28 November 2008 Newz Bits

December 2, 2008 at 9:22 am Leave a comment

TALKING POINT

IOI Corporation aborts purchase of Menara Citibank
IOI Corp announced yesterday that they are terminating their purchase to buy Menara Citibank which was negotiated for the sum of RM586.7m. As a penalty, the Group will have to forfeit some RM73m paid earlier including interest accrued to the vendor and is seeking legal advice on the matter, but which will only take
3% off FY09 numbers should any recourse fail. We expect that IOI will continue to see some volatility in the near term but our longer term outlook is maintained that share price should recover especially when CPO prices do as production numbers should be seen coming off in a month or two. Our BUY cal is maintained.

HIGHLIGHTS
On Malaysia
• TM International enlists JP Morgan and Goldman Sachs to help de-gear
• Palm oil stocks to reach record high in November 

On The Global Front
• European retail sales fall the most in at least 5 years
• German unemployment rate extends declines
REPORTS
• IOI Corporation – Menara Citibank no go…(Buy; RM3.14; TP: RM4.00)
• Petra Perdana – 3QFY08 Results (Buy; RM1.46; TP: RM2.00)
• Muhibbah Eng – 2QFY08 Results (Buy; RM1.01; TP: RM1.77)
• Sunrise – 1QFY09 Results (Buy; RM1.34; TP: RM2.32)
• Sunway Holdings – 1QFY09 Results (Buy; RM0.72; TP: RM0.92)

TM International Bhd (TMI) (TI MK, Buy, TP: RM5.95) has appointed JP Morgan and Goldman Sachs investment
bankers to restructure its debts and de-gear over time, said president and group CEO Datuk Seri Jamaludin Ibrahim. He said TMI has moved the bulk of its short-term debt obligation of RM10.45bn from next year to 2011/12, while the remaining amount will be announced shortly. He said with that the issue of uncertainty over TMI’s capability to repay its debts over the near term does not arise. TMI had just obtained a RM2bn loan facility from Maybank and RM4.85bn term loan from CIMB and Maybank. It is in negotiations with a foreign bank to convert its US$500m bridging loan. It will use the RM2bn to repay Telekom Malaysia (T MK, Hold, RM2.74) in Dec and pay the balance in cash in April. It is able to pay cash since its wholly owned unit Celcom (M) Bhd is able to generate nearly RM2bn cash every year. Meanwhile, the two investment bankers are to come up with a plan by Dec on how TMI can reduce its overall debt position and at the same time take into consideration its future capital expenditure requirements of RM5-5.5bn each year for the next 2 years. (StarBiz)
* * * * *
Proton Holdings Bhd’s second-quarter net profit surged more than tenfold, thanks mainly to improved margins and its popular Saga and Persona. However, the carmaker warned of challenging times ahead and that its second-half performance may be weaker as the economy slows. Proton, in the second quarter to September 30, sold more than 44,000 vehicles, or 12 per cent more than the 39,888 units it sold in the same period last year. For the six-month period, unit sales jumped by 35 per cent to 84,565 units. So far, there are no signs of sales declining drastically, says management. Domestic bookings for Persona have reached 59,028 units, while Saga hit 91,127 units. The company also announced the renewal of Syed Zainal’s contract although it is unclear if he will stay for another three years, which is the normal industry practice. The
terms of Syed Zainal’s new contract are still being worked out, Mohd Azlan said (BT)
* * * * *
Malaysia’s long-haul budget carrier AirAsia X is weighing its options for Europe following the London Stansted-Kuala Lumpur (KL) service which is set to take off on March 11, 2009. “The big question is whether we put all our efforts into London and this becomes the hub for Europe, and from there (London) people can go off to France, Germany or other destinations, or whether we eventually have one place in central Europe, one place in eastern Europe, for example,” said AirAsia group chief executive officer Datuk Seri Tony Fernandes. (BT)
* * * * *
Hong Leong Asia Ltd plans to spend up to RM380.5m or RM3.80 a share, to buy the rest of Tasek Corp Bhd that it does not already own. Hong Leong Asia, via wholly-owned unit Hartwell Pte Ltd, has sent a notice of take-over offer to Tasek yesterday. The notice was sent after Hartwell bought 13.5% of Tasek for RM94.67m. This raises the total stake held by Hong Leong Asia and friendly parties to 45.73%. (BT)
* * * * *
Palm oil stocks in Malaysia are expected to swell 5% in November to hit a record high of 2.19 million tonnes as export growth was weak despite a slight easing in output, a Reuters poll showed yesterday. Output in the No.2 palm oil producer is expected to slip 3.2% to 1.60m tonnes, according to a median of estimates from five plantation houses. MPOB will release its data on November palm oil exports, production and stocks on December 10. (BT)
* * * * *

European confidence in the economic outlook fell to a 15-year low this month even after radical interest-rate cuts and government stimulus measures aimed at battling the impact of the financial crisis. An index of executive and consumer sentiment dropped to 74.9 from 80 in Oct. The Nov decline was bigger than economists had forecast and takes the index to the lowest since Aug 1993. Central-bank and government packages have so far failed to boost sentiment after the euro-area economy slipped into a recession that may last through 2009. (Bloomberg)

* * * * *
European retail sales fell the most in at least five years in Nov as a recession eroded consumer confidence and spending, the Bloomberg purchasing managers’ index showed. The measure of sales in the euro region declined to 41 from 44 in Oct, remaining below the 50 limit that indicates contraction for a sixth month. The drop was the steepest in the near fiveyear history of the index. (Bloomberg)
* * * * *
German unemployment extended its decline in Nov, withstanding the worst recession in 12 years, as employers are slow to react to slumping orders. The number of people out of work, adjusted for seasonal swings, dropped 10,000 in Nov to 3.15m after falling 26,000 in Oct. The adjusted unemployment rate held at 7.5%, a 16-year low. The labour market follows the broader economy with a time lag of as much as nine months, according to the Cologne-based IW economic institute. As Germany’s recession began in 2Q08 unemployment should begin to worsen by the start of 2009. (Bloomberg)
* * * * *
China warned yesterday that its economic downturn could threaten stability as pressure grew on the European Central Bank to make a big cut in interest rates to help contain the global financial crisis. China’s State Information Centre forecast annual growth would slow to 8% in 4Q08 from 9% in 3Q08, a cooling from double-digit rates recorded in the past five years. Economic sentiment in Europe’s single currency zone hit 15-year lows in Nov and inflation expectations plunged, boosting the case for a big rate cut from the European Central Bank next week. (Reuters)
* * * * *

Entry filed under: Business, Finance, Stock Market. Tags: , , , , , , , , , , , , .

November 27, 2008 Daily Highlights 10 December 2008 Newz Bits

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Trackback this post  |  Subscribe to the comments via RSS Feed



%d bloggers like this: