Finance Ministry Secretary General Tan Sri Dr Mohd Irwan Siregar Abdullah said robust growth in the global sukuk market, led by Malaysia in recent years, had made it an important sector for the government.

“We talked about agro sukuk to help companies involved in farming activities raise capital to finance their businesses, alongside other forms of sukuk.

“We are also looking at other ways to introduce new products in the sukuk market in the coming years.

“This is to enable Malaysia to continue being the industry leader,” he told Bernama on the sidelines of the 4th World Takaful Conference : Family Takaful Summit Malaysia, yesterday.

Mohd Irwan said Malaysia’s Islamic capital market had contributed significantly to the development of the global Islamic capital market.

At the same time, he added, non-Muslim countries like Japan and Korea have been attracted to learn from Malaysia on how to introduce Islamic financing to raise their own capital.

The sukuk segment increased its market share of the overall bond market from 14.5 per cent in 2000 to 47.1 per cent as at the end of 2012.

Malaysia continued to be the world largest sukuk market with 69 per cent of the US$280 billion total global sukuk outstanding as at December 2012.

Earlier, in his speech, Mohd Irwan said demand for Islamic products was increasing tremendously on the back of the global financial turmoil, especially in European countries.

He also said that due to the better offers by Islamic financial products compared to the conventional in the global economy, this sector will be among the main points of discussion at the 4th Global Entrepreneurship Summit 2013 to be held in Kuala Lumpur, in October.

The US President Barack Obama, is expected to make a presentation at the event, on his maiden visit to Malaysia. — Bernama

He said the country certainly needed to focus on the outstanding debt before it became an issue.

“You have to start early, and I think it is very good initiative by the Prime Minister.

“Certainly, you want to do, it before the market forces you to do so,” he said on the sidelines of the CIMB Annual Asia Pacific Conference 2013 yesterday.

Prime Minister Datuk Seri Najib Tun Razak had announced the establishment of the special committee to strengthen public finances and ensure the nation’s long-term fiscal sustainability.

The committee, to be chaired by Najib, will include selected cabinet ministers and heads of departments, in an effort to cut the fiscal deficit to four per cent this year from 4.5 per cent of the gross domestic product (GDP) in 2012.

On the 2014 Budget, scheduled to be tabled in Parliament on October 25, Nazir said the government should balance its budget, while at the same time reinvigorating the private sector.

During his speech, Nazir advocated the inevitability that the journey will not be all smooth, and that complacency can derail the most certain outcomes.

“The most immediate challenge that we all face is the increasing likelihood of a major reversal of hot money out of emerging markets and Asia in particular.

“It is ironic that at this juncture, we are in fear of a US economic recovery.

“The “risk-off” trade and the potential end of Quantitative Easing represent clear and present dangers,” he said.

“My personal view is that we will see temporary volatility in regional financial markets but that our economies and financial systems are strong and our governments have lkearnt the hard lessons from the Asian Financial Crisis, so they will respond quickly, collectively and sensibly.” — Bernama

Chief executive officer Peter Miller said the company would leverage on the growth in the air travel and tourism industry and the people’s awareness on the need to buy insurance for travel protection.

“With 37 million passengers travelling onboard Air Asia, we can expect our earnings to grow healthy,” he told reporters after the company’s annual general meeting here yesterday.

Miller said a key initiative would be their partnership entered into with Malayan Insurance Co Ltd on May 21 to manage travel insurance for passengers of Cebu Pacific Air.com.

He said their 70 per cent acquisition in PT Batavia Mitratama Insurance was expected to be completed in the third quarter of the year.

“We expect this acquisition to contribute to our group in the long term,” added Miller.

Asked on the group’s acquisition plan in Thailand, he said the company has not entered into any negotiations with any party as it was still identifying the right partner.

General manager Sasitharan Krishnan said the company would expand its Tune Insure licence so that passengers travelling to Korea, Taiwan, Sri Lanka and Brunei woudl be insured.

Currently Tune Ins operates in 14 countries.

Tune Ins chalked up a pre-tax profit of RM58.55 million for the financial year ended Dec 31, 2012, up 71.2 per cent, from RM34.19 million recorded in the same period in 2011. — Bernama

The company controlled by Chinese billionaire Wang Jianlin will spend 700 million pounds on a 62-story luxury hotel and apartment building on the land on the South Banks of the Thames.

It also agreed to pay 320 million pounds to buy 92 per cent of Sunseeker International Ltd whose yachts have been featured in James Bond movies, it said in a statement yesterday.

“The bigger Chinese developers need to develop overseas markets as their domestic expansion is limited by the property curbs” on residential homes, said Zuo Hongying, a Shanghai-based analyst at AJ Securities Co. “And they’re fairly cash-rich.”

London has emerged as a haven for foreign wealth, with the pound’s decline attracting investors from Malaysia to Russia to developments like Battersea Power Station, where about half of the project’s apartments have been sold in overseas markets.

Chinese developers, including China Vanke Co, also are expanding overseas to take advantage of demand for real estate abroad from increasingly rich nationals.

Wanda will build the tallest residential building in Western Europe, at 205 meters, on the site upstream from the Houses of Parliament, Stephen Vernon, executive Chairman of Green Properties, the seller of the site, said in an interview today. It is in one of the clusters where tall buildings can be constructed in the city in an area called Nine Elms, he said.

The number of millionaires in China has climbed four per cent from 12 months earlier to 2.8 million, according to the Hurun Research Institute’s findings this year.

“Chinese consumption, particularly high-end consumption is booming,” Wang told reporters in Beijing.

Five of six private jets at a General Dynamics Corp Gulfstream factory in the US, where Wanda bought a plane last year, were earmarked for China, he added.

Wanda plans to expand its investment in the UK and build luxury hotels in eight to 10 cities globally, Wang said.

The company may announce more overseas investments next year, and investors will have a chance to buy Wanda shares in future, he said, without giving a time period for an initial public offering of the closely held company.

Wanda decided to buy Sunseeker because it is building three yacht clubs in China and each needs at least 10 yachts, Wang said.

Sunseeker sold about 190 boats in Asia, excluding Australia, in the past decade, with more than 60 percent of the purchases coming from China including Hong Kong, Gordon Hui, chairman of Sunseeker Asia said in an interview this month.

A lowest-priced Portofino 40 cruiser costs about five million yuan (US$815,000) and the most expensive model costs as much as 230 million yuan, Hui said. — Bloomberg

This was after the main contractor for the terminal building, UEMC-Bina Puri JV – a joint venture between UEM Construction (UEMC) and Bina Puri Holdings – confirmed that the completion date for KLIA2 will be April 30, 2014.

According to the research arm of Kenanga Investment Bank Bhd (Kenanga Research), with the progress for KLIA2 already in the final stages, they believe that it is highly achievable this time around for MAHB to complete the project in 10 months time and secure the Certificate of Completion and Compliance (CCC) and Operational Readiness & Airport Transfer (ORAT) as per the contractual obligations.

Due to the delays on the construction works on KLIA2, MAHB has invoked liquidated and ascertained damages (LAD) on the contractors with a daily rate of an estimated RM200,000 per day.

Should the LAD go through, the charges for the delay would make up to about RM60 million at the end of the project.

Despite the delays on KLIA2, MAHB remains as Kenanga Research’s top pick for the aviation industry on the back of diversified earnings and better airport traffic from increasing competition between low-cost carriers.

The airport operator had registered an 8.7 per cent growth on 1Q13 and has guided a seven per cent traffic growth in 2013.

“Some companies, especially in the food production services, are unwilling to go into halal logistics as their products have already been certified by Jakim,” managing director and chief executive officer, Abdul Aziz Miskon told Bernama on the sidelines of the recent 2nd Global Halal Trade and Logistics Summit here.

He said as an Islamic country that aims to become the global halal hub, ensuring that products reach their destination via halal logistics is important.

“It is also an added value for the companies. We are sometimes asked by our clients, especially from the middle east, if the goods are being sent to them the halal way,” he added.

By using the halal logistics, halal products will be segregated from those that are non-halal, and be put in different storage at a certain temperature to preserve their condition.

Abdul Aziz said although the company had taken a risk in entering the halal logistics business, he believed, the venture would grow.

Being the first logistics provider in Malaysia to be certified by the Halal Industry Development Corp (HDC) in 2009, MILS has recorded a tripling in income since starting out.

Besides halal logistics, the company, a registered Petronas vendor also provides normal logistics services, catering mainly for pharmaceutical products, automotive parts and also electronics.

“We are hoping to double growth this year,” Abdul Aziz said.

He said the halal logistics business in Malaysia was still in its infancy and the challenge was to create awareness among the big companies on its benefits.

“This is where the authorities can help. While there is some extra cost in utilising halal logistics, there are long term benefits for companies,” he added.

For its logistics hub in Pulau Indah, Selangor, MILS has invested RM150 million.

The hub serves as a one-stop, duty free centre for halal logistics. The available services include, inventory management, haulage and distribution services, freight and customs management and a container yard, sterilisation services, vendor managed inventory, light assembly, and cargo consolidation. — Bernama

Chief executive officer Aireen Omar said the news of the 11-month delay in the opening of the new airport, from the target date of June 28, was not a surprise for the frills-free carrier, as it had predicted the delay.

“This is what we’ve always predicted that the airport would only be ready in the second half of next year.

“But we hope the April 30, 2014 airport completion deadline is the final one.

“We cannot afford to defer our expansion plans any further,” she told Bernama in a telephone interview from Paris.

Aireen was responding to Malaysia Airports Holdings Bhd’s announcement yesterday that the new completion date for KLIA2 is April 30, 2014, and will begin operations on May 2.

Aireen said now that the airport’s opening has been delayed, the contractors must ensure safety and quality of the new terminal.

She said as AirAsia was concerned on the safety of its passengers and the airport’s users at large, it hoped that MAHB and the contractors would ready the terminal technically, systematically and operationally.

“These readiness are the ones that usually require substantial amount of time for a smooth and safe operations from a new airport,” she said.

Aireen also said AirAsia, as the largest airline to utilise KLIA2, has yet to receive any official notification from MAHB with regard to the new dates for completion and operations.

“Certainly, lack of transparency right from the beginning has affected all parties in terms of planning.

“What we’re disappointed is that MAHB should have been more transparent and honest about it (the delay) from the beginning,” she said.

The completion date for KLIA2 has been revised several times due to changes made to the original plan including building a bigger terminal to handle more than 40 million passengers and installing an automated baggage handling system.

The new airport, envisaged to handle up to 45 million passengers a year, will have 60 gates, eight remote stands and 80 aerobridges, plus a 32,000 square metre retail space with 225 retail outlets.

The project was first tendered out in 2009.

Its initial cost of RM1.9 billion has since ballooned to some RM4 billion with the bigger capacity plans and recent analyst reports indicate the cost might escalate further to RM4.5 billion.

Prime Minister Datuk Seri Najib Tun Razak announced in January that KLIA2 will be launched on June 28 to coincide with the launch date of the KL International Airport (KLIA) in 1998.

