Monday, October 30th, 2017

 

HSBC Q3 profits soar on booming Asia

HONG KONG, Oct 30 — Banking giant HSBC today reported a massive jump in third-quarter earnings, as business booms in Asia and a huge restructuring drive bears fruit. Pre-tax profit soared to US$4.6 billion in the period from July to September…


Quicken pace of fiscal deficit reduction when times are good: Experts

KUALA LUMPUR: Malaysia should better prepare for any major external shocks by reducing its fiscal deficit at a faster pace in the good times, industry experts opine.

Speaking at the 2018 Post-Budget Dialogue organised by the Malaysian Economic Association (MEA) on Monday, former United Nation assistant secretary-general for economic development Jomo Kwame Sundaram said it is important to look at a balanced budget by 2020 in the event of any adverse external developments, such as the reversal of the quantitative easing in developed countries, which might shake up the global market.

Given the significant increase in operating expenditure under Budget 2018, Jomo doubts how the government would manage to cut its fiscal deficit from 3% in 2017 to 2.8% in 2018.

While recognising there is also non-tax revenue coming from sources such as Petroliam Nasional Bhd (Petronas) and government-linked companies, he said the government should make it transparent on the source of the money.

Treasury Secretary-General Tan Sri Mohd Irwan Serigar Abdullah, however, said the gradual reduction in fiscal deficit is for the good of the people.

“We can come to surplus overnight because it is only RM39 billion (deficit), but we need to see it (the measures) shock the market or not,” he explained.

He added that the government will receive an additional RM3 billion in dividends from Petronas next year, which can be redistributed to the people.

Employees Provident Fund (EPF) general manager for economics and capital markets Nurhisham Hussein suggested that the government form a fiscal council to provide independent views on the Budget. “Right now we are not having debate on fiscal policy in an objective manner, but in political manner.”

On another note, senior research fellow at the Institute of China Studies of University of Malaya Cheong Kee Cheok is concerned about the huge amount of contingent liabilities, especially the non-government guaranteed debts.

“The government is taking on debts that are not guaranteed, like billions of ringgit in Pembinaan PFI.”
Pembinaan PFI is 99.9% owned by Finance Ministry Incorporated. Its nature of business is to source for financing to undertake government projects. The Federal Land Commission holds one share in Pembinaan PFI.

Irwan, however, gave the assurance that the government will evaluate the particular project or company background before taking on any government-guaranteed debts.

“If a company can finance the project in the long run, then we give government guarantee and it is given to viable companies such as Khazanah Nasional and the East Coast Rail Line project.”

RAM Ratings said in its recent report that the government-guaranteed debt load has risen from 11.8% of gross domestic product (GDP) in 2011 to 16.9% in the second quarter of 2017.

Over the longer term, the rating agency expects the contingent liabilities to increase at a measured pace amid continued rollout of infrastructure projects which are essential for Malaysia’s development.

Based on Nurhisham’s estimation, the contingent liabilities would have accounted for 55% to 60% of GDP if implicit ones were included with the likes of Kumpulan Wang Persaraan (Diperbadankan) and Perbadanan Insurans Deposit Malaysia.

However, compared with the US and European countries, he said, Malaysia’s contingent liabilities “are not very big”.


AirAsia, SATS in ground handling partnership deal

PETALING JAYA: Singapore ground handling and inflight catering services provider SATS Ltd and AirAsia Bhd, Asia’s leading low-cost carrier, have formalised a ground handling partnership in the fast-growing Asean region.

SATS has formed a ground handling entity, SATS Ground Services Singapore Pte Ltd (SGSS), to serve customers at Changi Airport’s new Terminal 4.

Under the partnership, SATS will acquire a 50% interest in Ground Team Red Holdings Sdn Bhd (GTRH), AirAisa’s airport service business arm, in exchange for SATS’s 80% stake in SGSS and aggregate cash consideration of S$119.3 million (about RM372 million).

AirAsia will book a gain on disposal of RM365.7 million in Q4 2017.

GTRH will be renamed SATS Ground Team Red Holdings Sdn Bhd, which will be the 50:50 joint investment vehicle of AirAsia and SATS that will hold stakes in both its Malaysia and Singapore subsidiaries, Ground Team Red Sdn Bhd (GTR) and SGSS respectively.

AirAsia will effectively own 51% of GTR and 40% of SGSS while SATS will effectively own 49% of GTR and 60% of SGSS. Both companies will also be responsible for growing the ground handling business in their respective markets and will explore expansion into Indonesia, the Philippines and Thailand.

SATS has been deploying technology to enhance connectivity for airlines and their passengers within its growing network of 47 airports across Asia. The new partnership will give SATS, which already owns a 49% stake in the largest flight caterer in Malaysia, Brahim’s SATS Investment Holdings Sdn Bhd, access to the Malaysian ground handling market.

