Showing posts with label Sector News. Show all posts
Upbeat outlook on Maybank, CIMB
SELLING PRESSURE: Most analysts maintain investment calls as banks’ stocks fall despite positive news
NEWS that Malayan Banking Bhd and CIMB Group would not be affected by new shareholding rules being proposed in Indonesia is “positive” for both banks, analysts said, but it did little to boost their stocks yesterday.
The stocks succumbed to selling pressure in the broader market amid fragile investor sentiment throughout the Asian region.
“I think, worries about Europe’s deepening crisis outweighed the good news for the two banks,” said an analyst from a foreign research firm.
It was reported late Thursday that Indonesia plans to limit single ownership in its banks to 40 per cent, but only for new investments.
The central bank’s deputy governor responsible for banking supervision, Halim Alamsyah, told analysts on a conference call that the new regulation would not be applied retroactively.
This means that Maybank and CIMB get to keep their controlling stakes in their respectivebanks in that country.
The news led Alliance Research to raise its call on CIMB to a “buy” from “neutral” as it removed the 10 per cent discount it had earlier placed on its valuation due to the shareholding
uncertainties in that country.
The research house also upped its target price for the stock by 50 sen to RM8.47.
The news is “highly positive” for CIMB given that its 96.9 per cent-owned CIMB Niaga contributes significantly to the group’s bottomline and is its key earnings driver, Alliance Research’s banking analyst Cheah King Yoong said.
CIMB Niaga accounted for about 32 per cent of CIMB’s pre-tax profit in the first quarter.
On the other hand, the new cap could deter local lenders RHB Capital Bhd and Affin Holdings Bhd from venturing into Indonesia.
Maybank shed 0.7 per cent to RM8.69 while CIMB eased 1.3 per cent to RM7.40 as the FBM KLCI fell along with most markets in the region.
The key index eased 0.5 per cent to 1,573.59 points. Affin was unchanged at RM3.07 while RHB Capital was down by 0.4 per cent to
RM7.40.
Cheah said the new shareholding cap is likely to deter foreign financial institutions from acquiring Indonesian banks, hence, from a longer term perspective, it may decelerate the anticipated competition in the Indonesia banking sector.
"This development is therefore expected to augur well for the foreign-owned incumbents such as CIMB Niaga. The announcement should also address the uncertainties surrounding the issue permanently, rather than Bank Indonesia leaving the issue hanging in the air by suspending its decision indefinitely back in December last year, in our opinion," Cheah, who is also Alliance's vice-president of equity research, said.
Other research houses did not change their calls on Maybank and CIMB.
"I believe the market had largely priced in the worst-case scenario for the two banks, believing that even if they had been affected by the new regulation, they would have been given ample time to sell down their stakes," said the earlier analyst.
Maybank owns 97 per cent of Bank Internasional Indonesia (BII), which accounts for under 5 per cent of the group's earnings.
Alliance Research and Hong Leong Investment Bank Research kept their "overweight" stance on the local banking sector, while RHB Research maintained a "neutral" after latest banking data showed that loans growth decelerated slightly to 12.1 per cent year-on-year in April, from 12.2 per cent in March.
Data showed that there was higher growth in the business segment in April while the household segment was marginally lower
From Business Times: Upbeat outlook on Maybank, CIMB
NEWS that Malayan Banking Bhd and CIMB Group would not be affected by new shareholding rules being proposed in Indonesia is “positive” for both banks, analysts said, but it did little to boost their stocks yesterday.
The stocks succumbed to selling pressure in the broader market amid fragile investor sentiment throughout the Asian region.
“I think, worries about Europe’s deepening crisis outweighed the good news for the two banks,” said an analyst from a foreign research firm.
It was reported late Thursday that Indonesia plans to limit single ownership in its banks to 40 per cent, but only for new investments.
 |
This means that Maybank and CIMB get to keep their controlling stakes in their respectivebanks in that country.
The news led Alliance Research to raise its call on CIMB to a “buy” from “neutral” as it removed the 10 per cent discount it had earlier placed on its valuation due to the shareholding
uncertainties in that country.
The research house also upped its target price for the stock by 50 sen to RM8.47.
The news is “highly positive” for CIMB given that its 96.9 per cent-owned CIMB Niaga contributes significantly to the group’s bottomline and is its key earnings driver, Alliance Research’s banking analyst Cheah King Yoong said.
CIMB Niaga accounted for about 32 per cent of CIMB’s pre-tax profit in the first quarter.
On the other hand, the new cap could deter local lenders RHB Capital Bhd and Affin Holdings Bhd from venturing into Indonesia.
Maybank shed 0.7 per cent to RM8.69 while CIMB eased 1.3 per cent to RM7.40 as the FBM KLCI fell along with most markets in the region.
The key index eased 0.5 per cent to 1,573.59 points. Affin was unchanged at RM3.07 while RHB Capital was down by 0.4 per cent to
RM7.40.
