SapCrest, Kencana and Petrofac in JV to develop Berantai

PETALING JAYA: Sapura Crest Petroleum (SapCrest), Kencana Petroleum and Petrofac Energy Developments, a unit of London-listed Petrofac, has entered into a joint venture (JV) to develop and operate the Berantai field located 150km offshore Terengganu.

A risk service contract was signed by Petronas and the operating parties to carry out the development and production of petroleum resources from the Berantai field while a joint operating agreement was also signed between the operating parties.

The contract would be for nine years commencing Jan 31, 2011 with first gas from the project expected by the end of Dec 2011.

Separate filings by SapCrest and Kencana to the stock exchange showed that both would have a 25% stake in the joint operating agreement with Petrofac owning the remainder stake.

Under the agreement, the operating parties would provide one well-head platform with 18 wells (expected to be completed by end-2012) together with related pipeline linking it to another existing platform and the provision of a floating production, storage and off-loading vessel (FPSO).

Additionally, the operating parties would also have the right to deploy works and services to the project while a second well-head platform would be installed in a subsequent phase.

The total development cost including for the subsequent phase, to be incurred collectively by the operating parties, was estimated at this juncture at approximately US$800 million excluding the provision of the FPSO.

Read more...

US STOCKS-Egypt riots spark biggest drop in nearly 6 months

NEW YORK: Stocks suffered their biggest one-day loss in nearly six months on Friday, Jan 28 as anti-government rioting in Egypt prompted investors to flee to less risky assets to ride out the turmoil.

Increased instability in the Middle East drove up the CBOE Volatility Index, the stock market's fear gauge, as investors scrambled for protective positions.
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Developments in the Middle East could be a trigger for investors to sell at a time when many expected a correction after a market rally of about 18 percent since September.


"I think the next two to three weeks, the crisis in Egypt and potentially across the Middle East, might be an excuse for a big selloff of 5 to 10 percent," said Keith Wirtz, president and chief investment officer at Fifth Third Asset Management in Cincinnati, Ohio.

Nasdaq quotations for its main stock indexes suffered an outage of nearly one hour at the open, causing confusion among traders. Nasdaq OMX Group blamed a glitch with its global index data service.

The Dow Jones industrial average ended down 166.13 points, or 1.39 percent, at 11,823.70. The Standard & Poor's 500 Index was down 23.20 points, or 1.79 percent, at 1,276.34. The Nasdaq Composite Index fell 68.39 points, or 2.48 percent, at 2,686.89. For the week, the Dow fell 0.4 percent, the S&P lost 0.5 percent and the Nasdaq dipped 0.1 percent.

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KL bourse set to consolidate further

Share prices on Bursa Malaysia is likely to dip next week with the market barometer testing the 1,500-points level as investors abstain from the market, taking a break for the Chinese New Year holidays.

The stock market will be closed on Feb 1 for the Federal Territory Day and for the Chinese New Year celebrations on Feb 3 and Feb 4. The local bourse will only trade for two days next week.

Affin Investment Bank Head of Retail Research Dr Nazri Khan said the market would continue to consolidate as investors off-load their positions due to next week's holiday-shortened trading week.

He said rumours of impending fiscal tightening by the central bank, using creative measures or non-traditonal measures such as properties, margin and reserve requirement, is expected to exert slight pressure on local market sentiment.

External factors which would continue to weigh on market sentiment next week would include rising inflationary pressure following the hike in oil and commodity prices.

"Further fiscal tightening is expected in China and India to address a property bubble and this is anticipated to impact local sentiment as both nations are Malaysia's big trading partners," Nazri told Bernama.

However, he said the undertone of the market was still intact.

For the week-just ended, sentiment remained bearish as profit-taking in heavyweight counters, despite a mild rebound on Thursday, dragged prices lower.

