Unicorn sets up Islamic bank unit

BAHRAIN-based Unicorn Investment Bank (Unicorn) is establishing a wholly-owned international Islamic banking subsidiary in Malaysia.It has appointed Datuk Vaseehar Hassan Abdul Razack as the chairman of the Malaysian subsidiary, called Unicorn International Islamic Bank Malaysia Bhd (UIIBM).Vaseehar, a banker with extensive experience in investment, commercial and Islamic banking, resigned from his post as the chairman of RHB Islamic Bank Bhd, RHB Bank Bhd and RHB Capital Bhd yesterday to assume his new position today.
Unicorn recently received, through Bank Negara Malaysia, its Islamic banking licence from the Ministry of Finance.It is believed to be the first foreign bank to obtain the licence to establish an international Islamic bank subsidiary under the Malaysian International Islamic Financial Centre (MIFC) initiative.Under the initiative, international Islamic banks are allowed to conduct a wide array of syariah-based banking business in Malaysia with non-residents in international currencies other than the ringgit.They are eligible for full tax exemption accorded under the Income Tax Act 1967 for 10 years from the 2007 year of assessment.The MIFC initiative was formulated, among other things, to strengthen non-ringgit-denominated Islamic banking.Bank Negara had said that it was prepared to issue more licences to foreign banks that plan to conduct Islamic banking in multiple currencies to turn Malaysia into a global Islamic banking centre.Unicorn was established in May 2004. It reported a record US$23.8 million (RM78.8 million) net profit in the six months ended June 2006. It also doubled its capital to US$233 million (RM771.2 million) after a successful fund-raising initiative in the middle of last year.It was one of the bidders for the 49 per cent stake in Bank Islam Malaysia Bhd last year, but subsequently withdrew from the bidding.Malaysian Islamic banking assets account for 13 per cent, or RM108 billion, of the country's total banking assets, and half of the Islamic financial market comprises ringgit-denominated sukuk, or Islamic corporate bonds, worth RM125 billion. -www.btimes.com.my

Balance Of Payment Down To RM4.4 billion in 3Q

KUALA LUMPUR, Dec 31 (Bernama) -- The country's balance of payments (BOP) dropped to RM4.4 billion in the third quarter of 2007 from RM33.8 billion in the previous quarter, the Statistics Department said Monday.The current account surplus expanded to RM28.9 billion from RM23.6 billion previously while the financial account recorded a turnaround to net outflow of RM30.9 billion from RM7.7 billion registered in the second quarter, the department said.As a mirror to overall balance, the international reserves held by Bank Negara Malaysia eased by RM4.4 billion in the quarter under review relative to an increase of RM33.8 billion posted a quarter ago, it said in a statement.The department attributed the growth in current account surplus to higher surplus on goods of RM35.2 billion and continued surplus on services of RM900 million.For the first three quarters of 2007, the overall balance of RM45 billion rose by RM17.2 billion or 61.7 percent from that of RM27.8 billion posted in the corresponding period last year, it said.The net increase in the central bank's external reserves amounting to RM45 billion was higher than that of RM27.8 billion posted in the corresponding period last year, the department added.

Dollar Extends Annual Loss Versus Euro, Yen on Fed Rate Cuts

Dec. 31 (Bloomberg) -- The dollar fell, completing its second annual decline against the euro and ending two years of gains versus the yen, as traders increased bets the Federal Reserve will cut rates again to counter an economic slowdown.
The dollar, trading at a two-week low versus the euro and yen, has weakened against 14 of the 16 most active currencies this year as the Fed cut borrowing costs three times as the housing market slumped. A report today may show sales of existing homes in the U.S. held at the lowest since the National Association of Realtors began keeping records in 1999.
``The U.S. economy is still slowing,'' said Lee Wai Tuck, a currency strategist at Forecast Singapore Ltd. ``The Fed is likely to cut rates in January. It puts the dollar under downward pressure.''
The dollar fell to $1.4747 per euro as of 11:41 a.m. in Singapore from $1.4723 in New York on Dec. 28. It has lost 10.4 percent this year, and reached $1.4967 on Nov. 23, the weakest since the euro began trading in 1999. The dollar fell to 111.79 yen from 112.28 on Dec. 28 and 119.05 at the end of 2006. It may decline to $1.4780 per euro today, Lee said.
Foreign-exchange trading will be less than half of normal levels today because of holidays in Japan, Indonesia, Thailand and the Philippines, Lee said.
Movements in currency markets may also be exaggerated, said Peter Pontikis, treasury strategist at Suncorp-Metway Ltd. in Brisbane, Australia.
``Illiquid conditions are dominating today,'' Pontikis said ``That's exacerbating moves at the moment.''
Volatility Rises
Implied volatility on one-week options for the dollar against the yen rose to 11.05 percent from 10.25 percent Dec. 28. Traders use implied volatility to gauge expectations for currency swings and as part of setting option prices.
The British pound headed for a second annual gain versus the U.S. currency, rising 1.9 percent to $1.9978. The Canadian dollar was poised for its biggest yearly advance since 2003, climbing 19.1 percent to 97.88 Canadian cents per U.S. dollar.
The yen has fallen against nine of the 16 major currencies this year as investors bought higher-yielding assets funded by loans in Japan, known as carry trades. It declined the most against Brazil's real, dropping 11.2 percent to 62.7759 yen. It also traded at 164.82 per euro, having weakened 4.7 percent to head for an eighth straight annual loss.
Lowest Rate
The Bank of Japan's benchmark interest rate of 0.5 percent, the lowest in the industrialized world, compares with 11.25 percent in Brazil and 4 percent in the 13-nation region sharing the euro.
In carry trades, investors borrow funds in countries with lower lending rates and use the cash to buy debt in nations that offer higher returns. Currency fluctuations can erase the profits earned.
Odds the Fed will cut its target rate for overnight bank loans a quarter-percentage point from 4.25 percent at its Jan. 30 meeting increased to 90 percent from 80 percent a week earlier, according to futures on the Chicago Board of Trade.
Sales of existing homes probably stayed at an annual rate of 4.97 million in November, the same as the prior month, according to the National Association of Realtors, which will release the report at 10 a.m. in Washington. Sales of new homes in the U.S. fell to a 12-year low last month, a government report showed Dec. 28.
The share of global foreign-exchange reserves held in dollars fell to a record low in the third quarter as demand for U.S. assets waned after the subprime-mortgage market collapsed, according to a Dec. 28 report from the International Monetary Fund. The data suggest central banks diversified out of the dollar as it weakened to the lowest in a decade.
The Fed's trade-weighted broad dollar index, a measure of the U.S. currency's value against its counterparts from the biggest American trading partners, reached a record low of 97.38 on Nov. 7.
Automatic Orders
The yen's advance against the dollar accelerated after it rose beyond 112.20 and 112.00, where automatic orders to buy the currency were placed, said Takashi Yamamoto, chief dealer at Mitsubishi UFJ Trust & Banking Corp. in Singapore.
Traders sometimes place automatic instructions to limit losses in case their bets go the wrong way.
The Japanese currency also may gain on prospects the Bank of Japan will keep interest rates unchanged while the Fed lowers borrowing costs, diminishing the allure of dollar-denominated assets. The yield premium investors earn on two-year Treasuries over similar-maturity Japanese government bonds was 2.39 percentage points, the lowest since Dec. 20.
``A rate hike in Japan is unlikely and U.S. rates may fall, so this could lead to a weaker dollar versus the yen,'' Yamamoto said. ``The yen may be bought'' to 111.00 against the dollar today, Yamamoto forecast.
The odds the Bank of Japan will lift rates at its next meeting on Jan. 22 were unchanged at zero percent on Dec. 28, based on calculations by Credit Suisse Group using overnight interest-rate swaps. -www.bloomberg.com

SapuraCrest bags RM505m contract

SAPURACREST Petroleum Bhd has bagged a US$148 million (RM505 million) regional contract for works within the Malaysia-Thailand Joint Development Area (MTJDA).
The job was awarded to its subsidiary, TL Offshore Sdn Bhd by the Carigali-PTTEPI Operating Co Sdn Bhd.
Work will include transporting and installing of platforms, including jackets, decks and building bridges and inter-field pipelines, for the JDA Block B-17 Field Development Plan Project located in the MTJDA.
It is targeted to begin at the end of the third quarter of 2008 with completion expected in the third quarter of 2009.
"We would like to thank CPOC for this award. We are developing a partnership with them as our drilling unit is already providing services on a long term contract and this major win extends the scope of work we are offering to now include the installation of their offshore facilities," SapuraCrest executive vice-chairman Datuk Shahril Shamsuddin said in a statement released in Kuala Lumpur yesterday.
The MTJDA is an area of overlapping continental shelf claimed and jointly developed by both Malaysia and Thailand.
It is approximately 7,250 sq km in size and is located in the lower part of the Gulf of Thailand.
This is SapuraCrest's second operation in the area following an earlier US$120 million (RM403 million) month drilling contract secured in January 2006.
Both successful bids come amid the company's long term development programme to further enhance its regional capabilities.
SapuraCrest is involved in supporting oil and gas field development in a variety of projects spanning Malaysia, Indonesia, Thailand, Russia, Australia and India.
"These investments by SapuraCrest Petroleum are geared towards actively sustaining, developing and acquiring the right resources, technologies, human capital and assets to provide the region's energy industry with the solutions that they need to develop increasingly complex shallow and deepwater oil and gas fields," Shahril said.-www.btimes.com.my

Hamdan plan for Ranhill in private

RANHILL Bhd, Malaysia's largest engineering group, could be the next target for a privatisation plan by president and chief executive Tan Sri Hamdan Mohamad, company sources said.Business Times understands that Hamdan is mulling plans to take the group private and later re-list the shares in London, Dubai or India, to command a higher valuation.A source said Hamdan may also opt to take Ranhill Utilities Bhd (RUB) private, after announcing a similar plan for Ranhill Power Bhd (RPB) in September.Ranhill announced plans to take RPB private by buying the rest of its shares for RM35.4 million or RM2.15 apiece, and consolidating the power company under the group to maximise returns."Ranhill is looking at various options to boost earnings and add value. It may take RUB private and re-list the company overseas, or seek a dual listing for its own operation. The plan is still preliminary," the source said. The source said Hamdan could also be testing the waters while his actual game plan is unclear.Neither Hamdan nor Ranhill executive director Datuk Chandrasekar Suppiah were available for comment.Ranhill now has a RM16 billion order book for engineering, procurement, commission and construction work under its belt, which will last it another seven years. About 85 per cent of the orders are from overseas.Business Times had reported early this month that Ranhill is planning to double revenue to more than RM3 billion by 2012, by bidding for infrastructure and construction jobs in Malaysia, India and Libya.For the 12 months to June 2007, Ranhill achieved a profit of RM117 million and RM1.47 billion in revenue.Bursa Malaysia Bhd chief executive officer Datuk Yusli Mohamed Yusoff recently said more companies may be taken private or listed elsewhere if the local stock exchange is not corrected."It's very hard to explain why a Malaysian company listed here commands a certain valuation, but if it was listed in another market it can command a higher valuation - when essentially the company is the same," he had remarked.-www.btimes.com.my

