Telekom Malaysia Bhd (TM) (T MK, Buy, TP: RM3.98) and Astro All Asia Networks plc may be getting into a bidding war to secure the rights for broadcasting the English Premier League (EPL) for the next three seasons, with the price likely to be more than RM500m. Industry sources said the bidding was entering a second round and might include other contenders such as ESPN STAR Sports. ESPN currently holds EPL broadcast rights for the Southeast Asian region and sells it exclusively to Astro in the Malaysian market. TM is believed to be keen on having the EPL broadcast rights for its planned broadband TV or IPTV (Internet protocol television) launch, following Singapore Telecommunications’ (SingTel) moves to secure EPL rights for three years beginning 2010. (StarBiz)
* * * * *Genesis Smaller Companies SICAV, a Luxembourg-based fund has emerged as a substantial shareholder in AirAsia Bhd (AIRA MK, Buy, TP: RM1.80) with 170.8m shares, or 6.19%, as of Tuesday. Genesis subscribed for 37.5m AirAsia shares on Sept 24 under the low-cost carrier’s placement exercise. After subscribing for the placement, it acquired 4m shares on Monday and 1m shares on Tuesday. (Financial Daily)
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Proton car sales in the United Kingdom (UK) have surpassed the company’s full-year target by 10% despite a weaker demand for new cars in the country due to the global economic slowdown. Proton Cars (UK) Ltd managing director Brian Collier said the company’s target had been to sell about 1,000 units this year. The larger base of repeat customers and efforts to keep costs down helped the company surpass its full-year target, he said. He added that car sales in the UK market were expected to drop to 1.7m this year from 2.4m two years ago. (Financial Daily)
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KPJ Healthcare Bhd has proposed to subdivide every existing share of RM1 each into two shares of 50 sen each and a subsequent one-for-four bonus issue of up to 105.53m shares as well as an issue of up to 131.91m free warrants on the basis of one warrant for every share held. In a statement, KPJ said as at Sept 30, 2009, its paid-up stood at RM211.05m comprising of 211.05m shares of RM1 each, including 620,800 treasury shares. (Financial Daily)
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Naza have failed in their conditional takeover bid for Kumpulan Jetson Bhd (KJB) as their RM1 per share offer for the remaining shares in Naza was rejected by the minority shareholders. The ICULS and warrants were offered at 93 sen cash per unit and 0.01 sen cash per unit respectively that commenced from Aug 20 2009, failed to meet the acceptance condition, which is more than 50% of the company’s shares and thus lapsed on its closing date. KJB’s shareholders were advised to reject the conditional takeover offer as market prices of the securities were significantly higher than offer prices. (Financial Daily)
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United Malayan Land Bhd (UMLand), which is in the process of a RM233m exercise to acquire and develop land in Johor, has gotten its shareholders to approve the land buy as well as a proposal to jointly develop the project with Tradewinds Johor Sdn Bhd, a company connected with its substantial shareholder Tradewinds Corp Bhd. Tradewinds Johor is a wholly-owned subsidiary of Tradewinds Resources Sdn Bhd, which in turn is a Tradewinds Corp unit. The latter, meanwhile, is a substantial shareholder in UMLand, with a 7.39% stake. UMLand said it had gotten shareholder approval to purchase the 254.5ha parcel of freehold land in Kulai from vendors, Ambang Budi Sdn Bhd, another Tradewinds Corp unit and Hartaplus Realty Sdn Bhd. It said the cash payment would be paid under two-year deferred payment arrangement. The land would be used to develop a mixed development project as well as supporting residential developments. The gross development value was RM718.1m while the estimated gross development cost was RM456.6m, which yielded a gross profit of about RM261.5m. The proposed development was estimated to take up to five years. It would be carried out via a UMLand-Tradewinds Johor joint-venture vehicle called Extreme Consolidated Sdn Bhd, in which UMLand would hold a controlling 51% stake. (Malaysia Reserve)
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The Ministry of Energy, Green Technology and Water has been exploring wind energy as a renewable energy option in Malaysia. Tests had been undertaken to access its viability and looking to develop as a source of electricity in 15 to 20 years. Minister Datuk Peter Chin during a visit to IMPSA (Malaysia) Sdn Bhd, which manufactures facilities in Lumut, Perak, said that they were to visit South Korea to obtain information on nuclear electricity power generation development there. As on electricity tariffs, there would be another review in December but there would be no guarantees in an increase. (Financial Daily)
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Stocks tumbled Thursday after a bigger-than-expected rise in weekly jobless claims and a weaker-than-expected reading on manufacturing sparked worries about the pace of the economic recovery. Many of the stocks and sectors that fuelled massive 3Q09 gains also drove the sell-off. Friday brings the week's biggest economic report: The monthly jobs report from the government. Employers are expected to have cut 175,000 jobs from their payrolls in September after cutting 216,000 in August. The Dow Jones industrial average lost 2.1% (-203.0 pts, close 9,509.3). The Nasdaq lost 3.0% (-64.9 pts, close 2,057.5) and the S&P 500 lost 2.6% (-27.2 pts, close 1,029.8). U.S. light crude oil for October delivery rose 21 cents to settle at US$70.82 a barrel on the New York Mercantile Exchange. (CNNmoney)
