked company, uffered losses to the tune of RM546 million.

He also wrote in the Sunday Star newspaper that the government investment am, Khazanah Nasional Berhad, as the Pos Malaysia's main shareholder, had not provided the true picture of the company's losses.

Azmi said the committee would also call in the Finance Ministry to seek clarification over the issue.

"We will get written answers from both sides. We will be asking a few more questions to Khazanah after listening to Tan Sri Adam today, also a few questions to the Ministry of Finance," he said.

Azmi also said that Pos Malaysia did not suffer losses.

"If there are losses, it could be due to the drop in the Transmile shares to 14 sen (in 2007). Now the price is 39 sen. Pos Malaysia has 15 per cent stake in Transmile," he said.

Meanwhile, Adam said he had said what need to be said to the PAC. "It's up to the PAC. I have my own information and I have shown it to them," he said. - Bernama

MRCB expands KL landbank with RM105m acquisition

MALAYSIAN RESOURCES CORP [] Bhd is expanding its landbank near in landmark KL Sentral development by acquiring a company which owns a piece of land fronting Jalan Brickfields for RM105 million.

MRCB said on Wednesday, June 30 it had proposed to acquire 22.82 million shares or 60% stake in GSB Sentral Sdn Bhd with 17.91 million redeemable preference shares of 1 sen each in GSB for a total of RM105 million.

It is acquiring the stake from Gapurna Sdn Bhd, which is principally engaged in property development.

GSB Sentral owns 91,040 sq ft of land which has been approved for a mixed development of office and service apartments with total gross floor area of 1.468 million sd ft and an estimated gross development value of RM850 million.

The development on the lot started in March 2009 and is expected to be completed by the fourth quarter of 2012.



Written by Joseph Chin
The Edge Malaysia

Berjaya Retail plans RM37.5m investment for 150 more 7-Eleven stores

Berjaya Retail Bhd (B-Retail), enroute for listing on the Main Board of Bursa Malaysia in mid-August, plans to invest RM37.5 million to open 150 new 7-Eleven convenience stores nationwide.

Another RM15 million will be spent to set up 100 Singer branches and sales agent shops, its director Datuk Azlan Meah said on Wednesday, June 30.

He said consumer confidence was improving in tandem with the economic recovery, thus aiding the growth of its subsidiaries, 7-Eleven Malaysia Sdn Bhd and Singer (Malaysia) Sdn Bhd.

"The listing of Berjaya Retail will enable us to further capitalise on the ever-growing business opportunities in Malaysia.
"Both 7-Eleven and Singer are established brand names in Malaysia. The 7-Eleven has been in Malaysia since 1984 while Singer is more than 100 years old," he said at the company's prospectus launch.

To date, Singer has about 560 branches, 3,500 sales agents and sales agent shops nationwide. The company planned to increase Singer branches and sales agent shops to 1,000 in the next five years.

The 7-Eleven, with 1,127 stores and 38 7-Eleven franchisees, aims to secure another 1,000 franchisees this year.
Berjaya Retail's initial public offering (IPO) is expected to raise between RM38.44 million and RM53.44 million in gross proceeds.

The IPO of a minimum of 71.87 million and up to 101.87 million ordinary shares of 50 sen each at an offer price of 50 sen per share comprises the offer for sale of a minimum 61.87 million shares.

A total of 91.87 million shares have been reserved for Bumiputera investors. - Bernama

Today's Diary What to expect on June 30, 2010

Prime Minister Datuk Seri Najib Razak to visit the National Key Economics Area (NKEAs) labs at Malaysia Airlines Academy, No 2 Jln SS7/13, Kelana Jaya, Selangor at 9am.

SC-Bursa Malaysia Corporate Governance Week 2010 at 9am.

LIMAHSOON BHD [] AGM at Metro Room 1, Prescott Metro Inn, Wisma Metro Kajang, Jalan Semenyih, Kajang, Selangor at 9am.

SYCAL VENTURES BHD [] AGM at Pearl International Hotel, KL at 9am.

HDM-CARLAW CORPORATION BHD [] AGM at Commonwealth House, No. 4, Jalan Birah, Damansara Heights, KL at 9am.

KUMPULAN POWERNET BHD [] AGM at Auditorium, Level 4, The Podium, Wisma Synergy, No. 72, Pesiaran Jubli Perak, Seksyen 22, Shah Alam, Selangor at 9.30am.

DPS RESOURCES BHD [] AGM at Conference Room, Lot 76 & 77, Kawasan Perindustrian Bukit Rambai, Bukit Rambai, Melaka at 9.30am.

METRONIC GLOBAL BHD [] AGM at No 2, Jalan Astaka U8/83, Seksyen U8, Bukit Jelutong, Shah Alam, Selangor at 10am.

NAM FATT CORPORATION BHD [] AGM at Royal Ballroom, Kelab Golf Sultan Abdul Aziz Shah, No. 1, Club House, Jalan Kelab Golf 13/6, Shah Alam, Selangor at 10am.

Efficient E-Solution Bhd AGM at Bangsar Seafood Garden Restaurant, KL at 10am.

MLABS SYSTEMS BHD [] AGM at Conference Room No. 2, 4th Floor, Menara Lien Hoe, No. 8, Persiaran Tropicana Golf & Country Resort, PJ, Selangor at 10am.

VIZTEL SOLUTIONS BHD [] AGM at Kenanga Room, Sri Damansara Club, Lot 23304, Persiaran Perdana, Bandar Sri Damansara, KL at 10am.

LEWEKO RESOURCES BHD [] AGM at Heritage Hotel Ipoh, Perak at 10am.

LCL CORPORATION BHD [] AGM at Metro Room 1, Prescott Metro Inn, Wisma Metro Kajang, Jalan Semenyih, Kajang, Selangor at 10am.

SCC IPO prospectus launching ceremony at Armada Hotel, PJ, Selangor at 10am.

Berjaya Retail Bhd launch of prospectus ceremony at Lecture Theatre, Berjaya University College of Hospitality, Level 11 West Wing, Berjaya Times Square, KL at 10.30am.

ADVANCE SYNERGY BHD [] AGM at Auditorium, Level 4, The Podium, Wisma Synergy, No. 72, Pesiaran Jubli Perak, Seksyen 22, Shah Alam, Selangor at 10.30am.

