News Highlights

In a bid to regain market share from its legitimate rivals as well as black market players, Multi Purpose Holdings Bhd’s (MPHB) wholly owned subsidiary Magnum Corporation Sdn Bhd yesterday launched its jackpot game called 4D Jackpot. The key attraction of the 4D Jackpot game is its snowballing prize, particularly when the sum grows to multi-million ringgit. (Financial Daily)
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AEON CO (Malaysia) Bhd may take a stake in its Japanese parent’s expansion plans in Southeast Asia. The parent company AEON Co Ltd, Japan’s second largest retailer, is looking to set up stores in Vietnam, Cambodia, Indonesia and possibly even Laos, managing director Nagahisa Oyama said. “AEON Malaysia may invest money in these countries if it is beneficial to us. We have an option to take a stake on a case by case basis, depending on the situation. Nothing has been decided yet”, he said. Oyama also said Southeast Asia represents a strong potential growth area for the Japanese group. (BT)
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Green Packet Bhd has set a net profit target RM1bn for 2013, driven by a maturing broadband and solutions business. The company expects to sign up 200,000 subscribers by year-end, from 35,000 in the first quarter of 2009. Green Packet expects revenue to increase more than threefold to RM300m this year, from RM88.43m in 2008. Over the next two year, the company
will be aggressively expanding its coverage and acquiring broadband customers. When its subscriber base hits the critical mass, it is expected to launch its new service – mobile voice. (BT)
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Hap Seng Consolidation Bhd (HSC) is selling its wholly-owned subsidiary Hap Seng Consolidation Financial Lease & Rental (China) Co Ltd (HSCFLR) for US$30.29m (RM105.11m) cash booking in a gain of RM36m, in a related party transaction. HSC said the acquirer was Lei Shing Hong Venture Capital Limited, a wholly-owned subsidiary of Hong Kong incorporated Lei Shing Hong Ltd (LSH). LSH’s 36.6% major shareholder, Datuk Seri Panglima Lau Cho Kun @ Lau Yu Chak, is also a director and major shareholder of Gek Poh Holdings Sdn Bhd, the major shareholder of HSC. Gek Poh Holdings owns a 61.48% stake in HSC. HSC said the consideration was about 1.5 times the net asset value of HSCFLR of RM71m as at Aug 31, 2009. It said the valuation was in line with the valuation of unlisted credit companies and the fact that the financial leasing services company was only incorporated on Feb 29, 2008. (Financial Daily)
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Dialog Group Bhd has started operations of phase one of Langsat Teminal (One) Sdn Bhd, which is a joint venture between the company, MISC Bhd and Puma Energy Asia Pacific BV. Dialog announced that the terminal received its first shipment of oil from its customer, Trafigura Pte Ltd last Saturday. The Tanjung Langsat terminal has a total capacity of 400,000 cubic metres (cbm), with the development planned to be completed in two phases. The total capacity for Phase 1, which was officially completed on Sept 16, is 130,000 cbm for storage of naphtha/middle distillates. Phase 2 of the project is targeted for completion by Match 2010 with a tank capacity of 270,000 cbm for storage of fuel oil. (Financial Daily)
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Berjaya Corporation Bhd (BCorp) and Brunei-based contractor have jointly submitted a joint bid to the Brunei Economic Development Board to undertake a waste management project in that country. In an announcement to Bursa Malaysia, BCorp said it and Ribhan Nurhidayah Contractor (RNC) had submitted the tender to undertake the energy efficient waste management system in Brunei. BCorp said it entered into a memorandum of understanding (MoU) with RNC last Friday to put in the tender for the project. Under the MoU, BCorp and RNC are to form a joint venture company with BCorp holding a 60% stake and RNC 40%, if they were to succeed in their bid. (Financial Daily)
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AMDB Bhd has proposed to buy two freehold office buildings known as 40 and 50 Eastbourne Terrace in Paddington, Westminster, London via the acquisition of a 60% stake in Westlink Global Investment Ltd (WLG). AMDB said WLG had inked a sale and purchase agreement with LS Victoria Properties Ltd to purchase the property for 50.5m (RM287.33m). AMDB said its subsidiary Walleng Enterprises Sdn Bhd had yesterday subscribed for 60 ordinary shares representing a 60% stake in WLG at par for cash. AMDB said the property provided a net lettable space of 146,000 sq ft of retail and office accommodation which are currently let to a variety of tenants with about 94% occupancy. It said base on current rentals, the net yield on the property was about 8.65%. (Financial Daily)
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Stocks tumbled Wednesday, retreating from one-year highs, as investors took a sell-the-news reaction to the Fed's decision to hold interest rates steady and keep its economic outlook relatively unchanged. Stocks initially rallied after the Fed announcement Wednesday, but failed to hold gains as investors used the latest nearly one-year milestone for the market as a reason to sell. A milder-than-expected response to a government auction of US$40bn in five-year notes also contributed to the