This partnership will support the rapid growth of AirAsia towards 500 aircraft and 150 million passengers by 2027 by combining AirAsia’s expertise in providing quick and low-cost turnarounds with industry best practices and innovative technology developed by SATS for passenger and ramp handling.

AirAsia Group CEO Tan Sri Tony Fernandes said, “We believe this joint venture will allow AirAsia to unlock significant value and grow it as we have done with AirAsia Expedia, our aviation academy Asian Aviation Centre of Excellence and later this year, our leasing arm Asia Aviation Capital. Our assets are very valuable and slowly people are beginning to see the true value of AirAsia, as today’s announcement proves.”


US stocks mostly lower ahead of Apple results, jobs data

NEW YORK, Oct 30 — Wall Street stocks were mostly lower in early trading today ahead of a heavy calendar of news events this week that includes Apple earnings and the October US jobs report. The Federal Reserve will be a key focus, with a…


Chin Teck Plantations Q4 net profit up 71%

PETALING JAYA: Chin Teck Plantations Bhd posted an almost 71% jump in net profit for the fourth quarter ended Aug 31, 2017, on lower cost of sales, higher dividend, interest income and foreign exchange gain.

The company made a net profit of RM10.4 million for the quarter under review, compared with RM6 million for the same quarter in 2016.

This was on a 4.9% increase in revenue to RM34.1 million, compared with RM32.5 million for the fourth quarter ended Aug 31, 2016.

The company said in its filing with Bursa Malaysia, suspended routine harvesting in its investments in oil palm plantation in Lampung Province, Indonesia is still pending clearance from relevant authorities. Harvesting of newly matured fields have stopped due to unrest in villages neighbouring the estate. This has resulted in the joint venture suffering losses.

Net profit for the 12 month period jumped more than two fold to RM40.5 million, compared with RM17.8 million for the same period in 2016.

This was on a 32.6% jump in revenue to RM148.6 million for the year, compared with RM112.1 million for the same period in 2016. It has decided not to declare a final dividend for the year ended Aug 31, 2017 having paid out 19 sen in dividends thus far.

The stock closed unchanged at RM7.8, with some 400 shares traded.


Chin Teck Plantations Q4 net profit jump 71%, declares no final dividend

PETALING JAYA: Chin Teck Plantations Bhd posted an almost 71% jump in net profit for the fourth quarter ended Aug 31, 2017, on lower cost of sales, higher dividend, interest income and foreign exchange gain.

The company made a net profit of RM10.4 million for the quarter under review, compared with RM6 million for the same quarter in 2016.

This was on a 4.9% increase in revenue to RM34.1 million, compared with RM32.5 million for the fourth quarter ended Aug 31, 2016.

The company said in its filing with Bursa Malaysia, suspended routine harvesting in its investments in oil palm plantation in Lampung Province, Indonesia is still pending clearance from relevant authorities. Harvesting of newly matured fields have stopped due to unrest in villages neighbouring the estate. This has resulted in the joint venture suffering losses.

Net profit for the 12 month period jumped more than two fold to RM40.5 million, compared with RM17.8 million for the same period in 2016.

This was on a 32.6% jump in revenue to RM148.6 million for the year, compared with RM112.1 million for the same period in 2016. It has decided not to declare a final dividend for the year ended Aug 31, 2017 having paid out 19 sen in dividends thus far.

The stock closed unchanged at RM7.8, with some 400 shares traded.


Boustead Plantations buying land in Sabah for RM750m

PETALING JAYA: Boustead Plantations Bhd’s unit Boustead Rimba Nilai Sdn Bhd is buying 42 parcels of land totalling 11,579.31ha in Labuk and Sugut, Sabah, from Dutaland Bhd’s Pertama Land Sdn Bhd for RM750 million.

The group said following the purchase of the five estates with a planted area of 10,000ha, it will embark on measures to increase its productivity, which currently is almost 47% lower than the fresh fruit bunch (FFB) yield of Boustead Plantations’ estates in Sabah of 16.6 tonnes a tonne.

Among the measures planned are progressive replanting of old and low-yielding fields and the construction of a new palm oil mill in one of the estates.

The management plans to replant about 7,400ha of the 9,998ha of plantable area in the estates over the next 10 years with improved high-yielding semi-clonal and clonal oil palms, which is expected to boost the FFB yield and profitability of the estates in the long run.

Boustead Plantations estimates a total investment of RM250 million for the above measures which will be implemented over 10 years upon completion of the deal.

For the financial year ended June 30, 2017 the estates made a profit of RM24.69 million.

The acquisition by Boustead Plantations is to be financed through a combination of internally generated funds (RM300 million) and borrowings (RM450 million).