Last month, MAHB announced KLIA2’s fifth delay, without giving any new date. — Bernama

The Singapore Institute of International Affairs chairman Simon SC Tay said following the crisis, Asean countries had done a lot to build the economy as well as political stability, despite being shadowed by two emerging economic giants, China and India.

“But with these two countries facing problems, more attention is now been placed on South East Asia,” he said at the fifth CIMB Annual Asia Pacific Conference here yesterday.

He was a panelist at the conference.

Simon said due to the crisis, integration amongst Asean countries had been emphasised, with more business friendly policies being developed.

However, he disagreed with nationalistic and protectionism policies, saying, it will in the end hurt the economy.

“Asean integration is imperative, particularly in the economic sector,” he said.

Meanwhile, the co-founder and chief executive officer of the Asian Strategy and Leadership Institute (Asli) Tan Sri Michael Yeoh said the Asean leadership needs to address the growing democracy challenge along with demographic and development challenges.

Also a panelist at the conference, he said while development challenges focused on the need for inclusive and sustainable development, and the demographic challenge was about an aging society, that of democracy emphasised human rights and protection.

“How Asean governments deal with this challenge is more important and crucial, when more people expect more freedom and greater human rights,” he added.

The two-day conference focuses on leadership vision and strategies as Asian countries and regional businesses seek to enhance growth, adaptability and stability in a globalising and rapidly changing landscape. — Bernama

According to the United Nation’s Economic and Social Commission for Asia and the Pacific’s (UNESCAP) Economic and Social Survey of Asia and the Pacific 2013, growth was driven by buoyant domestic demand backed by supportive policies.

“Fourth quarter growth was particularly strong in several economies in the subregion. Strong economic growth over the past two decades has resulted in a growing middle class.

“Average annual income per capita in the subregion doubled from US$2,387 in 1990 to US$4,744 in 2011, while the population living below US$1.25 a day (in 2005 purchasing power parity) declined from 45.5 per cent to 14.7 per cent during the same period,” UNESCAP noted in its report.

“This overlapped with a decline in the share of agriculture in gross domestic product (GDP), and a commensurate rise in the shares of industry and services.”

It also added that this structural transformation in turn was possible due to an educated and healthy workforce; during the past two decades, net enrolment in secondary education nearly doubled to two thirds of the population of secondary school age, while infant and under-five mortality rates were more than halved.

Human capital will become increasingly important as countries in South-East Asia seek to maintain the growth momentum amid a challenging global environment.

Looking specifically at Malaysia, the report noted that the country maintained a solid economic growth rate of 5.6 per cent in 2012, up slightly from 5.1 per cent in 2011.

UNESCAP enthused that Malaysia’s domestic demand expanded robustly, offsetting poor export performance.

“Private consumption growth accelerated on buoyant job markets, low inflation and government initiatives, such as civil servant salary hikes and one-off cash assistance to lower-income households

“Similarly, fixed investment growth surged to a multi-year high pace on public infrastructure spending and firm private investment benefiting from the ongoing structural reform agenda to achieve high-income country status by 2020 (Vision 2020).

“In contrast, the export of goods and services decreased from mid-2012, but much more modestly than the magnitude recorded during the peak of the global financial crisis in late 2008 and early 2009,” it stated.

In a joint statement, they expressed confidence in the growth of the investment-linked business in the bancassurance industry, saying over the last five years the segment has registered a compounded average growth rate of 80 per cent.

The empower plan offers five propositions — empower PROTECT, empower CRITICAL ILLNESS, empower MEDICAL, empower LADY and empower EDU PLAN.

“Empower is all about putting the customers in the driver’s seat by giving them the option to pick and choose from a menu so they buy only what they really need and want.

“With a strong strategic bank partner like Public Bank, we have every intention to fully leverage on the bank’s wide and varied clientele and distribution footprint to expand our bancassurance offerings,” said AIA chief executive officer Bill Lisle.

Meanwhile, Public Bank managing director Tan Sri Tay Ah Lek said: “As consumers become more aware about addressing their protection gaps and insuring for the future, many are opting for plans that are customised to suit their needs.

“Customers just starting out in life, in particular, are drawn to these products because they can start on a plan that suits their current affordability and add on options in the form of riders as their income rises.” — Bernama

The MoU will focus on driving human capital development, enhance knowledge and understanding of Islamic finance and ensure close cooperation towards promoting the sector to a broader international audience.

KFHR chairman Fahad al-Mukhaizeem said progress in research, innovation and institutional capacity building was vital for the continued growth of the Islamic finance industry.

“KFH Research has a deep understanding of the opportunities and issues within the Islamic finance industry and remains committed to supporting the sector’s continued development,” he said in a statement yesterday.

Established by Bank Negara Malaysia, INCEIF plays a crucial role in developing human capital for the global Islamic finance industry.

INCEIF president and chief executive officer Daud Vicary Abdullah said the MoU was a strategic partnership that would play a significant role in the development of the global Islamic financial services industry.

“The Middle East is an important and growing market.

By partnering with KFH, a successful and established Islamic finance brand in the region, INCEIF will be able to effectively leverage on this collaboration and help drive tangible development in the Islamic finance industry,” he added. — Bernama

Announced yesterday at a ceremony held at the world-renowned Paris Air Show 2013 in Le Bourget, France, Malaysia Airlines also received the prestigious accolade of ‘Best Airline Signature Dish’ for its satay, a traditional Malay dish, served in the First and Business Class cabins.

This is the airlines’ second year running to win this award.

The World Airline Awards are the global benchmark for airline excellence, with travellers from over 160 countries and more than 100 nationalities taking part each year in the world’s largest independent passenger satisfaction survey to decide the award winners.

These awards are significant achievements for MAS as it recognises the essence of Malaysian hospitality and is integral to MAS’ experience.

The airline’s on-board dining was also selected as the best in the skies, with the signature Satay, Malaysian grilled chicken and beef skewers in spicy peanut sauce, given the accolade of best signature dish on-board any airline.

Receiving the awards at the ceremony, MAS Group CEO Ahmad Jauhari Yahya thanked his team for their commitment in providing true Malaysian hospitality.

“With so much competition, even within our niche of premium full service carriers, it is an honour that Malaysia Airlines is once again recognised for its high service delivery levels and products,” he said.

The national carrier marked the entry of its first A380 into its fleet by having its Five-Star Airline status renewed by Skytrax last year– as the airline embarked on a series of improvements to reposition it as a premium
carrier.

Earlier this year, Malaysia Airlines joined oneworld alliance which has been named ‘World’s Best Airline Alliance’ at the Skytrax World Airline Awards 2013— as it strengthens its competitiveness, enabling it to offer customers an unrivalled alliance global network served by partners including some of the best and biggest airlines in the world.

Meanwhile, AirAsia X, the low cost, long haul affiliate carrier of the AirAsia Group also received the World’s Best Low Cost Airline – Premium Class and World’s Best Low Cost Airline – Premium Class Seat title.

The Skytrax World Airline Awards is the global benchmark of airline excellence and one of the most prestigious accolades for the airline industry.

This annual global survey is conducted over a 10-month period, covering over 200 airlines from the largest international airlines to smaller domestic carriers and travelers from over 160 countries took part in ranking quality standards across more than 40 areas of airline front-line products and services.

AirAsia deputy group chief executive officer Datuk Kamarudin Meranun who is also the co-founder and director of AirAsia X and AirAsia chairman Datuk Aziz Bakar were at the Paris Air Show in France to receive the awards.

Also present were AirAsia Board Director Datuk Fam Lee Ee and AirAsia CEO Aireen Omar.

“We started over 11 years ago with RM40 million in debt, and today we are valued at around RM9 billion in terms of market capital. We have flown over 190 million guests to date and we look forward to welcome our 200th million guest on board soon.

“It is an honour to be ranked as Asia and World’s Best Low Cost Airline for the fifth time in a row, and we would like to thank all of our guests for their support. Our journey does not end here, as we strive to make flying even more enjoyable and affordable for our guests in the years to come,” said AirAsia Group chief executive officer Tan Sri Tony Fernandes.

He also added: “It is also a proud moment to be receiving both the World’s Best Low Cost Airline in Premium Class and Premium Class seat awards for AirAsia X, as it is a testament of our continuous effort to deliver one of the best in-flight comforts. We are consistently seeking ways to improve our service in providing world class flying experience to our guests.”

AirAsia was established in December 2001 as a pioneer in the low-cost carrier industry in Asia. The group has set travel trends with many others following in its trail throughout the region.

The airline also has affiliates in Indonesia, Thailand, Philippines and Japan in addition to Malaysia, servicing 85 destinations across 21 countries, with AirAsia India in the pipeline.

Throughout the past decade, AirAsia has established itself as a market leader and innovator in travel and technology, offering not just flights but a wholesome travel experience with the introduction of mobile apps, interactive travel guides of the countries and destinations that AirAsia flies to, self check-in options and more.

All five AirAsia airlines – Malaysia, Indonesia, Thailand, Philippines and Japan operate one of the youngest fleet of Airbus A320 in the world, with an average age of only three years group wide; with firm orders of 475 Airbus A320 aircraft and deliveries up until 2026.

STRENGTHENING FINANCES: Najib (second left) along with (from left) Chief Secretary to the Government Tan Sri Dr Ali Hamsa, Second Minister of Finance Datuk Seri Ahmad Husni Hanadzlah, Secretary General of Treasury Tan Sri Dr Mohd Irwan Serigar Abdullah and Deputy Finance Minister Datuk Ahmad Maslan during the 2014 Budget Consultation session. — Bernama photo

PUTRAJAYA: The 2014 Budget will be tabled in Parliament on October 25, Prime Minister Datuk Seri Najib Tun Razak announced yesterday.

Najib also announced the setting up of a Fiscal Policy Committee aiming at reducing fiscal deficit, strengthening public finances and ensuring nation’s long term fiscal sustainability.

Najib, who is also Finance Minister, said he would chair the committee which would include selected Cabinet ministers and heads of departments.

“This committee will be served by a fiscal policy office at the Treasury.

“This is to underline the seriousness in terms of managing our fiscal position and reducing our fiscal deficit,” he said in his opening speech at the 2014 Budget Consultation sessions.

The government is on track in reducing the fiscal deficit further, from 4.5 per cent of the Gross Domestic Product (GDP) last year to four per cent this year.

“Our aim is to meet the medium-term fiscal target of around three per cent of GDP by 2015 without jeopardising the growth momentum of the domestic economy and on-going fiscal support for transformation initiatives.

“This will be achieved through a judicious mix of prudent but productive spending, and strengthening revenue enhancement measures that include better tax returns and enforcement by the Inland Revenue Board,” he said.

Also present at the consultation were Second Finance Minister Datuk Seri Ahmad Husni Mohamad Hanadzlah, Deputy Finance Minister Datuk Ahmad Maslan, Chief Secretary to the Government Tan Sri Dr Ali Hamsa, and Treasury Secretary-General Tan Sri Dr Mohd Irwan Serigar Abdullah.

