Monday, November 12th, 2018

 

Hold your horses on digital currency, MSWG tells Country Heights

PETALING JAYA: Country Heights Holdings Bhd (CHHB) shareholders' approval last Thursday was merely an approval-in-principle for it to seek support to “embark” on its initial coin offering (ICO) known as “Horse Currency”, said the Minority Shareholders Watch Group (MSWG).

In its weekly newsletter, MSWG said many details are not yet available to the shareholders, especially the regulatory framework for such ICO.

“CHHB is in the process of mobilising its team of experts and advisers to fine-tune the ICO offering and this will incur costs.”

MSWG cautioned that there is a risk that some of the money that is spent on the ICO journey that CHHB is embarking on may have to be written off if the regulatorily-approved ICO model turns out to be a “different animal” (maybe the same animal but with different features).

Nonetheless, it expects CHHB to provide sufficient details in the future to enable shareholders to make an informed decision on the ICO offering.

MSWG has raised a few concerns over the ICO exercise such as how would it be treated in its books – either equity or loan or a hybrid of these; risk management measures and framework to be established; how will the ICO ranks if there is a winding-up; will minority shareholders get a “restricted offer” at a lower price; and the risk of the success of the ICO given that CHHB is primarily involved in property sector, which is currently facing severe headwinds and overhang.

To recap, CHHB is planning to issue one billion units of Horse Currency backed by RM2 billion worth of assets held by the holding company with an initial 300 million open to the public for circulation. Its 20-member task force will continue to engage with regulators such as Bursa Malaysia, the Securities Commission, Bank Negara Malaysia as well as the Malaysia Blockchain Association.


Apple, tech sector crushed by weak forecasts

NEW YORK, Nov 12 — US stocks fell for a third day today, as a slump in Apple Inc shares following weak forecasts from two of its suppliers hit the technology sector. The iPhone maker fell 3.8 per cent after laser sensor maker Lumentum Holdings Inc…


MRCB to receive RM1.33b from govt for EDL concession termination

PETALING JAYA: Malaysian Resources Corp Bhd (MRCB) will receive RM1.33 billion from the government for the termination of the Eastern Dispersal Link Expressway (EDL) concession, and expects to see its net gearing improve to 0.28 times from 0.53 times as at Dec 31, 2017 (FY17).

MRCB intends to use the proceeds for the repayment of senior sukuk, junior sukuk and shareholder's advances, and as general working capital.

MRCB's sub-subsidiary MRCB Lingkaran Selatan Sdn Bhd entered into a termination and settlement agreement with the government today.

“Based on the audited consolidated financial statements of MRCB group for the FY17 and on the assumption that the concession termination had been effected at the beginning of that financial year, the earnings per share of the MRCB group is expected to increase from 6.56 sen to 7.50 sen as a result of the concession termination,” MRCB said in a stock exchange filing.

Net assets per share is expected to fall to RM1.10 from RM1.11.

To recap, MRCB had planned to dispose of the EDL following the government's decision to abolish toll collection on the highway from 2018. EDL is the first fullly private sector-funded highway that ran on a 34-year concession. The concession was awarded to MRCB in 2007.

The concession termination is subject to approval of MRCB shareholders at an EGM to be convened. MRCB has submitted an application to Bursa Malaysia Securities for a waiver from having to obtain shareholders' approval for the concession termination and the termination agreement and will seek shareholders' ratification at the EGM instead.

MRCB's substantial shareholders, namely the Employees Provident Fund Board, Gapurna Sdn Bhd and Lembaga Tabung Haji, which collectively hold at least a 51% stake in MRCB, will vote in favour of the concession termination and termination agreement at the EGM.

Barring unforeseen circumstances, and with all approvals being obtained, the concession termination is expected to be completed by the first quarter of 2019.


TMC Life Sciences’ Singapore parent to distribute stake in RSP Holdings to shareholders

PETALING JAYA: TMC Life Sciences Bhd's parent company in Singapore Thomson Medical Group Ltd (TMG) proposes to distribute its entire stake in its design and engineering and hospitality businesses, held by RSP Holdings Pte Ltd, to its shareholders via a distribution in specie by way of a capital reduction.

TMG told the Singapore Exchange that the proposed distribution will be effected by way of a distribution in specie of RSPH shares on the basis of one RSPH share for every one TMG share held.

