31 December 2008 Newz Bits

January 5, 2009 at 6:49 am Leave a comment

HIGHLIGHTS

On Malaysia
· KLK to allocate RM1.32bn to buy back shares
· MAS and Qantas finalizing engineering JV
· Hicom Properties acquires 2 companies for RM722m
On The Global Front
· US consumer confidence sinks to lowest level in 41 years
· US home prices decline at fastest rate on record
· Germany’s inflation drop to lowest level in more than 2 years

Kuala Lumpur Kepong Bhd (KLK MK, Hold, TP: RM8.04) has proposed to allocate about RM1.32bn to buy back up to 10% of its paid-up capital. In a circular issued to shareholders yesterday seeking their mandate for the buyback, the board of directors said the 10% stake would amount to 106.4m shares. “The funding for the proposed authority to buy back shares will be sourced wholly from internal funds,” the board said, adding that the RM1.32bn represented the audited retained earnings of the company as at Sept 30. (BT)
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AirAsia’s (AIRA, Buy, TP: RM1.90) new integrated call centre in Kuala Lumpur will be completed by February 15 2009, chief executive officer Datuk Seri Tony Fernandes said yesterday. He said in a statement that the call centre will be used for all the group’s country operations – Malaysia, Thailand, Indonesia, Australia, Brunei, Cambodia, China, India, Laos, Myanmar, the Philippines, Singapore, Vietnam and the UK. (BT)
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MAS Aerospace Engineering, a wholly owned subsidiary of Malaysia Airline System Bhd (MAS) (MAS MK, Rating under review), and Qantas are finalising the details for their engineering joint venture. In a filing to Bursa Malaysia, MAS said there was no material change in the status of the memorandum of understanding (MoU) signed between both parties. Both parties are still in discussion after a year of signing the MoU. The MoU was signed to establish a joint venture to provide airframe maintenance services from Malaysia. (StarBiz)
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HICOM Properties Sdn Bhd will acquire the entire equity interest in both Benua Kurnia Sdn Bhd and Neraca Prisma Sdn Bhd for a total purchase consideration of RM722.463m. DRB-HICOM said its wholly-owned subsidiary signed an agreement with vendors Datuk Ahmad Abdullah and Mohd Nazree Abu Kassim to acquire the stakes. Benua Kurnia and Neraca Prisma own three parcels of freehold land spanning 606.8ha in Johor Baru. The proposed acquisition would enable the group to immediately replenish their diminishing landbank. (StarBiz)
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Datuk Mohd Nadzmi Mohd Salleh has returned to Proton Holdings Bhd as its chairman and the appointment takes effect from Jan 1. According to a statement from the national carmaker yesterday, he will replace outgoing chairman Datuk Mohd Azlan Hashim, 51, who has held the post since February 2005. “He (Nadzmi) is no stranger to Proton, having served as managing director of Perusahaan Otomobil Nasional Sdn Bhd from 1993 to 1996 and deputy managing director of the company from Nov 2, 1992,” Proton said. Nadzmi had also held various senior positions in Edaran Otomobil Nasional Bhd, including executive director and chief executive officer. (StarBiz)
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A recovery in the local steel sector is likely to happen in 2H09 once the current high inventory level subsides, says Malaysian Iron and Steel Industry Federation (Misif) president Chow Chong Long. “The cut in worldwide steel inventory and production will help the steel sector to recover although total demand for steel hasn’t gone back to the level before August this year,” he said. He anticipated the Government would announce more stimulus packages, which were expected to focus on infrastructure development, soon and this was supposed to boost the construction and steel industries. (StarBiz)
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Wall Street surged Tuesday in an end-of-the-year bargain buying spree as investors scooped up a variety of shares hit hard in the 2008 stock market battering. All three major gauges jumped in the first few minutes of the session on news that the government will pour US$6bn into GMAC Financial Services, the financing arm of struggling automaker General Motors. The advance lost some steam after the release of weak economic reports, but then recharged as the session wore on. The DJIA rose 184.5 points (+2.2%, close 8,668.4 pts). The S&P 500 gained 2.4% (+21.2 pts, close 890.6) and the Nasdaq composite advanced 2.7% (+40.4 pts, close 1,550.7). In currency trading, the dollar fell versus the euro and the yen. US light crude oil for February delivery fell US$0.99 to settle at US$39.03 a barrel on the New York Mercantile Exchange. (CNNMoney)
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US consumer confidence sank to the lowest level in at least 41 years this month as Americans grew more concerned about keeping their jobs and paying their mortgages, raising the risk they’ll spend less next year. The Conference Board’s sentiment index unexpectedly fell to 38, the lowest reading since records began in 1967, the New York-based private research group said yesterday. Economists had been counting on a plunge in gasoline prices to improve consumers’ moods. The
decline in confidence signals that spending will tumble further next year and prolong the recession after a holiday shopping season that may have been the worst in at least four decades. (Bloomberg)
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US home prices in 20 major cities declined at the fastest rate on record, depressed by mounting foreclosures and slumping sales. The S&P/Case-Shiller index declined 18% in the 12 months to October, more than forecast, after dropping 17.4% in the year through September. The gauge has fallen every month since January 2007. The financial market meltdown that has reverberated around the globe has prompted banks to curb lending, signalling the housing slump will persist for a fourth year in 2009. Falling property values have eroded household wealth, causing consumers to pare spending and deepening what is projected to be the longest recession in the post-war period. (Bloomberg)
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Germany’s inflation rate dropped to the lowest level in more than two years in December after the cost of oil plunged. The inflation rate declined to 1.1% from 1.4% in November, the Federal statistics Office said in Wiesbaden yesterday. That is the lowest level since October 2006. From a month earlier, prices rose 0.4%. The cost of crude oil has dropped more than 70% from a July peak of US$147 a barrel, alleviating price pressure and making it easier for the European Central Bank to cut interest rates. The Frankfurt-based bank has lowered its benchmark by 175 basis points to 2.5% since early October after the global financial crisis pushed up lending costs and the euro area fell into its first recession in 15 years. (Bloomberg)
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Crude palm oil (CPO) prices will get the full impact of the rising La Nina weather risks, which are threatening major oilseeds and grain growing areas in the US and South America, by end-May 2009. La Nina, usually marked by wet weather and abnormal heavy rainfall, was expected to disrupt the 2009 planting season for oilseeds and grains like soybean and corn in the US in March and April, a plantation industry consultant said. He said La Nina could also affect the harvesting season for soybean in Brazil and Argentina from February to April. “All will depend on the length of the La Nina weather pattern in 2009,” the consultant added. He expects any disruption in planting or harvesting of soybean crops in 2009 would help bolster the currently-weak prices in most agriculture-based commodities, including CPO. (StarBiz)
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Oil futures may rebound from their worst year to average US$60 a barrel next year as OPEC makes record production cuts to counter the deepest economic slump since World War II. The forecast, the median of 33 analysts compiled by Bloomberg, represents a 50% gain from Tuesday’s US$40.02. A 14% reduction in supply, equal to 4.2m barrels a day, pledged by the Organisation of Petroleum Exporting Countries (OPEC) will erode US crude inventories that rose 10% this year as the slowing economy reduced world demand for the first time since 1983. (Bloomberg)
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30 December 2008 Newz Bits 2 January 2009 Newz Bits

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