Monday, September 11th, 2017
KUALA LUMPUR: With the Oct 5 deadline looming, the Energy, Green Technology & Water Ministry is still insistent that the Selangor state government make the next move in the water restructuring exercise.
Minister Datuk Seri Panglima Dr Maximus Johnity Ongkili said the state government must make an offer to Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (Splash) and agree on a price tag before the federal government can determine how it will assist with the acquisition cost.
“I am waiting for the Selangor government. I have answered in Parliament and many times publicly that the principle is ‘willing buyer willing seller’. They must make an offer to Splash then come back to us and ask how much the federal government can help,” he told reporters at the opening ceremony of the 7th IWA-ASPIRE Conference 2017 yesterday.
“I am only the arranger, I cannot name a price for them. They must make an offer to Splash. They know the valuation, they know the value, just make an offer to Splash because it will take a long time. Splash has to go to its board, it is a listed company,” he said.
On the federal government’s proposal for a 60:40 ratio to acquire Splash equity, with the state government bearing 40% of the cost, Ongkili said there has been some preliminary discussion but the final decision depends on the acquisition price agreed upon between the state government and Splash.
The federal government will look at the state government’s capacity to pay and how much help the government has provided previously, for the acquisition of three other companies under the restructuring deal.
“Based on that, we have to discuss at federal government level how much we can help. We will be reasonable. We need to check whether they have assets to back their borrowings and then we will see, subject to what we have already assisted and how much we can assist them.
“But this thing can only take place after they have signed the sale and purchase agreement,” Ongkili said.
He declined to disclose how much of the acquisition cost the federal government is willing to bear but said that it is negotiable.
On the independent valuation carried out by Deloitte, Ongkili said the report is meant to be the federal government’s third valuation and the details will not be shared with the state government.
“Two banks previously have given us the price and so we wanted to be confident because assets can devalue moving forward but borrowings and loans increase with interest. So we have to go through that process,” he said, adding that the state government has also done its own valuation and has a value for the asset.
On whether the Oct 5 deadline will be extended again should the state government fail to make an offer to Splash, Ongkili said there will be further discussions with the state government.
In 2014, the Selangor state government and the federal government signed an agreement which would see the state government take over four water concessionaires operating in the state, namely Puncak Niaga Holdings Bhd, Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), Konsortium Abbas Sdn Bhd and Splash.
The state government has already taken over water assets belonging to the three companies, except for Splash, which has been delayed twice from Oct 7, 2016 to April 7, 2017 with the latest deadline being Oct 5, 2017.
Note that Splash owes some RM530 million in receivables to Taliworks Corp Bhd as of March 2017, which is recoverable, provided the Splash acquisition issue is resolved.
LONDON: World shares returned to a record high yesterday, on relief that hurricane Irma looked to be losing strength in the United States and that North Korea’s anniversary celebrations at the weekend passed without any new missile test.
The MSCI All Country World Index, which tracks roughly 2,400 stocks in 47 countries, climbed to its latest peak as Europe’s insurers rose more than 2% on hopes Irma’s damage would not prove as costly as feared.
In New York, Wall Street opened sharply higher. The Dow Jones Industrial Average rose 157.28 points, or 0.72%, to 21,955.07.
As the start of US trading neared, Irma had weakened to a tropical storm and was expected to slow to a tropical depression by today.
The relief over North Korea and a weaker yen had also given Tokyo its best session since June in Asia, as investors began to lose their appetite for safer assets like gold and US Treasuries.
Winning a reprieve from risk aversion, the dollar registered its biggest gains in the currency markets in 10 days. It added 0.5% against its perceived safe-haven counterpart, Japan’s yen, and regained ground against the high-flying euro as a top European Central Bank (ECB) policymaker cautioned against the single currency’s recent rise.
Tokyo’s Nikkei 225 had risen 1.4% after Pyongyang held a celebration to congratulate the nuclear scientists and technicians who steered the country’s sixth and largest nuclear test a week earlier.
Seoul’s main index added 0.8%, while MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.4%.
“It’s too early to say the (North Korean) risks are gone, but one thing for sure is that market players now think the situation won’t get worse as it did some weeks ago,” said Lee Kyung-min, a stock analyst at Daishin Securities in Seoul.
The dollar hovered at ¥108.50, up from Friday’s 10-month trough of ¥107.32. Against a basket of currencies, it added 0.15% to 91.490, still close to last week’s 2½-year low of 91.011.
