Boustead sees bountiful year amid high CPO prices

BOUSTEAD Holdings Bhd expects to rake in record profit this year as palm oil prices continue to trade at buoyant levels of around RM3,000 per tonne.

Out of its six core businesses, plantation is the biggest earnings contributor, followed by shipbuilding and property development.

In the three quarters ended September 2011, Boustead's plantation division contributed RM267.1 million or 45.5 per cent to the group's RM585.9 million pre-tax profits.

So far, Boustead makes an annual profit of between RM450 million and RM700 million.

Read more: Boustead sees bountiful year amid high CPO prices

Johor Corp, CVC Capital launch takeover of QSR, KFCH

KUALA LUMPUR (Dec 14): Johor Corporation and CVC Capital Partners Asia III Ltd have teamed up to take over QSR BRANDS BHD [] and KFC HOLDINGS (M) BHD [] (KFCH).

Johor Corp and CVC Capital had on Wednesday, made the offer via a special purpose vehicle Massive Equity Sdn Bhd (MESB) in which Johor Corp holds a 51% stake and CVC Capital 49%.

MESB offered RM6.80 for the shares in QSR Brands Bhd and RM3.79 for the warrants. At RM6.80, this is 80 sen above the closing price of RM6 on Tuesday while the offer price for the warrants was a premium of 77 sen from the closing price of RM3.02.

MESB also made an offer to KFCH of RM4 per share and RM1 per warrant. At RM4, this was 59 sen above the closing price of RM3.41 on Tuesday but five sen below the closing price of RM1.05.

The securities were suspended from trading on Wednesday and resume on Thursday.

Johor Corp owns 55.9% of KULIM (M) BHD [], which, in turn, owns 53.9% of QSR. QSR has a 50.93% stake in KFCH.

Analysts had earlier expected only Johor Corp to take over QSR and KFCH and this did not include CVC Capital’s participation.

“By taking QSR and KFC Holdings private, Johor Corp would have more control and direct ownership over the cash flows and dividends of the crown jewels, KFC and Pizza Hut. QSR and KFC Holdings generate strong operating cash flows of RM250m million to RM300 million per annum but Johor Corp only get to enjoy less than half of it given their current stakes.

“A buyout of QSR and KFCH would increase the amount of dividends and cash flows that Johor Corp enjoys from this top fast food operator,” a research house said.

In December last year, Johor Corp had stated it has no plans to sell its prized assets, QSR and KFCH, which are held through its subsidiary Kulim.

Its president and chief executive Kamaruzzaman Abu Kassim had then said JCorp entered the quick service restaurants business in 2006 (through Kulim’s investment in QSR) and since then has seen tremendous growth in revenue and profit before tax (PBT) at an average of 13.8% and 3.7% per annum respectively.

“The results from this segment had contributed significantly, making up 47.5% and 44.1% respectively to Kulim’s revenue and PBT in the financial year ended Dec 31, 2009.

“It does not make sense to sell our core business,” he had then said in a statement.

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MAS to launch premium unit in ‘near term recovery plan’

Loss-making Malaysian Airline System Bhd (MAS) will launch a new regional premium airline, cut unviable routes and shed noncore businesses in its so-called "near term recovery plan" unveiled yesterday in a bid to return to profitability by 2013.

The new full-service airline will connect Malaysia to key destinations in the country and Asean, as well as South Asia and Greater China, using a fleet of Boeing 737-800, said MAS in a media statement yesterday. The-yet-to be named premium airline will fly all MAS’ domestic and regional routes in the long term.

The segmentation of management will allow the airline to focus on the unique needs of regional premium travellers, said MAS group chief executive officer (CEO) Ahmad Jauhari Yahya in Kuala Lumpur yesterday.

“Our domestic and regional routes are still our most profitable, in spite of intense competition from AirAsia Bhd,” he said.

The premier market of customers who prefer to fly full-service airlines will stay and is expected to grow, he said.

