Wednesday, December 13th, 2017


Dollar drops before Fed, after Alabama poll

LONDON, Dec 13 — The dollar dropped today awaiting the outcome of a Federal Reserve policy meeting and after a shock Democrat election win in a staunchly Republican senate district fuelled fears about US President Donald Trump’s tax cut plans….

EU warns British airlines on post-Brexit flying

BRUSSELS Dec 13 — British airlines will lose all flying rights the European Union has negotiated with third countries as well as those negotiated by individual EU states after Britain quits the bloc, the EU executive said in a note. In a…

Opec now sees oil market in balance within a year

PARIS, Dec 13 — Supply and demand in the global oil market are likely to balance out by the end of 2018 thanks to a pick-up in demand, notably from the transport sector, Opec said today. Demand is projected to grow by 1.51 million barrels per…

PIDM revises Differential Premium Systems framework

PETALING JAYA: Perbadanan Insurans Deposit Malaysia (PIDM) recently revised the Differential Premium Systems (DPS) framework for the Deposit Insurance System, effective from assessment year 2018, to reflect the increasingly diversified funding sources of member banks.

The DPS framework, which provides a framework to determine differential premium rates to be paid by member banks, will now see “loans to available funds” ratio and “composition of core funds” indicator replace the “loans to deposits” ratio and the “composition of individual depositors” indicator, respectively.

“These new indicators recognise a wider range of instruments that are regarded as stable funds, in line with regulatory and funding developments. Member banks that support their business with funding sources from deposits and debt instruments will benefit from the “loans to available funds” ratio. Additionally, the “composition of core funds” indicator provides incentives to member banks with high composition of stable funding sources,” said PIDM CEO Rafiz Azuan Abdullah in a statement.

Implemented in 2008, the DPS framework incentivises member banks to improve their risk profiles and ensures fairness among member banks. The better the risk profile of a member bank, the lower its applicable premium rate. PIDM reviews the DPS framework from time to time to ensure it remains current and relevant given a continuously evolving operating environment. The last review was carried out in 2015.

“Over time, banks have increasingly diversified their funding sources. Apart from traditional deposits, long-term debt instruments are gaining prominence as a source of stable funding, given the recognition under Basel III’s liquidity standards and advancements in Malaysia’s capital market. The revision to the DPS framework is timely to reflect such developments,” added Rafiz.

The assessment of the indicators under the revised DPS framework will be based on member banks’ positions as at Dec 31, 2017.

PIDM also announced that the Malaysia Deposit Insurance Corporation (Terms and Conditions of Membership) (Amendment) Regulations 2017 has been gazetted and came into effect on Nov 2, 2017. The terms and conditions of membership sets out the obligations and responsibilities of PIDM’s member institutions.

The enhanced terms and conditions of membership include, among others, compliance with prudential and Shariah standards, proper maintenance of records, additional information requirements, and timeliness of notification to PIDM by member institutions of any event that may undermine its safety and soundness.

Binasat eyes RM39.55m from IPO

KUALA LUMPUR: ACE market-bound Binasat Communications Bhd, which plans to raise RM39.55 million from its initial public offering exercise (IPO), is in the “preliminary stage” of expansion into the regional market.

The company, which is involved in the provision of telecommunications support services for satellite, mobile and fibre optic telecommunications network, is slated for listing on Jan 8 next year. It has a market capitalisation of RM120 million.

Binasat has earmarked 36.3% of the proceeds to set up a teleport, while 12.4% has been side-lined for the enhancement of the group’s operations and maintenance (O&M) service capabilities while about 12.1% is allotted for the enhancement of fibre optic network installation and commissioning services.

It has also apportioned 3.8% of the proceeds raised for its regional expansion into Vietnam, Myanmar and Laos.

Binasat COO Zulamran Hamat said at a media conference held after the group’s prospectus launch ceremony yesterday that Binasat has chosen Vietnam, Myanmar and Laos as destinations of choice for expansion considering the population size, internet penetration and technology enhancement conditions in these countries.

“At this stage the (IPO) allocation is mainly for setting up a representative office in the regional market.”

On top of that, Zulamran said the group is also looking to capitalise on the capital expenditure (capex) growth in the telco industry, which is about 7%-8% per annum.