EQUATOR LIFE SCIENCE BHD [] AGM at The Grand Paragon Hotel, Johor at 11am.

Focus Point to launch IPO prospectus at Jade Room, Lobby Level, Mandarin Oriental Hotel, KL at 11am.

MUDA HOLDINGS BHD [] AGM at Ground Floor, Lot 7, Jalan 51A/241, PJ, Selangor at 11am.

BCT TECHNOLOGY [] BHD [] AGM at Tropicana Golf & Country Resort, Selangor at 11am.

MAXBIZ CORPORATION BHD [] AGM at Dewan Tan Sri Hamzah, Royal Selangor Clubs, Kiara Sports Annexe, Bukit Kiara, KL at 11.30am.

YNH PROPERTY BHD [] AGM at Lead View Hotel, 2479, Jalan Dato' Yu Neh Huat, Taman Samudera, Sri Manjung, Perak at 11.45am.

Hock Lok Siew Corporation Bhd AGM at Lot 5613, Sungai Ketapang, Gurun, Kedah at noon.

INTELLIGENT EDGE TECHNOLOGIES [] Bhd AGM at Pacific Regency Hotel Suites - Meranti 1 & 2, Level 22, Menara PanGlobal, Jalan Punchak, Off Jalan P Ramlee, KL at 2pm.

Oxford Business Group and The Economic Planning Unit to launch its economic review on "The Report: Malaysia 2010" at Sapphire Room, The Mandarin Oriental Hotel, KL at 2.30pm. Prime Minister Datuk Seri Najib Razak to deliver keynote address.

H-DISPLAYS (MSC) BHD [] AGM at Pacific Regency Hotel Suites - Meranti 4, Level 22, Menara PanGlobal, Jalan Punchak, Off Jalan P Ramlee, KL at 3pm.




Written by The Edge Financial Daily

Linear director charged with abetting in fraud case

A SINGAPOREAN was charged with helping a former company director and two others commit securities fraud involving RM24 million.

A. Eswaramoorthy Pillay, 44, claimed trial to five charges of abetting.

Eswaramoorthy, who is the executive director of Linear Corp Bhd (9504), was charged with aiding former LFE Corp Bhd director Alan Rajendram, who allegedly cheated LFE by using the company's RM9 million to buy nine million of its shares.

He allegedly committed the offence at Bursa Malaysia Depository Sdn Bhd in Bukit Kewangan, Kuala Lumpur, between January 4 and February 8 2007.
He also faces an alternative charge of abetting Rajendram to commit criminal breach of trust (CBT) involving RM9 million on January 4 2007 at Standard Chartered Bank Bhd in Jalan Ampang.

The other four charges are:

* abetting Rajendram in committing CBT involving RM9.99 million at the same branch of the Standard Chartered Bank between January 11 and 16, 2007;

* abetting Chin Soong Jin, 43, to cheat EON Bank Bhd involving RM870,000 at Menara EON Bank in Jalan Raja Laut between October 16 and 19 2006;

* abetting Chin to cheat EON Bank Bhd involving RM1.8 million at the same branch of EON Bank between November 27 and 28 2006; and,

* abetting Chin and Liew Kiam Woon, 46, to cheat EON Bank involving RM1.298 million at the same branch of EON Bank on December 26 2006.

Deputy public prosecutor Chong Loong Men asked to fix bail at RM1 million as the offences were serious.

However, Eswaramoorthy's lawyer Datuk K. Kumaraendran asked for a lower sum saying his client was ready to surrender his passport.

Judge Rozana Ali Yusoff set bail at RM1 million, with RM500,000 to be deposited as security. She also ordered Eswaramoorthy to surrender his passport to the court and fixed July 27 for mention.



By Irdiani Mohd Salleh
Business Times

OSK Research maintains Buy on Petra Perdana

OSK Research is maintaining its Buy on Petra Perdana with a target price of RM1.77 based on the existing PER of 9x FY11 earnings.

“Currently, we understand that there are still a tussle between the 2 groups of Petra shareholders and hope of this being resolved soon. Otherwise, Petra faces the risk of losing out on new vessel contract awards to its listed peers like Alam Maritim and Tanjung Offshore,” it said on Wednesday, June 30.

OSK Research said however, going forward, should the internal strife be resolved, it believed Petra could possibly be the biggest beneficiary of new vessel contract awards.

The factors are because: 1) it has spare capacity, with an average utilization of below 50% now, and 2) deepwater projects like Gemusut should start first oil production in 2011 and Petra’s 10,000 to 12,000 brake horsepower vessels should come in handy here.


Written by OSK Research

Stocks to watch: Glomac, Green Packet, Sunway, Naim Holdings

Key Asian markets are expected to see strong downward pressure on Wednesday, June 30 after Wall Street fell on growing fears of a weakening global economic outlook.

On Wall Street, Reuters reported the S&P 500 had tumbled below its 2010 intraday low of 1,040.78 during the session on Tuesday. The index closed at its lowest level since Oct 30, breaking its closing low for the year at 1,050.47 -- another bearish signal for markets.

The Dow Jones industrial average lost 268.22 points, or 2.65%, to 9,870.30. The Standard & Poor's 500 Index fell 33.33 points, or 3.10%, to 1,041.24. The Nasdaq Composite Index dropped 85.47 points, or 3.85%, to 2,135.18.

At Bursa Malaysia, stocks to watch include GLOMAC BHD [], Green Packet, SUNWAY HOLDINGS BHD [], NAIM HOLDINGS BHD [] and George Kent (Malaysia) Bhd.

Glomac's fourth quarter earnings surged 80% to RM12.45 million and the property developer expects its financials to improve, helped by the company's locked in real estate sales, upcoming property launches, and landbank expansion. Its unbilled sales of RM588 million as at end-April 2010 was a new record high for Glomac

Green Packet's Packet One Networks will use RM322.9 million (US$100 million) proceeds for stake sale to SK Telecom to fund phases one and two of its WiMax infrastructure.

The infrastructure rollout include its WiMAX network and provision of commercial wireless access services across Malaysia, and working capital purposes to ensure the successful rollout of its WiMAX service in Malaysia.

Sunway Holdings targets record earnings for FY10 and it expects CONSTRUCTION [] to account for 50% of earnings. Its current order book is RM3 billion and it is bidding for RM16 billion of contracts, of which RM10 billion are local jobs.

