News Highlights - AirAsia, UMW Holdings, Building Materials Sector

AirAsia Bhd (RM3.57/share)

Has LCCT backup plan

AirAsia Bhd will likely shift to its other hubs in Malaysia should the budget carrier decide not to move to the new low-cost carrier terminal, KLIA2. Newly-appointed AirAsia chief executive officer Aireen Omar said that there is a backup plan in case KLIA2 is not built per the airline’s requirements that emphasise on safety, security as well as cost effectiveness. Besides Kuala Lumpur, the budget carrier has hubs in Sabah (Kota Kinabalu International Airport), Sarawak (Kuching International Airport), Johor (Senai International Airport), Penang (Penang International Airport) as well as a virtual hub in Singapore (Changi International Airport). Aireen added that AirAsia is still in talks with Malaysia Airports Holdings Bhd (MAHB) and is looking forward to the completion of KLIA2 which is on track to be opened in April 2013. – Business Times

UMW Holdings Bhd (RM9.13/share)

Changes tack in O&G game

After learning the hard way that the pipes segment in the oil and gas sector (O&G) industry is a cut-throat business, UMW Holdings Bhd is now building up its drilling assets to drive the division to profitability. Towards this end, a UMW spokesman said the company is looking to expand its fleet of rigs as the O&G division returns to profitability. He said that the strategy moving forward will be to focus on drilling activities and oilfield services. This will be categorised as the core business under the O&G division. UMW’s O&G division, anchored by its pipe manufacturing activities, was supposed to have been listed a few years ago. But the plans were up in tatters as the pipe manufacturing business was hit by intense competition. – The Edge

Building Materials Sector

Steel report ready

The much-awaited Boston Consulting Group’s (BCG) four-month study and its recommendations to enhance the competitiveness of the country’s RM40.0bil steel sector is completed and has been submitted to the International Trade and Industry Ministry (MITI) for further action, according to industry sources. While details on the study are still under close wrap, industry players believe that it will help to speed up MITI’s next course in formulating an effective mechanism to address the issues, disputes and challenges faced by the sector. Malaysian Iron and Steel Industry Federation (MISIF) newly-elected president Datuk Soh  Thian Lai said based on MISIF’s discussion with BCG, the gist of the study would likely cover on competitiveness, the existing steel policy, the import and export duties, and the influx of cheaper imports. He said any  indust r ial isat ion pol icy  for   the sector  must  be complete with a comprehensive view where iron and steel policy would give strategic importance of the domestic steel industry. - StarBiz

Source: AmeSecurities