Wednesday, February 22, 2012

'A good year for oil, gas industry'

'A good year for oil, gas industry'

'A good year for oil, gas industry'

Posted: 22 Feb 2012 09:04 AM PST

KUALA LUMPUR: The outlook of the world's oil and gas industry is expected to remain buoyant this year, said Acteon Group analyst Will Rowley. "Its (2012) going to be a good year. If you look at financial results of major operators and contractors, 2011 was better than 2010. "So, there is no reason this year should not be any better than 2011. There is no shortage of works, only margin to improve and a little bit of cost," said on the sidelines of the three-day Offshore Asia conference and exhibition 2012 here yesterday. For instance, he cited in the last few days, Schlumberger and Halliburton announced more than 40 per cent increase in their profitability year-on-year. "There was also increased profitability across major listed companies and operators, and in terms of cash in hand, it has gone up." In his presentation, Rowley said offshore oil is on an upward trend again. "All activities are increasing, supported by cash-rich operators. There are opportunities in new frontier areas through innovation of products, services and working method. "Exploration is increasing but geographically diverse. Deepwater continues to dominate short-term expenditure and the floating liquefied natural gas/liquefied natural gas is fast becoming a growing niche market." Moving forward, Rowley said the industry's capital expenditure is expected be close to a record level of about US$500 billion (RM1.52 trillion) this year. "There are also technical challenges that would cause more money to be spent," he added. He cited that listed exploration and production companies have in excess of US$200 billion (RM606 billion) in cash, while listed oilfield services firms have in excess of US$48 billion (RM145.44 billion) of cash. On the local front, Rowley said Malaysia is an exciting country for companies like Acteon to work in as there is a lot of potentials in the domestic oil and gas sector. Meanwhile, Petronas development and production senior general manager for petroleum engineering Chen Kah Seong said the national oil company is intensifying its domestic exploration as well as looking at high-value assets overseas as part of its strategies to sustain oil and gas reserves. He said information pertaining to Malaysia's oil and gas reserves life span can be obtained when Petronas announced its financial year results next month.


Asia Media eyes Main Market listing

Posted: 22 Feb 2012 09:11 AM PST

ASIA Media Group Bhd, the country's largest transit-TV network operator, will seek regulatory approval to move to the Main Market of Bursa Malaysia. The ACE Market-listed company plans to do so by the second quarter of this year, its controlling shareholder Datuk Ricky Wong Shee Kai said in an interview with Business Times. "We already have people working on the plan, drafting the proposal. If all goes well, we should be able to make a submission by April this year," Wong added. He reckoned that it will take about two months for Bursa to make a decision on the matter. "Going to the Main Market will give better valuations and reward shareholders who have been with us from day one," said Wong. Wong, who is also chief executive of Asia Media, controls some 45.61 per cent of the company. He added that Main Market-listed companies are able to fetch higher price-to-earnings valuation, and easier to place out shares to institutional funds. "If you are on ACE market, certain funds might have investment restrictions. We have to be realistic on our goals and market condition," said Wong. Asia Media is on an expansion drive and needs fresh capital to help fund the expansion, which is part of the country's economic transformation programme. As part of the plan, Asia Media plans to invest as much as RM500 million to develop the country's first transit-TV infrastructure by 2015. The project will contribute RM604 million in gross national income (GNI) and 400 jobs by 2020. Such a project will require a lot of funds, which could be obtained from bank borrowings, bonds issuance, internally generated funds or new shares issuance. Analysts feel that Asia Media's best bet of raising funds is to go to the Main Market, or via bank borrowings, private placements or using its own cash. Asia Media now has RM12.58 million in cash as opposed to RM968,000 a year ago, its latest accounts for the financial year ended December 31 2011 revealed. For the financial year in question, Asia Media posted a pre-tax profit of RM15.24 million versus a pre-tax profit of RM10.28 million a year ago. "I am not satisfied with the profit level. I think we can do better than that. This year, our internal target is to grow the pre-tax profit by at least 30 per cent," said Wong. An increase of 30 per cent over the 2011 pre-tax profit means that Asia Media could post a pre-tax profit of about RM20 million in the current financial year.