While acknowledging the challenging atmosphere in the telco industry, Binasat said that the engineering segment, which entails the provision of civil, mechanical and electrical services in the satellite, mobile and fibre optics areas – provides room for expansion on the back of digitalisation of mobile networks and enhancement of technology.

Binasat’s IPO exercise involves a total offer of up to 125.98 million new ordinary shares at an offer price of 46 sen per share. Of this, 85.98 million new shares will be up for public issue, with 13 million being made available to the Malaysian public, 13 million for eligible directors and employees and 59.98 million for placement for selected investors.

Domestically, the group claims to have a 57% market share for maintaining satellite ground stations located at petrol stations and 64% market share for O&M for all satellite ground stations.

Maxis Broadband Sdn Bhd and Huawei Technologies Malaysia Sdn Bhd are its major customers. Maxis contributed about 49.5% to the group’s revenue for FY17 while Huawei contributed about 26.3%.

PUC launches e-wallet platform Presto

KUALA LUMPUR: ACE-Market listed PUC Bhd, which is seeking approval for money raised initially for its renewable energy business to be pumped into its e-wallet business expansion, today launched Presto, a homegrown social marketing and e-wallet platform. The e-wallet service is targeted to go live in early 2018.

PUC proposes to pump in RM36 million from a rights issue of irredeemable convertible unsecured loan stocks (Iculs) last year, earmarked for its renewable energy business, to be used for the e-wallet business expansion. A total of RM42 million was raised.

“We’ve tried the solar plant business for the last one year but because of the rates and for commercial reasons, we’re not able to (kick off the project). We’re still trying to get more of the solar plant business. Meanwhile, we will see what other options we can use the funds for,” explained PUC group managing director and CEO Cheong Chia Chou. An EGM will be held next week to obtain shareholders’ approval for the pending variation.

PUC’s wholly-owned subsidiary EPF Solution Sdn Bhd, an e-payment services provider for businesses, received approval from Bank Negara Malaysia for an e-money licence in September, subject to fulfillment of requirements set by the central bank.

The platform allows shoppers to earn cash back and helps sellers to boost their presence and sales to shoppers, by leveraging social media engagement.

Cheong said Presto adopts the online to offline to online (O2O2O) model. This means shoppers visit the outlet to redeem the sellers’ goods (online to offline), and sellers will reward in-store shoppers for sharing deals on social media (offline to online).

He said unlike most e-commerce platforms that only focus on consumers’ needs, Presto ensures that both shoppers and sellers are able to maximise cash back as well as drive sales at prices that sellers are comfortable with.

“For Presto, we’re not looking at 20,000 merchants like other e-commerce platforms. We’re focused on helping our existing and new advertisers (sellers) reach out to consumers,” he told a press conference after the launch.

Cheong said PUC’s core business is in media and advertising, and having the e-wallet or more advertising via Presto are both in line with its businesses. The media business contributes 90% of its revenue.

Presto will first roll out its service in the Klang Valley and extend it to other parts of Malaysia in due course.

On the e-wallet component, PUC has proposed a variation for the utilisation of proceeds (RM36 million) to be used for the e-wallet business expansion. – by Ee Ann Nee

OCR expects higher 2018 earnings

PETALING JAYA: O&C Resources Bhd (OCR), which has turned around in the financial year ended July 31, 2017 (FY17), expects higher full-year earnings for FY18 driven by its strong order book and new project launches going forward.

Speaking to reporters at a press conference after the group’s AGM today, its managing director Billy Ong Kah Hoe said the group’s construction business has an order book of RM670 million, which includes in-house projects and external building works.

“In FY17, the major revenue contribution came from our construction business and we expect this to be maintained in FY18,” Ong said.

For the first quarter ended Oct 31, 2017, OCR saw its net profit more than triple to RM1.06 million from RM288,000 in the same period last year, helped by an increase in profit from the development and construction segments.

Going forward, Ong said the major projects that will contribute to the group’s earnings include the 1Malaysia People’s Housing (PR1MA) project in Malacca and Bukit Jalil, 1Malaysia Housing Projects for Civil Servants (PPA1M) project in Putrajaya and Tiara Bangi Homes project.

