Thursday, July 27th, 2017

 

AstraZeneca lung cancer failure sparks 16pc share fall

LONDON, July 27 – AstraZeneca’s combination of two injectable immunotherapy drugs failed to help patients as hoped in a closely watched advanced lung cancer trial, triggering the biggest ever daily fall in its shares today. The so-called…


European stocks struggle as Wall Street marches on

LONDON, July 27 — European stock markets struggled today while Wall Street marched relentlessly forward, boosted by more strong earnings from US corporates. The London market buckled on sorely disappointing news from British pharmaceuticals…


Edra Power’s Tadau Energy issues Malaysia’s first ‘green’ sukuk

PETALING JAYA: China-owned Edra Power Holdings Sdn Bhd’s unit Tadau Energy Sdn Bhd, which counts prolific investor Tan Sri Chua Ma Yu as its chairman, has successfully issued Malaysia’s first “green” sukuk.

The sukuk, which is believed to be a world’s first, is a RM250 million sustainable responsible investment (SRI) sukuk named Green SRI Sukuk Tadau.

In a joint statement issued by Tadau Energy and Affin Hwang Investment Bank Bhd (Affin Hwang IB) yesterday, the company said its Green Sukuk Framework has been certified by the Center for International Climate and Environmental Research – Oslo, Norway (Cicero).

The Green SRI Sukuk Tadau has a tenure of two to 16 years and has been assigned a long-term rating of ‘AA3’ by RAM Rating Services Bhd.

Tadau Energy is undertaking a large-scale solar project of 50MW in Kudat, Sabah, under two 21-year power purchase agreements entered into with Sabah Electricity Sdn Bhd in December last year.

Proceeds from the Green SRI Sukuk Tadau will be used to finance the project. Tadau Energy’s goal is to conserve the environment by providing an environmentally friendly, clean and sustainable power supply.

Affin Hwang IB is the principal adviser, lead arranger, lead manager and facility agent for the Green SRI Sukuk Tadau issuance.

Securities Commission chairman Tan Sri Ranjit Ajit Singh said: “The launch of Malaysia’s first green sukuk marks another significant milestone in product innovation that strengthens Malaysia’s position as a leading Islamic finance marketplace as well as its value proposition as a centre for sustainable finance.

“We believe that there is a significant opportunity arising from strong global interest in green financing where innovative fundraising instruments like green and SRI sukuk is a viable solution to address global needs for green and other forms of sustainable and responsible financing,” he added.

To be eligible for tax deductions under SRI sukuk incentives, issuers utilising the SRI sukuk framework towards green projects must ensure that proceeds raised are used to fund eligible SRI projects in the natural resources, renewable energy and/or energy efficiency sectors. In accordance with international practices, issuers are also encouraged to appoint independent experts to undertake an assessment on the eligibility of the project prior to issuance of the green sukuk.

The framework underlying this first green sukuk is the result of collaboration among the SC, Bank Negara Malaysia and World Bank Group, in an effort to develop an ecosystem to facilitate the growth of green sukuk and to introduce innovative financial instruments to tackle global infrastructure needs and green financing.

“With the successful development of the framework for the first green sukuk, Malaysia is playing a pioneering role in harnessing capital markets, and in particular Islamic finance, for climate friendly investments,” said World Bank Representative to Malaysia Faris Hadad-Zervos.

The landmark issuance is also in line with the rising trend of bonds introduced globally to facilitate and promote responsible investing, reinforcing Malaysia’s position as the marketplace of innovation, expertise and deal flow.

According to Moody’s Investors Service, global green bond issuance remained strong in the second quarter of 2017 with US$32.2 billion (RM137 billion) of total issuance, a new quarterly record. Total green bond volumes of US$61.7 billion for the first six months of the year represent a 66% increase over the first half of 2016, positioning the market to achieve US$120 billion in issuance for the full year.


Malaysia Airlines: Strategic tie-up for haj charter carrier by Q1 2018

SEPANG: Malaysia Airlines Bhd (MAB) expects to finalise its strategic partnership for the haj charter carrier by the first quarter of next year, said its group CEO, Peter Bellew.

Bellew, who was in Saudi Arabia last week, said he had a meeting with potential investors for the new service.

“Somebody came out with a name (for the new carrier) last week when we were in Saudi Arabia. So, I will discuss it with the board over the next few weeks.
“I will not share the name now. Certainly, it is very inspirational,” he told reporters after the launch of MAB’s first in-house innovation lab, called iSpace, at the Flight Management Building of the Kuala Lumpur International Airport here yesterday.

It was reported that MAB planned to start a charter flight service for the haj pilgrimage and umrah in Saudi Arabia.

Bellew said MAB is seeking strategic partners that have existing business relations in the aviation sector.

 “It will take time. We don’t need money to make it happen immediately. However, we are looking for people who have strategic interest in helping this to happen and making it a success in over 10 years.”

