News Highlights - Malaysia Building Society, Boustead Heavy Industries Corp, Plantation Sector

Malaysia Building Society Bhd (RM2.24/share)

Trims loan growth target

Malaysia Building Society Bhd (MBSB) CEO Datuk Ahmad Zaini Othman said it is trimming its loan growth target to between 15.0% and 20.0% this year amidst “domestic operating parameters”.  He said MBSB had set an earlier loan growth target in the range of 20.0% to 25.0%.

Zaini noted that MBSB would focus on personal finance, which will form a large bulk of its retail operation. As at Dec31, personal financing income was 49.0% of MBSB’s income portfolio. He added that with about 120,000 customers in its personal finance segment, this provides MBSB a 10.0% share of the personal finance market.

Meanwhile, the company expects the proceeds from the disposal of two plots of land in Johor and Sungai Buloh to be RM200.0mil. According to its latest annual report, the combined net value of the two plots of land is RM93.0mil. – The Edge

Boustead Heavy Industries Corp Bhd (RM3.29/share)

Confident of rebuilding orderbook

According to Boustead Heavy Industries Corp Bhd’s (BHIC) executive deputy chairman and managing director, Tan Sri Ahmad Ramli Mohd Nor, BHIC is confident of replenishing its orderbook and sustaining its business operation amid a challenging environment.

He said their current orderbook is RM860.0mil and will last until 2015. Executive director David W. Berry said 80% of its current orderbook were for jobs related to maintenance, repair and overhaul (MRO).

The past few years had been very challenging for the maritime industry, Ahmad Ramli said, adding that BHIC was not dependent on one sector alone or any single client. Ahmad Ramli also explained that BHIC was not overcharging the Government for the six LCS as prices were competitive. – StarBiz

Plantation Sector

Options against palm oil incentives

According to UK-based LMC International Ltd chairman, Dr James Fry, Malaysia has three main policy options to counter the lower Indonesian palm oil export tax structure introduced in September last year.

He said the first option would be for Malaysia to continue maintaining its current policy while increasing its crude palm oil (CPO) export quotas slowly. However, it was too late for diplomatic pressure to persuade the Indonesian government to dismantle its array of export incentives for the downstream industry. He said this would lead to substantial overcapacity in the downstream sector in South-East Asia.

Another option is to match in full the incentives provided by the Indonesian export tax system by adapting Malaysia current CPO export tax rules to offset the advantages enjoyed by Indonesia exporters via its export tax system. The final option would be to focus on the biggest loser both in tonnage and volume – the local palm oil refiners – from the new Indonesian export tax. He said the Government can focus on the policy that will support the margins of local refineries whereby it could apply a graduated export tax on CPO, increasing it to 9% to match Indonesia’s gap. - StarBiz

Source: AmeSecurities