Read more: KL bourse set to consolidate further

Stock Rally Hits the Skids

The market falls to a level it touched on 2011's first day of trading

Well, that was quick.
If traders needed a reminder what real stock-market volatility looked like, or how quickly two-plus weeks of grinding gains can be evaporated, Friday was the perfect day.
When the dust had cleared, the Dow Jones Industrial Average plunged 166 points to 11,824, the Nasdaq fell 2.5% to 2687, and the S&P 500 was off 1.8% to 1276. The S&P 500 found itself closing at a level where it had first ended on Jan. 5, and has now essentially cut in half its gain for the month and year.

At least the Nasdaq had a specific stimulus — a weak earnings report by Amazon.com (NASDAQ:AMZN) late Thursday, which included a miss on fourth-quarter revenue and drastically lower forecast for first-quarter operating profit, put traders on alert that it could be a rough session for tech stocks.

Still, to the general investor there was reason for optimism: the Nasdaq had returned to its old outperforming ways for much of this week, so a day off wasn’t necessarily cause for alarm for the broader market. Plus, both the Dow and S&P 500 were flirting with big, round numbers to attain (12,000 and 1300) that seemed within reach — especially on a Friday, with nothing but recent bullish momentum at play.

Read more...

NB: TWO trading days b4 cny 2011!

Alamakkk - Stock Markets Are 'Overpriced': Robert Shiller

Stock markets in the developed world have risen too much, Robert Shiller, economics professor at Yale, told CNBC Thursday.

On Wednesday, the Dow bounced above and below the psychologically-important 12,000 for much of the session. But stocks look expensive, Shiller said.

"I would say the market is overpriced based on fundamentals … I'm talking about the US and probably Europe," he said.

Read more...

Marginal move, massive impact

Petronas will start developing 25 per cent of its marginal oil fields from this year

Petroliam Nasional Bhd (Petronas) plans to start rolling out contracts to develop marginal oil fields from this year, a move that will not just replenish oil reserves but also help local companies servicing the industry to grow further.

Malaysia has 106 marginal oil fields with some 580 million barrels of oil, Petronas chief executive officer Datuk Shamsul Azhar Abbas told reporters at a briefing in Kuala Lumpur yesterday.

Marginal fields are small oil fields with less than 30 million barrels of oil and are usually considered uneconomical to develop. But the current high oil price, at about US$87 (RM265) a barrel now in the US markets, makes it attractive for foreign firms with the technology and knowledge to explore such fields.

The marginal fields plans also come under the government's Economic Transformation Programme where incentives were announced to help Malaysia earn some RM50 billion from oil and gas over 20 years.

"We have created a lot of excitement. We are in talks with interested parties and some fields are going through the bidding process," Shamsul said.

This will include fields like Sepat and Berantai, both in offshore Terengganu.

Petronas will start by developing 25 per cent of its marginal fields and it will group five fields into a cluster to make it more attractive for bidders.

It is now finalising bids for its first two marginal field clusters and hopes to award contracts by April this year.

Petronas also expects to start producing oil and gas from marginal fields this year.

The main difference in how Petronas will develop the smaller fields is the risk service contract (RSC). Unlike the production sharing contract (PSC) introduced in 1976, Petronas will own all of the oil under an RSC.

Contractors who build the oil rigs and other facilities will be paid a fee based on their performance.

Under a PSC, oil giants like Shell would partner Petronas and they will also own a percentage of the oil.

But Petronas will not focus on major oil firms for marginal fields but rather woo development and production specialists like UK-based Petrofac, Houston-based Schlumberger and Sweden's Lundin Petroleum.

They will also have to partner local firms that must have at least 30 per cent equity stake. The foreign firms are free to choose their local partners but Petronas will not tolerate sleeping partners.

The knowledge on marginal fields will also be useful for Petronas to develop its own smaller fields overseas.

The new incentives for the oil and gas sector may spur the production of 1.7 billion barrels of oil over some 20 years. This is the oil that will come from marginal fields and existing fields that have matured. Petronas and its foreign partners will use enhanced oil recovery methods where they will extract more oil from old fields.