SMS BikePlus riding on Avanti's popularity

Posted: 22 Feb 2012 09:37 AM PST

KUALA LUMPUR: SMS BikePlus Sdn Bhd, the sole distributor of Avanti bicycles and related products, believes Avanti bicycles will be well-received by potential customers, driven by growing public interest in cycling. "In recent years, there's been a growing trend in leading a healthier lifestyle and cycling is the ultimate activity for rejuvenating one's self," said SMS BikePlus director SM Zulfaris SM Zulkifli. The company, which launched its first concept store here yesterday, aims to achieve RM500,000 in revenue every month. This means it would need to sell about 100 bicycles, which sell from RM600 to RM35,000, on top of other related accessories. The bicycles had generated strong response so far, Zulfaris claimed. "Over the past two weeks, even before the concept store was officially launched, it sold more than 20 units," he said. Zulfaris said the target is achievable as the company could get recurring income or up-sell. "This is not like a car business where you sell a car to a customer and may not get recurring income from him, as he sends the car to another place for service. "We believe customers who buy an Avanti bicycle from us will eventually buy more accessories. "We also have professional bicycle-fitting equipment so that customers are able to fit their bicycles to their own requirement. "Plus, we have a full range of bicycles - for kids and for adults. "This means there's opportunity for us to sell a few bicycles to the same customer, for his family," explained Zulfaris. The company expects to achieve monthly sales of RM1.5 million by year-end as it adds two more concept stores in the country, one in Terengganu and the other in Penang. The company, which also has the rights to distribute the bicycles in Indonesia and Brunei, plans to expand to Indonesia early next year. SMS BikePlus is a subsidiary of SMS Group of Companies. SMS Group was founded by Datuk SM Shalahuddin SM Amin, who is co-founder of the Naza Group. Within two years of establishment, SMS Group is already the parent company of 14 companies with a variety of automotive and non-automotive industries, including property management, insurance, manufacturing, limousine services and transportation.


AirAsia sees sharp fall in 2011 net profit

Posted: 22 Feb 2012 07:57 AM PST

KUALA LUMPUR, Feb 22 — AirAsia today reported a sharp fall in net profit by almost half for 2011 but the budget carrier posted record revenue. The airline posted a revenue of RM4.47 billion ringgit for the year, up 13 per cent from 2010. In a filing to Bursa Malaysia, it said net profit for the financial year, which ended on December 31, was ...

Building on foreign interest in properties

Posted: 22 Feb 2012 08:22 AM PST

China has tightened loans,restricted purchases of multiple properties and imposed higher down payments while Singapore has introduced tougher measures aimed at foreign buyers, who have become increasingly visible in the residential sector. "This is a good time for Malaysia to attract foreign buyers. But there are three key areas that we have to improve on, which are security, education and healthcare," said Bandar Utama Development Sdn Bhd managing director, Datuk Teo Chian Kok. Khong and Jaafar managing director Elvin Fernandez said there was a future for properties in Malaysia as more foreigners were expected to invest here. He said once projects under the Economic Transformation Programme kicked in, there would be more demand for residential properties. "The focus now is to make the city more robust and there will be automatic response," he said at a media roundtable at Balai Berita, here, yesterday. Real Estate And Housing Developers' Association (Rehda) immediate past president Datuk Ng Seing Liong said the first national-level Malaysian Property Exposition (Mapex) for 2012 would be a good platform to introduce Malaysian properties to overseas buyers. Mapex 2012, to be held from March 2 to 4 at the Mid Valley Exhibition Centre here, will have 85 developers showcasing more than 300 housing developments across Malaysia. The exposition, themed "Home and Abroad", will also have foreign developers showcasing their projects here for the first time. They include Century Properties Inc from the Philippines and Knight Knox International from Britain. Ng said Mapex 2012 was expected to generate property sales of up to RM100 million.