On the consultations, Najib said 96 memorandums were submitted covering a wide spectrum of macro, sectoral and social issues to the Ministry of Finance (MOF) for consideration.

“I believe that among the 96 memorandums, part of it which we feel are in line with the government’s objectives would be considered,” he said.

“It focuses on two elements, invigorating the economy and ensuring the well-being of the people in an inclusive manner,” he said.

Najib said the theme for this year’s consultation is ‘Fulfilling Promises, Accelerating Transformation.’

“This year’s budget is of great significiance to the government that has been given a new mandate to fulfill the aspirations of the rakyat,” he said.

Najib said the government has taken various initiatives to enhance the nation’s competitiveness through promotion of innovative and high value added economic activities.

The government has introduced reform initiatives, particularly in liberalising the services subsectors since 2009.

“Given the many initiatives already in place, I would like to urge the private sector to avail themselves of the opportunities to invest and innovate in the services sector.

“With your active participation, we hope to achieve the targeted investment of RM44.6 billion for the services sector under the 10th Malaysia Plan,” said Najib.

He said the government was cognisant of the challenges confronting the economy, among others, the development of potential growth sectors especially in services, upgrading human capital and talent management particularly for women and youths as well as managing fiscal reforms.

“These areas of concern need to be addressed appopriately to ensure sustainable and inclusive growth,” he said.

Malaysia has a relatively young population, thus requiring the government to invest substantially on youth development, particularly in education and skills training.

He said youths today were more educated, ICT-savvy, and are well connected to social networking through blogging, Facebook and Twitter, where accurate and inaccurate information are spread rapidly.

“They also expect more opportunities in terms of tertiary education, jobs, entrepreneurship and affordable home-ownership.

In addition, they want their voices to be heard.

“The government is mindful of this new trend and has already established the 1Malaysia For Youth programme to provide a common platform for youths to inculcate leadership and volunteerism in nation building,” he added. — Bernama

The proposed initial public offering is the latest in a string of announced or rumoured listings that could return Malaysia to the ranks of top regional IPO markets.

The funds raised through the share sale will help pay off some of the debts of the Malaysian investment company, Dow Jones said in its report Monday, quoting people familiar with the plans.

Government-owned investor 1MDB has bought several power plants since last year, including Malaysian tycoon Ananda Krishnan’s power generation business for US$2.7 billion and Genting Bhd’s domestic energy operations for RM2.3 billion (US$730 million), Dow Jones said.

1MDB is a strategic investment company focused on spurring development in key economic sectors.

Malaysian companies raised billions in share sales last year, making the country Southeast Asia’s top IPO market by deal value, as big issues capitalised on a rising share index and optimism over government plans to spur the economy.

Activity cooled in recent months, however, as investors held their breath in the run-up to hard-fought May 5 elections, but the 56-year-old ruling coalition once again retained power, promising policy continuity.

At least a half-dozen new IPOs have been reported or are in the works, including that of Malaysian budget long-haul carrier AirAsia X, which has said it plans to raise more than 400 million in a listing July 10. — AFP

SUPPORTING SMES GROWTH: (From left) Azizi, YB Datuk Amar Abang Abdul Rahman Johari Tun Abang Openg, Sarbini and, president of Sarawak Chamber of Commerce and Industry, Datuk Abang Hj Abdul Karim Tun Abang Openg, during the launch of TM SME BizFest in Kuching. The event is targeted at the mass SMEs market comprising Micro and Small markets including those operating their business from home.

KUCHING: Telekom Malaysia Bhd (TM) has officially concluded the TM SME BizFest 2013 with its last stop in Sarawak based on its position as one of the top five states in Malaysia with one of the highest number of SME establishments in the nation.

The event was officiated by Minister of Housing and Minister of Tourism Sarawak, YB Datuk Amar Abang Abdul Rahman Johari Tun Abang Openg, while Azizi A Hadi, TM executive vice president (SME) and Sarbini Hamdan, state general manager, TM Sarawak were also present at the event.

Previous stops of the TM SME BizFest 2013 in Johor and the Klang Valley had managed to attract close to 10,000 participants in total from the Malaysian small and medium enterprise (SME) business community.

The event – already in its second year – is targeted at the mass SMEs market comprising Micro and Small markets including those operating their business from home.

TM chose Sarawak as one of the venues for the event because it is positioned as one of the top five states in Malaysia with one of the highest number of SME establishments in the nation.

During the opening speech, Azizi introduced the TM SME BizFest as a series of events which allows SME entrepreneurs to keep themselves updated on the latest ICT solutions to help them make their businesses easier.

“This event was organised for the first time last year and we are pleased that it was a success, with attendance of more than 3,000 SMEs, from which we have received positive responses as feedback from them,” he said.

TM had been encouraged by this success and had thus decided to continue the event this year and bring it up a notch with the theme, ‘Expanding Further’.

“We strongly believe in the future of SMEs in Malaysia and are proud to be able to play a part in supporting SMEs growth,” Azizi added.

Overall, TM’s approach to SMEs is ‘Business Made Easier’ by focusing on in-office and out-of-office solutions.

For instance, TM has products such as Office-in-a-Box, UniFi, HyppTV, SmartMap, and TM Voice for in-office solutions, while for out of the office, they have Marketing Tool, TM WiFi, and BizApp Store.

With a wide range of over 40 innovative ICT products and services designed to increase SMEs productivity and operational efficiencies, Azizi pointed out that they are confident these SMEs will benefit from their TM product bundling and solutions.

Highlights of the event also centred around business networking sessions, group seminars by business coaches, and a wide range of ICT solutions on exhibitions by TM and its business partners.

In addition, there was BizSpotz sessions running from morning to afternoon, featuring successful business icons who shared their journey and views in the business world.

Among the business icons who made their appearance at the knowledge sharing sessions were Sazzy Falak, founder of Street Fashion by Sazzy Falak; Mejar (K) David C.H. Teo, CEO of Metrowealth Movies Production Sdn Bhd; Amin Aznizan, Executive Director of Borneo to the World; Ursla Unnie Thomas Salang, Director, SME Corp Malaysia Negeri Sarawak; and Kenny Hoo, Founder and Chief Researcher of GOOD FENG SHUI Geomantic Research.

According to RHB Research Institute Sdn Bhd (RHB Research) in a report on the group, IJM Plantations continues to have to sell its CPO in Sabah to refineries at a RM100 per tonne discount to market prices.

This is due to demand still being weak and the impact of the new CPO export tax regime in Malaysia.

The new export tax regime has resulted in pure planters like IJM Plantations, particularly in Sabah (where the refinery capacity of 7.5 million tonnes outweighs the CPO production of the state of 5.8 million tonnes) having to absorb the equivalent of the export tax amount (currently at 4.5 per cent) when selling to domestic refineries.

IJM Plantations continues to sell mostly on the spot market, given the current lackluster CPO prices.

However, the company believes CPO prices could have a short window of opportunity to strengthen in the next few months, given its view that FFB production in the 2HCY13 could be weaker on a y-o-y basis, and is hoping for CPO prices to range between RM2,400 to 2,500 during this period.

Bearing this in mind, IJM Plantations’s year-end stock levels for the financial year ending March 2013 (FY03/13) are slightly higher than usual, as the company hopes to take advantage of higher prices in the short term.

Adding to that, the company’s growing contributions from its Indonesian plantations would also help to offset the weak price factor, as FFB production in Indonesia is expected to double in financial FY03/14 and then triple in FY15.

The research house also highlighted that year to date (YTD), May production in Malaysia rose a significant 45.3 per cent y-o-y, but growth is expected to moderate as this is from a low base in April and May 2012, which saw production negatively affected by delayed El Nino effects.

With a normalisation of cropping patterns this year, the company expects the strong growth to moderate in the latter half of 2013, projecting fresh fruit bunch (FFB) production to fall about five to seven per cent y-o-y during this period.

“Based on this projection, management expects FFB production growth in Malaysia for FY03/14 to remain relatively flat y-o-y,” RHB Research noted.

“However, given the 45 per cent YTD growth thus far, we believe this may be too conservative an assumption, and project Malaysian FFB growth at 4.3 per cent instead (up slightly from our previous assumption of 2.4 per cent) for FY03/13.”

“For FY03/14 to FY03/15, we project FFB growth of zero to one per cent pa from Malaysia, given its replanting activities of 700 to 800 acres a year,” the research house added.

More notably, IJM Plantations has been planting up its Indonesian landbank more aggressively over the last three years, planting up 6,000-8,000ha per year. As at end-FY03/13, IJM Plantations had planted close to 27,500 hectares (ha) of land in Indonesia, with 3,761ha already matured, producing 55,000 tonnes of FFB.

The research house speculated that over the next two years, between 4,000 to 5,000ha of landbank would mature every year, thereby more than tripling its current FFB production in Indonesia by end-FY06/15.

“We now project the group’s total FFB production growth at 12.1 per cent for FY03/14 (up from 11.6 per cent), followed by nine to 11 per cent growth for FY03/14-15 (from 10-12 per cent).”

IJM Plantations’s Indonesian plantations are projected to contribute about 14 per cent to total group production in FY03/14 (from eight per cent in FY03/13), before rising to 21 per cent in FY03/15 and 28 per cent in FY03/16.

“Given the fast pace of planting over the last few years, the ‘easier’ areas with the relevant permits have mostly all been planted up already, and as such IJM Plantations has a lower new planting target of 3,000ha for FY03/14.”

While there is still another 7,000 to 8,000ha of land left to be planted, including a relatively new acquisition of 4,620ha which has not been cleared yet. Assuming 2,000 to 3,000ha of land is planted up every year from FY03/14, IJM Plantations would have exhausted all its Indonesian landbank by FY03/16.

At this current juncture, the RHB Research explained that the company does not have any major ongoing negotiations for new landbank acquisitions, preferring to focus on ramping up production first.

The research arm of Kenanga Investment Bank Bhd (Kenanga Research) stated that positive contributions from the REIT’s yield accretive asset acquisition in Australia of about 8.5 per cent would drive growth going forward, while rental reversions were stable and limited to a maximum reduction of two per cent per annum.

It added that the group was keen on acquiring assets by financial year 2014 (FY14) from its parent, KPJ Healthcare Bhd (as the former has rights for the first option to acquire KPJ properties), and third parties (such as retirement homes in Australia) while acquisition news could be as soon as the third quarter of 2013.

“Management appears extremely interested in third party acquisitions to accelerate growth as acquiring from the parent is a lengthy three to four year process as the parent prefers to spin-off matured assets.

“However, the REIT has limited gearing room as its current gearing level is now 0.48 times (close to the Security Commission’s limit of 0.5 times).

“If the group places out 20 per cent (696.2 million new units) of its fund size, based on placement price of RM1.25 (five per cent discount to the five-day volume-weighted average price of RM1.32), it will raise proceeds of RM174.6 million.

“If the entire placement proceeds are used for acquisitions, we expect gearing to be lowered to 0.43 times,” the research team explained.

The REIT was initially formed to own and invest in six syariah-acceptable properties, which comprise of KPJ healthcare centres; the group rents out the entire asset, thus occupancy rates are 100 per cent.