Bellew said the new charter airline will be registered as a separate entity and carry a new image, logo, aircraft colour and configuration.

The new airline will create 600 to 700 jobs, including those for pilots, cabin crew and engineers, when it is fully operational and will charter six Airbus A380 jetliners from Malaysia Airlines.

“This airline, in the next 10 to 15 years, will grow beyond six aircraft. This will be a major boost to the county’s aviation industry,” Bellew said.

On the structure of the new airline, he said MAB may not be the ultimate shareholder in the company. – Bernama


Thailand’s PTT venture takes US$500m stake in Petronas LNG project

BANGKOK: PTTEP, the exploration and production arm of Thailand's oil and gas giant PTT Group, said on Thursday their liquefied natural gas (LNG) venture had taken a $500 million stake in a project with Petroliam Nasional Bhd (Petronas).

Announcing second-quarter results – which were roughly in line with analysts’ expectations – PTTEP said it is looking to expand further in Southeast Asia and is awaiting the results of a few bid proposals for exploration projects in the region.

It said a joint venture with its parent company, PTT Global LNG Co, has bought a 10% stake in liquefaction plant MLNG Train 9 in Malaysia.

The announcement comes barely a day after Petronas scrapped a proposed C$36 billion (RM123 billion) LNG project in Canada due to weak prices, dealing a blow to the Malaysian state company’s global ambitions and leaving it with a bill for work already done.

“Investment with a leading company, Petronas, would support the LNG business of the company in expanding our operations in Malaysia in the future,” PTTEP said in a statement.

PTTEP said it is awaiting the results of “a few” bid proposals submitted for projects in the final stages of development or close to production, mainly in Southeast Asia.

“The company plans to accelerate exploration activities in … projects in the current portfolio, particularly focused on Myanmar and Malaysia, as well as seeking new opportunities in strategic areas,” it said.

PTTEP will also participate in the bidding process for the Bongkot and Erawan gas fields in the Gulf of Thailand in the first quarter of 2018, it said.

PTTEP posted a second-quarter net profit of US$220 million, an increase of more than 180% from the same time last year, which it said was largely due to a hedging gain this year and a loss last year as well as a decrease in tax.

It said it is aiming for production of 290,000 barrels of oil equivalent per day (boed) in the third quarter in Thailand and expects total average sales for 2017 to be 300,000 boed. – Reuters


Thailand’s PTTEP takes US$500m stake in Petronas LNG project

BANGKOK: PTTEP, the exploration and production arm of Thailand’s oil and gas giant PTT Group, said yesterday it has taken a US$500 million (RM2.14 billion) stake in a liquefied natural gas (LNG) project with Malaysia’s Petroliam Nasional Bhd (Petronas).

Announcing second-quarter results – which were roughly in line with analysts’ expectations – PTTEP said it is looking to expand further in Southeast Asia and is awaiting the results of a few bid proposals for exploration projects in the region.

It said a joint venture with its parent company, PTT Global LNG Co, has bought a 10% stake in liquefaction plant MLNG Train 9 in Malaysia.

The announcement comes barely a day after Petronas scrapped a proposed C$36 billion (RM123 billion) LNG project in Canada due to weak prices, dealing a blow to the Malaysian state company’s global ambitions and leaving it with a bill for work already done.

“Investment with a leading company, Petronas, would support the LNG business of the company in expanding our operations in Malaysia in the future,” PTTEP said in a statement.

PTTEP said it is awaiting the results of “a few” bid proposals submitted for projects in the final stages of development or close to production, mainly in Southeast Asia.

“The company plans to accelerate exploration activities in … projects in the current portfolio, particularly focused on Myanmar and Malaysia, as well as seeking new opportunities in strategic areas,” it said.

PTTEP will also participate in the bidding process for the Bongkot and Erawan gas fields in the Gulf of Thailand in the first quarter of 2018, it said.

PTTEP posted a second-quarter net profit of US$220 million, an increase of more than 180% from the same time last year, which it said was largely due to a hedging gain this year and a loss last year as well as a decrease in tax.

It said it is aiming for production of 290,000 barrels of oil equivalent per day (boed) in the third quarter in Thailand and expects total average sales for 2017 to be 300,000 boed. – Reuters


Five Malaysian firms on Forbes ‘Asia’s Best 200 Under A BIllion’ list

PETALING JAYA: Five Malaysian listed companies made the cut to Forbes’ annual list for Asia’s Best 200 public companies which are seen as”growth engines”.

The “Asia’s Best Under A Billion 2017: The 200 Public Companies That Are Reliable Growth Engines” list features companies with less than US$1 billion (RM4.28 billion) in revenue and consistent top- and bottom-line growth.