Fuel prices, toll rates hold key to auto sales next year

PROMISING signs were seen in the Malaysian automotive sector this year after one-and-a-half-years of lacklustre sales, thanks to new models, easing of restrictions in hire-purchase loans, improving consumer confidence and steady job market.The sector clearly regained momentum in the second half this year, boosted by fiscal stimulus, including a significant pay hike for civil servants.But the current impressive run may be affected by rising inflation, including the possibility of another hike in petrol price and toll rates.“The Malaysian car industry is going through a new phase, a very competitive one. It is an uphill battle for some,” said an auto analyst said when commenting on the outlook of the industry.“Altough signs of recovery were seen in car sales, it is unlikely for the industry to continue the momentum next year if fuel prices and toll rates are raised,” he said.The government has indicated that the current petrol price would remain until the end of this year but rising crude oil prices have caused an increase in subsidies.Malaysia spends more than RM30 billion a year on fuel and gas subsidies and is now under pressure from rising crude oil prices.When the last petrol price hike was implemented — a steep 18.5 per cent to RM1.92 per litre in February 2006 — oil was trading at around US$60 (RM210 at that time) per barrel.But global oil prices are now above the US$96 per barrel, hitting a record high of US$99.29 on November 21.Given this situation, the Malaysian Automotive Association (MAA) is, however, still optimistic about the future direction of the local automotive industry.MAA president Datuk Aishah Ahmad said for the first 11 months of this year, total registered sales amounted to 444,932 units (with 404,793 passenger vehicles and 40,139 commercial vehicles).“So, 460,000 units in sales can be easily reached in 2007,” she told Bernama.“More likely, 2007 industry sales volume is estimated at around 475,000 to 480,000 units or a decline of around two per cent versus 2006,” she said.MAA had in July revised its original sales forecast to 460,000, a six per cent contraction, instead of its earlier forecast of 1.9 per cent growth.Total sales last year came up to 490,768 units.Judging by the current uptrend in sales, Aishah said the industry could expect to achieve total sales of 500,000 units next year.The launch of new models, such as the Proton Persona, Perodua Viva, Kia Spectra 5, new Toyota Vios and Mitsubishi Lancer 2.0GT, will keep fuelling demand in the coming months.Other factors that will help improve sales in 2008 include the wealth effect of the buoyant stock market, good economic conditions and the stabilising of the second-hand car market.Nevertheless, auto players might have to face several key challenges to maintain the current upward momentum in sales next year, Aishah said.“With the impending inflation and rise in oil price, toll and transport charges plus overseas and local source price increases, the greatest challenge for auto industry players in 2008 is how to maintain the current prices of motor vehicles,” she said.According to her, industry players must try to cut costs wherever possible to remain competitive next year.Aishah said an assurance given by the government not to raise import duties on foreign cars could help the industry.“What would have been preferred is for the government to ensure no increase in excise duties on the local sector for car prices to be more competitive in Malaysia,” she said. — Bernama

OPEC oil prices reapproach $90/bbl

The daily average oil prices of the Organization of Petroleum Exporting Countries (OPEC) rushed to nearly 90 U.S. dollars per barrel after Christmas, reaching 89.54 dollars Wednesday, the Vienna-based cartel said Thursday. The prices were 1.57 dollars higher than those on Monday, the last trading day before Christmas, it said. Marketing analysts believed the possibility of unexpected soaring oil prices was
limited due to the usual limited trade volume in the international oil market at the transition of the year. The sudden jump of the oil prices in the last trading day should be attributed to worry about the geopolitical security in the market caused by Turkey's air strike at northern Iraq, which might affect the oil export of Iraq. However, the Vienna-based energy consultancy association PVM said that the oil prices would continuously rise in the near future, mainly driven by the current lowest point of the crude oil stock in the United States. The daily average oil prices of OPEC maintained over 90 dollars consecutively for six trading days in November and hit record high of 91.91 dollars per barrel on Nov. 21. -www.rigzone.com

MAS under probe by European Commission

MALAYSIAN Airline System Bhd (MAS) and Malaysia Airlines Cargo Sdn Bhd were served with a "Statement of Objections" by the European Commission (EC) yesterday.Announcing this to Bursa Malaysia, the airline said the Statement of Objections was related to the EC's air freight investigation under Article 81 of the European Community Treaty, the general prohibition against anti-competitive behaviour.MAS said similar documents were also served to a number of airlines.It said the Statement of Objections is a routine stage in the EC's investigations under the article, and is not a final determination of an infringement."Nor does the Statement of Objections indicate any quantum of fines that might be ultimately imposed," MAS said.The national airline said it has a policy of compliance with all applicable laws, including competition laws in their countries of operation.The group is taking legal advice in relation to the European Commission investigation. - Bernama

Iran & SKS Ventures ink US$16b gas deal

TEHRAN: Iran signed a US$16 billion gas development deal with Malaysian group SKS here today after reaching a preliminary agreement in January, Iranian media reported.Iranian officials were not immediately available for comment on the agreement, the kind of energy deal that the US has been trying to prevent.Washington, which is leading efforts to isolate Tehran over atomic activities which the West fears may be used to build bombs, has sought to discourage foreign companies from investing in one of the world’s largest oil exporters.“The contract for a plan to develop the Golshan and Ferdows gas fields was signed today between Pars Oil and Gas Company, as a representative of the National Iranian Oil Company, and Malaysia’s SKS Ventures,” the official IRNA news agency said.State television carried a similar report.Iran and SKS signed a preliminary agreement in January to develop Iran’s southern Golshan and Ferdows gas fields and build plants to produce liquefied natural gas (LNG).A senior Iranian official said then that it would take 25 years to complete and that the Malaysian company would have 50 per cent of the produced LNG, adding that the two gas fields contained 60 trillion cubic feet of gas.Iran sits atop the world’s second largest gas reserves after Russia. But sanctions, politics and construction delays have slowed its gas development, and analysts say the country is unlikely to become a major exporter for a decade.Economists have said many foreign firms, particularly Western companies, are increasingly wary of investing in the Islamic Republic after the UN imposed two rounds of sanctions on the country over its nuclear row.But the country’s large oil and gas reserves still make it a magnet for international energy firms. Earlier this month, Iran said China’s Sinopec would invest around US$2 billion under a deal to develop the huge Yadavaran oil field, a deal which drew a swift rebuke from Washington.The United States is pushing for a third set of UN sanctions, even though a US intelligence report said Tehran had halted its nuclear weapons programme in 2003.Iran, saying it has never had plans to build nuclear bombs, insists its nuclear work is peaceful and aimed at generating electricity so that it can export more of its oil and gas.In January, the head of a key committee in the US Congress called for a halt to trade talks with Malaysia after the preliminary gas development agreement was signed with Iran.But a US trade official last month said the United States and Malaysia planned to resume formal negotiations on a free trade agreement in early 2008. - Reuters

Nepline to purchase vessels for US$30 Million

KUALA LUMPUR, Dec 26 (Bernama) -Shipping company, Nepline Bhd will buy two units of 7,000 dead weight tonnes (DWT) double-hull product oil tanker from two Chinese ship builders for US$30 million.In a filing to Bursa Malaysia, Nepline said it has entered into shipbuilding contracts on Monday respectively with Ningbo Doubletiger Import & Export Corp Ltd and Zhejiang Shenzhou Shipping Co Ltd for the purpose.The two vessels are part of its fleet expansion cum renewal programme.Nepline said the vessels once delivered will be slotted to perform contracts from major oil companies for the shipment of petroleum products.It said the purchase of the vessels would be funded by internally generated funds and bank borrowings.The company expects the construction of the vessels to be completed by the first quarter of 2009.-- BERNAMA

Tune Hotels making big waves

BUDGET hotelier Tune Hotels Regional Services Sdn Bhd, which operates under the Tune Hotels.com brand, has been making waves in the local hospitality scene even though it had only commenced operations since May.
Chief executive officer Mark Lankester said that like the no-frills airline AirAsia Bhd, low-budget Tune Hotels is poised to make waves and capture a huge market.

Mark Lankester“We have started rolling out expansion plans in Malaysia as part of our strategy to eventually have hotels in all AirAsia destinations.
“However, we are not limiting our openings to destinations that budget carrier AirAsia flies to,” he said, adding that the next hotel would be opened in Kota Kinabalu and Kuching.
The company now runs a flagship hotel at Jalan Tuanku Abdul Rahman in Kuala Lumpur, while about 20 hotels are under refurbishment or development.
Since the opening of its flagship hotel in Kuala Lumpur, Tune Hotel had received positive feedback.
The budget hotel follows closely AirAsia's model by offering rooms for accommodation at attractive prices, starting as low as RM9.99 per night.
“The potential in our business model is apparent from the hotel's high occupancy rate since our launch in May this year, with an average occupancy rate of 95% on weekdays and 100% on weekends,” Lankester told StarBiz in an interview recently.

Tune Hotels.com’s flagship hotel in Jalan Tuanku Abdul Rahman“We will spend about RM7mil to construct an annexe building of 50-rooms at our flagship hotel. It is scheduled for completion within ten months,” he said.
The group is also working on a greenfield project on about an acre at KL International Airport's low-cost carrier terminal.
The budget hotel at the airport is expected to be ready by first quarter 2008.
Tune Hotels is 72.19%-owned by Tune Ventures Sdn Bhd. Datuk Seri Kalimullah Hassan and Lim Kian Onn each hold a 12.03% stake and the balance 3.75% is held by Tune Hotels Employee Holding Sdn Bhd.
The shareholders behind Tune Ventures are Datuk Tony Fernandes (40%), Datuk Kamarudin Meranun (30%), Dennis Melka (25%) and Tune Strategic Investments Ltd (5%).
Beyond Malaysia, Tune Hotels is already looking at Bali and Bangkok but Lankester said the group wanted to strengthen its position locally before venturing overseas.
He said that by end-2008, there would be about 40 Tune Hotels in operation and under various development stages.
“We have received numerous offers from global property investors to assist with the roll-out of Tune Hotel across Asia.
“Hopefully by next year, we will have between 10 and 20 hotels, and add on about 15 hotels yearly,” he added.
Tune Hotels has a US$50mil joint venture with the Dubai government and a Singapore business tycoon to open 30 budget hotels in South-East Asia over the next 24 months.
Tune Hotels will have a 20% stake in the venture, while Istithmar PSJC, the investment arm of state-owned Dubai World, will hold 40%.
The remaining 40% will be held by City e-Solutions, a hospitality business which is majority-owned by City Developments, of which Singapore tycoon Kwek Leng Beng has a share.
Lankester said Tune Hotels was currently scouting for centrally-located properties in major tourists areas such as Bali, Jakarta, Bangkok and Phuket.
“Our first overseas hotel is expected to be opened in Bali by the end of next year. The location of the hotel is probably along Kuta Beach,” he noted.
Tune Hospitality Investment Dubai, a private equity real estate fund controlled and managed by Tune Hotels group, announced that it would open two hotels next year in Bali.
The group said it had secured two parcels of land to build a 146-room no-frills hotel at an estimated investment of US$3.65mil and a 196-room hotel for US$4.9mil.
Both hotels are expected to be operational by end 2008.
Lankester said: “We intend to open two or three hotels in the same vicinity.”
Besides Bali, Tune Hotels is likely to open its doors in other Indonesian cities such as Jakarta and Yogjakarta or in the capital and island resorts of Thailand.
Lankester said there was a fair amount of activity in Indonesia, given the popularity of AirAsia in Indonesia.
“There are about 68 incoming flights to Bali on a daily basis and we are looking at possibly three or four hotels in Jakarta, also in Yogjakarta and Bandung,” he said.
Moreover, Lankester said the company was currently looking at several sites in Bangkok, Phuket and Koh Samui.
“Tune Hotels is expected to either purchase or lease existing hotels and remodel them, or build new ones,” he said.
Lankester said that sometimes it was better to build new hotels from scratch, as this would be more economical.
He said each hotel was expected to cost RM15mil, while the average size of its hotels would be between one and 1.5 acres.
“We plan to develop some of the hotels and then franchise the brand and expertise to property owners,” Lankester said.
He said the company was in the process of raising capital for its expansion. “We have been talking to the banks and strategic investors,” he said.
On the capital needed, Lankester said it would depend on the investors and the number of hotels to be built.

