Petronas in RM8b deal

PETROLIAM Nasional Bhd (Petronas) is strengthening its global liquefied natural gas (LNG) business through the acquisition of 40 per cent interest in Santos Ltd's LNG project in Gladstone, in the Australian state of Queensland, for US$2.5 billion (RM8.1 billion).In a statement yesterday, Petronas said it will make an initial investment of US$2 billion (RM6.5 billion) and a further payment of up to US$500 million (RM1.6 billion) upon a final investment decision approval for a second LNG train.The two companies signed the agreement for Petronas' proposed purchase in the state capital, Brisbane, yesterday.Under the agreement, a 60:40 joint-venture company will be formed to develop and operate a gas liquefaction facility in Gladstone, with an initial one-train capacity of three million tonnes a year.
"The new entity will also build and operate a 450km pipeline from jointly-owned upstream coal seam gas (CSG) assets to the project site as well as undertake all marketing activities for the project's LNG output," Petronas said.It added that the LNG project partners will cooperate in the exploration and production of selected upstream CSG assets in Queensland, with Santos as the operator."The project has received Significant Project Status approval from the Queensland government and is currently in the pre-front end engineering design stage," Petronas said.The final investment decision is expected by the end of next year, while the project's first LNG cargo is planned for 2014. Petronas also said that the LNG project will benefit from the expertise of both companies."Petronas is a leading player in the global LNG industry with more than 25 years of experience and successful LNG projects in Malaysia and Egypt."The joint venture will benefit from Petronas' technical expertise and will have the opportunity to leverage on its capability in LNG shipping," it said.Santos is a major Australian oil and gas exploration and production company with interests and operations in several countries in Asia. It is also Australia's largest producer and marketer of domestic natural gas and a leading CSG player in the region.The acquisition marks Petronas' first investment in CSG assets and in an Australian LNG project.The company views the acquisition as a highly attractive opportunity, paving its entry into the CSG industry in Australia while also strengthening its position as a global LNG player.The acquisition is conditional upon necessary government and regulatory approvals, Petronas said.At the signing, Petronas was represented by its vice president of gas business Wan Zulkiflee Wan Ariffin and Santos, by its acting chief executive officer David Knox. -www.btimes.com.my

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Qatar bank plans US$300m shipping fund in Malaysia

BALI: Qatar Islamic Bank SAQ, the Gulf state's biggest syariah-compliant lender, plans to set up a US$300 million (US$1 = RM3.21) shipping fund in Malaysia through its Asian Finance Bank unit in the next two months to tap growth in the region."We are in the process of getting approval from the regulators in Malaysia," Asian Finance's chief executive officer Faisal Alshowaikh said in an interview from Bali. "We will come up to the market very soon," he said.Qatar Islamic and rivals including Kuwait Finance House, the world's second-largest Islamic bank, have been lured to Malaysia by the tax breaks and incentives for Islamic financial products. The nation also introduced an RM840 million shariah-compliant exchange-traded fund, the first of its type in Asia, in January.About 30 per cent of the Islamic shipping fund will be raised from equity, and the remaining 70 per cent will be generated through bank financing, Alshowaikh said. He didn't elaborate.
Asian Finance also plans to start a US$500 million property fund in 2009 that will invest in Southeast Asia to tap growth in the region's real estate market, Alshowaikh said. He is seeking to raise funds from investors in the Middle East."Investors are looking at Southeast Asia aggressively, and we will help them diversify," he said. "The property market in Malaysia is undervalued compared to neighbouring countries."Asian Finance began operations in Malaysia in January 2007. It also has a representative office in Jakarta, he said.In another development, Ithmaar Development Co, a unit of the Bahraini Islamic lender, Ithmaar Bank BSC, and partners created a US$500 million fund to invest in the property markets of Latin American states.Ithmaar, Kuwait-based Al Safat Investment Co and Bahrain- based Arabian Ventures will use the five-year syariah-compliant fund to invest in Argentina, Brazil, Mexico, Chile Costa Rica, Colombia, Ecuador and Venezuela, the partners said in an e-mailed statement on Wednesday. - Bloomberg

