Whats Next For GenM After EGM ?

Below, Genm announcement, as expected, shareholders gave its approval to acquire UK casino. A plus for GSP and a minus for Genm.

Announcement Details :

We refer to the Initial Announcement and the announcement dated 9 August 2010, both in relation to the above.

On behalf of GENM’s Board of Directors, we wish to announce that GENM’s shareholders have approved the resolution in relation to the Proposed Acquisition, as set out in the Notice of EGM dated 9 August 2010, at GENM's EGM held today.

Whats next for Genm ? More RRPT ? Lets work out the remaining cash for GENM :-

TOTAL CASH about RM5.2billions

1) Based on the Company’s issued and paid-up share capital of 5,907,059,648 ordinary shares as at 18 August 2010, and after taking into account the cumulative net outstanding treasury shares to-date of 214,501,100 (representing approximately 3.63% of the issued and paid-up share capital), the Company intends to purchase up to a further 376,204,865 of its shares (representing approximately 6.37% of the issued and paid-up share capital) within the next 10 months.

2) On 3 August 2010, New York Lottery announced that its evaluation committee has unanimously recommended to the New York Governor that Genting NY be awarded the New York video lottery licence for the Project. Genting NY’s proposal included US$380 million as an upfront licencing fee.

• Item 1 of shares buyback of 376millions shares, this may cost approximately, 376mil x RM3.10 = RM1.2billions
• Item 2 will cost approx. US$380 x RM3.2 = RM1.2billions
• Acquire UK casino = RM1.68billions

 
Est. Cash balance remain = 5.2 - 1.2 - 1.2 - 1.68 = RM1.12billions
 
Est. coming Q to be announced on 26/8/2010 & net profit approx. = RM270millions
 
Est. total cash balance = RM1.12b + RM270m = RM1.39billions
 
Will there be special dividend for this Q ????
 
Lets work out :-
 
Share Issued = 5.9billions
 
Maximum afforded dividend for this Q = 1.39/5.9 = 23sen per share
 
Let's chop dividend by half = 23/2 = 11sen per share
 

11sen per share dividend for this Q is possible but based on track records and the possibility to retain more cash for development and enrichment works for item 2 and UK casino. So, cut this by another half = 11/2 = 5.5sen.

 

My final figure of dividend for this Q could be around 3sen to 5sen. Special dividend ???? big fat hope again.

Spotlight on Genting EGM

Some analysts pessimistic about UK casino purchase due to challenging operating environment

 

PETALING JAYA: While the investing community may now be re-looking at Genting Malaysia Bhd due to its new flavour as an international play, just earlier this year this casino operator did not have a compelling story to tell.

Sure, profits were decent and it was sitting on a cash pile of some RM5bil, but that cash hoard was becoming more of a hurdle as all that money wasn’t doing anything.

 

Then came the announcement in early July that Genting Malaysia was setting its sights on its United Kingdom (UK) casino operations following the proposed acquisition of four casinos from Genting Singapore plc.

 

Analysts and shareholders kicked up a fuss, with what was seen as a clear-cut related party transaction.

 

Genting Malaysia announced that it was proposing to acquire Genting Singapore’s UK casino operations for £340mil (about RM1.67bil). Genting Singapore first bought Genting UK in 2006 at £626.91mil (RM3.13bil)

 

The UK casino operations comprise four companies – Nedby Ltd, Palomino Star Ltd, Palomino World Ltd and Genting International Enterprises (Singapore) Pte Ltd – collectively known as Genting UK.

 

Gambling in the UK is regulated by the Gambling Commission on behalf of the government’s Department for Culture, Media and Sport under the Gambling Act 2005.

 

There have been significant updates to UK’s gambling laws, including increasing tax on poker profits from 15% to as high as 50% depending on profitability. There have also been increased rates on all categories of amusement machine licence duty.

 

These measures are likely to continue to dampen the gaming enviroment in the UK and some analysts are pessimistic because of the challenging operating environment.

 

There are concerns that Genting Malaysia could be buying Genting UK at a time when the economy is not only weak, but faces a double whammy of the casino industry facing tough legislation.

 

Hence, all eyes will be on Genting Malaysia’s EGM tomorrow to approve the acquisition of Genting UK from Genting Singapore Plc Genting Malaysia’s second quarter results to June 30, will be also released on Aug 26.

 

Genting Malaysia has been on a roadshow in the last few weeks to meet up with its shareholders and to explain the rationale and potentential of buying into the UK casino operations.

 

Last week at Genting Singapore’s EGM, the resolution in respect of the sale of UK casino assets to Genting Malaysia passed by shareholders.

 

It is however interesting to note that over the last two days, Genting Malaysia has bought back a total of 11.2 million shares at an average price of RM3.03. This brings its cumulative treasury shares held at 3.71%.

 

The group has announced its intention to purchase up to a further 376 million shares (representing 6.4% of share cap) within the next 10 months.

 

Meanwhile last week, Genting Malaysia Bhd obtained all the necessary approvals and signed the agreement to develop the Aqueduct New York racino.

 

Genting New York is expected to invest US$1.3bil which consist of US$380mil (RM1.22bil) of licencing fee, US$350mil (RM1.12bil) initial capital expenditure (4,500 video lottery terminals), and US$650mil (RM2.08bil) to build three hotels of differing standards, shopping, recreation, spa and other resort facilities.

 

Dubbed Resorts World New York, the proposed three-storey facility will also contain several restaurants, water features, an outdoor terrace connected to the Aqueduct racetrack which will be able to accommodate up to 10,000 people and a 2,200-bay car park.

 

Genting New York aims to complete the entire development within 12 months from the date it obtains formal approval from the state to proceed.

 

As part of a wider development plan, Genting New York is also proposing to build three hotels of differing standards, shopping, recreation, spa and other resort facilities at a total cost of US$650mil (RM2.09bil). That will take the proposed outlay for the entire project to over US$1.3bil.

 

“If we assume daily win per terminal of US$300 (similar to the more successful Yonkers racino closer to New York city centre), Resorts World New York may contribute RM595mil and RM196mil to Genting Malaysia’s revenue and profit after tax respectively by 2013,” said an analyst from HwangDBS Research.

 

UOBKayHian reckons that the project is neutral to Genting Malaysia’s revised net asset value but is slightly earnings-accretive over the long term, assuming that the Aqueduct would be eventually given a license to operate table games.

 

The research house estimates the slot facility could provide a payback period of 5.5 years (on full expansion), while the payback period for the rest of the facilities could be significantly longer.

“Conservatively, Aqueduct could pull in revenue and operating profit of US$468mil and US$84mil respectively when it is fully expanded.

“This accounts for about 14% of Genting Malaysia’s forecasted 2012 operating profit,” said the research house.

The recent spotlight on the entire Genting group has been brought about by Genting Singapore’s sterling results and the re-rating of casino sector in Singapore. Genting Singapore is 52% owned by Genting Bhd.