Ringgit's uptrend to continue in 2008: Economists

AFTER a fine and steady uptrend this year, the ringgit is expected to appreciate further to RM3.22-RM3.25 next year backed by solid economic fundamentals, improving equity market as well as the weaker greenback, economists say.What has been positive about the ringgit’s uptrend is that it has been doing so gradually against the US dollar without any shocks to the economy since the government adopted the managed currency float regime more than two years ago.This has been a commendable performance since its de-peg after being fixed at RM3.80 between September 1998 and July 21, 2005, a clear indication that the Malaysian currency can hold its own.A myriad of positive factors led the local unit to touch its strongest level of RM3.31 per dollar on December 13.Economists say the local currency has remained strong relative to the US dollar and has moved within expectations, thanks to the guiding hands of the authorities.“We are actually projecting the ringgit to strengthen at the RM3.30 level by year-end. Based on the current performance, I think it can reach the target,” RAM Holdings chief economist Dr Yeah Kim Leng said.For next year, he projected the local currency to strengthen further as the US dollar is expected to continue its downward performance.“Next year, the ringgit will continue to be strengthened. The quantum of the appreciation will depend on the outlook of the US economy particularly further interest rate cuts by the US Federal Reserve, and we can see weaker a US dollar going forward,” he said when commenting on the local currency’s performance next year.According to analysts, the upward performance of the local unit next year will also be in line with the performance of its regional peers.They expect Asian currencies to likely continue their rallies in 2008 on expectation that foreign investors will pump in their cash into stocks, real estate and other assets in the region.Anthony Dass, research head at Inter Pacific Research Sdn Bhd, said the ringgit is expected to touch RM3.22-RM3.25 next year backed by improving economic fundamentals, improving equity market as well as the weakening of the greenback.He projected the local unit to strengthen further to hit the RM3.09-RM3.11 levels in 2009.On the overnight policy rate (OPR), Dass expects Bank Negara Malaysia (BNM) to hold it at 3.50 per cent in the first half of next year.“But in the second half, if inflation pressure remains contained I do not expect BNM to slash the rate if real returns continue to hover between 0.7 per cent and one per cent,” he said.Any cut in interest rate, he aded, will depend on the economic outlook.“If there is a need to spur private spending BNM could lower the OPR and hence lower real returns. I feel this will take place if private spending remains lacklustre or a drag from exports is somewhat pulling down the overall economic performance despite spurring private expenditure,” he said.BNM has kept the OPR at 3.50 per cent for 13 consecutive policy meetings, with BNM governor Tan Sri Dr Zeti Akhtar Aziz saying Malaysia’s interest rates are “below neutral” and still supportive of the country’s economic growth.She said the country’s inflation rate is also stable and is currently below two per cent.Inflation was forecast to average 2.0 per cent this year and 2.8 per cent next year. Average inflation was 3.6 per cent in 2006. - Bernama

OOCL plans direct links to Penang Port

ORIENT Overseas Container Line (OOCL) plans to launch a new dedicated direct service linking China, Pakistan and the Indian region with Penang Port early 2008.
According to the managing director of Orient Overseas Container Line (Malaysia) Sdn Bhd, Richard Hew, the new service will be part of the shipping line's commitment to facilitate cargo movement in the Northern Corridor Economic Region (NCER).
The NCER (which covers the states of Penang, Perlis, Perak and Kedah) expects to draw an investment of RM177 billion between 2007 and 2025 from the public and private sectors.
"Our new service will definitely strengthen the position of Penang Port serving the development of the region.
"The new service will also become the first direct link between Penang Port and the central China with direct services from three major ports, namely Shanghai, Ningbo and Shekou," said Hew.
He said the line will be deploying a mid-range carrier with the 1,200 TEUs carrying capacity in the trade.
"We are made to understand that the port will be dredging the approach channel to 13.5m from the present 11.5m to allow the passage of bigger mainline vessels," Hew added.
"We believe the service is timely and hope to get "berthing window" from the Penang Port," said Hew.
The service links 10 major ports in five countries in the region, namely China, Pakistan, India, Singapore and Malaysia.
"Our move to introduce the new service will further help the government's effort to spearhead the growth of the NCER.
" The service will also allow us to handle more regional transshipment traffic via Penang Port direct to final destinations," he said.
The new service, known as "China Pakistan Express" will be a joint service with Yang Ming Line and OOCL.
The port rotation will include Shanghai - Ningbo - Shekou - Singapore - Karachi - Mundra - Penang - Port Klang - Singapore - Hong Kong - Shanghai, for a 35-day round trip. The service also offers the fastest connection of seven days between Mundra Port in India and Penang Port in Malaysia. - PortsWorld

Singapore's non-oil domestic exports decline

SINGAPORE, Dec 17 (Bernama) -Singapore's non-oil domestic exports (NODX) fell by 3.4 percent last month in contrast to October's 6.5 percent increase, largely due to a drop in electronic NODX as non-electronic domestic exports were flat at 0.2 percent, the government said today.It said the NODX, valued at S$14.61 billion (S$1=RM2.28), to the top 10 NODX markets - except Malaysia, Hong Kong, South Korea, Thailand, Japan, Taiwan, the US and China - went down mainly to reduced inputs by the EU's 27 states as well as Indonesia.International Enterprise (IE) Singapore, an agency under the Trade & Industry Ministry which spearheads the development of the city state's external wing, said in a statement that non-oil re-exports (NORX) rose by 1.7 per cent in November, slower than the 5.5 per cent growth in October, contributed by the increase in non-electronic NORX.The agency said NODX to Malaysia rose by 1.2 percent in November, reversing the marginal decline of 0.9 percent in October due to growth in non-electronic NODX which offset the contraction in electronic NODX.Non-electronic NODX to Malaysia expanded by 3.0 percent in the month, slower than the 9.2 percent gain in October.The increase in non-electronic NODX was led by rising shipments of primary chemicals (+89 percent), metallic ores and scrap (+106 percent) and electrical machinery (+50 percent).Electronic domestic exports to Malaysia decreased for the eighth consecutive month by 0.6 percent in November, following the 9.6 percent fall in October.Slower sales of integrated circuits or ICs (-12 percent), telecommunications equipment (-60 percent) and capacitors (-20 percent) offset higher domestic exports of parts of ICs (+73 percent) and parts of PCs (+25 percent).Singapore's total trade in November grew 8.2 percent to $74.5 billion, the agency said.Malaysia continues to be Singapore's top world trading partner, accounting for 13 percent or $100.3 billion of its total trade of $774.1 billion for the January-November period.

Gamuda posts higher Q1 pre-tax profit of RM106.476 Mln

KUALA LUMPUR, Dec 17 (Bernama) -Infrastructure group Gamuda Bhd has registered a higher pre-tax profit of RM106.476 million for the first quarter ended Oct 31, 2007 compared with RM63.177 million in the previous corresponding quarter.The company which recently secured the government's approval to build the Ipoh-Padang Besar electrified double tracking project, also recorded higher revenue of RM473.494 million for the quarter against RM365.810 million previously.In its circular to Bursa Malaysia here, the company said the increases in revenue and pre-tax profit were due to higher contributions from all divisions, especially the construction division.The company said the overall group performance for the current financial year was expected to be better than the previous year.It said the commencement of double tracking project and other ongoing construction projects are expected to enhance the construction division's activities and earnings in the year.Besides that, water related and expressway concessions are also expected to contribute positively to the group's performance.

November inflation seen at 9-month high

MALAYSIAN annual inflation probably touched a nine-month high in November, a Reuters poll showed, but the central bank is likely to refrain from raising interest rates for now for fear of upsetting economic growth.According to the survey of 14 economists, consumer prices in November probably rose 2.0 per cent from a year earlier, driven by food prices and increased demand since civil servants got a big pay rise in July.That would be the strongest annual rate since February’s 3.1 per cent.But Malaysian inflation is still relatively low, compared with rates of more than 3 per cent most of last year and early this year.Annual inflation stood at 1.9 per cent in October and 1.8 per cent in September.“Existing price ceilings on some basic necessities, a strong currency as well as the fuel subsidy programme have helped to keep inflation low in Malaysia despite the escalation in global food and energy prices,” said Irvin Seah, an economist with DBS Bank.“But that does not mean inflationary risk is non-existent in Malaysia. The tipping-point on the inflation outlook will come when the government has to cut fuel subsidies to lessen the burden of this programme on its fiscal position.” However, rising price pressures are unlikely to result in tighter monetary policy for now, some economists said.“The central bank will adopt a cautious approach. We expect inflation to still be under 2.5 per cent in the first quarter, so it’s not necessary for the central bank to raise interest rates,” said Gundy Cahyadi, an economist with Singapore-based IDEAglobal.com.Malaysian economic growth this year has been largely driven by domestic factors as weak demand for technology products and a gloomy global outlook weighed on exports.The central bank has kept the official interest rate at 3.50 percent since April 2006. At its last monetary policy meeting in November, it said the risks to inflation and economic growth were evenly balanced. - Reuters

Odyssey set to ride on KL-Singapore route

LUXURY liner Odyssey Prestige Coaches Sdn Bhd is optimistic that it can capture a comfortable portion of the lucrative Kuala Lumpur-Singapore travel route.The 100 per cent Bumiputera-owned firm, a new player in the local transportation industry, has gone beyond the traditional bus service by providing luxury and comfort for its passengers, mainly targeted to business travellers.Managing director Wan Adlan Affendy Wan Abdul Rahman said Odyssey Prestige has so far pumped in about RM5 million into the new bus service, to purchase five new buses from Scania and set up lounges in Mont Kiara, Kuala Lumpur and in Singapore. "We will start with the five buses that we have. If the demand is great, we expect to increase the number of buses to another 20 within the next two years," he told Business Times in Kuala Lumpur recently.Wan Adlan Affendy said Odyssey Prestige aims to become a world-class customer service provider of cutting-edge, innovative and quality travel products and services.He said its state-of-the-art buses offer more first-class air travel, including on-board wi-fi access, personal television sets, telephones, plug in for laptops, and on-board meals."While it may look like getting on a plane to Singapore is faster, when you add up the cost and time spent to get to the airport and taxi fares, riding on a business class coach is more convenient and cuts time," Wan Adlan Affendy said.He said Odyssey has been created to be a luxury coach service for discerning individuals who expect nothing less than the highest standard of comfort and services during their travels."Our onboard crew are also trained for emergency situations and first-aid. You can be sure you are in very good hands when you are travelling with us," he said. -www.btimes.com.my