BPB said the proposed acquisition is part of its strategy to acquire more plantation land in Malaysia in view of the scarcity of suitable and sizeable land banks for oil palm cultivation, at a lower cost.

The total plantation land bank held by the Boustead Plantations group will increase by about 14.1%, from 81,838ha to 93,417ha. This also represents an increase of 15.7% in total planted area of oil palms from 63,840ha to 73,838ha.

The proposed acquisition is expected to be completed by the second quarter of 2018. Affin Hwang Investment Bank is the principal adviser to Boustead Plantations for the acquisition.

Meanwhile, Dutaland said the bulk of the proceeds from the sale, RM707 million, will be earmarked for it to acquire new businesses which will generate recurring income. Dutaland has invested about RM173 million for the assets since 1995.

Boustead Plantations’ share price closed unchanged at RM1.63 today. Dutaland’s share price was up 1.5 sen to close at 73 sen with some 21 million shares traded.


Boustead Plantations to buy land in Sabah

PETALING JAYA: Boustead Plantations Bhd’s unit Boustead Rimba Nilai Sdn Bhd is buying 42 parcels of land totalling 11,579.31ha in Labuk and Sugut, Sabah, from Dutaland Bhd’s Pertama Land Sdn Bhd for RM750 million.

The group said following the purchase of the five estates with a planted area of 10,000ha, it will embark on measures to increase its productivity, which currently is almost 47% lower than the fresh fruit bunch (FFB) yield of Boustead Plantations’ estates in Sabah of 16.6 tonnes a tonne.

Among the measures planned are progressive replanting of old and low-yielding fields and the construction of a new palm oil mill in one of the estates.

The management plans to replant about 7,400ha of the 9,998ha of plantable area in the estates over the next 10 years with improved high-yielding semi-clonal and clonal oil palms, which is expected to boost the FFB yield and profitability of the estates in the long run.

Boustead Plantations estimates a total investment of RM250 million for the above measures which will be implemented over 10 years upon completion of the deal.

For the financial year ended June 30, 2017 the estates made a profit of RM24.69 million.

The acquisition by Boustead Plantations is to be financed through a combination of internally generated funds (RM300 million) and borrowings (RM450 million).

BPB said the proposed acquisition is part of its strategy to acquire more plantation land in Malaysia in view of the scarcity of suitable and sizeable land banks for oil palm cultivation, at a lower cost.

The total plantation land bank held by the Boustead Plantations group will increase by about 14.1%, from 81,838ha to 93,417ha. This also represents an increase of 15.7% in total planted area of oil palms from 63,840ha to 73,838ha.

The proposed acquisition is expected to be completed by the second quarter of 2018. Affin Hwang Investment Bank is the principal adviser to Boustead Plantations for the acquisition.

Meanwhile, Dutaland said the bulk of the proceeds from the sale, RM707 million, will be earmarked for it to acquire new businesses which will generate recurring income. Dutaland has invested about RM173 million for the assets since 1995.

Boustead Plantations’ share price closed unchanged at RM1.63 today. Dutaland’s share price was up 1.5 sen to close at 73 sen with some 21 million shares traded.


M’sia to consider FTA with US if TPPA fails

KUALA LUMPUR: Malaysia will consider a Free Trade Agreement (FTA) with the United States if the Trans-Pacific Partnership Agreement (TPPA) fails to materialise.

Prime Minister Datuk Seri Najib Abdul Razak said at present, Malaysia and the US are committed to continuing with the dialogue in discussing trade and investment issues, via the Trade and Investment Framework Agreement.

“In respect of the TPPA, the Malaysian delegation and I had a dialogue with members of the US Congress and urged them to stick with the TPPA members to make the agreement a success.

“If it does not materialise, I have proposed that the TPPA model be incorporated into a bilateral agreement such as a FTA which has been postponed since 2008,” he added.

Najib said this when answering a question from Datuk Seri Tiong King Sing (BN-Bintulu) on the outcome of his visit to the US in September. – Bernama


Vizione wins RM401m deal from Paragon

PETALING JAYA: Vizione Holdings Bhd’s (VHB) unit Wira Syukur (M) Sdn Bhd is building four blocks of office suites in Ulu Langat, Selangor for Paragon Hemisphere Sdn Bhd for RM401 million.

The job which will run for three years, will encompass two phases. Date of possession for phase one is Oct 30, 2017, while phase two will start on May 1, 2018.

Phase one is to construct two blocks of office suites, namely, Block A (40-storey) and Block B (34-storey), consist of eight (8) storeys podium with 13 units 2-storey shop, one recreation centre and car parks.

Phase two is to construct two blocks of office suites, namely, Block C (42- storey) and Block D (36-storey), consist of eight (8) storeys podium with 10 units 2-storey shop, one recreation centre and car parks.