Genting Singapore’s second-quarter results took the investing community by surprise, when it beat analysts and consensus estimates.

For the second quarter ended June 30, Genting Singapore posted a net profit of S$396.5mil (RM925.9mil) compared with a net loss of S$50.7mil a year earlier.

Revenue soared to S$979.3mil from S$120.1mil previously. This translated to a profit margin of about 40%.

D-Day for GenM on Tuesday

KUALA LUMPUR: Since the passing of Tan Sri Lim Goh Tong, the late founder of the Genting group, his son and successor Genting Bhd chairman and CEO Tan Sri Lim Kok Thay’s tenure has been marked by an internationalisation of the group.

In an age of globalisation, this internationalisation strategy has taken the Malaysian gaming giant to spread its wings from its comfortable casino base on the lofty peaks of Genting Highlands, Malaysia to the UK, Singapore and soon, the US.

 

After acquiring the UK casino assets in 2006, the group went on to open the high-profile Resorts World Sentosa integrated resort in Singapore on Feb 14 this year, and is now bidding for a racetrack casino in New York City.

 

One of the direct effects of this globalisation drive on equity investors is the key decision that has to be made by minority shareholders of Genting Malaysia Bhd in an EGM on Tuesday.

 

At the EGM, they will decide whether or not to approve Genting Malaysia’s proposed purchase of the UK casino operations from Genting Singapore plc.

 

Genting Singapore shareholders had approved the proposal at an EGM on Wednesday. The deal is set to cost Genting Malaysia £340 million (RM1.68 billion) for the assets that include 44 gaming licences in the UK as well as various properties.

 

Genting Malaysia’s major shareholder Genting Bhd and the parent group’s chairman and CEO, Kok Thay (who also holds a direct 0.28% stake in Genting Malaysia) would not be voting at the Genting Malaysia EGM.

 

Since they are deemed interested parties in the transaction, they would abstain from voting in accordance with stock exchange regulations. The decision thus rests on the larger minority shareholders which, for Genting Malaysia, means some pretty high-powered foreign institutional investors.

 

The top five such minority shareholders are International Value Advisers LLC (2.48%), Vanguard Group Inc (1.38%), Blackrock Fund Advisors (1.27%), Wintergreen Advisers LLC (0.78%) and First Pacific Advisors Inc (0.72%).

 

However, a look at Genting Singapore’s list of minority shareholders also shows some of the same names, such as Blackrock Fund Advisors (0.9%) and Vanguard Group (0.3%), among others.

 

Among the smaller minority shareholders, Fidelity Management & Research holds 0.04% in Genting Singapore and 0.17% in Genting Malaysia; while Credit Suisse Asset Management holds 0.02% in Genting Singapore and 0.14% in Genting Malaysia.

 

The UK casino operations to be transferred are housed under Nedby Ltd, Palomino Star Ltd, Palomino World Ltd and Genting International Enterprises (Singapore) Pte Ltd.

 

Critics have voiced that it is yet another related-party transaction within the gaming group. They also lament that the deal does not create much value for the Malaysian arm and will deplete its cash pile.

 

The knee-jerk market reaction then was to bid down Genting Malaysia’s share price, which fell 12 sen to RM2.62 on July 2, a day after the proposal was first announced. Conversely, Genting Singapore’s share price rose as investors there welcomed the sale.

 

However, Genting Malaysia’s share price has bounced back sharply over the last week, gaining 12% in the past five trading days alone. The stock closed at RM3.07 yesterday, up 3 sen or 1%.

 

UK casinos seen as unexciting for Genting Malaysia

An analyst at a large brokerage-backed research house said on both a price-to-earnings ratio (PER) and enterprise value-to-Ebitda (EV/Ebitda) basis, the UK casino operations looked more expensive than Genting Malaysia’s total business.

 

Acquiring the UK casino operations would bring down Genting Malaysia’s overall valuation numbers, he said.

 

In the letter to minority shareholders dated Aug 9, RHB Investment Bank Bhd (RHB IB), the independent adviser for the proposal, said at market close on Aug 2 and based on consensus estimated FY2011 earnings, Genting Malaysia had an EV/Ebitda of 6.1 times and a PER of 12.9 times.

 

Based on the purchase price of £340 million, the valuation for the UK casino operations on EV/Ebitda basis was 11.2 times, with a PER of 25 times, according to the report.

 

Some analysts also said for the medium term, not much growth would be expected for the UK casino market.

 

Two analysts that The Edge Financial Daily spoke to said separately that among the major dampeners to growth was a smoking ban in enclosed public places that came into effect on July 1, 2007 across the UK. This has been blamed by the industry for reducing revenue.

 

At the same time, growth would be hurt by the uncertain outlook of the UK economy over the next several years, a two-year civil servants pay freeze expected to last well into 2012, and the value-added tax (equivalent to the proposed GST in Malaysia) that has returned to 17.5% effective Jan 1 this year from a temporary reduction to 15% on Dec 1, 2008.

 

Nonetheless, RHB IB recommended shareholders to vote in favour of the proposal.

 

Relating to the EV/Ebitda valuation, the independent adviser said: “Although the implied 2011 EV/Ebitda is above the average EV/Ebitda multiples of comparable companies, we do take into consideration that the proposed acquisition involves the acquisition of a controlling stake in the acquiree group.”

 

RHB IB had calculated an average EV/Ebitda of 9.3 times and an average PER of 19.8 times on a list of 15 comparable companies.

 

The adviser added: “We note that the purchase consideration is fair as the EV/Ebitda multiple implied by the purchase consideration for the proposed acquisition of 11.2 times is within the average EV/Ebitda multiple of comparable listed companies after applying a 20% to 30% control premium of between 11.2 and 12.1 times.”

 

According to an industry source, one reason for the transaction is that the UK casino business is a better fit for Genting Malaysia, while Genting Singapore is focused on getting up to speed and watching the competition with the Las Vegas Sands group that owns the Marina Bay Sands casino.

 

Genting Malaysia’s casino business is a likely better fit for the UK casino landscape in terms of clientele and type of operations, as compared with the integrated resort-style Genting Singapore operations.

 

Moreover, Genting’s entry into the UK casino market was initially based on the premise that the UK government would be liberalising the industry and would allow the construction of similar Las Vegas-style “super casinos” as promised by the administration of former prime minister Tony Blair.

 

However, the idea did not materialise under the Gordon Brown leadership, the industry source added.

 

Tuesday EGM ‘a tougher sell’

The proposed sale of the UK casinos to Genting Malaysia will make Genting Singapore a pure integrated resort play, and strengthen its balance sheet to face competition from Marina Bay Sands and other regional casinos.

