PAAB to raise funds

KUALA LUMPUR, Aug 28 (Bernama) -- The Finance Ministry-owned Pengurusan Aset Air Bhd (PAAB), which is in the midst of taking over the management of water assets from state governments, plans to go into capital market to raise funds to finance its capital projects in the longer term.This includes financing the take-over of the assets and liabilities of the state governments, Energy, Water and Communications Minister Datuk Seri Dr Lim Keng Yaik said Tuesday."The company has AAA rating which enables it to raise funds from anywhere, and not necessarily go for listing. It could be the bond market," he told reporters after the Fourth National Utilities Summit 2007 here.It was reported that about RM7.8 billion of debts are owed by water companies in the state governments, with Melaka and Negeri Sembilan recording debts exceeding assets."We are now negotiating with the state governments to surrender their water assets soon to PAAB," he said, adding that the water assets will then be leased back to the state governments but the rent will be determined according to their debt payments.PAAB will also take over the replacement of old water mains to maximise efficiency and ensure that water supplied is of high quality.Dr Lim said state governments are welcome to participate in the new water services regime, which will be enforced through the Water Services Industry Act next January.Johor and Selangor's privatised water companies have expressed interest in migrating to the new water services regime, he added.

Government to rely on hydropower to produce 30% of electricity needs

KUALA LUMPUR, Aug 28 (Bernama) -- The government plans to rely on hydropower to produce 30 percent of the country's electricity needs over the next decade to reduce dependence on fossil fuels, Minister of Energy, Water and Communications, Datuk Seri Dr Lim Keng Yaik, said here Tuesday."Sabah and Sarawak have the potential to deliver that," he said at the opening of the 4th National Utilities Summit 2007 here today.He said the development of hydropower and the transmission of power from Sabah and Sarawak to Peninsular Malaysia offered business opportunities for the energy sector.Dr Lim said the two states could supply about 4,000 to 5,000 megawatt hydropower in years to come.Currently, Malaysia relies on gas and to a lesser extent, coal to produce its electric power."We are also studying the possibility of getting more hydropower from the Rejang River basin such as Murum and Baleh for the longer term. The role of hydropower will be more prominent post-2010.He said the Bakun hydropower project, which was expected to be completed by 2011, still needed undersea cables to transport the power."However, the decision on the cable is still being considered," he said.Asked whether the undersea cable project was still viable, Dr Lim said: "I have to think about it. It is a matter of dollar and cent."At the moment, he said, the ministry was looking at technical and financing aspects before laying the undersea cable."Eventually the Bakun power source will still be brought to Peninsular Malaysia. It is only the matter of when and how much," he said.In June, Dr Lim said the government has asked Japan's Sumitomo Corp and Italy's Prysmian SpA to consider setting up plants in Malaysia to manufacture the submarine cables for the 700-kilometre undersea project, estimated to cost about US$1.5 billion.

US$10b project in IDR

KUALA LUMPUR: A group of investors from Abu Dhabi, Kuwait, Saudi Arabia and Lebanon are expected to join Malaysian investors to develop 2,000 to 2,500 acres in the Iskandar Development Region (IDR) into a high-end integrated city.
While the initial investment in the development is projected to be more than RM3bil, the construction cost is estimated to be between US$10bil and US$12bil, according to sources.
The massive development, which will be spearheaded by investors that have transformed cities in the Middle East, is projected to be completed no later than 2015.
Sources said the land would be purchased from South Johor Investment Corp (SJIC), the developer of IDR, but jointly developed by the Middle Eastern parties and SJIC. An agreement could be inked between the parties on development, advisory services and contracting.
Mudabala Group of Abu Dhabi and the Abu Dhabi Investment Authority are said to be among the investors that would be building high-end properties in IDR. There is also talk that a big developer from Abu Dhabi would partner Putrajaya Perdana Bhd in executing part of the development.
Swan Symphony Sdn Bhd, a consortium comprising Middle Eastern, Malaysian and Singaporean investors, has proposed to buy a 50.6% stake in Putrajaya Perdana for RM390mil cash with the intention of transforming the Malaysian developer into a global construction company.
Swan Symphony is 51%-owned by the Abu Dhabi-Kuwait-Malaysia Investment Corp and 49% by Autron Investment.
Mudabala has wide-ranging investments in real estate, utilities, basic industries, energy, health and services. The investment agency owns a 5% stake in Italian carmaker Ferrari and 25% of SR Technics, one of the largest maintenance, repair and overhaul service providers in Europe.
The foreign investors are said to have a track record in getting things done fast and a penchant for glamorous projects.
Although details are sketchy, plans for the development in IDR by the Middle Eastern investors will feature high-end properties priced up to RM2,000 per sq ft.
Facilities like a high-end yacht club, high-end shopping centres and luxurious hotels are said to be on the blueprint.
An expansion of the Senai airport is also on the cards and the Government is expected to create a conducive environment for investment by foreigners.
The entire development is expected to be a tremendous boost for the local construction and building materials industry.

