Exclusive: U.S. expanding corporate foreign bribery probes to include hiring

WASHINGTON (Reuters) - U.S. government agencies that have been probing banks' hiring of children of powerful Chinese officials are expanding existing investigations in other industries across Asia to include hiring practices, four people familiar with the matter said.

The Justice Department and the Securities and Exchange Commission have been asking global companies in a range of industries including oil and gas, telecommunications and consumer products for information about their hiring practices to determine if they could amount to bribery, these people said.

foreign bribery

  On Wednesday, mobile chipmaker Qualcomm Inc said it could face a civil action from U.S. authorities over alleged bribery of officials associated with state-owned companies in China. It also said it found instances in which "special hiring consideration" was given to people associated with state-owned companies or agencies in China.

Qualcomm declined to comment on Friday. The Justice Department and SEC declined to comment on whether they have expanded their probes.

Some of the new inquiries have zeroed in on hires in China, South Korea and southeast Asia, including Singapore, two of the people familiar with the probes said.

It was not clear how many companies were involved in the expanded probes and the people, who declined to be named because details of the investigations are not public, did not name specific firms.

Hiring issues have become a focus in bribery probes as a matter of course, sources said. That reflects a change in the wake of the investigation into whether JPMorgan hired children of China's state-owned company executives with the express purpose of winning underwriting and other business, they added.

If employees were hired at the direction of an official at a state-run company who was in a position to grant a U.S.-linked company business, the American firm could run afoul of the Foreign Corrupt Practices Act (FCPA), a 1970s law that bars bribes to officials of foreign governments, for instance.
"The government is starting to recognize there may be widespread abuse but the misperception that it is not illegal," one source said.

Proving corrupt intent on the part of both the officials and the companies hiring the workers would be difficult, though, defense lawyers predicted.

Charles Duross, who led the Justice Department's FCPA unit until January, when he joined the law firm Morrison & Foerster, said a job offer could constitute a "thing of value" under the law but the challenge would be proving a quid pro quo.

In the wake of the JPMorgan probe, Reuters reported in November the SEC had sent letters to Morgan Stanley and other banks, including Goldman Sachs and Citigroup, seeking information about their hiring practices.

The new inquiries involve employees who were potentially qualified for their jobs, and performed work, as well as "no-show" jobs, where people do not do work for which they are paid, sources said. In the past, few cases by U.S. authorities have dealt with hiring practices that involved real jobs.

A Singapore-based lawyer said that companies across Asia have been reviewing hiring practices as a result of the probe into banks, but the lawyer said he was unaware that anyone was involved yet in a formal investigation.

source

U.S. vows more sanctions on Russia unless tensions ease in Ukraine

WASHINGTON (Reuters) - U.S. Secretary of State John Kerry told Russian Foreign Minister Sergei Lavrov in a telephone call on Tuesday that Washington would impose more sanctions on Russia if tensions did not de-escalate in eastern Ukraine, a senior U.S. official said.
The official said Kerry talked to both Lavrov and Ukrainian Prime Minister Arseny Yatseniuk.
"With Foreign Minister Lavrov, the secretary expressed deep concern over the lack of positive Russian steps to de-escalate, cited mounting evidence that separatists continue to increase the number of buildings under occupation and take journalists and other civilians captive," he said.
"He urged Russia to tone down escalatory rhetoric, engage diplomatically in the east with the OSCE and Ukrainian government, and issue public statements calling for those occupying buildings to disarm and stand down in exchange for amnesty," he added.

The official said Kerry also reiterated that the absence of measurable progress on implementing last week's Geneva agreement would result in increased sanctions on Russia.
In Moscow, the Russian Foreign Ministry said Lavrov had told Kerry that Ukraine must take urgent steps to implement the Geneva agreement aimed at defusing the Ukraine crisis.
The U.S. official said Kerry had told Yatseniuk that Kiev must take important steps as well to de-escalate tensions, "including progress on amnesty legislation, steps toward broadening the national dialogue on constitutional reform to include representatives of all regions and close coordination with the OSCE monitoring mission."
Washington has said it would decide "in days" on additional sanctions if Russia does not take steps to implement the agreement.

 source

Stock Watch: Will Alam Maritim get Pan Malaysia subcon job?

KUALA LUMPUR (Apr 21): Will offshore oil & gas service provider Alam Maritim Resources Bhd get the subcontract work from the RM10 billion Pan Malaysia offshore transportation and installation (T&I) job?

This is the question the oil and gas sector is asking after the Pan Malaysia T&I job was awarded to Barakah Offshore Petroleum Bhd, Puncak Niaga Holdings Bhd and SapuraKencana Petroleum Bhd.

“It is unlikely Alam Maritim will be the subcontractor,” one analyst told theedgemalaysia.com.

“But, if at all the firm becomes a subcontractor, it will only enjoy a thin slice of the T&I job,” the analyst added over the telephone.

AmResearch in a note today said it was uncertain of the actual sub-contracting jobs that could be up for offer, given SapuraKencana’s additional vessels and Puncak’s earlier joint venture (JV).

“We are uncertain as SapuraKencana will be taking delivery of two new construction vessels while Puncak Oil & Gas had earlier teamed up with Leighton Holdings in the earlier tender process,” said analyst Alex Goh of AmResearch.

Goh noted if there were any subcontracting works for Alam Maritim, it would only likely to materialise in the third quarter of this year.

The Edge Weekly this week reported that Alam Maritim has been in discussion with Barakah, Puncak Niaga and SapuraKencana to become their subcontractor for their RM10 billion T&I job.

But there was no indication in the report of Alam Maritim's chances following these discussions.

In December last year, the three firms were awarded four packages for the T&I job by Petroliam Nasional Bhd (Petronas). Alam Maritim did not secure the contract.