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It’s a tough pull for MAS

MALAYSIA Airlines (MAS) is perhaps the only Malaysian company that has undertaken the most number of restructuring exercises over the past decade to try to get back on its feet.

A decade ago its books were severely tainted with red ink and had to be cleaned up via the Widespread Asset Unbundling (WAU) exercise where it became an asset light airline. But 10 years later it is still in dire straits and appears not too far from where it was a decade ago.

This Wednesday the new boss of MAS, Ahmad Jauhari Yahya, after coming in one-and-a-half hours late for the media briefing, threw in yet another plan to put it back on course. The theme is “right sizing'' and it involves cost cuts to spinning-off businesses.

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Source of photo

NB: Monitor for sign of successful turnaround!!

The making of Sapura Kencana Petroleum

The creation of an oil and gas giant hasbegun. SapuraCrest Petroleum Bhd and Kencana Petroleum Bhd will be going through an RM11.85bil merger exercise to create the largest oil service provider by assets in the country - soon to be known as Sapura Kencana Petroleum Bhd.

For now, under a cash and share swap deal, a special purpose vehicle called Integral Key Sdn Bhd would be buying all the assets and liabilities of SapuraCrest for RM5.87bil and Kencana for RM5.98bil.

This shall be satisfied by some five billion Integral Key shares priced at RM2, and RM1.84bil in cash.

Integral Key has offered to acquire the SapuraCrest business for RM5.87bil equivalent to RM4.60 per share. It will acquire Kencana's business for RM5.98bil equivalent to RM3 per share.

At RM2, Integral Key's implied price earnings (PE) is approximately 20 times. The historical PE multiple of Kencana and SapuraCrest are 28.04 times and 25.41 times respectively.

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SapuraCrest Kencana eyes lucrative overseas deals

The upcoming merged entity is bidding for multi-billion ringgit worth of oil and gas jobs stretching from Malaysia to Brazil.

SapuraCrest Kencana Petroleum Bhd, the upcoming merged entity between Malaysia’s two largest oil and gas (O&G) players, is eyeing more international projects, especially in Australia and Brazil, to boost its already fat order book of RM13 billion.

SapuraCrest Petroleum Bhd executive vicechairman and president, Datuk Seri Shahril Shamsuddin, said the company and Kencana Petroleum Bhd were bidding for multi-billion ringgit worth of O&G jobs stretching from Malaysia to Brazil.

“There is a lot of work coming out of Australia and Brazil is also another country that you can’t ignore. India is also heating up with new investments in oilfields.

“In the longer term, we will look at the Gulf of Mexico. As a merged entity, we can take on more jobs and bid for larger projects,” Shahril said in an interview with Business Times yesterday.

Also present was Kencana Petroleum Bhd’schief executive officer Datuk Mokhzani Mahathir.

SapuraCrest last month won a US$1.4 billion (RM4.4 billion) contract from Petroleo Brasileiro SA (Petrobras), Latin America’s largest company, to charter and operate three units of pipe-laying support vessels.

Kencana, on the other hand, announced yesterday that it won a RM1 billion contract to help build a liquefied natural gas processing facility in Australia, awarded by United States-based Bechtel International Inc.

Shahril said SapuraCrest Kencana, which will be the world’s fourth largest O&G service provider by market capitalisation upon merging, aimed to grow its revenue by 15 to 20 per cent per annum.

“Currently, our combined revenue is between RM5 billion and RM5.5 billion a year and we are confident to increase that year-onyear,” Shahril said.

On whether the new merged entity will embark on an acquisition trail, Shahril said if there were companies that could help mitigate risk or enable SapuraCrest Kencana to do projects at low cost, it would consider the options available.

The acquisitions may include buying engineering firms or those involved in specialised areas.

SapuraCrest and Kencana are merging in a deal worth RM11.85 billion to create the largest O&G service provider by asset in the country.

Under their cash and share swap deal, special purpose vehicle Integral Key Sdn Bhd will buy all the assets and liabilities of SapuraCrest for RM5.87 billion and Kencana for RM5.98 billion.

