AirAsia Bhd (AIRA MK, Buy, TP: RM1.80) wants to increase its cargo business by targeting clients that are more price sensitive and less time sensitive, said AirAsia X chief executive officer Azran Osman-Rani. He also stated that the airline will be able to grow its cargo revenue by half in 2009 from RM40m recorded last year. While cargo revenue represents roughly 1.5% of the group’s topline in 2008, the airline hopes to increase the contribution to 10% by 2011. (Business Times)
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Ahmad Zaki Resources Bhd is close to bagging a RM50m contract for the initial works of the Hulu Terengganu hydroelectric project, which among other things entail clearing works and the building of roads, sources say. It is understood that a letter of award has yet to be issued to AZRB with the last lap of negotiations still ongoing with state utility Tenaga Nasional Bhd (TNB MK, Buy, TP: RM9.90). According to Tenaga, work on the dam was slated to start this year with construction targeted for completion by 2013. (Financial Daily)
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Ekuiti Nasional Bhd (Ekuinas) may take some listed companies private as one of its investment strategies. However, these listed firms would still be deemed medium-sized and not large companies that are the domain of other government investment institutions such as Permodalan Nasional Bhd or Khazanah Nasional Bhd. It also plans to invest around RM50m to RM70m in companies with a track record and they could then do initial public offerings (IPO) after three or seven years. Ekuinas is still studying its investment prospects, but is sticking to its plan of making the first move in six months or sometime at the end of March 2010. (Business Times)
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Berjaya Hotels & Resorts plans to sell off its properties in Seychelles, Sri Lanka, Singapore and London to concentrate on its more profitable markets in Asia-Pacific. Chief executive officer Joseph Won said if prices are right, it would also dispose of Berjaya Beau Vallon Resort and Berjaya Praslin Resort in Seychelles and Berjaya Eden Park Hotel in London. He said the group is in discussions with a few parties for its properties in Seychelles and London and hopes to sell them within the next two quarters. He added that the plan for Asia-Pacific would be to open up to 20 new hotels and resorts in Japan, South Korea, Vietnam, Maldives and Malaysia over the next six to seven years. The list would include Berjaya branded
properties, which the group would own and operate on its own, and hotels operated by third parties. Berjaya Hotels & Resorts will use proceeds from the sale of the foreign properties, and its own reserves and existing cash flow to finance the expansion. (Business Times)
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Tradewinds Corp Bhd (TCB) will open its RM170m luxury accommodation in Langkawi called "The Danna" in July next year. The Danna, to be positioned in the same league as the existing Tanjung Rhu Resort and The Datai, will be built, owned and operated by TCB, its chief executive officer Shahrul Farez said. Shahrul said TCB's decision to open the property in Langkawi was prompted by the high average room rates (ARRs) that the island garners. Shahrul said the new hotel, located in Telaga Harbour Park and neighbouring Burau Bay, will have 130 rooms. This property sits on a 11,363 sq m site, which is on a 55-year lease from the Langkawi Development Authority (Lada). The market value of the property as appraised by Rahim & CO
in May 2007 was RM100 million, on a completed basis. (Business Times)
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Multi Sports Holdings Ltd has entered into an agreement with Fujian Xueyu Property Co Ltd for the acquisition of land and two completed factory buildings for RMB29.5m (RM15.02m) cash. The 3.12ha site was located in Xibin Farm, Xibin Town, Jinjiang city, Fujian province while the six-storey factory buildings had an aggregate built-up area of 17,631.6 sq m. The sports shoe manufacturer said the purchase would be funded by the proceeds arising from its initial public offering and internally generated funds. The setting up of a new production centre and new production lines on the land would increase the group’s production capacity, future earnings and earnings per share. (StarBiz)
Stocks fell on Friday, ending lower for the week, after weaker-than-expected reports on durable goods orders and new home sales sparked concerns about the strength of any recovery. Investors reacted negatively to Wednesday's Federal Reserve meeting and Thursday's weaker existing home sales report and oil slump. The Dow Jones industrial average lost 0.4% (-42 pts, close 9,665.19). The S&P 500 index lost 0.6% (-6 pts, close 1,044.38). The Nasdaq composite fell 0.8% (-17 pts, close 2,090.92). U.S. light crude oil for October delivery rose 13 cents to settle at US$66.02 a barrel on the New York Mercantile Exchange. (CNN Money)