Economy may grow faster on rise of biodiesel sector

THE Malaysian economy is expected to achieve more rapid growth with the rise of the biodiesel industry, Deputy Prime Minister Datuk Seri Najib Tun Razak said today.He said worldwide demand for biodiesel is expected to increase significantly in the near future, providing a boost for Malaysia as the major producer of palm oil.“Worldwide demand for biodiesel is expected to explode and this will ensure that the price (of palm oil) is at a satisfactory and stable level,” Najib said.“So we don’t have worry about the palm oil price falling to a low level as it did before,” he told reporters after officiating the biodiesel factory of Mission Biotechnologies Sdn Bhd at Kuantan port.Also present were Pahang Menteri Besar Datuk Seri Adnan Yaakob, Mission Biotechnologies’ chairman Tan Sri Razak Ramli and Mission Biofuels Ltd Australia’s chairman Dario Amara.Najib said analysts have forecast that the palm oil price, now at RM2,900 per tonne, will not fall below the RM2,400 per tonne level with expansion of the industry.On competition from other countries, he said Malaysia has a major edge, especially in the supply of palm oil.In his speech, Najib said the government plans to increase palm oil output by another 30 per cent by 2010 to cater to export demand as well as demand from biodiesel producers.He said Malaysia is now producing 15 million tonnes per annum and the demand for biodiesel is expected to triple to 30 million tonnes by 2010. — Bernama

Kencana expects rig licence

KENCANA Petroleum Bhd, through its subsidiary Kencana Mermaid Sdn Bhd, expects to be awarded the licence to operate and market drilling rigs in Malaysia by Petroliam Nasional Bhd by January next year.
Kencana Mermaid, which is 60 per cent controlled by Kencana Petroleum, was set up recently to support Mermaid Kencana Rig 1 Pte Ltd, which will own a US$136 million (RM452 million) tender rig.
Kencana Mermaid's main role is to provide drilling services and act as an operator of tender rigs.
In October this year, Kencana Petroleum Venture Sdn Bhd and Mermaid Drilling (Singapore) Pte Ltd agreed to work together to offer drilling services in the offshore oil and gas industry.
Kencana Petroleum owns a 25 per cent stake in Mermaid Kencana, while Mermaid Drilling has 75 per cent interest.
On its procurement, construction and commissioning of a petroleum hub and bunkering facility job at the Asia Petroleum Hub, Kencana Petroleum executive chairman Datuk Mokhzani Mahathir said they were awaiting details from the project owners to start work.
"We have yet to receive final specifications on the Asia Petroleum Hub. What we have right now is a very general scope of the job at hand, so we are awaiting further details," Mokhzani said.
It is understood that some engineering work has already started at the site and that the delay is due to some technical issues.
Kencana Petroleum deputy executive chairman Chong Hin Loon said the project was not behind schedule and was expected to be able to meet its 2009 timeline.
On its plans for the coming year, Mokhzani said the group intends to consolidate its operations by enhancing the current business of newly-acquired Torsco Sdn Bhd and ensuring that businesses under Kencana Petroleum Venture run smoothly before it does anything else.
"We've got our hands full, but we are planning for the future," Mokhzani told reporters after the group's annual general and extraordinary general meetings in Kuala Lumpur yesterday.
He said the group's aim is to maintain always an order book of not less than RM1.4 billion.-www.btimes.com.my

Northern double tracking rail project

Contract awarded to Gamuda Bhd & MMC Corp Bhd (20% of total cost project RM2.5 billion)
Project cost: Fixed cost RM12.5 billion within five years to be completed.
Funding: Through private finance initiative (Malaysian Government)
Project description: 32 civil engineering firm had been been appointed for the design phase worth RM420 million. 16 earthworks and 12 piling contract worth RM1.6 billion will be awarded. RM3.8 billion to bumiputra contractors for the first wave as per total 300 packages covering of 100 bridges, 30 stations buildings plus 180km of culverts and drainage works. New plants investment worth RM6 billion. Project will also require RM2.2bil for steel bars, cement and the pre-cast concrete.
Related company: Concrete Engineering Product Bhd (CEPCO) & Industrial Concrete Product Bhd-manufacture of pre-stressed concrete spun tiles.
Lafarge Malayan Cement Bhd, YTL Cement Bhd & Cement Industries of Malaysian Bhd- cement suppliers.
Kinsteel Bhd-Perwaja Steel Sdb Bhd & Southern Steel Bhd- steel suppliers
UMW Holdings Bhd & Tractors Malaysia- heavy machinery

Double-tracking rail project cost escalates

The cost of building the multi-billion Ipoh-Padang Besar double-tracking railway project has escalated to RM12.5 billion from RM8 billion due to the rise in oil prices and building materials, according to Gamuda Bhd.The government in June this year accepted the proposal from Gamuda and its joint venture partner MMC Corp Bhd to build the 330-kilometre railway track.Gamuda’s group managing director Datuk Lin Yun Ling said the prices of oil and building materials such as cement had increased significantly compared to four years ago.Gamuda-MMC was awarded a similar project four years ago before it was shelved. The government decided to revive the project earlier this year.Speaking to reporters after Gamuda’s annual general meeting in Shah Alam today, Lin said the Gamuda-MMC joint venture would undertake only 20 per cent of the project work while the balance would be outsourced.He said all the outsourced jobs would be given to local contractors, especially capable Bumiputera contractors in Perak, Penang, Kedah and Perlis.Over the next six months, the first wave of outsourced contracts worth RM3.8 billion would be awarded for the construction of 100 bridges, 30 station buildings, 180 kilometres of culverts and drainage works, 300 kilometres of track works and utilities, he added.Lin said the Gamuda-MMC joint venture had appointed a consultant for design and supervision, 32 civil engineering consultant firms, and 16 firms for survey and soil investigation for the project involving a cost of about RM400 million.According to him, the railway project will also benefit local companies involved in providing heavy machinery and equipment, motor vehicles and building materials as well as quarry operators. — Bernama

Melewar & Putera Capital bid for Penang monorail

A CONSORTIUM comprising Melewar Industrial Group Bhd (MIG) and Putera Capital Bhd last month submitted a bid to design, build and operate the Penang monorail system.
The bid was submitted on the closing date of the tender, November 14.
The monorail project is believed to be worth more than the estimated RM1.6 billion for the previous proposed monorail job.
MIG managing director and chief executive officer Tunku Ya'acob Tunku Abdullah said the RM1.6 billion was the estimated cost for the proposed loop system.
"The loop involves one line only, so it is cheaper. Now the project involves longer route and double-track. Of course, it will be more than RM1.6 billion," he told a news conference after the signing of a strategic cooperation agreement between MIG's wholly-owned subsidiary Melewar Metro Sdn Bhd and Putera Capital in Kuala Lumpur yesterday.
Also present were Melewar Integrated Engineering Sdn Bhd chief executive officer Uwe Ahrens, Putera Capital chief executive officer Wan Azman Wan Salleh and Putera Capital director Kamil A Rahman.
The signing of the memorandum of understanding is a prelude to cooperation between both parties in the proposed Penang monorail project. Melewar Metro submitted its bid through Melewar Metro (Penang) Sdn Bhd (MMP).
Both parties have also agreed to sign a share sale agreement later on the acquisition of a stake in MMP, where Putera Capital would acquire 20 per cent of MMP.
The previous proposed Penang monorail project was based on private funding initiative. This time around, the government, through Syarikat Prasarana Negara Bhd, will provide the funding, and the private sector has been asked to submit tenders as contractors of the project.
Steel maker MIG and civil and structural expert Putera Capital are confident that their consortium would win the bid for the Penang monorail job.
However, they were tightlipped about the cost of their proposed bid.-www.btimes.com.my

Gamuda starts work on RM8b Hanoi project

BUILDER Gamuda Bhd has started construction work on the RM8 billion Yenso Park project in Hanoi, Vietnam, with completion slated for 2010.
A ground-breaking ceremony was held at the site on Tuesday attended by Vietnam's Deputy Minister of Construction Cao Lai Quang, Hanoi People's Committee vice-chairman Nguyen Van Khoi, Malaysian Ambassador to Vietnam Lim Kim Eng and Gamuda group managing director Datuk Lin Yun Ling, among others.
"The Yenso project is not just about the construction of the largest sewerage treatment plant in Vietnam. It also includes the construction of an international park with beautiful waterfront with lakes. The area totals 280ha, making it Asia's largest urban park facility," Lin said in a statement yesterday.
In January this year, Gamuda won the Vietnamese government approval to develop the commercial centre.
Covering 327ha, Yenso Park will include a five-star hotel, an international convention centre, offices, apartments, luxury condominiums and villas, a recreational club, community facilities and a botanic park.
Gamuda is partnering Vietnamese state-owned Mechanical Engineering Services LLC to develop the project.-www.btimes.com.my

Malaysia eyes RM1.7billion FDIs for Selangor halal park

MALAYSIA is aiming for some US$500 million (RM1.7 billion) foreign investments in an international halal park that will be developed in Selangor.
Government-owned MIHAP Holdings Sdn Bhd is trying to rope in China's National Investment Management Ltd (NIML) for the project.
The firms signed a memorandum of understanding (MOU) recently, witnessed by Prime Minister Datuk Seri Abdullah Ahmad Badawi, NIML said in a statement.
Under the deal, NIML will develop a halal franchising centre at the park and expects to generate 100,000 visitors per year from abroad.
NIML will also provide franchise management, in line with its current activities in the Shanghai Global Brand Franchise Centre, and halal global brand development.
"We expect new investments and business relocation from China to be in the halal food manufacturing, production of the halal pharmaceuticals and the halal biohealth food industry," said MIHAP adviser Datuk Ibrahim Ahmad.
NIML managing director Eros Lai said China has a Muslim population of over 30 million and they are ready for global markets.
"Our local partner (MIHAP) will assist us in the foreign direct investment process and audit certification, while our role is to bring in capital investments and players to build on the success of MIHAP.
"We are excited about this National Project under the Private Finance Initiative announced by the government last year," he added.-www.btimes.com.my

