On The Platter
MSC (FV RM5.60 – BUY) Corporate News Flash: No Impact from New Mining Regulations
The Star reported on Saturday that the Indonesian government
has imposed a 20% tax on some raw metal ore exports, and will prohibit
shipments of raw materials unless miners submit plans to build smelters. The
export ban will definitely affect mining companies, especially for those having
long-term agreements with external parties. The rules are a precursor to a
total ban on raw material exports by 2014. According to the report, tin ore is
among the metals in the export ban list and Malaysia Smelting Corporation (MSC)
operates its tin mining activities in Indonesia via its subsidiary, PT Koba
Tin.
ADVANC (FV THB205.00
– BUY) 1QFY12 Results Review: Surprised on the Upside
STARHUB (FV SGD2.80 –
NEUTRAL) 1QFY12 Results Review: All Priced In
KULIM (FV RM5.47 –
BUY) Corporate News Flash : Johor Corp To Buy Over QSR’s Business
Market Review
Up, up and away.
The FBM KLCI surged 7.87 pts to close at 1591.04 on Friday. News over the
weekend include: Ta Ann Holdings Bhd is increasing the harvest of its
plantation logs to produce hybrid plywood, Asia’s economic growth will average
around 5% to 5.3% in the next 3 years according to the Second Finance Minister
Datuk Seri Ahmad Husni Hanadzlah and Malaysia Smelting Corp Bhd will continue
to pursue opportunities to expand its tin resources in Pahang, Kedah,
Terengganu and Perak. Meanwhile, RAM Ratings is projecting a corporate default
rate of between 0.5% and 1.1% for 2012 and DKLS Industries Bhd and the Selangor
State Development Corp (PKNS) will jointly participate in the redevelopment of
a proposed mixed property project with a gross development value of RM1.5bn. On
the global front, the US markets and crude oil price closed lower on Friday,
with the latter shedding USD4.05 to close at USD98.49/barrel.
MEDIA HIGHLIGHTS
US stock market
slumps
US stocks slumped, sending the Standard & Poor’s 500
Index (S&P 500) to its biggest weekly retreat this year, as data on the
American and European labor markets fueled concerns the global economy is
weakening. The Dow Jones Industrial Average fell 168.32 pts, or 1.3% to
13,038.27, while the S&P 500 shed 22.47 pts, or 1.61% to 1369.10. (StarBiz)
Claims for Bakun pile
up
State-owned Sarawak Hidro SB, the chief promoter of the
problem-plagued Bakun hydroelectric dam, is faced with claims of more than
RM820m, raising the cost of what already ranks as one of the country’s most
expensive infrastructure undertakings. Financial executives close to the project said the
Malaysia-SinoHydro Corp Joint Venture, a JV company led by Sime Darby Bhd, has
submitted claims amounting to RM670m for the civil works of the mammoth
undertaking. Separately, a consortium led by Argentina’s IMPSA group, the chief
supplier of turbines for the massive dam project, is seeking another RM140m
from Sarawak Hidro. (Financial Daily)
Freight Management
bullish on FY12
Logistics player Fright Management Bhd (FMB) is expecting
another year of growth, boosted by its
third party logistics (3PL) business and growth potential in the local
logistics industry. Managing director Chew Chong Keat said FMB still has room
to grow in the local logistics sector. He added that FMB has managed to
maintain growth despite uncertainty in the logistics industry. (Financial
Daily)
KFC and QSR buyout
close to fruition
The buyout of KFC Holdings Bhd (KFC) and its parent, QSR
Brands Bhd by the Johor Corp (JCorp)-led consortium is coming close to
fruition with the JCorp board now
finalizing the sale and purchase agreement (SPA), sources said. StarBiz had
reported that a government-linked investment company (GLIC) would be part of a
special purpose vehicle in the buyout exercise. They said the GLIC would
be the second largest shareholder in
KFC/QSR after JCorp, upon completion of the buyout. (StarBiz)- Please see
accompanying report.
