Md Nor is MAS chairman

Tan Sri Md Nor Md Yusof now serves as the chairman of Khazanah Nasional Bhd's executive committee.

Read more: Md Nor is MAS chairman http://www.btimes.com.my/articles/mezz-2/Article/#ixzz1TYtFIGHz

Kuala Lumpur: Malaysian Airline System Bhd (MAS) yesterday announced that Tan Sri Md Nor Md Yusof will be its new chairman effective August 1. Md Nor was formerly MAS managing director before becoming executive chairman of the Securities Commission until March 31 2006. He currently serves as the chairman of Khazanah Nasional Bhd's executive committee. Md Nor also sits on the board of several companies and institutions, including Malaysian Agrifood Corp Bhd and Pelaburan Hartanah Bhd, and is also a trustee of Yayasan Khazanah. He was president and CEO of Bank of Commerce (M) Bhd which is now CIMB Bank Bhd.

Gold Price Monitor Chart (KFH) 29.07.2011

Petronas: No deal with joint venture

Kuala Lumpur: Petroliam Nasional Bhd (Petronas), the national oil company, has disputed claims by a Malaysian-Iranian-Chinese (MIC) joint venture that they are poised to be awarded a contract to develop a marginal oil field.

Read more: Petronas: No deal with joint venture http://www.btimes.com.my/articles/petre/Article/#ixzz1TMIhJE3q

Earlier this week, it was reported that China's largest petroleum refiner Sinopec Petroleum Services Corp (Sinopec) was poised to take a major stake in a planned RM2.06 billion venture to help develop a Petronas marginal oil field located off the coast of Terengganu. At a press conference held on Monday, it was disclosed that under the deal, Sinopec will hold 40 per cent stake in the consortium, while Sabio Oil and Gas Sdn Bhd (SOG), a unit of Sabio Technology Bhd (STB), and Iranian group International Oil and Design and Construction Sdn Bhd (IODC) will have 30 per cent stake, respec-tively. "This is our maiden foray in the oil and gas industry. We have set up SOG solely for this project and we are optimistic to be given a chance by Petronas to develop this project," STB executive chairman Datuk Seri Ahmad Sukimi Ibrahim was reported to have said. "The Sinopec-Sabio-IODC consortium has not taken part in any of our prior processes," Petronas said in a late statement yesterday. "We had already completed a data review process with parties interested in the fields identified for the first phase of the development and has so far awarded a Risk Service Contract (RSC) for the Berantai field to the Petrofac-Kencana-Sapura partnership," Petronas added. Petronas also added that as part of its selection criteria, any local company to be selected by foreign partners to participate in the RSC petroleum arrangement is required to have a proven track record as an established oil and gas service provider, apart from being a listed entity. None of the local companies in the MIC joint venture are listed, but it was also reported that STB, incorporated just last November, had obtained approval to list on Bursa Malaysia and soon will be issuing its public prospectus. However, a quick check on Bursa Malaysia and the Securities Commission's website did not reveal any details concerning a draft prospectus by STB. Analysts, meanwhile, were puzzled on why Petronas took more than a day before issuing a statement, but pointed out that Malaysia has been prone to mega oil deal announcements. In 2007, Trans-Peninsula Petroleum outlined plans for a US$7 billion pipeline, to be laid across northern Malaysia, which will divert up to a third of oil now being carried through the Straits of Malacca. Trans-Peninsula linked up with a Saudi firm, Al-Banader International Group, for oil supplies while a unit of Ranhill Bhd was slated to help in the design and construction of the pipeline. While today in the city, a US$100 billion (RM294 billion) Trans-Asian Oil and Gas Pipeline memorandum of understanding signing ceremony is slated to take place.

CIMB set to make South Asian foray

CIMB will next week open a representative office in Mumbai, India, and form a partnership with the Kotak Mahindra Group, say sources

Read more: CIMB set to make South Asian foray http://www.btimes.com.my/articles/cim4/Article/#ixzz1TMIMvByH


Kuala Lumpur: The country's second largest banking group, CIMB Group Holdings Bhd, is set to make its first foray into South Asia. Sources said it will next week open a representative office in Mumbai, India, and form a working partnership with the Kotak Mahindra Group, one of the country's top banking and financial services group. It is also expected to form an alliance with some partners in Sri Lanka to tap on the burgeoning investment banking opportunities in the island state. Group chief executive officer Datuk Seri Nazir Razak said recently that CIMB's strategy for the India, China and Middle East regions would be to form working partnerhips with established players there, rather than acquire equity stakes. "We're looking at working partnerships, not equity. You'll know our proposition with regard to these three markets by year-end," he told Malaysian reporters in Beijing, China, last week. Acquisitions would be a priority for the group only in Asean, he said, referring to the grouping of 10 Southeast Asian nations which include Malaysia, Thailand and Indonesia. "We're always talking (to potential targets), but nothing material so far," he remarked. In India, CIMB is expected to capture opportunities from flows between India and Asean. It is also likely to focus on areas like investment banking, asset management and private equity - segments in which the Kotak Mahindra Group is strong. The Indian group's many businesses include a bank, Kotak Mahindra Bank Ltd, which has over 230 branches and manages assets worth US$11 billion (RM32 billion). In Sri Lanka, CIMB is poised to have early mover advantage as big and prominent investment banks from the West have yet to enter the market in a big way. The initial public offering market in Sri Lanka is "boo-ming" and merger and acquisition activities have been on the rise ever since a three-decade-long civil war ended in 2009, investment bankers say. In China, CIMB has a presence via two representative offices in Shanghai and a 19.99 per cent stake in Bank of Yingkou Co Ltd, a mid-sized lender. It plans to convert one of the representa-tive offices into a branch. The group is believed to be studying opportunities in the Middle East.