late declines. The Dow Jones industrial average lost 0.8% (-81.3 pts, close 9,748.5). The Nasdaq lost 0.7% (-14.9 pts, close 2,131.4) and the S&P 500 lost 1.0% (-10.8 pts, close 1,060.9). U.S. light crude oil for October delivery fell US$2.79 to settle at US$68.97 a barrel on the New York Mercantile Exchange. (CNNmoney)
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The Federal Reserve will slow its purchases of mortgage securities by 1Q10, seeking to avoid disrupting the housing market as an economic recovery takes hold. Officials left the target rate for overnight loans between banks at a record low of between zero and 0.25%. Yesterday’s decision was unanimous. “Economic activity has picked up following its severe downturn,” the committee said yesterday. “Conditions in financial markets have improved further, and activity in the housing sector has increased,” the Fed said. “Household spending seems to be stabilizing, but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit.” The FOMC said monetary and fiscal stimulus combined with stabilizing financial conditions “will support a strengthening of economic growth and a gradual return to higher levels of resource utilization in a context of price stability.” (Bloomberg)
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U.S. credit-card defaults rose to a record in August and more losses may lie ahead as delinquencies climbed for the first time since March, according to Moody’s Investors Service. Write-offs rose to 11.49% from 10.52% in July, Moody’s said yesterday in a report. Loans at least 30 days delinquent rose to 5.8% from 5.73%. “Early-stage” delinquencies, or loans overdue 30 to 59 days, surged to 1.65%, from 1.41%, signalling higher losses in coming months. Banks typically write off loans after 180 days. Card issuers have struggled with rising defaults as the recession drove up unemployment to 9.7% and the impact of income tax refunds waned. Credit-card defaults typically track the U.S. jobless rate since consumers tend to fall behind on payments when their income dries up. “We continue to call for a recovery of the credit-card sector to begin once industry average charge-offs peak in mid-2010 between 12% and 13%,” said the Moody’s report, which predicted unemployment may reach 10.5%. (Bloomberg)
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The Bank of England may stop buying bonds when it completes its current 175bn-pound (US$286bn) plan as the U.K. shakes off the recession, the Confederation of British Industry said. Gross domestic product will rise 0.3% in 3Q09, the biggest U.K. business lobby said in a report yesterday, reversing a June prediction for a drop of the same size. The CBI forecast 0.4% growth in 4Q09 and said the central bank will start raising the benchmark interest rate in 1H10. “Armageddon has receded somewhat over the horizon,” Richard Lambert, CBI director general and a former Bank of England policy maker, told reporters at a briefing in London Tuesday. “But the recovery will be slow and protracted. Unemployment will continue to rise.” The central bank plans to complete its current program to buy bonds by November. The economy will expand 0.9% in 2010 after a 4.3% contraction this year, the CBI said. (Bloomberg)
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French consumer spending fell for a second month as rising joblessness deterred spending such goods as clothes and accessories. Spending on manufactured goods fell 1% in August from July, when it declined 1.2%, Paris-based national statistics office Insee said yesterday. Economists expected a 0.3% gain in August, a Bloomberg News survey showed. French consumers are cutting back on concern that rising job losses will weaken their spending power in the months ahead. Unemployment rose to 9.5% in 2Q09, the highest in more than three years. Finance Minister Christine Lagarde said Tuesday that the government will maintain measures to bolster the economy until joblessness begins to recede. (Bloomberg)
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French manufacturing confidence jumped to the highest in almost a year as recovery from the worst recession in half a century buoyed exports and depleted inventories. The index of sentiment among factory executives rose to 85 in September from 82 in August, Paris-based statistics office Insee said yesterday. Economists had expected that the index would climb to 81 this month, according to the median of 16 forecasts in a Bloomberg News survey. The improvement reflects demand from retailers who slashed inventories as the recession hit its trough early this year. Even so, with unemployment rising, consumer demand will act as a brake on growth in the months ahead. Exports increased 9% in July from the previous month, according to the Finance Ministry. The same month, the number of unemployed actively looking for a job increased to 2.54m, matching the 28-month high set in May. (Bloomberg)

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