Malaysian inflation rises to 3% in April

Malaysia's inflation rate edged up to 3.0 percent in April from 2.8 percent the month before, driven by higher food prices, according to official data released Wednesday.
Malaysia heavily subsidises a range of basic items including fuel, rice, flour and bread, moderating the effect of rising prices compared to other Asian nations.
However, the growing subsidy bill is putting a strain on government coffers, with fuel subsidies alone expected to hit over 53 billion ringgit (16.4 billion dollars) this year.
Recently, the government said it would spend 4.0 billion ringgit to increase food production and tackle price hikes as the country faces spiralling global oil and food costs.
Prime Minister Abdullah Ahmad Badawi has also said that several projects under the government's multi-billion-ringgit five-year development blueprint are currently under review due to rising costs.
The Department of Statistics said the consumer price index was up 0.3 percent in April from the previous month. For the first four months of the year, inflation averaged 2.7 percent. -
Agence France Presse

Japan's Ibiden investing RM1b in Penang plant

JAPAN'S Ibiden Co Ltd, the world's biggest printed circuit board (PCB) maker, will invest at least RM1 billion to set up its third manufacturing plant in Penang.The plant, which will make and develop multi-layer PCBs, is scheduled to operate by the third quarter of next year.Construction of the 18.5ha facility will begin as early as next month.About RM800 million will be spent over the next two years, mainly on construction of the plant and buying equipment from across the globe.
It is expected to create jobs for 900 Malaysians next year.The plant will be used to manufacture high-performance and high-density printed wiring boards, which are widely used in mobile phones."Worldwide demand for mobile phones is expected to maintain its constant growth. The replacement demand is also anticipated to increase," Ibiden printed wiring board unit manager and executive officer Sotaro Ito said in Kuala Lumpur yesterday.Depending on future demand, the company may build another plant in Penang in 2011, Ito said.Its existing two plants are located in the Seberang Jaya and Prai industrial areas.Ibiden's investment is a big boost for Malaysia's foreign direct investment (FDI). Japanese investments in the manufacturing sector have been increasing significantly since 2003.The Malaysian Industrial Development Authority (Mida) is optimistic that FDI from Japan will surpass its record last year when the country brought in RM6.52 billion, up 48 per cent from RM4.4 billion in 2006."If we can close the deals we are working on, I am confident that we can easily match or surpass last year's number," Mida director-general Datuk R. Karunakaran said.Between January and March this year, 13 projects from Japan were approved in various industries, with capital investment of RM270 million, excluding investment by Ibiden.International Trade and Industry Minister Tan Sri Muhyiddin Yassin will be leading a trade and investment mission to Japan in July.Seminars and roundtable meetings will be organised in Osaka, Yokohama and Tokyo.Mida will also send technical teams and specific product missions to attract Japanese investment in areas such as food ingredients; functional and halal food; petrochemical and polymers; specialised machinery for electrical, electronics and metal working industries; flat panel display; and semiconductors and electronic components. -www.btimes.com.my

TH Plantations to expand oil palm estates

TH Plantations Bhd, the plantation arm of Lembaga Tabung Haji, aims to boost the size of its oil palm estates by 50 per cent this year to boost income.The company's landbank now totals 28,730ha and wants to grow this as crude palm oil prices continue to be strong.TH Plantations managing director Datuk Rashidi Che Omar said the company, which owns estates in Sarawak and Terengganu, is scouting for land in the two states as well as in Kelantan, Sabah and in Riau and Kalimantan in Indonesia."We are in active talks with several parties including our parent Tabung Haji," Rashidi told reporters in Kuala Lumpur yesterday after the company's annual general meeting.
Apart from its own estates, TH Plantations also manages Tabung Haji's 129,660ha oil palm plantations in Sabah, Sarawak, and Riau in Indonesia.
"How much we plan to spend depends on land availability and only then can we determine the financing method but it will be financed by internally-generated funds," said Rashidi.The current market price for existing plantations starts at around RM30,000 per ha while unplanted land could sell for RM7,000 per ha, he said.Rashidi added that the firm also plans to spend RM64 million to develop new areas and upgrade its existing three oil palm mills in Peninsular Malaysia.Meanwhile, TH Plantations chairman Tan Sri Dr Yusof Basiran said CPO prices will continue to be strong, ranging between RM3,000 and RM3,500 per tonne due to tight supply and strong demand for biodiesel.-www.btimes.com.my

AirAsia still owes MAHB RM5.4million

LOW-cost carrier Air Asia Bhd still owes Malaysia Airport Holdings Bhd RM5,443,746, Transport Minister Datuk Ong Tee Keat said yesterday.“AirAsia is still in the process of paying the debt,” he said in a written reply to a question from Wee Choo Keong (PKR-Wangsa Maju) at the Dewan Rakyat sitting yesterday.Wee wanted to know if AirAsia had paid back the subsidy of RM60 million to the government and its debts to MAHB after Malaysia Airlines (MAS) took over the air services in the interiors of Sabah and Sarawak. Ong said following the rationalising of domestic air services carried out by the government in March 2006, it had given AirAsia the mandate to provide the interior air services. AirAsia subsequently appointed Fly Asia Xpress (FAX) to operate the service effective August 1, 2006.
“Considering that the service is a social obligation for the areas in Sabah and Sarawak and a non-economic service, the government therefore will bear in full the operation cost through subsidy,” he said.Whoever the operator of the service, the government will provide the full subsidy which need not be paid back, he added. — Bernama

