The Sun

PNB, EPF keen to take over phase two of Battersea Power Station project

SHAH ALAM: Permodalan Nasional Bhd (PNB) and the Employees Provident Fund, (EPF) long-term investors in the Battersea Power Station project in London, have shown interest in taking over the commercial assets being developed by Battersea Phase 2 Holding Co Ltd for £1.61 billion (RM8.8 billion).

Today, Sime Darby Property Bhd and SP Setia Bhd, both 40% interest holders in Battersea Phase 2, announced that Battersea Phase 2 Holding had entered into a heads of agreements with PNB and EPF to explore the terms of a potential sale on completion of the commercial assets currently being developed within Phase 2 of Battersea Power Station project, to a joint venture company to be formed between PNB and EPF.

Battersea Phase 2 Holding Co is a wholly owned subsidiary of Battersea Project Holding Co Ltd.

PNB and EPF expressed their interest to explore the transaction following strong progress made to date in Phase 2 with over 90% of residential units having been presold and the letting of the entire office space in the Power Station Building (about 470,000 sq ft) to Apple.

Sime Darby Property said in its statement the proposed transaction would provide increased certainty of investment return to Sime Darby Property and SP Setia as development partners earlier than would otherwise be the case, and enable both parties to focus on securing the development profit and investment returns from the remainder development in Phases 3 to 7 of the Battersea Power Station, which is estimated to be completed in 2028.

“The proposed transaction, once completed, would augur well with our business plans as it will enhance our investment returns and allow SP Setia to capitalise on arising opportunities as a property developer while continuing to play a significant role in the overall development of the project,” SP Setia said in a statement.

It added that the proposed transaction demonstrates the strong direct commitment by the ultimate institutional shareholders in the project.

The shareholdings in Battersea Project Holding will remain unchanged between Sime Darby Property, SP Setia and EPF. SP Setia remains committed to and is positive on the long-term prospects of the Battersea Power Station project.

Phase 1 (known as Circus West Village), which consists of 12 residential blocks and 100,000 sq ft of high-quality restaurants, shops, offices and leisure accommodation was handed over to the purchasers and tenants over the course of last year.

The Battersea Power Station project covers 42 acres and includes 3.5 million sq ft of mixed commercial space, together with 4,364 new homes.


Malaysia, Indonesia slam EU move on palm oil

KUALA LUMPUR: Top palm oil producers Indonesia and Malaysia today criticised the European Union (EU) for backing a ban on the use of palm oil in biofuels, with a Malaysian minister calling the move a protectionist trade barrier and a form of “crop apartheid”.

European lawmakers approved draft measures on Wednesday to reform the power market there and reduce energy consumption to meet more ambitious climate goals. The plan includes a ban on the use of palm oil in motor fuels from 2021.

Indonesia and Malaysia are the world’s top two palm oil producing countries, accounting for nearly 90% of global supply.

A large portion of European palm oil imports are used to make biofuels, giving the industry’s top two producers cause for concern as they fear overall demand will fall.

“This vote is very disappointing. It’s a black day for free trade. You are discriminating against palm oil,” Malaysia’s Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong told reporters at an industry conference here.

By allowing other vegetable oils to be used in biofuels, the EU was discriminating against palm oil, he said.

“The EU is practising a form of crop apartheid,” Mah said separately in a statement.

Palm oil exports are a key source of revenue for Malaysia. The EU is its second-biggest market after India.

Indonesian Trade Minister Enggartiasto Lukita told reporters in Jakarta there should be fair treatment for all vegetable oils, and that Indonesia had protested the EU’s “negative campaign” on palm oil on several occasions.

The palm oil industry has come under fire in Europe over its impact on forest destruction and Southeast Asian producers have faced calls to meet higher sustainability standards.

Mah said Malaysia’s ambassadors in the 28 EU member countries will raise objections and that he will work closely with Indonesia to protect the interests of smallholders.

“The government will not tolerate the denigration of the palm oil industry and will ensure Malaysia gives a fitting response to those who harm the palm oil industry,” Mah said. – Reuters


Malaysian palm oil output to rise 3% in 2018

KUALA LUMPUR: Palm oil production in Malaysia, the world’s No. 2 producer of the commodity, will rise by 3% in 2018, an industry body forecast today.

The Malaysian Palm Oil Board (MPOB) expects production to climb to 20.5 million tonnes from 19.9 million tonnes in 2017, the group’s director-general, Datuk Ahmad Kushairi, said at an industry conference here.

“We expect momentum will still be there, that’s why we are forecasting production will be moving forward,” he said.

Malaysian production of the edible oil is widely expected to rise this year as fields continue to recover from the dry weather effects of a 2015 El Nino. The weather pattern can impact fruit yields for up to two years.