Read more: Marginal move, massive impact

SapuraCrest Petroleum: Buy, target price RM4.40

AMRESEARCH kept its "buy" call on SapuraCrest Petroleum Bhd (8575)after the firm won a fresh US$32 million (RM97.92 million) contract from Petroliam Nasional Bhd (Petronas) in Myanmar.

The stock is its top pick for the oil and gas sector for its attractive valuations, strong order book, re-acceleration of order book accretion and improving earnings delivery.

AmResearch estimated that SapuraCrest's latest contract will boost its earnings in the 2012 fiscal year by 2 per cent.

While this project will only add a slight 1 per cent to the group's outstanding gross order book of RM9 billion, AmResearch believes that this is just a foretaste of the pipeline of massive new orders given SapuraCrest's established capability in securing new jobs domestically and overseas.

"We maintain our view that SapuraCrest is a favourite to secure offshore installation jobs from Petronas' prolific capital expenditure rollout, potentially up to RM40 billion this year," it said in a report yesterday.

The stock closed at RM3.58 yesterday, which implies a potential upside of 23 per cent to AmResearch's target price.

Read more: SapuraCrest Petroleum: Buy, target price RM4.40

Gamuda: Buy, target price RM5.25

HwangDBS Vickers thinks Gamuda has been an 'unjustified' laggard against its closest peer, IJM Corp, and expects this underperformance to reverse this year.

BUILDER Gamuda Bhd (5398) is a "high conviction buy" as it is a strong proxy to the upcoming mass rapid transit (MRT) project at home and changes in Vietnam's property market, says HwangDBS Vickers Research.

The research house thinks Gamuda has been an "unjustified" laggard against its closest peer, IJM Corp Bhd, and expects this underperformance to reverse this year.

For one, it believes Gamuda's joint venture with MMC Corp Bhd as the project delivery partner for the RM36 billion MRT could be a prelude to clinching a lucrative RM14 billion tunneling works project that has high margins.

In Vietnam, after several false starts, Gamuda looks set to launch its RM6 billion Celadon City (Ho Chi Minh City) development in February after the Chinese New Year, and its RM10 million Gamuda City (Hanoi) in April, with total maiden sales estimated at RM700 million for this financial year.

"When ramped up, Vietnam could be a bigger earnings kicker than the MRT, with RM13.6 billion gross development value for its effective stake (MRT: RM7 billion), higher margins of 18-20 per cent (MRT: circa 10 per cent), and longer duration of 10 years (MRT: 5 years)," it said in a report yesterday.

HwangDBS also thinks Gamuda may be a frontrunner for second phase of the Durkhan highway in the Middle East, as well as the Sungai Langat 2 water treatment plant and the runway portion of the low-cost carrier terminal projects at home.

Gamuda's price closed at RM3.85, implying a 36.4 per cent upside to HwangDBS' target.

Read more: Gamuda: Buy, target price RM5.25

Kencana completes placement, gets RM398mil

PETALING JAYA: Kencana Petroleum Bhd's private placement of 166.7 million shares of 10 sen each via its book-building exercise has been completed.

The issue price that has been fixed at RM2.38 each would result in gross proceeds of about RM397.6mil.

The issue price represented about 1.65% discount to the closing price of Kencana shares on Jan 25 of RM2.42. It is believed that the shares were oversubscribed by 3.5 times.

Maybank Investment Bank Bhd chief executive officer Tengku Datuk Zafrul Tengku Abdul Aziz said the private placement received a strong demand from both international and domestic institutional investors.

This was despite a very tight discount to the closing market price and the correction in Asian equity markets, he said.

“This indicates investors' confidence in the future of Kencana,” Tengku Zafrul said in a statement yesterday. Maybank Investment is the joint adviser of the private placement.

Nevertheless, Kencana had yet to reveal how it is going to use the proceeds as well as the identity of the investors, although it is believed that they include Permodalan Nasional Bhd, Employees Provident Fund and Kumpulan Wang Persaraaan.

Attempts to contact Kencana group chief executive officer Datuk Mokhzani Mahathir was unsuccessful.