It is also mulling to set aside 20% of its profit after tax as dividend in FY11.

Sarawak-based builder and property developer Naim Holdings Bhd signed a memorandum of understanding with three other parties to explore the prospect of collaborating for the development of two community inter-linked smart cities.

The MoU was with the Miri City Council, and two other parties in China - Guangzhou Panyu Economy and Trade Promotion Bureau of Guangzhou, and Institute of Digital Guangdong for the development of the Panyu-Miri Smart Cities (PMSC).

PMSC shall create and maintain a special information super highway link between the smart intelligent cities of Panyu and Miri with a “mirror” computer server to be hosted in each other’s cities which will enable users in both cities to enjoy community linked projects.

George Kent, which posted a 45% rise in its latest quarterly earnings, is on a capacity expansion mode to strengthen the growth platform of its core businesses in water meters manufacturing and construction.

The group would invest RM50 million to double the production capacity of its manufacturing facilities to two million water meters per annum in three years from one million currently.

MUTIARA GOODYEAR DEVELOPMENT [] Bhd posted net profit of RM8.89 million in the fourth quarter ended April 30, 2010 and expects the current financial year to be satisfactory due to improving outlook for the overall economy.

Revenue was RM42.35 million. Earnings and revenue were before the adoption of the Issues Committee (IC) Interpretation with the effective date starting from Feb 1, 2010.



Written by Joseph Chin
The Edge Malaysia

No board nod for Linear fund transfer

Linear Corp Bhd (9504) yesterday revealed that former non-executive director Alan Rajendram had single-handedly advanced funds from its offshore account not once, but twice, without the board's approval.

Following the two instances, the company has put in controls such as having two persons to sign for the release of funds from the offshore account, Linear executive director Yap Chee Keong said.

Linear had told Bursa Malaysia earlier this month that it advanced the RM36 million, or almost all of its cash, to Global Investment Group Inc (GIG) as a performance consideration for a RM1.66 billion cooling tower project in Manjung, Perak.

"The first time the RM36 million was advanced to GIG was at the end of December last year," Linear executive director Mevin Nevis told reporters after the company's annual shareholder meeting in Seberang Prai on mainland Penang.

The closed-door meeting, which lasted not more than 15 minutes, was attended by five shareholders, reporters were told.
When the company's auditors told the board that the money should not have been paid out without the board's approval, the RM36 million was refunded to Linear by GIG in February this year.

"In April this year, Rajendram made a RM36 million payment again to GIG without the board's approval," Nevis said. "He claimed he was under pressure from GIG to move forward with the project."

However, the board had agreed in February that future payments to GIG could not be released without full board approval, a formal contract and an extraordinary general meeting.

Rajendram could not be immediately reached for comment.

Yap said that Linear was now working with Rajendram to either deliver the project or refund the RM36 million by November this year.

Yap, who was appointed to Linear's board last month to turn around the company, described the recent developments as "self-inflicted internal weaknesses which we have addressed over the last two months".

Linear's outstanding loans currently total RM39 million. This is made up of RM18 million in secured and RM21 million in unsecured loans.

It will only take legal action to recover the money from Rajendram if he fails to meet the November 30 deadline, Yap said.

When asked to comment on the fact that both Rajendram and Linear executive director Bryann Pillay had been charged by the Securities Commision with securities fraud involving LFE Corp Bhd, Yap said:

"The company is not related to Linear and we maintain they are both innocent until proven guilty."

As for Linear, it may sell and lease back its main asset, its factory in Prai, to generate cash. That factory has an open market value of RM19 million.

Yap maintained that Linear still enjoyed a good brand name and a favourable order book. He did not elaborate.

EPF to reduce stake in RHB Cap by mid-2011

The Employees Provident Fund (EPF) will pare down its stake in RHB Capital Bhd to 40% by mid-2011, said chief executive officer Tan Sri Azlan Zainol.

“We have to sell down to 40% by the middle of next year,” he said on the sidelines of Securities Commission-Bursa Malaysia Corporate Governance Week here yesterday.

He said the state pension fund had not identified potential buyers for its 57% stake in the country’s fourth-biggest bank by assets.

Meanwhile, Azlan said EPF aimed to grow its overseas investment to between 10% and 15% next year from only 7% now. “We want to look at bond papers as well as properties,” he said. — Bernama

Football lags other sports on technology

SUBJECT OF DEBATE: Germany's goalkeeper Manuel Neuer eyes the ball shot by Lampard before the goal was disallowed in the Fifa World Cup 2010 Germany vs England game. The controversial ruling has again brought up the issue of whether technology should be used in the football. - AFP/Relaxnews 

 

CAPE TOWN: High profile sports like rugby, tennis, cricket and basketball have seamlessly embraced technology to aid referees and linesmen, so why doesn't football?



The short answer is that Sepp Blatter and the FIFA heirarchy are from the old school and reluctant to dilute the human factor that has governed the game for so long.

UEFA president Michel Platini is in complete agreement, arguing that video replays would interrupt the flow of the game.

Their defiant stance is in sharp contrast to many other sports that have adapted to the modern age. For example, basketball referees use replay systems to make sure players are shooting within the time allotted by the shot clock, while in cricket, a third umpire, with access to TV replays, has been successfully adopted.

FIFA's position has again been brought into focus at the World Cup with a series of bad decisions sparking renewed calls for change.

Blatter awoke to headlines Monday like, "Soccer must leave the Stone Age" and "FIFA fossil Blatter needs to be buried" after Frank Lampard's perfectly good goal was ruled out in England's 4-1 mauling by Germany.

Replays showed the ball was clearly over the line.

Just hours later, Argentina's opening goal in their last 16 clash with Mexico was allowed to stand despite Carlos Tevez being in an offside position.

England coach Fabio Capello made clear how he felt.

"It's incredible that in a time of technology, the referees aren't capable of deciding if there has been a goal or not," said the Italian.

England captain Steven Gerrard also called on FIFA to look at goal-line technology. "FIFA will have to look at that because I looked across at the linesman and he was by the edge of the area so how can he see if that's over the line or not."

While many of the referees and linesmen at the World Cup have been praised for their fitness and keeping their cards in their pockets, Sunday's howlers were just the latest in a string of questionable calls.

