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Malaysia
AirAsia (AIRA MK, Buy, TP: RM1.90) is flying another oriental route – Kuala Lumpur-Taipei, starting July 1 via its low- cost long-haul carrier affiliate AirAsiaX. In a statement yesterday, AirAsia said the route would start with five direct flights weekly. Booking periods start from today to May 3 for travel between July 1 2009 and January 2010. (Financial Daily)
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Sime Darby Bhd (SIME MK, Buy, TP: RM6.40) says Super Deals Travel & Tours Sdn Bhd has received unconditional approval from the Foreign Investment Committee to buy the former’s subsidiary Sime Darby Travel Sdn Bhd. Completion of the disposal is pending the nod from the Tourism Ministry, Sime Darby told Bursa Malaysia yesterday. (BT)
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IOI Properties Bhd will be delisted from the Bursa Securities list on Tuesday. To recap, IOI Corp now holds 91.33% of IOIP. PNB and Valuecap were among the shareholders that did not take up the offer. (Financial Daily)
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Lityan Holdings Bhd hopes to resolve its financial woes by the end of the year and start to be profitable in 2010, said group managing director and chief executive officer Nor Badli Mohd Alias. Lityan, a supplier of both IT software and hardware, has been classified under the financially troubled category of PN17 since 2004, after several overseas ventures turned sour.(StarBiz)
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Northport (Malaysia) Bhd will continue its expansion plans at Port Klang this year, despite a sluggish business environment. The NCB Holdings Bhd subsidiary, which operates the country' largest multipurpose port, has budgeted RM500m for the expansion. (BT)
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YTL e-Solutions Bhd will invest RM2.5bn over the next 5 years to roll-out a nationwide mobile Internet network to cater for 14m customers, said managing director Tan Sri Francis Yeoh. The first service trial will take 6-8 months, with a full nationwide rollout in 14 months. YTL e-Solution’s unit Y-Max Infra Sdn Bhd entered into a contract with Samsung to implement a nationwide mobile Internet network. Samsung will provide a comprehensive WiMAX network solution, including base stations, end-to-end information technology, multimedia technology and a range of mobile Internet devices. (Malaysian Reserve)
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The 16,000ha Tanjung Manis Halal Park in Sarawak, launched two months ago, has attracted RM9 billion worth of investments from 11 companies. Halal Industry Development Corp Sdn Bhd (HDC) chief executive officer Datuk Jamil Bidin said the investors comprise of six Taiwan companies (RM6bn) and the others are local firms (RM3bn). They plan to invest in, among others, aquaculture, biotechnology and modern farming. (BT)
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The Minority Shareholder Watchdog Group (MSWG) is working with Bursa Malaysia Bhd to come up with an organisation or a pool of independent directors for companies to choose from whenever they require independent directors. This is part of efforts to increase the level of corporate governance in Malaysia, MSWG said. It will also be launching a corporate governance ranking system for all companies on Bursa Malaysia by next month, said MSWG chief executive officer Rita Benoy Bushon. (StarBiz)
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Indonesia has offered Petronas a chance to participate in developing the country’s giant Natuna D-Alpha gas field, Prime Minister Mohd Najib Razak said yesterday. Indonesia’ government has appointed state oil firm Pertamina as the operator of Natuna, but it does not have the capacity to develop the gas field alone, with an estimated RM144.8bn investment required. Pertamina intends to keep a 40% stake in the Natuna D-Alpha gas project, with 60% to be shared among the partners. The Natuna-D-Alpha block has around 222 trn cubic ft (tcf) of gas reserves, of which 46 tcf are thought to be commercially viable. The block accounts for about 25% of Indonesia’s total commercially recoverable gas reserves of 182 tcf. The block is situated 1,100km north of Jakarta and 200km east of the West Natuna fields that feed gas to Singapore. (Malaysian Reserve)
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INVESTMENT RESEARCH
Global
Stocks staged a late-session rally Thursday, influenced by a weak housing market report, a mix of corporate results and the latest for the automakers. The Commerce Department will today release the March durable goods orders report and the Census Bureau releases the March new home sales report. Stocks are down for the week as investors have retreated after a six-week
advance that propelled the S&P 500 nearly 29%. The Dow Jones industrial average gained 0.9% (+70.5 pts, close 7,957.1). The Standard & Poor' 500 index gained 1.0% (+8.4 pts, close 851.9) and the Nasdaq composite gained 0.4% (+6.1 pts, close 1,652.2). In currency trading, the dollar fell versus the euro and the yen. U.S. light crude oil for June delivery gained 77 cents to settle at US$49.62 a barrel on the New York Mercantile Exchange. (CNNmoney)
