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Malaysia
Axiata Group (AXIATA MK, Hold, TP: RM1.77) will consider listing its Bangladesh subsidiary, AKTEL, in 2010 or the year after if capital markets stabilise by then. Its president and Group CEO said Axiata’s previous plan to float AKTEL was put on hold due to deteriorating market conditions. Meanwhile he also said that Axiata will be open to divesting its sub-scale or non-core units which could include the company’s current operations in Iran where it owns 49% in Mobile Telecommunications Company of Esfahan. (Malaysian Reserve)
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Tenaga Nasional Berhad (TNB MK, Hold, TP: RM7.00) will retain the present electricity tariff as long as the price of oil, gas and coal remain unchanged. The president and CEO of the Group stressed that the current concern was effective use of electricity. (Malaysian Reserve)
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The decision by Malaysia and Singapore to further liberalise air travel between them is expected to benefit low-cost carriers – Firefly and AirAsia (AIRA MK, Buy, TP: RM1.90) – when the new traffic rights take effect in June, sources said. Under the new agreement, which was announced by the Singapore Transport Minister, carriers from both countries would operate between Singapore and six new destinations in Malaysia and vice versa. The destinations are Ipoh, Kuala
Terengganu, Kuantan, Malacca, Sandakan, and Tawau apart from allowing more flights to Penang, Langkawi, Kuching and Kota Kinabalu. (Malaysian Reserve)
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Local oil and gas (O&G) companies are keen on gaining a foothold in the rapidly growing energy sector in India, which is expected to attract between US$120bn and US$150bn in investments over the next 5 years. Local companies on the lookout for jobs in India are SapuraCrest (SCRES, Sell, TP: 0.64), Kencana, and Scomi Engineering. (Financial Daily)
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The EPU will present a comprehensive proposal to the government to resolve the toll issue within three months. A Minister from the Prime Minister’s department said the EPU will review all aspects, including the concerned agreements and its economic impact, in drawing up the proposal. When asked about the possibility of the government taking over Plus Expressway Bhd, he said the proposal would have to be studied in detail first. (Malaysian Reserve)
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Aeon Credit Services (M) Bhd (Aeon Credit) will continue its drive to improve efficiency with a plan to establish a collection agency as a new business that may be operational as early as 4QFY09, which is 20 February 2010. According to Aeon Credit’s managing director, Naruhito Kuroda, this centre will leverage on micro-credit collections of the company, as well as third parties, financial institutions, utilities, and other service companies. (Financial Daily)
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Bintulu Port Holdings Bhd is aiming to reduce its dependency on liquefied natural gas (LNG) cargo to 60% of its total operating revenue in the next 5 years, said its chairman Tun Mohd Eusoff Chin. Currently, LNG contributes 78% of the group’s revenue. The group will enhance existing facilities; develop new facilities such as refurbishment of the multipurpose terminal, and development of 19.1ha for operations buildings and yard. The company plans to expand its container terminal, develop an additional berth for the edible oil terminal, oil and gas terminal, and break bulk facilities. The estimated cost of these projects is about RM600m. (Financial Daily)
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Eastern & Oriental (E&O) Bhd is set to launch 2 premium projects in Kuala Lumpur (KL) and Penang, despite the economic slowdown. The 2 projects are the RM1bn serviced apartment project at the former St Mary’s School site in Jalan Tengah, KL, and the RM1.3bn Seri Tanjung Pinang (STP 1) luxury condominium project. The St Mary project in KL, which is a
50:50 JV with Lion Group, is being developed on a 4.13-acre parcel of land, with a DV of RM500m going to E&O. The project is scheduled to be launched in 3QCY09. STP 1 has a GDV of RM1.3bn, which E&O plans to launch at the end of 2009. (The Edge)
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Eastern Pacific Industrial Corporation (EPIC) is still on an expansion drive to enhance its operations in fabrications and port services, despite a slight slowdown in maintenance work on ships and rigs at the Kemaman Supply Base (KSB) in Terengganu. The company owns the sole petroleum supply base in Peninsular Malaysia, which hosts some 300 companies supporting the oil sector. The company is allocating RM100m in capex for FY2009, and intends to double its port tonnage from its current 3.9m tonnes in 5 years. (The Edge)
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Petroliam Nasional Bhd (Petronas) has signed an exploration and production sharing agreement with Oman to explore and sell natural gas there, strengthening its presence in Oman' oil and gas industry. It inked the deal last Wednesday to explore and sell natural gas from Block 63 in Al Dhahirah and Al Dakhiliyah regions, covering an area of 3,709 sq km. Industry sources told Business Times that the EPSA is for an acreage of Natih block, and Petronas is working with British oil company BP for the development of the natural gas in the designated area. (BT)