Bank Islam may assume BIMB listing status

Posted: 22 Feb 2012 08:32 AM PST

BIMB owns 51 per cent of Bank Islam, from which it derives the bulk of its earnings. "BIMB have been discussing the pros and cons of such a move. They may want to simplify the BIMB group structure," one of the sources told Business Times. Bank Islam accounts for some 85 per cent of BIMB's profit before zakat and taxation (PBZT). The rest of the BIMB group's earnings comes mainly from a listed Islamic insurance firm, Syarikat Takaful Malaysia Bhd (STMB), in which BIMB owns a 65.2 per cent stake. A banking analyst from a local brokerage said it would make sense for Bank Islam to be the listed entity as investors tend to buy into BIMB for exposure to the fast-growing Islamic banking operations. "Having Bank Islam at the top helps matters because it stems the leakage to minority interests that happens now at the BIMB level and also gives investors direct exposure to the banking operations rather than through the holding company," said the analyst. The change in structure would also improve valuations, he said, pointing out that currently there was a tendency to attach a holding company discount. Bank Islam managing director Datuk Seri Zukri Samat, when asked about the matter in a recent interview, said: "It's an idea the shareholders may want to consider seriously as the direct listing will give the bank flexibility in raising capital for its future expansion." BIMB could not immediately be reached for comment. BIMB, listed on the Main Market in 1997, is controlled by the pilgrims fund Lembaga Tabung Haji, which also holds an 18.5 per cent stake in Bank Islam. Still, it remains to be seen how another major shareholder of Bank Islam, Dubai Group LLC, would feel about the bank being listed. Dubai Group, which bought a 40 per cent stake in the bank from BIMB in 2006 for RM828 million, or RM1.20 a share, has since diluted its stake to 30.5 per cent after it did not take up its portion of new preference shares in the bank's last cash-raising exercise. Its stake would be further diluted if the bank were to be listed. On the other hand, a listing could provide an exit opportunity for the group, should it want to realise its investment. Bank Islam, which accounted for RM342 million of BIMB's PBZT of RM399.8 million for the nine months to September 30 last year, is keen to expand into Indonesia and Bangladesh. BIMB shares, which have gained 5.4 per cent this year, beating the benchmark FBM KLCI's 1.9 per cent gain, last closed at RM2.14.


AirAsia sees sharp fall in 2011 net profit

Posted: 22 Feb 2012 07:57 AM PST

KUALA LUMPUR, Feb 22 — AirAsia today reported a sharp fall in net profit by almost half for 2011 but the budget carrier posted record revenue. The airline posted a revenue of RM4.47 billion ringgit for the year, up 13 per cent from 2010. In a filing to Bursa Malaysia, it said net profit for the financial year, which ended on December 31, was ...

Euro zone teetering on brink of recession

Posted: 22 Feb 2012 07:50 AM PST

LONDON, Feb 22 – The euro zone economy is in danger of tipping into recession, with the services sector shrinking this month along with manufacturing, tempering a wave of optimism after a new bailout deal for Greece struck this week. Surveys of purchasing managers published today showed unexpectedly weak activity in the region's most powerful ...

IGB upbeat on G Residence take-up

Posted: 22 Feb 2012 08:08 AM PST

KUALA LUMPUR: IGB Corp Bhd expects its strategically-located G Residence condominiums to sell out by the end of the year . Jointly developed with SHL Consolidated Bhd on a 70:30 basis, G Residence is scheduled to be completed by February 2015. It is located along Jalan Desa Pandan here on a 1.46ha site and overlooks the Royal Selangor Golf Club. The two-tower 23-storey residential development incorporates a multi-purpose hall, a gym, 30m lap pool and a common garden. IGB head of property development, Teh Boon Ghee, said G Residence looks over on Lingkungan U-Thant, backs the Polo Club and neighbours the Royal Selangor Golf Club. "G Residence is surrounded by a mature township of shop offices and cosy apartments. It is very affordable considering its location. Great Eastern Mall is just a leisurely 10-minute walk away," he said. So far, 80 per cent of G Residence have been sold out. Priced at an average of RM650 per sq ft, the condominiums are sold between at RM610,000 and RM1 million per unit. "All the units in Block A are sold out. Only 40 per cent units in Block B are still available," Teh told a press briefing here yesterday. "Those who wish to buy G Residence units for investment can expect a rental yield of about 5.5 per cent. A 1,500-sq-ft unit can be rented out for RM4,000," he added. Since the start of 2012, Bank Negara Malaysia mandates banks to explain to borrowers the implications of the loans they take, illustrating to them just how much more they will have to pay should the base lending rate go up. This is applicable to housing and car loans, credit and charge cards, personal financing including overdraft facility and financing for the purchase of shares in the stock market. Asked if the BNM ruling has affected property sales, Teh replied, "not really. Out of all the sales at G Residence, only a few buyers were seen to take a little longer to secure their home loans." He then said it is worthwhile to note that starting July 2012, borrowers will not be penalised heavily for early settlement of their housing loans. Instead, banks will only be allowed to charge for the cost incurred in processing the loan and not for profit loss from the early repayment.