Last month, it was reported that Kencana planned to raise RM800mil via a private placement as well as the issuance of Islamic bonds and warrants.

OSK Research analyst Jason Yap believed the fund-raising exercise would be invested in the company's local marginal fields.

Prime Minister Datuk Seri Najib Tun Razak, on Jan 11, announced billions of ringgit worth of investment in the oil and gas industry to enhance oil extraction from marginal fields.


Kencana, alongside SapuraCrest Petroleum Bhd, are widely speculated to be the local frontrunners for the marginal fields developments.

Petronas will unveil a new business model on the development of marginal oil fields and local players are expected to team up with more experienced foreign partners.

“There is no earnings guidance revealed as yet but I believe initial works for the marginal fields would be fabrication of structures.

“The opportunities to co-manage the marginal fields will enable local players to learn and upgrade their portfolio,” Yap told StarBiz.

Read more here

Dow 12K: Signals of Recovery?

Dow breaks through 12,000, first time since 2008

NEW YORK (AP) -- The Dow Jones industrial average broke through 12,000 for the first time in two and half years Wednesday .....

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Pre-CNY Sell Off 2010 and 2011

Muhibbah, JV partner land PetGas RM1.07b job

KUALA LUMPUR: MUHIBBAH ENGINEERING (M) BHD [] and its consortium partner Perunding Ranhill Worley Sdn Bhd have secured a RM1.07 billion contract from PETRONAS GAS BHD [] under the LNG Regasification Project.

Muhibbah said on Wednesday, Jan 26 that the contract was for the engineering, procurement, CONSTRUCTION [], installation and commissioning (EPCIC) alliance for the LNG Regasification Unit, Island Berth and Subsea Pipeline of the LNG Regasification Project.

Under the contract, the consortium will undertake the construction of the LNG Regasification Unit, Island Berth and Subsea Pipeline within the vicinity of the Sungai Udang Port in Melaka.

Muhibbah said the construction works will commence in April 2011 and were expected to be completed at the end of July 2012.

“The contract is expected to contribute positively to the earnings and net assets of Muhibbah Group for the current and future financial years,” it said.

Taken from here

Investors take profits ahead of CNY holidays

THE stock market's main benchmark suffered its second double-digit drop in four trading days, wiping out all of its gains so far this year.

The FTSE Bursa Malaysia KLCI fell 16.54 points to 1526.43 points. Yesterday's close was 0.46 per cent lower than the new year's first day close of 1533.42 points.

The benchmark index closed at a record of 1574.49 points last Monday.

Maybank Investment Bank Bhd's head of retail research Lee Cheng Hooi said the blue chip index could fall to as low as 1525 points.

"The market is sluggish, and some funds are getting out a bit," said Lee, adding traditionally buying interest will come back after the Chinese New Year (CNY) holidays.

The market will still have to breach the 1576 level to sustain a rise. Lee said the research house has a year end 1710 target.

Mercury Securities head of research Edmund Tham, meanwhile, believes that foreign funds are still in the market but they may have taken some profits ahead of the lunar new year.

"Some of them may have locked in gains, ahead of the long holiday period, as they will not be able to react to what's happening in the US and Europe during the period," said Tham.

Next week, the market will be closed for three trading days. On February 1, Bursa is closed for the Federal Territory public holiday, while on the 3rd and 4th, it will be closed for the Chinese New Year.

"The ringgit is strong and Malaysia is an inflation steady country unlike the Philippines and Indonesia," opined Tham to support his assessment that the exchange here is still being eyed by foreign funds.

The ringgit yesterday closed stronger against the US dollar to RM3.0525, as the currency approached a 13-year high. The ringgit reached RM3.0475 on January 14, the strongest level since October 1997.

Normally, a currency would weaken when there is an outflow of funds, while it becomes stronger when there is greater demand.

Normally, a currency would weaken when there is an outflow of funds, while it becomes stronger when there is greater demand.