The euro eased to US$1.2020, having hit a top of US$1.2092 on Friday amid speculation the ECB was closer to starting a wind-back of its stimulus programme.
China’s central bank was also a focus in Asia after it confirmed reports that it planned to scrap reserve requirements for financial institutions settling foreign exchange forward yuan positions with effect yesterday.
“The removal potentially makes it easier for traders to purchase the USD, easing the pressure for yuan appreciation,” analysts at ANZ said in a note. “The change likely signals some discomfort about the stronger yuan and its impact on Chinese exports.”
The dollar was up 0.3% against the offshore yuan at 6.5269 yuan, off a low of 6.4437. – Reuters
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PETALING JAYA: Policy changes may be on the cards under the Bumiputera Economic Transformation Roadmap 2.0 (BETR2.0), according to Unit Peneraju Agenda Bumiputera (Teraju).
“We are looking into some policy changes and stuff like that, this will require more deliberation and specific studies are going to be taken on that,” said CEO of Teraju, Datuk Husni Salleh.
Almost five months on since the launch of the roadmap by the Prime Minister Datuk Seri Najib Abdul Razak in April, Husni said Teraju has thus far identified some 46 initiatives which it is mulling to implement.
It is currently working closely with ministries to “refine” and look at ways to implement these initiatives, gathered from its engagement with stakeholders prior to the launch of BETR 2.0.
Drawing reference to the first BETR launched in 2011, which took about 3-4 years for the roll out of programmes, Husni said the same is expected this time around, as factors such as legality, practicality and budget resources, has to be deliberated upon.
Besides that, in line with the upcoming Budget 2018, Teraju is also engaging with the Economic Planning Unit (EPU) to see how it could “align” the 11th Malaysia Plan agendas with that of the Bumiputera agenda.
Husni was speaking to reporters at the documents exchange ceremony between Hong Leong Islamic Bank Bhd (HLISB) and Teraju earlier today.
As per the operation agreement entered between the two parties, HLISB in its capacity as a newly appointed panel bank of Teraju will be pumping in funds amounting to RM350 million as a financing facility for the Teras programme.
HLISB is targeting to provide 60% of the financing facility to Bumiputera small and medium enterprises (SMEs) in sectors such as construction and infrastructure, telecommunications, agriculture, manufacturing and green technology.
The bank which joins the ranks as the sixth bank to provide financing facility for the Teras program, is targeting to disburse the funds to some 20-30 Teras registered companies annually.
HLISB CEO, Jasani Abdullah said based on the response the fund receives, the bank may consider altering the amount made available.
The funds by HLISB will bring the size of the total fund available to Bumiputera companies registered with Teras to RM2.89billion.
Of the RM2.89 billion, the unutilised balance stood at RM1.15 billion.
As at July, some 310 companies have benefited from the program, having received financing amounting to RM1.39 billion.
PETALING JAYA: Political uncertainty in the US and concerns over stubbornly low inflation weighing heavily on the prospects of higher US interest rates will most likely support the ringgit, said ForexTime Ltd (FXTM) research analyst Lukman Otunuga.
“The factor that will affect the ringgit’s performance for the rest of this year is still the US dollar. A vulnerable US dollar is also likely to attract investors towards the internal bond markets, which could further boost buying sentiment towards the ringgit,” he told SunBiz.
He said the growing confidence in Malaysia’s economy and the overall encouraging outlook is likely to have a positive impact on the ringgit’s performance for the rest of this year, whilst further supporting buying sentiment.
“It is difficult to say where the ringgit may conclude this year, especially when considering how, like most emerging market currencies, its outlook remains impacted by the US dollar’s direction,” he added.
He said the Dollar Index is already sinking towards 91.00 and potentially dipping to levels not seen since 2014, which is good news for emerging markets including Malaysia.
Otunuga said Malaysia’s improving macro fundamentals should be good for the ringgit and its outlook this year end.
“Domestic economic growth expanded 5.7% in the first half of 2017, while the nation’s trade balance data, as a whole, has been above expectations for the most part of this year. With Bank Negara Malaysia optimistic over the nation’s economic health and Malaysia’s rate of inflation stabilising, the outlook remains highly encouraging and as such, should benefit the ringgit,” he added.
