Monday, January 7th, 2019


Lion Industries to sell stake in Angkasa Amsteel

PETALING JAYA: Lion Industries Corp Bhd is disposing of its entire 50% stake in Angkasa Amsteel Pte Ltd to Daehan Steel Co. Ltd for S$26.65 million (about RM80.90 million) cash.

In a filing with Bursa Malaysia, the group said the proposed disposal will enable it to dispose of its non-core assets and use the proceeds to fund its expansion into the flat steel business and working capital requirements.

Last year, the group announced its proposed expansion into the flat steel business via the proposed acquisitions of flat steel assets with a production capacity of up to 3.2 million metric tonne (MT) per annum of hot rolled coils and up to 0.7 million MT per annum of cold rolled coils.

The total funding required for the proposed expansion is RM636 million including associated costs in relation to the proposals of about RM32 million.

Incorporated in Singapore, Angkasa Amsteel’s principal activities are in the trading and fabrication of steel and dealing in building materials. Its subsidiaries are involved in steel trading.

Lion Industries holds 50% minus one share in Angkasa Amsteel while LTC Corp Ltd holds the remaining 50% +1 share.

Angkasa Amsteel will complete the disposal of its entire equity interest in its Malaysian subsidiaries Angkasa Amsteel (M) Sdn Bhd and Angkasa Steel Sdn Bhd as part of a restructuring exercise on or prior to the completion of the proposed disposal.

The Malaysian subsidiaries will be liquidated after the proposed disposal. Based on the proforma consolidated balance sheet of Angkasa Amsteel as at March 31, 2018, Lion Industries is expected to receive about S$10.16 million as its share of distribution of assets under the liquidation of the subsidiaries.

Thus, the total proceeds to be derived from the proposed disposal and the restructuring exercise is about S$36.81 million.

Lion Industries acquired the sale shares in 2011 and 2012 at a total of RM38.05 million. The proposed disposal is not expected to give rise to any gain or loss to the Lion Industries group.

Petronas starts trial runs at crude distillation unit for Rapid

SINGAPORE: Malaysian state oil company Petroliam Nasional Bhd (Petronas) started trial runs at the crude distillation unit (CDU) for a joint-venture refinery with Saudi Aramco in Malaysia last week, two sources with knowledge of the matter said today.

The move marks a major milestone for the US$2.7 billion (RM11 billion) project known as Rapid – or Refinery and Petrochemical Integrated Development – in Pengerang, Johor. The test runs put the project on track for commercial operation in 2019.

The company also received its second cargo of 2 million barrels of Saudi crude last week, according to the sources and data on Refinitiv Eikon.

Petronas could not be immediately reached for comment.

Rapid consists of a 300,000-barrel-per-day (bpd) refinery and secondary refining units that will allow the companies to produce refined oil products that meet Euro 5 fuel specifications. The refinery is linked to a petrochemical complex with a capacity of 7.7 million tonnes a year.

The first crude oil cargo for Rapid was offloaded at Pengerang in September.

The refinery is one of four new complexes in Asia that represent a combined processing capacity of nearly 1.3 million bpd scheduled to start up from late 2018 to 2019.

Another of the four complexes, a 400,000 bpd refinery, owned by Hengli Petrochemical in Dalian in northeast China, started trial runs in December.

These plants will increase Asia’s crude demand while adding to fuel output in the region.

Berjaya Media has until June 20 to submit regularisation plan

PETALING JAYA: Berjaya Media Bhd (BMedia) has been granted an extension of time up to June 20, 2019 to submit a regularisation plan to Bursa Malaysia.

In a filing with Bursa Malaysia, the company said that Bursa Malaysia had granted the extension vide its letter dated Jan 7, 2019. The regularisation plan is to address its Practice Note 17 status.

Bursa Malaysia has the right to suspend the trading of BMedia’s listed securities and to de-list the company if it fails to submit a regularisation plan on or before June 20, 2019; fails to obtain approval for the implementation of the regularisation plan; or fails to implement the plan within the stipulated time frame.

Earlier, Berjaya Corp Bhd founder and executive chairman Tan Sri Vincent Tan Chee Yioun had said that a profitable private company will be injected into BMedia as part of its regularisation plan.

Sapura Energy bags contracts worth RM760m

KUALA LUMPUR, Jan 7 — Sapura Energy Bhd has bagged a RM760 million contract for its drilling and engineering and construction businesses, lifting the value of contract wins to RM9.3 billion in its current financial year ending Jan 31, 2019. In a…

Aston Martin triggers Brexit contingencies to prepare for no deal

LONDON, Jan 7 — Aston Martin has hired a supply chain chief and approved Brexit plans to avoid delays by using ports other than Dover and flying in components as the carmaker prepares for a possible no deal in March, its boss told Reuters….

Trucks used to test UK’s no-deal Brexit preparedness

MANSTON, Jan 7 — Dozens of trucks descended on an abandoned airfield in southeast England today in an exercise for easing congestion in Channel crossings in case of a no-deal Brexit. The trucks, many of them belonging to the Eddie Stobart haulage…

Consumer sentiment to remain healthy this year

PETALING JAYA: AmInvestment Bank has maintained its “overweight” rating on the consumer sector, as consumer sentiment is expected to remain healthy on the back of recent consumer-friendly initiatives by the government.

It said in a report today that recent initiatives such as the reintroduction of petrol subsidy, capping of the electricity tariff and introduction of public transport subsidies, have contained the problem of rising cost of living and effectively put more money back into the pockets of consumers.