Read more: Investors take profits ahead of CNY holidays

Buy Malaysian Resources: HwangDBS

One of the best news for Malaysian Resources Corp Bhd (MRCB)is the RM1.2 billion Lot D project that had received approval from the Ministry of Housing for completion in 48 months vs the mandated 36 months, says HwangDBS.

"This means a possible launch in mid-2011 to diversify MRCB’s earnings away from construction, which dominated financial year 2009- 2010 forward earnings (50-75 per cent of EBIT)," adds HwangDBS.

HwangDBS expects the take-up to be strong with at RM1,000-RM1,200 per square feet, which is a discount to the adjacent St Regis.

"This will also coincide with the launch of its strata offices at Lot B (RM1.2 billion in gross development value). About 30 per cent has been sold to committed buyers," HwangDBS said

HwangDBS, however understands that there is no firm commitment for a mass rapid trnsport (MRT) station at KL Sentral, but possibly one at the Museum nearby.

Given the strengthening KL Sentral franchise, Rubber Research Institure Malaysia (RRIM) land project and its robust contract flows in 2011. HwangDBS recommends MRCB a 'buy' with target price of RM3.05 (with a 41 per cent upside). - Reuters

Read more: Buy Malaysian Resources: HwangDBS

Dow average nears 12,000 as tech stocks climb

NEW YORK (AP) -- The Dow Jones industrial average neared 12,000 for the first time since June 2008 Monday as technology and materials companies led broad gains in the stock market.

Technology stocks rose after Intel Corp. increased its dividend and said it would buy back more of its stock. The company gained 1.7 percent.

Materials companies gained 1.2 percent after a report from the National Association for Business Economics showed that economists are more positive about economic growth and the job market than at any time since the start of the Great Recession.

Vulcan Materials Co., Alcoa Inc. and Sealed Air Corp. each gained more than 3 percent. Alcoa, which jumped 3.6 percent, was the top-performing stock among the 30 that make up the Dow Jones industrial average.

The Dow gained 87 points, or 0.7 percent, to 11,960. If it closes above 12,000, the Dow would be at its highest point since June 19, 2008.

Read more...

One Trading Week To CNY - FBM KLCI closes at 3wk low as funds take profit

KUALA LUMPUR: The FBM KLCI closed at a three-week low on Friday, Jan 21, the worst performance since this year as some funds took money off the table, in line with key regional markets on concerns about more monetary tightening policies by China's government.

At 5pm, the KLCI was down 19.08 points or 1.22% to 1,547.43, the lowest since Jan 3 when trading started for the year. Turnover was 1.89 billion shares valued at RM3.16 billion. Declining counters battered advancers 717 to 185 while 224 stocks were unchanged.

Most regional markets also ended in the red, with losses ranging from 0.5% to 2.16%. South Korea's Kospi skidded 1.74% to 2,069.92 -- retreating from an all-time high of 2,119.24 on Wednesday.-- as investors took profits after the main index hit record highs earlier this week, and as concerns about further Chinese monetary policy tightening weighed on shares of big exporters.

Japan's Nikkei 225 1.56% to 10,274.52, Hong Kong's Hang Seng Index 0.53% to 23,876.86 and Singapore's Straits Times Index 0.68% at 3,183.81.

Jakarta's Composite Index was the worst, down 2.16% to 3,379.54. However, China's markets managed to recover part of Thursday's losses, with the Shanghai Composite Index up 1.4% to 2,715.29.

Analysts said foreign funds were taking some money from the regional markets, which was evident from the selling of Jakarta blue chips.

At Bursa Malaysia, KL Kepong fell the most, down 52 sen to RM22.34, PPB and Kulim 30 sen each to RM17.20 and RM13.28 while Batu Kawan shed 26 sen to RM16.92 and IOI Corp six sen to Rm5.89

CIMB fell 30 sen to RM8.34, dragging the KLCI down by 5.28 points while Genting's 32 sen decline to RM11.36 pushed the index down by another 2.8 points. Other banks also fell, with Maybank down 10 sen to RM8.81 and AMMB 14 sen to RM6.76.