But at 4.19 pm today, Alam Maritim gained 12 sen or 7.7% to RM1.67, after the Edge Weekly report. The stock saw some 27 million shares traded. It had earlier hit a high of RM1.68.

Although AmResearch was doubtful if Alam Maritim would get the sub-contractor work, it stayed positive on the group’s further expansion into the underwater services.

Alam Maritim hopes to secure parts of the RM1.2 billion to RM1.5 billion contracts, noted the research house.

Analyst Goh said he maintained his ‘buy’ call on the stock with unchanged fair value of RM2.05 – higher than the current market price of the stock.

Meanwhile, CIMB Investment Bank Research said if successfully secured, the subcontracting works might boost Alam Maritim’s earnings per share by 12%, 22% and 22% for FY14, FY15 and FY16 respectively.

“But for now, we maintain our earnings forecasts and target price of RM2.00. We also retain a buy call on the stock,” said analyst Norziana Mohd Inon of CIMB IB.

Source

Govt studies splitting Tenaga Nasional into three units

TNB is going to split into three..


KUALA LUMPUR: The Government is looking into the proposal to split Tenaga Nasional Bhd (TNB) into the three units of power distribution, generation and transmission.
Speaking on the sidelines of Power-GEN Asia 2011/Renewable Energy World Asia 2011 conference, Energy, Green Technology and Water Ministry secretary-general Datuk Loo Took Gee confirmed that the matter was “under study”. She declined to elaborate.
“I think we need to be quiet and do our work well to present it to the market when we're ready,” Loo said when asked to comment on the matter.

Speculation is rife about a proposal to split up TNB in order to re-organise the dominant electricity supplier and to help it fix its financial woes.
TNB recently said it faced an additional RM3bil in costs from having to look for alternative sources of fuel for power generation due to a shortage of gas supply.
It has been reported that newly-established special purpose vehicle, MyPower Corp, will oversee TNB's “break-up” as part of the Government's effort to reform the country's power sector.
MyPower, which is currently under Loo's ministry, is headed by Datuk Abdul Razak Majid, a veteran in the power sector who was formerly TNB senior vice-president of corporate affairs.
The special unit's task involves restructuring the legal and regulatory framework of the industry to make it more equitable, competitive, liberalised and provide a level playing field. “MyPower will conduct studies based on nine aspects including power purchase agreements, governance issues, gas supply and tariff issues,” Loo said.
Asked if it was studying the deregulation of the power industry, she said: “Yes... this is also part of MyPower's task.”
Loo also said MyPower was reviewing the power purchase agreements with independent power producers.
In May, Energy, Green Technology and Water Minister Datuk Seri Peter Chin said the ministry was being assisted by MyPower and the Energy Commission to implement several changes to the country's electricity supply sector as identified by Khazanah Nasional Bhd on the need for reforms in the energy sector. “These changes are needed for a vibrant energy sector,” he had said.

Separate units: Speculation is rife about a proposal to split TNB in order to reorganise the dominant electricity supplier and to help it fix its financial woes.

Loo also said TNB was looking to have a clearer explanation of the respective costs they incur from the generation, distribution and transmission of electricity.
“We have to explain to the public how much of the tariff increase will come from generation, distribution and transmission,” she said.
Meanwhile, TNB chief operating officer and executive director Datuk Azman Mohd, speaking at the conference, said the electricity supply industry in Malaysia and generally in Asia faced multi-dimensional challenges.

Azman: ‘Consumer expectations are becoming increasingly sophisticated and unpredictable.’

 

He said these challenges included depleting indigenous energy resources, high demand growth, major infrastructure investment requirements, escalating and volatile fuel prices, public demand on the issues of environment.
“This is all happening as consumer expectations are becoming increasingly sophisticated and unpredictable. This calls for prudent risk management and planning to be put in place, which involves finding a balance between project development and its associated risks, and exploring alternative supply options and technologies,” Azman said.
He said TNB had developed biomass, solar power and solar-wind hybrid systems to help spur the renewable energy development and research.

Malaysia Bank is losing nearly RM 10 bil in market value.

The Banker hit  at their life support when they losing nearly RM 10 bil in market capital.
..................