Petronas ventures in Uzbekistan

STATE-OWNED Petroliam Nasional Bhd (Petronas) has signed three key agreements in Tashkent, Uzbekistan, boosting its presence and strengthening its business portfolio there.
Petronas, through wholly-owned Petronas Carigali Overseas Sdn Bhd (PCOSB), signed a deal on activities and main principles for the Baisun Block production-sharing agreement (PSA) and an exploration agreement for the Surkhanski Block with the Uzbekistan government in Tashkent yesterday.
Both blocks are located adjacent to each other in the Surkhandarya region, south of the country.
Petronas also signed a memorandum of cooperation (MOC) for petrochemical projects with the Uzbek national oil company Uzbekneftegaz National Holding Co (UNG).
Petronas was represented by its president and chief executive officer Tan Sri Mohd Hassan Marican, while the Uzbek government and UNG were represented by Deputy Prime Minister Ergash Shaismatov and chairman Ahmedov Nurmuhammad Ahmedovich, respectively.
The agreement on activities and main principles for the Baisun Block PSA outlines the main principles and provisions for the PSA.
Under the PSA, which PCOSB expects to enter into next year, the firm will hold a 100 per cent equity stake and will be the operator for the block.
Currently, it is already undertaking exploration work in the block, measuring 3,150 sq km, under a joint-study agreement signed with UNG in 2005.
The exploration agreement for the Surkhanski Block grants PCOSB the rights to carry out exploration work in the block, measuring 7,200 sq km, and will subsequently pave the way for a PSA upon discovery of hydrocarbons.
The agreements for the two blocks will enhance Petronas' presence in the upstream sector of Uzbekistan.
PCOSB is already actively involved in the Aral Sea PSA, in which it has 20 per cent equity.
Other partners in the venture, which is currently in exploration stage, are UNG, CNPC International Ltd, Korea National Oil Corp and Lukoil Overseas Holding Ltd.
Meanwhile, the MOC for petrochemical projects allows Petronas and UNG to undertake joint studies and paves the way for the two parties to cooperate in the development of downstream petrochemical projects in Uzbekistan.
UNG currently operates ethylene and polyethylene manufacturing plants at the Shurtan Gas Chemical Complex in the Qashqadaryo province.-www.btimes.com.my

Fed offers modest rate cut

WASHINGTON: The Federal Reserve cut benchmark US interest rates by a modest quarter-percentage point yesterday to help the US economy withstand tightened credit and a prolonged housing slump, disappointing Wall Street, which had hoped for more-aggressive action.The central bank’s decision takes the bellwether federal funds rate, which governs overnight lending between banks, down to 4.25 per cent. While the action was widely expected, some economists had thought the Fed might offer a bolder half-point reduction in the rate.The blue chip Dow Jones industrial average was down more than 130 points within minutes of the Fed’s announcement of its action, while prices for US government bonds and the value of the dollar rose.The Fed has now cut overnight rates, their key economic policy lever, by a full percentage point since mid-September in an effort to put a floor under an economy increasingly seen at risk of falling into recession.In a related move, the Fed trimmed the the discount rate it charges for direct loans to banks by a matching quarter point to 4.75 per cent.“Today’s action, combined with the policy actions taken earlier, should help promote moderate growth over time,” the Fed’s policy-setting Federal Open Market Committee said in a statement outlining its decision.The Fed noted that financial strains had increased in recent weeks and said some inflation risks remain. It refrained from offering its usual assessment of the balance of risks facing the economy.“Recent developments, including the deterioration in financial market conditions, have increased the uncertainty surrounding the outlook for economic growth and inflation,” it said.The Fed’s decision follows renewed deterioration in credit markets after major financial institutions around the world reported billions of dollars worth of write-downs due to extensive exposure to delinquent mortgages. - Reuters

KFH shelves plan to bid RHBCap stake

KUWAIT Finance House (Malaysia) Bhd (KFHM) will temporarily shelve plans to acquire a stake in local lender RHB Capital Bhd to concentrate on its organic expansion strategy in Malaysia."We are not looking at any acquisition exercise at the moment. Our focus right now is on (achieving) organic growth (in profit and revenue) where we aim to increase the number of our branches in Malaysia," said managing director K. Salman Younis.He was speaking to reporters after the opening of KFHM's second branch by Kuwait Finance Minister Bader Mishari Al-Humaithi in Shah Alam yesterday.Salman said KFHM is still interested to acquire a stake in RHB Capital."We are always keen on opportunities to expand our franchise. However, until today, we have not received any formal invitation to discuss the matter," he added.For 2007, KFHM aims to open at least five new branches in the Klang Valley and other major cities such as Penang and Johor.Within the next four years, it plans to have between 40 and 50 branches nationwide.In line with its expansion plan, Salman said KFHM targets to introduce, on a large scale, financing facilities for the small and medium enterprises (SMEs) by this year."As a universal bank, we do not discriminate by going solely for big corporate clients. We are always interested to help take small businesses to other levels of development," he said.He believes that SMEs are vital to the economy. In most developed countries, their contribution account for between 85 per cent and 95 per cent of total economy."There is indeed huge potential in the SME sector. We expect to see strong growth in this segment," he added.Meanwhile, Bader Mishari hopes KFHM will promote greater bilateral cooperation in economic activities as well as in the Islamic financial market."It is my hope that KFH will continue to play a major role and (take the) initiative to further develop Islamic banking in the region and the Middle East," he said.The presence of KFH, an Islamic bank from the Middle East, provides alternative banking to consumers via-a-vis conventional banking for the benefit of the company as well as consumers in Malaysia through its innovative products and services, he added.

Petronas awards onshore block to NOEX & Petronas Carigali

KUALA LUMPUR, Dec 7 (Bernama) -- Petroliam Nasional Bhd (Petronas) today awarded a production sharing contract to Nippon Oil Exploration Ltd (NOEX) and Petronas Carigali Sdn Bhd for onshore Block SK333 in Sarawak.According to Petronas, the award of the contract signalled the possible revival of active onshore explorations in Malaysia, as part of its continuous efforts to enhance and augment the country's hydrocarbon reserves.Covering an area of 3,100 square kilometres, Block SK333 is located in the Baram area, the site of thriving exploration activities in the early 1900s, Petronas said in a statement.The national oil corporation said under the contract, NOEX with 75 percent interest will the operator of the block while Petronas Carigali, the exploration and production arm of Petronas, owns the remaining 25 percent.The minimum financial commitment to the block is US$40 million (US1.00=RM3.30), according to Petronas."The partners will acquire and process 500 line kilometres of 2D (two-dimensional) seismic data and drill two wildcat wells with an aggregate depth of 4,000 metres," it said."An airborne gravity and magnetic survey over the block will also be conducted," it added.Signing of the contract was held here today with Petronas represented by its vice president of exploration and production business Ramlan Abdul Malek, NOEX by its president and chief executive officer Teruo Omori and Petronas Carigali by its managing director and chief executive officer Datuk Abdullah Karim.

CIMB to free RM3.6b in capital from building sale

CIMB Bank Bhd expects RM3.6 billion of capital release from the sale and lease back of Menara Bumiputra Commerce at Jalan Raja Laut, in Kuala Lumpur, due to be completed early 2008.Bumiputra-Commerce Holdings Bhd (BCHB) is selling the prime property to Pelaburan Hartanah Bumiputra Bhd for RM460 million which CIMB Bank will lease back for 10 years with an option for five plus five years.“Modern banks should not do other things but banking. We should rent our buildings. Other people are good at owning buildings and we rent from them,” said CIMB group chief executive officer Datuk Nazir Razak.The RM3.6 billion will be ploughed into the group’s business, he said, pointing out that the same structure was deployed for Bangunan CIMB, its new headquarters.He said under the sale and lease programme for Menara Bumiputra Commerce, the banking group’s cost saving based on the group’s entire consolidation, mainly in terms of rental, will amount to RM7.5 million a year.“At the moment we are in 25 buildings, and we will streamline our operations into two or three buildings and this will result in some cost savings for us,” he explained.There could be another such exercise as the group still owns several bank branches as well as a building at Jalan Tun Perak, describing it as part and parcel of its capital management exercise.

MMC-Gamuda set to win RM12.5b rail deal

A CONSORTIUM comprising MMC Corporation and Gamuda is poised to snare a RM12.5 billion (S$5.3 billion ) contract from the government to electrify and double-track a 329-kilometre portion of the railway grid between Ipoh, the capital of Perak state, and Padang Besar on the Malaysia-Thai border.
The award is likely to refocus attention on Malaysia's increasingly expensive penchant for opaque and so-called 'negotiated' contracts. In this case, the uproar could be even louder: the contract award represents almost 86 per cent of a much larger project in 2003 that would have electrified the entire North-South railway grid from Johor Baru to Padang Besar, an extra 268 km over the current award.
The latter project had been awarded in the twilight days of the administration of former Prime Minister Mahathir Mohamad but was abruptly cancelled two months after he stepped down by his successor Abdullah Ahmad Badawi in the name of fiscal austerity: Malaysia was, and still is, running a fiscal deficit. Mr Abdullah's decision then was the genesis of an acrimonious break between the two men that flared into the open a year later.
Now Mr Abdullah seems to have changed his mind in spectacular fashion. Executives familiar with the matter said that the government was likely to make the announcement 'soon' and that it was to be a government contract and not a private finance initiative as had been re-proposed by the consortium in November, 2006. If true, Mr Abdullah is following in the footsteps of Dr Mahathir who had always envisaged the project as being government funded.
Infrastructure specialist Gamuda is controlled by businessman Lin Yun Ling while MMC, a power, ports and construction conglomerate, is the flagship company of tycoon Syed Mokhtar Al-Bukhary.
The enormous cost escalation of the project is expected to be explained away by the government as a function of rising commodity prices over the last three years.
Indeed, in January this year Gamuda's Mr Lin was quoted as saying that 'it would make more sense to build the railway sooner rather than later given the rising costs of raw materials such as fuel (up 300 per cent) and copper (up 100 per cent).' Mr Lin also said that with double tracking, the saving in fuel consumption over the next 30 years - at the then oil price of around US$70 a barrel - would be RM150 billion.
Even so, at RM12.5 billion, the Gamuda-MMC bid would come in at around RM38 million a kilometre which some consultants say is expensive. According to them, Ircon, or the Indian Railway Company of India, which is bidding for the southern stretch of railway between Gemas and Johor Baru, has valued its bid at around RM31 million a kilometre.

Ranhill joint venture bids for pipeline jobs

RANHILL Bhd and its Australian partner, McConnell Dowell, have bid for jobs under the Sabah-Sarawak Gas Pipeline project.
Ranhill president and chief executive Tan Sri Hamdan Mohamad said that Petroliam Nasional Bhd (Petronas) had got back to them to clarify some technical details on their proposal.
"Technical clarification is at the tail-end of their evaluation, and once that is done, they should be looking at commercial valuation and the awarding should be soon after that," he said.
Hamdan added that the company had also pre-qualified for the Sabah-Sarawak oil and gas terminal facilities for processing gas and oil.
On another development, he said that the Senai-Desaru Expressway will only be fully completed in February 2009.
Speaking to reporters after the group's annual general meeting in Kuala Lumpur yesterday, Hamdan said the Senai-Pasir Gudang stretch, under Packages 1 and 2 of the project, will be opened by August next year.
However, the section from Cahaya Baru to Desaru will be delayed by about six months.
"If I was only half through with the earthworks, I would be worried. But I am almost done (90 per cent) with that and I don't see any further delays in the completion of the expressway as we have all the supplies we need," he said.
Last Thursday, RAM Holdings Bhd put Senai-Desaru Expressway Bhd's RM1.46 billion bonds on "Rating Watch with a negative outlook" because of the project delays since last year.
On its Sudan project, Hamdan said the group had reached a settlement agreement with its client, a joint venture between China National Petroleum Co and Petronas, to recoup the US$200 million (RM672 million) cost overrun it incurred.
They have agreed on a combination of variation order and charge order of US$50 million (RM168 million), an expansion contract to 300,000 barrels a day worth US$150 million (RM504 million), and the main contract of a water injection facility worth US$167 million (RM561 million).
Ranhill currently has a RM15 billion order book for engineering, procurement, commission and construction work under its belt, which will last it another seven years.
About 85 per cent of the orders are from overseas.