Petronas Chemicals fell 15 sen to RM6.20 after a news wire said was due to a downgrade at Macquarie Group Research from "Outperform" to "Neutral".

Read original here

SEGi on course for record-breaking net profit

SEG International Bhd (SEGi) (9792), the country's second largest publicly-traded private higher education provider by sales, is on course to register a record-breaking net profit for the year just ended December 31 2010, says its group managing director Datuk Clement Hii Chii Kok.

Up to the nine months ended September 30, SEGi posted a net profit of RM31.32 million, eclipsing that of RM14.37 million registered in 2003.

In the year ended 2009, SEGi posted sales of RM176.76 million, alongside a net profit of RM10.02 million.

Hii, formerly executive deputy chairman of the Star Publications (M) Bhd, said the quantum leap in net profit was possible because SEGi had started to cater for higher margin courses.

"Previously, we were providing lower margin courses, but now we have branched out to higher margin courses such as in the medical sector, engineering studies, creative arts and early child education studies," he said in an interview with Business Times at his office in Kota Damansara.
On the company's full-year profit for the year just ended, Hii declined to reveal specific targets, but noted that on average, SEGi has been posting some RM10 million in profits every quarter.

A potential RM10 million profit in the final quarter will help boost SEGi's profit for the year to about RM40 million, more than doubling its 2003 record profit year.

"Yes, the fourth-quarter results will be reflective of the previous quarters. For 2011, we also expect the overall pre-tax profit margin to imporove, and consequently the net profit margins. We expect the current year to be even better," said Hii.

He added that SEGi expects student enrolments to grow by as much as 25 per cent this year, mostly in the high-margin courses.

SEGi, which operates six campuses nationwide, services some 23,000 students in various courses. A 25 per cent growth in enrolment will help boost its university's student population to about 28,000 by year-end.

Hii also said the growth in revenue is sustainable and will be exponential.

"Where revenue grows, our cash reserves will also be strong," he added.

Read more...

Mitrajaya proposes share split, bonus issue, free warrants

KUALA LUMPUR: MITRAJAYA HOLDINGS BHD [] has proposed a corporate exercise which includes a one-into-two share split, proposed bonus issue of 139.85 million new shares and also the issuance of 52.44 million free warrants.

It said on Wednesday, Jan19 the proposed share split involved the subdivision of every one RM1 share into two 50 sen shares.

Mitrajaya also proposed bonus issue of 139.85 million new shares on the basis of one bonus share for every two shares held after the proposed share split.

It also proposed to issue 52.444 million new free warrants on the basis of one warrant for every eight shares held after the share split and proposed bonus issue.

Read more...

Masteel, KUB in RM1b plan for inter-city rail transit infra in Iskandar Malaysia

KUALA LUMPUR: Malaysia Steel Works (KL) Bhd (Masteel) and KUB MALAYSIA BHD [] (KUB) have proposed to build and operate a 100km inter-city rail transit system in Iskandar Malaysia which will connect to the MRT line from Singapore.

The companies said in a joint statement on Wednesday, Jan 19, 2011, the project could cost over RM1 billion and consists of up to 25 commuter stations in major towns in the Iskandar Malaysia region in the initial stage.

"The operation of the inter-city rail transit shall be based on a 25-year concession," they said in the statement after the signing of the head of joint venture agreement to undertake the project.

Masteel and KUB would hold 60% and 40% equity stakes respectively in the JV company, Metropolitan Commuter Network Sdn Bhd. The project would be undertaken in three phases and completed within 24 months from project commencement.

The building of the rail transit infrastructure would also be funded by project financing under the public-private Partnership scheme (PPP).

Masteel managing director and chief executive officer Datuk Seri Tai Hean Leng said this would be a major infrastructure project in Johor as it would greatly boost its connectivity and economy.

"The upcoming inter-city rail transit is a reflection of Johor's continued progress thus far, and I believe that it would serve to bring the state to the next level of growth and vibrancy," he said.