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Demand for U.S. durable goods unexpectedly fell in August and sales of new homes rose less than forecast, restraining the pace of the economic recovery. Orders for goods made to last several years dropped 2.4%, the biggest decline since January, the Commerce Department said Friday in Washington. Economists forecast durable goods orders would increase 0.4%, according to the median of 75 projections in a Bloomberg News survey. Estimates ranged from a decline of 2% to a 4% gain. Outside of transportation, bookings were expected to increase 1%, according to the Bloomberg survey. Sales of new homes climbed 0.7% to a 429,000 annual pace last month, a separate Commerce Department report showed, as builders cut prices at a record pace to compete with the foreclosures that are flooding the market for previously owned houses. Sales were forecast to rise to a 440,000 pace, according to a Bloomberg survey. (Bloomberg)
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Federal Reserve decided to keep pumping US$1.25trn of new money into the mortgage market to focus on rescuing the U.S. economy as the financial system revives and banks ask for less help. The Fed is allowing some of the 10 support programs it created or expanded after the credit crisis began in August 2007 to expire or shrink. That caused the first decline in the amount of money the U.S. has committed on behalf of taxpayers to end the recession, according to data compiled by Bloomberg. The central bank has purchased US$694bn of mortgage-backed securities since January and plans to spend US$556bn more by April 2010 to keep interest rates down. The U.S. has lent, spent or guaranteed US$11.6trn to bolster banks and fight the longest recession in 70 years, according to data compiled by Bloomberg. (Bloomberg)
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The French economy will grow in 3Q09, and strengthening the recovery is a priority over currency problems, French Finance Minister Christine Lagarde said in a televised interview. “We will have positive growth for the third quarter,” she said on LCI television. She declined to give a precise figure, saying the forecast for growth in 2010 of 0.75% is “conservative” and the outlook is for “weak” inflation. Emerging signs of economic growth in different parts of the world remain “fragile,” she added. Asked whether the relative strength of the euro compared with the dollar was holding back growth and European competitiveness, Lagarde said the Group of 20 would be a good forum for discussion of monetary issues. “It is not acceptable that the euro pays the price for monetary adjustments between the dollar and the yua,” she said, referring to the Chinese currency. “The main problem is support for recovery by coordinated stimulus measures.” (Bloomberg)
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Bank of Japan board members last month remained concerned that small companies are struggling to borrow even as credit conditions improve, minutes show. “Many members noted that the improvement in funding conditions of large firms was significant, but that of small firms and firms with low credit ratings remained limited,” according to the Aug. 10-11 policy
meeting minutes released Friday in Tokyo. Some members said companies remain concerned about the outlook for their businesses and funding conditions, the minutes said. One policy maker said the central bank should try not to hinder a “self-sustaining recovery” in the functioning of financial markets, while at the same time continue to provide “ample liquidity” to the banking system. (Bloomberg)
* * * * *
Chinese industrial companies’ profits fell at a slower pace as a recovery gathered pace in the world’s third-biggest economy on stimulus spending and record lending in 1H09. Net income declined 10.6% y-o-y in the eight months through August to 1.67trn yuan (US$245bn), the statistics bureau said yesterday. Profits dropped 22.9% in the first five months of the year. Sales in the first eight months of the year rose 1.6% to 32.4trn yuan. The data is for companies with annual sales of more than 5m yuan in 39 industries, including steel, chemicals, electricity, telecommunications and mining. The government is aiming for 8% economic growth to create jobs and so limit the risk of social instability in the world’s most-populous nation. (Bloomberg)