To date, the REIT has completed five acquisition exercises with a total of 25 properties, and total asset value increasing by 178 per cent to RM1.46 billion since listing in 2006.

Australian assets currently make up 10 per cent of total group asset composition, with Malaysia taking 85 per cent and Indonesia the remaining five per cent.

With Kenanga Research’s estimated RM174.6 million from placement proceeds while assuming 8.5 per cent net property income (NPI) yield for the Australian asset acquisition, it expected FY14 estimated RNI to increase by 22.3 per cent to RM74.3 million.

This was on the assumption that the annualised impact of the acquisition while FY14 estimated dividend per unit (DPU) would increase by 3.9 per cent to 9.4 sen, it said, while pointing out that many other Malaysian REITs (M-REITs) were finding it challenging to acquire local assets given the low cap rate environment.

“Al-Aqar REIT is currently trading at FY13 to FY14 estimated gross yields of 6.4 to 6.7 per cent, price earnings ratios of 15.8 to 15.1 times, and FY14 estimated price to book value of 1.1 times.

“We believe the stock deserves a slight premium to its peers as it is the only healthcare M-REIT and operates within a niche market with minimal direct competition, while downside to the stock is limited as reversions reductions are capped to maximum two per cent per annum,” Kenanga Research summed up.

The research team derived a target price of RM1.41 per unit (11.7 per cent total return) and remained bullish on the REIT based on FY14 estimated target net dividend yield of 6.4 per cent.

According to HwangDBS Vickers Research Sdn Bhd (HwangDBS Research) in a research report on the group yesterday, Petronas Gas’ management indicated that the Melaka regas plant would be commissioned soon.

The development was in line Petroliam Nasional Bhd’s (Petronas) plan to commission the plant by end 2Q13, after previous delays with initial target dates of August 2012, and December 2012.

“We expect stronger 2H13 earnings for Petronas Gas with the commencement of the Melaka Regas plant.

“This is the key inflexion point for the stock given previous delay,” said the research house.

Petronas Gas currently receives stable earnings under the fourth gas processing and transmission agreement (GPTA) for its Peninsular Gas Utilisation (PGU) pipeline.

The LNG terminal would provide similar secured earnings to Petronas Gas with the bulk of earnings from reservation charges and variable return based on gas volume, and possibly incentives for efficiency gains.

The fixed component is slated to help the group to recoup the capital expenditure (capex) incurred with the research house stating, “We do not expect start-up losses in the first few years of operation.”

“We expect the plant to enhance Petronas Gas’ financial year 2013 (FY13) forecast net earnings by two per cent and five per cent per annum.”

To add on the good news, it was noted that the LNG terminal has received it’s first tanker.

According to Platts vessel tracking data, the 152,900 cubic metre (cu m) Seri Bijaksana owned by MISC Bhd, a subsidiary of Petronas, is carrying cargo from Nigeria to the Asia Pacific.

Ship tracking data showed that it was diverted when it was halfway through the Straits of Malacca, making a 90-degree left turn to the terminal before arriving on April 30.

The report quoted a source as saying that the vessel is discharging its cargo, and will probably take 40 days maximum to commission the terminal. The Melaka regas plant also showed some good visibility for the future.

The plant includes two floating and storage units to receive and store LNG, an island jetty, and regas units and pipelines to transport the LNG to the PGU network.

It was reported earlier that Petronas has signed three LNG import agreements. The first, signed in May 2011, was with France’s GDF Suez to supply 2.5 million metric tonnes (MT) of LNG over three and a half years starting August 2012. The second is with Qatargas for the supply of 1.5 million MT per year of LNG over 20 years, with deliveries starting in 2013. The third is with Norway’s Statoil, signed in June last year.

With Barisan National retaining control in Johor after the election, this has removed doubt surrounding the Pengerang regas project proposed by Petronas, with a final investment decision by 1Q14.

Petronas Gas is the front-runner for the Pengerang regas plant under the RAPID project given its involvement in the Melaka plant, and the Pengerang plant would be connected to the main PGU pipeline network.

The US$20 billon RAPID project in Pengerang with a capacity of 300,000 barrels per standard day will supply feedstock to RAPID’s petrochemical complex as well as produce gasoline and diesel that meet European specifications.

The Pengerang Integrated Petroleum Complex (PIPC) under RAPID will comprise 22,000 acres of industrial land and be home to oil refineries, petrochemical plants, and an LNG storage and regasification plant, to be commissioned by 2017.

The research house believed that the development of new regas plants and continued gas-related capex by Petronas will be the key rerating catalysts for the gas player.

It also added that Petronas expects to make a final investment decision for RAPID by 1Q14.

“We believe the investment for this regas plant in Pengerang will be much larger than the RM2 billion Malacca regas plant (3.8 million MT per annum capacity). Petgas is the front-runner for the Pengerang regas plant under the RAPID project given its involvement in the Melaka plant, and the Pengerang plant would be connected to the main PGU pipeline network.

“We expect immediate earnings accretion from new investments and estimate that every RM1 billion in investments would raise Petgas’ discounted cash flow valuation by 19 sen per share, assuming 11 per cent project internal rate of return.”

The surplus will expand 57 per cent to 490,000 metric tonnes this year, enough to meet US demand for six months, according to RCMA Commodities Asia Group, the Singapore-based company that has traded rubber for nine decades.

Futures in Tokyo, a global benchmark, will drop at least another 4.9 per cent to 225 yen a kilogramme (US$2,373 a tonne) by the end of December, according to the median of 16 analyst estimates compiled by Bloomberg. Five anticipate 200 yen, a price last seen in 2009.

Thailand, Malaysia and Indonesia, representing about 70 per cent of supply, failed to agree on new curbs at a meeting last week after reducing exports by 300,000 tonnes in the six months through March. While record global car production signals rising demand for tyres, that won’t end the glut caused by farmers expanding output by 18 per cent in three years after prices more than doubled since the end of 2008.

“There isn’t enough demand out there to absorb the surplus,” said Kazuhiko Saito, the chief analyst at Fujitomi Co in Tokyo who has covered the market for almost a quarter century. “We’re going to see an influx of rubber unless governments intervene as production from Southeast Asia moves into high gear.”

Rubber fell 22 per cent to 236.7 yen on the Tokyo Commodity Exchange (Tocom), this year and is now 56 per cent below the record 535.7 yen reached in February 2011. Lower prices should reduce costs for Bridgestone Corp, Michelin & Cie and Goodyear Tire & Rubber Co, the biggest tiremakers.

The Standard & Poor’s GSCI gauge of 24 raw materials dropped 2.5 per cent since the start of January and the MSCI All-Country World Index of equities climbed 7.7 per cent. Treasuries lost 1.2 per cent, a Bank of America Corp index shows.

RCMA Commodities Asia was anticipating a 2013 surplus of 353,000 tonnes in March and increased its estimate because of signs that demand in China, Europe and the US is weakening.

The International Rubber Study Group also may need to increase its forecast for a 179,000-ton glut because consumption is weaker than anticipated, said Lekshmi Nair, a senior economist at the Singapore-based group. The 35-nation body said in January that demand would rise about six per cent to 11.6 million tonnes and production 3.2 per cent to 11.8 million tonnes. The new forecast will be released next month, Nair said.

Thailand, Malaysia and Indonesia also failed to extend their export curbs at a meeting in April. Tokyo futures had already plunged more than 20 per cent from this year’s high of 337.8 yen in February by then. Officials from the International Tripartite Rubber Council met again June 12 and 13 without deciding on any new measures.

Thailand had sought to reverse the slump by unilaterally extending its export restrictions for 60 days. While that helped futures rally to 299 yen by May 13, the slump resumed before the additional curbs ended. Thai export prices fell 14 per cent to 85.5 baht a kilogramme (US$2,780 a tonne) this year from the peak of 198.3 baht in 2011, according to data from the Rubber Research Institute of Thailand.

The imbalance between supply and demand may be superseded in Tokyo trading by moves in the yen, which reached a four-year low last month against the dollar amid the Bank of Japan’s monetary stimulus measures.

A weaker yen increases the appeal of futures denominated in the currency and was the main reason why the Tocom rubber contract jumped 20 per cent in less than four weeks from the middle of April, said Makoto Sugitani, head of sales at commodity broker Newedge Japan Inc. — Bloomberg

EasyJet, issuing a statement amid the Paris Air Show where European aircraft maker Airbus is battling for orders with US rival Boeing, said that is has secured an option to buy an additional 100 A320neo planes.

“I am delighted that easyJet is able to announce its fleet plans today,” said the airline’s chief executive Carolyn McCall.

“All manufacturers competed hard for the easyJet business.

“Both Airbus and Boeing offered us new generation aircraft that met our requirements and offered greatly improved fuel efficiency.

“Ultimately, Airbus offered us the best deal, and at a price with a greater discount to the list price than their landmark fleet purchase with easyJet in 2002,” she added.

EasyJet is to acquire 35 current generation A320 aircraft for delivery between 2015 and 2017 under an existing option agreement, and 100 new generation A320neo planes for delivery between 2017 and 2022 under a new deal.

It added that 85 of the 135 ordered aircraft will be used to replace ageing passenger planes, with the remaining 50 used to build on easyJet’s strategy of increasing its seat capacity of between three and five per cent annually.

The huge transaction is subject to approval by easyJet shareholders, including its largest, the airline’s founder Stelios Haji-Ioannou who has bitterly opposed the company’s desire to purchase new planes.

Haji-Ioannou, or simply Stelios as he is widely known, was meanwhile last year defeated in his attempt to throw out a multi-million-pound pay deal for executives.

Stelios and his family currently own almost 37 per cent of easyJet.

The founder argues that easyJet should be returning money to shareholders via the payment of dividends, rather than increasing its seating capacity. — AFP

The IMF, one of a trio of lenders overseeing Dublin’s 85 billion euro (71.8 billion pounds) bailout, said Ireland’s economy grew modestly in 2012 for the second year in a row and employment during the first quarter of this year was up one per cent from the same period a year ago.

The IMF’s board approved the tenth disbursal of about US$1.27 billion, bringing to US$27.79 billion the total funds that Ireland has received from the IMF so far.

The country must meet conditions attached to the loan to get each subsequent disbursement.

Acting chairman David Lipton of IMF’s executive board said Ireland has been steadfast in two-and-a-half years of work to control its deficit and improve its economy as public debt is expected to peak this year with economic growth accelerating next year.

Unemployment remains high at 13.7 per cent and a quarter of bank loans “are non-performing and losses persist, hindering new lending,” said the IMF.

In April, the IMF forecast Irish growth of 1.1 per cent this year and 2.2 per cent in 2014.

Ireland was the second euro zone country to be bailed out by the IMF in 2010, after Greece, and has been one of the success stories in the euro-zone debt crisis, with European and IMF leaders eager to congratulate the country for the fiscal discipline that has helped it get back on its feet.