PIDM Targets RM128 Mln Revenue FY09

KUALA LUMPUR, May 12 (Bernama) -Malaysia Deposit Insurance Corporation (PIDM), which administers the statutory deposit insurance system, is targeting a revenue of RM128 million for the current financial year ending Dec 31, 2008 under the new Differential Premium Systems (DPS) regulation rate structure for its member banks."The target was forecast based on a premium of RM120 million and an expected investment income of RM8 million under the new regulatory system," its chief executive officer, Jean Pierre, told a press conference here today to release PIDMs Annual Report 2007.He said PIDMs net income for last year totalled RM89 million and its total accumulated surpluses stood at RM211 million.Last year, PIDM's revenue was RM115.7 million, comprising RM110 million in premiums and RM5.7 million from investment income, he said."With the growth in deposits held with members, the total insured deposits grew to RM179 billion at the end last year from RM165 billion at end-2006," said Pierre.PIDMs membership increased to 33, comprising 22 commercial banks and 11 Islamic banks as at Dec 31, 2007, he said.Pierre said this year PIDM has rolled out a number of regulations, applicable for its member banks, to further strengthen the deposit insurance system under DPS regulations.He said the new DPS regulation rate structure provides incentives for PIDMs member banks to adopt sound risk management practices as the premiums will be collected based on individual member banks profile."This DPS will reward banks whose risk profiles are low through reduced premiums, and impose higher premiums on banks with higher risk profiles," he added.

Foreign parties keen on halal hub

FOREIGN investors have promised to pour in RM1.4 billion to help develop the Tanjung Manis halal hub in Sarawak.Sarawak Chief Minister Tan Sri Abdul Taib Mahmud said that investors from Taiwan and the Middle East have expressed their interest.The Tanjung Manis halal industrial park is part of a master plan by Halal Industry Development Corp (HDC) to make Malaysia a global halal hub.Abdul Taib witnessed the signing of a memorandum of understanding (MOU) between Tanjung Manis Food and Industrial Park Sdn Bhd and HDC at the third World Halal Forum in Kuala Lumpur yesterday.
Under the MOU, both parties will work together to develop the halal park in Sarawak. They will also promote and market halal manufacturing and commercial activities undertaken there.Abdul Taib also said that about 15,000ha have been set aside in the area to produce halal meat and fish.On another matter, he said that the Sarawak state government has identified several areas to plant padi.However, only areas where investments will definitely "take off" have been approved."So far, Sarawak has about 7,000ha allocated for padi planting for the next five years," said Abdul Taib.The federal government has allocated RM50 million for the planting of padi in Tulai. Another 20,000ha in Limbang will be allocated later."This will only come into effect after we launch the hydro-dam project in Limbang as we need to make sure that these areas have proper irrigation," Abdul Taib said.He added that these areas were extremely conducive to growing padi.The government expects a yield of nine tonnes of rice per hectare from the identified areas.The state government is hoping for an allocation of up to RM3 billion for rice production under the Ninth and Tenth Malaysia Plans.-www.btimes.com.my

