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KKB Engineering awarded RM60.9m contracts

PETALING JAYA: KKB Engineering Bhd has bagged multiple contracts worth RM60.9 million.

The group told Bursa Malaysia that it had received two letters of award from the Sarawak Rural Water Supply Department for the proposed construction and completion of water supply from Kota Samarahan to Sebuyau, Samarahan Division for Sarawak Water Supply Grid Programme – Stressed Areas under Package 3A and 3B.

In addition, KKB also received additional supply orders for MSCL pipes & specials Laras Jaya Engineering Sdn Bhd, Cipta Wawasan Maju Engineering Sdn Bhd and Cityon Development Sdn Bhd.

These supply orders are to be delivered in stages within the 1H2020.

KKB noted that the contract period for construction contract Package 3A is 14 months commencing from end-October 2019 and scheduled to complete by December 2020.

Meanwhile, Package 3B is for 16 months from end-October 2019 to February 2021.

At the noon break, KKB’s share price was unchanged at RM1.40 on 50,000 shares done.

Research houses maintain ‘neutral’, ‘hold’ calls on Digi

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Johnson & Johnson recalls 33,000 bottles of baby powder as FDA finds asbestos in sample

NEW YORK, Oct 19 — Johnson & Johnson (J&J) said yesterday it is recalling around 33,000 bottles of baby powder in the United States after US health regulators found trace amounts of asbestos in samples taken from a bottle purchased online….

Euro jumps to near two-month highs on Brexit deal

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Potential re-rating for FGV, upgraded to buy

PETALING JAYA: FGV Holdings Bhd’s possible disposal of its 51% stake in MSM Malaysia Holdings Bhd might warrant a re-rating of its share price should the stake sale materialise, according to Hong Leong Investment Bank Research (HLIB Research).

Although the disposal will likely result in FGV incurring a disposal loss or impairing the remaining stake in MSM if it is a partial disposal, the research house still views the move positively as it will reduce MSM’s share of losses to FGV and FGV’s net gearing.

Despite the fact that FGV’s performance in Q3 19 will likely to remain weak as the crude palm oil (CPO) price only started recovering since August and raw sugar cost will remain high for the rest of 2019, HLIB Research opined that FGV deserves a relook into.

Earlier, FGV had confirmed that it was in talks with several parties to dispose of its 51% stake in MSM.

FGV reported a loss before tax of RM56.8 million in Q2 19 compared to a profit before tax of RM23.4 million in Q1 19, dragged down mainly by losses registered at sugar and plantation segments.

“We believe weak Q2 19 performance was the main culprit to FGV’s share price downtrend since August 2019.” said HLIB Research.

The research house raised its net loss forecast for FGV by 47% to RM130.7 million, to account for larger loss assumptions at sugar division and JV losses.

However, it will maintain its FY20-21 core net profit forecasts at RM7.1 million-RM18 million based on average CPO price assumption of RM2,200/tonne and fresh fruit bunches output of 4.9 million tonnes and 5.4 million tonnes, respectively.

“We took this opportunity to switch our valuation methodology, to better reflect the value of FGV’s businesses. Post revision of valuation methodology, we upgrade our rating on FGV to buy from hold previously with a target price of RM1.22 from 97 sen previously.”

Widad buys integrated facilities management firm for RM95.89m

PETALING JAYA: Widad Group Bhd is acquiring a 90% stake in Serendah Heights Sdn Bhd (SHSB) for RM95.89 million.

The acquisition will be satisfied via RM86.3 million cash and the issuance of new Widad shares.

Widad told Bursa Malaysia that it had entered into a heads of agreement (HOA) with SHSB’s shareholders namely Prihatin Ehsan Holdings Sdn Bhd and Training Camp Aabata Sdn Bhd for the acquisition.

Widad said the purchase sum will be raised from a combination of internally generated fund and bank borrowings.

SHSB holds YBK Usahasama Sdn Bhd, which had in May 2010 entered into a concession agreement with the Malaysian government and Universiti Teknoloji MARA to develop the facilities and infrastructure and to carry out maintenance works for the UiTM Campus in Jasin, Malacca.

Currently YBKU has remaining concession period of another 14 years ending 2034 totalling RM861.6 million.

Pursuant to the HOA, Widad and the vendors have agreed to exercise their best endeavour to negotiate and finalise all terms of the definitive agreement pertaining to the proposed acquisition within two months.