The companies are obtaining shareholders' approval at their respective extraordinary meetings on December 14 and December 15.

The exercise is scheduled to be completed by first quarter 2012.

Read more: SapuraCrest Kencana eyes lucrative overseas deals

Maxcorp boss seeks to take over Wijaya

The low-profile Anuar Adam, who helms privately-held Maxcorp Group, aims to buy out Datuk Tiong King Sing’s interest in Wijaya at about RM1.10 per share.

Kuala Lumpur: Former army Major (rtd) Anuar Adam is gunning for control of Wijaya Baru Global Bhd.

Anuar is understood to be backed by a group of powerful Indonesian businessmen.

The low-profile Adam, who helms privately-held Maxcorp Group of companies, aims to buy out Datuk Tiong King Sing in a deal that values the Sarawakian tycoon’s interest in Wijaya at about RM1.10 per share.

Wijaya’s mother share closed 4.5 sen higher at 80.5 sen, while the warrants ended the trading day 9.5 sen higher at 33 sen.

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How to Chase the Market Rally

They say the best athletes make it look easy; their swing so fluid, their sight so sharp, their hands so certain. Whatever the case may be, their performance is as instinctive as it is smooth. And so it is with the best investors, who have the consistency and confidence to play their game, and not be enticed into something else.

For Gene Peroni, portfolio manager at Advisors Asset Management, his game is simple: "Identify quality companies, with good earnings growth, good cash flow, and in some cases nice dividends", that are technically "trending higher, not ones that are still in troughs."

"Once we've identified those stocks...I think the best tack is to buy and hold through the short-term volatility," Peroni explains in the attached video.

While many investors may fear that they have missed the move of the past week or so, this Philadelphia-based fund manager sees higher levels ahead

"It would seem like you were chasing the markets," Peroni says. "But when you really compare that with the upside potential before the end of the cycle -- I believe it's above 16,000 (on the Dow Jones Industrial Avg.) over the next several years -- then the risk to reward, even at these levels, remains very attractive. For stocks individually, it's an even better outlook."

Cyclicals, and what he calls the "market leaders", are his favorites right now particularly Transportation plays like airlines, truckers, shippers as well as rails "right down the line." Kansas City Southern (KSU) being one of his favorites.

In addition, if you combine his expectation that there will be a migration into small and midcap names, with his affinity for industrials, aerospace and defense names like TransDigm (TDG) make the cut over their large cap peers.

And finally, Peroni is getting long energy, which he says has good sub-sector underlying strength in groups like oil and gas drillers, oil services and oil technology. Here, he singles out Concho Resources (CXO) as a "leadership stock" that's worth a look.

What do you think? Is it time to dive in or cash out?

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Three-way bid for Proton stake

It is believed that the bidders are Tan Sri Syed Mokhtar AlBukhary’s DRB-HICOM, several key shareholders linked to the Naza Group and Proton chairman Datuk Mohd Nadzmi Mohd Salleh.

As many as three parties have submitted a bid to Khazanah Nasional Bhd yesterday to seek control of national carmaker Proton Holdings Bhd, people involved in the bidding process said.

“The bids were in the range of between RM6 and RM7 a share,” said a party directly involved in the bidding process.

It is believed that the bidders are Tan Sri Syed Mokhtar AlBukhary’s DRB-HICOM Bhd, several key shareholders linked to the Naza Group and Proton chairman Datuk Mohd Nadzmi Mohd Salleh.

Khazanah has a 43 per cent stake in Proton, and any bidder seeking to buy the government investment arm’s block will trigger a general offer.

“Those are the nitty gritty details, which are still being worked at ... but whoever is buying Proton is getting the company on the cheap,” said the source.

As at end-March 2011, Proton’s book value per share stood at RM9.84.

Read more: Three-way bid for Proton stake

Marco is on an uptrend, albeit gradual

MARCO CORPORATION (M) SDN BHD is a wholly owned subsidiary of Marco Holdings Bhd., listed on the main board Bursa Malaysia. Farsighted with a focused vision, coupled with a steadfast corporate culture, these values have greatly contributed to the rapid business expansion of MARCO CORPORATION.