 

With the proliferation of new casinos across Asia and the aggressive branding and expansion of Macau as the region’s premier gaming destination, Resorts World Sentosa will need to constantly reinvest and upgrade itself to attract more regional gamblers and high-rollers.

 

Resorts World Singapore will thus face an increasingly competitive environment, to which its Universal Studios theme park — the only one in Southeast Asia — is a big added attraction for the integrated resort.

 

This is much unlike the casino operations in Resorts World Genting, which operates as a monopoly, and caters more to the local crowd with less reinvestment needed.

 

How minority shareholders in Genting Malaysia will decide on Tuesday remains to be seen, but the approval in Malaysia “is a tougher sell” compared to Singapore, said an observer.

 

That key decision could well decide how the wider Genting group plans the next step of its internationalisation strategy.

Carlsberg - Another Good Q

Carlsberg just announced Q2 result and declared Interim Dividend of 5 Sen and Special Dividend of 2.5 Sen, total up to 7.2sen dividend. Bravo, another good Q !! Net profit of 30m for this Q about 250% increase compare to previous corresponding Q. Thanks to the World Cup and the synergy from Carlsberg (S) aquisition. Earnings per share for the quarter grew to 10.08 sen versus 4.21 sen a year ago.

Simply, by adding Q1 EPS with Q2 EPS, we get 12.38 + 10.08 = 22.46 sen. 2 more Q to go, just X2 we get a total estimated 22.46 * 2 = 44.92sen.

PE = 5.2/44.92 = 11.57

FV = 15 * 44.92 = RM 6.73 (ho ho ho)

Making money just as simple as that. Buy this type of value stock and keep them for long term. AHA, would not it just as simple as 123....

1. buy...

2. keep....

3. rewards....  :) :)

GENM A Pinocchio Formation ??

Finally, GENM starts to move and break the RM3 barriers. :) But many TA would think this is not convincingly enough to break above RM3 as it last closed at RM2.99. In technical term this might called a pinocchio bar or in short pin bar as GENM rammed up to RM3.11 before settling down at RM2.99. Gosh, so volatile. !!

Even so, this has not confirmed as pin bar as yet, cause, a confirmation of pin bar would depend on the third bar which mean this would need to depend on tomorrow bar forming, if the third bar makes the pin bar sticks out noticeably in between, then we can confirmed it is a bearish reversal pin bar formation. wow !! talking technical here. ha ha ha ha

Am sure you guy heard a lot of this, if the breakout not convincingly break through, further down side would be expected. walau er..... i am just another technical expert here. aikse man. Don't mean to teach technical here. In fact long term guy like me don't depend on technical as these kind of stuff would not apply to long term investment. :)

In short, i have sold some GENM out at RM3.05 today. Reason is simple, because i don't believe GENM will ever give special dividend anymore. They are talking about spending few hundred millions for RRPT for buying UK casinos from GENSP. So, what is that more to expect for special dividend so to speak. This trend up is an opportunity i believe and it make way for me to look at GENSP instead. So, seize the day if you can. Till then happy trading.

Genting Singapore swings to Q2 profit

Bravo !!! started to generate profit already. :)

Genting Singapore Plc reported second-quarter profit of S$396.5 million (US$291 million) compared with a loss a year earlier as its new casino resort in Singapore “made an impact” in its first full quarter of operations.

Revenue surged to S$979.3 million in the three months to June 30 compared with S$120.1 million a year ago, according to a filing to the Singapore stock exchange today.

Earnings before interest, tax, depreciation and amortization, or Ebitda, were US$513.9 million, with margins of 52 percent, the statement said.

Singapore overturned a 40-year ban on casinos in 2005 to spur economic growth.

Genting’s US$4.7 billion Resorts World Sentosa opened on February 14 and features Southeast Asia’s only Universal Studios theme park.

Billionaire Sheldon Adelson’s Las Vegas Sands Corp opened its rival US$5.5 billion Marina Bay Sands casino resort in Singapore’s financial district in April.

The group’s Ebitda figure was “way above our S$244 million and consensus forecasts, which we think was S$220 million,” Aaron Fischer, a casinos analyst at CLSA Ltd in Hong Kong, wrote in an e-mail.

“With such a strong set of results, our fair value for the stock will likely be revised to at least S$1.50,” Fischer wrote.

Genting Singapore, controlled by Malaysia’s Genting Bhd, is the second-best performer on the Straits Times Index over the past 12 months, surging about 50 per cent compared with the benchmark’s 14 per cent gain.

The shares ended at S$1.28 today before the results announcement, compared to their record close of S$1.30 in December. Fischer’s target price for the stock is S$1.30, according to Bloomberg data. - Bloomberg

LONBISC Surely Worth More Than That

I was once written this stock LONBISC here, that was 4 months back. We are expecting the 4Q to be announced end this month (Aug). I would expect the momentum to be continued where the 4Q would registered higher revenue with better profit, just assume by taking the latest rolling 4Q, it will represent a total of EPS of 22.37sen. This would mean a PE of 1.25/22.37 = 5.58sen, this is far more lower to industry PE like Apollo = 11sen, OFI = 9sen and HupSeng of 7.6sen.

The previous 3sen Dividend would be a bit disappointing but would improve gradually i believe, as this can be seen through their expansion plan by having their 11th factory in placed and taking over of TPC plan though it is a struggle bid. The current NAV stood at RM2.23, which mean the company trades at just 58% of NAV. With the expansion of plant, i would foresee a climb in future revenue and net profit figures. This would mean a better future dividend and they used to pay 50% of it earnings as dividends way back in 2007, i would expect it may continue again. If so, then base on 22.37sen EPS a minimum of 10sen dividend is likely possible by early next year.

My way of simple FV based on current valuation would be 7.5 X 22.37sen = RM1.67. Thus, a 6 months mid term of investment would possible to see the price trading about 75% of NAV to somehow at least finding it actual value for Lonbisc.

The only set back for Lonbisc is it high short term borrowings which stood at RM114 millions, if this is not control  well it may turn out to be a disaster to Lonbisc but luckily Lonbisc has a very high reserve from it retaining earnings where a figure of RM99 millions to counter the set back. Alternatively, a one off RI would do the business by knocking down it borrowings.

REIT vs direct real estate investment

INVESTING in real estate can be tricky.

 

For a start, those who intend to make a quick buck by “flipping” property within a few months will find that it is risky, especially in a property market less buoyant than in Hong Kong or Singapore.

 

The alternative is hard work, that is, managing residential properties (and absorbing all the hidden costs that come along with it) as long term investments, receiving rent and selling them off for a capital gain or profit.

 

Another factor that may deter investors from real estate is the difficulty in raising enough capital to purchase a particular property.

 

So, should you consider putting your money in a real estate investment trust (REIT) instead?

 

Granted, a REIT does not comprise residential property, but if it is profit you are interested in, it may be an option.