BMMB opens 57th branch in Temerloh

Posted: 22 Feb 2012 08:14 AM PST

KUALA LUMPUR: Bank Muamalat Malaysia Bhd (BMMB) has opened its 57th branch in Temerloh, Pahang. This is part of its repositioning programme to upgrade and relocate its branches to strategic locations. Bank Muamalat chief executive officer Datuk Redza Shah Abdul Wahid said the bank had made a strategic decision to position itself in Temerloh for the local community's convenience and accessibility to Islamic banking facilities. "This is an opportunity for us to reach out to long-established businesses and small-and-medium enterprises here and offer them Islamic banking solutions," he said in a statement. The new branch at Jalan Tengku Ismail was opened by Temerloh district officer Datuk Abdull Muain Abdul Hamid on Monday. Other than Temerloh, BMMB is also present in the state with branches in Mentakab, Kuantan and Pekan.


Mudra Tropika's RM30m project

Posted: 22 Feb 2012 09:39 AM PST

JOHOR-based property developer, Mudra Tropika Sdn Bhd, is currently undertaking a niche RM30 million project to turn what was once an undeveloped enclave into an ultra-exclusive boutique residences in the heart of Johor Baru. Called 28@Gertak Merah, the new lifestyle residential area is located in the old quarter of the southern city in Jalan Mustapha near the Istana Besar's Royal Gardens and the Abu Bakar Mosque. With only 28 limited edition units of semi-detached homes on international leasehold lots, the houses start from RM1,177 million to RM2.534 million. The units cover a total of 1.861ha, which is surrounded by greenery and away from the hustle and bustle of the city's commercial areas. It is learnt that the project is designed with a modern colonial-cum-tropical concept. Every unit will be equipped as a modern smart home with an alarm system, complete with panic buttons and an automatic gate. The residential area will be a 24-hour guarded commune. Mudra Tropika chief executive officer Mohd Nazim Sabtu said the 28@Gertak Merah project's main advantage is its strategic location on prime land, about three kilometres from the Johor Baru city centre. "The main concept and objective is to deliver exclusive living with unobstructed hill view, low density, privacy and landscaped environment. In a nutshell, its an exclusive residential area in the heart of Johor Baru," he told Business Times when met yesterday. Nazim said they had planned the concept of having a low-density boutique residences about two years ago. The 28@Gertak Merah project is the latest addition to Johor Baru's growing, but exclusive market for high-end lifestyle residential properties which is priced more than RM1 million. Once completed, it will be a main part of the Flagship A zone under the Iskandar Malaysia economic development corridor. Nazim, who is also a director of Mudra Tropika, revealed that the company has always put pride in being different when it comes to property development, and the 28@Gertak Merah project is testament of this. Despite talk that this year will see a slowdown in property sales, he said Mudra Tropika is confident that it can achieve 50 per cent of sales for 28@Gertak Merah by this year. The figure equates to RM20 million in the project's gross development value. "The groundwork has started and the project is scheduled to be completed by early 2014," said Nazim. Mudra Tropika was established in 2006 and was initially put in charge to privatise and develop several parcels of state government land. The company has seen the development of several Malay Reserve land in the Nong Chik area starting with Nongchik Heights, D'Permata homes, a block of three-storey commercial shoplots, the Nongchik Riverside commercial project and of late the 28@Gertak Merah project.


Al Rajhi Bank records strong performance

Posted: 22 Feb 2012 09:11 AM PST

AL RAJHI Bank, the world's largest Islamic banking group, has achieved highest net profit among Saudi banks. As of December 31 2011, the bank posted a net profit of 7,378 million riyals (RM5.95 billion), an increase of nine per cent from last year. Its shareholders' equity reached 33 billion riyals (RM26.61 billion), up 8.3 per cent from last year, while total assets increased 20 per cent to 185 billion riyals (RM149.17 billion) last year. Al Rajhi Bank chief executive officer and managing director Abdullah Suleiman Al Rajhi said in a statement that the bank's strong performance was due to the diversification of revenue sources and development of both the investment and banking sectors. The bank expects to maintain the financial results, and is committed to giving its shareholders profitable revenues and offering "excellent" service to its customers throughout its large branch network in Saudi Arabia, Malaysia, Kuwait and Jordan. Meanwhile, Al Rajhi Bank Malaysia's new chief executive officer Azrulnizam Abd Aziz said the bank constantly strives to be on par with other banks in Malaysia. "(The performance) is reflective of the commitment and dedication that Al Rajhi has for its valued customers in providing innovative and fitting financial solutions which are in line with Islamic values," he said. Meanwhile, Al Rajhi was named "Best Islamic Retail Bank" in Islamic Finance News Awards 2011 unveiled last week. The bank was also named the "Best Islamic Bank" in Saudi Arabia and "Best Islamic Retail Bank" for the fourth straight year. The IFN Awards honours the best in the Islamic financial industry and is one of the most prestigious awards and highly recognised by the global Islamic capital markets, the AlRajhi statement said.