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Bursa Malaysia will adopt the FTSE global index standard, and thus be known as the FTSE Bursa Malaysia KLCI from July 6. The FTSE Bursa Malaysia KLCI will comprise the 30 largest main board companies based on investable market capitalization. It will be free-float-adjusted and liquidity-screened to give investors a highly investable and tradable index. The improved index will adopt a higher speed of calculation of every 15 seconds compared with 60 seconds now. (StarBiz)
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Global
Stocks inched higher Friday as better-than-expected earnings from Citigroup, General Electric and Google, helped stretch the recent advance to a sixth straight week. The Dow Jones industrial average added 0.07% (+5.90 pts, close 8,131.33). The Standard & Poor' 500 index gained 0.5% (+4.30 pts, close 869.60) and the Nasdaq composite gained 0.2% (+2.63 pts, close 1,673.07). In currency trading, the dollar gained versus the euro and fell against the yen. U.S. light crude oil for May delivery rose 35 cents to settle at $50.33 a barrel on the New York Mercantile Exchange. (CNNmoney)
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Orders for U.S. durable goods and home sales probably retreated in March after rebounding the previous month, showing any economic recovery will be slow to evelop, economists said before reports this week. Bookings for goods th meant to last several years fell 1.5%, the 5 drop in 6 months, according to the median forecast in a Bloomberg News survey. Combined sales of new and existing homes likely decreased to a 5.02m annual rate, down from a 5.06m pace in February. (Bloomberg)
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European Central Bank President Jean-Claude Trichet said he wouldn’t exclude another “very measured” rate cut, though a zero interest-rate policy wouldn’t be appropriate for the bank. The bank this month cut its benchmark rate less than economists had forecast, by a quarter point to 1.25%, and delayed a decision on new, so called non-standard policy tools such as purchases of debt securities until May 7. Policy makers on the ECB’s 22-member council are divided over the best way to stem the euro region’s worst recession since World War II. Trichet said ther was no split among the Governing Council. He declined to comment on any possible non-standard measures the bank may decide at its May 7 meeting. (Bloomberg)
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China’s 4 trn yuan (US$585 bn) stimulus plan has shown “better-than-expected” results in reviving growth of China’s economy and helped restore market confidence, Premier Wen Jiabao said. “China’s rapid reaction in rolling out the stimulus package has resolved some prominent problems in the economy, strengthened market confidence and stabilized people’s expectations,” Wen said on Saturday at the Boao Forum in southern China’s Hainan province. The Chinese economy grew 6.1% in the first quarter, urban fixed-asset investment expanded, and loans rose amidst record car sales in March, signalling a tentative recovery. (Bloomberg)
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The Bank of Japan will probably cut its forecasts for the economy and prices next week as the recession takes a toll on spending by companies and households. The world’s second-largest economy will probably contract 4.2% in the year to March 2010, more than twice the pace the central bank projected three months ago, according to the median estimate of 16 economists surveyed by Bloomberg News. Consumer prices excluding fresh food will tumble 1.3%, they said, also faster than the bank’s earlier estimate. Governor Masaaki Shirakawa said this month that the economy has “underperformed” since January and weakening spending by companies and consumers will impair growth even as declines in exports and production moderate. Economists say Prime Minister Taro Aso’s record 15.4trn yen (US$155bn) stimulus package is unlikely to sustain a recovery. With the benchmark interest rate already at 0.1%, the bank will probably be forced to buy more debt issued by the government and companies to inject money into an economy heading for the worst recession since 1945. (Bloomberg)
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Asian currencies mostly gained this week, led by the Indonesian rupiah, as signs a global recession is easing whetted investors’ risk appetite, helping draw funds to emerging markets. The rupiah surged 5.5%, its best performance this year, as early election results indicating President Susilo Bambang Yudhoyono may keep his post bolstered demand for Indonesian assets. The rupiah is the only gainer this year among Asia’s 10 most-traded currencies after President Yudhoyono, who plans to stand for re-election in July, won the support of more than half of respondents in a poll following parliamentary elections last week. He was favored by 53% of 4,200 people who cast their ballots in the April 9 contest, according to the Indonesian Survey
Institute’s exit-survey. (Bloomberg)
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