Thursday, November 16th, 2017


CIMB gets approval to open retail branch in Philippines

PETALING JAYA: CIMB Group Holdings Bhd’s subsidiary CIMB Bank Bhd has received approval from the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) to operate a branch in the Philippines.

It said in a statement today the first retail branch in the Philippines is expected to be fully operational by the fourth quarter of 2018.

Following the banking sector liberalisation in 2014, CIMB Bank is the first Malaysian banking group to be granted approval by the BSP to operate under Republic Act No. 10641, which allows the entry of foreign banks into the Philippines through the establishment of wholly owned operations with full banking authority.

CIMB Group chief executive Tengku Datuk Seri Zafrul Tengku Abdul Aziz said with the approval, the missing link to complete CIMB’s Asean-10 footprint has materialised.

“This will further propel CIMB into becoming the leading Asean universal bank, which will further strengthen our value proposition to customers,” he said.

“The Philippines offers tremendous opportunity with progressive regulation, attractive demographics, relatively lower banking penetration and good talent.
“Our strategy will see us applying the best of our digital assets from across the region as well as working with key strategic partners locally,” he added.

CIMB Group is Malaysia’s second largest financial services provider and is one of the leading universal banking groups in Asean that offers consumer, investment and Islamic banking, asset management, insurance products and services.

Grand Hoover: Major shareholder, some directors approached for stake sale

PETALING JAYA: Grand Hoover Bhd which was issued an unusual market activity query by Bursa Malaysia over the sharp rise in its share price recently, said its major shareholder has been approached to sell a substantial stake in the company.

The company’s share price jumped from 43 sen on Monday to 72 sen on Wednesday. Today, it rose 48.39% or 30 sen to hit limit up and close at 92 sen with 5.99 million shares done, before trading in the stock was halted at 4.18pm.

In response to the query, the company said its major shareholder and certain directors have been approached by a few parties who expressed interest in acquiring a substantial stake in the company as well as to explore any possible joint venture with the company on certain business opportunities.

“However, the discussions with the various parties are still preliminary at this juncture and no agreements and/or conclusions have been made insofar on the discussions. The company will make the necessary announcements to Bursa Malaysia in the event that any of the corporate exercises stated above materialise,” it said.

Aside from that, Grand Hoover said, it is unaware of any corporate development, rumour or report in relation to its business and affairs of the group that may account for the sharp rise in its share price.

Trading in its shares resumes tomorrow.

Econpile wins LRT3 contract worth RM208.7m

PETALING JAYA: Econpile Holdings Bhd’s wholly owned subsidiary Econpile (M) Sdn Bhd (EMSB) has bagged a Light Rail Transit Line 3 (LRT3) construction contract worth RM208.7 million.

In a filing with Bursa Malaysia today, the group said Gabungan Strategik Sdn Bhd awarded the contract to its unit to undertake bored piling and general infrastructure works of guideway, stations park and ride, ancillary buildings and other associated works from Bandar Utama to Johan Setia. The duration of the contract is about 34 months.

Econpile said the contract is the main stream business of EMSB and is expected to contribute positively to the revenue and earnings of the group for the financial year ending June 30, 2018.

Econpile closed 0.33% lower at RM3.02 today with 2.09 million shares traded.

SP Setia shareholders approve purchase of I&P Group

SHAH ALAM: SP Setia Bhd, which received shareholders’ approval to acquire the entire equity interest in I&P Group Sdn Bhd for RM3.65 billion, plans to be less aggressive in terms of its sales target next year to focus on adding value to its additional landbank.

Previously, analysts opined that the group’s RM4 billion sales target for 2017 is “overly aggressive” although the developer was optimistic that it can achieve the target despite soft property demand and stricter lending policy.

Speaking at a press conference after the group’s EGM today, president and CEO Datuk Khor Chap Jen said the group is “positive” on achieving its sales target this year, but added that “there is still a lot of work to be done”.

Khor said it is too early to come up with its sales goals for next year but plans to do not less than its RM4 billion target this year.

“Next year, we will not be so aggressive. We will take our time and make sure we add value to our additional land. Some of the land are very strategic and some of them are in very matured area. So we want to ‘sweat’ the land more,” he said.

“During the first month of 2018, there will be a lot of planning, until the second half onwards to 2019 you can see us rolling out a lot of projects,” he added.

Commenting on the property market outlook, Khor said the group expects to see some “pick-up” in 2018, noting at the moment the market is quite flat.

“We think the market actually has hit the bottom. We do think that 2018 will pick up, but whether strong or slow, it depends on whether there are catalysts.”

Khor said the group views the I&P purchase as a synergistic acquisition given their projects’ vicinity as well as engaging in the similar nature of business.

“If you look at I&P’s land, they are (located) in Klang Valley and Iskandar Malaysia, where we actually (already) have a strong presence. And there are also new areas where SP Setia doesn’t have presence.

“Besides, all of their staff have been doing township development. To expand, you need good experienced people. So I think this is a very good match,” he said.

Upon completion of the acquisition, SP Setia’s landbank will increase more than 70% to 9,728 acres, with its prime landbank growing significantly in the central part of Klang Valley and Johor Baru.