'Malaysia must beef up fiscal reforms to balance its books'

Posted: 22 Feb 2012 09:12 AM PST

KUALA LUMPUR: Malaysia must not go slow on its fiscal reforms to balance its books if it does not want to risk fiscal and debt position. Malaysia has run up fiscal deficits for 15 consecutive years and the public debt to GDP ratio is 53.5 per cent, approaching the Treasury's internal prudent fiscal rule of 55 per cent. CIMB Investment Bank said this could crimp the government's ability to take additional debt. Its chief economist Lee Heng Guie warned that the lack of strong political will to press ahead with fiscal reforms could undermine the country's fiscal and debt position. As end 2011, the debt has expanded by 11.5 per cent annually to RM456.1 billion, placing Malaysia with the highest fiscal deficit to GDP ratio in the region. "While one can argue that the ratio is 'safe and manageable' compared to the debt-laden eurozone economies, it does not mean that Malaysia's policymakers can go slow on fiscal reforms. "More room for fiscal manoeuvring is crucial to safeguard growth during these uncertain times." Not only has the debt growth outpaced the 8.4 per cent annual (nominal) GDP growth since 1997, but the debt service charge to revenue is also rising. Lee estimated that the charge has taken up 10.1 per cent of last year's total revenue. "The high level of debt constrains the government's ability to take on additional risk in its balance sheet." Also, if the country does not commit to a credible fiscal reduction plan, it runs the risk of a downgrade of its credit rating in the event of a major change that pushes the fiscal deficit off track. " Poor fiscal management and high levels of debt can jeopardise monetary policy objectives as they can increase inflationary expectations and cause real interest rates to rise and/or the currency to depreciate." While a fiscal deficit is needed to counteract a downturn, the country should not be running a deficit when things are back to normal. The government should aim to balance the books over the economic cycle. The deficit-to-GDP ratio had been brought down from 5.3 per cent in 2002 to 3.2 per cent in 2007 before it hits a record seven per cent of GDP in 2009 during the global financial crisis. In the 2012 Budget, the fiscal deficit is projected to come down to 4.7 per cent of GDP from 5 per cent of GDP in 2011. But CIMB said the pace of fiscal adjustment should not be frontloaded as it could undermine recovery. "The government should target a long-term decline in the public debt-to-GDP ratio, not just its stabilisation at post-crisis levels."


Jan CPI rises by 2.7pc

Posted: 22 Feb 2012 08:13 AM PST

KUALA LUMPUR: The Consumer Price Index (CPI) for January rose by 2.7 per cent, an indication of easing inflationary pressures in Malaysia. The pace of growth from 101.8 to 104.5 was within market expectations, which pointed to a slowing growth momentum. The Statistics Department said yesterday the index increased by 0.3 per cent when compared to December. Bank of America Merrill Lynch economist Dr Chua Hak Bin said food prices have been kept in check during the Lunar New Year holidays in late January. The 13 food items placed under price control from mid till end January included chickens, eggs, cabbages, shrimps and pork. "We expect inflation to average 2.6 per cent in 2012, down from about 3.2 per cent in 2011." Chua expects the biggest inflation risk for 2012 to be the timing and magnitude of any fuel subsidy cuts but this is only likely to occur after the general elections. "We think there is a slightly higher than even possibility that Bank Negara Malaysia will cut the policy rate by 25 basis points at the upcoming March meeting, bringing the policy rate to 2.75 per cent." Inflation pressures are easing and slowing external demand will likely see growth fall below 5 per cent in the first quarter. Bank Negara's recent policy statement was more dovish and balanced, providing room for a possible rate cut.