One of the most high-profile came when Mali's Koman Coulibaly disallowed Maurice Edu's goal for the United States in the 85th minute of their 2-2 draw with Slovenia, denying them a vital win.

French referee Stephane Lannoy also came under fire for sending off Brazil's Kaka against the Ivory Coast, while he allowed Luis Fabiano's second goal to stand despite a clear double handball.

Supporters of technology will say this mistakes could have been avoided.

Football authorities have trialled goal-line technology before, but the International Football Association Board ruled it out in March.

It followed cameras being placed on goal posts and electronic chips inserted in the ball to determine if it had crossed the goal line, similar to the HawkEye technology used in tennis and cricket.

They have also tested using two additional referees, in the Europa League, to prevent mistakes, with that experiment is still being analysed.

How long they can keep football as one of the last sports to adopt the latest technology remains to be seen.

But the aging Blatter appears to be in no hurry to change.

"No matter which technology is applied, at the end of the day a decision will have to be taken by a human being," he said recently.

"This being the case, why remove the responsibility from the referee to give it to someone else?"

FIFA's official spokesman Nicolas Maingot reiterated the stance on Monday.

"We will not open any debate on refereeing decisions at the daily media briefing, this is not the place for this and you will appreciate that I am not competent to do that," Maingot told reporters. - AFP/Relaxnews

Petra AGM continues on July 20

Latecomers initially barred, resolutions on election of directors to be tabled at next meeting

KUALA LUMPUR: Arriving mere minutes after the Petra Perdana Bhd’s AGM was to commence nearly caused a small group of shareholders to be locked out of the meeting.

The group of shareholders, including former CEO Tengku Ibrahim Petra Tengku Indra Petra’s wife Datin Che Nariza Hajjar Hashim and family members, was initially refused entry for arriving slightly after 11am.

Taken aback, they objected and words were exchanged.

Nariza raised her voice at one point and said “this is my company” when she was barred from entering the heavily guarded building.

However, the issue was resolved quickly and the latecomers eventually allowed to attend the highly anticipated meeting that lasted about four hours without any untoward incident.

All the resolutions were passed at the AGM with the exception of the company’s proposed name change while five other resolutions pertaining to the re-election of directors were not tabled due to a court order

The High Court ordered the chairman of the meeting to adjourn the AGM to July 20 for the re-election and election of directors.

The re-election of four existing directors – Surya Hidayat Abd Malik, Shamsul Saad, Raja Annuar Raja Abu Hassan and Idris Zaidel – and the election of Lembaga Tabung Haji’s candidate Hamdan Rasid will be tabled at next month’s meeting.

The meeting will also decide on the candidates for directors nominated by Nariza, Nik Ismail Tengku Besar Indra Raja and Ramilah Joannah Sulaiman,

Meanwhile, Minority Shareholder Watchdog Group (MSWG) corporate services general manager Lya Rahman said the AGM was professionally conducted and there were no untoward incidents.

“Shareholders were very active and raised lots of questions,” she said. MSWG also witnessed the counting of the ballot at the AGM.

Managing director Shamsul Saad said the proposed name change for the company to Perdana Petroleum Bhd failed to receive at least 75% of votes.

“It was just short of votes. The majority voted for it (change of name) but since it is a special resolution we needed 75% votes,” he said after the AGM.

Shamsul said shareholders also approved the private placement of new shares to Nam Cheong Dockyard Sdn Bhd.

Last Friday, Petra Perdana was given the green light for the private placement of 10% of its paid-up share capital to Nam Cheong.

A shareholder who declined to be named said it was rather unfair for the shareholders to vote on the resolution as they were given very limited time to digest the information.

“What if Bursa Malaysia has not approved the placement? What is the hurry? Will the company go bankrupt if we don’t get the investment from Nam Cheong?” he asked.

Shamsul said the private placement was expected to raise RM38mil to RM40mil.

“The private placement will strengthen the company’s financial status, bring on board a strategic partner and allow us to continue with our fleet renewal plan; (all) important for the growth of the company,” he said.

The private placement is likely to be completed soon while the renounceable rights issue is slated to be concluded by year-end. The rights issue is expected to raise RM60mil.

Executive director Datuk Henry Kho said the corporate exercises were to raise funds to facilitate the financing of new vessels, repay borrowings and to be used as working capital.

To a question, he said Petra Perdana had managed to reduce its gearing to about RM250mil currently. Its gearing was RM440mil and RM660mil in 2009 and 2008 respectively.

Shamsul said the company would look into 29.6% associate Petra Energy Bhd’s invitation to nominate members to the latter’s board.

“It was very gracious of them to invite us (to join the board). We have yet to decide who and how many directors to nominate,” he said, adding that Petra Perdana would make a decision after Petra Energy’s AGM today.

By LEONG HUNG YEE
hungyee@thestar.com.my

MAMEE: A household brand name

MAMEE-DOUBLE Decker (RM3.23) is aiming for a double-digit topline increase for its F&B business under a multi-pronged growth strategy. The stock is trading at reasonable forward price-to-earnings (P/E) of roughly 10 times at the current share price — and offers a fairly attractive net yield estimated at 5%.

Its underlying business — the manufacturing of instant noodles, snacks, beverages and cultured milk — is relatively resilient and generates steady cashflow. As such, the company is well able to leverage on its strong balance sheet to support future expansion plans — and maintain a dividend payout of not less than 50% of annual net profit. Mamee is sitting on net cash totalling RM66.5 million or equivalent of 46 sen per share at end-March 2010.

A homegrown F&B with household brand names
Mamee, which was established in 1971 as a manufacturer of dry noodles and instant vermicelli, has grown steadily into one of the country's leading F&B players.

The company has created and built some of the most enduring brands over the past four decades, including the Mamee instant noodles, Mamee Monster, Double Decker and Mister Potato. It holds dominant positions in the domestic instant noodles and snacks market segments — and has also expanded its footprint overseas. Exports — to over 80 countries — currently account for roughly 30% of total sales.

Aims to double sales over next five years
Mamee intends to sustain a double-digit pace of growth for sales going forward. This includes growing both domestic operations as well as export markets.

