24 December 2008 Newz Bits

December 25, 2008 at 5:59 am Leave a comment

TALKING POINT

Celcom in partnership with Tune Talk
Celcom, a wholly owned subsidiary of TMI, yesterday entered into an agreement with Tune Talk whereby Celcom will subscribe 2,625,000 shares of RM1 each at RM2,625,000 in Tune Talk. In
addition, Celcom will receive a call option on Tune Talk. Tune Talk plans to offer mobile communication services as a mobile virtual network operator (MVNO). We make no change to our earnings estimate at this juncture as we believe MVNOs face a difficult challenge in the long run against the established mobile operators who have spent significant amount of capex to build and establish their networks.

HIGHLIGHTS

On Malaysia
· AirAsia takes Sime Darby’s proposal to build LCCT in Labu
· Jetstar denies possible combination with AirAsia
· MAHB’s financial restructuring plan receives cabinet approval
On The Global Front
· US economy shrinks 0.5% at annual pace in 3Q08
· UK economy contracts 0.6% q-o-q in 3Q08
REPORTS
· TM International – Partners with Tune Talk (Buy; RM3.58; TP: RM5.95)

AirAsia Bhd (AIRA MK, Buy, TP: RM1.90) took up Sime Darby’s (SIME MK, Buy, TP: RM7.30) proposal to construct a private low-cost carrier (LCC) airport in Labu, Negri Sembilan, as it could not wait for Malaysia Airports Holdings Bhd (MAHB) to finalise plans for the setting up of a bigger low-cost carrier terminal (LCCT) to replace the existing LCCT at KLIA. An Air Asia official said MAHB’s plan for a permanent LCCT had yet to be finalised and if the carrier were to follow the airport operator’s schedule, it could potentially face a shortfall of at least 41 parking bays for its aircraft. (Financial Daily)
* * * * *
Jetstar Asia Pte Ltd (Jetstar) has denied a report in a local daily which said that it was in talks with AirAsia Bhd (AIRA MK, Buy, TP: RM1.90) on a possible combination. Jetstar, a Singapore-based budget carrier backed by Qantas Airways Ltd said that there were no discussion on any merger and that the 2 airlines were working on commercial arrangements, such as
transferring passengers between each other’s flights when delays occur. (Financial Daily)
* * * * *
The termination of Sunrise Bhd’s (SUN MK, Buy, TP: RM2.32) put and call option agreement involving RM767m worth of properties is the latest major cancellation to hit the property sector. The proposed agreement signed with Malaysia Commercial Development Fund Pte Ltd (MCDF) gives MCDF the right to buy Sunrise’s MK20, a mixed development project in Mon’t Kiara, for RM767m during the option period. MCDF paid RM36.9m as option deposit to the developer, which would now be refunded given the deal’s cancellation. (StarBiz)
* * * * *
Malaysia Airports Holdings Bhd’s (MAHB) financial restructuring plan has finally received the cabinet’s approval yesterday, resolving the long outstanding issues that had bogged down the company. Ironically, the approval on MAHB’s plan came hot on the heels of the government giving Sime Darby Bhd (SIME MK, Buy, TP: RM7.30) and Air Asia Bhd (AIRA MK, Buy, TP: RM1.90) the green light to build and operate a LCCT in Labu, Negri Sembilan. Sime Darby officials said the airport was entirely a private initiative and would not involve government funds. Under the plan, MAHB would pay the government RM1.01bn, of which RM508m would be in cash, and the remaining to be set off against capital expenditure projects, which include upgrading works at the LCCT and aerotrain in KLIA. (Financial Daily)
* * * * *
The Government is considering a reduction in Malaysian Palm Oil Board cess payment or even suspend it for a certain period to assist planters in dire straits. Primary Industries and Commodities Minister, Datuk Peter Chin Fah Kui, said that the Government was willing to look into these options if there was justification that the cess payments were burdening local planters, given the sharp fall in crude palm oil (CPO) prices. (StarBiz)
* * * * *
According to the Malaysian Automotive Association (MAA), vehicle sales in the country fell for a 2nd month in November y-o-y. Sales of cars, vans and sport utility vehicles (SUV) decreased 6.7% y-o-y to 40,865 units last month. MAA also predicted a further drop in demand this month amid softening demand in line with the current global trend. (Financial Daily)