Takaful Ikhlas wins global awards

Posted: 22 Feb 2012 07:51 AM PST

KUALA LUMPUR: Takaful Ikhlas won two international awards and was honoured as the "Best Takaful Provider" from the Islamic Finance News 2011 and Euromoney magazine 2012. President and chief executive officer of Takaful Ikhlas Sdn Bhd Datuk Syed Moheeb Syed Kamarulzaman said winning the awards strengthens its presence in the takaful industry and verifies its commitment in achieving success. "The awards will keep us more determined to bring Takaful Ikhlas to the frontline for promoting Islamic financial products, specifically takaful coverage by offering highly innovative products and quality services," he said. He added that takaful has strengthened its position locally as well as globally. The award from the Islamic Finance News is the forth consecutive recognition since 2008. Meanwhile, the recognition from the Euromoney Islamic Finance Magazine, which is the Best Takaful Provider Award, is the second received after 2010.


Auto players to meet BNM

Posted: 22 Feb 2012 07:48 AM PST

AUTOMOTIVE players will meet with Bank Negara Malaysia tomorrow to discuss the new lending rules that have caused a sharp drop in industry sales. The likes of Proton Holdings Bhd, Perusahaan Otomobil Kedua Sdn Bhd (Perodua) and Malaysian Automotive Association (MAA) are seeking a review, or at least a realignment, to the policy. "This Friday, we will meet Bank Negara on reviewing the guidelines and reach an understanding, as it is not just Proton or Perodua but the industry as a whole which are facing difficulties. "Let us discuss how we can mitigate this as the long-term impact will be quite big," Proton managing director Datuk Seri Syed Zainal Abidin Syed Mohamed Tahir said. MAA early this week said total industry volume plunged 25 per cent year-on-year in January to 40,948 units from 54,781 units previously. Industry players and analysts blamed the weak figures largely to tightening of the hire purchase loan approval process, which came into effect on January 1 this year. They claimed that it had resulted in a high rejection rate with only 30 per cent of applicants securing car loans. Syed Zainal said the matter is serious as the entire industry eco-system would be severely affected in the long term if no solution was found. "The automotive industry is very much linked to the country's economic growth. We understand the move is in line with the government and Bank Negara's intention to control household debt and we agree to it. "But if this continues, it's not good for everybody, with fewer cars, less income and less taxes, due to the ripple effect," he added. Syed Zainal was speaking to reporters after the preview of "Proton-Yes First 4G Internet Cars" collaboration here yesterday.


AirAsia earnings in Q4 plummet 56pc

Posted: 22 Feb 2012 07:56 AM PST

Net profit for three months ended December 31 2011 was RM135.7 million, down from RM311.1 million a year earlier. Revenue for the same period improved by 9.3 per cent to RM1.27 billion compared with RM1.16 billion, supported by growth in passenger volume and higher fares. AirAsia said the outlook for the first quarter of 2012 should be seen in the context of the current higher prices of oil and aviation fuel. "However, barring any unforeseen circumstances, the directors remain positive for the prospects of the group for the first quarter and remainder of 2012," it told Bursa Malaysia. For the 12-month period of 2012, net profit was 46.8 per cent lower at RM564.1 million compared with RM1.06 billion. Revenue for the same period managed to rise 13.3 per cent to RM4.47 billion from RM3.95 billion a year before. AirAsia said based on the current forward booking trend, underlying passenger demand in the first quarter for the Malaysian, Thai and Indonesian operations remains positive. "Load factors achieved in the month of January were higher than the prior year in Malaysia and slightly lower in Thailand and Indonesia, with average fares higher in all three countries," it said. The group will take delivery of three A320 aircraft in the first quarter of this year, which will be in service in Malaysia, Thailand and the Philippines.


Analysts raise AFG share target

Posted: 22 Feb 2012 09:09 AM PST

KUALA LUMPUR: At least five research houses raised their target prices for Alliance Financial Group Bhd (AFG) after the country's smallest banking group posted slightly better-than-expected third quarter results. The group, which owns Alliance Bank, saw net profit rise by 9.1 per cent to RM121.4 million. This helped its nine-month net profit grow by 14.8 per cent to RM372.3 million, accounting for about 80.9 per cent of an analyst consensus estimate for the full year. AFG's share price rose by 1.1 per cent to close at RM3.79 yesterday after HwangDBS Vickers Research, RHB Research, CIMB Research, TA Research and UOB Kay Hian raised their targets on the stock. Not all, however, had "buy" recommendations on it. "We continue to like AFG for its attractive valuation and strong earnings visibility," said HwangDBS, which kept its "buy" call on the stock and raised its target by 20 sen to RM4.50. AFG's improved nine-month earnings was supported by a strong growth in non-interest income - something the group is trying hard to grow as competition in the lending space intensifies - as well as Islamic banking and lower impairment charges. "We believe that the group should be able to grow its non-interest income, which makes up 24.8 per cent of group net income and is on track to hit 30 per cent of overall income in the medium term. (This is) correlated to strong growth in fee income and investment income," OSK Research said in a report yesterday. AFG had hinted at an analyst briefing two days ago that that a dividend upside surprise was unlikely to happen in the foreseeable future given that it needs to conserve capital to meet Basel III requirements, the research house added. "Although Bank Negara Malaysia's new lending guidelines have reduced industry approval rates, given (AFG's) consistently stringent credit scoring process, its own approval rates are holding up albeit with some decline," Hong Leong Investment Bank Research said. It kept its "buy" call and target price of RM4.34 on the stock.