Cheah said the new shareholding cap is likely to deter foreign financial institutions from acquiring Indonesian banks, hence, from a longer term perspective, it may decelerate the anticipated competition in the Indonesia banking sector.
"This development is therefore expected to augur well for the foreign-owned incumbents such as CIMB Niaga. The announcement should also address the uncertainties surrounding the issue permanently, rather than Bank Indonesia leaving the issue hanging in the air by suspending its decision indefinitely back in December last year, in our opinion," Cheah, who is also Alliance's vice-president of equity research, said.
Other research houses did not change their calls on Maybank and CIMB.
"I believe the market had largely priced in the worst-case scenario for the two banks, believing that even if they had been affected by the new regulation, they would have been given ample time to sell down their stakes," said the earlier analyst.
Maybank owns 97 per cent of Bank Internasional Indonesia (BII), which accounts for under 5 per cent of the group's earnings.
Alliance Research and Hong Leong Investment Bank Research kept their "overweight" stance on the local banking sector, while RHB Research maintained a "neutral" after latest banking data showed that loans growth decelerated slightly to 12.1 per cent year-on-year in April, from 12.2 per cent in March.
Data showed that there was higher growth in the business segment in April while the household segment was marginally lower
From Business Times: Upbeat outlook on Maybank, CIMB
两月完成 共享网络计划 9公司分组4G联盟
（吉隆坡11日讯）我国目前共9家公司拥有4G执照，鉴于我国市场或只需2至3个4G网络服务，因此大马通讯与多媒体委员会将推出“4G联盟计划”，让业者各自合组成4G网络服务集团。
负责国内电信监管机构的大马通讯与多媒体委员会，预计将在两个月内，批准约2至4个“4G联盟计划”。
该委员会主席拿督莫哈末沙里尔说，国内将出现2至4个4G联盟组合，至于最后出现几个4G联盟组合目前还无法确定。
“或许每个联盟由两家公司组合会更好……这些业者正在找寻本身的伙伴，因此我们希望在未来两个月内完成有关计划。”
技术支援新模式
他强调，届时可能只有2或3个4G网络服务，而不会再有8个或9个4G网络服务。
“这是非常新的合作模式，国内的法令及现有的技术也支援这种模式。届时一个4G网络，可能是由两三家公司共同分享。”
Ageing oil palm plantations likely to lift CPO price
PETALING JAYA: Anticipation over declining crude palm oil (CPO) production due to ageing plantations in major producing countries including Malaysia, would likely bolster the commodity to hit RM4,000 per tonne by second half of this year, according to industry players.
Malaysian Estate Owners Association president Boon Weng Siew who pegged the country's total planted area with palm trees of over 20 years old to between 30% and 40%, said many of the ageing palm trees in Malaysia were mostly under the smallholders' holdings.
Of the total CPO production, smallholders contributed the bulk at about 52% while the rest was from large plantation companies, according to the National Association of Smallholders.
Despite a RM7,000 per ha grant by the Government for smallholders to carry out replanting activities,
Boon said: “It was difficult to persuade them especially with the CPO price trading above RM2,000 per tonne over the past three to four years.
“What more with the CPO prices currently trading in the region of RM3,300 to RM3,370 per tonne.”
Boon, a veteran planter, said the reluctance to undertake active replanting activities could also be due to the “insufficient” grant to cover the entire replanting costs up to maturity period of about three to four years.
He pointed out that the actual replanting cost up to maturity period should be about RM12,000 per ha given the current high costs of fertiliser and pesticides.
On the country's average yields, Boon said the current national average was about 20.2 tonnes of fresh fruit bunches (FFB), 20% oil extraction rate (OER) and about four tonnes of CPO per ha.
“At the current replanting rate, it is actually difficult to comprehend how Malaysia can achieve its vision for palm oil, i.e. 35 tonnes of FFB, 25% OER and 8.75 tonnes of CPO per ha per year by 2020,” he added.
The Malaysian Palm Oil Board (MPOB) had in early January said eight entry-point projects (EPPs) under the Government's Palm Oil NKEAshowed commendable achievements in meeting the targets set in 2011, the first year of its implementation.
For EPP1 in the upstream sector, the area of backlog cleared by plantations and organised smallholders, achieved 83.2% or 83,200ha last year, compared with 100,000ha in the earlier target.
Areas of new planting and replanting by smallholders reached 74.6% of the total 26,600ha. Of the total application for 37,432.64ha, about 29,995.09ha were approved and verified, said MPOB.
MPOB said oil palm felled and replanted was at 19,768.54ha last year where 8,429ha were for new planting and 11,338.92ha for replanting.
Meanwhile, United Malacca Bhd chief executive officer Dr Leong Tat Thimsaid replanting should be taken seriously given the high ageing profile of oil palm trees especially those over 25 years othat tended to drag the yields lower.
“In well established estates, I believe that replanting accounts for 2% to 5% of total planted area annually,” he said.
Leong estimated that the current replanting cost to maturity for most plantations could range from RM10,000 to RM13,000 per ha.