* * * * *
Stocks fell Tuesday in a sparsely traded session as the market limps toward the end of a brutal year. The market had drifted lower for most of the day, but losses accelerated in late afternoon trade. The DJIA ended down 100 points (-1.2%, close 8,419.5 pts). The S&P 500 slid nearly 1% (-8.5 pts, close 863.2) and the Nasdaq composite shed 0.7% (-10.8 pts, close 1,521.5). In currency trading, the dollar fell versus the euro and the yen. US light crude oil for February delivery slid US$0.93 to settle at US$38.98 a barrel on the New York Mercantile Exchange. (CNNMoney)
* * * * *
The US economy shrank in 3Q08 at a 0.5% annual pace as the now year-old recession intensified. The contraction in gross domestic product from July through September was the worst since 2001, according to revised figures from the Commerce Department yesterday. Consumer spending fell the most in almost three decades. A lack of credit, declining home prices, and
cutbacks in consumer and business spending indicate a deepening slump in the final three months of this year and into 2009. President-elect Barack Obama and his economic team are working to propose a stimulus package that could amount to US$850 bn over two years to limit the damage and create 3m jobs. (Bloomberg)
* * * * *
US new home sales fell in November to a 17-year low as credit dried up and consumer confidence sank. Purchases dropped 2.9% to an annual pace of 407,000, lower than forecast, according to figures from the Commerce Department yesterday. The median sales price declined 11.5% y-o-y. The housing recession and credit crisis may extend into 2009, signalling little relief for the broader economy. The Federal Reserve last week dropped its target rate to as low as zero to spur
lending, while President-elect Barack Obama has pledged to work to halt foreclosures, boost housing and provide a “jolt”’ to the economy. (Bloomberg)
* * * * *
US sales of single-family houses dropped in November by the most in two decades and resale prices collapsed at a pace reminiscent of the Great Depression, dashing speculation the market was close to a bottom. Purchases of both new and existing houses dropped 7.6% m-o-m, the biggest decline since January 1989, to an annual rate of 4.43m, government and industry figures showed yesterday. A 13% drop in the median resale price y-o-y was the most since records began in 1968 and was likely the largest since the 1930s, the National Association of Realtors said. (Bloomberg)
* * * * *
The UK economy shrank the most since 1990 in 3Q08 and mortgage lending dropped to the lowest in 14 years as tightening credit exacerbated the slide into recession. Gross domestic product contracted 0.6% q-o-q, the Office for National Statistics said yesterday. The drop was bigger than the previous estimate of 0.5%, which economists had expected would be confirmed.
Home-loan approvals plunged 61% to 17,773 in November y-o-y, the British Bankers’ Association said. The Bank of England and Prime Minister Gordon Brown are struggling to shore up the economy as banks ration lending and global trade slumps. The central bank has already cut its benchmark interest rate to 2%, the lowest since 1951, and may move again next month.
Brown next month will announce new measures to revive the flow of loans and protect workers. (Bloomberg)
* * * * *
Poland’s central bank reduced the benchmark interest rate by three-quarters of a percentage point, more than forecast and the biggest cut in almost seven years, to cushion the impact of an economic slowdown. The Narodowy Bank Polski cut the seven-day reference rate to 5%. The Warsaw-based bank said data that have been released recently, in particular a marked decline in investment growth in the third quarter, confirm that economic growth in Poland has been slowing significantly and the easing of monetary policy should contribute to stabilizing economic growth. The global slowdown has spread to the European Union’s largest eastern member, prompting the government to revise its 2008 growth outlook to 3.7% from 4.8% and warn of a
further lowering. (Bloomberg)
* * * * *

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23 December 2008 Newz Bits TM International Partners with Tune Talk

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