Autos to substitute smartphones as major tech driver

KUCHING: Automotive is expected by the research arm of Hong Leong Investment Bank Bhd (HLIB Research) to substitute smartphone as the major growth driver for global tech sector. According to HLIB Research, increasingly, new vehicles are embedded with more semiconductors for safety (airbag system), autonomous (park assist system), positioning (GPS navigation), comfort (stability control system), […]

Mapping the sustainability landscape

KUCHING: The ways of doing business has evolved with time. Long gone are the days of operating a business purely for the want of generating profits; these days, it is  crucial to consider of the impact our businesses have on our enviroment, society and economy as a whole. In the midst of doing business, sustainability […]

Sabah Cement, Ecooils ink agreement for ecologically-processed pozzolan

KOTA KINABALU: Cement Industries (Sabah) Sdn Bhd (Sabah Cement) has signed a sales and purchase agreement with Ecooils Sdn Bhd for a 10-year supply of ecologically-processed pozzolan for use in Sabah Cement’s products. Sabah Cement chief executive officer, Bahrul Razha Chuprat, said the processed pozzolan material, an oil palm by-product, would enable the company to […]

Mah warns of ‘tit-for-tat’ over eu’s palm oil threat

KUALA LUMPUR: Malaysia, Indonesia and Thailand are ready to join forces and retaliate over the European Union’s (EU) threat to exclude palm oil from its biofuel mix and renewable energy by 2021, which is a discriminatory act and amounts to an attack on the palm oil industry. Such action will affect oil palm smallholders more […]

MB World a ‘buy’ with Rapid development

PETALING JAYA: Hong Leong Investment Bank (HLIB) Research has initiated coverage on MB World Group Bhd with a “buy” call and a target price of RM2.75, offering a 32.2% upside from its current price.

The group’s share price was up 12 sen to RM2.20 today with 129,100 shares traded.

MB World, formerly known as Emas Kiara Industries Bhd, is mainly involved in property development and geotechnical engineering services.

In a note today, HLIB Research said it sees the group as the proxy for Petronas’ Refinery and Petrochemical Integrated Development (Rapid) expansion, given that its maiden township project is benefiting from the growth potential and spill-over effects from both developments in Pengerang and Desaru Coast.

Bucking the lacklustre trend of overall property market, the research house said MB World was able to achieve an overall take-up of more than 80% within a year after the launch of its projects, thanks to its first mover advantage.

Besides the key selling point of close proximity to Pengerang and Rapid projects, HLIB Research said the location also provides the residences a safe distance from the risk of severe environmental impact and pollution in Pengerang.

“Besides, the project is expected to fetch an attractive rental yield in the range of 6%-10% drawing the inference from the rental rate in the neighbour township,” it added.

In addition, HLIB Research said the group is a rising property player in Johor with a total gross development value of RM3.5 billion to be developed for the next 10 years.

The research house said the group’s revenue is expected to rise by three-years compound annual growth rate of 139% in anticipation of continue strong new sales in FY18 and FY19, having achieved about RM566 million sales (excluding Pinnacle Tower project) in FY17.

Furthermore, it said the sustainability of earnings is supported by the unbilled sales of RM275 million as of Q3 FY17 and healthy margin given its low land cost.

“We forecast FY17 and FY18 core earnings at RM27 million (up 70% y-o-y) and RM44 million (up 64% y-o-y), respectively,” it added, noting there is a potential increase in dividend following the projected high earnings growth.

GDB Holdings set for listing on ACE Market

PETALING JAYA: Construction services firm GDB Holdings Bhd has received approval from Bursa Malaysia Securities Bhd to list on the ACE Market, targeted for the first quarter of 2018.

Established since 2013, GDB has completed construction works for several projects in Kuala Lumpur, namely KL Eco City (Parcel B) and One Central Park. The group is working on several high value projects such as Westside III, Etiqa Office Tower, AIRA Residence and Menara Hap Seng 3.

GDB holds a Grade G7 License from the Construction Industry Development Board of Malaysia, which allows it to tender for projects with unlimited value, as well as Sijil Perolehan Kerja Kerajaan that enables it to participate in tenders for government jobs.

It is involved in the implementation of large-scale construction projects, with strong emphasis on environment, quality, and safety.

It has multiple certifications such as ISO 9001:2015 Quality Management System, ISO 14001:2015 Environmental Management System, and OHSAS 18001:2007 Occupational Health and Safety Management System.