Gold Price Monitor Chart (KFH) 27.07.2011

Rating milestone

Group CEO of CIMB sees China's Dagong Global Credit Rating Co Ltd as being best-placed to represent the region's voice in global credit ratings

Read more: Rating milestone http://www.btimes.com.my/articles/ating/Article/#ixzz1SuBTt41e


Beijing: CIMB Group Holdings Bhd's chief, who has long advocated the need for Asia to have at least one rating agency that can represent the region's voice in global credit ratings, sees China's Dagong Global Credit Rating Co Ltd as being best-placed to take on that role. The group threw its support for Dagong by becoming the first corporation in Asean to be rated by the private, independent rating agency. Dagong, set up in 1994, is the largest and the only rating agency in China that is not partly-owned by or affiliated with any Western rating agencies such as Standard and Poor's (SandP), Fitch Ratings and Moody's. "To us, Dagong has the best foundations to be the Asian voice in global ratings," Datuk Seri Nazir Razak, group chief executive officer of CIMB Group, said at the launch of its rating report here yesterday. The group's commercial banking arm, CIMB Bank Bhd, was assigned a long-term local currency issuer rating of "AA", and a long-term foreign currency rating of "AA-". Both ratings carried a positive outlook. Nazir has, since 2009, been speaking out on the need for there to be at least one Asian-owned-and-managed rating agency to balance the dominance of Western institutions, whose frameworks he described as being "unfair", and to reflect the rise of Asian economic power. "Despite the recent wave of downgrades across the West, I find it difficult to understand how Spain (rated 'AA' by SandP) is still rated higher than China ('AA-'), and Ireland ('BBB+') higher than India ('BBB-'). "How is China, with over US$3 trillion (RM8.94 trillion) in foreign exchange reserves and only US$27 billion (RM80.5 billion) in foreign currency sovereign debt more likely to default than Spain which has US$13 billion (RM39 billion) in reserves and US$1 trillion (RM2.98 trillion) in debt?," Nazir highlighted in his speech at the launch. Ever since the recent global financial crisis, people have become less trusting of Western rating agencies and are now more eager to have objective rating information, he said. "I'm not saying don't get rated by SandP and the rest, but we do need to get an Asian voice out there," he remarked. Nazir later shared with Malaysian reporters that he had hoped that RAM Ratings would become the Asian voice in global ratings, but this will not happen now that the Malaysian rating agency has taken up the "wrong strategy" in looking to partner with SandP. SandP is currently in discussions to take up a stake in RAM. "RAM has very strong credentials, and I think it's giving up on those credentials by partnering with a Western agency. So now we're betting on Dagong," Nazir remarked. Dagong's chairman and president Guan Jianzhong said the agency has been been approached to provide rating services to an increasing number of international financial institutions (FI), mostly from Europe. Dagong gained international attention last year when it became the first non-Western rating agency to issue credit ratings for 50 countries. CIMB Bank is one of the first FIs it rated. Dagong's ratings on CIMB Bank are higher than that assigned by SandP, Moody's and Fitch as the Chinese agency placed relatively more weight on the growing prospects of the bank and its position and strength at home and in the region, Guan said. "Our inaugural rating by Dagong will prove an important milestone in strengthening economic and financial sector linkages between China and Malaysia. With this rating, regulators, fund managers and investors in China and beyond will have an Asian-alternative assessment of CIMB Bank's financial strength and credit standing," Nazir said. Asked about CIMB Group's plans for China, Nazir said it planned to convert a representative office in Shanghai into a branch so that it is better able to facilitate investment flows between China and Asean. CIMB Group's presence in China currently is through two representative offices in Shanghai and a 19.99 per cent stake in Bank of Yingkou, a Chinese mid-sized lender.

Gold Price Monitor Chart (KFH) 22.07.2011

Bursa bullish on profit growth

Kuala Lumpur: Bursa Malaysia Bhd, the country's stock exchange operator, wants to aggressively grow its net profit by at least 20 per cent a year over the next three years.