Elsoft Research Bhd, Kerjaya Prospek Group Bhd. MyEG Services Bhd, Pentamaster Corp Bhd and Vitrox Corp Bhd have been featured on the list.

MyE.G appears as the company with the highest market value with US$1.80 billion. The e-government services provider’s net income stood at US$35 million while it sales stood at US$68 million.

China saw the most representatives on the list with 68 companies, while Sri Lanka has the least with one.

Forbes looked at 18,000 Asian companies with an annual revenue between US$5 million and US$1 billion with the highest sales and earnings per share growth for both the most recent fiscal one- and three-year periods, and the strongest five-year average return on equity, before narrowing it down to the best 200.


Higher deferred tax expense drags down TNB’s third quarter bottom line

PETALING JAYA: Tenaga Nasional Bhd’s (TNB) net profit for the third quarter ended May 31, 2017 fell 15% to RM1.96 billion from RM2.31 billion a year ago due to higher deferred taxation expense.

In a filing with Bursa Malaysia yesterday, TNB said deferred taxation expense rose from RM22.1 million to RM400 million, from higher capitalisation of assets during FY16 and FY17, which was recognised during the quarter.

Revenue for the quarter rose 3.47% to RM12.55 billion from RM12.13 billion a year ago due to an under-recoverability of Imbalance Cost Pass-Through (ICPT) recognised during the quarter amounting to RM507.1 million, compared with RM537.6 million recognised a year ago.

For the nine months ended May 31, 2017, net profit fell 7.50% to RM5.18 billion from RM5.61 billion a year ago due to the increase in finance cost from the recognition of interest in amounts owing to the government and from new borrowings acquired during the period.

Revenue for the period rose 4.98% to RM34.95 billion from RM33.29 billion a year ago due to the lower over-recoverability of the ICPT recognised during the period of RM288.8 million compared with RM1.93 billion a year ago.

TNB expects unit electricity demand to grow in line with the projected gross domestic product growth for this year, which was recently revised upwards to 4.8% from 4.5% by the International Monetary Fund.

“Notwithstanding the above, the board remains cautious on the group’s outlook for the year ending Aug 31, 2017, given the prospect of volatility in global commodity and energy prices,” it said.

TNB’s share price rose 0.14% to close at RM14.24 yesterday with a total of 14.41 million shares traded, giving it a market capitalisation of RM80.70 billion.


Caring Pharmacy Q4 earnings jump 59%, proposes 3 sen dividend

PETALING JAYA: Caring Pharmacy Group Bhd’s net profit for the fourth quarter (Q4) ended May 31, 2017 jumped 59% on higher sales generated from existing outlets due to aggressive and extensive promotional campaigns.

It registered a net profit of RM4.34 million compared with RM2.7 million in the corresponding quarter.

This was on 10% higher revenue of RM119.5 million, compared with RM108.3 million for the same quarter the year before.

Caring, which has proposed a final dividend of three sen for the quarter, established four complex outlets and closed down one high street outlet and one speciality retail outlet during the period. As of May 31, 2017, it has a total of 107 community pharmacies.

In a filing with Bursa Malaysia the group said its operating environment will remain challenging in view of weak consumer purchasing power and escalating costs, despite a mild recovery in the ringgit.

“Nevertheless, by focusing on products and services quality, the group remains optimistic that it will continue to be profitable in the next financial year,” its board of directors said.

Net profit for the 12-month period ended May 31, 2017 was 80% higher at RM13.1 million, compared with RM7.3 million for the financial year ended May 31, 2016. This was on 14% higher revenue of RM460 million, compared with RM 402.6 million for the same period in 2016.


Maybank gets continued boost from Indonesian unit

KUALA LUMPUR: Malayan Banking Bhd’s (Maybank) Indonesian unit PT Bank Maybank Indonesia Tbk will continue to provide a boost to the group’s results, said MIDF Research.

The research house said it was pleasantly surprised by the decline in interest expense despite lower current and savings accounts in Maybank Indonesia’s results for the first six months of FY17.

Maybank Indonesia posted a net profit growth of 16.3% year-on-year to 998.5 billion rupiah (RM320.75 million) due to strong net interest income (NII) growth and lower provisions.

“Taking all into consideration, we are optimistic on the group’s prospect for the rest of FY17 given that we expect lower provisions and the potential to maintain momentum of loans growth and quality deposits growth,” MIDF said in a report.

NII growth of 7% came mainly from better funding management. MIDF believed this was due to better funding cost management given that interest income was flattish.

“Pending the announcement of the group’s Q2’17 result, we make no change to our forecast for now.

“While the expected total return is currently below our threshold of +15%, we are making an exception in this case pending for the group’s (Q2’17) result.”

For now, MIDF maintained its “buy” call on Maybank with an unchanged target price of RM10.30.

Maybank shares closed unchanged at RM9.64 on Friday, on volume of 4.42 million units traded.