25 November 2008 Newz Bits

December 1, 2008 at 9:17 am Leave a comment

HIGHLIGHTS

On Malaysia
• IOI to acquire more land in Malaysia than in Indonesia
• WCT secures additional RM1.2bn job from the Middle East
• Overnight Policy Rate lowered from 3.50% to 3.25% 

On The Global Front
• US government to lend more than US$7.76trn to rescue financial system
• UK to cut taxes and increase social security contributions in a ₤20bn stimulus package
REPORTS
• Media Prima – 3QFY08 Results (Buy; RM0.93; TP: RM1.25)
• UMW Holdings – 3QFY08 Results (Buy; RM5.40; TP: RM6.45)

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IOI Corp Bhd (IOI MK, Hold, TP: RM4.00) is keen to acquire more land in Malaysia than in Indonesia. Group executive chairman Tan Sri Lee Shin Cheng said: “Given the current market uncertainties, we prefer to increase our land bank in Malaysia but in Indonesia, we will continue with new planting efforts.” Speaking after the joint press conference by Malaysian Palm Oil Board and six top local plantation companies yesterday, he said IOI Corp also did not expect bigger foreign exchange (forex) losses in the coming quarters. “There is no need to worry as 90% of the company’s products are for export. “We are taking risks on a basket of currencies. It’s just the ups and downs. Now it’s a little bit sharper,” Lee said. (StarBiz)
* * * * *
Smallcap World Fund Inc has emerged as a substantial shareholder in KNM (KNMG MK, Hold, TP: RM0.85) while Fidelity International Ltd has ceased to be a substantial shareholder. Capital Research and Management Co, a company founded by the late investor Jonathan Bell Lovelace, manages the Smallcap World Fund. Smallcap also has stakes in IJM and Digi although not substantial. (Financial Daily)
* * * * *
WCT Bhd has been awarded additional works under the contract for the construction and completion of the motor racing circuit in Yas Island, Abu Dhabi. The contract was earlier awarded to the company’s 50 per cent owned joint-venture company, Cebarco-WCT WII (CWCT) for the construction, completion and remedying of defects for the motor racing circuit. CWCT has been awarded additional works worth about RM1.2bn by ALDAR Properties PJSC. (BT)
* * * * *
Petronas Gas Bhd (PGas) has signed a shareholders’ agreement with Yayasan Sabah to set up a joint venture (JV) company to develop a 300MW gas power plant. PGas told Bursa Malaysia yesterday it would hold a 60% stake in the JV company and Yayasan Sabah, the remaining 40%. The JV company would build the plant and related facilities and infrastructure, known as the Kimanis power plant project, in the Papar district, Kota Kinabalu. (StarBiz)
* * * * *
Malaysia’s 200,000-odd oil palm planters, initially forecast to spend more than RM5bn on 3.5m tonnes of imported fertiliser this year, have collectively agreed to reduce fertilizer purchases in the next six months. Oil palm plantations consume more than 75% of the nation’s fertiliser imports. “We’re considering not applying fertiliser for the next six months to cut cost if fertiliser prices do not come down. Fertiliser is still two times more costly than at the beginning of the year,” said Malaysian Palm Oil Association (MPOA) chairman Datuk Azhar Abdul Hamid, who is also Sime Darby Bhd executive vicepresident of the plantation and agribusiness division. He was speaking to reporters after a meeting with Malaysian Estate Owners Association (MEOA) president Boon Weng Siew and the Malaysian Palm Oil Board (MPOB) chairman Datuk Sabri
Ahmad. (BT)
* * * * *
Bank Negara has cut its benchmark Overnight Policy Rate (OPR) by 25 basis points to 3.25% from 3.50%, and
signalled it was ready to cut the rate further. To inject more liquidity into the banking system, Bank Negara also cut the statutory reserve requirement (SRR) for banking institutions for the first time in a decade – from 4% to 3.5% – effective Dec 1. (StarBiz)
* * * * *
The government will, from next month, start awarding to contractors RM600m worth of small infrastructure projects identified under the RM7bn economic stimulus package. Tan Sri Khalid Ramli, director-general of the Implementation Coordination Unit (ICU), said the projects are people-centric, involving the building of basic infrastructure such as roads, jetties and drains. He anticipates that by March next year, about 80 to 90% of these projects would have been awarded to contractors. (BT)
* * * * *
Stocks surged Monday in a broad rally as Citigroup’s massive rescue package and President-elect Obama’s picks for his economic team pushed investors off the sidelines. The DJIA gained 397 points, or 4.9% to close at 8,443.4. The S&P 500 index rose 6.5% (+51.8 pts, close 851.8) and the Nasdaq composite gained 6.3% (+87.7 pts, close 1,472.0). In currency trading, the dollar fell versus the euro and gained against the yen. US light crude oil for Jan delivery rose US$4.57 to settle at US$54.50 a barrel on the New York Mercantile Exchange. (CNNMoney)
* * * * *
Home re-sales in the US dropped in Oct and prices fell by the most on record, signalling a deepening housing recession going into 2009. Purchases of existing homes slid to an annual rate of 4.98m, a National Association of Realtors report showed in Washington. The median price fell 11.3% y-o-y, the most since the group began collecting data in 1968. The figures indicate a renewed downturn in an industry that showed signs of stabilizing this year, hurt by the credit squeeze and record mortgage foreclosures. That may raise pressure on President-elect Barack Obama to aid homeowners and potential buyers as he assembles a record stimulus package. (Bloomberg)
* * * * *
The US government is prepared to provide more than US$7.76trn on behalf of American taxpayers after guaranteeing $306bn of Citigroup debt. The pledges, amounting to half the value of everything produced in the nation last year, are intended to rescue the financial system after the credit markets seized up 15 months ago. The unprecedented pledge of funds includes $3.18trn already tapped by financial institutions in the biggest response to an economic emergency since the New Deal of the 1930s. The commitment dwarfs the plan approved by lawmakers, the Treasury Department’s US$700bn Troubled Asset Relief Program. (Bloomberg)
* * * * *
The UK will cut taxes and increase social security contributions in a ₤20bn (US$29.7bn) stimulus announced
yesterday. The package is said to worth around 1% of gross domestic product. The indirect value-added tax will be cut to 15% from 17.5% through the end of 2009. UK Chancellor of the Exchequer Alistair Darling said he would make permanent the tax cuts for 22m people announced in May. (WSJ)
* * * * *
Plans for a second Chinese stimulus package show the government’s determination to sustain growth and may help the economy expand more than 8% for each of the next two years. The National Development and Reform Commission is proposing income tax cuts, salary increases and larger housing subsidies according to Chinese media yesterday. (Financial Daily)
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Plantations Weekly Review: 17th – 23rd November 2008 Media Prima 3QFY08 : Weaker quarter

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