At the EGM, all its resolutions were passed, including the group’s acquisition of 342.5 acres of land in Bangi known as Bangi Estate for RM447.58 million.

SP Setia gained 13 sen or 3.81% to RM3.54 with 6.33 million shares done today.

AmBank Research keeps ‘overweight’ call on construction sector

PETALING JAYA: AmBank Research has maintained its “overweight” call on the construction industry even as it considers risk premiums to have risen, triggered largely by MRT Corp’s move to introduce a “build and finance” model for MRT3.

The research firm analyst Joshua Ng opined that the model gives an upper hand to foreign contractors with strong financial backing from their governments i.e. the Chinese and Japanese.

The situation is exacerbated by investors increased cautiousness towards construction stocks ahead of the 14th general election, as construction stocks are generally perceived to be vulnerable to policy changes.

The construction index hit a low of 310.50 points before closing 0.2 points lower to 311.83 points today.

Ng stated that the build and finance model is not new in Malaysia, listing the RM4.5 billion Second Penang Bridge and the RM1.3 billion Pahang-Selangor Raw Water Transfer Tunnel project as examples of projects in recent years, however it could lead to local contractors falling further down the food chain in terms of jobs, thus affecting the value and margins for locals.

Citing the structure seen for the East Coast Rail Link job, Ng said the Chinese main contractor China Communications Construction Co (CCCC) subdivided the project into a number of large packages and awarded all but one to its subsidiaries.

The subsidiaries will then subdivide their respective work packages further and parcel out part of them to Malaysian contractors. In other words, Malaysian contractors can only, at best, become second-line subcontractors to CCCC for the ECRL project. The exception to the scenario is only if CCCC decides to award the remaining large package directly to a Malaysian contractor.

“While seemingly negative, we do not believe the latest development warrants a downgrade to the construction sector. The sector’s earnings prospects remain strong with most players sitting on record order books, thanks to the rollout of the Pan Borneo Sarawak highway (RM16 billion), MRT2 (RM32 billion) and LRT3 (RM12 billion) in recent years,” Ng said in his note to investors.

Key risks for the sector include the government is to embark on an austerity drive, resulting in mega and basic infrastructure projects being scaled down, postponed or cancelled; escalation in key input costs, particularly, steel and labour; liquidated and ascertained damages due to late delivery (arising from labour shortage, delays in construction site handover, construction site mishaps, unforeseen ground conditions, challenges in relocation of utilities and traffic diversion); and legal disputes with clients, subcontractors or suppliers.

AmBank Research’s top buys are Gamuda Bhd (expertise in tunnelling and resilient property profits), Sunway Construction (involvement in all key mega projects such as the MRT2 and LRT3, and recurring internal jobs), Kimlun Corp Bhd (supply of concrete segments to rail projects including potentially the ECRL and attractive valuations) and Protasco Bhd (recurring incomes from road maintenance concessions and attractive dividend yield).

US stocks boosted by solid Wal-Mart, Cisco earnings

NEW YORK, Nov 16 — Wall Street stocks rose early today, bouncing from recent weakness along with global equities following solid earnings from Wal-Mart Stores and Cisco Systems.  The gains followed two days of declines prompted by weakness in…

Sapura Industrial slips into the red in Q3 from a year ago

PETALING JAYA: Industrial and automotive manufacturer Sapura Industrial Bhd fell into the red for the third quarter ended Oct 31, 2017 on lower revenue and higher operating costs, mainly cost of imported materials as well as labour and production-related expenses.

The group posted a net loss of RM1.2 million for the quarter compared with a RM1.6 million net profit for the same quarter in 2016.

Group incurred some non-recurring expenses in line with factory relayout activities in preparation for new parts launched in October 2017. This was on 10% lower revenue of RM50.4 million, compared with RM56.1 million for the corresponding quarter in 2016.

Sapura Industrial said the outlook for the second half of the year will continue to be challenging for the automotive sector. As such, the group has intensified its efforts to further strengthen operational efficiency.

Total industry volume is projected to grow by 1.7% from 580,124 motor vehicles in 2016 to 590,000 in 2017.

Net loss for the nine-month period ended Oct 31, 2017 stood at RM2.1 million, compared with a RM2.6 million net profit for the same period in 2016. This was on 1.7% lower revenue for the cumulative period at RM148.4 million, compared with RM150.9 million for the same period in 2016.

The group’s stock was untraded today. Its last active closing price was 88 sen.

IEA: US to account for most world oil output growth over 10 years

BONN, Nov 16 — The United States is expected to account for more than 80 per cent of global oil production growth in the next 10 years and it will produce 30 per cent more gas than Russia by that time, the International Energy Agency (IEA) said…

Sime Darby unit to sell loan stocks in Prolintas to PNB

KUALA LUMPUR, Nov 26 — Kumpulan Jelei Sdn Bhd, an indirect wholly-owned unit of Sime Darby Bhd, has signed a sale and purchase agreement with Permodalan Nasional Bhd (PNB) for the sale and transfer of the redeemable loan stocks it held in…

American Express unveils blockchain-enabled payments

NEW YORK, Nov 26 — American Express today said it was working with Ripple, a blockchain solutions provider, to enable cross-border payments in partnership with Santander UK. The card issuer said its foreign exchange international payments…