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TIME dotCom next focus is Asia Pacific

The company is now ready to go beyond the region equipped with its RM1 billion in assets.

SUBANG JAYA: TIME dotCom Bhd, which already has a strong presence in Southeast Asia, now plans to focus its business in the Asia Pacific market.

Executive director and chief executive officer Afzal Abdul Rahim said the company is now ready to go beyond the region equipped with its RM1 billion in assets.

"We will hit the international market and play with the big boys," Afzal told reporters here after the company's extraordinary general meeting.

TIME dotCom Bhd is the country's second largest fixed line telecommunications network and solutions provider after Telekom Malaysia Bhd.

It is a pioneer in fibre optic telecommunications technology, delivering data and non-data communication services to enterprise, corporate, government, wholesale and retail customers via its fibre optic network traversing Thailand to Singapore.

TIME dotCom had received minority shareholders approval on its RM339 million proposed acquisition of three companies.

Afzal said the group can now pursue its plan to become a regional player with the Asia Pacific market as its main focus.

The three companies are Global Transit Communications Sdn Bhd, which is a leading regional wholesale Internet service and backhaul provider, AIMS Group, a leading "carrier hotel" (a type of data centre) in Malaysia and Global Transit Entities, which hold internet licenses in Singapore and Hong Kong.

Upon completion by the first quarter 2012, the acquisitions will effectively position TIME dotCom into a regional telecommunications player.

This will see TIME dotCom moving up the telecommunications value chain giving it access and the capability to serve a multi-billion dollar market comprising the growing Indo-China, ASEAN and North Asian market where more than half of the world’s population resides and Internet demand is increasing.

TIME provides backhaul and wholesale bandwidth solutions to leading regional and global operators offering a full suite of telecommunication services, ranging from voice and data communications including high-speed broadband, Internet, satellite connectivity and managed services.

TIME was first to market fibre-to-the-home in Malaysia in early 2010.

Its signature product, TIME fibre broadband, now offers Malaysian home Internet users the fastest broadband connectivity in the country with speeds of up to 50Mbps.

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Of penny stocks and regulations

Penny stocks will survive. They survived the designation of Iris Corp Bhd, and they will survive the recent designation of Harvest Court Industries Bhd.

It is easy to paint penny stocks in one brush, that they are useless and mere vehicles for a quick punt.

Just like it's easy to push the buck to the regulator for letting stocks surge, with the occasional unusual market query.

In all fairness, the regulator had issued an alert to investors on trading in Iris five years ago, and on Harvest Court as early as last week.

Did the market players understand that an investor alert is the most serious warning before a stock is designated?

The market regulator should not be used as a punching bag for market participants' lack of foresight in scrutinising the Bursa Malaysia website.

Likewise, a handful of black sheep should not be allowed to poop the party, which never begun for the rest.

The likes of Fitters Diversified Bhd, Cuscapi Bhd and Asia Media Bhd, which are making good profits relative to their size, never really appreciated during the penny stock rally, or, should we say, the penny stock mutiny.

Should companies such as SYF Resources Bhd, which this week announced a plan to venture into the property sector and change its core business, be dismissed merely because it ran up at the wrong time?

Others, however, seem to have managed to dodge the limelight.

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Harvest shares, warrants advance, ignore trading curbs

KUALA LUMPUR (Nov 18): HARVEST COURT INDUSTRIES BHD []’s shares and the warrants climbed on Friday despite the trading curbs on the securities which came into effect on Wednesday to check excessive speculation.

At 4.14pm, Harvest was up 31 sen to RM1.35 with 8.89 million shares done while the warrants added 26 sen to Rm1.15 with 8.51 million units transacted.

The performance of the securities bucked the cautious broader market which saw the FBM KLCI falling 4.77 points to 1,460.70.