Looking back at the performance of emerging market currencies so far this year, he said the majority of these currencies entered the year under intense selling pressure, with some even finding comfort at oversold levels as President Donald Trump’s protectionist stance sparked fears over the future of global trade.
He said investors priced in much of Trump’s “market-shaking promises” but very little, if anything at all, has come to fruition so far and market players have realised the difficulty Trump will face with legislative reforms, which is likely to have a very negative impact on the greenback.
“With uncertainty over Trump’s next moves, political instability in Washington and fading rate hike expectations all weighing heavily on the currency, US dollar weakness is set to remain a dominant theme. This is very positive for emerging market currencies and has been a catalyst for the gradual ringgit correction over recent months,” he said.
“When considering how emerging market currencies still have higher yields against developed currencies and investors are acknowledging that they are oversold, it makes sense that market players are pouring money back into emerging markets,” he added.
Meanwhile, HLIB Research forecast the ringgit to trade at RM3.90 against the dollar next year, should the US Federal Reserve (US Fed) keep up to its schedule for the interest rate hike and balance sheet unwinding exercise.
This could be further made possible by a potential war outbreak.
The research house has revised its ringgit forecast for the year, to between RM4.10 and RM4.25 against the greenback.
“We are turning mildly positive on ringgit after the recent sharp rebound. We now see ringgit appreciation bias to be sustained by a confluence of domestic and external factors,” HLIB said.
External factors such as the synchronisation process between global growth and monetary policy, will continue to exert downward pressure on the US Dollar, while the ringgit is set to be boosted by firmer crude oil prices.
On the domestic front, low foreign holdings in upcoming maturities and higher export proceeds conversion from strong trade surplus are seen as positive for the ringgit.
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PETALING JAYA: George Kent (Malaysia) Bhd has won a bid to supply and deliver 650,000 water meters to the Water Supplies Department (WSD), Hong Kong, worth US$6.86 million (RM28.72 million).
The bid was made under the group’s subsidiary, George Kent International Pte Ltd. George Kent will supply the DN15 Brass PSM-T water meters to WSD within two years in 24 shipments. In 2015, the group secured the contract to supply 600,000 water meters to WSD.
The company said in a statement today, the single order of 650,000 water meters from one single client is an enormous order by industry standards, and the largest single order George Kent has ever obtained from a single source over the span of its metering business history.
To-date, George Kent has successfully secured large water meter contracts from both Hong Kong and Singapore water authorities at the same time, which are renowned for their stringent standards in water meter evaluations. Last year, George Kent secured the tender to supply 323,630 water meters to Public Utilities Board, Singapore which marked the third time the group had succeeded in winning tenders from the republic.
George Kent’s water meter manufacturing facility based in Puchong, Selangor is presently the largest brass-forging plant in Asean with a total production capacity of 2.5 million water meters per year.
KUALA LUMPUR: HSS Engineers Bhd’s associate HSS Integrated Sdn Bhd (HSSI) has been appointed engineering consultant for the upgrading of high priority water distribution system for the Iskandar Malaysia region for RM5.1 million.
The contract encompasses engineering design and construction supervision for the high priority project. HSSI was appointed by Pengurusan Aset Air Bhd (PAAB).
The works are to commence on Sept 19, 2017, with targeted completion in the second quarter of 2022. Thus, the contract is expected to contribute positively to the HSS group’s performance in the financial years ending Dec 31, 2017 to 2022.
HSS executive director Tan Sri Kuna Sittampalam said the water sector is the next area of growth for the HSS group, and a timely venture, in light of the public sector’s clear emphasis on systematically developing the water infrastructure to meet the incessant demand from the ever-growing population.
“This is our second contract secured from the water sector this year. We foresee more opportunities to participate in the continuous upgrading of this crucial sector across various aspects, including water distribution systems, water treatment plants, and sewerage plants, amongst others.”
In March 2017, the HSS group announced a RM5.4 million engineering design and construction supervision services contract obtained from Syarikat Air Darul Aman Sdn Bhd to upgrade the water treatment plant in Air Lubuk Buntar Lama, Kedah, which is slated for completion in March 2021.
LUXEMBOURG, Sept 11 — Google today launched a legal challenge to a record €2.4-billion (RM12 billion) fine imposed by European anti-trust authorities for favouring its own shopping service, lodging an appeal at the EU court in Luxembourg….