RM3b structured fund

THE RM3 billion PNB Structured Investment Fund, launched yesterday to invest in structured products and a property trust that owns Permodalan Nasional Bhd (PNB) buildings, may generate returns of more than six to seven per cent a year, its manager said."Our funds in the past have been giving six to seven per cent annual returns. We are confident we can do better (with this new fund)," PNB president and group chief executive Tan Sri Hamad Kama Piah Che Othman told Business Times after the launch in Kuala Lumpur.The closed-end fund plans to distribute income annually, subject to the discretion of the manager, the company said in a statement. The principal investment is protected when held to the five-year maturity.
Speaking at the launch, Hamad Kama Piah said the new product was conceptualised after considering the current needs of discerning investors.Principal preservation, capital appreciation and yearly dividends remain their priority during this time of market volatility, he said.Up to 80 per cent of the fund will be invested in structured products issued by Deutsche Bank Malaysia, which may include bonds, stocks, equity-linked and hybrid products.The fund will also put up to half of its money in PNB REIT (real estate investment trust), which owns seven properties in Kuala Lumpur and Johor Baru worth about RM1 billion in total.The commercial buildings - Menara PNB, PNB Darby Park, PNB Damansara, Menara Tun Ismail, Wisma KPMG, Menara and Plaza Pelangi, and Pelangi Leisure Mall - are owned by PNB and 93 per cent occupied on average."PNB is 'giving away' its prime properties, at a cost of course, to be incorporated into the REIT as an added security to investors," Hamad Kama Piah said.The REIT is currently private, but there are plans to float it on Bursa Malaysia's main board towards the end of the five-year tenure of the PNB Structured Investment Fund.The structured investment fund is open to individual and institutional investors at a net asset value of RM1 during the offer period, which will last for 45 days until June 25, or upon full subscription of the units.Minimum investment starts at 10,000 units for individuals and 50,000 units for institutions.Minimum additional investment for individuals is 1,000 units and for institutions 5,000 units during the offer period. There is no limit to the amount an investor can put in. -www.btimes.com.my

Malaysian fund sells RHB Capital stake to Abu Dhabi Bank

Malaysia's state-run pension fund sold 25 percent of its stake in the country's fourth largest bank, RHB Capital, to Abu Dhabi Commercial Bank (ADCB), a statement said Thursday.
The deal between the Employees Provident Fund (EPF) and ADCB, a Middle Eastern concern, is valued at 3.876 billion ringgit (1.22 billion dollars), at 7.20 ringgit per share, it said.
The EPF is the single largest shareholder in RHB Capital with an 82 percent stake. Under a central bank ruling, it needs to reduce its holding to 35 percent by June this year.
Based on the purchase price, the deal is the "largest investment to date of a Middle East investor into the Malaysian financial sector," the EPF said.
Upon divesting its stake to ADCB, the EPF will cut its shareholdings in RHB Capital to 57 percent from 82 percent.
The EPF said the landmark deal will drive RHB Capital to become one of the top three banks in the Southeast Asian region by 2020.
"RHB Cap and ADCB will now be uniquely positioned to leverage on growing business flows ... and strengthen both banks' regional position in the global Islamic Banking market," EPF chief executive officer Azlan Zainol said in the statement.
In March last year, EPF beat two rivals, including Kuwait Finance House, to gain control of RHB Capital by acquiring its parent Rashid Hussain Bhd.
Azlan, who is also a director at RHB Capital, said the banking group was planning to double its profit and market capitalisation in three years.
EPF chairman Samsudin Osman said EPF intends to further reduce its holding in RHB Capital, state Bernama news agency reported.
"We hope to bring in more investors and parties, which could contribute positively to the growth of RHB Capital. The EPF however, will remain the single largest shareholder in RHB Capital," he said, according to Bernama.
EPF has requested approval from the central bank to keep 40 percent of RHB Capital instead of 35 percent.
With the sale, the ADCB is now the second largest shareholder of RHB Capital. -
Agence France-Presse

2008 subsidy for fuel & gas to be RM45 billion

KUALA LUMPUR, May 7 (Bernama) -Taxpayers may have to bear a whopping RM45 billion in subsidies for fuel and gas this year, Second Finance Minister Tan Sri Nor Mohamed Yakcop, said here Wednesday.He said the subsidies are based on global crude oil prices hovering between US$100-US$120 per barrel.Of this, RM18 billion is for petrol, diesel and liquefied petroleum gas, RM7 billion in tax relief and RM20 billion is for the Petronas gas subsidy, he told a media conference.The subsidy looks set to increase if the price of oil increases further."It is RM45 billion and rising. If the crude oil price spikes to US$130 per barrel tomorrow then the subsidy will be higher," he said after launching RHB Banking Group's new logo.Tuesday, oil price shot up to a fresh record of US$122 per barrel on global markets on supply worries and a weak dollar.Nor Mohamed said there was no cap for the subsidy amount.However, he said the government was looking at ways to restucture the whole subsidy scheme to make sure that it was sharp and focuses on the right priority sector."We are mindful of the need for the subsidy scheme to be sharp. Any aspect of the present subsidy scheme, if it is blunt, then we've got to sharpen it."Asked on the effect of the restructuring, he: "If we restructure and refocus on the subsidy, the net effect may not be much for the government. It is just that the subsidies will be more efficiently and effectively done. We have to minimise the leakage. So, the cost may not be necessarily higher."Nor Mohamed did not give a timeframe or deadline for the restructuring.Earlier, in his speech, he said "continuous reassessments are required to enable us to build upon our strengths and comparative advantages as well as seek new opportunities, both locally and abroad."More importantly, there is need to be equipped to respond to these new opportunities as well as challenges."It is my hope that the RHB Bank will continously transform and reinvent itself as what is relevant today may not necessarily serve us well in the years ahead," he said.He also said that the banking sector plays a crucial role in attracting foreign direct investors as well as in the country's socio-economic stability.