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Palm oil may reach US$1,000 (RM3,460) a tonne if a global economic recovery pushes crude oil up to US$95 a barrsaid James Fry, managing director of LMC International Ltd, which tracks the world’s main oilseeds. Oil has risen 48% tyear, averaging US$57 a barrel. Palm oil has increased 29%. The commodity will climb above US$750 a tonne in Rotterdamcrude remains at the current level of about US$65 a barrel, Fry said. He added that the price may reach US$675 if oil drops US$10. “Stocks no longer drive palm oil,” Fry said. “Instead of stocks acting as the main driver of prices, the Brent crude price band is now the major influence.” (Financial Daily)
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* * * * *
Ahmad Zaki Resources Bhd is close to bagging a RM50m contract for the initial works of the Hulu Terengganu hydroelectric project, which among other things entail clearing works and the building of roads, sources say. It is understood that a letter of award has yet to be issued to AZRB with the last lap of negotiations still ongoing with state utility Tenaga Nasional Bhd (TNB MK, Buy, TP: RM9.90). According to Tenaga, work on the dam was slated to start this year with construction targeted for completion by 2013. (Financial Daily)
* * * * *
Ekuiti Nasional Bhd (Ekuinas) may take some listed companies private as one of its investment strategies. However, these listed firms would still be deemed medium-sized and not large companies that are the domain of other government investment institutions such as Permodalan Nasional Bhd or Khazanah Nasional Bhd. It also plans to invest around RM50m to RM70m in companies with a track record and they could then do initial public offerings (IPO) after three or seven years. Ekuinas is still studying its investment prospects, but is sticking to its plan of making the first move in six months or sometime at the end of March 2010. (Business Times)
* * * * *
Berjaya Hotels & Resorts plans to sell off its properties in Seychelles, Sri Lanka, Singapore and London to concentrate on its more profitable markets in Asia-Pacific. Chief executive officer Joseph Won said if prices are right, it would also dispose of Berjaya Beau Vallon Resort and Berjaya Praslin Resort in Seychelles and Berjaya Eden Park Hotel in London. He said the group is in discussions with a few parties for its properties in Seychelles and London and hopes to sell them within the next two quarters. He added that the plan for Asia-Pacific would be to open up to 20 new hotels and resorts in Japan, South Korea, Vietnam, Maldives and Malaysia over the next six to seven years. The list would include Berjaya branded
properties, which the group would own and operate on its own, and hotels operated by third parties. Berjaya Hotels & Resorts will use proceeds from the sale of the foreign properties, and its own reserves and existing cash flow to finance the expansion. (Business Times)
* * * * *
Tradewinds Corp Bhd (TCB) will open its RM170m luxury accommodation in Langkawi called "The Danna" in July next year. The Danna, to be positioned in the same league as the existing Tanjung Rhu Resort and The Datai, will be built, owned and operated by TCB, its chief executive officer Shahrul Farez said. Shahrul said TCB's decision to open the property in Langkawi was prompted by the high average room rates (ARRs) that the island garners. Shahrul said the new hotel, located in Telaga Harbour Park and neighbouring Burau Bay, will have 130 rooms. This property sits on a 11,363 sq m site, which is on a 55-year lease from the Langkawi Development Authority (Lada). The market value of the property as appraised by Rahim & CO
in May 2007 was RM100 million, on a completed basis. (Business Times)
* * * * *
Multi Sports Holdings Ltd has entered into an agreement with Fujian Xueyu Property Co Ltd for the acquisition of land and two completed factory buildings for RMB29.5m (RM15.02m) cash. The 3.12ha site was located in Xibin Farm, Xibin Town, Jinjiang city, Fujian province while the six-storey factory buildings had an aggregate built-up area of 17,631.6 sq m. The sports shoe manufacturer said the purchase would be funded by the proceeds arising from its initial public offering and internally generated funds. The setting up of a new production centre and new production lines on the land would increase the group’s production capacity, future earnings and earnings per share. (StarBiz)
Stocks fell on Friday, ending lower for the week, after weaker-than-expected reports on durable goods orders and new home sales sparked concerns about the strength of any recovery. Investors reacted negatively to Wednesday's Federal Reserve meeting and Thursday's weaker existing home sales report and oil slump. The Dow Jones industrial average lost 0.4% (-42 pts, close 9,665.19). The S&P 500 index lost 0.6% (-6 pts, close 1,044.38). The Nasdaq composite fell 0.8% (-17 pts, close 2,090.92). U.S. light crude oil for October delivery rose 13 cents to settle at US$66.02 a barrel on the New York Mercantile Exchange. (CNN Money)
* * * * *
