Monday, 23 July 2012

News Highlights - Sime Darby, DRB-Hicom, Automotive Sector, Water Sector


Sime Darby Bhd (RM9.94/share)
Plans Liberian palm oil bulking facilities
Sime Darby Bhd, one of the top three largest plantation companies in the world, plans to build palm oil bulking facilites in Liberia or neighbouring areas in the next one or two years. This will be a preparatory move in storing the edible oil before it is exported to markets such as Africa, Europe and the United States. Bulking facilities consist of tank farms used to store processed palm oil such as palm olein or crude palm oil in a regulated environment before they are pumped into vessels and shipped to their export destinations. A source said Sime Darby had tasked Felda-Johore Bulkers Sdn Bhd with building a tank farm as a prepatory move before it starts harvesting its oil palm plantations in Liberia.  Felda-Johore is an associate of Felda Global Ventures Holdings Bhd (FGV) in which Sime Darby also owns a 10% stake. Sime Darby ventured into the African country two years ago and now owns some 220,000ha there. – Business Times

DRB-Hicom Bhd (RM2.73/share)
DRB-HICOM, Proton lifeline for Lotus
Proton Holdings Bhd may have to pump in another STG100mil (RM491mil) in troubled British sports car maker Group Lotus plc in order to keep it afloat. DRB-HICOM Bhd managing director Datuk Seri Mohd Khamil Jamil said the money will have to be pumped in by March 2013. Proton has pumped in STG100mil into Lotus so far this year after several banks cut their credit lines to the sports car maker. Mohd Khamil, who is also the chairman of Proton and Lotus, said Lotus was being funded via internally generated funds from Proton and DRB-HICOM. He also confirmed that Proton had submitted a revised plan to the national carmaker’s six big lenders. Lotus has already drawn down more than STG200mil before the banks stopped the remaining STG62.5mil to be disbursed to Lotus, a move that could push it into technical insolvency. Mohd Khamil added that if Lotus fails, DRB-HICOM will fail as Proton has given the guarantees for the loan. –Business Times

Automotive Sector
Strong pick-up in commercial vehicle sales
The commercial vehicle segment is expected to see a bigger increase in sales compared with passenger vehicle this year, as demand is expected to be buoyed by rising commercial activity and healthy construction sector growth. According to the Malaysian Automotive Association (MAA), sales of commercial vehicles is expected to grow 4.6% to 68,000 units in 2012 from 65,010 units a year earlier. Sales of passenger vehicles, meanwhile, is forecast to grow 2.2% to 547,000 this year, less than half of the growth projected for the commercial vehicle segment. According to the MAA, a total of 35,369 units of new commercial vehicles were sold in the first six months of this year, which accounted for 11.7% share of the total industry volume. This was marginally higher than the 10.6% share achieved in the same period last year where 31,549 units were sold. – StarBiz


Water Sector
MMC eyeing JV with PAAB
Tan Sri Syed Mokhtar Al-Bukhary’s flagship outfit, MMC Corp Bhd, is believed to have proposed to the government to form a special purpose vehicle with Pengurusan Aset Air Bhd (PAAB) to take over the country’s water assets. MMC managing director Datuk Hasni Harun revealed the proposal to co-own the water assets with PAAB two weeks ago in a presentation to the government with the Finance Ministry, Energy, Green Technology and Water Ministry, and PAAB. Some government officials said it could be tricky for MMC in realizing the plan. He said it is not easy for MMC to venture into the water sector after PAAB was given the mandate to develop and manage the country’s water assets as it would be a step backwards, after the privatized water assets were bought back by PAAB only a while ago.  Furthermore, such a plan would be perceived as being contradictory to the initial goal of PAAB – water asset nationalization. – The Edge

Source: AmeSecurities 

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