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Manufacturing in the U.S. expanded less than anticipated by economists and more Americans filed claims for unemployment benefits, pointing to a recovery that will be slow to generate jobs. The Institute for Supply Management’s factory gauge decreased to 52.6 in September from 52.9 in August, the Tempe, Arizona-based group said yesterday. Fifty is the dividing line between expansion and contraction. The ISM index, which dropped for the first time this year, was forecast to rise to 54, according to the median of 80 estimates in a Bloomberg survey of economists. Projections ranged from 51.5 to 56. Manufacturing accounts for about 12% of the world’s largest economy. The number of jobless claims climbed to 551,000 last week, more than economists forecast, figures from the Labour Department showed. Last week’s jobless claims figures overshot the median estimate of economists surveyed by Bloomberg News which projected an increase to 535,000, raising concern today’s jobs report will also disappoint expectations that payroll decreases are slowing. (Bloomberg)
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Spending by U.S. consumers climbed in August by the most since 2001, indicating the biggest part of the economy is starting to rebound from its worst slump in almost three decades. The 1.3% increase in purchases was larger than forecast and followed a 0.3% gain in the prior month that was bigger than previously estimated. (Bloomberg)
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The number of contracts to buy previously owned homes in the U.S. increased more than forecast in August, reinforcing signs of a rebound in housing, industry figures showed yesterday. The index of signed purchase agreements, or pending home sales, rose 6.4% after a 3.2% gain in July, the National Association of Realtors announced in Washington. The gain was the seventh in a row. Compared with a year earlier, pending sales rose 12.4%. Declining home prices, low mortgages rates and government stimulus programs have helped end the housing-market meltdown that sparked the financial crisis. Federal Reserve policy makers last week committed to buy full amount of a US$1.25trn mortgage-backed securities program and extended the end-date by three months. Pending home sales were projected to increase 1% in August, according to the median forecast of 36 economists in a Bloomberg News survey. Estimates for August ranged from a drop of 2.5% to an increase of 3%. Pending home sales are considered a leading indicator because they track contract signings. (Bloomberg)
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U.K. manufacturing activity unexpectedly contracted for a second month in September as factories cut jobs and growth in new orders slowed, a survey showed. An index of manufacturing fell to 49.5 from 49.7 in August, the Chartered Institute for Purchasing and Supply and pollsters Markit said in a report. The reading was lower than the 50.2 median forecast in a Bloomberg News survey of 26 economists. A level below 50 indicates contraction. While the pace of manufacturing output growth eased “sharply,” export business accelerated as the global economy strengthened and the fall in sterling made British goods more competitive abroad, according to the survey. “The picture is one of consolidation not contraction in September” and manufacturing probably contributed to economic growth in the third quarter, said Rob Dobson, senior economist at Markit. “But the outlook remains uncertain given the current reliance on price discounting and fiscal support.” (Bloomberg)
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Europe’s unemployment rate rose to the highest in more than 10 years in August as companies continued to cut jobs even as the region’s largest economies emerged from recession. Unemployment in the 16-member euro region increased to 9.6 percent from 9.5 percent in July, the European Union statistics office in Luxembourg said. That’s the highest since March 1999 and matched the median forecast from a Bloomberg survey of 23 economists. (Bloomberg)
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Retail sales in Germany, Europe’s largest economy, unexpectedly fell in August as concern about rising unemployment kept a lid on consumer spending. Sales, adjusted for inflation and seasonal swings, decreased 1.5% from July, when they rose 0.7%, the Federal Statistics Office in Wiesbaden said yesterday. Analysts had forecast a 0.2% increase, the median of 28 estimates in a Bloomberg News survey showed. German retail sales may decline 2% in nominal terms this year, industry association HDE said on Sept. 16. 40% of the retailers surveyed by the association said they expect the bottom of the economic crisis next year, compared with just 6% who foresee the trough in 2009. (Bloomberg)
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The European Central Bank will lend banks less money than economists forecast in its second 12-month auction of unlimited funds, indicating banks’ need for cash has eased for now. Banks bid for 75.2bn euros (US$110bn) at the current benchmark interest rate of 1%, the Frankfurt-based ECB said yesterday. It loaned a record 442bn euros at the first auction in June and economists had forecast demand for 137.5bn euros this month, according to the median of 16 estimates in a Bloomberg News survey. The ECB, which will offer banks 12-month loans for a third time on Dec. 15, is flooding the system with money in the hope it will be lent on to companies and households. Money-market rates have dropped as the economy shows signs of emerging from recession and banks become less wary of lending to each other. ECB Governing Council member Marko Kranjec said the demand “shows the system is liquid enough and that banks don’t need funds so much.” (Bloomberg)