Inspectors from Ireland’s ‘troika’ of lenders said on May 9, the country remained on track to complete its bailout at the end of this year, but warned it needed to do more to address entrenched unemployment and bad debts.

The IMF cautioned in April that Ireland’s prospects hinged on a recovery in the European economy and further help by European leaders to ease the burden of the country’s banking debt.

Ireland agreed earlier this month to a detailed review of its troubled banks’ loan books this year to placate its international lenders, and will have its stress tests before a Europe-wide exercise in 2014. — Reuters

“It was possible that the exchange rate would depreciate further over time as the terms of trade declined, which would help to foster a rebalancing of growth in the economy,” the Reserve Bank of Australia (RBA) said in minutes of its June 4 meeting released in Sydney.

“The board also judged that the inflation outlook as currently assessed might provide some scope for further easing, should that be required to support demand,” it said.

Governor Glenn Stevens and his board lowered borrowing costs by two percentage points over the past 20 months to 2.75 per cent, joining global counterparts in embracing record-low rates to help combat currency strength. He is aiming to rebalance growth as mining regions in the north and west thrive and manufacturers in the south and east struggle.

“We are left with no doubt that the RBA remains on an easing bias, but today’s minutes provide no new guidance on whether or not the RBA will pull the trigger,” said Alvin Pontoh, a Singapore-based Asia-Pacific strategist at TD Securities. “There is little here to dissuade us from expecting the RBA to stand pat again next month.”

Since the RBA’s May cut, the Aussie has fallen about seven per cent, also helped by speculation on a change in US policy.

“Interest rates had declined further as a result of the board’s decision at the May meeting,” the RBA said, referring to its unexpected decision to cut the cash rate in that month.

“The exchange rate had also depreciated noticeably, though it remained at a high level considering the decline in export prices that had taken place over the past year and a half.”

While the nation’s terms of trade, a ratio of export prices to import prices, peaked in 2011, Australian industry has been squeezed by a currency that held above $1 from mid-June last year to May 10, the longest stretch above parity with the US dollar since the Aussie was freely floated in 1983.

The Federal Open Market Committee starts its two-day policy meeting yesterday, a month after Fed Chairman Ben S Bernanke said that stimulus efforts, which have included the asset buying program known as quantitative easing, could be scaled back should the US employment outlook show ‘sustainable improvement.’ — Bloomberg

Inbound non-financial investment increased 0.3 per cent from a year earlier to US$9.26 billion, the Ministry of Commerce said in a statement, after a 0.4 per cent gain in April.

China’s outbound investment rose 20 per cent in the first five months of the year to US$34.3 billion, compared with a 27.4 per cent pace in January-April.

The report follows data indicating capital inflows slowed last month while growth decelerated in exports, industrial production and lending.

Confidence is fading in an economic rebound this quarter, with investment banks from Morgan Stanley to Barclays Plc cutting their 2013 expansion forecasts.

“Growth in developed markets is picking up while China’s growth is slowing down, and China is no longer an ideal place for low-value-added manufacturing,” Dariusz Kowalczyk, senior economist and strategist at Credit Agricole CIB in Hong Kong, said before the release.

South Korea-based Samsung Electronics Co, the world’s largest smartphone maker, may boost investment by US$1 billion in Vietnam’s Bac Ninh province, the state-run Dau Tu newspaper reported last week.

The Chinese government is trying to streamline regulatory procedures for foreign investors to boost inflows as Premier Li Keqiang seeks to pare the government’s role in the economy.

Huang Feng, deputy director of the Commerce Ministry’s FDI department, said June 4 that the ministry’s examinations of projects fell to about 100 in 2012 from more than 3,000 in 2005.

The National Development and Reform Commission, China’s top economic-planning agency, said March 5 that FDI may rise about 1.2 per cent to US$113 billion this year.

Outbound investment was projected to increase 15 per cent to US$88.7 billion, the agency said in its annual report to the legislature. — Bloomberg

AIMING FOR FURTHER LISTING: Photo shows (from left) Lankester, Dr Napthine, Fernandes, and commercial manager of Air Asia X, Australia, Stuart Myerscough, unveiling the opening price of Tune Hotel Melbourne. After the launch of AirAsia X’s IPO and the proposed listing of AirAsia Indonesia, budget hotel operator, Tune Hotels, is expected to be listed in 2015.

KUALA LUMPUR: After the launch of AirAsia X’s initial public offering (IPO) and the proposed listing of AirAsia Indonesia, budget hotel operator, Tune Hotels Regional Services Sdn Bhd (Tune Hotels), is expected to be listed in 2015.

Tune Group founder Tan Sri Tony Fernandes said the company aims to be listed on Bursa Malaysia Securities Bhd.

“We are looking for an IPO in the next two years. Tune Hotels will be the sixth entity under the Tune Group to go for listing,” he told reporters at the launching of Tune Hotels’ first hotel in Australia yesterday.

Fernandes said before the proposed IPO, Tune Hotels should well-position itself in the international hotel industry, with a sustainable cashflow and business strategies.

“Profitability is the most core issue when a company goes for public listing. This is because the company is committed and answerable to the people who have invested in the company,” he said.

Tune Hotels is part of the Tune Group, a lifestyle business conglomerate co-founded by Fernandes and Datuk Kamarudin Meranun.

AirAsia Bhd, the home airline unit of Tune Group and the AirAsia Group, was listed in November 2004, followed by the listing of Asia Aviation – an investment holding company of Thai AirAsia, on the Stock Exchange of Thailand in May 2012.

Tune Insurance was listed on the local bourse in February.

AirAsia’s long-haul affiliate, AirAsia X, followed suit with its IPO launch last week.

AirAsia Indonesia is expected to be listed in the fourth quarter of this year, with up to US$200 million to be raised through the proposed IPO.

Meanwhile, Tune Hotels chief executive officer (CEO) Mark Lankester said a 2015 listing would be the most appropriate period for the company as it has laid out clear expansion plans to position itself among other hoteliers in the world.

By end-2014, the company aimed to operate at least 50 hotels in 12 countries, which include new ventures in Japan, Middle East, Africa, Austria and Italy, he said.

Currently, the company runs 29 hotels in six countries, with about five million guests having stayed at Tune Hotels to date.

The 30th hotel, to be opened in November, will be the company’s maiden hotel in Australia.

The 225-room property in Melbourne entails an investment of US$50 million to US$60 million.

“The next immediate country that we will be venturing into is Japan, with the opening of a hotel in Okinawa at the end of the third quarter.

“We’ve started to lay strong groundwork since six years ago and I think we should continue doing that for another two years before proceeding with an IPO,” he told Bernama.

On the home front, Lankester said Tune Hotels would be expanding to Alor Setar, Cyberjaya and Melaka soon and negotiations are underway to open a hotel in Sibu.

He said Melbourne will be positioned as the company’s hub for its growth plans in Australia and New Zealand.

“I think Sydney will be our next location. We aim to have at least three to four hotels in Australia by 2015 depending on the demand,” he added. — Bernama

Datuk Sabri Ahmad

FELDA Global Ventures Holdings Bhd (Felda), the world’s third-largest manager of palm oil plantations, plans to tap its RM6.2 billion (US$2 billion) cash pile to expand abroad as Malaysia runs short of available land.

Felda, which completed the world’s third-largest initial public offering in 2012, will take advantage of lower prices to buy more land in neighbouring Indonesia this year, start rubber processing in Myanmar and form a port storage joint venture in West Africa, chief executive officer (CEO) Datuk Sabri Ahmad said.

“Prices of plantations are more reasonable now,” Sabri said in an interview in Kuala Lumpur, where the company is based, on June 14. “There are potential opportunities.”

Malaysia has reached the limit of land it can use for palm cultivation. While output of the edible oil can grow through higher productivity, it may not increase much above today’s levels, the government said March 5. A tripling in palm oil prices from 2006 to March 2008 drove Southeast Asian planters to expand abroad, spurring Sime Darby Bhd (Sime Darby) and Golden Agri-Resources Ltd, the world’s top two palm oil producers, to turn to new countries with suitable climates such as Liberia.

Felda raised US$3.3 billion in its share sale in June last year, with demand from institutions exceeding supply by more than 40 times. After jumping 16 per cent in its debut, the stock has slipped below its offer price of RM4.55 to trade at RM4.50 yesterday. Sime Darby dropped 3.6 per cent during the same period, while Kuala Lumpur Kepong Bhd fell 7.1 per cent as palm oil prices slumped about 19 per cent.

Slower growth in China and recessions in Europe crimped demand for the world’s most-used cooking oil, hurting prices and pushing inventory to record highs in Malaysia and Indonesia at the start of this year.

Futures may trade at RM2,400 to RM2,600 a metric tonne for the rest of this year, said Sabri, who will step aside as CEO on July 15 and be replaced by Dr Mohammed Emir Mavani Abdullah. This is lower than his forecast of RM2,500 to RM2,800 in February.

Felda is rated the equivalent of sell by 12 out of 20 analysts at banks including Deutsche Bank AG and Credit Suisse Group AG, according to data compiled by Bloomberg. Its outlook is ‘challenging’ due to its replanting programme of 15,000 hectares (37,065 acres) per annum, Arhnue Tan, an analyst at Alliance Bank Bhd, wrote in a May 30 report.

Lower palm oil prices have hurt producers’ earnings, with Sime Darby reporting a 21 per cent drop in third-quarter profit. Felda Global’s first-quarter net income fell 29 per cent to RM136.7 million from a year earlier, it said May 29.

The stock trades 20.6 times earnings, compared with an average 32.2 times for 38 agricultural product makers listed in Kuala Lumpur, according to data compiled by Bloomberg.

“If they acquire estates with a younger age profile that will help grow the business and offset some of the older trees that they need to replant,” Ivy Ng, an analyst at CIMB Investment Bank Bhd, said in a phone interview. “The cash from the IPO is currently sitting in banks. If they can buy something that gives a higher return and grow the overall business of the group in the medium term, then it’ll be positive.”

Felda plans to spend RM300 million to buy and plant another 20,000 hectares of palm oil land in Indonesia’s Kalimantan province, said Sabri. Last year, the company acquired about 15,000 hectares through its 95 per cent-owned PT Citra Niaga Perkasa.

Malaysia, the world’s second-largest producer after Indonesia, had a planted area of about 5.1 million hectares at the end of 2012, according to data from the country’s palm oil board. The Southeast Asian nation’s output may total 18.9 million tonnes in 2013, matching the country’s record crop in 2011, the board forecast in January.

Indonesia’s harvest may rise nine per cent this year to 28 million tonnes, Indonesian Palm Oil Board chairman Derom Bangun said May 7. The two countries account for about 85 per cent of global production of the commodity used in foods, cosmetics and biofuel.

Output of palm oil, which represents more than 30 per cent of global cooking oil production, will expand five per cent to 58.1 million tonnes in 2013 to 2014 after doubling since 2002, US Department of Agriculture data showed. Demand for palm oil is increasing globally, helping spur total world export volume of 17 major oils and fats to a record 75.65 million tonnes in the 2012 to 2013 marketing year that began October 1, Hamburg-based researcher Oil World said June 4.