 

REITs originated in the United States in the 1960s, but it wasn’t until 2005 that Axis REIT became the first property trust to be listed on Bursa Malaysia.

 

In Malaysia, there are now 14 REITs to choose from on the Main Market, offering investors a choice to own stakes in commercial, industrial, plantation and office real estate.

 

Aside from being more liquid than investing in real estate, one of the reasons why REITs are more appealing than investing in actual real estate is because of its high yield.

 

Gross dividend yield in the FTSE Bursa Malaysia index is about 2.9%, while the average yield for a REIT in Malaysia is about 8%.

 

REITs yield higher returns because commercial real estate generates a huge amount of cash flow from rentals.

 

If one invests in real estate though, it may be hard to charge the most preferred rental rate, even if the property had been purchased for a hefty price, simply due to market forces.

 

As for REIT prices on the stock market, they generally tend to be “low risk” because their prices are sustained by the yield factor, hence the volatility element is reduced.

 

Even so, REITs are not immune to economic difficulties.

 

REITs such as AmFirst, Hektar, UOA and Axis hit their lowest point in the middle of the financial crisis in 2008 but have since recovered to their pre-crisis prices, if not better.

 

Part of their recovery, says an analyst, is due to good management, good investor relations and a proven track record when it comes to acquisitions.

 

Still, one critic of REITs says it is probably more worthwhile to purchase stocks of established companies if they want to play safe.

 

Advocates of the property trust point to the fact that REITs are a different investment class altogether, choosing to view them as an investment that bridges the gap between a fixed deposit and the stock market.

 

One drawback of REITs is their inability to benefit from capital gain, unlike real estate.

 

But with REITs, returns may be secured with less risk which make them a nice way to take advantage of the big booms in the real estate market.

 

Investors can do without taking on the risk of mortgage payments, unscrupulous tenants and rising tax rates.

 

However, less risk obviously comes with less reward.

 

Good capital appreciation is still the main factor driving demand for landed residential properties.

 

Since 2008, there has been an annual compounded growth rate of 10% for capital appreciation in residential hotspots such as Petaling Jaya, Taman Tun Dr. Ismail and Mont Kiara.

 

A home can go up in value ten-fold given the right market conditions, which would give one a hefty sum of money right into his or her pocket - this won’t happen with any REIT.

 

Ultimately, for someone who wants to have more control of their assets and is willing to improve their value, investing in residential real estate can be a good choice.

 

For someone looking for passive real estate investment, with the added benefits of portfolio diversification and liquidity, a REIT is a good option to consider.

 

Think of them as allowing investors to be exposed to the real estate market without having to fork out as much capital.

 

Alternatively, REITs could be purchased as part of a balanced portfolio, until one has enough capital to enter the real estate market.

What's In Store In Aug 2010 & Beyond

Aug 2010 …

1. EONCap will hold its EGM on Aug 19 2010 for shareholders to vote on the proposed disposal of its entire assets and liabilities to HLBB;

2. Cocoaland was “currently in discussions and negotiations with potential partners to broaden its growth which could involve the issuance of new shares amounting to between 20% and 30% of its share capital. at discount;

3. The government is likely to announce the award of contracts for two major public transport projects worth RM1.1 billion in Aug 2010 to Scomi Eng (Partial);

4. Malaysia will only announce its 2Q2010 GDP numbers on Aug 2010;

5. Detailed list of the programmes and projects for the first two years (2011-2012) rolling plan of the 10MP and Part II of the New Economic Model;

6. MRCB is front runner in acquiring several parcels of land in KL and Selangor, including 60.7ha in Jalan Cochrane, an 8 ½ ha tract in Jalan Ampang Hilir and another 400ha in Sungai Buloh under the purview of the Rubber Research Institute of Malaysia. Government land sales are expected to be announced in conjunction with the unveiling of the 10 MP;

7. B-Retail, which owns 7-Eleven Malaysia Sdn Bhd and Singer (Malaysia) Sdn Bhd, is scheduled for listing in mid-August 2010;

8. Genting Mal Bhd’s ubsidiary, Genting New York, had formally bid to develop and operate a video lottery facility in New York is likely to be announced on Aug 3 2010;

9. Affin Holdings Bhd, a Malaysian bank partly owned by Boustead Holdings Bhd, may conclude the acquisition of Indonesia’s PT Bank Ina Perdana by the third quarter 2010. The acquisition would be Affin’s first overseas venture;

10. Ho Hup has been granted a time extension of four months until Aug 4 2010 to submit its revised regularisation plan to Bursa Malaysia Securities for approval. Ho Hup hoped to “complete preparation and drafting of its regularisation plan” for submission to the relevant authorities within six months from July 2010.

Sept 2010 …

1. Axiata will be announcing a dividend policy by the end of the 3Q2010;

2. Kencana Petroleum Bhd and Dialog Group Bhd are among nine companies shortlisted to construct an oil and gas services terminal in Malaysia’s Sabah state. Contract expected to be awarded on September or Oct 2010;

3. The actual transfer of assets and liabilities from EON Capital to HLB will only be done once the Kuala Lumpur High Court makes its final decision … Sept 20 to Sept 23 2010 as well as on Sept 27 and 28 2010;

4. Primus had filed a legal suit last month against the directors of EON Cap and three entities controlled by Rin Kei Mei and Tan Sri Tiong Hiew King for RM1.1bil in damages as it believed the price for EON Cap should be much higher than that offered by HLB. It was reported that trial dates were set on Sept 20 to 23 as well as on Sept 27 and 28 2010

Oct 2010 …

1. The Economic Transformation Plan which includes the 12 NKEAs, as well as the announcement of the 2011 Budget, both slated for October 2010;

2. Faber’s renewal of its medical services concession will be sometime in Oct 2010;

3. The listing of Malaysia marine & Heavy Engineering Sdn Bhd (MMHE) – a unit of Petronas – in Oct 2010;

4. Industry observers do not discount the possibility of more tax or duty hikes at the Budget 2011 in October 2010

Nov 2010 …

1. US Democrats midterm congressional elections in Nov 2 2010;

2. A Saudi-Malaysian consortium, whose member includes MAHB has prequalified to bid for work for the first phase of the expansion of Prince Mohammed Bin Abdulaziz Airport in Medina, Saudi Arabia. An award expected by the end of November 2010;

3. Contractors For LRT Package A are supposed to submit their tenders in August 2010. It will then need two to three months to evaluate them and hopefully start the main ground works in November 2010. Sources say IJM Corp is a strong candidate for a portion of the main civil works. As such UEM Group also stands a chance. However MRCB could turn out to be a surprise candidate;

4. Linear director had undertaken to “deliver” the King Dome project to Linear, to “indemnify” Linear in the event of any loss, including refund of the cash advanced and to take over the letter of award at cost in the event Linear decides not to proceed further. A Nov 30 2010 deadline had been set. Linear is expecting itself to be out of PN17 “within 12 months” from June 2010. The company already has a turnaround plan in mind, which will be spearheaded by its new directors;

5. HLBB and EONCap have given themselves a time extension to obtain the relevant approvals for their proposed transaction on the sale of the latter’s assets and liabilities to the former by Nov 30 2010, from Aug 15 2010 previously.