Read more: Bursa bullish on profit growth http://www.btimes.com.my/articles/burzaf/Article/#ixzz1Sncaveas


Last year, the group's net profit was down 36 per cent from RM177.6 million it recorded in 2009, due to a one-off capital gain. Its chief executive officer, Datuk Tajuddin Atan, said apart from profitability, the company's medium-term target includes boosting trading in the securities and derivatives markets. "We hope to ensure that our securities' daily average trading value growth is on par with leading listed exchanges in the region, and achieve 50,000 contracts in our derivatives markets by 2013," he said at a media briefing to announce Bursa Malaysia's half-year results. In increasing its market participation base, one of the initiatives that it had put in place was the allowance for up to 100 proprietary day traders, of which there has been an increase from 36 to 55 currently. Tajuddin said Bursa Malaysia will also engage domestic and foreign institutional investors to relook this market, given Malaysia's revised positions in two major indices. "With the dual-licensing programme that allows securities dealer representatives with adequate experience to fast-track into becoming futures broker repre-sentatives, we hope to see an increase in the scope of services and cross-selling by our intermedia-ries, thereby enlarging their client base," he said. Bursa has laid out a three-year strategic thrust that is aimed at increasing the bourse's competitiveness and market vibrancy. "Our business direction in the mid-term is to build market competitiveness and drive vibrancy by increasing our investor base, providing greater diversity of products and services, and impro-ving accessibility to our market and investor segments," he said. Bursa Malaysia recorded its highest half-year profit over the last four years yesterday, with net profit for six months ended June 30 2011 rising by 37 per cent to RM76.2 million from RM55.5 million in the same period last year. The improved profit was due to the increase in stable revenue co-ming from, among others, new lis-tings "... we have seen Malaysia's capital markets benefiting from the shift in major funds towards emerging markets," he said. Meanwhile, Bursa Malaysia's chief regulatory officer, Selvarany Rasiah, said the bourse could exceed the 29 initial public offerings (IPOs) recorded last year. With 17 IPOs so far this year, she said another eight listings are pending.

Gold Price Monitor Chart (KFH) 21.07.2011

Gold Price Monitor Chart (KFH) 19.07.2011

Gold Price Monitor Chart (KFH) 15.07.2011

UK's Petrofac to accelerate West Desaru output

Kuala Lumpur: Petrofac Ltd, Britain's oil and gas services provider, expects to pump as much as 60,000 barrels of oil per day (bopd) from its Block PM304 offshore Peninsular Malaysia after it pledged to quicken its work.

Read more: UK's Petrofac to accelerate West Desaru output http://www.btimes.com.my/articles/petmou/Article/#ixzz1SEDuMY1d

Petrofac and Petroliam Nasional Bhd (Petronas) signed two memorandums of understanding (MoUs) in London on Wednesday, of which one of them is to accelerate production from Block PM304. Petrofac said this will be done by introducing an early production system at its West Desaru block. It will also use a mobile offshore production unit or Mopu, which is in the process of being purchased. "This approach is expected to bring forward first oil production from West Desaru into the fourth quarter of 2012," Petrofac said in a statement posted on its website. It did not mention the original first oil production date. At the same time, Petrofac said the second phase development of the Cendor block is set to start in the second quarter of 2013, bringing the overall production capacity of Block PM304 to around 60,000 bopd. Petrofac issued and posted the statement on its website after the signing of the two MoUs with Petronas, witnessed by Prime Minister Datuk Seri Najib Razak, who is on an official visit to the UK. According to the statement, the first MoU records the undertaking by Petrofac and Petronas to accelerate production from Block PM304, with a third phase of development. Petrofac owns a 30 per cent equity share and is the operator of PM304, which includes the Cendor and West Desaru fault blocks. At the signing, Petronas was represented by its president and chief executive officer (CEO) Datuk Shamsul Azhar Abbas, while Petrofac was by its group CEO Ayman Asfari. Petrofac said the second MoU outlines its plan to collaborate in the areas of competency development, capacity building and education activities. Petrofac has been working with Petronas since 2004 when it began the development of Block PM304 with the Cendor block.

DiGi set to seal two MVNO deals

Shah Alam: DiGi.Com Bhd, the country's third largest operator, is expected to announce two mobile virtual network operator (MVNO) deals in the second half of the year.

