Tenaga Nasional Bhd (TNB MK, Buy , TP: RM9.90) is being sued for RM106.89m jointly by Irham Niaga Sdn Bhd (INSB) and Irham Niaga Logistics Sdn Bhd (INLSB), that involves an ongoing legal dispute with TNB’s subsidiary TNB Transmission Network Sdn Bhd (TNBT). The dispute dated back to 2005, when the former filed an arbitration proceeding for restitution of all rentals made to INSB and INLSB under 5 year tenancy agreements, which was responded by a counter-claim for wrongful repudiation of the tenancy agreements. Last July, the High Court dismissed TNBT’s application to set aside the arbitration awards and allowed with cost INSB’s and INLSB’s application to register and enforce the arbitration award against TNBT, which TNBT had later appealed against the court order. (Financial Daily)
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Tenaga Nasional Berhad (TNB MK, Buy, TP:RM9.90) inked a renewable energy power purchase agreement (REPPA) with Pesaka Technologies Sdn Bhd for the 10MW mini hydro project the company will develop in Sungai Brooke , Kelantan. Under the REPPA, TNB will purchase the power generated for RM14.89m per year or 17 sen per kilowatt hour for a 21-year period. The 17sen/kWh rate is at the high end of the 14-17 sen range TNB acquires power from hydro based RE projects as compare to 21 sen for non-hydro projects (biomass, biogas). (Malaysian Reserve)
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Future increases in tobacco excise duty will only encourage the trade of illicit cigarettes and hamper the earnings of legitimate cigarette companies further, according to British American Tobacco Malaysia Bhd (BAT) (ROTH MK, Hold, TP: RM47.00). The company said it was hopeful that the government would not increase excise duties further at Budget 2010, to be tabled later this month, as the illicit cigarette trade was increasing at an alarming rate. Steve Rush, BAT’s finance director, said the government should increase enforcement, impose stringent non-financial penalties and heighten awareness of criminal involvement in illicit cigarettes in order to curb the rise in illicit trade. Rush also said it was too early to determine the impact of the current excise hike on future earnings, adding that it had no immediate plans to increase cigarette prices further. (StarBiz)
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Astro All Asia Networks plc paid “over US$250m” (RM855m) to keep its exclusive rights to broadcast the 2010/2013 English Premier League (EPL) in Malaysia, as “competition” caused the price to double from the previous bid in 2006. Astro commented that all in costs for EPL, over 3 years could come to US$300m and subscription rates is expected to move up gradually with cost. Astro, which had 2.78m subscribers as at end-July 09, had added over 1m customers from previous round of bidding for the EPL rights in 2006. The management had guided analysts that sports content cost will be about 35% of total content cost for FY1/10, up from 30.2% in FY1/09 and 25.5% the year before. Basing on these statistics and assuming its subscribers base grow too about 3m, it’s estimated that Astro’s average EPL cost would average about US$143 per subscriber for the 2010/2013 season, which is about 55% more than the 2006/2009 estimated cost. (Financial Daily)
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Dialog Group Bhd has proposed a special share dividend of one treasury share for every 50 shares held, amounting to 27.71m treasury shares to be distributed for the ended FY June 30 2009. It was to commemorate the 25th anniversary of the incorporation of its group of companies. The entitlement date has yet to be fixed. Together with cash dividends, interim and proposal final) of 36% less 25% tax, total gross dividend rate for FY09 is 57.6%, which adding the dividend payout ratio for FY09 is 74%. As at Oct 6, the gross dividend yield is 4.6%. This is the 2nd time the company is distributing share dividends. The proposal special share dividend and final cash dividend of 24% less tax are subject to shareholder’s approval at the forthcoming AGM. (Financial Daily)
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The pre-marketing for Maxis Bhd’s initial public offering (IPO) of shares, possibly Malaysia’s largest IPO in recent years, will start next week, a person familiar with the deal said yesterday. The source, speaking on condition of anonymity, told Dow Jones Newswires that the listing exercise is targeted to be completed by the end of November. (BT)