Dec 2010 …

State private equity fund manager Ekuiti Nasional Bhd (Ekuinas) will announce its third investment before year-end (2010). They are talking with a number of parties but have not decided on any companies or sectors. This (third investment) is to fulfil its third objective to invest in the non-core assets of either GLCs, PLCs or MNCs

Jan 2011 …

KEURO’s directors are of the view that approval to implement the WCE will be obtained in FY2011 ending Jan 31, 2010.

In The Near-Medium Term …

1. A white knight may emerge for KKB. Sources say the company is planning to diversify into the property and construction sector with the appointment of chin;

2. It is learnt that Carotech’s lenders had two meetings in July 2010 to discuss the company’s proposed debt restructuring scheme and will likely give it the green light. Carotech has been given six months beginning 1 July 2010 to complete the exercise;

3. Sources say E&O’s major shareholders are believed to be considering a privatization of the property develop. They are talking to banks to finance the exercise;

4. The shareholders Sarawak Plantations are said to be looking to sell down their interest in the state owned company;

5. Khazanah could possibly lower its shareholding or exit altogether in the near term of about six months, including those under UEM Group. The likely assets (for divestment) are PLUS Expressways Bhd, CIMB Group Holdings Bhd, Tenaga Nasional Bhd, Time Engineering Bhd, TIME dotCom Bhd and DRB-Hicom Bhd,” said the report;

6. Speculation is rife that Ekuinas, with JV partners could be eyeing a stake in POS. Ekuinas will announce its next investment project by the end of 2010;

7. MMM is requesting a three-month time extension from Bursa as it is unable to meet the July 31 2010 deadline for the submission of its audited accounts for the fiscal year ended March 31, 2010;

8. Bina Puri is close to signing a JV agreement with IIB to develop some seven acres of a RM500 million mixed development in Medini, one of the five flagship zones of Iskandar Malaysia. The agreement is expected to be sealed soon;

9. CIMB is in the process of negotiation with the relevant authorities on how to get listed in Jakarta;

10. Sources say BHIC may soon get a letter of intent for its next batch of patrol vessels, which could be worth up to RM8 billion;

11. UEM Group Bhd is keen to bid for the RM43 billion KL MRT project;

12. LSE-listed Aseana Properties Ltd, a unit of Ireka Corporation Bhd, may consider returning excess cash to shareholders following the proposed disposal of properties in 1 Mont’ Kiara for RM333 million. Aseana expects to complete the proposed transaction by year-end (2010);

13. UEM Group were no plans yet to re-list the company or raise capital but did not rule out the possibility in future.

14. UEM Group Bhd has no plans yet to dispose of its 45% stake in Time Engineering Bhd, but will do so if there are interested parties with substantial game plan. Time Engineering had received its shareholders’ mandate in July 2009 to sell its entire stake in TdC at no less than 48 sen a share;

15. Market speculation of a potential change in a substantial shareholding of Mudajaya Group Bhd. One of Mudajaya’s shareholder is Mulpha Intl;

16. DRB-Hicom aims to make its banking unit, Bank Muamalat Malaysia Bhd, one of the top five Islamic banks in the country within the next two years;

17. Fitters’ MD Datuk Richard Wong’s had significantly increased his equity interest to over 30% of the company’s paid up capital. It plans to attract institutional investors in the near term;

18. PJI is in process of a capital restructuring exercise which hopes to complete in six months (July 2010 – Dec 2010). It is also undergoing a management reshuffle. It has disposed two of its assets;

19. The High Court had granted Transmile a restraining order under Section 176 of the Companies Act 1965 to halt further proceedings and actions taken against the company and Transmile Air Services Sdn Bhd (TAS) for 90 days starting July 16 2010;

...

About Sime Darby,Scomi Group,Uchi Tech,Tenaga

Sime Darby




What’s Up? … dated July 2010



PNB has pared down its stake in the country’s largest conglomerate Sime Darby Bhd with the disposal of more than 47 million shares resulting in its direct interest being lowered to 13.87%.



PNB disposed of 5.5 million shares on July 9 2010 to reduce its stake in the conglomerate from 838.90 million shares or 13.96% to 833.40 million shares or 13.87%. Data services indicated that the shares were sold off-market in a number of tranches with prices ranging from RM7.69 to RM7.80 per share.



According to Sime’s July 13 filing, PNB had disposed of 19 million shares on July 7 2010 and a further eight million shares the following day to reduce its stake from 865.90 million shares or 14.41% to 838.90 million shares or 13.96%. The two blocs of shares were sold off-market at RM7.50 per share and drawing a total value of RM202.5 million.



PNB’s shareholding in Sime has gradually been reduced since early July 2010. It had disposed of over 15 million Sime shares on July 1, 2, July 5 and 6 2010.



An institutional investor could have picked up the big chunk of the shares sold by PNB as Sime remained financially strong with contributions from its plantation, industrial, property and motor sectors at satisfactory levels.



Due to provisions to the tune of RM964 million, Sime posted a net loss of RM308.63 million in its third quarter ended March 31, 2010 (3QFY10) versus a net profit of RM150.57 million a year earlier. Its net asset per share stood at RM3.49 as at March 31 2010.



Sime’s recent losses would not impact its 50% dividend payout policy.







Scomi Group



Shareholding of Scomi Group as at May 2010

Kaspadu (including indirect): 15.21%

Axa Investment: 5.35%

EPF: 0%



Shareholding of Scomi Marine as at April 2010

Scomi Group: 52.71%

LTH: 5.11%

Chuan Hup Holdings Bhd: 23.19%

Meer Sadik Habib: 5.84%



Shareholding of Scomi Engineering as at April 2010

Scomi Group: 69.31%



What’s Up? … dated July 2010



Sources say its major shareholder Kaspadu Sdn Bhd is poised to loosen its grip on or even exit from the company. In an exercise that will see a realignment of shareholding at Kaspadu level, it is learnt that Datuk Kamaluddin Badawi will cased to be a substantial shareholder in Scomi but his partner Shah Hakim will remain with the group.



This is why Kaspadu has reduced its shareholding in Scomi by more than half from a year ago (2009). It is not known who bought the shares. Sources say the shares were sold to friendly with Kaspadu. Shah and his partners are still very much in control



In 2003, Kamaluddin had a 36.25% stake in Kaspadu, Shah hakim 36.25% and Nazimah Syed Majid 27.5%. It is understood that under the realignment, Shah Hakim is keeping his interest in Kaspadu while Kamaluddin and Nazimah are selling their stakes, But it is not clear to whom Kamaluddin and Nazimah have sold their shares.