Read more: DiGi set to seal two MVNO deals http://www.btimes.com.my/articles/digi0307/Article/#ixzz1S63gxoeQ

"It's going to be a busy year for us as far as the MVNO space is concerned, it's going to be exciting. We will be launching two MVNOs in the second half of this year," DiGi chief executive officer Henrik Clausen said during an interview with Business Times recently. Last year, DiGi announced an MVNO tie-up with Baraka Telecoms. However, the deal was off before the official launch of the service. Baraka, however, had tied up with Maxis Bhd to become a mobile virtual network enabler (MVNE). An MVNO is a company that offers mobile services like a normal mobile operator, without owning a radio spectrum or licence to the airwaves. It is able to offer the services by riding on existing mobile operators' network and infrastructure. An MVNE is a company that offers services such as billings to MVNOs. Currently, there are more than four MVNOs in the country. They include XOX, Merchantrade, Tune Talk and Redtone which are now riding on Celcom's network. The business model works where the MVNO has strength in a particular segment where the mobile operator is not strong in it. For example, Merchantrade has a strong customer base among foreign workers particularly South Asians, while XOX's services are mainly targeted at urban Chinese. Although Clausen declined to comment on segments these MVNOs be targeting at, analysts believe DiGi may be looking at MVNOs that have strength in suburban areas as well as the non-Chinese market. Meanwhile, Happy, DiGi's in-house MVNO brand, has started to show results. When Happy was launched in December 2007, its main idea was to use it as an "experiment" to gauge how an MVNO business model can work with DiGi. Happy was also used to tap into the East Coast markets, where the DiGi prepaid brand was not strong. "Due to some reasons, the DiGi prepaid brand wasn't popular in East Coast states like Kelantan and Trengganu. So, we decided to use Happy to penetrate the market. It is now showing results. "In fact, we are hoping to double Happy's market share in this segment over the next 12 months," said Clausen.

Gold Price Monitor Chart (KFH) 14.07.2011

Chorus gets louder

Kuala Lumpur: The chorus for reviving a multi-billion ringgit submarine power cable project is getting louder.

Read more: Chorus gets louder http://www.btimes.com.my/articles/noclear/Article/#ixzz1RwNowLQM

Now it is Energy Commission (EC) chairman Tan Sri Ahmad Tajuddin Ali's turn to press the case, saying it is a "real option" and Peninsular Malaysia will need power from Sarawak if the government defers plans to build a nuclear power plant. "It (bringing power from Sarawak) is a possibility," he told reporters after delivering the opening address at the 3rd Energy Forum here yesterday. He confirmed that the government is still considering transporting energy from Sarawak although the RM10 billion project was shelved just over a year ago. However, he stressed that doing this would delay the country's nuclear power plans but not abolish it altogether. Back in April, Tenaga Nasional Bhd (TNB) chairman Tan Sri Leo Moggie said the cable project may be revived, especially with concerns over nuclear power. He said that other hydropower projects with a potential of up to 28,000 megawatts (MW) could be developed in Sarawak to feed the Peninsula. Sarawak is expected to have surplus supply of electricity when the Bakun hydroelectric plant comes on stream this year. Currently the total consumption of electricity in Peninsular Malaysia is about 15,000 megawatts (MW) and could face a power shortage by 2015 based on the government's targeted economic growth rate of 6 per cent per year for the next five years. Electricity demand in the peninsula has been growing between 5 and 8 per cent every year. In order to cope with the anticipated increase in demand, over 10,000MW of new and replacement generation capacity will be required in the peninsula from now to 2020, involving an estimated RM40 billion to RM50 billion of investments. "If we can bring 1,000MW to 2,000MW from Sarawak then we will be able to meet the demand for about two to three years," Tajuddin said. On the country's nuclear power programme, the official position is to continue planning until a formal decision is made by the government. But if the decision is not to continue then other alternative sources of power must be found using conventional fuel, gas and renewable energy. "Any shortfall in the supply capacity, for example by a decision to defer or even not to adopt the nuclear option, will mean that alternative capacity from another source or a combination of sources will have to be found," he said. To meet the projected demand for power in the nation, the EC has identified the need for possibly six units of 750MW each of combined-cycle gas turbine units, three in 2016 and another three in 2017. "The planting-up sequence for 2018 and beyond has not been firmed up yet," he said.

Levy on heavy power users from January

The levy money will be used to reward green energy producers through the feed-in tariffs.

Read more: Levy on heavy power users from January http://www.btimes.com.my/articles/REfund/Article/#ixzz1RwNHP5c5