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Sales of existing U.S. homes in March stayed near a four-month average, and prices rose from February, a sign the housing recession has stopped getting worse. From a year before, existing home sales were down 7.1% in March. Distressed properties accounted for about 50% of all home resales last month, the group said, up from about 45% in previous months. The median price slumped 12% from March 2008, to US$175,200, and climbed 4.2% from February. While prices normally increase during this time of year, the gain was more than twice as large as in prior years, NAR’s Yun said. While yesterday’s figures from the National Association of Realtors showed purchases fell more than forecast to an annual rate of 4.57m, economists noted that the sales level is hovering near the level it reached in November. Prices for home resales posted their biggest monthly gain since June 2005, and NAR chief economist Lawrence Yun said that some regions are seeing multiple bids on properties. (Bloomberg)
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The number of Americans filing first-time applications for unemployment insurance rose last week to 640,000 as forecast, while total benefit rolls reached a record, indicating the labour market continues to deteriorate. Initial jobless claims increased by 27,000 in the week that ended April 18, from a revised 613,000 the prior week, the Labour Department said yesterday. The number of people staying on jobless-benefit rolls rose by 93,000 to 6.14m, the 12th straight week the figure has set a record. Job losses may continue all year even as the longest recession in the post-war era shows signs of reaching a trough. The release indicates employment cuts may come close to topping 650,000 for a record fifth straight month in April because yesterday’s report covers the week of the monthly payroll survey. The jobless rate among people eligible for benefits rose 0.1 percentage point to 4.6 percent, the highest since January 1983, in the week ended April 11. (Bloomberg)
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The Federal Reserve released its most detailed breakdown to date on the types of assets it accepted from Bear Stearns a year ago and the cause of losses on the portfolio. The biggest losses in the US$25.7bn portfolio of Bear Stearns assets as of the end of last year came from commercial and residential mortgages, according to a report released by the Fed yesterday. The
central bank agreed in March 2008 to buy the assets so JPMorgan Chase & Co. would acquire Bear Stearns and avert the investment bank’s bankruptcy. Yesterday’s report follows pressure by lawmakers on the central bank to identify the collateral for its record extension of credit, along with a lawsuit by Bloomberg News in November. Fed Chairman Ben S. Bernanke has pledged to boost disclosure, assigning Vice Chairman Donald Kohn to lead the effort. The Fed wrote down the value of former Bear Stearns commercial-mortgage holdings by 28% to US$5.6bn and residential loans by 38% to US$937m as of Dec. 31, the central bank said yesterday. Properties in California and Florida accounted for 45% of outstanding principal of the residential mortgages. (Bloomberg)
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Europe’s manufacturing and service industries contracted at the slowest pace in six months in April, signalling the worst of the recession may be over. A composite index of activity in both industries posted its biggest gain on record, rising to 40.5 from 38.3 in March. The index is based on a survey of purchasing managers by Markit Economics and a reading below 50 indicates contraction. The manufacturing index rose to 36.7 from 33.9 in March, while the services index increased to 43.1 from 40.9, Markit said. A composite index measuring new orders showed the weakest contraction in six months. European industrial orders fell 34.3% y-o-y in February, the most in at least 13 years, the European Union’s statistics office said yesterday. The International Monetary Fund predicts the euro-region economy will contract 4.2% this year, the most since World War II. (Bloomberg)
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U.K. government support for the banking system has risen to 1.4trn pounds (US$2trn) and may climb higher as the financial crisis spreads to building societies and economists warn lenders may need more aid. Commitments include 526.5bn pounds of asset insurance, 250bn pounds to guarantee bank lending and 154bn pounds to take on the liabilities of nationalized banks Northern Rock and Bradford & Bingley Plc. The government also loaned the Bank of England 185bn pounds to finance a special liquidity program for banks. In addition, the central bank agreed to purchase as much as 150bn pounds of assets with new money to lower borrowing costs through so-called quantitative easing. Other state aid to the industry includes direct investment in U.K. lenders, assistance for customers of Icelandic banks and the bailout of Dunfermline Building Society. The 1.4trn figure doesn’t count government pledges to stimulate the economy. (Bloomberg)