Demand for U.S. durable goods unexpectedly fell in August and sales of new homes rose less than forecast, restraining the pace of the economic recovery. Orders for goods made to last several years dropped 2.4%, the biggest decline since January, the Commerce Department said Friday in Washington. Economists forecast durable goods orders would increase 0.4%, according to the median of 75 projections in a Bloomberg News survey. Estimates ranged from a decline of 2% to a 4% gain. Outside of transportation, bookings were expected to increase 1%, according to the Bloomberg survey. Sales of new homes climbed 0.7% to a 429,000 annual pace last month, a separate Commerce Department report showed, as builders cut prices at a record pace to compete with the foreclosures that are flooding the market for previously owned houses. Sales were forecast to rise to a 440,000 pace, according to a Bloomberg survey. (Bloomberg)
* * * * *
Federal Reserve decided to keep pumping US$1.25trn of new money into the mortgage market to focus on rescuing the U.S. economy as the financial system revives and banks ask for less help. The Fed is allowing some of the 10 support programs it created or expanded after the credit crisis began in August 2007 to expire or shrink. That caused the first decline in the amount of money the U.S. has committed on behalf of taxpayers to end the recession, according to data compiled by Bloomberg. The central bank has purchased US$694bn of mortgage-backed securities since January and plans to spend US$556bn more by April 2010 to keep interest rates down. The U.S. has lent, spent or guaranteed US$11.6trn to bolster banks and fight the longest recession in 70 years, according to data compiled by Bloomberg. (Bloomberg)
* * * * *
The French economy will grow in 3Q09, and strengthening the recovery is a priority over currency problems, French Finance Minister Christine Lagarde said in a televised interview. “We will have positive growth for the third quarter,” she said on LCI television. She declined to give a precise figure, saying the forecast for growth in 2010 of 0.75% is “conservative” and the outlook is for “weak” inflation. Emerging signs of economic growth in different parts of the world remain “fragile,” she added. Asked whether the relative strength of the euro compared with the dollar was holding back growth and European competitiveness, Lagarde said the Group of 20 would be a good forum for discussion of monetary issues. “It is not acceptable that the euro pays the price for monetary adjustments between the dollar and the yua,” she said, referring to the Chinese currency. “The main problem is support for recovery by coordinated stimulus measures.” (Bloomberg)
* * * * *
Bank of Japan board members last month remained concerned that small companies are struggling to borrow even as credit conditions improve, minutes show. “Many members noted that the improvement in funding conditions of large firms was significant, but that of small firms and firms with low credit ratings remained limited,” according to the Aug. 10-11 policy
meeting minutes released Friday in Tokyo. Some members said companies remain concerned about the outlook for their businesses and funding conditions, the minutes said. One policy maker said the central bank should try not to hinder a “self-sustaining recovery” in the functioning of financial markets, while at the same time continue to provide “ample liquidity” to the banking system. (Bloomberg)
* * * * *
Chinese industrial companies’ profits fell at a slower pace as a recovery gathered pace in the world’s third-biggest economy on stimulus spending and record lending in 1H09. Net income declined 10.6% y-o-y in the eight months through August to 1.67trn yuan (US$245bn), the statistics bureau said yesterday. Profits dropped 22.9% in the first five months of the year. Sales in the first eight months of the year rose 1.6% to 32.4trn yuan. The data is for companies with annual sales of more than 5m yuan in 39 industries, including steel, chemicals, electricity, telecommunications and mining. The government is aiming for 8% economic growth to create jobs and so limit the risk of social instability in the world’s most-populous nation. (Bloomberg)
* * * * *
Palm oil may reach US$1,000 (RM3,460) a tonne if a global economic recovery pushes crude oil up to US$95 a barrsaid James Fry, managing director of LMC International Ltd, which tracks the world’s main oilseeds. Oil has risen 48% tyear, averaging US$57 a barrel. Palm oil has increased 29%. The commodity will climb above US$750 a tonne in Rotterdamcrude remains at the current level of about US$65 a barrel, Fry said. He added that the price may reach US$675 if oil drops US$10. “Stocks no longer drive palm oil,” Fry said. “Instead of stocks acting as the main driver of prices, the Brent crude price band is now the major influence.” (Financial Daily)
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