YTL Corp Wins Bid for Prime Property in Singapore

YTL Corporation Berhad announced today that it has been awarded the tender for the en-bloc purchase of 50 residential units of the Westwood Apartments located on Singapore's famed Orchard Boulevard, for a total cash consideration of SGD435 million. This is the largest residential collective sale transaction since the new en bloc legislations came into force on 4th October. Westwood Apartments is a condominium development strategically located on the Orchard Road shopping and entertainment belt and within easy access of several stations on Singapore's efficient Mass Rapid Transit system. YTL Group Managing Director Tan Sri Dato' (Dr) Francis Yeoh Sock Ping, said, "The opportunity to develop prime, iconic properties that speak to the YTL brand is a very exciting one. This acquisition, our third land acquisition in Singapore in the last 2 years, is well in line with our wider strategy, focusing on upscale real estate in well-established markets, which enables us to employ our branding to enhance the value of these properties". "In the last 2 decades, the YTL Group has worked towards elevating the standard of upmarket lifestyle concepts in this region of the world to a standard that Asia deserves, through the development of hotels, villas and retail and residential properties. Southeast Asia, with its vast coastal areas, natural beauty and pristine waters, has largely untapped potential to become the Mediterranean or Caribbean of the East. Our focus continues to lie in developing the very finest in luxury homes, hotels, marinas and other real estate, architecturally designed and crafted to a world-class standard of excellence, and which blend ecologically with their natural surroundings to preserve the environmental value of these areas." Apart from geographical diversification and increase in YTL Corp's existing property development landbank portfolio in Singapore, the proposed acquisition will enable the Group to enhance its earnings potential from the high sale and rental rates expected from the renewed interest in the property sector in Singapore. The Group will be able to leverage on its existing local market knowledge, expertise and resources derived from its current involvement in the high-end Lakefront and Sandy Island residential development projects in Sentosa Cove, Singapore, which will comprise exclusive, bespoke homes. "Recent sales of well-designed branded properties amongst high net-worth individuals reflect the positive sentiments of the property market in Singapore. For example, the Ritz-Carlton Residences were recently sold for as high as S$5,000 psf, a reflection that Singapore is primed for growth in the indulgent property sector," said Michael Ng, Managing Director of Savills Singapore.

Esso to spend RM38 million on retail network

Esso Malaysia will invest $10.9 million to expand its retail network in Malaysia in 2007, which will include building at least six new petrol stations.
The company would acquire sites and construct new stations in high growth areas, such as the Klang Valley, Johor Barn, and Penang.
Esso currently operates a total of 284 service stations, while its affiliate, Mobil, runs more than 200 stations, nationwide.

Synergy seen rising 6-7% on market debut

SHARES in Malaysia’s Synergy Drive, whose interests range from palm oil to engineering, could rise 6-7 per cent on their debut on Friday, but plans for big investments beyond its core businesses may saddle it with debt, clouding its outlook.State-controlled Synergy Drive, formed from a merger of conglomerate Sime Darby and two other planters, Golden Hope and Kumpulan Guthrie, has profited as prices of palm oil, used for food and fuel, have more than doubled since January 2006.The company, valued at more than US$16 billion, will be Malaysia’s biggest listed firm and the world’s second-biggest planter by value after Singapore’s Wilmar International Ltd, which is worth US$18.2 billion.But some analysts are concerned that plans to invest up to RM21 billion (US$6.24 billion) to take 60 per cent stakes in the mammoth Bakun hydroelectric dam and the construction of undersea cables may place the debt-free Synergy under financial strain.“People are a little worried about Synergy Drive’s taking a stake in Bakun,” said a fund manager, who declined to be named.“Without Bakun, Synergy would have had a sterling debut, but now we think it’s going to be muted: Perhaps 6-7 per cent up, but definitely less than 10 per cent. Their getting involved in non-core assets is worrying.” Synergy’s shares will start trading at RM8.90, or about 21 times current year earnings, in line with the broader Kuala Lumpur Composite Index.The price is at a generous discount to pure-play plantation company IOI Corp Bhd, which trades at almost 26 times earnings and Wilmar, at 31 times.“Synergy Drive is not a pure-play plantation company so you can’t compare it with IOI or Wilmar,” said OSK Research analyst Tursina Yaacob, who has a 12-month price target of RM13.65, or around 29 times fiscal 2008 earnings.“We like the management and its shareholder, (state asset firm) Permodalan Nasional Bhd, and we think there will be investor interest because it’s a core heavyweight holding.” Synergy Drive had net profit of RM2.63 billion on sales of RM28.22 billion in the year to end-June, according to proforma accounts in its sale prospectus.Synergy gave no forecasts, but OSK Research estimates fiscal 2008 net profit will rise 5 per cent to RM2.75 billion.The firm has said it is aiming for an improvement of as much as RM500 million in earnings before interest and tax annually from July 2009, with an estimated 80 per cent of the cost and revenue synergies coming from the plantation unit.

Citi to sell $7.5 Billion of equity units to the Abu Dhabi Investment Authority

NEW YORK, Nov 26, 2007 (BUSINESS WIRE) -- Citi announced today that it has reached an agreement to sell Equity Units, with mandatory conversion into common shares, in a private placement to the Abu Dhabi Investment Authority (ADIA), a long-term investor committed to the U.S. capital markets, in the amount of $7.5 billion. ADIA's aggregate ownership in Citi's common shares, including the conversion of these Equity Units, will total no more than 4.9% of Citi's total shares outstanding.
"This investment, from one of the world's leading and most sophisticated equity investors, provides further capital to allow Citi to pursue attractive opportunities to grow its business," said Win Bischoff, Citi's Acting Chief Executive Officer. "It builds on a series of actions we have taken over the past several months to strengthen our capital base, which have included sales of certain non-strategic assets, the issuance of trust preferred securities, and the previously announced plan to use common stock to purchase 32% of Nikko Cordial in Japan. In addition, ADIA is a significant participant in alternative investments and emerging markets financial services, two areas in which we have major positions and have been expanding.
"This investment also enables us to access capital in an efficient manner, and is consistent with our strategy of maintaining a balance sheet that benefits from highly diverse sources of funding in terms of both geography and type of security," Mr. Bischoff continued.
"Citi possesses a unique position in the financial markets throughout the world. We see in Citi a highly respected company with a premier brand and with tremendous opportunities for growth," said ADIA's Managing Director, Sheikh Ahmed Bin Zayed Al Nahayan. "This investment reflects our confidence in Citi's potential to build shareholder value."
ADIA has agreed not to own more than a 4.9% stake in Citi, and will have no special rights of ownership or control and no role in the management or governance of Citi, including no right to designate a member of the Citi Board of Directors.
Substantially all of the investment proceeds will be treated as Tier 1 capital for regulatory capital purposes. Accordingly, it will support Citi's progress toward its goal of achieving its targeted capital ratios by the end of the first half of 2008. The investment is expected to close within the next several days.
Each Equity Unit is mandatorily convertible into Citi shares at prices ranging from $31.83 to $37.24 per share. The Equity Units convert to Citi common shares on dates ranging from March 15, 2010, to September 15, 2011, subject to adjustment. Each Equity Unit will pay a fixed annual payment rate of 11%, payable quarterly. The payment rate reflects market terms based on the conversion premium as well as Citi's current dividend yield. Additional details of the Equity Units are provided in an attachment to this release.
The Abu Dhabi Investment Authority (ADIA) is a well-established, well-respected institutional investor committed to the stability of the global financial infrastructure. It is the sovereign wealth fund of the government of Abu Dhabi, one of the seven emirates that comprise the federation of the UAE.
Citi, the leading global financial services company, has some 200 million customer accounts and does business in more than 100 countries, providing consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. Citi's major brand names include Citibank, CitiFinancial, Primerica, Smith Barney and Banamex. Additional information may be found at www.citigroup.com or www.citi.com.
Certain statements in this document are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from those included in these statements due to a variety of factors. More information about these factors is contained in Citigroup's filings with the Securities and Exchange Commission.

MIER maintains growth 5.40% for 2008

KUALA LUMPUR, Nov 27 (Bernama) -- The Malaysian Institute of Economic Research is maintaining its downward revision of a 5.4 percent growth next year from 5.8 percent projected earlier, but says a recession in the U.S. economy could make matters worse.Growth projections for this year is maintained at 5.7 percent.The revised figures were also in light of the International Monetary Fund's downward revision of global economic growth, MIER's executive director Mohamed Ariff Abdul Kareem, said here today.Although domestic demand would be propped up somewhat prior to the general elections, the global economy could grow at a slower pace owing to the fallout from the subprime turmoil, he said.He said that the spurt in oil prices was another factor which has the potential to derail the global economy.Oil prices have been skyrocketing to record levels of almost US$100 per barrel.However, he said that with the expected rebound in the global economy in 2009, the Malaysian economy could shift towards its potential growth path, expanding by 5.7 percent.MIER, however is maintaining 5.7 percent growth forecast for 2007.

IOI denies considering Unico stake

KUALA LUMPUR: Plantation giant IOI Corp Bhd has denied claims that it is considering purchasing a controlling stake in Unico-Desa Plantations Bhd.
Chairman Tan Sri Lee Shin Cheng said reports that IOI had shown interest in buying the stake were false.
“We have not made any offer to purchase (the stake). We have not had any expressions of interest, nothing,” he told a press conference yesterday.

Tan Sri Lee Shin Cheng“However, if Unico made an official offer to sell its stake (in Unico-Desa), then we will consider. Otherwise, we are not interested,” he added.
Unico Holdings Bhd, Unico-Desa's parent company, had at its AGM in September passed a mandate to undertake a capital-reduction exercise and distribute 29.3% of Unico-Desa's shares to its shareholders.
The mandate did not sit well with ousted director Tan Kai Hee, who publicly voiced his opinion via several Chinese newspapers.
Associated Chinese Chambers of Commerce and Industry of Malaysia president Tan Sri William Cheng, playing the role of mediator, stepped in and met with the Unico group's board members and Tan to resolve the issue.
Cheng had proposed a solution – sell off a total 57% stake in Unico-Desa en bloc (as opposed to the 29.3%), which would fetch a better premium.
When news of Cheng's proposal (to sell a 57% stake) hit the market, speculations were rampant on a potential takeover, with IOI headlining the rumour list. So strong were the speculations that Unico-Desa's stock soared.
Late last week, Unico group's board of directors held a press conference to announce that it had initiated defamation proceedings against Tan and also to set the record straight about the takeover, at least on Unico's part.
Unico group chairman Tan Sri Lim Guan Teik had then confirmed the group was going ahead with the mandate approved at its AGM and that it would carry on with the capital-reduction exercise.
He also confirmed that the group never received any offer to purchase the (controlling) stake in Unico-Desa either from IOI or anyone else, but said that the group would consider the option (to sell) if it received a “good offer.”