Hartalega records RM50.7mQ3 net earnings

Posted: 22 Feb 2012 08:00 AM PST

KUALA LUMPUR: Hartalega Holdings Bhd, a rubber glove maker, registered a flat growth in its third-quarter net profit, due partly to the increase in raw material prices and more competitive sales pricing. The company posted a net profit of RM50.7 million for the third quarter ended December 31 2011. Its revenue, however, jumped 28 per cent to RM241.95 million during the quarter. For the nine-month period, revenue gained 27 per cent to RM690.85 million, while net profit rose 10 per cent to RM151.6 million. The significant revenue growth was in line with continuous expansion of the group's production capacity and the increase in demand. "However, the profit-before-tax margin reduced to 26.4 per cent from 33.1 per cent due to the increase in raw material prices of nitrile latex and more competitive sales pricing for the current quarter compared with the corresponding quarter of the preceding year," said Hartalega said in its filing to Bursa Malaysia yesterday. The company's third-quarter pre-tax profit was about 7 per cent higher than that of the preceding quarter ended September 30 2011. Hartalega attributed the increase to stronger sales and a reduction in foreign exchange net loss of RM6.41 million. The net loss in foreign exchange was RM202,000 for the quarter under review compared with RM6.61 million in the preceding quarter. Nevertheless, Hartalega remains optimistic about the remaining financial year and will continue to implement its expansion plan to reduce lead times to meet demand as well as capitalise on the expected increase in demand. "We have further expanded our Plant 5 with two more new advanced high-capacity glove production lines. Both lines have started operations this month. "We also have commenced the construction of Plant 6 with 10 new advanced high-capacity glove production lines and target to start operating the first line in September 2012. "The board (of Hartalega) is optimistic that the group will achieve the internal target growth for both sales revenue and net profit for the financial year ending 31 March 2012," the company said. On Bursa Malaysia yesterday, Hartalega shares closed 1.5 per cent, or 12 sen higher, at RM7.97.


MAHB to call for second KLIA2 retail outlet tender

Posted: 22 Feb 2012 09:10 AM PST

MALAYSIA Airports Holdings Bhd (MAHB) will call for a second tender for the operations of retail, food and beverage (FandB) and services outlets at its new low-cost carrier terminal, KLIA2, from next week. The phase involves 39 lots of key airside retail, FandB and services concessions, MAHB said. The FandB tender will specifically be called on February 29, while the services concessions, which include bureau de change and banking, will be called on March 8. In the departure building, the retail concessions on offer include fragrances and cosmetics, beauty and well-being, confectionery, fashion, sun-glasses, travel and luggage, home decor, watches, Asian souveniers, children's goods, music, books and personal care stores. The stores range from 44 square metres (sq m) to 154 sq m. MAHB senior general manager for commercial services, Faizah Khairuddin, said interest in the outlets among international and local concessionaires is "high". "Everything has to be ready for operations by April 2013," Faizah said at a press conference to update on the tender process here yesterday. KLIA2 is the new permanent low-cost carrier terminal (LCCT) at Kuala Lumpur International Airport in Sepang. KLIA2 offers 35,200 sq m of commercial space. The concessionaires for all 225 lots at the terminal will be announced by July this year. MAHB has projected RM1.6 billion in retail sales from the new LCCT once it starts operating at its full capacity or handling an estimated 30 million passengers in five years. Yesterday, Faizah also gave away RM5,000 worth of shopping vouchers to 10 winners who had participated in the "KLIA Indulge Till You Fly" online contest. The contest was held between December 2011 and January 2012, attracting nearly 800 participants.


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