To this end, it has started the year on a strong note. Sales in 1Q10 were up 26% year-on-year (y-o-y) to RM115.4 million while net profit grew 14% on the year to RM12 million. We expect growth in the next few quarters to remain relatively robust, underpinned by key new product launches and increased consumption during the FIFA World Cup and Hari Raya festive celebration in 2Q-3Q10.

Mamee recently expanded its snacks range to include Mister Potato Rice Crisps, which is touted as the healthier alternative to conventional snacks. Another key launch was the Mi Goreng Indonesia in April 2010. To ensure taste authenticity, this particular instant noodle is currently manufactured under contract in Indonesia.

Steady pipeline of new products

A steady pipeline of new products is one of the cornerstones of the company's growth strategy. We expect Mamee's in-house R&D team to maintain focus on its key markets, especially the snacks segment, which has registered well above industry average growth over the past few years.

Industry statistics estimate Mamee's share of the snacks market at over 31%. The segment currently accounts for about 60% of the company's total sales. It is also the second-largest selling brand for instant noodles in the country, with a market share estimated at roughly 14%.

The company plans to spend close to 10% of sales each year on A&P for brand building and promoting consumer awareness in new products.

Expanding distribution network
At the same time, Mamee is strengthening and expanding its distribution network. This includes stepping up incentives for its 150 distributors and wholesalers in order to gain further market share. It is also exploring a more direct distribution channel — moving vans, to tap underserved suburban and rural areas.

Capital expenditure is estimated at about RM30 million per annum for the next two-three years. This would include three new Mister Potato production lines, the first of which is slated for commissioning in July 2010, to cater to the strong growth and positive consumer response to the Rice Crisps. The company is sanguine that the MSG-free product will do equally well in export markets.

Targeting bigger export market
Export is another key thrust to support future growth, given the limitations of our country's relatively small population. In this aspect, Mamee has had fairly good success. For instance, it is currently among the three biggest selling brands of instant noodles in Myanmar, where the company has a manufacturing facility that caters solely for that market.

As mentioned above, it currently exports to over 80 countries, including key markets like Australia, Singapore, Hong Kong, Russia and the Netherlands. The company had recently strengthened its marketing team with the aim of expanding exports to generate at least 50% of sales within the next few years. Some of the key target markets will include the Asean region and the Middle East, a potentially huge market for the company's halal products.

Reasonable valuations and good yields
We forecast net profit to grow by about 9% this year to roughly RM47.4 million or 32.5 sen per share. That implies its shares are now trading at reasonable forward P/E of about 10 times — compared to the broader market average and its prospective growth.

Plus, shareholders are expected to earn a net yield of 5% based on Mamee's minimum dividend payout policy of 50% of annual earnings. Net tangible assets stood at RM1.57 per share at end-March 2010.

Note: This report is brought to you by Asia Analytica Sdn Bhd, a licensed investment adviser. Please exercise your own judgment or seek professional advice for your specific investment needs. We are not responsible for your investment decisions. Our shareholders, directors and employees may have positions in any of the stocks mentioned.

Naim to venture into China?

NAIM HOLDINGS BHD [], a Sarawak-based builder and property developer, has signed a memorandum of understanding with three other parties to explore the prospect of collaborating for the development of two community inter-linked smart cities.

In a statement yesterday, Naim said it signed the MoU on Monday with the Miri City Council and two other parties in China - Guangzhou Panyu Economy and Trade Promotion Bureau of Guangzhou and Institute of Digital Guangdong - for the development of the Panyu-Miri Smart Cities (PMSC).

“The PMSC shall create and maintain a special information super highway link between the smart intelligent cities of Panyu and Miri with a ‘mirror’ computer server to be hosted in each other’s cities which will enable users in both cities to enjoy community-linked projects,” Naim said.

Naim, whose revenue is entirely derived locally for now, has been eyeing real estate opportunities abroad. While it is still speculative, the latest development may be seen as a measure by which Naim could later explore development opportunities in China.

In March this year, its wholly owned subsidiary NCSB Engineering Sdn Bhd signed an MoU with Libya’s General Board of Privatisation & Investment to jointly conceive the development concept for a mixed project known as the Solar Oasis Science and Business Park on an estimated 100ha site about 30km from the Tripoli City.

In Sarawak, Naim had last month signed an MoU with CAHYA MATA SARAWAK BHD [] and Bintulu Devlopment Authority to record their intention to jointly develop the Samalaju new township.

The estimated RM1.5 billion initial portion of the project on a planned 2,200ha site is expected to comprise at least 5,000 units of residential units for a start, Naim had told the stock exchange. Naim also said the Samalaju new township might eventually cater to some 50,000 people.

Property development contributes 40.2% to Naim’s revenue of RM123.35 million in the first quarter ended March this year while CONSTRUCTION [] made up 55.1%.


Written by Chong Jin Hun

VSI stages firmer recovery

V.S INDUSTRY BHD [] (VSI), an integrated electronic manufacturing services (EMS) provider, posted a net profit of RM6.5 million in its third quarter ended April 30, 2010 (3QFY10) versus a net loss of RM4.2 million a year earlier as it strengthened its recovery with its third consecutive quarterly profit.

Revenue improved 12.8% to RM192.7 million from RM170.8 million previously while pre-tax profit amounted to RM10.8 million versus a loss of RM3.8 million. Basic earnings per share stood at 3.63 sen.

The 3QFY10 net profit represented a 46% jump from RM4.44 million achieved in the preceding quarter ended Jan 31, 2010, while revenue rose 6.4% from RM181.1 million.

In a statement yesterday, VSI said the better performance was largely due to the increased business volume as a result of the economic recovery in the group’s end markets.

“Thus far, we have seen the revival of consumer confidence worldwide spurring the demand for consumer electric and electronic products. This translated into higher sales orders from our clientele.

“In addition, we also maintained our production efficiency and reduced our finance costs for the quarter under review,” said its managing director Gan Sem Yam.

For the nine months to April 30, 2010, the group’s net profit more than doubled to RM15 million from RM6.6 million previously, due to the group-wide cost containment in areas of operations and financing, despite a flat revenue performance. Revenue fell slightly to RM550.7 million from RM553.2 million, while EPS rose to 8.37 sen from 3.68 sen.

In addition, VSI posted a lower share of losses from associates of RM2.8 million in the period, compared with losses of RM7.8 million previously, alongside the upturn in economic climate in China.