Scomi Bidding RM5-6 billion monorail projects

PETALING JAYA, May 7 (Bernama) -Scomi Group Bhd, a global service provider in the oil and gas industry, energy and logistics engineering, is bidding for RM5 billion to RM6 billion worth of monorail projects overseas.Disclosing this, its group chief executive officer, Shah Hakim Zain said the group has been shortlisted for final tenders for monorail projects in Iran and India.The projects being tendered include in Marshad, Karat and Tehran in Iran and in Mumbai and Delhi in India.He added that the group will be submitting final tenders to India on June 15 and in Iran soon.Scomi recently signed a collaborative agreement with the Hanoi Metropolitan Rail Management Board to prepare a feasibility study on a monorail system in Hanoi, Vietnam."We are cautiously optimistic of securing these projects, we are focussing on countries that are seriously implementing monorail projects," he said during a press conference today to announce Scomi's employee development programmes.Shah Hakim said Scomi is investing RM2 million a year on its executive management programme (EMP).The Scomi EMP programme represents an opportunity to bring all middle managers throughout the company to a common level of skills and competencies.

Weaker dollar won't hurt exports

THE easing of the American dollar will not affect Malaysia’s exports as the currency is not the instrument that decides the export situation, Second Finance Minister Tan Sri Nor Mohamed Yakcop said.Instead, measures such as the use of an innovative system, reduction in costs and exploration into new markets will be able to raise export levels, he said in reply to a supplementary question from Fong Kui Lun (DAP-Bukit Bintang)at the Dewan Rakyat today.“In the present day, it is too complicated to use the ringgit’s exchange value as the instrument to increase export,” he said. In order for traders to carry out their business, the stability of the currency rate is important and it is not the specific exchange rate such as 3.2 or 2.8.
“The important thing for traders and businesses is that the rate is stable and there is no situation of volatility in the market,” Nor Mohamed said.The government has taken various measures to diversify the country’s exports to the non-traditional export markets, including the signing of bilateral agreements with many south nations.“Therefore, our exports at the moment are highly diversified, and we are not that dependent on the United States or other countries.“The government will continue to look at other measures and incentives for exporters in terms of budget and also use MIDA (Malaysian Industrial Development Authority),” he said.Nor Mohamed said the government would ensure that there is no speculation on the ringgit with the continued policy of not giving loans in ringgit to outsiders. He said the crisis in 1997 and 1998 was brought on by currency manipulators who had been allowed to borrow ringgit and sell the local currency unit.“What we did during the crisis..was very simple. We just did not allow them to borrow ringgit for selling. “That solution is still in our system,” he added.Meanwhile, the minister also said that Malaysia will retain a ban on currency traders borrowing the ringgit for trading.Malaysia has maintained the ban since the 1997/98 Asian financial crisis.-reuters

Maybank buys 15% stake in MCB Bank, Pakistan's largest bank for RM2.17 Billion

KUALA LUMPUR, May 5 (Bernama) -Malayan Banking Bhd is buying an initial 15 percent stake in MCB Bank Ltd, Pakistan's largest bank, for RM2.17 billion, it was announced Monday.Maybank president and chief executive Datuk Seri Abdul Wahid Omar said the bank was looking to acquire up to 20 percent of shares in MCB Bank from Nishat Group.Nishat is a conglomerate with interests in textiles, cement and the financial sector.He said the proposed acquisition of the remaining five percent would be conducted in the next one year.MCB is Pakistan's largest bank in terms of market value and is worth around US$4 billion.With the acquisition, Maybank would be given the right to appoint two directors to represent its interest in the bank, he said.This will be another major foreign acquisition for Maybank this year.In March this year, Maybank, the country's largest lender, bought a 55.7 percent stake in Indonesia's sixth largest bank Bank Internasional Indonesia (BII) from Singapore's Temasek Holdings (Pte) Ltd for RM4.8 billion.It also planned to tender for the other 44.3 percent stake held by the remaining shareholders of BII.Abdul Wahid said as part of the transaction, Maybank and MCB would also enter into a business cooperation arrangement which would include Islamic banking, retail banking, credit cards, asset management and Small and Medium Industries (SME) banking.