Felda has been in talks to create a palm oil hub with storage facilities in West Africa for about a year and should reach an agreement by December, said Sabri, without giving the location. This will be used by the company for processing, packaging and distribution to the region, he said.

About a million hectares of land is available for development in the West and Central Africa region, according to Doug Hawkins, an agribusiness specialist at Hardman & Co, a London-based market research group. Singapore-based Olam International Ltd and Wilmar International Ltd are also expanding in the region with interests in the Ivory Coast and plans for Ghana.

Felda is awaiting investment authority approval to start downstream rubber-processing operations in Myanmar, its CEO said. The planter signed a deal in October with Pho La Min Trading Ltd to potentially set up rubber plantations there.

Demand from the biodiesel industry should cushion slowing sales to India and China, Sabri said. Malaysia might win some market share after the European Union imposed tariffs on Indonesian and Argentinian biodiesel, a type of fuel made from vegetable oils and animal fats, he said. The duties punish exporters for allegedly selling it in the EU below cost, a practice known as dumping.

“A lot of people are not importing from Indonesia and Argentina, so there’s a vacuum in terms of the palm methyl ester supply to Europe,” said Felda’s CEO. “So this is potential for our biodiesel industry to revitalise itself.”

Felda would benefit from a weaker ringgit as about 80 per cent of its revenue is denominated in dollars, said Sabri. The Malaysian currency has strengthened 1.2 per cent over the past year to 3.1204 per dollar.

“By the end of the year, the ringgit could be at RM3 to the dollar,” Sabri said. “The current level is a bit of a distortion; recently it’s been very volatile.”

The ringgit is expected to strengthen to 3.05 by the end of 2013, according to the median forecast of analysts surveyed by Bloomberg.– Bloomberg

Tan Sri Amirsham A Aziz

GEORGE TOWN: The electrical and electronics (E&E) sector attracted investments of RM3.2 billion in the first quarter of the year and will remain a major contributor to the country’s Gross Domestic Product, says Malaysian Investment Development Authority (Mida) chairman Tan Sri Amirsham A Aziz.

He said the sector rebounded with a high-level of investments with 20 projects approved during the quarter and was expected to provide employment and increased opportunities to local companies.

Despite Malaysia being home to many of the largest and most successful multinational corporations, the industry also had many home-grown stars.

“Domestic players have taken the lead to move up the value chain as many players have started to get involved in research and development (R&D) in the E&E industry.

“SMEs (small-and-medium entrepreneurs) has also shown innovation interest as there are abundant opportunities within the E&E industry,” he said in a keynote address at a seminar on the electrical and electronics industry here yesterday.

Amirsham said the approved investment recorded in the E&E sector between January and March affirmed Malaysia’s effort to attract high-technology, skill-intensive and high-value added activities have been successful.

“As we transit from labour intensive investment to high-technology investment, the E&E sector last year saw a significant reduction in investment to RM3.98 billion compared with RM20.06 billion in 2011.

“Our manufacturing sector has also undergone a period of transformation and restructuring,” he added.

He said Mida was very excited that more E&E companies were undertaking global functions and shared services such as R&D centres, operational headquarters, global supply chain, global distribution and global fulfillment centre in Malaysia this year.

He added the establishment of global R&D functions, with new product introduction functions within the E&E industry in Malaysia, was paving the way for technology transfer from parent companies to the local workforce. — Bernama

OUTBACK FORRAY: Photo shows a view of Tune Hotel Melbourne’s family room. Tune Hotels has announced the pre-opening sale of its first Australian property in Melbourne and that the city will serve as its operational headquarters for the Australia and New Zealand region.

Mark Lankester

KUCHING: International hotel group, Tune Hotels yesterday announced the pre-opening sale of its first Australian property in Melbourne and that the city will serve as its operational headquarters (HQ) for the Australia and New Zealand region.

The announcement was made yesterday by Mark Lankester, the group chief executive officer (CEO) of Tune Hotels in the presence of the visiting Premier of Victoria, Honourable Dr Denis Napthine. Also present was co-founder of Tune Group, who is also Group CEO of AirAsia, Tan Sri Tony Fernandes.

According to a press statement, Tune Hotel Melbourne, located at 609 Swanston Street, Carlton, is conveniently located next to the University of Melbourne, just two streets away from popular Lygon Street and minutes to Melbourne’s Central Business District (CBD). The 225-room property will open for customers on November 1, 2013.

To celebrate its arrival, Tune Hotel Melbourne is offering an attractive room rate from just A$49 (US$46/RM157) per night. The promotion is offered exclusively online at www.tunehotels.com and guests have the option to choose and pay only for amenities that they require.

Bookings can be made from June 18 to 28, 2013 for stays between November 1, 2013 and March 31, 2014, subject to availability of rooms. A total of 1,000 rooms will be made available at that price.

Dr Napthine said, “Melbourne’s new Tune Hotel would open its doors in Melbourne’s CBD in November to coincide with Victoria’s world-famous Spring Racing Carnival.”

Dr Napthine also welcomed the decision by Tune Hotels to set up its Australia and New Zealand Operational HQ in Melbourne.

“Together, the investment is expected to create up to 100 jobs.”

To add to the celebration, long-haul low cost airline AirAsia X is also running a joint promotion where a one-way flight seat from Kuala Lumpur to Melbourne is going from as low as RM329.

Guests have until June 23, 2013 to make a booking for travel between November 15, 2013 and March 31, 2014, subject to the availability of seats. Also on offer are Fly Thru services from Jakarta-Melbourne (from 1,459,000 rupiah one-way) and Bangkok-Melbourne (from 5,890 baht one-way), allowing guests to seamlessly connect via Kuala Lumpur.

In addition, AirAsia X is offering its Premium Flatbed seats from as low as RM2, 299 from Kuala Lumpur to Melbourne.

Premium seat guests can also enjoy premium complimentary products and services including Pick A Seat, Priority Check-in, Priority Boarding, Priority Baggage, 25 kilogramme Baggage Allowance, Complimentary Meal and Pillow & Duvet.

Fernandes added, “AirAsia X had been serving the Melbourne route for more than four years now and it is one of our best-selling.

Additionally, he said“We are sure the Australian market will welcome and embrace Tune Hotels just as they did AirAsia X.”

Commenting on Melbourne as Tune Hotels’ Operational HQ for Australia and New Zealand, Lankester said, “We are very excited about Tune Hotel Melbourne as it marks our growing brand’s entry into Australia and New Zealand.

Melbourne will be the location for our HQ overseeing Australia and New Zealand operations, working in conjunction with the corporate office in Kuala Lumpur.

“Given our long term plans for the region, the Australia and New Zealand HQ will be staffed relevantly to oversee and provide central support to Tune Hotels’ properties in Australia and New Zealand.”

“And to celebrate in true Tune Hotels style, we’re offering travellers one of the lowest room rates seen in central Melbourne for years. Tune Hotels is all about offering a great night’s sleep at a great price. Tune Hotel Melbourne will serve domestic business and leisure travellers and visitors from abroad who are looking for great comfort just minutes from Melbourne’s CBD without paying the usual exorbitant rates,” added Lankester.

Meanwhile, the Premier of Victoria is currently leading around 300 Victorian businesses and 450 delegates on a Super Trade Mission to Southeast Asia. Kuala Lumpur is the mission’s first stop before moving on to other key Asean cities – Singapore, Jakarta, Bangkok, Manila, and Hanoi, among others.

For real-time updates and promotion alerts, follow Tune Hotels via Facebook at www.facebook.com/tunehotelsAUS and on Twitter. Alternatively, for booking and further information, visit www.tunehotels.com.

UNIQUE COURSES: Photo shows Stella Chong, principal of Infinity Management Training Centre. IMTC is currently offering IMTC-UBS Management workshops in Kuching, with courses covering accounting management, personnel management and stock control management.

KUCHING: Infinity Management Training Centre (IMTC) is currently offering IMTC-UBS Management workshops in Kuching, with courses covering accounting management, personnel management and stock control management.

IMTC, founded in 2011, is a training and development centre operated by Infinity Management Consultants Sdn Bhd (Infinity Management Consultants), with its main office located in Kuching, while its international office is located in Kuala Lumpur.

During an interview with the Borneo Post, the principal of Infinity Management Training Centre, Stella Chong, explained as to why their teaching methods were unique when compared with those of other institutions or training centres.

She explained, the methods used when conducting the courses include ‘progress information’, whereby they provide students with only the required amount of progressive information specifically for the chosen programme.

This will allow students to learn new skills without much difficulty, as they will not have to handle too much excessive and unnecessary information that can otherwise be misinterpreted.

“This will thus allow students to be able to absorb the important information in a more simplified form, without causing them to be confused by irrelevant information during the learning process,” highlighted Chong.

In addition, students will be given practical case studies in class as well as hands-on experience with the UBS software application, which will allow them to handle the day-to-day matters that they will likely face when working in a company.

Students who sign up for one or all of the IMTC-UBS management programme, will need to go through a three-day course for each workshop, which includes an official exam for the UBS certificate on the last day.

After the completion of the chosen courses, students will obtain a UBS certificate and IMTC Certificate, awarded by Sage Software Sdn Bhd and Infinity Management
Training Centre, respectively.

As a registered training provider of Ministry of Human Resources Malaysia (PSMB) and SAGBE-UBS, and a member of the Malaysian Institute of Management, IMTC assures that they provide highly qualified and experienced trainers for all three programmes.

Among those who can consider signing up for these courses include accountants, account executives, human resource executives, entrepreneurs, fresh SPM/Senior III/STPM school leavers, and others.

Chong also pointed out that aside from limited seats for each intake, there is an ongoing promotion only for June
to July 2013 intakes, with fees at RM650 (originally RM1,200) per pax for each course, inclusive of course material.

Interested parties may visit IMTC’s website at www.imConsultants.com.my or visit its Facebook page to download the course details and the registration form.

The office is located on the 3rd floor, No. 163, Bormill Estates, Lorong Tun Ahmad Zaidi Adruce 8, Kuching. For further enquiries, call 082-428188.

Ravinder Kaur Mahan Singh

KUCHING: Ravinder Kaur Mahan Singh, 53, has been appointed to the board of Malaysia Building Society Bhd (MBSB) as an independent non-executive director, effective June 5.

Ravinder Kaur has an MBA from Manchester Business School in the UK and a BA (Hons) in Asean Studies (Diplomatic Services Modules) from University of Malaya, Kuala Lumpur.

Her appointment comes after having spent 22 years in the banking and finance sector in senior management positions in the area of corporate banking, asset management, private equity and financial consultancy.

She started her career with Malayan Banking Bhd in 1984. In 1996, Ravinder Kaur joined the management team of Sime Bank Berhad, a subsidiary of Sime Darby Bhd, according to a press statement issued in Kuala Lumpur.

Sime Bank Bhd was later acquired by RHB Bank Bhd in 1998. In 2004, she was recruited by Citibank Bhd to head its Global Relationship Banking (GRB) to look after its clients of multinational corporations.