It is uncertain whether the restructuring at Kaspadu level has any link to the events that occurred more than a year ago (2009), whne Scomi came under the spotlight following reports of US sanctions against Shah hakim and several other Malaysian businessmen who were allegedly involved in nuclear proliferation. .



Also, it is believed that Kamaluddin has been keen to exit Scomi.



It is worth nothing that Kaspadu had sold its Scomi shares at 35 sen to 50 sen apiece which is at a 50% to 70% discount to Scomi’s NTA per share of RM1.05. Given the fact that Scomi is undervalued, the divestment at such prices is quite puzzling, especially by a major shareholder. Furthermore, Scomi is main beneficiary of the potential cash dividends that will be declared by its subsidiaries.



Scomi is considered undervalued based on a sum of parts valuation of its subsidiaries, Scomi’s 69.31% stake in Scomi Engineering and 42.71% in Scomi Marine are worth RM475 million. If strip out the RM475 million from current market cap, the group would only be valued at RM35.6 million.



It is worth nothing that Scomi is the largest recipient of cash from its subsidiaries that have been divesting.





Uchi Tech Bhd



What’s Up? … dated July 2010



Its European orders which comprise about 80% of total revenue, are not affected by the sovereign debt crisis in Europe.



Its customers are MNCs most from Europe.



This could possibly due to the Energy Savings Act enacted by the European countries, which was implemented from Jan 2010. The Act would leave customers with no choice but to place orders with Uchi due to lack of alternative suppliers in the market.



It posted a net profit of RM9.95 million for 1Q2010. Its net asset per share stood at 47 sen. In FY2009, the company’s revenue fell and net profit declined to RM26.95 million which was due to 2008 financial crisis.



The company is targeting a 25% to 30% growth in US dollar revenue as compared to 2009. Uchi conducts all its trades in US dollars.



It has taken advantage of its large cash pile and low stock prices to purchase its own shares, and conducted frequent share buy backs throughout July 2010. As at July 2010, the company had a total of 5.11 million treasury shares.



Its other strengths are its huge cash pile of about rm124 million as at March 31, 2010 and is zero gearing. Its net asset cash per share is 33.1 sen.



The large cash would allow Uchi to give high dividends to its shareholders in FY2010 and FY2011. Its dividend policy is to distribute a minimum of 70% of its profit after tax to its shareholders.



Going forward … It plans to diversify away from Europe. It is currently negotiating with China some business deals.



The company is also taking concrete steps to reduce its heavy dependence on the coffee machine modules division by 2010 end.



Its strong cash pile also enable it to fund capex while allocating a targeted 7% of total revenue for R&D to sped up diversification away from the coffee machine modules division.





Tenaga



Sources say The Energy Commission of Malaysia has been given the mandate to call for competitive bidding for the expansion of coal fired plants in Peninsular Malaysia.



It is leant that the regulator for the electricity and gas supply industry is in the process of preparing request proposals and other documents inviting bids for the supply of an additional 1000 MW to 2000 MW of electricity.



A committee under the Energy Commission with representatives from TNB and EPU will call for bids and determine who can give the lowest tariff for new plant up or power plants.



The Energy Commission was roped in because Tenaga will also be bidding for the expansion of its Janamanjung coal fired plant. Apart from Tenaga MMC Corp has also expressed interest in expanding its Tanjong Bin Power plant to supply additional power to the grid.



Besides Tenaga and MMC Corp, the owners and operators of gas plants are also looking to increase their supply of power to the national power grid. Among them are YTL Power and Tanjong plc.



The move to call for bids comes on the back of the need to boost reserve power margins to cope with increasing power in the peninsula.



Meanwhile, Tenaga biggest fear is that if there are too many new power plants, it would result in excess reserve margins, which will impact its bottom line. Which is why the utility is pushing for a gradual increase in capacity.



The government is also initiating discussions with the first generations IPPs on the possible extension of their services, subject to supply of natural gas from Petronas and pricing for the IPPs’ electricity.

REIT growth is key to capital gains

KUALA LUMPUR: The Edge Financial Daily yesterday wrote on the weak price performance of the two newly listed REITs, Sunway Real Estate Investment Trust (SunREIT) and CapitaMalls Malaysia Trust (CMMT).

It highlighted the fact that while capital gains for REITs may not be strong, the total returns for shareholders is very decent after adding back dividends or distribution per unit.

All Malaysian REITs, even those now trading below IPO prices, have given positive total return to shareholders.

While high yields are likely to keep REIT investors contented, the key to capital growth in REITs is in raising overall yields and asset value, usually through yield-accretive acquisitions.

The lack of such yield-accretive acquisitions, or value enhancement propositions, is one of the key factors behind the lacklustre price performance of many REITs.

It is not surprisingly REITs are often viewed as one-off exercises to realise the value of a developer’s assets. “REIT growth is key, because unlike a company which can undergo business expansion, REITs are often injected at the height of their potential. And unit-holders still want to see a growth in returns,” said an analyst.

Generally, returns can grow through increasing the REIT’s net profit, changing the distribution policy or through property acquisition. The acquisition may be funded through internal cash reserves, a rights issue or a new issue of shares.

According to a study by The Edge Financial Daily, the earnings per unit (EPU), on average, for the 11 Malaysian REITs (excluding SunREIT and CMMT) have dipped 4.5%, from 15 sen to 14.4 sen, during the FY07 to FY09 period.

Starhill REIT stands out from the pack, having grown its EPU by 339%, from 6.9 sen in FY07 to 30.2 sen in FY09. The movement was mostly due to increases in fair value from property revaluations of RM274.4 million during June 2009.

AmFirst REIT also has a high growth rate of 73%, from 7.3 sen to 12.6 sen over the same period, largely due to property revaluation of RM23.5 million during the year ended March 31, 2010.

Al-’Aqar KPJ REIT, the most active REIT acquirer, is another REIT which has enjoyed higher EPU growth, totalling 49% from 7.5 sen to 11.1 sen from FY07 to FY09. In FY08 and FY09, Al-’Aqar KPJ REIT, the sixth largest REIT by capitalisation, introduced 14 more properties into its portfolio, comprising hospitals, an office building and a nursing college at a total cost of RM451.6 million. On July 6, Al-’Aqar added a further seven medical properties as well as a hotel for a total of RM383.4 million, raised partially by cash and a new issue of shares. It remains to be seen how this will affect the unit-holders in the coming financial year.

In contrast, Quill Capita REIT and UOA REIT appear to have suffered lower EPU over the years, falling by 68% (from 26.3 sen to 8.5 sen) and 48% (40.7 sen to 21.3 sen), respectively, from FY07 to FY09, mainly due to a slowdown in property appreciation gains. Based on annual reports, Quill Capita’s net appreciation in fair value of properties was RM57.1 million in FY07 compared to a total of RM3.5 million in FY08 and FY09.