Malaysia’s exports are expected to increase 5.1% to 17.4 million tonnes this year, though a stronger ringgit will be a “challenge”, Ahmad said.

MPOB expects the country’s palm oil stockpiles to drop 15.8% to 2.3 million tonnes in 2018, potentially supporting prices. Palm oil stockpiles in Malaysia climbed to their highest in over two years at the end of December.

Earlier, an industry analyst said global palm oil production is expected to rise by 5 million to 6 million tonnes in 2018, slower than last year’s growth of 8 million tonnes.

James Fry, chairman of commodities consultancy LMC International, said “2018 output will be 5-6 million tonnes above the 2017 total, led by Indonesia”, he told Reuters before his speech.


Ringgit ends marginally lower versus greenback

KUALA LUMPUR: The ringgit close marginally lower against the US dollar today on the back of rising US Treasury yields, dealers said.

At 6pm, the local note finished at 3.9540/9570 against the greenback from 3.9520/9560 on Wednesday.

Oanda Corp Head of Trading for Asia Pacific, Stephen Innes, said the ringgit was initially traded higher, however the US Treasury yields rose and triggered a stronger US dollar momentum and some short covering in early trade.

“The ringgit is more than up for the challenge,” Innes said, adding that today's lethargic foreign exchange market moves suggested that investors would continue to take advantage of any opportunistic retreat on the dollar-ringgit exchange rate as bullish momentum remained intact.

“While higher US bond yields could present some headwinds for the local unit, surging global equity markets and higher energy prices more than offset the pressure from US interest rates, and the local traders started to re-engage short dollar-ringgit positions once the dollar correction ran out of steam,” said Innes.

Oil prices also lent support as there was tightening supply and strong global demand, he added.

The domestic note traded mixed against a basket of major currencies.

It declined against the Singapore dollar to 2.9887/9912 from Wednesday's 2.9867/9906, but advanced against the Japanese yen to 3.5522/5553 from 3.5674/5720 yesterday.

The ringgit eased against the British pound to 5.4731/4777 from 5.4506/4577 and was higher against the euro at 4.8290/8339 from 4.8388/8441. — Bernama


Khazanah Nasional to embark on Transformation 2.0

KUALA LUMPUR: Khazanah Nasional Bhd, which saw strong earnings growth of 84.7% in 2017, is embarking on a five-year Transformation 2.0 Programme to bring the investment fund to greater heights.

This follows the completion of its 10-year Government-Linked Company (GLC) Transformation Programme in 2015.

Speaking at a press conference here today in conjunction with the release of the Khazanah Nasional Annual Review, managing director Tan Sri Azman Mokhtar (pix) said Transformation 2.0 will pave the way for the investment fund to undertake more transformative transactions in the wake of the fast-changing landscape.

“As you know we’ve done many deals and deals are always on the cards, but we’re also constantly looking at transformative transactions.”

Interestingly, Khazanah has been exploring opportunities in the Blockchain segment, which is the underlying technology behind many cryptocurrencies.

“It’s a game changer. We’ve been looking at certain areas, but we did not make any investment,” said deputy managing director Tengku Azmil Zahruddin. “At the right time, it’s something we’ll consider.”

However, Azman stressed that Khazanah has never invested in digital currencies.

The Transformation 2.0 Programme, which will adopt innovation, disruption and entrepreneurship in company cultures, aims to achieve total shareholders’ return of 11% a year, in line with the previous performance.

Khazanah reported an 84.7% leap in profit before tax to RM2.89 billion in 2017 from RM1.57 billion in 2016, driven mainly by contributions from core companies as well as investments in China, including Alibaba.

Portfolio net worth adjusted soared 13.2% to a record high of RM115.6 billion in 2017, while realisable asset value was up 8.2% to RM157.2 billion.
With the better results, Khazanah declared a higher dividend of RM1 billion in 2017 against RM650 million in 2016.

Last year, Khazanah undertook 14 new investments last year totalling RM6.3 billion as well as 12 divestments that gave RM6.4 billion in proceeds and gains on divestments of RM2.5 billion.

Commenting on Khazanah’s prospects in 2018, Azman expects a continued steady growth in its portfolio, barring any major market changes. “We’ve stress tested our portfolio, it can take the volatility in downside.”

Speaking of a succession plan, Azman, whose contract expires at end-May 2019, said he has no final say as the candidate will be decided by the board with the approval of the prime minister. “It’s premature to tell, I’ll address this next year.”

However, Azman said the sucession plan has been underway with the appointment of two deputy managing directors – Ahmad Zulqarnain Onn and Tengku Azmil Zahruddin.

Asked if he was thinking of a contract extension, Azman said: “I don’t think too much, not overstay or understay”.