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AirAsia (AIRA MK, Buy, TP: RM1.90) is flying another oriental route – Kuala Lumpur-Taipei, starting July 1 via its low- cost long-haul carrier affiliate AirAsiaX. In a statement yesterday, AirAsia said the route would start with five direct flights weekly. Booking periods start from today to May 3 for travel between July 1 2009 and January 2010. (Financial Daily)
*****
Sime Darby Bhd (SIME MK, Buy, TP: RM6.40) says Super Deals Travel & Tours Sdn Bhd has received unconditional approval from the Foreign Investment Committee to buy the former’s subsidiary Sime Darby Travel Sdn Bhd. Completion of the disposal is pending the nod from the Tourism Ministry, Sime Darby told Bursa Malaysia yesterday. (BT)
*****
IOI Properties Bhd will be delisted from the Bursa Securities list on Tuesday. To recap, IOI Corp now holds 91.33% of IOIP. PNB and Valuecap were among the shareholders that did not take up the offer. (Financial Daily)
*****
Lityan Holdings Bhd hopes to resolve its financial woes by the end of the year and start to be profitable in 2010, said group managing director and chief executive officer Nor Badli Mohd Alias. Lityan, a supplier of both IT software and hardware, has been classified under the financially troubled category of PN17 since 2004, after several overseas ventures turned sour.(StarBiz)
*****
Northport (Malaysia) Bhd will continue its expansion plans at Port Klang this year, despite a sluggish business environment. The NCB Holdings Bhd subsidiary, which operates the country' largest multipurpose port, has budgeted RM500m for the expansion. (BT)
*****
YTL e-Solutions Bhd will invest RM2.5bn over the next 5 years to roll-out a nationwide mobile Internet network to cater for 14m customers, said managing director Tan Sri Francis Yeoh. The first service trial will take 6-8 months, with a full nationwide rollout in 14 months. YTL e-Solution’s unit Y-Max Infra Sdn Bhd entered into a contract with Samsung to implement a nationwide mobile Internet network. Samsung will provide a comprehensive WiMAX network solution, including base stations, end-to-end information technology, multimedia technology and a range of mobile Internet devices. (Malaysian Reserve)
*****
The 16,000ha Tanjung Manis Halal Park in Sarawak, launched two months ago, has attracted RM9 billion worth of investments from 11 companies. Halal Industry Development Corp Sdn Bhd (HDC) chief executive officer Datuk Jamil Bidin said the investors comprise of six Taiwan companies (RM6bn) and the others are local firms (RM3bn). They plan to invest in, among others, aquaculture, biotechnology and modern farming. (BT)
*****
The Minority Shareholder Watchdog Group (MSWG) is working with Bursa Malaysia Bhd to come up with an organisation or a pool of independent directors for companies to choose from whenever they require independent directors. This is part of efforts to increase the level of corporate governance in Malaysia, MSWG said. It will also be launching a corporate governance ranking system for all companies on Bursa Malaysia by next month, said MSWG chief executive officer Rita Benoy Bushon. (StarBiz)
*****
Indonesia has offered Petronas a chance to participate in developing the country’s giant Natuna D-Alpha gas field, Prime Minister Mohd Najib Razak said yesterday. Indonesia’ government has appointed state oil firm Pertamina as the operator of Natuna, but it does not have the capacity to develop the gas field alone, with an estimated RM144.8bn investment required. Pertamina intends to keep a 40% stake in the Natuna D-Alpha gas project, with 60% to be shared among the partners. The Natuna-D-Alpha block has around 222 trn cubic ft (tcf) of gas reserves, of which 46 tcf are thought to be commercially viable. The block accounts for about 25% of Indonesia’s total commercially recoverable gas reserves of 182 tcf. The block is situated 1,100km north of Jakarta and 200km east of the West Natuna fields that feed gas to Singapore. (Malaysian Reserve)
*****
INVESTMENT RESEARCH
Global
Stocks staged a late-session rally Thursday, influenced by a weak housing market report, a mix of corporate results and the latest for the automakers. The Commerce Department will today release the March durable goods orders report and the Census Bureau releases the March new home sales report. Stocks are down for the week as investors have retreated after a six-week
advance that propelled the S&P 500 nearly 29%. The Dow Jones industrial average gained 0.9% (+70.5 pts, close 7,957.1). The Standard & Poor' 500 index gained 1.0% (+8.4 pts, close 851.9) and the Nasdaq composite gained 0.4% (+6.1 pts, close 1,652.2). In currency trading, the dollar fell versus the euro and the yen. U.S. light crude oil for June delivery gained 77 cents to settle at US$49.62 a barrel on the New York Mercantile Exchange. (CNNmoney)