The project will ease traffic congestion, estimated to grow at 4.2% every year along Johor and Singapore.

Read more...

Bursa, Thai bourse to start cross-trades by year-end

MALAYSIA and Thailand will start cross-trading of shares by year-end as part of a plan to make Southeast Asian markets more accessible and spur trading, Bursa Malaysia Bhd chief executive officer Datuk Yusli Mohamed Yusoff said. Singapore, followed by the Philippines, will be next to join the drive to link the Association of Southeast Asian Nations (Asean), Yusli said yesterday.
The bourses aim to promote investment in a region with "one of the highest savings rates in the world", Veerathai Santiprabhob, Stock Exchange of Thailand's chief strategy officer, said by phone.

"What we're talking about is to create an electronic link between different markets in Asean," Yusli said in an interview in Kuala Lumpur.

"If Asia is going to be exhibiting strong relative growth compared to the rest of the world, then hopefully if we can get the infrastructure and network up, it can make it easier for investors to come here."

Read more: Bursa, Thai bourse to start cross-trades by year-end

Petronas’ multi-billion ringgit job award likely by end of the month

PETALING JAYA: Petroliam Nasional Bhd (Petronas) is expected to award multi-billion ringgit contracts for the development of marginal oil fields by the end of this month to several consortia comprising local and foreign companies.

It is also believed that Petronas will unveil a new business model on the development of the marginal oil fields and possibly, more incentives for the industry.

“The local players will tie up with foreign oil and gas majors in a consortium where the former would have a minor role as it is something new to them. The locals need to learn,” said an industry source.

“Moreover, substantial financial resources are required. (But) This is an opportunity never presented to local companies. They have always been contractors; now they stand to become concession holders.”

The likely victors of the jobs to develop marginal oilfields will come from across the industry as it would involve “different segments of the industry's full value chain”.

“All legitimate players will have a strong role to play,” said the industry source.

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It is believed that Kencana Petroleum Bhd and SapuraCrest Petroleum Bhd may form an alliance together with a foreign oil and gas major.

SapuraCrest and Kencana have been busy raising capital to fund their expansion plans and are widely speculated to be one of the front runners.

“We are excited ... this would likely involve participation of several local service providers (with strong balance sheet, proven track record and execution abilities and overseas exposure).

“It could also involve strategic tie-ups with independent oil majors and prospecting of strategic assets (floating structures) to develop the marginal fields. If realised, we foresee a re-rating in valuations on the stocks involved in this area,” said Maybank IB Research.

Other potential beneficiaries, according to industry analysts, include Tanjung Offshore Bhd, Petra Energy Bhd, Malaysia Marine and Heavy Engineering Bhd and Perisai Petroleum Teknologi Bhd.

“This will provide more sustainable and predictable cashflow for companies rather than lumpy contracts which most of them are involved in right now,” said an analyst.

The announcement by Petronas is highly anticipated, not least because it marks a major shift in the industry for the first time, Petronas will open up the country's marginal fields to unconventional operators and that too, not just to foreign companies.

“Petronas is looking at different ways of doing business. The concern before has always been deliverability of projects by domestic companies.

“So, local companies have been urged to tie up with foreigners. This would be the second paradigm for the country's oil and gas sector,” said the source.

Enhanced oil recovery and marginal field development are part of the key thrusts under the Government's Economic Transformation Programme.

There are about 25 marginal fields that have been identified, of which 10 including Sepat, Cendor Phase 2 and Berantai are ready for development this year. The total production for these marginal fields are expected to reach 1.7 billion barrels of oil equivalent to a total investment of RM70bil to RM75bil.

“From this, we expect RM5bil to RM8bil worth of contracts to be rolled out in 2011,” said TA Research.

“The whole plan to develop harder-to-reach or marginal oil fields also has some major risks that need to be mitigated as it involves the country's assets. Malaysia can't afford to wrongly execute the plan,” said an observer.

Read more...