Brakes on plan to
sell off Lotus
DRB-Hicom has put a stop to the plan by the former
management of Proton Holdings Bhd to sell off Lotus Group International Ltd. It
is understood that a closed-door meeting was held recently in Norwich, Britain,
the home of the sportscar maker, headed by Proton’s executive chairman and new
Lotus chairman Datuk Seri Mohd Khamil Jamil. British media reported that Khamil
met with British Business Secretary Vince Cable and South Norfolk member of
parliament Richard Bacon to allay fears that Proton was about to pull the plug
on Lotus. (BT)
MMC Corp looking to
relist Malakoff
With Gas Malaysia Bhd almost ready to start trading on Bursa
Malaysia, MMC Corp Bhd, a construction, power and port group, is planning
another initial public offering (IPO) for its other subsidiary, Malakoff Corp
Bhd. Group managing director Datuk Hasni Harun said MMC, owned by businessman
Tan Sri Syed Mokhtar Al Bukhary, hoped to relist Malakoff by next year. On the
rationale of listing its existing subsidiaries, Hasni said MMC was focused on strengthening
its business capabilities and further explore ways to unlock the value of its
assets. (BT)
Hibiscus unit secures
Norway JV deal
Hibiscus Petroleum SB is expanding its involvement in the
Norwegian oil and gas industry through a jointlycontrolled company with its
local partner there, North Energy ASA. In a filing to Bursa Malaysia last
Friday, it said that the joint company called Lime Petroleum Plc has secured
50% of North Energy’s interests in four concessions in Norway. (Malaysian
Reserve)
ECONOMIC
HIGHLIGHTS
Thailand: Prasarn signals rate cut over as GDP forecast
raised Thailand will refrain from further interest-rate reductions as an
economic recovery that is exceeding the central bank’s expectations prompts it
to raise the 2012 growth forecast. Governor Prasarn Trairatvorakul said that Thailand
will probably expand 6% this year, from a previous estimate of 5.7%, while
inflation is still at a “manageable level.” The Bank of Thailand has kept its
benchmark rate unchanged at its past two meetings at 3%, a level that Prasarn
said is in an “accommodative zone” and will help strengthen the nation’s
growth. (Bloomberg)
Philippines:
Inflation accelerates from 30-month low on fuel, food
Philippine inflation accelerated in April from a 30-month
low on higher utility, fuel and food costs, reducing scope for the central bank to resume interest-rate cuts. Consumer
prices rose 3% y-o-y, after a 2.6% advance in March. The median estimate was
for a 2.6% gain. Inflation pressure may rise further after the government approved
a fare increase for jeepneys, a popular mode of transport, and President Aquino
said that wage boards would speed up discussions on higher minimum pay.
(Bloomberg)
Australia: Central
bank cuts growth, inflation outlook on weak hiring
The Reserve Bank of Australia (RBA) cut growth and inflation
forecasts as weak job and housing markets keep price gains in check. The RBA
said that labor market conditions have continued to be on the soft side to
date, with large increases in employment in mining and some service industries
roughly offset by declines in the manufacturing, hospitality and retail
sectors. The central bank sees average growth of 3% in 2012, down from its February
estimate of 3.5%. Consumer prices should rise 2.5%, from a previous prediction
of 3%. (Bloomberg)
EU: Manufacturing,
services shrink more than estimated
Euro-region services and manufacturing output contracted
more than initially estimated in April, adding to signs of a deepening economic
slump. A euro-area composite index based on a survey of purchasing managers\dropped
to 46.7 from 49.1 in March. That’s the fastest rate of decline since October
and below an estimate of 47.4 published on 23 April. A reading below 50
indicates contraction. A gauge of euro-region manufacturing fell to 45.9 in
April from 47.7 in March, while a measure of services dropped to 46.9 from
49.2. (Bloomberg)
UK: Home prices drop
the most in 1.5 years as recession bites
UK house prices dropped the most in 1.5 years in April as a
stamp-duty exemption for first-time buyers ended and the economy fell into its
first double-dip recession since the 1970s. Prices dropped 2.4% from March, the
largest monthly decline since Sept 2010, to an average GDP159,883. Prices had
risen 2.2% in March. April values were down 0.6% y-o-y. Demand for homes was
boosted earlier this year as first-time buyers took advantage of a tax
exemption on purchases of homes costing less than GBP250,000 before it ended in
March. (Bloomberg)
US: Job gains
trailing forecasts, adding to concerns of US slowdown
American employers in April added the fewest number of jobs
in six months and wages stagnated. The 115,000 increase in payrolls was less
than the forecast of a 160,000 increase and followed a revised 154,000 gain in March
that was larger than initially estimated. Unemployment fell to a three-year low
of 8.1% as people left the labor force. The April increase in payrolls leaves
the labor market 5m jobs short of the 8.8m lost as a result of the 18-month
recession. Private payrolls during Obama’s term in office turned to positive
from negative in April, with a net gain of 35,000. Overall payrolls remain
lower than when Obama was inaugurated because there are 607,000 fewer
government workers, including federal, state and local employees. Average
hourly earnings were USD23.38 in April, little changed from the month before.
(Bloomberg)
Global: Consumer
confidence gains
Global consumer confidence rose in the first quarter as
improvements in the US economy and continued growth in Asian markets brought
sentiment levels to the highest level since the global recession began. Nielsen
said its index of consumer confidence rose 5 pts in the period to 94. North
America rose 8 pts to 92 while Europe is the most pessimistic region at 72 pts,
though confidence increased in 16 out of 27 markets there. Asia-Pacific continues
to be the most optimistic area at 103 pts. (Bloomberg)
Source: OSK188
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