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Privately-held Global Rail Sdn Bhd and its partner from China have jointly submitted a RM28bn proposal to develop a high-speed railway and inter-modal freight system in Malaysia, linking economic corridors to major airports and seaports. Global Rail managing director Fan Boon Heng said the proposal was submitted on September 28 to the Ministry of Finance, the Economic Planning Unit and the Johor Menteri Besar. The project is a private finance initiative (PFI) with China Infraglobe Consortium, a global infrastructure development and logistics specialist. Fan said China Infraglobe has the financing in place to fully fund the project, which will be implemented in four phases over 10 years. Fan said the implementation of the project to lay electrified double tracks will start from Iskandar Malaysia in Johor. Under the first phase, the parties involved will lay the tracks from Johor Baru to Gemas, while under Phase 2, the tracks will run from Gemas to Tumpat in Kelantan. Phase 3 will start from Kluang, with connections to the KL International Airport, Port Klang and the Port Klang Free Zone (PKFZ) in Selangor. The fourth phase will be from PKFZ to Perlis and up to the Thai border. (BT)
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Petgas Trading and Gazprom Marketing and Trading, the UK subsidiaries of Petroliam Nasional Bhd (Petronas) and Russia's Gazprom respectively, are in talks to expand gas ventures beyond Britain, Petgas said yesterday. "The companies have expanded the initial area of collaboration to include other gas marketing and trading activities," Petgas said. "And discussions are ongoing to deepen and extend the scope of the two companies' relationship, which may include ventures beyond the UK gas market." Initial collaboration between Petgas and Gazprom involved delivering liquefied natural gas (LNG) cargo to Britain's Dragon LNG terminal in south Wales in August and last month."Additional LNG cargo is now planned through this coming winter and into 2010," Petgas added. (BT)
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Malaysia’s interest rates still need to support the country’s economic recovery, said central bank governor Tan Sri Dr Zeti. Malaysia’s central bank kept borrowing costs unchanged in August after the economy’s contraction eased in the 2Q. As quoted by Dr Zeti, “It’s important to not prematurely exit from this strategy of supporting growth and interest rates still need to be supportive to growth but also need to be normalised.” Bank Negara Malaysia (BNM) will look at “potential distortions” that could emerge from a very low interest rate environment and even so, its borrowing costs are “not near zero” will still be able to remain supportive. Easing inflation allowed BNM to cut its benchmark interest rate from 3.5% in mid-Nov to a record low of 2%. GDP shrank 3.9% in 2Q from a year earlier, easing from a 6.2% drop the previous quarter. Zeti commented that the contraction (Financial Daily)
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Malaysia’s budget deficit in 2010 will be “well below” this year’s level as government trims spending and increase revenue. Malaysia’s economy is forecast to contract as much as 5% this year as the world recession slashes exports, spurring the government to boost spending and increase its deficit to 7.6% of GDP in 2009. The central bank predicts the economy will resume growth this quarter and is ready to pick up the slack after slipping into a recession in the 1H. (Financial Daily)
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The property development and construction players want Budget 2010 to remove, or keep to the minimal, the levies and stamp duties on private projects and property transactions. Penang Master Builders and Building Materials Dealers Association (PMBBMDA) president Finn Choong said levies for project contracts and foreign workers had raised construction costs, which had to be passed on to consumers. “Presently the levies are high in comparison with those of developed countries and have eroded the competitive edge of the local construction industry.” Choong said. PMBBMDA also urged the government to remove approved permits for new construction machineries as this will spur the adoption of new and green construction technology by local construction companies. (StarBiz)
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Stocks seesawed Wednesday, with blue chips weaker and techs a bit higher as a two-day advance petered out amid a mixed dollar, lower oil prices and some jitters at the start of the quarterly financial reporting period. Dow component Alcoa (AA, Fortune 500) got things started on the right foot after the close Wednesday, reporting quarterly earnings and revenue that fell from a year ago but surpassed analysts' estimates. Alcoa's report is typically seen as the symbolic start of the reporting period, as it is usually the first Dow component to report. The Dow Jones industrial average lost 0.1% (-5.7 pts, close 9,725.6). The Nasdaq gained 0.3% (+6.8 pts, close 2,110.3) and the S&P 500 gained 0.3% (+2.9 pts, close 1,057.6). U.S. light crude oil for November delivery fell US$1.31 to settle at US$69.57 a barrel on the New York Mercantile Exchange. (CNNmoney)