Pos Malaysia, Maybank partner to offer shared banking services

Written by Surin Murugiah of theedgemalaysia.com

Friday, 14 January 2011 19:16

KUALA LUMPUR: POS MALAYSIA BHD [] and MALAYAN BANKING BHD [] have teamed up to provide shared banking convenience for their customers at more than 400 Pos Malaysia outlets.

In the agreement signed on Friday, Jan 14, they said the alliance would enable the bank to provide banking services to more customers, especially the underserved segment, through the extensive network of Pos Malaysia’s outlets. The partnership would enable Maybank to especially reach the rural areas of Sabah and Sarawak.

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The three phase implementation programme will see selected Pos Malaysia outlets offer Maybank customers to undertake over the counter bank transactions such as cash deposit and withdrawal for savings account holders and loan repayments in the initial stage.

An automated teller machine would be provided at selected Pos Malaysia outlets to offer banking convenience beyond banking hours as well as additional services such as fund transfer, top-up of mobile credits or 'Touch 'n Go’ card.

"By end June 2011, Pos Malaysia services will expand to cover remittance service and opening of savings account," Abdul Wahid said.

Read more...

19.01.11

Economy to Grow 3-4% in 2011 But Hiring Still Lags: Bernanke

Land re-pricing to boost UEM Land, Tebrau

UEM Land Bhd, Tebrau Teguh Bhd and Mulpha International Bhd are among Malaysian property companies that will benefit from a “re-pricing” of the land and property values in the southern Johor state, according to RHB Research Institute Sdn Bhd.

“The re-rating of the Johor property play started following the negotiation of the land swap deal between Singapore and Malaysia,” RHB said.

“The re-rating process was further accelerated by the introduction of the Government’s economic transformation program.” -- Bloomberg

Read more: Land re-pricing to boost UEM Land, Tebrau

MRT jobs to be out in May, ahead of schedule

CONTRACTS for work on Malaysia's first mass rapid transit (MRT) line, linking Kajang and Sungai Buloh, will be awarded in May this year, an official said.

This is earlier than some analysts expected and will likely be welcomed by the market, which has been looking for projects like this, which come under the government's Economic Transformation Programme (ETP), to show progress.

The project's groundbreaking is supposed to kick off this July.

The Land Public Transport Commission chief executive officer Mohd Nur Ismal Kamal said tenders for the preliminary and main works will likely be called by Syarikat Prasarana Negara Bhd at the end of April, with the awards to be announced "around mid-May".

The Prasarana-appointed project manager, a joint venture between Gamuda Bhd and MMC Corp Bhd, will be able to give recommendations on which firms should get contracts, but it will be the government who has the final say, Nur Ismal said.

It is "not clear" yet if tenders for rollingstock, which include trains, will also be called before the project's groundbreaking, he added.

The Kajang-Sungai Buloh line, expected to be operational by 2016, is the first of possibly at least three MRT lines to come that would run a length of between 55 and 60km.

The three lines may cost RM36.6 billion in total, going by Gamuda-MMC's initial estimates in 2009, but this has yet to be determined.

Nur Ismal said the target cost for the first line is currently being worked out.

A special purpose vehicle set up by the Ministry of Finance Inc will be tasked to raise funds for this project, and possibly other infrastructure projects in future, he said.

There will be incentives for MMC-Gamuda if they can deliver the project below the target cost. Should they incur cost over-runs, however, they will have to pay up the difference, he said.

"We are highly focused on delivering the first line," he said.

Nur Ismal was speaking to reporters in Putrajaya after Prime Minister Datuk Seri Najib Razak announced 19 more projects, including the MRT, under the ETP.

More news on the second and third lines may be unveiled in late March or early April this year, he added.

"The timeline for the (first) MRT tender is slightly ahead of our expectations ... it should be viewed positively by the market," Chris Eng, head of reach at OSK Investment Bank Bhd, told Business Times.

Najib said the MRT will employ about 130,000 people at its peak construction phase and have a significant multiplier impact on associated industries.

Investment in it will see an incremental gross national income contribution of RM21.3 billion come 2020.

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