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European Union finance chiefs said the pace of recovery means they probably won’t withdraw stimulus measures before 2011 as they grapple with rising unemployment and the effects of the euro’s gains. Governments should start to end their stimulus measures once economic growth “takes hold,” EU Monetary Affairs Commissioner Joaquin Almunia told a press
conference yesterday at a meeting of European finance chiefs in Gothenburg, Sweden. Exit plans should be implemented once the recovery is under way, “in our own view the latest in 2011,” European Central Bank President Jean-Claude Trichet said. (Bloomberg)
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Japanese companies plan to deepen investment cuts as profits slump, inhibiting the recovery from the nation’s worst post-war recession, the central bank’s Tankan survey showed. Large businesses aim to cut spending 10.8% this year, more than the 9.4% planned three months ago, the central bank said in Tokyo yesterday. Confidence at big manufacturers climbed to minus 33 from minus 48 in June and a record low of minus 58 in March, the Bank of Japan said. A negative number means pessimists outnumber optimists. The improvement matched economists’ predictions and only brought the index on par with the level during the 2001 recession. Confidence among large service companies rose for a second straight quarter to minus 24 from minus 29. The capital spending plans are the worst for a September survey in at least 26 years. Large companies see profits falling 22% this fiscal year, the Tankan showed. (Bloomberg)
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China’s manufacturing expanded at the fastest pace in 17 months in September on stimulus spending and this year’s record growth in new loans. The Purchasing Managers’ Index rose to a seasonally adjusted 54.3 from 54.0 in August, the Federation of Logistics and Purchasing said yesterday in an e-mailed statement in Beijing. The latest number was lower than the median estimate of 55 in a Bloomberg News survey of 13 economists. A reading above 50 indicates an expansion. An output index rose to 58.0 in September from 57.9 in August, a measure of new orders climbed to 56.8 from 56.3, and an export-order index increased to 53.3 from 52.1, according to yesterday’s statement. An index of employment index rose to 53.2, the highest level since April 2008, from 51.4. Fifteen out of the 20 industries surveyed by the agency showed expansion in September. (Bloomberg)
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The World Bank’s private investment arm said it will spend more than US$1.5bn over three years in developing countries to buy distressed assets and invest in companies struggling to refinance their debt. The Washington-based lender’s International Finance Corp. is also in talks with partners from private industry and other international institutions to raise as much as US$5bn for specific projects, it said in an e-mailed statement yesterday. The IFC and its partners aim to direct funds to businesses, pools of illiquid assets and investment funds, it said. (Bloomberg)
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The International Monetary Fund raised its forecast for global growth next year as more than US$2trn in stimulus packages and demand in Asia pull the world economy out of its worst recession since World War II. The Washington-based IMF said the economy will expand 3.1% in 2010, more than a July forecast of 2.5%. China’s economy will grow 9% and India’s 6.4%. That compares with growth of 1.7% in Japan, 1.5% in the U.S. and 0.3% in the euro region. Days after President Barack Obama and other leaders declared that the Group of 20 is now the main forum for steering the global economy, the forecasts show emerging Asian nations powering the return to growth. The IMF warned that the recovery would be “weak by historic standards” and said restoring banks to health remains a priority. The world economy will contract 1.1% this year, less than the 1.4% in July, the IMF said. So-called advanced economies including the U.S., Germany and Japan will lead the slump, shrinking 3.4%. As a bloc, emerging economies will expand 1.7% this year. (Bloomberg)
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Losses for the airlines industry as a whole got worse in 2Q, with 68 major airlines reporting net losses of US$2.3bn (RM7.96bn) following US$4bn in 1Q, the International Air Transport Association (IATA) said. “The European Union and Asian airlines had the worst 1H, accounting for around US$5bn of industry losses; US losses were moderated by much larger capacity cuts,” it said in its Airline Financial Monitor release for August-September. Airline stocks however got a boost in September due to favourable interest from investors as signs emerged of an upturn in this highly cyclical sector. It has resulted in airlines raising a further US$3bn debt and US$500m equity to cash cushion. IATA said the improvement in both passenger numbers and freight volumes from 1Q lows accelerated in the first two months of 3Q, with seasonally adjusted levels for passenger kilometres flying up 3% on 2Q and freight volumes up 6%. IATA said forecasters are getting more positive on 4Q but it is not clear whether economic recovery would continue to strengthen or fizzle out in 2010. (Malaysia Reserve)
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