Malaysia-Islamic Finance in region

KUALA LUMPUR, Aug 27 (Bernama) -- Malaysia is fast becoming a model for the successful development of an Islamic financial system alongside the well-established conventional banking system in the Asia-Pacific region, a business leader said today."This is not surprising as Malaysia, as a multi-cultural nation, was quick to recognise and respond to the significance of the influence of cultural, religious and social dimensions of modern life in the mechanism for transaction," said Datuk Dr Tan Tiong Hong, chairman of the Association of Business Executives (ABE), United Kingdom.He was opening a seminar here on Malaysia's role in global Islamic finance leadership, education and value innovation.Tan said that given the rapid economic development of Malaysia in the past two decades and its multi-ethnic composition with more than 60 percent Muslims, it is natural that Islamic principles are innovatively assimilated into the mechanism of transactions that are acceptable to its Muslim population.He noted that Malaysia has a headstart in the successful implementation of a modern Islamic financial system alongside the conventional financial system, saying this had been made easy with the setting up of the Pilgrims Management Fund Board in 1963.Tan felt that with the backing of the government, the Islamic financial system can become more comprehensive, progressive, effective and efficient," he added.After the seminar, a memorandum of understanding (MoU) was signed between the ABE, the International Society of Business Administrators (ISBA) UK, the Centre for Islamic Business Research (CIBR) Malaysia and Zheng He Education 1421 to provide study modules and certification for distance learning students.

Hong Leong Pre-tax Profit Up 15% to RM986 Million

KUALA LUMPUR, Aug 27 (Bernama) -- Hong Leong Financial Group Bhd's pre-tax profit for financial year ended June 30, 2007 rose by 15 percent to RM986 million from RM859 million in the same period last year.In a statement here today, it said net profit increased by 20 percent to RM488 million over the same period last year.Hong Leong said for this year, the group was focused on transforming its core businesses -- banking, insurance and securities and asset management.It said the banking division's net profit rose by 13 percent to RM621 from RM550 million previously."The positive profit performance continues to be supported by strong quality loans growth, particularly in the consumer financing segment namely, from mortgage, credit cards and personal lending," it said.Hong Leong said the insurance division's net profit rose by 32 percent to RM91 million from RM69 million previously, mainly attributable to higher investment income and growth in premiums received.It said the securities and asset management division's net profit rose by 41 percent to RM26 million from RM18 million previously."This was due to higher brokerage income arising from the strong Bursa Malaysia trading volumes experienced during the year," it said.

Malaysia's trade With APEC expected to rise

KUALA LUMPUR, Aug 27 (Bernama) -- Malaysia's total trade with the Asia Pacific Economic Cooperation (APEC) countries, which has been growing over the past 10 years to US$226.7 billion in 2006, is expected to increase further this year."We foresee the trend to continue this year and also in future because most of the economies growing strongly are located within the APEC region," Malaysia External Trade Development Corporation's chief executive officer Datuk Noharuddin Nordin said today."As you know, countries like Japan and North America are already traditionally our strong markets," he told reporters at the "Specialised Capacity Building Course for APEC Trade Commissioners", which was officiated by Matrade's chairman Tan Sri Halim Mohammed.Malaysia's total trade with the 20 APEC countries jumped 84.6 percent to US$226.7 billion last year compared with US$122.8 billion in 1997.The country's exports to APEC economies expanded by 11.5 percent to US$123.6 billion last year from US$103.2 billion in 2005 while imports rose by 12.9 percent to US$103.2 billion in 2006 from US$91.4 billion in the previous year.On the course, Noharuddin said it was to enhance the skills and effectiveness of trade commissioners in their capacity as business facilitators and economic representatives.It was also to create a platform for trade commissioners to network and share information as well as experiences on changing business cultures, he said.The course, organised by Malaysia for the first time, is participated by representatives from China, Indonesia, the Philippines, Malaysia, South Korea, Japan, Chile, Hong Kong and Mexico.Earlier, Halim in his opening speech said that Malaysia would host the International Trade Malaysia 2007 Exhibition, to be held from Nov 12 to 15 at the Matrade Exhibition and Convention Centre.The event, themed "Fostering Business Collaboration", would provide a platform for participating companies from many parts of the world to develop trading, investment and collaboration opportunities, he said.He added that in conjunction with the exhibition, the Kuala Lumpur International Trade Forum, would also be held to attract international business leaders, entrepreneurs and industrialists.

Steel Consumption to increase 7% in 2008/09

KUALA LUMPUR, Aug 27 (Bernama) -- Local steel consumption is expected to increase by 7.0 percent next year and in 2009 from 7.7 million tonnes last year, the President of the Malaysian Iron and Steel Industry Federation Tan Sri Soong Siew Hoong said today."Major projects for implementation under the Ninth Malaysia Plan would likely boost demand for building materials and steel products domestically," he said at the Asean Steel conference here today."The growth rate of the Malaysian steel industry from 2007 until 2010 is expected to be lower but more sustainable averaging 6.0 percent annually," he said.He said steel consumption per capita was projected to increase to 318 kilogrammes in 2010 from 297 kg this year.Soong said the industry as a whole would have a made greater efforts to strengthen its position by growing the downstream sector to support the upstream sector.The industry was expected to expand its downstream activities to produce a wider range of higher-valued products, he said.He also said that growth was likely to come from more infrastructural projects.