Finance stocks hardest hit

PETALING JAYA: Finance stocks lead declines on Bursa Malaysia with the country's largest bank, Malayan Banking Bhd (Maybank) losing RM3.06bil of its market capitalisation of RM62.81bil on Thursday, as it succumbed to the bearish sentiments dominating markets globally.
The stock touched an intra-day low of RM7.95 and ended yesterday at RM7.99 with 20.953 million shares changing hands.
Global capital markets have plunged technically into bear territory, with the MSCI Index losing some 20% since peaking on May 2.
The second largest banking group, CIMB Bank, added three sen to RM6.74; however, it has shed some 17% of its share price since late last month.
Both banks took a nose-dive, touching a 52-week low after Credit Suisse Group AG said they were most vulnerable to de-rating risks, while CIMB regained ground after falling to an intra-day low of RM6.60.
“Our analysis suggests that CIMB and Maybank are most at risk, while Public Bank and Alliance Financial Group offer better downside protection.
“We continue to favour those banks that trade on comparatively low valuations, and are relatively under-owned by foreigners and could be re-rated on developments in mergers and acquisitions,” it said in a report.
Since the global financial crisis in 2008, foreign investors have increased their average holdings in Malaysian banks from 21.4% to 24.3%, according to Credit Suisse. The most widely held Malaysian bank among foreigners is CIMB with a 36.4% holding and accounting for 13.7% of total holdings of foreigners in Malaysia.
Credit Suisse says historical earnings performance suggests that the earnings downside risk is limited to less than 15%, adding that earnings of Maybank and CIMB are more vulnerable, while earnings of RHB Capital, Hong Leong Bank and Public Bank are quite resilient.
Public Bank fell 16 sen to RM12.44, Hong Leong Financial Group lost 88 sen to RM10.06 while Hong Leong Bank shed 13 sen to RM9.85. RHB Capital declined 18 sen to RM7.72 and Alliance Financial Group edged down one sen to RM3.15.
Recently, OSK Research downgraded the local banking sector to “neutral” from “overweight”, citing lack of catalysts amid strong external headwinds.
“Although the banks under our coverage continued to report earnings which were largely in line with our expectations, this was largely driven by lower provisions and an unsustainable surge in non-interest income trading gains for certain banks.
“The quality of earnings, as reflected in the growth momentum of the sector's pre-provision operating profit, has been on a decline since the first quarter of 2011, with the first-half annualised pre-provision operating profit growing at just 1.7% compared with 12.1% in 2010 and 14.9% in 2009,” it said.
OSK also said it might be time for a reversal of fortunes, as banks were a proxy to the economy and had performed exceptionally well since the economy started to recover in early 2009.
The Finance index had outperformed the broader FBM KLCI from April 2009 to early August 2011, notching nearly 27 consecutive months of out-performance and 32 months of uptrend.
However, Affin Investment Bank is maintaining the banking sector as “overweight,” saying that its health remains sound, as reflected by sufficient capital adequacy ratios and healthy loans growth even through 2008-2009. This was aided by accommodative monetary policy.
“Drawing from the share price behaviour in the 2008 financial crisis, there are still more downside risks, ranging from 20% to 54% for Malaysian banking stocks, although fundamentals are expected to be largely intact.
“No doubt, we acknowledge the reality that the sell-down in equities has more do to with fear and jitters, and in fact, could be uncontrollable when irrationality sets in,” it said.
OSK says Malaysian banks are largely domestic-driven and to a certain extent, regional-driven. Given the resilient domestic economy, the earnings for the banking sector are unlikely to be significantly dampened by the external environment.
Meanwhile, Aberdeen Asset Management Sdn Bhd managing director Gerald Ambrose expressed shock at how markets reacted to developments recently.
He said, there didn't seem to be an answer to the problems in Europe as the debt crisis had a contagion effect on the countries with Italy being the recent victim.
According to him, when the West is down, Asia will be impacted since the region is still very much exposed to the West via exports.

Source: The Star

Petronas Losing: Petronas Shares Down to earth as shares down on Eurozone crisis and declining oil prices

The Petronas Unit(PChems) is a good stock to play as recession resist counter. However when you are play stock market game the trend is so unpredictable and thar call stock market game.
..............

PETALING JAYA: Some Petroliam Nasional Bhd (Petronas)-linked stocks took a beating, as uncertainties over the eurozone crisis and declining oil prices prompted jittery investors to take profit and unwind some of their positions in markets across Asia.
Petronas Chemicals Bhd (PChem) saw RM2.16bil wiped off from its market capitalisation. The counter ended 27 sen lower at RM5.78, nearing a range it has not seen since early January this year. The stock reached an intra-day low of RM5.74.
In November, the largest petrochemical producer in South-East Asia raised RM12.8bil from the market in its initial public offering (IPO), with a price of RM5.20 for institutional investors.

Meanwhile, Petronas Dagangan Bhd (PetDag) shed 16 sen to close at RM17.04 yesterday, while Petronas Gas Bhd (PetGas) lost 32 sen to end at RM13.40.
“Stocks like these are weakening due to foreign funds selling and also because of lower oil prices,” said one head of research.
Crude oil traded near the lowest price in three weeks on concerns that demand for fuel will be weakened with the worsening European debt crisis.
But the sell-down on the Petronas-linked stocks has led some analysts to advise their clients to “buy on weakness”.
“It (the sell-down) doesn't reflect the fundamentals and potential of the company. With the sell-down on PChem, we are advising our clients to buy as it presents a good opportunity for investors to pick up this company's shares as it is a well-managed outfit. We are expecting the company to post good profits in the second half of 2011,” said an analyst with Maybank Investment Bank.
He believes the sell-down was due to foreign players paring down their stakes after the unfavourable developments seen in Europe.
To be noted is that these Petronas stocks have been top performers in the market. PetDag is still the top performing stock on the benchmark FTSE Bursa Malaysia KLCI, with a gain of 43.5% so far this year, while PetGas has gained 17.9% this year.
Meanwhile, Petronas' shipping arm MISC Bhd has also seen its share price trending down. Moody's Investors Service has downgraded MISC's rating from A3 to Baa1 with a negative outlook, on concerns of MISC's high level of debt-funded capex as well as the challenging nature of its operating environment. The announcement of the downgrade was made in the evening, after the stock market closed. MISC added 24 sen to RM6.88. However, it is still some 19% off the RM8.50 level it was trading at early this year.
Petronas' indirect subsidiary and offshore fabrication arm, Malaysia Marine Heavy Engineering Bhd (MHB), retreated from its high of RM8.67 recorded in July, to trade near the RM6 mark. MHB shed three sen to close at RM6.10.
In a recent Bloomberg report, CIMB Investment Bank Bhd research head Terence Wong said the worsening global economic turmoil might cause investors to keep unloading Malaysian equities.
He said if the bearish mood were to continue, there would be more selling.
Overseas funds sold RM3.8bil of Malaysian shares last month, the most since October 2009, after four consecutive months of inflows, according to data compiled by Bursa Malaysia.
The net foreign outflow from Malaysia in August accounted for 31% of the total from emerging markets in Asia excluding China, suggesting that the local bourse suffered the brunt of the selling,” said a foreign bank-backed research house analyst.
About RM6.7bil of foreign funds flowed into the Malaysian stock market from April to July.