Likewise, UOA REIT’s properties appreciated RM29.1 million in FY09 compared to RM78.8 million in FY07. In order to increase their current yields, REITs should consider the future values of each new asset in their portfolio. A manager should consider the net effect of a new acquisition on portfolio yield. For example, funding the acquisition with borrowings charged at an effective interest rate higher than the yield will lead to a fall in the portfolio’s overall return.

For the two new listings, SunREIT and CMMT, the prospects for acquisition look bright.

SunREIT had said it aims to double its asset base in five to seven years, whereas CMMT has the first right of refusal to acquire CapitaMall Asia’s properties.

CapitaMall Asia is one of Asia’s leading shopping mall developers, managers and owners. However, valuation of any new asset acquired will be key to the REIT’s value and yield.

This article appeared in The Edge Financial Daily, July 27, 2010.

Recommended Stocks From Research Houses

Stocks To Watch For 13th General Election …


CIMB, MRCB, IJM, UEM Land, Hong Leong, Scomi, Proton, Sapura Crest, Proton,

Wah Seong, MMC Corp, DRB-Hicom, Zeland, Hiap Teck, George kent, Hong Leong Ind, Johan, Mamee, Nylex, Paramount Corp, Delloyd Ventures, Daiman, Symphony, Malaysia Smelting, Tradewinds Corp, Tower REIT, Trdaewinds Plantations, Dijaya, HLG Capital, Bolton, VS Industry, Ancom, PadiBeras, YHS, Winsun Tech, TH Group




Target Price(s) Set By Research Houses After Greece 's Debt Crisis Erupted ... 2010



1. Tan Chong: 3.95 (MIDF), 7.05 (CIMB)

2. Proton: 4.67 (MBB), 5.60 (CIMB), 5.80 (MIDF), 4.85 (HDBS)

3. APM: 4.20 (Inter-Pacific), 5.40 (AMResearch)

4. Kulim: 7.32 (Inter Pacific), 7.92 (MIDF)

5. Axiata: 3.77 (ECM), 4.02 (OSK), 4.52 (Inter Pacific), 4.95 (CIMB)

6. Sime Darby: 6.74 (OSK)

7. Maxis: 5.86 (OSK)

8. BStead: 4.48 (ECM), 4.40 (AMResearch)

9. RHB Capital: 5.77 (MBB)

10. Airasia: 2.20 (OSK)

11. Evergreen: 1.43 (RHB)

12. SapCrest: 1.95 (RHB), 3.02 (CIMB), 3.12 (AMResearch), 2.90 (InterPac)

13. BJtoto: 4.37 (OSK), 4.80 (UOB Kay Hian), 4.75 (MIMB)

Genting Malaysia

· The Case Against The Acquisition

· The Case For The Acquistion

Genting Malaysia Bhd (GenM) is acquiring Genting Singapore PLC’s casino operations in the UK (Genting UK) for £340 million (RM1.67 billion) cash.

Genting UK’s operations consist of four companies — Nedby Ltd, Palomino Star Ltd, Palomino World Ltd and Genting International Enterprises (Singapore) Pte Ltd. The acquisition was in line with its strategy to grow its core businesses of leisure, hospitality and entertainment internationally, beyond Malaysia.

Genting UK’s operations have the largest number of casino properties in the UK with 44 casino properties, including five located in London. They come with established gaming brands such as Crockfords, Colony Club, Maxims, Circus, The Palm Beach and Mint.

As at Dec 31, 2009, the four companies had a total revenue of £194.1 million and a net profit of £6.7 million. This means, at the acquisition price of £340 million, the transaction is priced at a historical price-to-earnings ratio (PER) of 51 times. The four companies had collective net assets of £288.9 million as at March 31, 2010, implying an acquisition price-to-book ratio of 1.2 times.

GAB Record High

The impending dividend in the coming q of GAB would likely to spur the price higher couple with good result expected about 15% increase due to the World Cup season recently. The actively acquisition of GAB shares by Aberdeen, MUFG & Credit Suisse have certainly added some spike in price as well. Approximately about 30% shares floating in the market, up surge of price is just make simple even with relatively small volumn of shares transacted. No sign of pausing as yet, how high will it go ??

Bought QCAPITA

Bought myself QCAPITA at RM1.02. Aiming for DPU for the coming Q on 29th July 2010, expected to be around 3.8sen. NAV stood at RM1.21, so there is 18% discount there, not a bad deal.

Strategy Of REITs Investment

elmo said...

I don’t know if LaBrooy, the CEO of AXREIT is speaking for himself or for the general REIT market.

REIT is rather new in this country and most of us have no experience in handling them. I have some AXREIT shares at low entry cost. The return at that entry price is around 12-13%. But tread carefully don’t get euphoric when the index shoots beyond 1300 like today when we can boast about our “gain” in both the dividend income as well as property appreciation.

Let me take you back to some one and half years ago when the market was down. AXREIT being one of the toughest guy in the block was hammered down from above RM1.70 to a bare RM1.00 per share. As we know, market index, like tides floats up and down. We should rebalance our portfolios when the tides are high lest one fine day when the tide goes out we realise that none of us have our pants on!

Now lets question ourselves here. Shall I get into AXREIT at RM2.10 now (KLCI>1300) or am I going to take a chance for the chips to go down (which may not happen for a long long time) and lost the dividend income before I jump in?

Just my 2 sens. When you are confused like I often was, take youself down the path of Zen..."Patience". Trust your instinct. Pick your choice. Lastly, Remember the phrase "Margin of safety".

July 21, 2010 9:01:00 AM GMT+08:00

horse said...

elmo,

probably LaBrooy has tonned on hand waiting to dispose ?? haha

anyhow personally i think REITs investment should not treat as normal share, we should adopt/embark DCA strategy if one really serious of investing in REITs. No right or wrong, just sharing my view. coz, dealing with REIT our ultimate goal is to earn regular interest (DPU) higher than FD.

Ok. this exactly how it work....

1) first set your target of DPU return rate, say anything more than 8% DPU, you will invest else u will not trigger any purchase on REIT.

2) investment time frame should be fairly long (5 to 7 years)

3) invest at regular intervals (1 a month, 1 a quarter or 1 a year)

4) invest at each of those intervals in equal amount or size of lots

5) these regular investments should continue through all kind of market conditions – good, bad and indifferent

e.g say you've 60K, you gradually invest 60K for 5 years. You can opt for 1K a month, d remaining put in FD. 1K a month for REIT that give > 8%, drawdown from FD every month untill it turn ZERO.

You will notice the advantage of having the actual "True Average Cost".

So, this is something for us to consider in future since the REIT industry is gradually bigger in size in M'sia.

elmo - i think above will addressed your hesistation in REIT investment whether to carry out now or later or scare of lost of dividend income.