Widad said the proposed acquisition is in line with the group’s principal activities of construction and integrated facilities management.

“It represents a strategic opportunity for the company to strengthen its remaining order book from approximately RM910 million currently to RM1.8 billion post proposed acquisition and diversifying its service offerings into the education industry.”

The proposed acquisition is expected to be completed in the first quarter of 2020.

At the noon break, Widad’s share price gained 1.4% to 35 sen on 3.68 million shares done.

LPI Capital posts lower profit in Q3

PETALING JAYA: LPI Capital Bhd’s (LPI) net profit for the third quarter ended Sept 30, 2019 fell 4.3% to RM87.82 million from RM91.81 million a year ago, due to an increase in claims and a slower growth in gross premium income.

Founder and group chairman Tan Sri Dr Teh Hong Piow (pix) said the group reported a 8.5% improvement in revenue to RM423.84 million from RM390.59 million previously, contributed by the increase in gross earned premium and investment income.

Its wholly-owned insurance subsidiary Lonpac Insurance Bhd reported a 0.5% growth in its gross premium income from RM378.1 million to RM380.0 million while its claims incurred ratio increased to 43.6% from 37.2% in the previous corresponding quarter.

For Lonpac, its combined ratio for the third quarter deteriorated to 70.8% from 65.1% previously while its underwriting profit declined 7.9% to RM75.7 million from RM82.2 million. This was mainly due to the unfavourable claims experience reported in medical and miscellaneous accident classes of insurance.

For the nine-month period, LPI’s net profit expanded 2.5% to RM235.76 million from RM230.05 million, while revenue rose 7% to RM1.2 billion from RM1.12 billion in the previous year’s corresponding period.

During the same period, Lonpac’s gross premium income increased 3.6% to RM1.21 billion from RM1.17 billion previously while its net earned premium income went up 10.2% to RM746.0 million from RM676.7 million.

However, its claims incurred ratio deteriorated to 45.2% from 41.6% previously while its combined ratio increased to 72.0% from 68.7%. With the higher claims reported, Lonpac’s underwriting profit was 1.9% lower at RM208.3 million from RM212.4 million.

Looking ahead, LPI said the volatile global economic conditions and the ongoing trade disputes continue to affect the performance of the Malaysian insurance industry.

The group expects the remaining period of 2019 to remain challenging as economic conditions are not expected to improve soon.

“We have taken steps to consolidate our market position and are reviewing portfolios where performances have not been up to expectation. In this competitive and volatile environment, we will focus on building a sustainable portfolio that will add value to our shareholders.”

According to ISM Insurance Services Malaysia Bhd, Lonpac is ranked third in terms of gross written premium in Malaysian general insurance industry with a 8.6% market share as at June 30, 2019.

At the noon break, LPI’s share price gained 10 sen or 0.6% to RM15.60 with 1,400 shares changing hands.

Crest Builder bags RM155.1m Kelana Jaya project from Glomac

PETALING JAYA: Crest Builder Holdings Bhd has accepted a RM155.1 million project for the construction of a proposed plaza @ Kelana Jaya mixed commercial development from Glomac Bhd.

The project is in SS7, Petaling Jaya and comprises two blocks of serviced apartments (348 units each) and a 25-storey SoHo, which will be built on top of a 14-storey podium.

Construction work will take 24 months from its scheduled commencement date of Nov 15, 2019 and is targeted for completion by Nov 14, 2021.

With this contract win, Crest Builder’s outstanding order book stands at RM1.1 billion which will provide earnings visibility for the next three years.

“We are pleased to be Glomac’s construction partner for this project in Petaling Jaya and we look forward to a long-term partnership with them in their other upcoming projects too,” said Crest Builder group managing director Eric Yong in a statement.

At the noon break, Crest Builder’s share price was down 0.5% to 94.5 sen on 7,000 shares done.

No choice but to invest in oil, says Shell CEO

LONDON, Oct 15 — Royal Dutch Shell still sees abundant opportunity to make money from oil and gas in coming decades even as investors and governments increase pressure on energy companies over climate change, its chief executive said. But in an…

European stocks turn down after Brexit, trade-driven rally

BERLIN, Oct 14 — A three-day rally in European shares halted today as investors assessed the scale of progress from Friday’s US-China trade talks and worried that a Brexit withdrawal agreement was still some way off after signs of a major…