Source: The Star

No more Firefly !! AirAsia is doing monopoly !!

The word monopoly is a true cruel in this market especially stock market and yet this play important aspect in playing the stock market. This made happen in MAS and AirAsia shares deal recently. So this is good or bad?
.................

Scant details on MAS-Firefly deal
PETALING JAYA: There seems to be very little known about Malaysia Airlines' plan for existing budget carrier Firefly Sdn Bhd and its new proposed airline Sapphire.
A spokesman for the national carrier told StarBiz that following the initial announcement on Aug 9, it was too premature to provide further information and that more information would be available once details of the plan have been finalised.
When MAS and AirAsia Bhd entered into a collaboration agreement on Aug 9 after major shareholders of both airlines executed a share swap deal, it was announced that MAS would review Firefly's operations and that the national carrier's shorthaul full-service carrier business may be undertaken by itself and/or through a new MAS subsidiary known as Sapphire. MAS was also said to have the flexibility to re-designate capacity, assets and resources from Firefly to form Sapphire.
However, since the initial announcement, details have been scant on what will happen to Firefly's existing operations. There have been concerns that Firefly flights will be cancelled with some routes axed and air fares increased as a result of the collaboration agreement.

Overlapping services: There have been concerns that Firefly flights will be cancelled with some routes axed and air fares increased as a result of the collaboration agreement signed in August.

 

A week after the August announcement, Firefly managing director Datuk Eddy Leong is reported to have said that Firefly would be upgraded to a full-service turboprop operator while Sapphire would take over its Boeing jets.
Leong added that Firefly's turboprop operations would be expanded in terms of fleet size and routes, and would continue as an independent brand under MAS ownership.
Meanwhile, CIMB Research expects Sapphire to start operations in November and the airline will be positioned as a full-service carrier serving regional routes (Asean, South China and south/east coast of India), in the same way SilkAir is positioned within the Singapore Airlines group.
“We believe that Sapphire will adopt the same seat configuration as the refreshed MAS B737-800 product, which is a significant improvement from the existing aged B737-400 fleet.

“Aside from this, all of Firefly's leased B737-800s could be re-configured from low-cost carrier planes into full-service carrier aircraft and then transferred to Sapphire,” the research report said.
It added that from a tax perspective, it would seem logical to keep all operations under mainline MAS because of its tax-exempt status until 2015 as well as its huge unutilised capital allowances and tax losses carried forward. But there are other considerations such as the need to clearly separate Sapphire from MAS as Qantas Airways did with Jetstar.
“Sapphire is likely to sign contracts of service with pilots and crew on different terms than that of MAS. Also, Sapphire staff are not likely to be unionised. This will give Sapphire a lower unit-cost base and help it achieve greater profits. Second, we suspect that a stake in Sapphire could eventually be sold to Qantas,” CIMB Research said.
Despite the fact that Qantas has said that its Asia-based super premium full-service carrier will be based in either Singapore or Malaysia (with a higher leaning towards Singapore), CIMB Research believes that Qantas will want to have a presence in Kuala Lumpur and may do so through an investment in Sapphire.
“As such, Sapphire needs to be separated from mainline MAS to facilitate an investment by Qantas, which would not be interested to invest in other parts of MAS's business, including its domestic and international aviation businesses, even if the Malaysian Government permitted this.
“An investment in Sapphire would fit Qantas very well because the KL aviation market is unlikely to be able to accommodate a super-premium offering by Qantas' new airline,” it added.

Source: The Star

US Bank halt the loan but Malaysia Bank give loan !!!

Based from Time Magazine 26 September 2011, Subcriber Edition, mention that US bank halt their loan to American even do the bank has profit more than USD 198 bilion. However at Malaysia the situan is different the Bank is racing in giving financing to Malaysian People. So does this a good clue in investing in KLSE stock market?
.............................................
UALA LUMPUR, Sept 20 (Bernama) -- OCBC Bank (Malaysia) Bhd aims to disburse RM4 billion in loans for Small and Medium Enterprises (SMEs) by year-end. Last year the bank disbursed about RM2.5 billion.

Director and Chief Executive Officer Jeffrey Chew said this year, the bank as of June, had approved RM5 billion in loans for SMEs with RM2 billion having been disbursed.

"We are very proud that Malaysia is number one in terms of access to credit for SMEs and this is spearheaded by Bank Negara Malaysia, which has enabled the industry to develop.

"They (SMEs) just need to have a good business plan, track record and human capital capability in areas such as branding, marketing, distribution and so forth," he told reporters at the ACCA SME Conference 2011 here.

SME Corp Malaysia's Deputy Chief Executive Officer Mahdi Mohd Ariffin said the main challenge faced by SMEs today was actually cash flow.

"When a bank looks at proposals, it needs to consider and access the cash flow of these SMEs because it helps them repay loans.

"Access to finance should not be the issue confronting SMEs, as Malaysia has been recognised as being number one, in terms of getting access to credit and there is ample liquidity in the market," he added.

He also said that banks are currently searching for good SMEs that have the potential to export or widen trade overseas.

Source: Bernama

TNB going bankrupt: Will Tenaga Nasional be split up?

The Tenaga is suffering a lot of lost..
..............