“Going forward, we would not only invest in more marketing activities but also capacity expansion, as we anticipate more demand from existing and potential clientele. We are confident of seeing an outperformance of last year’s results,” Gan said.


Written by The Edge Financial Daily

PKFZ bondholders are in jeopardy !

PKFZ bond blues - written by Sharon Tan

Payments to Port Klang Free Zone (PKFZ) bondholders are in jeopardy as the Inland Revenue Board (IRB) has directed the Port Klang Authority (PKA) to remit RM328.4 million that is allegedly owed by Kuala Dimensi Sdn Bhd (KDSB) in backdated taxes.

According to sources, the letter to PKA by IRB to stop payment to KDSB was issued last Wednesday. Consequently, the port authority has written to the trustees of the bonds informing them of the stop-payment order by IRB and that it would comply with the instructions.

The trustees, OSK Trustees Bhd, in return have written to PKA and IRB seeking that the payment be released as the money was due to the bondholders and not KDSB.

OSK Trustees said the money is due to holders of papers issued by two special-purpose vehicles (SPVs) — Transshipment Megahub Bhd (TMB) and Valid Ventures Bhd (VVB) — and not KDSB.

The trustees also cited a legal opinion that if PKA retains the sum and pays it to IRB, it would constitute an event of default.

“If instructed by the holders of the bond, OSK may appoint receivers and managers over TMB and enforce ALA (Absolute Legal Assignment) against PKA through TMB for the benefit of bondholders,” the legal opinion stated.

It is learnt that the amount due to TMB is RM230 million and to VVB, RM120 million. The due date for payment is June 30, which is tomorrow.

“The amount (with PKA) is not the property of KDSB but that of TMB and VVB. There is therefore no question of PKA complying with IRB’s request which is premised on the misapprehension that the repayment amount is payable by PKA to KDSB,” the trustees told IRB and PKA.

Sources say the board of PKA is expected to meet today to deliberate on whether the trustees have any right over the money.

TMB and VVB are two of four SPVs set up by KDSB to raise RM4.6 billion to finance the PKFZ project. The other two SPVs are Special Port Vehicle Bhd and Free Zone Capital Bhd.

The total amount due to the four SPVs this month and next is RM723 million. The sum owed to TMB and VVB are due tomorrow while the remaining amount is due to the other two SPVs.

A source in IRB said PKA could not refuse IRB’s directive. “PKA has no recourse to refuse to make payment to IRB as directed, as Section 68 (1) ITA 67 gives IRB the right,” he said.

IRB has acted under Section 68 (1) which gives the director- general powers to appoint any person to the agent of any other person if he thinks fit.

Asked on the rights of the bondholders, the source said: “Unless the bondholders have first right as stipulated in the bond... So, even if IRB and the bondholders are on the same level playing field, IRB will prevail over the bondholders because of the Act.”

However, in its letter yesterday, OSK Trustees reminded PKA that the payments due had been absolutely assigned and payable by PKA.

OSK Trustees also said PKA was duty-bound to correct IRB’s misapprehension. KDSB has, with the consent of PKA in an absolute legal assignment dated Sept 13, 2004, absolutely assigned the repayment to TMB. Hence, the repayment amount was not payable by PKA to KDSB but from PKA to TMB, the trustees added.

“We put you on notice that PKA will be in breach of its undertaking to pay the repayment amounts to TMB and VVB in the event PKA does not pay the repayment amounts to TMB and VVB on the respective due dates,” said the letter.

OSK Trustees also highlighted serious adverse consequences to local and foreign bondholders/noteholders who have invested in the bonds/notes on the basis of PKA’s undertaking and the government’s credibility in the event of default.

“We also put you on notice that any payment made by PKA to IRB from the repayment amounts will not discharge PKA’s liability to TMB and VVB, and PKA will still be liable to TMB and VVB for the repayment amounts,” said OSK Trustees.

KDSB is the main contractor for the PKFZ project that saw huge cost overruns and resulted in PKA having to take a soft loan from the government to meet payments to bondholders. KDSB had issued bonds to the tune of RM4.6 billion with the backing of letters of support from the transport ministry.

Because the project has little cash flow, the loans had to be restructured or the cost could go beyond RM8 billion and even RM12.5 billion.


This article appeared in The Edge Financial Daily, June 29, 2010.

MMosaics to be privatised?

Main board-listed maker and trader of mosaic and ceramic tiles Malaysian Mosaics Bhd (MMosaics) may soon be taken private, according to sources.

While details of the price or terms of a privatisation exercise were not available at press time, it is worth noting that the stock is currently trading at about half its net tangible asset value.

“Privatisation makes sense (for the controlling shareholder); the stock is already tightly held,” a source told The Edge Financial Daily.

The company’s largest shareholder is Gek Poh (Holdings) Sdn Bhd, a private entity controlled by Datuk Seri Panglima Lau Cho Kun. As at March 31 this year, Gek Poh held a 73.07% direct and indirect stake in MMosaics. Gek Poh is also the holding company of Hap Seng Consolidated Bhd.

MMosaics rose four sen or 2.9% to RM1.42 yesterday, on a volume of 60,900 shares. The company has a total of 78.34 million shares issued, and a market capitalisation of RM111.25 million.

At yesterday’s closing price, it would cost Gek Poh about RM29.96 million to buy the remaining 26.93% stake it does not already own in MMosaics. Gek Poh should be in good financial condition through its control of plantation group Hap Seng which has enjoyed high palm oil prices over the past few years.

MMosaics’ shares are trading at well below their net asset value. At RM1.42, the stock is trading at 0.51 times its latest net tangible assets per share of RM2.79.

As at March 31, the company had net debt (total borrowings minus cash and cash equivalents) of RM189.17 million. It also has RM250.99 million worth of property, plant and equipment and RM132.19 million in inventories.

For the financial year ended Dec 31, 2009 (FY09), MMosaics posted a net profit of RM14.51 million on revenue of RM322.22 million. For the first quarter ended March 31 this year, it posted an unaudited net profit of RM1.04 million on revenue of RM63.6 million.


This article appeared in The Edge Financial Daily, June 29, 2010.