GDB has also obtained the QLASSIC, CONQUAS, BQUAS, SHASSIC, and Green 5-S programme certifications for various projects.

Alliance Investment Bank Bhd is the principal adviser, sponsor, sole underwriter, and placement agent for the initial public offer exercise.

Investors sense opportunities in Big Oil — but mind the gap

LONDON, Jan 5 — Investors are gaining confidence — up to a point — that 2018 will be the year of oil stocks. While shares in top energy companies have risen since mid-2017, they have failed to keep step with recovering crude markets,…

AmInvestment keeps ‘neutral’ stance on oil and gas stocks

PETALING JAYA: AmInvestment Research, which has maintained its crude oil price forecast at US$55/barrel-US$60/barrel (RM221.10/barrel-RM241.20/barrel) for this year, has a neutral stance on the sector given gloomy offshore development prospects.

The research house explained that the reason for maintaining its crude oil forecast was due to the increased optimism stemming from the post-continuation of Organisation of the Petroleum Exporting Countries (Opec) production quotas, geopolitical concerns in the Middle East amid concerns of a US shale oil resurgence.

“Even with the extension of Opec production quotas until the end of 2018, US crude oil production still remains elevated at the near all-time high of 9.8 million barrels/day. However, this exuberance is dampened by the slight drop of two rigs to 929 rigs for US oil and gas rigs, which is still 2.3x up from the May 2016 low of 404, with the trajectory inching higher as this is less than half of the 2011 peak of 2,026,” the research report read.

“Barring a further deterioration shift in geopolitical tensions, we view the current price dynamics at a precarious position given the persistent supply-demand imbalance,” it added.

The research house said albeit crude oil prices having crossed the US$60/barrel mark, the prospects of the segment remained gloomy given Petronas’ “unchanged view” that crude oil price ought to be “lower for longer”.

Contract awards saw a 15% year-on-year (y-o-y) decline to RM7.6 billion, last year, despite seeing a 20% quarter-on-quarter increase in the fourth quarter of last year to RM1.6 billion.

The increase was mainly from the 2018 Pan-Malaysian Transport Installation/Maintenance, Construction and Modification jobs to Sapura Energy.

“As these Pan Malaysian umbrella scope of works are mainly determined on a call-up basis, we still expect Petronas to maintain a cautious approach to upstream exploration and development expenditures,” the research house noted.

Weak capex roll-outs could also indicate that the worst can stretch for a while for Malaysian operators, which operate wholly offshore, especially those struggling with high gearing such as Bumi Armada, Alam Maritim and UMW Oil & Gas.

“We may upgrade the sector if the visibility improves for a faster pace of upstream capex rollouts, which ultimately hinges on higher crude oil price sustainability,” AmInvestment said.

An upgrade of ratings can be expected should global economy be strong enough to drive oil consumption, geopolitical tensions in the Middle East and West Africa deteriorate and US crude oil production, which is set to exceed the all-time peak of 9.6 million barrels in March 2015, faces growth constraints. On the flip side, a de-rating can be expected in the event of an oil glut.

Continued inventory expansion for US crude, slower-than-expected global economic growth, and non-compliance by Opec members to their agreed quotas, which could lead to aggressive measures to regain market shares are seen as the potential catalyst for a downgrade.

The report also noted that global funds with environmental, social and governance commitments may also avoid oil and gas stocks, following suit the footsteps of Norway-based Norges Bank Investment Management’s recent decision to exclude oil and gas stocks from its US$1 trillion fund.

Its stock picks for the year include companies with stable and recurring earnings such as Dialog Group Bhd and Yinson Holdings Bhd.

“Dialog’s earnings visibility is secured largely by the Pengerang Deepwater Terminal project with its enlarged buffer zone, while Yinson’s Ghana floating production, storage and offloading vessel project will provide the earnings momentum over the next two years,” the research house said.

As US budget fight looms, Republicans flip their fiscal script

WASHINGTON, Jan 2 ― The head of a conservative Republican faction in the US Congress, who voted this month for a huge expansion of the national debt to pay for tax cuts, called himself a “fiscal conservative” on Sunday and urged budget…

Around 6,000 Swiss VW owners seek damages in emissions scandal

ZURICH, Dec 30 — Swiss consumer protection organisation SKS has filed a claim on behalf of some 6,000 car owners seeking damages from Volkswagen AG and Swiss car dealer AMAG related to the “Dieselgate” emissions scandal. The claim has been…