Power player at home and beyond

WAY back, on September 29 1992, when Peninsular Malaysia was plunged into a nine-hour blackout, two civil engineers and a marketing man saw the light in power plant construction.
Tan Cheng Huat, Lam Kar Keong and Albert Chang were then building workers' quarters for Tenaga Nasional Bhd (TNB) at the Kapar power station near Port Klang.
The humiliating blackout jolted the government into fast-tracking the appointment of independent power producers (IPPs) and, consequently, the construction of more power plants.
When the government announced plans to build power plants, Zelan seized the opportunity.
"In those days of building the workers' quarters for TNB, we also got to know the power plant equipment suppliers and learn about the civil engineering works for power plants.
"We started off sub-contracting for small jobs with Asea Brown Boveri, the leader in making gas turbines," Lam said.
He recalled that within a year of the major outage, three power plants were built in Connaught Bridge (Klang), Paka (Terengganu) and Pasir Gudang (Johor). From there, Lam said, he and his friends earned the trust of TNB.
"We also worked very closely with power generating equipment suppliers. They needed a local partner to stabilise project risks and we knew the ground very well. Therefore, we matched each other," he said.
Looking back, Lam summed up the first defining moment for the business as "being at the right place at the right time".
While it seemed that good luck played a role in the beginning, it was undoubtedly good planning that earned Zelan its reputation as a reliable power plant contractor.
"We strive to do things right the first time round. That way, the greater the probability of us delivering the job on time and within budget," Lam told Business Times during a visit to the Tanjung Bin power plant in Johor.
He said the recently completed project has been a launching pad for Zelan in gaining international recognition as a full-fledged engineering, procurement, construction and commissioning (EPCC) specialist.
Among the company's ongoing projects are two 300MW coal-fired power plants in Chhattisgarh, India. It is halfway through completing the RM320 million project.
In Saudi Arabia, Zelan is undertaking two power and water desalination projects worth RM1.03 billion in Shoaiba and Shuqaiq.
Zelan is also busy with two projects in the United Arab Emirates (UAE). In Dubai, it is building a 45-storey office and service apartment block for RM308 million. In the capital city of Abu Dhabi, Zelan is teaming up with IJM Corp Bhd, Sunway Builders Sdn Bhd and LFE Engineering Bhd to carry out construction works worth RM1.4 billion in the Al-Reem development.
"We started to get big jobs in Indonesia and Saudi Arabia when potential clients saw our progress with the RM5.7 billion Tanjung Bin power plant. This project actually put us on the global map as an EPCC specialist," Lam said.
Of the RM5.7 billion, Zelan did the civil works amounting to RM1.4 billion while its Japanese partner Sumitomo Corp supplied the generator, turbine and boiler.
"It took us almost 10 years to build a job bank of RM1 billion, but with the Tanjung Bin project, prospective clients see that we have the technical expertise and financial muscle to take on big jobs."
Zelan completed the Tanjung Bin job in 38 months, ahead of the average construction time-frame of 48 months, and was rewarded with a performance bonus.
To date, Zelan has built 16 power plants, but does not own any concession to operate either a power or water supply plant.
However, things are about to change. Zelan is tendering to build and operate power generation and water desalination plants in emerging economies outside Malaysia.
"We're ready to take on the role of an independent power producer or an independent power and water producer," said Lam, the managing director of Zelan Construction Sdn Bhd.
The group has earmarked up to RM2 billion to buy shares in electricity producers, possibly in Indonesia, Vietnam, India or the UAE.
"We can easily finance half of the RM2 billion with our own funds. The other half could be funded via share placements or bonds.
"Although we're looking into greenfield concessions, we're not averse to brownfield ones. If there are existing concessions that have a lot more years to go and the price is right, why not," Lam said.
Greenfield concessions are upcoming power plants which have yet to yield any earnings, while brownfield units are existing ones receiving money as they sell electricity to clients.
Asked if Zelan is eyeing any brownfield concessions in Malaysia, Lam replied: "It is almost impossible because everyone wants to sell high."
Currently, Zelan's outstanding construction jobs amount to RM5 billion.
"We've had to turn away some job offers because it is more important to deliver what we promise. What we have in hand now will keep us busy for another three years," Lam said.
Lately, Malaysia's construction sector has started to grow again, after shrinking in 2004, 2005 and 2006. The industry, which had retrenched staff during that period, began experiencing a "brain drain" as a result of the aggressive hiring by companies which had secured major contracts, especially for their overseas projects.
"The job market has changed for the better. Sometimes, we cannot avoid a 'brain drain', but we believe in empowering deserving staff with the right opportunities. It is not about giving higher salary; it is also about keeping key staff in the loop of the group's decision-making," Lam said.
"I can confidently say that we've groomed our second-tier leaders. They are a committed team. Zelan is ready to be an integrated player in the global market of power and water supply," he added.

IJM Prop unveils RM6.5b Penang waterfront project

IJM Properties Sdn Bhd is set to transform Penang into a world class economic and residential hub with the unveiling of its project, The Light Waterfront Penang.IJM Corp Bhd chief executive officer/managing director Datuk Krishnan Tan said the RM6.5 billion mixed residential and commercial development is the island’s first integrated waterfront city and would be built on part of the 137 hectares of reclaimed land along Penang’s eastern coastline.“The Light will feature 62ha of breathtaking development on the reclaimed land and will be developed in three phases,” he said at ceremony to unveil the project in Penang today.Under phase one, covering 17ha, six parcels of high-end waterfront residences, comprising 1,186 units, would be developed.“The development is expected to be completed in three to five years,” he said.Tan said under phase two, a commercial and retail city, comprising Gateway Towers, hotels, signature offices, showrooms, banquet and conference facilities, cultural hall, visitor centre and waterfront amphitheatre would be developed on 41.7ha.“One unique feature of the city is the floating stage and a floating restaurant. The entire city will also be interconnected by water taxis,” he said.He said The Light would also feature three ha of seafront park under phase three of the development.Tan said the project, which will developed by IJM Properties Sdn Bhd’s subsidiary, Jelutong Development Sdn Bhd, is expected to be completed in 2017.“Land reclamation is in progress and construction will start by the end of next year,” he said.

Ranhill unit gets RM300m Libyan earthwork job

RANHILL Bhd's Amona Ranhill Consortium Sdn Bhd has been awarded a 105.81 million Libyan dinar (US$88.16 million or RM297 million) advanced earthworks contract in Libya.
The contract from the Libyan Housing and Utilities Board is in relation to a housing project in Tajura district, Tripoli, which will comprise 10,680 units.
In a statement to Bursa Malaysia, Ranhill said the scope of works under the contract include the mass excavation and fill to the whole of the Tajura housing project.
The contract period is 20 months and work has commenced at site.
"The implementation of works pursuant to the advanced earthworks contract shall be sourced from advanced payment and progress payments," Ranhill said in a statement to Bursa Malaysia Bhd.

RM2.2b bid to take Magnum private

MULTI-PURPOSE Holdings Bhd (MPHB) has partnered a private equity firm to launch a RM2.2 billion bid to take Magnum Corp Bhd, a gaming company, private.
The deal is an opportunity for MPHB to bring in CVC Asia Pacific Ltd to enhance the future performance of Magnum, MPHB said in a statement to Bursa Malaysia yesterday.
MPHB and CVC signed a heads of agreement for the deal yesterday. They have until February 20 to sign a definitive agreement.
"I believe this partnership will accelerate our growth over the long term, leveraging on CVC's international experience and networks," MPHB managing director Datuk Surin Upatkoon said in the statement.
This would be the second investment by CVC in Malaysia. In March, CVC led investors to buy Genting Bhd's paper and packaging business for some RM745 million.
Under this latest deal, a special purpose vehicle (SPV) will be set up where MPHB will hold 51 per cent and funds managed by CVC will have the rest.
MPHB, which holds 55.54 per cent of Magnum, will pay the remaining shareholders RM3.45 a share, a 12 per cent premium to its pre-suspension price. It will fund this with interest-free loans from the SPV and borrowings from Magnum.
Once MPHB gets full control of Magnum, it will then sell it to the SPV. It did not say how much CVC will invest for the 49 per cent stake.
As part of the deal, Magnum will also make a general offer for the 1.75 per cent stake it does not own in Magnum 4D Bhd at RM3 per share or a total of RM8.8 million.
However, the offer price of RM3.45 for Magnum was below what most analysts have cited as their fair value for the stock.
Nine out of 16 analysts have higher target prices, according to data compiled by Bloomberg.
Among others, OSK Research values Magnum at RM4, while ECM Libra pegs the stock at RM3.86.
This means that investors may not rush to accept the offer.
"It would seem too low a price to accept," said an analyst who declined to be named.

SapuraCrest bags RM505m contract

SAPURACREST Petroleum Bhd has bagged a US$148 million (RM505 million) regional contract for works within the Malaysia-Thailand Joint Development Area (MTJDA).
The job was awarded to its subsidiary, TL Offshore Sdn Bhd by the Carigali-PTTEPI Operating Co Sdn Bhd.
Work will include transporting and installing of platforms, including jackets, decks and building bridges and inter-field pipelines, for the JDA Block B-17 Field Development Plan Project located in the MTJDA.
It is targeted to begin at the end of the third quarter of 2008 with completion expected in the third quarter of 2009.
"We would like to thank CPOC for this award. We are developing a partnership with them as our drilling unit is already providing services on a long term contract and this major win extends the scope of work we are offering to now include the installation of their offshore facilities," SapuraCrest executive vice-chairman Datuk Shahril Shamsuddin said in a statement released in Kuala Lumpur yesterday.
The MTJDA is an area of overlapping continental shelf claimed and jointly developed by both Malaysia and Thailand.
It is approximately 7,250 sq km in size and is located in the lower part of the Gulf of Thailand.
This is SapuraCrest's second operation in the area following an earlier US$120 million (RM403 million) month drilling contract secured in January 2006.
Both successful bids come amid the company's long term development programme to further enhance its regional capabilities.
SapuraCrest is involved in supporting oil and gas field development in a variety of projects spanning Malaysia, Indonesia, Thailand, Russia, Australia and India.
"These investments by SapuraCrest Petroleum are geared towards actively sustaining, developing and acquiring the right resources, technologies, human capital and assets to provide the region's energy industry with the solutions that they need to develop increasingly complex shallow and deepwater oil and gas fields," Shahril said.

YTL Power to issue RM2.2b bonds

MALAYSIAN power producer YTL Power International Bhd plans to issue up to RM2.2 billion (US$651 million) in bonds with up to RM2.23 billion detachable warrants, the company said today.
The bonds would allow YTL Power to raise funds for future investments and projects, and for potential refinancing of existing borrowings, it said in a statement.

DiGi to spend RM800m on 3G rollout

MOBILE phone operator DiGi.Com Bhd plans to invest up to RM800 million under a three-year plan to provide services like faster video downloads and Internet access.
The company is buying the necessary airwaves from Time dotCom Bhd in an all-share deal worth some RM655 million.
It will also partner Time dotCom to develop new products and share transmission towers, among other things.
"This is a fair deal," chief executive officer Morten Lundal said in a briefing in Kuala Lumpur yesterday. Time dotCom obtained the spectrum from the government for some RM50 million.
Lundal said the price DiGi is paying is fair due to the benefits it will get from the airwaves over the long term.
DiGi will also spend another RM150 to RM200 million in capital expenditure to set up the network infrastructure for third-generation telecommunications services next year.
It will use internal funds to roll out the network.
Meanwhile, Time dotCom chairman Datuk Wan Muhamad Wan Ibrahim said the company is eyeing a five per cent stake in DiGi.
"We want to be a substantial shareholder in the company," Wan Muhamad said.
He said the company hopes to buy another 1.5 per cent stake through Digi's book-building exercise, which started yesterday.
Time dotCom will have 3.5 per cent stake and board representation in DiGi once a definitive agreement on the alliance is signed in two-and-a-half months.
For Time dotCom, the deal will create additional revenue of between RM10 million and RM15 million a year as it leases out its fibre optic network to DiGi.
Time dotCom and DiGi will also develop a knowledge-sharing programme for human capital development and conduct joint studies to identify and develop additional areas of cooperation.
According to Time dotCom managing director Datuk Baharum Salleh, DiGi and Time dotCom have already started discussions on how the products, research and network of the two companies can work together.