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U.S. consumer credit fell in August for a seventh straight month as banks maintained restrictive terms and job losses made households reluctant to borrow. Consumer credit fell by US$12bn, or 5.8% at an annual rate, to US$2.46trn, according to a Federal Reserve report released yesterday in Washington. Credit dropped by US$19bn in July, less than previously estimated. The series of declines is the longest since 1991. Labour Department figures last week showed there were more job cuts than forecast in September and the jobless rate kept rising. Economists had forecast consumer credit would drop US$10bn in August, according to the median of 36 estimates in a Bloomberg News survey. Projections ranged from a decline of US$15bn to an increase of US$6.2bn. The Fed initially said consumer credit decreased a record US$21.6bn in July. (Bloomberg)
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U.K. consumer confidence rose to the highest in 1 1/2 years in September as the economy showed signs of escaping the recession, Nationwide Building Society said. An index of sentiment rose six points to 71, the highest since April 2008, Britain’s biggest customer-owned lender said in an e-mailed statement yesterday. TNS questioned 1,000 people for Nationwide from Aug. 24 to Sept. 20. The Bank of England will today keep its asset-buying program capped at 175bn pounds (US$280bn) as policy makers assess the strength of the recovery, economists say. Reports this week showed house prices have recovered to the level of a year ago and that the economy is no longer shrinking. An index measuring expectations for the economy rose 9 points to 106, the highest since December 2005, Nationwide said. The gauge of spending increased by 3 points to 103. (Bloomberg)
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Europe’s economy contracted more than estimated in 2Q09 as consumer spending, investment and exports were weaker than earlier reported. Gross domestic product in the 16-nation euro region fell 0.2% from 1Q09, when it dropped 2.5%, the European Union’s statistics office in Luxembourg said yesterday in publishing final figures on 2Q09 GDP. The decline was sharper than the 0.1% decrease estimated on Sept. 2.While the euro-area economy is gathering strength after governments injected billions of euros through tax cuts and spending incentives to fight the worst recession since World War II, the International Monetary Fund projected last week that Europe’s recovery will be “slow and fragile.” From a year earlier, 2Q09 GDP decreased 4.8%, also sharper than the 4.7% drop estimated earlier. The economy may expand 0.2% in 3Q09 and 0.1% in 4Q09, the European Commission forecast on Sept. 14. (Bloomberg)
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German factory orders rose more than economists forecast in August, indicating that growth in Europe’s largest economy continued to accelerate in 3Q09. Orders, adjusted for seasonal swings and inflation, rose 1.4% from July, when they advanced a revised 3.1%, the Economy Ministry in Berlin said yesterday. That was a sixth consecutive increase and exceeded the 1.1% median forecast of 38 economists in a Bloomberg News survey. Compared with a year earlier, orders were down 20.4%. Foreign orders climbed 4.6% in September from the previous month, yesterday’s report showed. Domestic orders decreased 1.9%. (Bloomberg)
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Tenaga Nasional Berhad (TNB MK, Buy, TP:RM9.90) inked a renewable energy power purchase agreement (REPPA) with Pesaka Technologies Sdn Bhd for the 10MW mini hydro project the company will develop in Sungai Brooke , Kelantan. Under the REPPA, TNB will purchase the power generated for RM14.89m per year or 17 sen per kilowatt hour for a 21-year period. The 17sen/kWh rate is at the high end of the 14-17 sen range TNB acquires power from hydro based RE projects as compare to 21 sen for non-hydro projects (biomass, biogas). (Malaysian Reserve)
* * * * *
Future increases in tobacco excise duty will only encourage the trade of illicit cigarettes and hamper the earnings of legitimate cigarette companies further, according to British American Tobacco Malaysia Bhd (BAT) (ROTH MK, Hold, TP: RM47.00). The company said it was hopeful that the government would not increase excise duties further at Budget 2010, to be tabled later this month, as the illicit cigarette trade was increasing at an alarming rate. Steve Rush, BAT’s finance director, said the government should increase enforcement, impose stringent non-financial penalties and heighten awareness of criminal involvement in illicit cigarettes in order to curb the rise in illicit trade. Rush also said it was too early to determine the impact of the current excise hike on future earnings, adding that it had no immediate plans to increase cigarette prices further. (StarBiz)
* * * * *