In 2006 she joined Equity Ventures Pte Ltd in Singapore where she managed and coordinated private equity initiatives and responsibilities within the firm.

In her current position, she is nvolved in providing financial restructuring services of companies and advisory services to foreign investors and training in strategy and account management.

Based on the information provided, the origin of Malaysia Building Society Berhad (MBSB) can be traced back to the Federal and Colonial Building Society Limited incorporated in 1950.

Subsequently, on March 15, 1956 it changed its name to Malaya Borneo Building Society Limited (MBBS), with the Malaysian government as its major shareholder.

MBBS was then listed on the Stock Exchange of Malaysia and Singapore in August 1963. Malaysia Building Society Berhad (MBSB) was incorporated on March 17, 1970 in Malaysia to take over the Malaysian operations and was listed on the Kuala Lumpur Stock Exchange on March 14, 1972.

As a financial provider, MBSB offers a spectrum of innovative financial products and services for both individuals and corporates throughout its branches nationwide.

Alfian Abu Talib

KUCHING: Telekom Malaysia Info-Media Sdn Bhd (TM Info-Media) has just concluded its Kuching leg of its networking event named ‘Coffee Talk 2013’ yesterday.

The event gathered clients, as well as those in the local business community to share insights, thoughts on the current market as well as what is the latest trends that is going on.

“This is the first time we’re holding it in Kuching with the main aim to help our clients, advertisers as well as the local community to get together and mingle in a very casual way to discuss on the current environment.

“Instead of holding it at a hotel, which makes it relatively rigid, we opted for a more friendly gathering at our partner’s (Starbucks) to gather everyone to share insights,” stated Alfian Abu Talib, chief executive officer for TM Info-Media.

“This engagement programme is one of our ways of expressing gratitude for our supportive clients as well as to strengthen the relationship between TM Info Media and its clients.”

Two speakers were sharing their products as well as insights during the event and one speaker, Wan Abdillah Edruce, the president for the Sarawak Social Media Association noted the importance of the growing influence of social media for businesses.

RHB Research Institute Sdn Bhd (RHB Research) analyst Danny Chan stated that these new earnings forecast figures were upgraded following the first quarter (1Q) of FY13 earnings season, compared with only 16 per cent in FY13 and 11 per cent in FY14 forecast previously in a March 18 report.

“Small and midcap O&G companies in our coverage are likely to grow its year-on-year (y-o-y) earnings by a larger percentage (34.1 per cent in FY13 and 34.9 per cent in FY14) due to the recent contract awards to the offshore support vessel players and topside maintenance players.

“For large cap stocks within our coverage, we are projecting a y-o-y earnings growth of 16.6 per cent in FY13 and 15.3 per cent in FY14, largely supported by their strong order books. Due to the lack of wins by large cap O&G companies in 1QFY13, we believe that earnings growth in FY14 will be slower than FY13F as their order books will decrease towards FY14,” Chan outlined in a 33-page sector update yesterday.

The analyst added that oil prices would likely stabilise above US$90 per barrel on the increasingly positive domestic developments, with the development of marginal oilfields overlapping with the resurgence in deepwater field developments.

He revealed that RHB Research’s internal target for the oil price in 2013 is US$95 per barrel and reiterated the research house’s positive on the outlook for the O&G sector in the long term.

In terms of O&G stocks that are forecast to outperform this year, Chan said that within the sub-sectors in the O&G services industry, RHB Research is positive on offshore vessel owners on rising charter rates and asset utilisation and positive on companies venturing into local upstream businesses.

The research house’s top sector picks are SapuraKencana Petroleum Bhd (SapuraKencana) with room for further upside), Bumi Armada Bhd, Perisai Petroleum Teknologi Bhd, Dayang Enterprise Holdings Bhd, Alam Maritim Resources Bhd and Favelle Favco Bhd. Despite the recent surge in SapuraKenacana’s share price, RHB Research still saw room for further upside as “investors will look toward its FY15F earnings, which will include the full-year contributions from its tender rigs,” said Chan.

The research house’s fair value of RM4.96 per share is premised on 22 times FY15 earnings per share, which represents a 37 per cent premium to the sector average.

“We deem this premium justifiable given the group’s RM18.2 billion strong order book and FY13 to FY16 earnings compounded annual growth rate of 45.1 per cent.

“The stock is our top large-cap pick within the O&G space,” Chan highlighted.

Datuk Shahril Ridza Ridzuan

KUALA LUMPUR: The Employees Provident Fund (EPF) is considering expanding its investment portfolio and increasing its investment assets in the new sectors this year.

Chief executive officer (CEO) Datuk Shahril Ridza Ridzuan, said the new sectors were healthcare and industrial, among others.

Currently, EPF’s main contributors were fixed income (Bursa Malaysia and government bonds), which accounted for 65 per cent and 35 per cent from equities and others, he said.

“We are looking at the sectors that are actually robust this time and not so dependent on economic cycles as we want to maintain our record in bringing stable returns to our depositors. Our target has always been to provide the real return, which is inflation plus two per cent,” he told reporters after the visit by Deputy Finance Minister Datuk Ahmad Maslan to EPF yesterday.

Meanwhile, Shahril said the EPF expected 80,000 employers to register with the newly-launched online application, e-Caruman, by year-end.

“We have just launched e-Caruman. We intend to basically wrapped up the numbers as we undertake more promotion and education to attract them. Currently, we do not have problems with big employers (multinational corporations and government-linked companies), they already do it electronically. Our target is the smaller and mid-scale employers,” he said.

He said many employers still resorted to manual submission and there were many errors, which had resulted in the money not being able to be credited to the right accounts immediately.

“So, we spent a lot of time and money, basically correcting the errors.

“By going online, it will be easier for us to detect the errors in the form submitted to us and the employers can correct them,” he said. — Bernama

Datuk Dr Wong Lai Sum

KUALA LUMPUR: Malaysia’s halal industry has room to grow further with various programmes organised by the government to boost trade for the industry.

Malaysia External Trade Development Corp (Matrade) chief executive officer Datuk Dr Wong Lai Sum said the halal industry could take business opportunities from the global Muslim population of about 1.66 billion, which is growing.

Malaysia contributes 1.25 per cent to the global halal trade of US$2.3 trillion.

Wong also called for small and medium enterprises involved in logistics to merge and become bigger and financially stronger.

“Halal logistics becomes a very important component to grow.

“Therefore, they can offer integrated logistics right across,” she told reporters after presenting her keynote address at the second Global Halal Trade and Logistics Summit.

The two-day summit, which started yesterday, is a platform for the exchange of ideas and networking for professionals in the halal compliance, manufacturing, logistics and supply chain industries internationally.

“There is a need to break the business into two.

“One where business caters to halal consignment and one that does not cater for halal consignment.

“The one that is catering towards halal consignment requires special work in terms of where you store it, how you bring it through, what type of vehicle you are going to carry, how you package it,” she said. — Bernama

Datuk Michael Ong

KUALA LUMPUR: The luxury car market segment in Malaysia remains healthy, said Rolls-Royce Motor Cars Kuala Lumpur managing director, Datuk Michael Ong.

He said Malaysia was a well-established passenger car market and the luxury segment was healthy as all the brands were represented here.

“We can see there is a promising future for us,” he told reporters after launching the new Rolls-Royce model, Wraith, here yesterday.

Ong said with the launch of Wraith and a promising economic outlook in Malaysia, the company would be able to exceed its average sales of 20 units annually.

“We have received pre-orders for this model and we expect to deliver them to the customers in the fourth quarter because when you place an order, it will take five months to make it,” he said.

He said the company was still negotiating with the government on the final price of this model.

In Malaysia, the pricing for Wraith starts from RM1.3 million (without taxes and other charges).

This model is powered by V12 engine married to eight-speed automatic transmission and it can achieve the 0-100km/h sprint in 4.6 seconds. — Bernama

EOR is a technique that uses gas, chemical injection or thermal flooding to improve oil recovery from industry norms (of 20 to 35 per cent) to 30 to 50 per cent, implemented to extract the maximum potential from mature oil fields.

Harnessing EOR requires the use of advanced technologies and significant capital investment which are initiatives supported by Petronas, according to RHB Research Institute Sdn Bhd (RHB Research) analyst Danny Chan.

“Petronas has adopted a three-pronged strategy to encourage EOR initiatives, which are: reviewing existing PSC (product sharing contract) terms to reward companies that implement EOR, offering opportunities to companies that specialise in EOR to encourage operations here and ensuring that the most cutting-edge methods and technologies are deployed to cut capital and operating costs,” Chan outlined in a sector update yesterday.

In January 2012, Petronas, via its subsidiary, Petronas Carigali Sdn Bhd, signed on two PSCs with Shell Malaysia for EOR projects off the coast of Sabah (St Joseph, South Furious, SF-30 and Barton fields) and Sarawak (nine fields in the Baram Delta).

Both parties intended to commit some US$12 billion over 30 years and they aimed to increase the recovery factor from 36 to 50 per cent, the analyst pointed out.

Meanwhile, ExxonMobil, together with Petronas Carigali, has formed a 50-50 partnership to invest some US$3.2 billion to undertake EOR projects in the Tapis, Guntong, Tabu, Palas, Seligi, Irong Barat and Semangkok fields and the Telok gas development project off Terengganu.

Dialog Group Bhd (Dialog) and its foreign partner Halliburton have been awarded a 24-year contract to enhance the recoverable reserves from the Bayan Field, located offshore Bintulu, Sarawak, valued at approximately US$1.2 billion (RM3.7 billion).

This partnership could potentially be a catalyst for Dialog to secure more O&G field rejuvenation jobs in the future as it beefs up its technical expertise, Chan believes.

“Moving forward, our channel checks suggest that there are at least four EOR opportunities in the near-term: Shell’s St Joseph chemical enhanced oil recovery (CEOR) project and Petronas Carigali’s Angsi CEOR, Bokor and Samarang oilfield redevelopment projects.

“The projects mentioned will provide both the local and foreign EOR players with opportunities to land contracts very soon.

“In our view, the EOR business will likely thrive over the next decade, fuelled by Petronas’ initiatives to drive EOR projects and favourable oil prices.

“We believe that as long as oil prices are above US$80 per barrel, production companies will have more room to implement EOR initiatives.

“We nominate local listed companies such as Scomi Energy Services Bhd, Uzma Bhd and Deleum Bhd as key beneficiaries of the EOR boom.”

While Chan expressed positive sentiment with the potential contract awards in the Malaysia O&G space, any delays in contract awards might have a short-term negative effect on a particular company’s stock price.

Hence, he believed that some counters could be subjected to short-term volatility, giving an example in the form of would be Petronas’ Refinery and Petroleum Integrated Development (Rapid) project which is expected to be delayed to end 2016 or early 2017.

The car is part of the Saga FLX model range but will be branded as the Saga SV.

According to the research arm of Kenanga Investment Bank Bhd (Kenanga Research), it remains neutral on the latest news of Proton’s new variant which is almost 13 per cent or RM5,000 cheaper than the FLX Standard 1.3, the previous entry-level Saga.