Anyone else have any better method ??

July 21, 2010 10:08:00 PM GMT+08:00

elmo said...

I sort of liken investment in REIT as to purchase a small unit of Rental Business Property. As usual, the prices of this property in a long run will just appreciate if it’s location remains in the prime business area. O.K. location of a premise is static but the center of activity migrates with time. That’s point number one.

Two, the market prices of any REIT floats with the market sentiment as a whole. As I have mentioned, take AXIS for example (I am more familiar with this one) before the subprime crisis Axis worked it’s way up to RM1.70 per share but sinks to just less than RM1.00 /share! Such a variation has happened and I bet it will happen again.

We all have limited Cash so we have to work it out where is our entry point for taking up REIT investment. I think you will agree with me not anytime is the best time for entry. Definitely not any price is a good price to take up the investment. Why buy a shoplot for RM1 million at KLCI 1300 when you may be able to get one for RM750,000 some 3 years down the road when KLCI say sinks below 900?

Having said that I think of all, yes ALL the REITs counters, AXIS is the best bet at this point in time. … so long as this CEO (LaBrooy) is running the show. BUT do keep an eye (or two) on their policy. AXIS is very aggressive, keep acquiring more and more properties over a short period of time. Good and bad. The gearing mustn’t be too high and when economy slides, even a very little bit, the strain will show. Here the Market Interest Rate is very important to this sector. (Our monetary policy is upward pressure on interest rate so far). They, AXIS, do not have much reserve. 90% of rental income distributed quarterly. To expand, they raise more money!

Also, one thing I hate about AXIS is that when the company raise money to acquire new properties, they do not offer the new shares to the existing share holders. I never was offered. Then when the “deal” is done, there is an increased in the number of total shares in the company with each new acquisition! How was the shares sold? A big question mark?

 

July 22, 2010 10:07:00 AM GMT+08:00

Why REITs should be the choice of investment

KUALA LUMPUR: Real estate investment trusts (REITs) offer many advantages to investors who are keen to invest in the property market.

Axis REIT Managers Bhd chief executive officer Stewart LaBrooy said what was important now to REIT players was to educate them on the benefits on investing in REITs.

“We need to educate them as most of them are not really aware of the advantages, such as having a higher yield compared with some other investments,” he said yesterday at the Investor Insights into Malaysian REITs in 2010.

As a result of the lack of awareness on REITs, he said, the participation from Malaysians in REITs was still small compared with other countries.

“We have 13 REITs now listed on Bursa Malaysia that cover all types of industries. With a high dividend yield of about 7% annually, low entry cost and support with higher corporate governance, REITs should be the choice of investment,” he said, adding that the size of assets of Malaysian REITs was now about RM16bil.

In REITs, a pool of money from investors is invested in properties such as office buildings or shopping malls and the investment is managed by REIT managers.

LaBrooy said another advantage of investing in REITs was the tax efficiency where investors were taxed only once.

“Apart from that, it is easy to invest in REITs as you can buy it today and sell the unit tomorrow, similar to equity stocks. Plus, REITs are a hedge against inflation,” he said, adding that they were low risks and a passive type of investment.

He said the way REITs did its business was to make sure about 90% to 100% of its retained earnings before tax were given back to investors.

“Last year, despite facing a global economic crisis, Malaysian REITs were still giving back about 70% to 80% of its retain earnings to investors,” he said.

Meanwhile, touching on the outlook of residential and office market in Malaysia, CB Richard Ellis (M) Sdn Bhd executive chairman Christopher Boyd said overall, both markets were still stable.

“For the residential market, we are still in the safe net as in Malaysia, developers are still using the method of sell-first-before-build. If you build first then sell like what is done by some other countries, then you will risk yourself of not getting buyers if suddenly problems arise, such as the economic downturn, ” he said.

Our Information Being Sold

Many times often we would received unknowing promotion calls from some corporate with number withheld usually, mostly insurance promotion which collaborate with Banks/TelCo giving special promotion on insurance coverage. Most of the common phrases as below :-

a) hi, you name has been picked by our computer......

b) congratulation !! you are the few being selected in line with our company anniversary....

c) hi sir, we can offer personal loan with special interest rate...

so on and so forth....

When asked, where did you get my contact number ? The common answer would be "from my superior".

This left me in doubt that my information could has been sold to many companies by some unscrupulous people out there. This people have nothing better to do but hacked into million accounts and sell them in bundles of 1000 for some money. What the hack !!!

Many have get conned or scammed by this kind of marketing trick. That include my brother being victimised where he got realise after a few months of transactions in direct debit of credit card, lost few hundreds buck there.

How would you deal with this kind of "crank" calls (i would named it) ?? as this bunch is obviously being trained and strikingly play on words to deceive you.

I would usually returned with "This is police station you are calling"......

Public Bank

Steady As It Goes

Highlights  2QFY10 results (likely on 19 Jul) expected to be +4-5% qoq while 1HFY10 yoy expected to be in mid-teens.

This will be largely in line with our forecast and consensus.

Expect interim dividend but unsure about quantum.

However, full year payout policy of 50-55% intact.

Loan growth on track to hit its +14-15% full year target.

NIM to show slight improvement as benefit of two OPR hikes filtering through and intact mortgage pricing discipline.

Non-interest income to continue benefit from Public Mutual and transaction fees.

Asset quality largely stable.

Partly offset by slightly higher provision due to absence of huge recovery and initial sequential improvement from Hong Kong as well as continued loan growth (based on FRS139 transitional provision).

Not overly concerned about Basel III given that recent G20 suggests more flexibility and time will be given. Worst case is cash call of RM3.5bn in 2012 but amount may be lower with full adoption of FRS139 and grandfathering.

Catalysts  Earnings growth.

 Watered down Basel III with more time given, relieving concerns about potential cash call.

Risks  Unexpected jump in impaired loans and lower than expected loan growth.

 Impact from Basel III on capital.

Forecasts  No changes.

Rating HOLD

 Positives –

 Above industry asset quality, loan growth and yield;

 Excellent track record in delivering guidance.

 Negatives –

 Dividend payout lower than previous years and potential cash call in 2012.

Valuation  RM12.34 based on Gordon Growth with ROE of 23.5% and WACC of 9.1%.

Source from : HLIB

Citigroup second-quarter earnings fall 37%

 

NEW YORK: Citigroup Inc posted a $2.7 billion quarterly profit, down 37% from the same quarter last year, hurt by lower revenue in its investment banking business.

The third-largest U.S. bank posted second-quarter profit of 9 cents a share, compared with $4.28 billon, or 49 cents a share, a year earlier.

Analysts on average expected 5 cents a share before special items, according to Reuters Estimates.

Through Thursday's stock market close, the company's shares had risen 26 percent this year, while the broader U.S. banking sector had risen 17 percent. - Reuters