TMG also proposed a further capital reduction to streamline its capital structure and write off accumulated losses.

As at Sept 30, 2018, TMG's issued and paid-up share capital and accumulated losses were S$2.77 billion and S$281.19 million (RM8.3 billion and RM843.57 million), respectively. The further capital reduction will involve a write-off of S$281.19 million in accumulated losses and will concurrently result in the company's issued and paid-up share capital being reduced by S$281.19 million.

TMG said the corporate exercises are in line with the group's current focus in developing and growing its healthcare business as well as plans to divest the real estate business.

“It will lead to us becoming a pure healthcare company, and will allow management to focus on capturing the growing demand for quality healthcare in this region,” said its chairman, Ng Ser Miang.

On Bursa Malaysia today, TMC Life fell 1.3% to 75.5 sen on volume of 43,300 shares. Trading in the stock was delayed by an hour pending the announcement.


Wall Street slides as Apple’s sales worries persist

WASHINGTON, Nov 12 — Wall Street opened lower today, extending losses from Friday when fears for global growth saw stocks retreat. Tech shares led losses, with Apple slipping on fears of lower sales. But crude oil prices in New York recovered some…


Oil prices advance as Saudi to cut output

LONDON, Nov 12 — Oil prices advanced today after crude kingpin Saudi Arabia announced plans to cut output in the face of global oversupplies and demanded that other producers followed suit. Higher crude lifted shares across the commodities sector,…



QSR inks deals with KIP for KFC drive-thru outlets

KUALA LUMPUR: QSR Brands (M) Holdings Bhd, which has inked two agreements with Kepong Industrial Park (KIP) Group to develop new KFC drive-thru restaurants, plans to open a minimum of 67 new KFC outlets and another 60 Pizza Hut outlets nationwide over the next three years.

Speaking at the memorandum of understandings (MoUs) signing ceremony yesterday, QSR Brands managing director Datuk Seri Mohamed Azahari Mohamed Kamil said the group also planned to upgrade close to 20% of its stores for a fresh new look.

The group has over 810 KFC and 460 Pizza Hut outlets across Malaysia, Singapore, Cambodia and Brunei.

Moving forward, Mohamed Azahari said the group intends to continue collaborating with the renowned developer to keep the momentum of its restaurant growth across its retail centres going, adding it is now in talks with seven property developers.

Under the MoUs, the parties will jointly develop two new KFC drive-thru restaurants at KIP Group’s retail outlets, namely KIP Mall Desa Coalfields in Sungai Buloh and KIP Mart Lavendar in Senawang.

KIP Group’s CEO Valerie Ong said the partnership is expected to boost KIP Real Estate Investment Trust’s (KIP Reit) occupancy rate and footfall to 1,500 visitors per day once it opens its doors to the public in December next year.

She said with the extension of the new KFC drive-thru restaurant, the group’s KIP Mart Lavendar is expected to increase its occupancy rate by 4% to about 85%.

“The addition of KFC restaurants to the present tenant mix will increase our array of food and beverage outlets that will inevitably take both QSR Brands as well as KIP Group to the next level. We look forward to more successful collaborations in the near future,” Ong added.

To recap, QSR Brands and KIP Reit formed its first strategic collaboration last month via a tenancy agreement to establish a KFC restaurant at KIP Mart in Kota Tinggi, Johor.

KIP Reit, which has total assets under management of RM614.9 million as at Sep 30, 2018, is expected to surpass the RM1 billion mark by 2019.

KIP Reit’s portfolio consists of five KIP Marts properties located at Masai, Tampoi, Kota Tinggi, Senawang and Malacca as well as a retail mall in Bangi known as KIP Mall.

Asked to update on the group’s RM2 billion initial public offering (IPO) plans slated by this month, Mohamed Azahari said “work is in progress”.

According to a draft prospectus submitted to the Securities Commission Malaysia, QSR Brands is offering a total of 1.465 billion shares for sale in its IPO, which includes a public issue of 70 million new shares.

Proceeds from the IPO will mainly be used for the expansion of KFC and Pizza Hut businesses across the country within 12 months.