Where to invest a stronger ringgit

When China announced it was letting its currency trade with more flexibility last week, the ringgit, which has a high correlation with the yuan, hogged the limelight as among the region’s top currency performers. As at the time of writing yesterday, the ringgit has strengthened 10% to RM3.23 per US dollar, up from RM3.59 almost a year ago.

Given our stronger purchasing power, where should investors put their ringgit now?
Nor Zahidi Alias, chief economist of Malaysian Rating Corporation Berhad (MARC), reckons that everything depends on the perceived prospect of the ringgit against major currencies in the medium and long term.

“Against the USD, for instance, we believe that the ringgit’s strength may fade in the medium term as recent positive development is largely due to the People’s Bank Of China decision to adopt to a more flexible exchange rate regime, making it possible for the yuan to appreciate,” he said.

“Such an appreciation, if it happens, will temporarily strengthen the ringgit as there is a high positive correlation between the two currencies.”

However, the lingering problems in the European economy will, to some degree, moderate the growth of an export-dependent economy like Malaysia and take the shine off the ringgit in the medium term, noted Nor Zahidi.

Should the anxiety among asset managers re-emerge following the ongoing European economic debacle, a rush towards safe haven instruments will strengthen the US dollar, and put downward pressure on the ringgit, he added.

Under this scenario, Nor Zahidi reckons that short-term foreign denominated assets will be appealing for investors. “Their values will rise if the direction of ringgit suddenly reverses and starts to weaken,” he said.

“We feel that foreign currency denominated savings, for instance, in Australian dollar and other high yield currencies, are an attractive choice as they may appreciate in value in the medium term.” he said.

Robert Foo, principal consultant of MyFP Services Sdn Bhd, a licensed financial planning firm, pointed out that investors should not just focus on the more favourable currency exchange rate environment.

“For instance, some people note that the pound has depreciated and think ‘maybe I should buy an apartment in UK.’ But you should also consider things like will the property appreciate, and if you can rent the property out. Take into account that the UK property you buy may not be easy to manage unless you’re staying there,” he said.

“If your investment horizon is merely three to six months, you would essentially just be speculating,” he said. Investors should be looking at a time horizon of about three to five years and above.

“When you talk in those terms, a slight appreciation in the last few months should not be the main criterion in deciding where you put your money,” Foo says, adding that it remains uncertain if the ringgit will strengthen continuously in the next couple of years.

“What we normally advise our clients to do is to spread their money out in different asset classes and different currencies. Similarly, we always advise our clients to invest in funds that have exposure in different countries,” he said.

In the long term, the global economy will continue to recover despite the hiccups and bumpy rides brought on by European economic woes, said Nor Zahidi. “This will likely lead to a softening of the greenback as risk aversion continues to subside, thus weakening the value of US dollar against major currencies including the ringgit”.

In Nor Zahidi’s opinion, if Malaysia manages to address its long-term weakness in attracting private investments, the ringgit will undergo a structural change in its trend, strengthening towards the RM3.00 per US dollar level.

In this regard, fundamentally strong and high yield equities will be the top choices for long-term investors who believe in the transformation of the Malaysian economy and the recovery of the global economy, said Nor Zahidi.

“Similarly, bond funds which are heavily invested in good quality corporate bonds can provide greater upside as corporate cash flows generally move in line with gross domestic product (GDP) growth and with lower risk of default during a good economy,” he said, adding that for higher risk tolerance investors, investment in commodity products such as crude oil may pay off in the long term.

On the outlook of ringgit versus other major currencies like Australian dollar and British pound, Nor Zahidi said he’s more positive about the prospect of the Australian dollar.

”We see a continuous, although bumpy recovery of the Australian economy following an acceleration of China’s economy,” he explained. “Such development will lead to more hawkish stance by the Reserve Bank of Australia (RBA) which in turn strengthens the Australian dollar against major currencies including the ringgit”.

However, when it comes to the prospects of British pound within the next six months, Nor Zahidi is “less sanguine” about it.

“We anticipate a moderation in its economic momentum following austerity measures to be implemented by the government to address its budgetary problem,” he said, while clarifying that he is positive about the long-term prospects of the British economy, since it would be aided by global economy recovery.



Written by Lim Siew May
The Edge Malaysia

Formula to ensure room for MAS, AirAsia to grow

THE Transport Ministry will work on a formula to enable both AirAsia and Malaysia Airlines to develop and grow commercially.

However, it stopped short of saying that it will come up with a national aviation policy.

"We will only work on policy changes based on need," recently appointed Transport Minister Datuk Seri Kong Cho Ha said when asked on whether his ministry would look to develop such a policy. He was officiating at a two-day "Pillars of Aviation" conference in Kuala Lumpur yesterday, entitled "Bridging the Gap Between Emerging Markets".

Kong said the expansion of the local aviation industry provides room for both airlines to grow.



In his speech, he said the government is aware that strengthening the aviation industry is key to the development of business and commercial sectors.

"Our g overnment will always proactively ensure that the aviation industry in Malaysia maintains its agility and flexibility to respond to any changing circumstances in order to continuously grow and prosper," Kong added.

Meanwhile, Malaysia Airports Holdings Bhd (MAHB) senior general manager of operation services Datuk Azmi Murad told participants that it targets the current low-cost carrier terminal (LCCT) to breach the 16 million passenger mark by year-end.

The LCCT was extended in March 2009 to accommodate 15 million passengers a year.

The new permanent LCCT, which has a design capacity of 30 million passengers annually, is due to be ready by early 2012.

Azmi said with June coming to a close, MAHB saw 18.9 per cent growth in passenger volume in the first six months of the year for all 39 of its airports in Malaysia.

The Kuala Lumpur International Airport (KLIA) performed slightly better at 20 per cent growth compared to last year's.

Azmi said the growth was largely contributed by regional legacy carriers and the low-cost airlines.

MAHB is also working on enabling seamless transfers of passengers and baggage from the main terminal in KLIA and the current LCCT, and vice-versa.

The move is expected to allow passengers to check in themselves and their baggage at the terminal of arrival.

"We are fine-tuning things now, but should be able to start offering it by the end of the year," Azmi said.

The initiative is part of MAHB's move to ease travel for some 500 passengers on average a day, who move from the main terminal and LCCT




By Presenna Nambiar
Business Times

HANDAL Offshore wins RM6m crane deal

Handal Offshore Services Sdn Bhd, an offshore crane manufacturing and servicing company, has secured a RM5.57 million contract to supply two pedestal cranes to Kencana HL Sdn Bhd.