Speculation resurfaces as the utility faces additional RM3bil in costs
PETALING JAYA: Speculation of splitting Tenaga Nasional Bhd (TNB) up has resurfaced as the utility company faces an additional RM3bil in costs from having to look for alternative sources of fuel for power generation due to a shortage in gas supply.
However, TNB president and chief executive officer Datuk Seri Che Khalib Mohd Noh did not respond to StarBiz query on the matter.
Analysts said there were a number of obstacles that would make any break-up of the company unlikely at the moment.
They pointed out that fixed energy prices and power-purchase agreements signed with the independent power producers were among the main reasons why there would not be any imminent split-up.
“This was mooted 10 years ago as part of a power-pooling structure where prices would have been deregulated and left to the markets,” an analyst pointed out.
TNB has three divisions, transmission, distribution and generation, of which the first two are the most profitable.
The analyst said any break-up of TNB was highly unlikely as the political costs would be too high. “Due to the high costs of energy, letting prices gyrate may not be a good idea,” he said.
Furthermore, he said energy subsidies would only be entirely removed in 13 years (based on recommendations by the Performance Management and Delivery Unit that subsidies be gradually removed) while the power purchase agreements (PPAs) signed with the independent power producers complicated any move to restructure prices.
“The Government will have to wait at least until 2016 when the first of the first generation PPAs expire,” he said.
Meanwhile, another analyst added that the idea of breaking up TNB was not feasible as long as the company's generation division did not have a cost pass-through mechanism.
“It's difficult to see earnings visibility especially if there's more disruption to gas supply,” he said, adding that there was also the question of whether the Government would allow the company to pass on the costs to consumers.
HLIB Research analyst Daniel Wong, in a report, downgraded TNB shares to “hold” with a target price of RM5.10, based on discounted cash-flow estimates on continued disruption in gas supply and delay in tariff hikes.
TNB closed 8 sen up at RM5.09 yesterday.
“In the near term, TNB's margin will be eroded by higher fuel cost due to gas shortage (even if Petroliam Nasional Bhd maintenance is completed) as power demand increases while coal and hydro power capacity utilisation has been maximised,” Wong said.
He said the decision to implement a fuel cost-pass-through mechanism lay with the Government and was influenced by political, economic and social factors.
Wong added that the proposal for fuel cost sharing during gas curtailment period was also pending Government approval.

Source: The Star

More Debt Created by TNB-TNB to issue RM5bil sukuk for Janamanjung plant soon

PETALING JAYA: Tenaga Nasional Bhd (TNB) will raise RM5bil from a 20-year ringgit-denominated sukuk issuance at the end of next month to finance the extension of its Janamanjung power plant.
This comes at a time when the national utility company is facing a severe gas supply shortage that may result in it incurring additional fuel cost.
In a Bernama report on Thursday, TNB president and chief executive officer Datuk Seri Che Khalib Mohd Noh said the group would do its book-building exercise in the third week of October. “The timing is good as the domestic market is now flush with liquidity,” he said.
In April, TNB awarded French group Alstom a 650-million-euro (RM2.8bil) contract to build the Janamanjung 1,000-MW supercritical coal-fired power plant.
Alstom will engineer, procure, construct and commission a 1,000-MW steam turbine, a generator, a supercritical boiler and auxiliaries. The plant is expected to come online in 2015.
The plant will be the single largest in South-East Asia and will produce enough electricity to power nearly two million households in the country.
The project follows TNB's 1999 contract with Alstom to build the currently operating 2,100-MW Manjung coal-fired power plant.
The supercritical power plant operates at a higher temperature than regular coal-fired power plants. Its high temperature increases the pressure at which it operates, which in turn improves its efficiency, increasing the amount of power output and decreasing emission per unit of fuel burned.
Meanwhile, TNB is still bogged down by cost concerns whereby it may incur additional fuel costs of up to RM3bil.
On Tuesday, Che Khalib said the company's fourth-quarter performance would be weak and his earnings estimate for 2011 had gone haywire and had been cut by more than 50%, marred by a continued gas supply shortage.
Analysts have said the gas shortage might only be permanently resolved by the second half of 2012, when Petronas Gas' regasification terminal in Malacca was operational and Malaysia started importing liquefied natural gas at market prices.

Source: The Star

MAS losing money: QPR sponsorship a ‘good deal’ for MAS

 A move that can be question?
.................................................
KUALA LUMPUR: The recently inked home jersey sponsorship between Malaysian Airline System Bhd (MAS) with Barclays Premier League club Queens Park Rangers (QPR) is a “good deal” for the national carrier, said Khazanah Nasional Bhd managing director Tan Sri Azman Mokhtar.

Azman’s comments come on the back of MAS getting flak for the sponsorship arrangement.

Much of the brickbats stem from the national carrier looking at such a sponsorship after bleeding a net loss of over RM520 million in 2QFY11 ended June 30.

“We felt that we got a good deal that stands on its own commercially. I think all the numbers are there, we (just need to) add value,” Azman told newsmen at the sidelines of Forbes Global CEO Conference yesterday. Khazanah owns a 69.5% stake in MAS.

In a statement yesterday, MAS’ top official said the latest sponsorship enables the national carrier to reinforce its global full-service presence and premium franchise via football fans from Europe, the Americas, Asia-Pacific, Australia and other regions.

“It also celebrates MAS’ recent collaboration framework with AirAsia,” said MAS executive director Mohd Rashdan Md Yusof.

QPR, however, is among the less celebrated teams in the Barclay’s Premier League (BPL). After a 15-year absence the team is now back in the top flight of English football but is unlikely to impress.

As an indication of its stature, QPR’s ground Loftus Road has a capacity of only some 18,500, in contrast to other teams which have stadiums with capacities exceeding 50,000 spectators. Other teams MAS was linked to were much more well known with larger followings.

MAS was the official air charterer of Manchester United’s Asian Tour in 2005 and 2007.  It was also the official air charterer for Chelsea’s Asian Tour in 2008 and this year. Arsenal had also travelled on MAS charter flights for its Asian tour this year.

Other issues with regard to transparency have irked market watchers as well. Under this plan, MAS will sponsor the jerseys of QPR during its BPL home matches for the 2011/12 and 2012/13 seasons while budget airline AirAsia Bhd will sponsor QPR’s away match and “third” jerseys for the two seasons.