Astro All Asia Networks plc paid “over US$250m” (RM855m) to keep its exclusive rights to broadcast the 2010/2013 English Premier League (EPL) in Malaysia, as “competition” caused the price to double from the previous bid in 2006. Astro commented that all in costs for EPL, over 3 years could come to US$300m and subscription rates is expected to move up gradually with cost. Astro, which had 2.78m subscribers as at end-July 09, had added over 1m customers from previous round of bidding for the EPL rights in 2006. The management had guided analysts that sports content cost will be about 35% of total content cost for FY1/10, up from 30.2% in FY1/09 and 25.5% the year before. Basing on these statistics and assuming its subscribers base grow too about 3m, it’s estimated that Astro’s average EPL cost would average about US$143 per subscriber for the 2010/2013 season, which is about 55% more than the 2006/2009 estimated cost. (Financial Daily)
* * * * *
Dialog Group Bhd has proposed a special share dividend of one treasury share for every 50 shares held, amounting to 27.71m treasury shares to be distributed for the ended FY June 30 2009. It was to commemorate the 25th anniversary of the incorporation of its group of companies. The entitlement date has yet to be fixed. Together with cash dividends, interim and proposal final) of 36% less 25% tax, total gross dividend rate for FY09 is 57.6%, which adding the dividend payout ratio for FY09 is 74%. As at Oct 6, the gross dividend yield is 4.6%. This is the 2nd time the company is distributing share dividends. The proposal special share dividend and final cash dividend of 24% less tax are subject to shareholder’s approval at the forthcoming AGM. (Financial Daily)
* * * * *
The pre-marketing for Maxis Bhd’s initial public offering (IPO) of shares, possibly Malaysia’s largest IPO in recent years, will start next week, a person familiar with the deal said yesterday. The source, speaking on condition of anonymity, told Dow Jones Newswires that the listing exercise is targeted to be completed by the end of November. (BT)
* * * * *
Privately-held Global Rail Sdn Bhd and its partner from China have jointly submitted a RM28bn proposal to develop a high-speed railway and inter-modal freight system in Malaysia, linking economic corridors to major airports and seaports. Global Rail managing director Fan Boon Heng said the proposal was submitted on September 28 to the Ministry of Finance, the Economic Planning Unit and the Johor Menteri Besar. The project is a private finance initiative (PFI) with China Infraglobe Consortium, a global infrastructure development and logistics specialist. Fan said China Infraglobe has the financing in place to fully fund the project, which will be implemented in four phases over 10 years. Fan said the implementation of the project to lay electrified double tracks will start from Iskandar Malaysia in Johor. Under the first phase, the parties involved will lay the tracks from Johor Baru to Gemas, while under Phase 2, the tracks will run from Gemas to Tumpat in Kelantan. Phase 3 will start from Kluang, with connections to the KL International Airport, Port Klang and the Port Klang Free Zone (PKFZ) in Selangor. The fourth phase will be from PKFZ to Perlis and up to the Thai border. (BT)
* * * * *
Petgas Trading and Gazprom Marketing and Trading, the UK subsidiaries of Petroliam Nasional Bhd (Petronas) and Russia's Gazprom respectively, are in talks to expand gas ventures beyond Britain, Petgas said yesterday. "The companies have expanded the initial area of collaboration to include other gas marketing and trading activities," Petgas said. "And discussions are ongoing to deepen and extend the scope of the two companies' relationship, which may include ventures beyond the UK gas market." Initial collaboration between Petgas and Gazprom involved delivering liquefied natural gas (LNG) cargo to Britain's Dragon LNG terminal in south Wales in August and last month."Additional LNG cargo is now planned through this coming winter and into 2010," Petgas added. (BT)
* * * * *
Malaysia’s interest rates still need to support the country’s economic recovery, said central bank governor Tan Sri Dr Zeti. Malaysia’s central bank kept borrowing costs unchanged in August after the economy’s contraction eased in the 2Q. As quoted by Dr Zeti, “It’s important to not prematurely exit from this strategy of supporting growth and interest rates still need to be supportive to growth but also need to be normalised.” Bank Negara Malaysia (BNM) will look at “potential distortions” that could emerge from a very low interest rate environment and even so, its borrowing costs are “not near zero” will still be able to remain supportive. Easing inflation allowed BNM to cut its benchmark interest rate from 3.5% in mid-Nov to a record low of 2%. GDP shrank 3.9% in 2Q from a year earlier, easing from a 6.2% drop the previous quarter. Zeti commented that the contraction (Financial Daily)
* * * * *
Malaysia’s budget deficit in 2010 will be “well below” this year’s level as government trims spending and increase revenue. Malaysia’s economy is forecast to contract as much as 5% this year as the world recession slashes exports, spurring the government to boost spending and increase its deficit to 7.6% of GDP in 2009. The central bank predicts the economy will resume growth this quarter and is ready to pick up the slack after slipping into a recession in the 1H. (Financial Daily)