Kuala Lumpur: The government will impose a levy on heavy electricity users starting January 2012 and use the money to remunerate green energy producers under the Renewable Energy Act's feed-in tariffs (FiT). "Green energy producers will be rewarded via the feed-in tariffs. The funding is derived from polluters-to-pay concept," said Energy, Green Technology and Water Ministry's deputy secretary general for energy sector Badaruddin Mahyudin. He said the Sustainable Energy Development Authority will set up the Renewable Energy Fund in September 2011 to collect the levy and oversee the implementation of the FiT. "Those who consume more than 300KW (kilowatts) per hour will be considered heavy energy users and they will be taxed. We estimate Tenaga Nasional Bhd (TNB) to collect RM300 million per year on behalf of the government to fund the green power producers. "Please note, household customers consuming 200 units of electricity or less will not be affected by the renewable energy levy," he said. "Our ministry has, so far, received a RM189 million loan from the Finance Ministry to kick-start the Renewable Energy Fund," he added. Badaruddin was speaking to reporters after launching the pre-show guide of POWER-GEN Asia 2011 here yesterday. The regional conference and exhibition on power generation, transmission and distribution will be held at the Kuala Lumpur Convention Centre from September 27 to 29. It was highlighted that manufacturers, which make up 40 per cent of TNB's clientele, are the likely target group to be slapped with the renewable energy levy. Badaruddin said the government is aware that the largest contributor to the levy will be from the industrial sector. He gave an assurance that the 1per cent levy on the bills of heavy energy users will only minimally impact the industry's manufacturing cost. Moreover, the industrial sector may want to offset the incremental electricity cost by being more energy-efficient at their factories or even generating green power, thus benefit from the FiT. To date, TNB's small renewable energy programme is only applicable to those generating up to 10MW. Come September 2011, the FiT will raise the bar to 30MW. Power is generated from sustainable sources that include hydro, solar, biomass and biogas. The FiT essentially guarantees green power producers a premium selling price over that generated from depleting and finite sources like oil, gas and coal. The FiT could, on a cumulative basis until 2020, facilitate avoidance of about 46 million tonnes of carbon dioxide emitted from conventional power generation. This is achieved if and when Malaysia generates at least 3,000MW of green power.

Proposal to merge SapuraCrest, Kencana

The merged SapuraCrest-Kencana entity is expected to have a market capitalisation of RM10 billion as well as some RM6 billion worth of assets.

Read more: Proposal to merge SapuraCrest, Kencana http://www.btimes.com.my/articles/psk1/Article/#ixzz1RqzOUJ7F

Kuala Lumpur: Maybank Investment Bank Bhd (Maybank IB) and CIMB Investment Bank Bhd have joined forces to entice SapuraCrest Petroleum Bhd and Kencana Petroleum Bhd to merge and create the largest local oil and gas service provider by assets. The merged entity is expected to have a market capitalisation of RM10 billion as well as some RM6 billion worth of assets. A special purpose vehicle, Integral Key Sdn Bhd (IKSB), yesterday offered to acquire the assets and liabilities of SapuraCrest and Kencana Petroleum in exchange for cash and IKSB shares . The cash portion for SapuraCrest is RM875 million or about 14.9 per cent of the deal, while for Kencana the cash portion is RM969 million or 16.2 per cent of the deal. Under the proposed deal, Sapura-Crest and Kencana Petroleum will have equal share in IKSB, while IKSB will maintain the listing status of only one of the two companies. The other will be delisted from the stock exchange. The deal values SapuraCrest at RM5.87 billion, or RM4.60 a share, and Kencana Petroleum at RM5.98 billion, or RM3 a share. SapuraCrest and Kencana's last traded prices prior to their suspension yesterday were RM4.49 and RM2.80 respectively. "We believe the proposed merger is timely, in light of the investment cycle in the oil and gas sector, especially in exploration and production activities (upstream). Both SapuraCrest and Kencana Petroleum have commendable individual capabilities and competencies which are complementary across the value chain," Maybank IB's chief executive officer Tengku Datuk Zafrul Tengku Abdul Aziz said. CIMB Investment executive director Datuk Charon Mokhzani and legal adviser Kadir Andri and Partners partner E. Sreesanthan were also present at the press conference. For the deal to go through, 75 per cent of the shareholders of the two companies, respectively, must approve the offer. SapuraCrest's major shareholder chief executive officer Datuk Shahril Shamsuddin and Kencana Petroleum's chief executive officer Datuk Mokhzani Mahathir have thus far expressed interest in the deal. Shahril owns a direct and indirect stake of 40.1 per cent in SapuraCrest through Sapura Holdings Sdn Bhd, while Mokhzani holds a 32.4 per cent stake in Kencana through his interest in Khasera Baru Sdn Bhd. Kencana, on its part, has appointed AmInvestment Bank Bhd as its adviser and Credit Suisse as its financial adviser. SapuraCrest, however, has yet to appoint an adviser. Both parties were approached last Thursday with the proposal. The board of SapuraCrest and Kencana Petroleum have 32 days to accept the offer before it lapses. Should the offer obtain both boards' approval, the proposal by Maybank IB and CIMB Investment suggests the establishment of a merger integration committee to be co-chaired by principal shareholders, Shahril and Mokhzani. The committee will work to iron out details of the merger before it is presented to shareholders for approval.

Sime auto unit revving up for another record

For the year ended June 30 2010, Sime Darby Motors registered a record turnover of RM10.1 billion, while the plantation division generated RM10.86 billion in sales.