MAS has yet to disclose details of the sponsorship deal. Based on unconfirmed reports, MAS may have committed over £3 million (RM14.6 million) for the QPR jersey sponsorship.

In contrast, AirAsia announced to Bursa Malaysia on Monday that it had committed some £500,000 for the QPR sponsorship and highlighted that the transaction was a related party transaction (RPT) given that Tan Sri Tony Fernandes has interest in both AirAsia and QPR.

Interestingly apart from being the “away shirt” sponsor of QPR, AirAsia will also receive the rights to advertise at the QPR’s Loftus Road Stadium and get match tickets and hospitality benefits.

MAS, however, has kept mum and did not announce the QPR sponsorship deal to Bursa, and said the transaction is not considered an RPT despite Fernandes owning a stake in MAS via Tune Air.

In a response to The Edge Financial Daily’s queries, MAS responded: “The sponsorship quantum is a matter agreed between QPR and MAS.

“MAS did not make an announcement to Bursa yesterday as the QPR transaction does not fall under the categories for RPT requiring an announcement.”

These sponsorships issues came just a month after MAS and AirAsia shareholders agreed to swap shares under a deal that will pave way for a tie-up between the two airlines.

Under the deal, Khazanah has taken up a 10% stake in AirAsia while Tune Air Sdn Bhd, which owns some 23% in AirAsia, has subscribed to 20.5% of MAS’ shares.

Separately, at the sidelines of the Forbes conference, Fernandes said: “Malaysia has to change its way of thinking and stop this defeatist attitude... If we continue to not brand ourselves we might as well allow a foreign airline to be the national carrier of this country.

“We have built ourselves by investing in the brand and if we really want to be a global leader and have brands that are globally recognised (then) we have to invest. It’s a tiny investment in relation to what you want to build,” added Fernandes.

Nevertheless, the question remains: will MAS be able to raise its profile with the sponsorship and how does such move fit in its strategy?

Source: The edge

Stock Highlight !! UOA Devt subsidiary awards RM101m job !!

KUALA LUMPUR: UOA Development Bhd’s subsidiary Ceylon Hills Sdn Bhd has awarded a RM101.36 million CONSTRUCTION [] job for a 27-storey hotel suites project off Bukit Ceylon in Kuala Lumpur to its unit Allied Engineering Construction Sdn Bhd (AEC).
UOA Development said on Wednesday, Sept 7 the project was for the construction of the main building and infrastructure of the One Bukit Ceylon Hotel Suites.
AEC will be appointed the main contractor for the construction which includes the construction and completion of piling, buildings and associated accessories works. The construction period is for 27 months.
Ceylon Hills is partly held by Transmetro Sdn Bhd, a related party. Transmetro, which is involved in property investment and consultancy services, is a major shareholder of UOA Development.
Both UOA Development and Transmetro hold 54.0% and 36.0% equity interest in Ceylon Hills, respectively.

Source: The Edge

Malaysian market near one-year low

Another blow to KLSE market with analyst say it stock near one-year low !!
.....................

Financial stocks lead declines on concerns over eurozone’s widening crisis
PETALING JAYA: The sell-offs last month amid bearish sentiments have sent the local bourse's benchmark index to levels not seen since last September when talk of further merger and acquisition activities drove the market higher.
Markets in the region closed lower with financial stocks leading the declines on concerns over the euro-zone's widening crisis while prospects for global growth looked ever gloomier.
At Bursa Malaysia, losers outpaced gainers 423 to 253 while 279 other counters were traded unchanged. There were 706.60 million shares traded with a total turnover of RM1.51bil.
Affin Investment Bank Bhd research head Andy Ong said in a report that last month saw the steepest monthly outflow of net foreign selling from the local equity market since October 2009.
“The August 2011 outflow is almost triple the RM1.3bil outflow in May 2010, a heightened period of risk aversion on concerns of eurozone's sovereign debt strain,” he said, adding that the consolidation in April/May last year saw Asian markets pull back 7% to 23% similar to the recent sell-offs.
Foreigners sold RM3.8bil of equities in August as they fled to safe-haven investments such as gold, yen, Swiss franc and US Treasuries.
Ong said the previous sharpest selldown was in February this year amounting to RM3.4bil during the regional portfolio re-balancing exercise that saw a shift in funds out of emerging markets into the more cyclical North Asian and developed markets.
Analysts have revised their year-end targets for the FBM KLCI and have recommended for now a sell-into-rebound strategy as the outlook remains unclear with external negative news flows coupled with weaker earnings dampening investor sentiments.
Maybank Investment Bank Bhd acting research head Wong Chew Hann said in another report that there could still be some near-term downside potential as August's net activities reversed out just 58% of the total net foreign buying in April to July.
“We expect volatility to persist with growing uneasiness in the eurozone and United States,” she said.
World Bank president Robert Zoellick told Bloomberg in an interview yesterday that risks to the global economy was intensifying with the euro-zone's outlook dependent on right decisions being taken by policymakers.
“We're moving into a dangerous period,” he said, adding that the 17-member currency union was facing a particularly sensitive time.
European markets opened higher although trading was volatile with the Stoxx Euro 600 Index opening lower. US equity futures were down with the S&P 500 futures shedding 1.53% and the Dow Jones futures dropping 1.45% at 5pm.
Spot gold, which surged to above US$1,920 per ounce, hovered around US$1,890 at press time while US Treasury yields fell as demand rose. Nymex crude oil was US$1.75 lower at US$84.70 per barrel at press time while crude palm oil for December delivery hovered below RM3,000 per tonne.

Source: 

MAS Sued For US$80 Million and is down for USD 80 Mil !!!!