Malaysia's GDP to grow 5.9pc in 2008: World Bank

BANGKOK: The World Bank says the outlook for the Malaysian economy in 2008 is more positive with a 5.9 per cent growth rate but feels the prospects also depend largely on how significantly economic conditions in the US worsen in the coming months.It says the sub-prime crisis appears to have had a limited effect on the Malaysian financial sector so far, although its impact on export performance could be more significant over time.The World Bank’s latest East Asia & Pacific Update shows that Malaysia’s real GDP (gross domestic product) growth in 2007 is expected to moderate to 5.7 per cent, after growing 5.9 per cent in 2006.“Although export performance has so far been weak in 2007, domestic demand should help to sustain growth. Strong private consumption is likely, given favourable consumer sentiments, low inflation, high commodity prices, stable interest rates and a recent pay hike for government officials,” World Bank says.Similarly, an expansionary fiscal policy, following the Budget 2008 announced in September, should also strengthen growth, it adds.The Update, a six-monthly report on the region’s economic and social health, finds that growth in emerging East Asia is expected to exceed eight per cent in 2007 for a second year in a row and to moderate only slightly in 2008, despite growing concerns about the US sub-prime crisis and increasing global oil prices.Among the East Asian countries, China is expected to grow by 11.3 per cent in 2007 before slowing modestly to 10.8 per cent in 2008 while Vietnam is to grow by 8.2 per cent next year compared to 8.3 per cent this year.Cambodia is likely to achieve 8.0 per cent growth in 2008, Laos 7.9 per cent, Indonesia 6.4 per cent, the Philippines 6.2 per cent and Thailand 4.6 per cent.Although East Asian exports to the US have already slowed, more buoyant investment and consumption in China and other countries have allowed growth to remain strong and even pick up this year, says the World Bank.The report finds that for the first time, the number of poor people living below US$2 a day in East Asia has fallen below 500 million, down from one billion in 1990.The Update cautions that new highs for oil prices will test the solidity of the East Asian and global economic expansions in 2008, stating that an average oil price of US$90 in 2008 will be associated with an income loss in East Asia of a little over one per cent of GDP.The report’s lead author, Milan Brahmbhatt, says: “The impact of the US sub-prime crisis and the renewed surge in oil prices have clearly increased downside risks.“Nevertheless we expect the stronger growth momentum in the region to carry through 2008.”The Update also says that although China has become a major export market for the rest of East Asia, economies need to remain focused on finding new ways to meet China’s ever changing and highly competitive market.“The new challenge for China’s East Asian neighbours will be in making the transition from supplying inputs for China’s exports to also supplying its domestic market, something that may require significantly different research, production, branding and marketing skills and channels,” Brahmbhatt says

Salcon unit gets RM36m Zecon Water job

Salcon Bhd’s wholly-owned subsidiary, Salcon Engineering Bhd (SEB), has won a contract for the construction of Petaseh intake pumping station in Negri Sembilan and associated mechanical and electrical works.In a statement today, Salcon said the RM36.12 million contract from Zecon Water Corp Sdn Bhd, a subsidiary of Zecon Bhd, is expected to be completed over a period of 30 months.Zecon was recently appointed the main contractor of the project.SEB chief operating officer How See Hock said the contract would add positively to its construction order book.Salcon is a total water and wastewater solutions provider, offering technical and management capability, as well as advanced technology and expertise in the water and wastewater industries

DiGi &Time dotCom form alliance

MALAYSIA'S mobile phone firm DiGi has agreed to form strategic and equity tie-ups with broadband telecommunications firm Time dotCom Bhd, allowing DiGi access to Time’s prized 3G spectrum.State-controlled Time said it also received an offer from DiGi’s parent, Telenor, to buy a stake in DiGi via a share placement to help DiGi comply with Malaysian equity rules. Both companies have announced the alliance in statements to Bursa Malaysia today. - Reuters

Scomi Marine revenue RM118 million in Q3

KUALA LUMPUR, Nov 12 (Bernama) -- Scomi Marine Bhd revenue for third quarter ended Sept 30, 2007 rose to RM118 million from RM110 million in the same period last year.In a statement here today, Scomi Marine said the revenue represented an eight percent increase compared to the corresponding quarter in 2006."The rise was largely due to the rates revision from the marine logistics business and also increased contribution from the offshore support services division," it said.Scomi Marine said the marine logistics division remained the major revenue generator with an 86 percent contribution, due to the size of the fleet in operations under this business.It said net profit, however, fell 44 percent lower compared to the same quarter in 2006."This is due to higher docking costs for the marine logistics division and higher gain on vessel disposal for third quarter 2006," it said.Net profit for third quarter fell to RM15.966 million from RM26.404 million previously.Scomi Marine is an associate company of Scomi Group Bhd, which is involved in four core businesses -- namely Oilfield Services, Energy & Logistics Engineering, Energy Logistics and Production Enhancement.

Fuel price-to terms reality

KUALA LUMPUR, Nov 13 (Bernama) -- Malaysians will be ushering 2008 probably with much anxiety, as there are already indications that a rise in the price of fuel is inevitable.But just how much the increase will be in 2008 after the government kept its word that there won't be any increase in 2007? It's certainly difficult to speculate on the quantum increase but Malaysians certainly have to face higher cost of living.Malaysian consumers have every reason to feel anxious as they have already seen a series of price hikes relating to essential items during the current year with the latest being the rise in flour prices that in turn pushed up the bread prices between 10 sen and 30 sen effective 1 November.Prime Minister Datuk Seri Abdullah Ahmad Badawi had made it clear that government would review the existing petrol and gas subsidy mechanism looking at the current scenario.
DIFFICULTY IN SUSTAINING PRICES
Its definitely burdensome for the government to continue maintaining the current retail price of fuel when crude oil prices in the global market are about to surpass the the US$100 (about RM334) mark per barrel.Though the rising prices in the international market may have benefited Malaysia, a net exporter of petroleum, the fuel subsidy is depleting the national coffers.According to the Federation of Malaysian Consumer Associations (FOMCA) Communication Director Mohd Yusof Abdul Rahman, any increase in the price of crude oil means the government has to spend more on subsidising petrol, diesel and liquefied petroleum gas (LPG) to keep their retail prices low.As for the first eight months of this year, the government had to cough out subsidies worth RM16 billion to maintain the retail prices of fuel in the domestic market while the price of crude petroleum went up to unprecedented levels.Currently in Peninsula the retail price of premium petrol RON97 is RM1.92 per liter, RON92 RM1.88 per liter, diesel RM1.581 per liter and LPG RM1.75 a kilogram.
NO ALTERNATIVE
As fuel is the enabler for transportation and manufacturing activities, thus any increase in its prices will definitely impact both sectors.According to Mohd Yusof, the effect on both sectors in turn would bear upon the prices of goods and services down the line, which has to be borne by the consumers."Looking at the people's reaction following the 30 sen per liter increase in 2006, what worries them is the transportation cost that would also indirectly impact the cost of goods and services."What more when consumers are left with no choice but to use their own transport to commute to their workplace or for other purposes," he said referring to the public transportation that is still unsatisfactory.If the people had a choice, say they could opt for a reliable public transportation system or natural gas vehicles (NGV), then they may not react negatively on the fuel price hikes."Currently most of the NGV are taxis. If Malaysian made cars like Proton and Perodua come up with vehicles with both petrol and natural gas tanks, they will provide great savings for vehicle owners," said Mohd Yusof.
MISSUSE OF SUBSIDY
On the fuel subsidy, Mohd Yusof opined that it was only appropriate for the government to review the petrol and diesel subsidy."Currently the petrol subsidy is enjoyed by all private vehicle owners including the high heeled who don't deserve the subsidy."The subsidy is also enjoyed by foreigners like Singaporeans who refuel in Johor Baharu and the Thai who procure fuel supply in Perlis and Kelantan," explained Mohd Yusof.Even the fishermen who enjoy a RM1 subsidy for every liter of diesel are known to abuse the privilege by selling the subsidized fuel in the black market."A study conducted by the Agriculture and Agro Based Industries Ministry clearly indicated a rise in the sale of subsidised diesel but the catch is on the decline. Therefore, the subsidy doesn't serve its intended purpose," he said.Mohd Yusof noted that as the government has to bear high subsidy cost and tax relief on fuel, thus its only appropriate that the subsidy is utilised to upgrade public transport, health and education facilities.
HAVE TO BE BORNE TOGETHER
Meanwhile, FOMCA's adviser Dr Hamdan Adnan said Malaysians have to accept the rise in fuel prices with an open heart and bear in mind that the government has been subsidising fuel prices all this while."Regardless of what happens we have to keep up with the current developments. The government should not be blamed; it is due to the oil prices in the global market," he said.The government can only provide a small portion of subsidy and the rest must be borne by the people.Dr Hamdan pointed out this is definitely difficult as of late the consumers had to bear a series of price hikes involving various goods."They are increasingly burdened. The feel good factor is no more there," said Dr Hamdan.The people too are concerned with the development as sooner or later the price of other goods too will rise. What more when the toll rates on the highways are expected to go up in the New Year."Therefore we hope that even if the government rises fuel prices, the increase won't be excessive as it will only worsen inflation," he said.The inflation rate is reported to have gone up by 2 percent compared to five percent last year.
STEPS TO CONTROL PRICES
The government has been advised to take necessary steps to ensure there is no unreasonable increase in prices of goods or services when the prices of fuel goes up.According to Dr Hamdan, the government must ensure this looking at the fact many parties, including the transport operators, would be lobbying with the government to hike up prices."We don't want a situation where government servants have to seek another pay hike and it is a known fact that the rise in salary only gives rise to a never ending inflationary cycle," he explained.However, Dr Hamdan noted that Malaysians must count on their blessings because despite promoting capitalism and free trade, the government also regulates the prices of necessities.At the same time, he also said that the consumers should not forget that the trader too has to make a living but the government has to cap the profit margin for price controlled items."I hope that the government would be able to cooperate with the non governmental organisations (NGO) in this respect," he added.
CHANGE YOUR WAYS
In what ever situation, the attitude is the one that will decide whether the hike in fuel prices will badly affect the consumer's financial position. Whether we are prudent in our spending or splash the money beyond our means will be the deciding factor.As pointed by Dr Hamdan, Malaysians can no longer afford to spend as they liked and have to come to terms with reality and build up resilience."We have been in the comfort zone for far too long. This comfort zone would shrink further in the new year," he explained.Apart from being prudent and seeking additional income to meet the rising expenses, one should also think of reviving the "Green Earth" programme by planting food crops around the house compound and cut down on fuel use by sharing vehicle for example.Regardless of the attitude or the actions that we take, as consumers the choice to live lavishly or prudently is in our hands.