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Sales of existing U.S. homes in March stayed near a four-month average, and prices rose from February, a sign the housing recession has stopped getting worse. From a year before, existing home sales were down 7.1% in March. Distressed properties accounted for about 50% of all home resales last month, the group said, up from about 45% in previous months. The median price slumped 12% from March 2008, to US$175,200, and climbed 4.2% from February. While prices normally increase during this time of year, the gain was more than twice as large as in prior years, NAR’s Yun said. While yesterday’s figures from the National Association of Realtors showed purchases fell more than forecast to an annual rate of 4.57m, economists noted that the sales level is hovering near the level it reached in November. Prices for home resales posted their biggest monthly gain since June 2005, and NAR chief economist Lawrence Yun said that some regions are seeing multiple bids on properties. (Bloomberg)
*****
The number of Americans filing first-time applications for unemployment insurance rose last week to 640,000 as forecast, while total benefit rolls reached a record, indicating the labour market continues to deteriorate. Initial jobless claims increased by 27,000 in the week that ended April 18, from a revised 613,000 the prior week, the Labour Department said yesterday. The number of people staying on jobless-benefit rolls rose by 93,000 to 6.14m, the 12th straight week the figure has set a record. Job losses may continue all year even as the longest recession in the post-war era shows signs of reaching a trough. The release indicates employment cuts may come close to topping 650,000 for a record fifth straight month in April because yesterday’s report covers the week of the monthly payroll survey. The jobless rate among people eligible for benefits rose 0.1 percentage point to 4.6 percent, the highest since January 1983, in the week ended April 11. (Bloomberg)
*****
The Federal Reserve released its most detailed breakdown to date on the types of assets it accepted from Bear Stearns a year ago and the cause of losses on the portfolio. The biggest losses in the US$25.7bn portfolio of Bear Stearns assets as of the end of last year came from commercial and residential mortgages, according to a report released by the Fed yesterday. The
central bank agreed in March 2008 to buy the assets so JPMorgan Chase & Co. would acquire Bear Stearns and avert the investment bank’s bankruptcy. Yesterday’s report follows pressure by lawmakers on the central bank to identify the collateral for its record extension of credit, along with a lawsuit by Bloomberg News in November. Fed Chairman Ben S. Bernanke has pledged to boost disclosure, assigning Vice Chairman Donald Kohn to lead the effort. The Fed wrote down the value of former Bear Stearns commercial-mortgage holdings by 28% to US$5.6bn and residential loans by 38% to US$937m as of Dec. 31, the central bank said yesterday. Properties in California and Florida accounted for 45% of outstanding principal of the residential mortgages. (Bloomberg)
*****
Europe’s manufacturing and service industries contracted at the slowest pace in six months in April, signalling the worst of the recession may be over. A composite index of activity in both industries posted its biggest gain on record, rising to 40.5 from 38.3 in March. The index is based on a survey of purchasing managers by Markit Economics and a reading below 50 indicates contraction. The manufacturing index rose to 36.7 from 33.9 in March, while the services index increased to 43.1 from 40.9, Markit said. A composite index measuring new orders showed the weakest contraction in six months. European industrial orders fell 34.3% y-o-y in February, the most in at least 13 years, the European Union’s statistics office said yesterday. The International Monetary Fund predicts the euro-region economy will contract 4.2% this year, the most since World War II. (Bloomberg)
******
U.K. government support for the banking system has risen to 1.4trn pounds (US$2trn) and may climb higher as the financial crisis spreads to building societies and economists warn lenders may need more aid. Commitments include 526.5bn pounds of asset insurance, 250bn pounds to guarantee bank lending and 154bn pounds to take on the liabilities of nationalized banks Northern Rock and Bradford & Bingley Plc. The government also loaned the Bank of England 185bn pounds to finance a special liquidity program for banks. In addition, the central bank agreed to purchase as much as 150bn pounds of assets with new money to lower borrowing costs through so-called quantitative easing. Other state aid to the industry includes direct investment in U.K. lenders, assistance for customers of Icelandic banks and the bailout of Dunfermline Building Society. The 1.4trn figure doesn’t count government pledges to stimulate the economy. (Bloomberg)
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