Read more: Sime auto unit revving up for another record http://www.btimes.com.my/articles/ZURE/Article/#ixzz1RqyDlpGv

CHENGDU (China): Sime Darby Motors, a unit of the country's oldest conglomerate Sime Darby Bhd, is poised to create company history by becoming the single largest contributor to group revenue for the financial year just ended June 30 2011. Historically, the plantation division has been the mainstay of the Sime Darby group, but in recent years, the motor division has been playing catch-up. For the year ended June 30 2010, Sime Darby Motors registered a record turnover of RM10.1 billion, while the plantation division generated RM10.86 billion in sales. Sime Darby Motors performance for the financial year just ended was also helped by its operations aboard. According to Sime Darby Motors managing director Datuk Lawrence Lee, the company had sold some 70,000 vehicles in the year ended June 30 2011, substantially higher than the 60,000 units projected earlier. With this in mind, Lee suggested that Sime Darby Motors would overtake the plantation division as Sime Darby's number one revenue contributor for the financial year just ended. "From July 2010 to June 2011, we sold more than 70,000 vehicles with China sales making up about 27,000 units," Lee told Malaysian reporters prior to the launch of Sime Darby Motors' BMW 4S centre here yesterday. Sime Darby Motor was already ahead of the plantation division up to the third quarter ended March this year, notching a revenue of RM11.5 billion helped by sales of 54,514 vehicles across eight countries. In the year ended June 2010, it sold a total of 56,836 vehicles. The RM11.5 billion is equivalent to about 30 per cent of the total revenue of Sime Darby, the world's largest listed palm oil producer. As at December 31 last year, Sime Darby's plantation division registered a revenue of RM5.72 billion. Sime Darby Motors is currently present in eight countries across Asia Pacific. It represents 32 marques ranging from premium and super premium brands such as BMW, Porsche, Rolls-Royce and McLaren to various mass market brands like Hyundai and Mazda and also commercial vehicles such as Hino and Mack. Some 80 per cent of Sime Darby Motors' revenue comes from overseas, Lee said. The company is one of the world's largest BMW dealer groups. The China market, which includes Hong Kong and Macau, will continue to be Sime Darby Motors' most important market especially in the premium segment, although Lee expects continued solid growth in Singapore, Thailand, Australia and Malaysia too. The China market, he said, has climbed since the past three years, buoyed by the company's premium segment led by BMW, MINI and Rolls Royce. In the third quarter, Sime Darby's sales in China, Hong Kong and Macau registered RM4.6 billion revenue to account for about one third of Sime Darby Motor's total turnover. Singapore and Thailand came in second with a combined RM2.17 billion during the same period, while Malaysia was third with RM2.03 billion. "Sales volume of our China market grew 63 per cent over the July 2010-June 2011. The impediment to our growth there is how to get the right location for our outlets," Lee said.

Gold Price Monitor Chart (KFH) 12-07.2011

Gold Price Monitor Chart (KFH) 08.7.2011

Ramly Food now a billion ringgit business

Kuala Lumpur: What started out as a humble beginning, making beef burger patties from home and selling them to friends, has turned Ramly Food Processing Sdn Bhd into a billion ringgit business.

Read more: Ramly Food now a billion ringgit business http://www.btimes.com.my/articles/20110704235204/Article/#ixzz1RBwhYEZU


Ramly Burger has been a successful homegrown brand in Malaysia over the last three decades. Its sales have breached the RM1 billion mark and it is aiming to double that to RM2 billion by 2016. "We plan to export Ramly food products worldwide," said founder and managing director Datuk Ramly Mokni. In the pipeline is the plan to build a bigger manufacturing facility next year at Pulau Indah Halal Park near Port Klang, with an investment of about RM250 million. Ramly Food now owns two processing plants at the Bandar Tun Razak industrial zone in Cheras and the IKS industrial park in Mukim Batu, Kuala Lumpur. The plants collectively produce about 150,000 tonnes of products each day. Ramly Food manufactures beef, chicken, prawn and fish patties as well as frankfurters, cocktail sausages, chicken and beef nuggets, and minced chicken and beef. The company also produces its own sauces like black pepper, chilli and tomato sauce, as well as mayonnaise, bread and butter. Currently, Ramly Food exports its products to Asian countries such as Indonesia, Singapore, Thailand and Indonesia. Exports command about 30 per cent of its revenue. "With the new plant, besides being able to increase production capacity, we also hope to increase our product offerings from 30 to more than 100. By 2016, we see export markets comman-ding at least half of group sales," Ramly said. In 1979, Ramly decided to give up his job as a butcher at a supermarket and began to make burger patties with his wife Datin Shala Siah Abdul Manap from their flat in Lorong Haji Hussein Kuala Lumpur. The husband-and-wife team made the patties manually, mincing meat and adding own blend of spices to the patties, producing about 200 pieces a day. Ramly had a burger stall in Jalan Haji Hussein off Jalan Chow Kit and gained a lot of support from friends who also began their own stalls sourcing patties from Ramly. Production then increased to 2,000 patties a day. He later took a loan from Bank Pembangunan Malaysia Bhd and moved to a shop-house-cum-factory in Bandar Tun Razak, Kuala Lumpur, where Perusahaan Ramly Mokni Sdn Bhd was established in 1984. Ramly Group has recently collaborated with chef Liza Zainol to produce a 16- episode cooking show to be aired on RTM's TV2 every Saturday and Sunday beginning July 16, as part of its promotional activities. and#8212; By Zurinna Raja Adam

DiGi's upgrade plans

Shah Alam: DiGi.Com Bhd, the country's third largest mobile operator, will embark on a transformation journey vital for its survival in the ultra-competitive industry over the next 12 to 18 months.