Another down by MAS in term of cash flow !!
.......................................
KUALA LUMPUR, Sept 6 (Bernama) -- Malaysia Airline System Bhd (MAS) is being sued by U.S GIRO - Warranty House International, Inc. for alleged breach of contract and fraudulent misrepresentation and is seeking damages of up to US$80 million (US$1=RM2.98).

In a filing to Bursa today, MAS said it was served with a complaint in the United States District Court for the Northern District of Oklahoma on Aug 22, 2011.

Without elaborating on the litigation, MAS said it was reviewing the complaint with the assistance of external counsel.


Source: Bernama

Malaysian banks losing appeal? Loose to Thai and Indon?

Previously Malaysia loose to Singapore now to Thai and Indon that was a double blow!!
......................................................

Analysts say Thai and Indonesian banks appear to be more ‘attractive’ to investors
PETALING JAYA: In the absence of mergers and acquisitions (M&As) activities, the Malaysian banking sector appears to have lost its lustre while Thai and Indonesian banks are hogging analysts' headlines.
“Thai and Indonesian banks are more attractive from the perspective of investment recovery and overall macro growth, respectively,” said Lim Sue Lin, senior banking analyst at HwangDBS Vickers Research.
As for Malaysian banks, she noted that apart from the lack of M&As that had fuelled interest lately, there was not much upside to earnings growth.
Nomura Equity Research, in its report, said: “From a valuation perspective, Malaysian banks do not appear cheap, trading at an average financial year 2011 forecast (FY11F) price-to-book value (P/BV) of 2.2 times on a return on equity (ROE) of 17%.
“By comparison, we find Thai banks trading at a P/BV of 1.8 times with an average ROE of 15%.
The Nomura report noted that political risk was rising in Malaysia as the country headed for the next general election, and it expected:
2011 loans growth to maintain last year's momentum at 13%. But for 2012F, loan growths will fall back to trend levels of about 9%;
an absence of overnight policy rate hikes; net interest margin (NIM) compression has been more intense and prolonged than expected, leading to poorer average lending yields.
credit costs to fall more quickly than expected, cushioning pressure from narrowing NIMs.
Looking at the track record for the past 20 years, Nomura noted that for every 1% increase in the Government's development spending, it would typically raise construction sector loans by 1%.
“However, we note that the multiplier effect was stronger in the 1990s (2.7 times) than in the 2000s (0.4 time), partly due to greater level of private sector construction activities in the 1990s and a lower level of gearing for construction companies in the 2000s.
“Even if the Government achieves its economic transformation programme-driven gross domestic product growth target of 6%, it may only translate to a further 0.7 percentage point upside to loan growth, which is negligible,” said Nomura.
DBS Vickers Research expects Thailand's economy to remain resilient in 2011 and provide a solid base for an investment recovery cycle. Capacity utilisation has gradually improved from trough levels of 50% back in February 2009.
“We have seen further recovery since April 2010, when it stood at 58%, to 62% currently,” said DBS Vickers. “We expect to a strong 1H11 led by inventory re-building in manufacturing and a recovery in agricultural output, which was hit by adverse weather in 2010.”
Muted private investment since 2006 due to political instability has meant that capacity utilisation rates are elevated in fast growing export sectors.
Sectors such as vehicles and technology have seen capacity utilisation rates increase in 2010 from 2009, said DBS Vickers.
A Singapore-based banking analyst views the Indonesia economic outlook as resilient, fuelled by strong domestic demand which acts as a buffer against world economic uncertainties.
“In that sense, Indonesia stands out and investors are willing to pay a premium for that,” he said.
In an earlier report, DBS Vickers said: “Indonesian banks remain an attractive investment on a longer-term basis, based on potential growth prospects.
“Near-term, we see policies which will be implemented within the banking system derailing growth to some extent. The key risk lies in a potential decline in NIM, which will lead to lower ROEs.
“Despite potential competition in micro lending, we think lending yields will remain high (versus non-micro lending banks), given the large untapped business opportunities.
“The Indonesian market is largely domestic driven and is also awash with foreign liquidity.”
The booming economy and accelerating infrastructure spending are good for loan growth in Indonesia.
Also, Indonesian banks' low loan-to-Gross Domestic Product ratio of only 28% represents one of the most promising growth prospects in the Asean region,” said DBS Vickers.
However, on the longer term outlook, Malaysian banks are not losing out.
Although the interest in domestic M&As may have dwindled, it is expected to be rekindled once market conditions returned to normalcy.
“Future M&A activity will be driven by the competitive intensity within the Malaysian banking sector, the existence of smaller commercial and Islamic banks, which are potential targets and the controlling interests, held by certain shareholders in the local banking sector,” said Malaysian Rating Corp vice-president and head of financial institution ratings Anandakumar Jegarasasingam.
On the regional front, Anandakumar said the main competitive threat for major Malaysian banks were the Singaporean banks.
“The Indonesian or Thai banks are unlikely to emerge as a regional force, at least in the medium term, as their financial sector and regulatory framework have not matured as much as that of Singapore or Malaysia.”
On whether Malaysian banks can compete with Thai and Indonesian banks, Maybank president and CEO Datuk Seri Wahid Omar said: “Absolutely. Malaysian banks are stable and there are solid companies in the region.”
At the same time, Wahid acknowledged the growing optimism in Thailand especially with the new government in place and Indonesia as the single largest economy in Asean.

Stock highlight !! Telekom Malaysia PATAMI Falls To RM290.5 Million

KUALA LUMPUR, Aug 24 (Bernama) -- Telekom Malaysia Bhd's (TM) group profit after tax and minority interests (PATAMI) for the six months ended June 30, 2011 fell to RM290.5 million from RM367.3 million in the same period of 2010.

Revenue, however, increased to RM4.381 billion from RM4.275 billion previously, it said in a filing to Bursa Malaysia today.