“Powered by the same 1.3 litre Campro IAFM as Saga FLX and available in manual and CVT automatic transmissions, the Saga SV is priced from RM33,438 to RM36,888 in Peninsular Malaysia, while the current Proton Saga cars are priced between RM38,800 and RM49,900,” Kenanga Research highlighted.

Although this latest move by Proton is expected to slow down the month-on-month decline in the sales of its cars, the lower car price will put further pressure on its already thin and declining profits.

The research division noted that earnings before interest and tax (EBIT) margins in DRB-Hicom’s automotive segment were just 1.9 per cent in the financial year 2013 (FY13), compared to 3.5 per cent in FY12.

However, based on the research arm’s calculations, an average 10 per cent reduction in Proton Saga’s price will only reduce DRB-Hicom’s EBIT by less than two per cent.

Looking ahead, this move by Proton could lead the entire industry into the next phase of price competitions, rebates and promotion, the research house predicted.

In addition, at the recent DRB-Hicom Investor Day event, the management highlighted that the key initiatives to revive Proton and reduce its cost would be to further reduce its vendors or suppliers with a target to reducing the cost by 30 per cent in the next five years.

The company will also leverage on its collaboration with its partners to reduce cost via the sharing of platform, technology and putting in place stringent procurement processes.

As such, Kenanga Research maintained a market perform recommendation on DRB-Hicom stock with a target price of RM2.81 per share from RM2.77 per share previously.

The contract for August delivery, with the biggest open interest, climbed as much as 0.8 per cent to RM2,458 (US$785) a metric tonne on the Bursa Malaysia Derivatives and ended the morning session at RM2,448. Futures fell 0.7 per cent last week, the first such loss since the five days ended May 3. Palm for local physical delivery in July was at RM2,430 on June 14, according to data compiled by Bloomberg.

Malaysia, the second-largest producer after Indonesia, left the tax on crude palm oil exports unchanged at 4.5 per cent for a fifth month in July to boost shipments. Exports jumped 18 per cent to 709,860 tonnes in the first 15 days of this month, surveyor Intertek said on June 15. Demand typically picks up ahead of Ramadan, which falls in July this year, when Muslims break day-long fasts with communal meals.

“Demand is continuously there, mainly for Ramadan,” Rajesh Modi, a trader at Sprint Exim Pte, said by phone from Singapore. “Suppose the market goes higher, then demand may slow down. Buyers may switch to soybean because soybean is coming down and palm oil is going up.”

Soybean oil’s premium over palm oil was at US$264.97 a tonne yesterday compared with an average of US$319 this year, according to data compiled by Bloomberg. The two edible oils are substitutes in food and fuel uses.

Soybean oil for December delivery fell 0.3 per cent to 47.50 cents a pound on the Chicago Board of Trade, while soybeans for delivery in November declined one per cent to US$12.8575 a bushel.

Refined palm oil for January delivery climbed 0.7 per cent to 6,264 yuan (US$1,023) a tonne on the Dalian Commodity Exchange, while soybean oil for delivery in the same month rose 0.3 per cent to 7,630 yuan. — Bloomberg

TRADE ON-THE-MOVE: Photo shows Matrade’s Portal which is can be clearly viewed on mobile devices. Sarawakian exporters are encouraged to leverage on Matrade’s e-services which offer bounteous timely information and services capable of boosting a business’ competitive edge, on a global scale.

KUCHING: Sarawakian exporters are encouraged to leverage on Malaysia Trade Development Corporation’s (Matrade) e-services which offer bounteous and timely information as well as services capable of boosting a business’ competitive edge on a global scale.

Matrade Sarawak also called for companies which are already members of the agency to update their profiles as well as company contacts for the convenience of interested parties and other users of Matrade’s e-services.

The e-services, which consist of various online applications for the business communities, are accessible via various means that include the internet, SMS, e-mail, and mobile devices such as tablet and smartphones.

These e-services are made available for the convenience of Sarawakian exporters especially those who are based at distant locations from Matrade Sarawak’s head office in Kuching.

During an exclusive with The Borneo Post, Matrade Sarawak director Noor Azian Romlan encouraged  local exporters to be more receptive towards this new medium.

“We would like to encourage Sarawak exporters to use this facility as this can be treated as competitive edge for them to get timely trade-related information beforehand,” she explained.

“Leverage on the information communication technology (ICT) development because this will make it more convenient and this era, embracing the development of ICT is relevant for your business.”

Matrade’s e-services span across various channels of communications namely Matrade Portal, Matrade TUBE, MyExport, MySMS and Mobile Apps.

Matrade Portal (www.matrade.gov.my) serves a good platform for Malaysian exporters to promote their products and services as the website has its own database for Malaysian companies and it attracts more than 350,000 visitors with approximately 1.5 million page views in 2012, Noor Azian explained.

gTo facilitate users to search for information to their needs, the portal has been categorised according to Malaysia Exporters and Foreign Buyers. The e-Directory of the portal provides profile and images of Malaysian companies’ products and services for free,” she added.

Apart from that, the website also features stories on successful Malaysian exporters to provide greater visibility as well as to motivate Malaysian companies to learn from the success of these featured companies.

Matrade Sarawak noted that it was also currently looking to feature Sarawakian companies on the website’s successful Malaysia exporters segment.

The website also provides online facilities such as applications and registrations to Matrade’s events, trade fairs, exporters training programmes and business matching.

Also, another highlight to Matrade’s e-services is myExport, an online account that is provided for every registered members of Matrade.

“Members will be provided with information on opportunities, information on the market, reports that we have gathered from our trade officers including those overseas, as well as international trade information especially on the global opportunities,” Noor Azian

pointed out

MyExport also provides market alerts, trade leads, and international tender notices for the convenience of its members.

Noor Azian further said, “Our trade officers continuously put timely information into this account; listed under the market alert. This timely information is provided so that members can get the latest information and respond ontime.

gThis account is also where Matrade can communicate directly to companies/exporters. This online service is only exclusively for exporters who register with Matrade.”

Registration for MyExport and Matrade service are free. The service is also as mobile apps on smartphones and tablets. The app can be downloaded for free and supports Android (PlayStore), IOS (AppStore), and BlackBerry RIM (AppWorld) plantforms.

gWe encourage members to activate their MyExport account as well as keep it updated, regularly for the convenience of other users and interested parties of Matrade’s website as well as to promote your company because as your companies’ profiles will be published on there,” Noor Azian advised.

Other e-services such as Matrade TUBE provides guide videos, while MyBayar on Matrade’s Portal  provides convenience for exporters to make virtual payments. On the mobile front, MySMS provides information via SMS, and Matrade’s mobile apps include Trade2Media for members of the media.

For more information, call 082-246780 or visit Matrade’s website at www.matrade.gov.my. Alternatively, visit Matrade Sarawak at Menara Grand, Jalan Ban Hock, Kuching or email Matrade Sarawak at sarawak@matrade.gov.my.

THE US budget deficits widened while job creations continue to improve in optimism. Japan¡¦s equities weakened retrospective to the rapid rise in yen after Bank of Japan (BoJ) held the monetary policy unchanged. The UK housing demand recovered to a three-year record high and market analysts believed Bank of England (BoE) will follow suit to US policy in adding more stimulus.

The US budget deficit widened in May after the government¡¦s spending was increased to 10 per cent from a year ago. Outlay exceeded revenue by US$138.7 billion compared with US$124.6 billion shortfall in May 2012. Jobless claims fell 12,000 to 334,000 in the week ended June 8 and better than median forecast.

The US producer-price index in May which measures the wholesale prices rose 0.5 per cent after falling 0.7 per cent in April while core prices was up 0.1 per cent in line with expectations. Industrial production climbed 0.1 per cent after dropping 0.4 per cent in April and 0.3 per cent in March, boosting growth for the first time in past three times.

The Dow Jones markets fell back from early session of gains as the International Monetary Fund cut its 2014 outlook for America and urged the central bank to carefully manage its exit from stimulus plans.

The Standard & Poor¡¦s rating agency upgraded the US credit rating outlook to AA+ from negative. This is based on receding fiscal risks and improvement in job markets after the world¡¦s largest economy had slid for two years.

Japan¡¦s gross domestic product (GDP) expanded an annualised 4.1 per cent in first quarter (1Q), compared with a preliminary calculation of 3.5 per cent. Another report showed current-account surplus for April was 750 billion yen (US$7.6 billion) that was more than double the median estimate.

Japan¡¦s government has announced its plan to sell inflation-linked bonds in October, after it was terminated since 2008. The new issuance will come with a guarantee of minimal price protection against decline benchmark and deflation.

Last Tuesday, central bank policymakers remained monetary policy unchanged. The fiasco of no added stimulus ignited a jump in yen prices and bludgeoned Japan¡¦s stocks. The Nikkei 225 Average Index fell from intra-week top at 13,584 and drove down almost 1,200 points while settling at 12,686 benchmarks on Friday. Likewise, the US dollar/Japanese yen has declined from above 99 benchmarks to briefly below 94 levels resulted a two-month lowest record equated five yen losses.

Euro-areas industrial production rose 0.4 per cent in April versus revised 0.9 per cent gain in March. The expectation was a decline while central banks forecast the GDP for 2Q will continue to stagnate. In overall, debt crisis remained as major concern to policymakers as they observe the rising yield of bonds issued by indebt nations.

The UK Royal Institution of Chartered Surveyors reports the housing price index rose to five in May from the previous month reading at one, clocking a three-year record high though experts said it was still far from full-scale recovery. British jobless claims fell in May by 8,600 to 1.51 million while unemployment recorded at 7.8 per cent.

The former UK policymaker Adam Posen said BoE will soon start add stimulus to economic solution that is similar to the US Federal Reserve in order to stay buoyant. This statement supported the pound to be floating on strong sentiment sometime middle last week.

Technical Forecast  

US dollar/Japanese yen has been dipping one way down and settled at 94.07 for the weekend. This week, we foresee the market trend may reverse upwards following the news of issuance of Japanese government bonds with stop-protection in October. The support will emerge at 92.50 levels while topside could rise to 97 areas. The range may be good for speculators who trade on short-term.

Euro/US dollar topped 1.339 last week and has been staying afloat near here on Friday. This week, the market trend may begin to turn down to 1.315 as profit-taking arises.

The trend must not break above 1.3400 resistances in order to maintain this downside projection otherwise short traders need to abandon their trades.

British pound/US dollar are also beginning to fizzle out at 1.5740 regions.

This week, we reckoned the range will weaken gradually and the prices are expected to move down from 1.5750 to 1.5550 levels. Profit-taking may emerge soon if no more positive fundamental news pushes the market above 1.5750 resistances. Similar to the euro, short-traders need to cap their unexpected losses if the bulls return and march above 1.5750 levels.

Disclaimer: This article was written for general information only. No liability by the writer or newspapers. Dar Wong is the founder of pwforex.com with 24 years of trading experience in global derivatives and forex markets. He can be reached at  dar@pwforex.com