Read more: DiGi's upgrade plans http://www.btimes.com.my/articles/digig4/Article/#ixzz1RBvujpzz

The transformation agenda started last year when Henrik Clausen, DiGi's latest chief executive officer, joined the company. It will cover three areas - network, information technology (IT) system and distribution. "Without the transformation, we would lose out and die. So, in order to drive growth, we need to transform a good company into an even stronger company," Clausen said in an interview with Business Times last week. Trends are indicating that there will be more mobile phone users consuming data going forward, as more smart phones flood the market as well as the decrease in smart phone prices. To prepare itself for the trend, DiGi feels the need to swap and upgrade its entire network and equipment. The swapping process is expected to be completed by end of this year. "When you look at transformation, one of the things you need to focus on is to have an intelligent network. So, we have signed a vendor (China's ZTE) to complete the swap. All these will be 4G ready, everything will be one rack. So, when 4G is ready, it is just going to be a software upgrade," Clausen said. The next area of transformation would involve upgrading its IT system such as the billing system. "This is to enable us to respond faster to the market, and to support our business model," he added. The last area it plans to transform is its distribution, said Clausen. "We have strong distribution and dealers and we see some opportunities for expanding that model, in areas where its underserved such as the East Coast and other geographical areas. "On top of that, we need to get retail right, and we also see online distribution becoming more and more part of the game," he said. Clausen added that the biggest change the industry will experience over the near to medium term is not so much about the declining trend in voice services, the growing demand for mobile data, new services and contents. Instead, it is about how services will be delivered. "No one is going to stop talking. So, to some extend, voice is the history, present and the future. I think it is more about how that voice experience is going to be supported by the operators. "Today, a customer's need is quite effectively provided by having a voice platform and data platform. That's how the network has been built. But, if you look at the 4G networks, over time, there will be integrated networks where voice will be data. "So, at some point in time, that convergence will happen. People will still talk, but the voice experience will be delivered on a data-type platform," he said.

CIMB takeover?

Kuala Lumpur: Analysts are not keen on the prospect of RHB Capital Bhd (RHBCap) potentially initiating a takeover of CIMB Group Holdings Bhd, a banking rival about three times its market size, as suggested in a news report.

Read more: CIMB takeover? http://www.btimes.com.my/articles/prepos-2/Article/#ixzz1R1On0pX9

They said that the move would be "value-destructive".

Both banks have denied they are in discussions for such a move. The denials came about after Singapore Straits Times reported yesterday, citing unnamed government and banking sources, that work was still in progress on the deal that would create Southeast Asia's biggest banking entity by market value. It was said that RHBCap would likely make an all-cash offer for CIMB. "The push is still for consolidation of the (banking) sector, and this is one of the options being considered," the Straits Times was told by a senior government official familiar with the situation, who added that no timeframe had been set for the proposed deal. RHBCap's biggest shareholder, the Employees Provident Fund (EPF) with a 45 per cent stake, said it was unaware of such a plan. "The EPF is unaware of any discussion concerning RHBCap taking over CIMB and as a shareholder, we would not know if any bank level talks are being held on the issue," an EPF spokesperson told Business Times. The news report took analysts by surprise as RHBCap has long been viewed as a takeover target rather than an acquirer. "It's a case of the hunted suddenly turning into the hunter," remarked one. Up until last week, RHB had been the one pursued for a takeover by not just CIMB, but also Malayan Banking Bhd. Both the bigger banks however aborted their respective plans after Abu Dhabi Commercial Bank set a high valuation bar when it sold its 25 per cent stake in RHBCap to Aabar Investment, a sister company, at RM10.80 a share. "There could be something to the report as behind the scenes, people may still be exploring possible structures for a RHB-CIMB merger to go through. It may be motivated by parties higher up," an analyst from a foreign research house opined. He said one possible structure is for RHBCap to raise funds via a rights issue that would be taken up entirely by the EPF, which could then, in a back-to-back deal, sell back a substantial stake of the enlarged entity to Khazanah Nasional Bhd. Khazanah, the government's investment arm, is a key shareholder in CIMB. EPF also owns about 12 per cent of CIMB. A spokesperson from RHBCap said yesterday the bank "is not in discussion with CIMB on any potential takeover offer". A CIMB spokesperson, meanwhile, emphasised that CIMB had ceased negotiations on RHBCap, and "there is no change in that position". Lim Sue Lin, a banking analyst at HwangDBS Vickers Research, doesn't think it makes sense for a smaller bank to buy a bigger one. This has not happened before with any success in Malaysia, at least not since Bank Negara Malaysia started encouraging market-driven mergers. "The deal seems unlikely given the relatively smaller size of RHBCap compared with CIMB. I think it would be better the other way around," Lim remarked. OSK Research, in a note to clients yesterday, said although EPF can well afford to back an all-cash deal, which is likely to be the preferred method should Khazanah be interested in an all-out exit, the merger would be value-destructive as there were too many lines of revenue duplications. "And with RHBCap being significantly smaller than CIMB, acquiring the latter will result in greater value destruction for RHBCap post-merger," it said. OSK estimated that the merged entity faces a potential earnings dilution of 12.5 per cent even before factoring in "negative synergy" arising from the merger. It also estimated that RHBCap would have to raise close to RM58 billion via a rights issue, assuming a cash offer of RM9.60 for each CIMB share, which is a book value of 3.03 times. CIMB's share price closed unchanged in the stock market at RM8.93 yesterday. OSK noted that pricing would be a key stumbling stock in any such deal as RHBCap would have to pay a respectable premium to entice CIMB's foreign institutional shareholders. "Even if the proposed acquisition of CIMB by RHBCap was indeed true, we believe that it is unlikely that RHBCap will overpay as the sale by Khazanah could be part of a government mandate, while EPF will be answerable to its stakeholders as the acquisition in itself is not commercially viable," it added. RHBCap's share price eased 1 sen to RM9.15 yesterday.