TM said the lower PATAMI was primarily due to higher operating costs.

For the second quarter ended June 30, 2011, its PATAMI increased to RM127.2 million from RM124.4 million in the same period last year due to higher revenue and lower net finance cost.

Its revenue rose to RM2.233 billion from RM2.150 billion previously.

It said this was due to higher revenue from Internet and multimedia, data services and other telecommunications-related services which mitigated the impact of lower revenue from voice and non-telecommunications related services.

Meanwhile, group chief executive officer, Datuk Seri Zamzamzairani Mohd Isa, said TM was on track to increase its UniFi broadband service coverage to a total of 78 exchange areas covering 1.1 million premises passed by year-end and 1.3 million premises passed by end-2012.

Zamzamzairani said TM capital expenditure fell to RM749 million during the first half of 2011, as compared to RM804 million spent in the same period last year.

"TM has spent about RM4 billion on its high-speed broadband project up to the first half of year," he said at a media briefing after announcing TM's results today.

He said TM has proposed an interim dividend payout of 9.8 sen per share.

Source: Bernama

Stock highlight !! IJM Corp expects order book to reach RM9b

KUALA LUMPUR: IJM CORPORATION BHD [] reported a stronger set of results in the first quarter ended June 30, with earnings at more than RM115 million while it expected its total order book to reach RM9 billion.
It said on Wednesday, Aug 24 that net profit rose 34% to RM115.03 million from RM85.74 million a year ago, underpinned by earnings growth in the CONSTRUCTION [] and industry divisions.
Revenue increased 4.8% to RM1.033 billion from RM986.08 million mainly due to the construction, industry, PLANTATION [] and infrastructure divisions.  Earnings per share were 8.51 sen compared with 6.43 sen.
Earlier, its managing director and chief executive officer Datuk Teh Kean Ming said IJM Corp had an order book of RM3.7 billion and expected it to increase substantially with its West Coast Expressway (WCE) and the New Pantai Expressway (NPE) expansion.
"Barring any unseen circumstances, we hope to see our order book to potentially come up to RM9 billion with the recognition of WCE and NPE extension projects," he said after the group's AGM.
The WCE and NPE jobs are estimated to be valued at RM4 billion and RM1 billion respectively.
He said IJM Corp would focus on local projects due to encouraging prospects for infrastructure initiatives under the Economic Transformation Programme.
IJM Corp had submitted a prequalification bid for the mass rapid transit project and it is teaming up with a foreign partner to bid for the non-tunneling portion as well.
Analysts have estimated the total MRT to be worth RM20 billion.
"We would focus on local projects rather than overseas. It is not conducive to take up any jobs in India at the moment due to the high interest rates and escalation of material costs," he said.
He added that IJM Corp has made the necessary provisions for its India projects in the fourth quarter ended March 31, 2011 and that should not be any more provisions for it.
"The provisions were done according to FRS139. But this does not mean we are writing off our debts. We would do the write-backs whenever we get our receivables for our project in India. But that would be no more write-offs," he said.
He said IJM Corp was also buying the minority stakes of two of its Indian toll concessionaires so it could realise its full potential earnings.
It currently holds a 35% stake in the Swarna tollway and a 49% stake in the Chilkaluripet-Vijayawada tollway.
"While these tolled roads are still loss-making (which is usual for new tolls), we expect higher returns to come as Indian toll tariffs are increased every year based on the country's inflation," he said.

Source: The Edge

Stock highlight !! IJM Land sees resilient property market

KUALA LUMPUR: IJM Land Bhd expects local property market to remain resilient this year, underpinned by stronger demand as younger people were also buying property.
Its managing director and chief executive officer Datuk Soam Heng Choon said on Tuesday, Aug 23 IJM Land would continue to launch projects for its current financial year ending March 31, 2012 due to the strong demand for property.
He said interest rates continue to remain low and attractive for property investments.
The volatile equities market, which had been trending downwards, would also see investors looking at bricks-and-mortar to hedge against inflation besides commodities.
IJM Land's current unbilled sales is just over RM1 billion which would last the group two years. It plans to launch RM2 billion worth of projects in FY2012.

Source: The Edge

Stock highlight !! Scomi Group 2Q net profit surges to RM14.99m

KUALA LUMPUR: SCOMI GROUP BHD [] net profit for the second quarter ended June 30, 2011 surged to RM14.99 million from RM3.62 million, due mainly to better performance by the oilfield services division, largely fuelled by growth in the Eastern Hemisphere.
It said revenue for the quarter however fell to RM398.17 million from RM429.29 million in 2010 due to lower turnover in the oilfield services division’s Middle East and Western Hemisphere, particularly Europe, operations.
In addition, the lower revenues were also due to the weakened US Dollar, which had depreciated by approximately 10% against Malaysia Ringgit, since Q2 2010.
Earnings per share rose to 1.08 sen from 0.26 sen in 2010, while net assets per share was 71 sen.
For the six months ended June 30, Scomi’s net profit rose to RM25.02 million from RM17.19 million a year earlier, despite posting lower revenue of RM735.56 million from RM888.56 million in 2010.
On its prospects, Scomi said it was cautiously optimistic of improved earnings for the current year on the back of the projected increase in drilling activities in Malaysia and its neighbouring countries, where the group’s oilfield services division will likely benefit.
The company said it also expects better performance from its Transport Solutions Division arising from better cost management and contributions from its Kuala Lumpur Monorail Fleet Expansion project in Malaysia.
Scomi said the group had secured two large projects together with its Consortium partners in Brazil and would continuously pursue opportunities in monorail projects especially in Malaysia, Brazil and India to capitalise on the increasing demand and opportunities for infrastructure development in these countries.
“The group continues to focus on project execution and stronger cost management to achieve better performance,” it said

Source: The Edge