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Harvest Court rallies to six-year high

Written by Syarina Hyzah Zakaria Thursday, 03 November 2011 11:37

KUALA LUMPUR: Harvest Court Industries Bhd’s share price surged by over 20% with some 54.23 million shares changing hands, making it the third most actively traded stock on Bursa Malaysia yesterday.
.....
The company also drew attention when it announced the appointment of Nazifuddin Najib, the son of Prime Minister Datuk Seri Najib Razak, as a non-executive director. Nazifuddin is also a director of Sagajuta.
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Harvest rebounds after 2-day selldown on trading curbs
Written by Joseph Chin of theedgemalaysia.com Friday, 18 November 2011 15:04

KUALA LUMPUR (Nov 18): The shares of HARVEST COURT INDUSTRIES BHD [] staged a mild rebound on Friday after a two-day selldown since Wednesday after trading curbs were placed.

At 2.57pm, the share price was up 15 sen to RM1.19 with 5.60 million units done. The warrants gained six sen to 95 sen with 5.26 million units transacted.

On late Monday, Bursa Malaysia Securities Bhd announced that it had declared the securities of Harvest Court as designated counters with effect from Nov 16, Wednesday, due to excessive speculation.

The imposition of this ruling for the shares and the warrants are in force until further notice.

Wall St jumps, on track for weekly gain as fears ebb

NEW YORK (Reuters) - Stocks rose on Friday and were on track to end the week higher as Italy's Senate approved economic reforms, easing investors' concerns about the euro zone's debt crisis.

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SapuraCrest wins RM4.37 billion Petrobras job

PETALING JAYA (Nov 1, 2011): SapuraCrest Petroleum Bhd has won a US$1.4 billion (RM4.37 billion) contract from Petróleo Brasileiro S.A. (Petrobras) to build, charter and operate three deepwater flexible pipe-lay support vessels (PLSV) for the Brazilian national oil company.
"This contract is a significant milestone as it marks our entry into the vast, dynamic yet technologically challenging oil and gas market in Brazil,'' executive vice-chairman and president Datuk Seri Shahril Shamsuddin said in a press statement today.
Under the award, SapuraCrest's wholly-owned unit TL Offshore Sdn Bhd (TLO) is to construct and charter the three PLSVs to Petrobras.
"Revenue from the award is expected to be generated by the fourth quarter of 2014,'' SapuraCrest said in a separate statement to Bursa Malaysia.

"The award will have no effect on the issued and paid-up share capital of the company and is expected to contribute positively to the group's net assets and earnings for the financial year ending Jan 31, 2015 and beyond,'' it added.

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Stocks Sink to End Month, but Major Indices Still See Big Gains for October

Consumers less negative than data says: U.S. Commerce official

Charts are Bullish

Bigger network for Asia Media

Puchong: Asia Media Group Bhd, the country's largest transit-television network operator, plans to launch a terrestrial digital TV station by as early as the first quarter of next year, said its controlling stakeholder Datuk Ricky Wong Shee Kai.
"We have started testing works in Puchong and Shah Alam early this month, and have allocated as much as RM50 million in capital expenditure next year to help us with the launch in the Klang Valley," Wong told Business Times in an interview at his office.

Wong, who owns slightly more than 45 per cent of Asia Media, is also the chief executive officer of the company.
"A partial launch will be done in the first quarter, and by the second quarter, we should be in full swing," said Wong.

He said the first step in the plan to launch the terrestrial digital TV station is to launch the "out-of-home service".

"Out-of-home service means that people who use public transport such as the Rapid buses and the city's rail service will be able to watch live TV," said Wong.

Read more: Bigger network for Asia Media

Expect All-Time Market Highs in 2012

TimeCom as sole network provider for Scomi

KUALA LUMPUR: Scomi Group Bhd (Scomi), a global oilfield services, transport solutions and marine services provider, has appointed TIME dotcom Bhd as the sole network provider to meet its global connectivity needs across five countries.

The partnership includes the design, implementation and full management by TIME dotcom Bhd of Scomi's Private Data Network connecting Scomi's offices in India, Indonesia, United Arab Emirates, United Kingdom and Malaysia.