“The substitution of the Goods and Services Tax (GST) with the Sales and Services Tax (SST) is a net positive to consumers as the SST has a narrower scope compared with the GST,” it said.

According to the Malaysian Institute of Economic Research, the Consumer Sentiment Index has recovered beyond the 100-point confidence threshold after three years of a low sentiment trend.

AmInvestment Bank believes that the positive trend in consumer sentiment will be sustained as consumers become more confident of the government with expectations of more rakyat-centric government policies, better governance and transparency.

It expects private consumption to grow at 6.5% year-on-year on the back of a healthy labour market and stable inflation.

While the food and beverage sub-sector does not typically benefit from greater disposable income, AmInvestment Bank has identified Berjaya Food Bhd (BFood), Mynews Holdings Bhd and Power Root Bhd as the top picks for the sector.

It said that BFood is a beneficiary as improved consumer sentiment will drive discretionary spending while Mynews will be an indirect beneficiary of the public transportation subsidy.

“We reckon that this measure will boost foot traffic surrounding the train stations. Mynews currently operates more than 30 stores in the MRT, LRT and monorail stations,” it added.

Meanwhile, Power Root will be a potential beneficiary as it is a producer of staple products. It will also benefit from a stronger US dollar as around 50% of its sales are in exports.

Downside risks that may prompt it to review its call for the sector are weakening of the ringgit against the US dollar (its 2019 assumption average is RM4.12) and sluggish improvement to economic fundamentals, which could lead to a de-rating of the sector.

“A sluggish recovery in economic fundamentals such as high operational costs and a weak ringgit may not see consumers fully benefitting from savings tied to the SST reintroduction and consumer-friendly measures, thereby dampening the recovery in consumer sentiment,” it said.

Spring Art plans IPO, to acquire new machinery

PETALING JAYA: Spring Art Holdings Bhd is looking to list on the ACE Market of Bursa Malaysia and will use the proceeds from its proposed initial public offering (IPO) to acquire new machinery for its new factory.

In a draft prospectus exposure on the Securities Commission website, the group said its IPO involves a public issue of 97.7 million new shares, of which 20.8 million shares will be made available for the Malaysian public and 4.2 million shares for application by eligible directors, employees and persons who have contributed to the success of the group.

The remaining 72.7 million shares will be made available for application by way of private placement to selected bumiputra investors approved by the Ministry of International Trade and Industry and selected investors.

There will also be an offer for sale of 27.02 million existing shares via private placement to selected investors.

The group is involved in the manufacturing of ready-to-assemble furniture products, where it under-takes the design and development, manufacturing as well as marketing and sales of office furniture, bedroom furniture, living room furniture as well as other types of furniture.

To date, the group owns three facilities and operate six production lines with a total annual production capacity of 337,016 units of furniture. Currently, its manufacturing processes, save for lamination activities, are carried out at its manufacturing factories located in Muar, Johor.

For the six-month period ended June 30, the group posted a net profit of RM1.96 million on the back of RM22.7 million in revenue.

Foreign selling on Bursa eased to RM54.4 million last week

PETALING JAYA: Foreign funds sold RM54.4 million net of local equities last week, less than half of the amount disposed in the previous week.

“The momentum of foreign net outflows from Bursa tapered last week but extended the weekly foreign selling streak to nine weeks,” MIDF Research said in its weekly fund flow report today.

On new year’s eve, international investors sold RM36.1 million net on Bursa following the drop in China’s factory activity for the first time since 2016. The local bourse remained flat, only ending 0.1% lower at 1,691 points on Monday. It was also notable that the FBM KLCI gained 56 points since it hit its lowest level in 2018 of 1,635 points on Dec 18, 2018.

MIDF Research said Bursa kicked off 2019 on a sombre note as foreign funds sold RM55.4 million on Wednesday, bringing the foreign net selling streak to 12 days, the longest since the 37-day selling spree recorded from early May to late June 2018.

“Despite Apple’s slash in revenue guidance, foreign investors disregarded the news and took the opportunity to buy RM64.6 million net on Thursday, the largest daily inflow in more than two weeks.”

“Foreign funds reverted to selling mode on Friday albeit at a moderate pace of RM27.5 million net. Optimism sparked by the China’s services gauge was outweighed by disappointing US manufacturing data as the ISM (The Institute of Supply Management) manufacturing index fell to 54.1 last month, the lowest level since November 2016.”

For the first three trading days of 2019, MIDF Research said foreign funds pulled out RM18.3 million net or US$4.5 million net of equities from Bursa. This is substantially lower than Thailand’s outflow of US$130.4 million net while Indonesia and the Philippines saw a net inflow of US$54.9 million and US$23.1 million, respectively.

“The participation rate amongst the various group of investors saw an increase across the board. The average daily traded value of foreign investors registered the largest weekly advance of 36% but was still below the healthy level of RM1 billion,” it added.

KBB unit qualifies for Petronas jobs

PETALING JAYA: KBB Engineering Bhd’s subsidiary OceanMight Sdn Bhd has been qualified as one of Petroliam Nasional Bhd’s (Petronas) contractors to bid for engineering, procurement and construction (EPC) works.

In a filing with Bursa Malaysia, the group said OceanMight has accepted and signed a letter of award of the Petronas Frame Agreement (contract) for the provision of EPC of fixed offshore structure works by Petronas.

The contract is effective for six years from Dec 12, 2018, unless terminated earlier. A formal contract is expected to be executed within three months from the acceptance of the letter of award.

The contract is expected to contribute positively to the earnings and net assets of the company and the group for the duration of the contract.