* * * * *
The property development and construction players want Budget 2010 to remove, or keep to the minimal, the levies and stamp duties on private projects and property transactions. Penang Master Builders and Building Materials Dealers Association (PMBBMDA) president Finn Choong said levies for project contracts and foreign workers had raised construction costs, which had to be passed on to consumers. “Presently the levies are high in comparison with those of developed countries and have eroded the competitive edge of the local construction industry.” Choong said. PMBBMDA also urged the government to remove approved permits for new construction machineries as this will spur the adoption of new and green construction technology by local construction companies. (StarBiz)
* * * * *
Stocks seesawed Wednesday, with blue chips weaker and techs a bit higher as a two-day advance petered out amid a mixed dollar, lower oil prices and some jitters at the start of the quarterly financial reporting period. Dow component Alcoa (AA, Fortune 500) got things started on the right foot after the close Wednesday, reporting quarterly earnings and revenue that fell from a year ago but surpassed analysts' estimates. Alcoa's report is typically seen as the symbolic start of the reporting period, as it is usually the first Dow component to report. The Dow Jones industrial average lost 0.1% (-5.7 pts, close 9,725.6). The Nasdaq gained 0.3% (+6.8 pts, close 2,110.3) and the S&P 500 gained 0.3% (+2.9 pts, close 1,057.6). U.S. light crude oil for November delivery fell US$1.31 to settle at US$69.57 a barrel on the New York Mercantile Exchange. (CNNmoney)
* * * * *
U.S. consumer credit fell in August for a seventh straight month as banks maintained restrictive terms and job losses made households reluctant to borrow. Consumer credit fell by US$12bn, or 5.8% at an annual rate, to US$2.46trn, according to a Federal Reserve report released yesterday in Washington. Credit dropped by US$19bn in July, less than previously estimated. The series of declines is the longest since 1991. Labour Department figures last week showed there were more job cuts than forecast in September and the jobless rate kept rising. Economists had forecast consumer credit would drop US$10bn in August, according to the median of 36 estimates in a Bloomberg News survey. Projections ranged from a decline of US$15bn to an increase of US$6.2bn. The Fed initially said consumer credit decreased a record US$21.6bn in July. (Bloomberg)
* * * * *
U.K. consumer confidence rose to the highest in 1 1/2 years in September as the economy showed signs of escaping the recession, Nationwide Building Society said. An index of sentiment rose six points to 71, the highest since April 2008, Britain’s biggest customer-owned lender said in an e-mailed statement yesterday. TNS questioned 1,000 people for Nationwide from Aug. 24 to Sept. 20. The Bank of England will today keep its asset-buying program capped at 175bn pounds (US$280bn) as policy makers assess the strength of the recovery, economists say. Reports this week showed house prices have recovered to the level of a year ago and that the economy is no longer shrinking. An index measuring expectations for the economy rose 9 points to 106, the highest since December 2005, Nationwide said. The gauge of spending increased by 3 points to 103. (Bloomberg)
* * * * *
Europe’s economy contracted more than estimated in 2Q09 as consumer spending, investment and exports were weaker than earlier reported. Gross domestic product in the 16-nation euro region fell 0.2% from 1Q09, when it dropped 2.5%, the European Union’s statistics office in Luxembourg said yesterday in publishing final figures on 2Q09 GDP. The decline was sharper than the 0.1% decrease estimated on Sept. 2.While the euro-area economy is gathering strength after governments injected billions of euros through tax cuts and spending incentives to fight the worst recession since World War II, the International Monetary Fund projected last week that Europe’s recovery will be “slow and fragile.” From a year earlier, 2Q09 GDP decreased 4.8%, also sharper than the 4.7% drop estimated earlier. The economy may expand 0.2% in 3Q09 and 0.1% in 4Q09, the European Commission forecast on Sept. 14. (Bloomberg)
* * * * *
German factory orders rose more than economists forecast in August, indicating that growth in Europe’s largest economy continued to accelerate in 3Q09. Orders, adjusted for seasonal swings and inflation, rose 1.4% from July, when they advanced a revised 3.1%, the Economy Ministry in Berlin said yesterday. That was a sixth consecutive increase and exceeded the 1.1% median forecast of 38 economists in a Bloomberg News survey. Compared with a year earlier, orders were down 20.4%. Foreign orders climbed 4.6% in September from the previous month, yesterday’s report showed. Domestic orders decreased 1.9%. (Bloomberg)
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