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Dow closed at 11 397 down 247, but indicators point to an uptrend - Let's see! Dow R~11 640 KLCI R~1480

The Following Day

21 October 2011

 

P1 to offer fibre-powered broadband in 1Q12

KUALA LUMPUR: Green Packet Bhd’s wireless broadband arm, Packet One Networks (M) Sdn Bhd (P1), will begin offering fibre optic cable-powered high-speed broadband (HSBB) and possibly IPTV services by 1Q12, having sealed a 10-year wholesale agreement with Telekom Malaysia Bhd (TM).

“Along with [the] launch early next year, we [will] also look at providing IPTV and Video on Demand (VoD),” P1 CEO Michael Lai said at the signing ceremony between P1 and TM yesterday.

The agreement gives P1 access to some 1.3 million homes connected to TM’s HSBB network, alongside leading mobile phone operators Maxis Bhd and Celcom Axiata Bhd, which had earlier signed similar wholesale agreements with TM. These services will compete with TM’s own HSBB triple-play (broadband-home voice-IPTV) offering UniFi which has 142,000 customers as at mid-August, 30% of whom are active users of the IPTV service.

P1 currently offers wireless broadband services using its WiMAX network. Lai, who declined to reveal the value of the agreement, said P1 would need very little capital expenditure for the new service as it rides on TM’s infrastructure.

“There will be some allocation for operational expenditure, [which] we will reveal in the future [when it is ascertained],” he said.

The collaboration with P1 is TM’s third agreement with a local telco since it signed the public-private partnership agreement (PPP) with the government in 2008.

Zamzamzairani: The partnership will bring enormous benefits to all end users. Under the agreement, TM is to allow any MCMC-licensed service provider access to the HSBB network that is estimated to cost RM11.3 billion over 10 years for a fee.

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Wall St. gains on euro-fund optimism, Dow up on year

NEW YORK (Reuters) - U.S. stocks jumped 1 percent on Wednesday, pushing the Dow into positive territory for the year, as the euro-zone rescue fund was set to get approval from all EU members.

Momentum buying was partly in play, analysts said. The S&P 500 has gained 13.5 percent from the intraday low hit last week on Tuesday and was on track for its largest seven-day rally since March 2009.

"It feels as though the market is experiencing the possibility of a melt-up," said Hank Smith, chief investment officer of Haverford Trust Co. in Philadelphia.

"You've got a lot of money on the sidelines that just didn't want to take the risk of being invested. That could come back in."

Slovakian lawmakers struck a deal to ratify more powers for the euro zone's rescue fund, known as the EFSF, effectively ending a crisis that threatens the euro's survival and which has weighed on stocks and other risky assets for months.

Slovakia is the last country in the 17-member currency zone left to approve the revamped EFSF.

Bank shares led the advance again, with the KBW Bank Index (Philadelphia:^BKX) shot up 4.1 percent. Citigroup (NYSE:C) gained 6.2 percent to $29.54.

The Dow Jones industrial average (DJI:^DJI) was up 159.92 points, or 1.40 percent, at 11,576.22. The Standard & Poor's 500 Index (SNP:^GSPC) was up 18.51 points, or 1.55 percent, at 1,214.05. The Nasdaq Composite Index (Nasdaq:^IXIC) was up 31.46 points, or 1.22 percent, at 2,614.49.

The S&P 500 traded above 1,200 for the first time in three weeks, taking the benchmark near the upper end of a range it has been stuck at since early August.

If the index is able to stay above resistance at 1,215, that would be seen as a bullish signal, analysts said.

Among earnings, PepsiCo Inc (NYSE:PEP) rose 3.7 percent to $63.19 after it reported slightly better-than-expected earnings and affirmed its full-year target. But Alcoa Inc (NYSE:AA) fell 2.5 percent to $10.04 and ranked as one of the biggest drags on the Dow, a day after reporting results.

(Reporting by Caroline Valetkevitch; Additional reporting by Rodrigo Campos; Editing by Jan Paschal)

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Note: Downward trend channel broken upwards!!