“These projects will keep us busy for the next three to four years,” he added.

Furthermore, he said the group is also expecting earnings recognition from the property development division, mainly derived from the newly launched luxury service residence project called [email protected], with a gross development value (GDV) of RM240 million.

To date, Ong said the project has achieved a take-up rate of 80%.

He added the group’s upcoming projects include the RM166 million mixed development project in Pahang, known as PRIYA scheme, RM330 million mixed development in Kuantan and RM134 million project in Malacca.

“Additionally, with a net gearing of 0.11 times, the company is well positioned to capitalise on any opportunities that arise,” he added, noting the group is continuously looking to acquire new land bank, particularly in the Klang Valley area.

OCR owns 104 acres of land bank, located across Klang Valley, Kuantan and Malacca, with an estimated GDV of RM870 million.

At its AGM earlier, the group obtained shareholders’ approvals to change its name to OCR Group Bhd as part of its rebranding strategy. – by Wan Ilaika Mohd Zakaria

Britain has guaranteed no Brexit backsliding, says Verhofstadt

STRASBOURG, Dec 13 — Britain’s Brexit minister has personally guaranteed that London will not go back on its hard-fought EU divorce promises, the European Parliament’s pointman Guy Verhofstadt said today. David Davis caused alarm by saying…

Yinson’s Q3 earnings up 44% to RM91.16 million

PETALING JAYA: Yinson Holdings Bhd registered a 44.4% in net profit to RM91.16 million for the third quarter ended October 31, 2017 compared with RM63.11 million in the previous corresponding period, underpinned by higher profit contribution from the FPSO John Agyekum Kufuor, lower impairment loss on property, plant and equipment as well as net favourable exchange movement of RM7.8 million.

Its revenue doubled from RM127.94 million to RM263.12 million.

The integrated offshore production and support services provider said in a filing with the stock exchange that the short- to medium-term outlook in the oil and gas sector remains challenging and uncertain due to protracted oversupply, emerging new alternative energy resources and financial institutions risk appetite towards the sector.

“Moving forward, global economic activity is expected to remain subdued despite unprecedented easing of monetary conditions in major economies.”

Amid the challenging global economic environment and the volatility of other currencies against US dollar, the group said it will strive to achieve satisfactory results for the financial year ending January 31, 2018.

For the first nine months of the year, Yinson's net profit increased 61.2% from RM145.85 million to RM235.04 million on the back of an 82.4% jump in revenue from RM357.79 million to RM652.76 million.

Its shares fell 5 sen or 1.3% to close at RM3.76 on some 457,800 shares done.

Minetech Resources to get new substantial shareholder with granite quarry buy

PETALING JAYA: Minetech Resources Bhd (MRB) plans to take a 60% interest in a granite quarry mining rights owner Bertam Capital Sdn Bhd (BRSB) for RM16.8 million, to be satisfied via issuance of new shares in MRB at 14 sen.

The deal will leave seller Bertam Roadbase Sdn Bhd (BRSB) with a 14.1% interest in MRB. MRB's share price closed up one sen at 15 sen, with some 13.0 million shares changing hands.

BCSB made a net profit of RM1.8 million against RM23.1 million revenue for the financial year ended Aug 31, 2017.

The MRB Group, which is principally involved in quarry operations and is currently operating quarries at Puchong, Selangor; Bidor, Perak; Pantai Remis, Perak; and Kuantan, Pahang until recently has been recording losses for its quarry segment since 2013.

It recorded profits for the six month financial period ended Sep 30, 2017.

Save for the quarry located in Puchong, Selangor where the MRB Group is acting as a subcontractor for the quarry owner, the MRB Group owns equity stakes in the other quarries.

Upon completion of the proposed acquisition, the MRB Group would be able to expand its geographical reach with BCSB’s quarry located in the state of Negeri Sembilan and contribute positively to the MRB Group. In addition, the MRB Group will be able to capitalise on BCSB’s existing customer network to market other products and services, such as its civil engineering services, asphalt premix products or bituminous products.

Chong Jun Heng, a director in MRB, is a minority shareholder in BRSB with a 9.52% shareholding, and has abstained from all deliberations regarding the deal.