QSR teams up with KIP for drive-thru KFC outlets

KUALA LUMPUR: QSR Brands (M) Holdings Bhd, which has inked two agreements with Kepong Industrial Park (KIP) Group to develop new KFC drive-thru restaurants, plans to open a minimum of 67 new KFC outlets and another 60 Pizza Hut outlets nationwide over the next three years.

Speaking at the memorandum of understandings (MoUs) signing ceremony yesterday, QSR Brands managing director Datuk Seri Mohamed Azahari Mohamed Kamil said the group also planned to upgrade close to 20% of its stores for a fresh new look.

The group has over 810 KFC and 460 Pizza Hut outlets across Malaysia, Singapore, Cambodia and Brunei.

Moving forward, Mohamed Azahari said the group intends to continue collaborating with the renowned developer to keep the momentum of its restaurant growth across its retail centres going, adding it is now in talks with seven property developers.

Under the MoUs, the parties will jointly develop two new KFC drive-thru restaurants at KIP Group’s retail outlets, namely KIP Mall Desa Coalfields in Sungai Buloh and KIP Mart Lavendar in Senawang.

KIP Group’s CEO Valerie Ong said the partnership is expected to boost KIP Real Estate Investment Trust’s (KIP Reit) occupancy rate and footfall to 1,500 visitors per day once it opens its doors to the public in December next year.

She said with the extension of the new KFC drive-thru restaurant, the group’s KIP Mart Lavendar is expected to increase its occupancy rate by 4% to about 85%.

“The addition of KFC restaurants to the present tenant mix will increase our array of food and beverage outlets that will inevitably take both QSR Brands as well as KIP Group to the next level. We look forward to more successful collaborations in the near future,” Ong added.

To recap, QSR Brands and KIP Reit formed its first strategic collaboration last month via a tenancy agreement to establish a KFC restaurant at KIP Mart in Kota Tinggi, Johor.

KIP Reit, which has total assets under management of RM614.9 million as at Sep 30, 2018, is expected to surpass the RM1 billion mark by 2019.

KIP Reit’s portfolio consists of five KIP Marts properties located at Masai, Tampoi, Kota Tinggi, Senawang and Malacca as well as a retail mall in Bangi known as KIP Mall.

Asked to update on the group’s RM2 billion initial public offering (IPO) plans slated by this month, Mohamed Azahari said “work is in progress”.

According to a draft prospectus submitted to the Securities Commission Malaysia, QSR Brands is offering a total of 1.465 billion shares for sale in its IPO, which includes a public issue of 70 million new shares.

Proceeds from the IPO will mainly be used for the expansion of KFC and Pizza Hut businesses across the country within 12 months.


IOI Corp first quarter earnings 60% lower

PETALING JAYA: IOI Corp Bhd's net profit for the first quarter ended Sept 30, 2018 fell 60% to RM143.80 million from RM360.00 million a year ago due mainly to lower operating profit and total net foreign currency translation loss on foreign currency denominated borrowings and deposits.

Excluding the total net foreign currency translation loss of RM61.1 million on foreign currency denominated borrowings and deposits as well as fair value gain on derivative financial instruments from the resource-based manufacturing segment of RM20.2 million, the underlying pretax profit of RM236.1 million for Q1 FY2019 is 41% lower than the underlying pretax profit of RM403.5 million for Q1 FY2018, with lower contribution from all segments.

Its revenue was up 0.5% to RM1.88 billion compared with RM1.87 billion in the previous year's corresponding quarter.

With lower exports during the end of the year period, the current high palm oil inventories is expected to persist in the near future.

The prevailing trade war between China and US will provide greater opportunity for Malaysia to increase its exports of palm oil to China during the first quarter of next year when China’s soya beans stocks is drawn down.

The current discount of palm oil price over mineral oil price resulting in greater demand for palm biodiesel is also a positive factor which will underpin palm oil price.

“Overall, we expect CPO (crude palm oil) price to be supported at between RM2,000 and RM2,250 per tonne until the beginning of year 2019,” IOI Corp said.

The current strength of the US dollar against the ringgit will result in further non-cash foreign exchange translation loss on its medium to long term US dollar-denominated borrowings.

“However, this translation loss will be mitigated partly by the translation gain in our US dollar-denominated cash deposits from the balance of the Loders Croklaan equity divestment proceeds.”

Overall, the group expects its financial performance for the next quarter to be satisfactory, albeit slightly lower than the previous quarter due to the lower CPO price.