Bursa may feel SGX time pressure

For now, Bursa Malaysia has no plans to emulate Singapore's stock exchange in doing away with a midday break from August 1

Read more: Bursa may feel SGX time pressure http://www.btimes.com.my/articles/clockf/Article/#ixzz1R1NYoT9j

Kuala Lumpur: Singapore's move to have longer trading hours on its stock exchange by doing away with a midday break from August 1 this year may pressure Malaysia to eventually do the same, analysts and dealers said. For now, though, stock exchange operator Bursa Malaysia Bhd has no plans to emulate the move. "There are currently no plans to eliminate the lunch/midday break or to change trading hours at Bursa Malaysia," an official told Business Times yesterday. Singapore Exchange Ltd (SGX) announced yesterday that it would scrap its 90-minute midday trading break, resulting in continuous trading hours from 9am to 5pm. It said this would allow its market hours to overlap more with those of other Asian exchanges, enabling investors trading pan-Asian securities to respond to regional market movements and news flow. "Continuous all-day trading will offer all investors more opportunities to trade and manage their risks," SGX's chief Magnus Bocker said in a statement, adding that it would also help Singapore progress further as an international financial hub. Analysts and dealers contacted by Business Times had mixed views as to whether Malaysia should do the same to enhance its own competitiveness. The trend in the region seems to be lengthier hours. In Asia, stock exchanges in Korea, India and Australia already trade non-stop. And recently, Hong Kong increased its trading hours while Japan also plans to do so soon. There may be a case for Malaysia to follow suit seeing as it plans to have trading linkages with Singapore, Thailand and the Philippines by the first quarter of next year. Technology provider SunGard was appointed earlier this month to develop a platform to enable cross-border routing and trading. "There may be some pressure for Bursa to do the same ... but I don't think there's an absolute necessity to do so at this point in time," said Chris Eng, head of research at OSK Securities Sdn Bhd. Dealers argued that eliminating the current two-hour lunch break that starts from 12.30pm will not result in more trades. Many also say they need that time to meet with clients and would actually prefer shorter trading hours to enable them more time to do that. "I suppose it (the longer hours) may eventually happen, but it won't bring about any changes in trading volume," said the head of dealing at a local brokerage firm. An analyst from a foreign research firm agreed. "I don't think it will make any difference (if hours are lengthened) in Malaysia as people tend to put in trades before and after lunch. The incremental trades you get during lunch hour will not offset the costs involved," she remarked. It wouldn't do good to shorten trading hours either as this would mean less exposure to key foreign markets like London, she added. Singapore, which analysts say sees twice the trading volumes Malaysia does, initially wanted to do away with the lunch break earlier in March but delayed the move due to lack of support from the industry. Bursa's ex-chief Datuk Yusli Mohamed Yusoff said in January this year that Bursa may have to revisit proposals for lengthier trading hours and scrapping lunch breaks despite the lack of industry support, given the developments in other regional markets. "If we stand still and other people are moving fast, then we risk becoming less competitive," he had said. Datuk Tajuddin Atan in April took over as Bursa Malaysia's chief executive officer. Hong Kong, since March 7 this year, has implemented longer trading hours, starting the stock market at 9.30am (instead of 10am before) and closing at 4pm, with a one-and-a-half-hour lunch break from noon. It plans to stretch the hours further from March 5 next year by shortening the lunch break by 30 minutes.

CIMB Islamic Money Market Fund 01-07-2011

Gold Price Monitor Chart (KFH) 01-07.2011