The cranes, expected to be delivered in the first-quarter of next year, will be used for the construction of topsides under the East Piatu development projects, it said in a filing to Bursa Malaysia today.

The company, a subsidiary of Handal Resources Bhd, said the project would contribute positively to group earnings this year and in 2011. -- Bernama

RM450m allocated to refurbish Menara Tun Razak

Tradewinds Corp Bhd, which is undertaking the RM450 million refurbishment of the 29-year old Menara Tun Razak in Jalan Raja Laut, forsees office rental in the building to increase by 40 per cent by 2014.

Chairman Tan Sri Megat Najmuddin Megat Khas said office space in the buildig was currently rented out between RM3.50 and RM4.50 per sq ft and this would be increased to RM6 per sq ft.

He said the redevelopment activities would result in a temporary decline in the rental income from the group's property division.

"Barring any unforeseen circumstances, we expect to see rental income to decline by RM8 million annually, but we are optimistic that we can recover and improve our profitability when the Menara Tun Razak project is completed in four years," Megat Najmuddin told a press conference today after the company's annual general meeting.



Tradewinds will also construct a 40-storey office building, next to the Menara Tun Razak, later this year which will be crucial for the company's property development business.

"The development would enhance the area in terms of asethetics and value, increase our profile as a major high-end urban property developer, attract new and reputable clientele as well as create spill-over effects for surrounding areas," Megat Najmuddin added.

He also said the company planned to set aside RM70 million to refurbish three other hotels under its wings, PJ Hilton, Hilton Kuching and Pelangi Langkawi.

"It is part of our strategy to improve the quality of our hotel properties," he said, adding that the hotel business was expected to perform better this year than previously.

Megat Najmuddin added the group would continue to improve their asset management process to maximise returns from the hotel properties while ensure optimal capital utilisation by the Hotel Division. - Bernama

Petra Energy eyes chunk of Petronas' RM3.2b contracts

Petra Energy is confident of securing a "significant chunk" of the contracts by Petronas worth RM3.2 billion of which the results will be known in six months.

Petra Energy's recently appointed CEO Kamarul Bahrain Albakri said the company "hopes to secure a good percentage of it (the contracts)" because it already has a good track record with its other partners like Shell".

"We're confident of securing from a technical perspective. That's where we see it enhancing our book orders," he said at a press conference after its AGM on Tuesday, June 29.

"We are quite confident with the uptrend in the oil and gas industry. We are very well positioned with our track record," he added.


Written by Daniel Khoo
The Edge Malaysia

Linear: Rajendram’s indemnity letter legally binding

Linear Corporation Bhd has the right to take legal action against its former director Alan Rajendram Jeya Rajendram if he fails to deliver on his promises pursuant to a legally binding indemnity letter that he had given to the company, said its executive director Mevin Nevis.

“The indemnity is tantamount to a guarantee all signed and properly done — witnessed by the Commission of Oaths,” Nevis told The Edge Financial Daily yesterday.

Linear had told Bursa Malaysia on June 21 that it had received a duly signed letter of indemnity (LOI) and statutory declaration (SD) dated June 17 from Alan Rajendram.

According to Linear, a director of Linear had accepted full responsibility for the financial commitment and exposure of the company to the RM1.66 billion King Dome Project and for the purpose of demonstrating the director’s conviction in the overall commercial viability.

It meant that the director had undertaken to “deliver” the King Dome project to Linear, to “indemnify” Linear in the event of any loss, including refund of the cash advanced and to take over the letter of award at cost in the event Linear decides not to proceed further. Linear said a Nov 30 deadline had been set.

The controversy surrounding Linear stems from the announcement of the RM1.66 billion district cooling project awarded by Seychelles-based Global Investment Group Inc (GIG) in relation to the little-known King Dome project in Manjung, Perak, which was then touted the “world’s biggest dome” housing an indoor city.

Meanwhile, the company’s management is expected to undergo a grilling by its minority shareholders at its 16th AGM today in Penang.

The board of directors is likely to face questions as to how the debacle happened, what steps it will take to improve its corporate governance and internal controls, how the company plans to get back the RM36 million paid to GIG and get itself back on its feet again.

The company’s three new directors appointed on May 7 — executive director Yap Chee Keong and Saw Heng Soo, and non-executive director Neoh Chee Kean — will be in the spotlight.

It is learnt that Yap, along with Nevis and its chief operating officer Clive Vincent Nelligan, will spearhead efforts for its corporate restructuring exercise.

Linear fell into the PN17 status last week. Sources close to the restructuring plans told The Edge Financial Daily last week that they expected the company to be out of PN17 status “within 12 months”. How that is achieved is unclear.

The AGM today will give Linear’s directors a chance to present their plans for the company moving forward. The key question on shareholders’ minds is probably whether the company will be able to recoup its RM36 million.


This article appeared in The Edge Financial Daily, June 29, 2010.

HwangDBS announces income distribution for two funds

HwangDBS Investment Management Bhd has declared income distributions for two of its conventional funds.

An interim gross income distribution of RM0.005 was declared for the HwangDBS Select Income Fund (SIF) for the financial period ending June 30, 2010.

For the HwangDBS Select Balanced Fund (SBaIF), the company declared a final gross income distribution of RM0.05 for the financial period ending June 30, 2010.

HwangDBS chief executive officer and executive director Teng Chee Wai said the investing climate had been challenging but both SIF and SBaIF were able to meet their respective objective and expectations of investors who invested in the funds over the mid- to long-term.

In a statement on Tuesday, June 29, he said that SIF performed well due to a combination of factors like the fund's exposure to Asian equities and defensive active asset allocation over the 2008 to 2009 period of volatility.

As for SBaIF, Teng said the fund continued to maintain its track record of no defaults in any of its underlying investments since inception.

"Its resilience can be attributed to the outperformance of Malaysian equities compared to their broader Asian peers in April 2010," he said.

However, Teng said that market sentiment remained relatively fragile and expectations are that volatility may pick up over the next quarter.

As such, he said, HwangDBS will look to invest in dips on selective sectors and maintain a focus on credit quality to enhance the yield and returns of the portfolios. — Bernama