“Older palm trees are taller thus making harvesting very difficult. What more with local planters currently facing serious shortage of foreign fruit harvesters.”
He opined that the stagnating average yield performance in Malaysia among others was due to the conversion of the “hilly” rubber areas into oil palm plantations some 20 years ago.
Meanwhile, Standard Chartered Bank in its global research report “Crude palm oil - A price storm is brewing” said a severe structural slowdown in palm oil output was under way.
“The downtrend will worsen over the coming seasons with the deceleration in palm output caused largely by the ageing profile of estates in South-East Asia, which accounts for over 90% of the market, as well as sub-optimal farming practices across much of the region.
“Our conservative estimate is that more than 20% of trees in Malaysia are over 25-years-old. In reality, this could be more,” said the report.
Its long-term bullish view on CPO, relatively accommodative global interest rates and a deteriorating age profile of trees in Malaysia, should help to convince planters that replanting decision is best not to be delayed.
“We also believe there is a price storm brewing in the industry due to a deceleration in yields, the severity of which will be bullish for the market,” it added.
StanChart has forecast the annual average CPO price this year at RM3,450 per tonne. It has also revised second quarter (Q2) 2012 CPO price to RM3,500, Q3 at RM3,350 and Q4 at RM3,700 respectively.
As of 5.30pm yesterday, the benchmark third-month CPO futures contract for July was traded at RM3,373 per tonne, up RM13 from RM3,360 per tonne on Monday. - The Star Biz
Wednesday May 9, 2012
Indian log importers return with new orders
KUCHING: India, the No. 1 buyer of Sarawak's tropical logs, has returned with new orders following the recovery of its currency.
Ta Ann Holdings Bhd financial controller Augustine Siaw said Indian log importers slowed down their buying activities in the fourth quarter last year after the rupee depreciated in value.
“They have now come back to buy our logs as the rupee has recovered,” he told StarBiz.
Ta Ann exported 74% of its 2011 export of nearly 148,000 cu m of logs to India.
Sarawak Timber Association's figures revealed that India imported 1.86 million cu m worth RM1.13bil or 60% of Sarawak's total log exports last year.
In 2010, India purchased 2.21 million cu m of Sarawak logs.
Ta Ann reported a 23% increase in average log selling prices last year, compared with 2010 but recorded a 22% drop in export volume due to lower production due to adverse weather conditions.
Meanwhile, Ta Ann and several other Sarawak-based listed timber companies reported a steep increase in their log production volumes in the first quarter this year.
During the Jan-March period, Ta Ann's production rose to 81,040 cu m or more than 12% from 72,284 cu m a year earlier.
Jaya Tiasa Holdings Bhd raised its production volume by more than 45% to 288,828 cu m from 186,222 cu m previously. Sister company Subur Tiasa Holdings Bhd's (Subur) production volume grew by more than 65% to 134,654 cu m in the first quarter from 81,067 cu m in the previous corresponding period.
Both Jaya Tiasa and Subur are under the stable of the diversified Rimbunan Hijau group.
Better weather conditions this year have facilitated log harvesting activities. Sarawak was hit by extreme wet weather in the first quarter last year which hampered logging activities.
In 2011, Sarawak's log production fell below 10 million cu m, to 9.61 million cu m, which was the lowest in more than two decades. In terms of export, the state recorded a 30% drop last year to 3.1 million cu m worth RM1.85bil.
The 2010 and 2009 volumes were 10.15 million cu m and 10.37 million cu m respectively. In 1991, the state logged a record 19 million cu m, and this was gradually reduced and maintained at about 12 million cu m a year in the past 10 years to ensure sustainable forest management. The Star Biz
Wednesday May 9, 2012
Rising value of properties a real concern
KUALA LUMPUR: The Government needs to address the issue of affordability of residential properties as persistently high prices have become an issue to many people.
“We have computed the affordability (issue). Prices have risen to a level that has created some concern. In fact the International Monetary Fund (IMF) in its Article 4 consultation report has mentioned that this is the main risk or vulnerability facing the Malaysian economy: overvalued house prices,” Ratings Agency Malaysia Holdings Bhd (RAM) chief economist Dr Yeah Kim Leng said.
“It is not a bubble yet largely because for certain segments the income level is sufficient to absorb those kind of (high priced) houses. But there comes a point where you will find declining demand largely because of rising vacancies or declining rental yields that will help to cap property prices,” Yeah told journalists at a press briefing yesterday after RAM's annual general meeting.
Yeah expected an eventual soft landing for the property market in Malaysia but also said that developers should be ready for any change in market dynamics.
“Developers must take the risk that should there be a slowdown or market crash (that) they are in a position to absorb it without creating problems for the banking sector or economy. But at this juncture we are quite comfortable that most developers are going in (to the market) with their eyes fully open,” Yeah said.
“Most of the property companies that we have rated (credit rating) are fairly strong in their credit quality. Overall we are looking at maybe certain smaller developers that will be at risk but by and large I think that the property market is in a sustainable basis. But watch out for too high prices that will create affordability problems,” he added.
Meanwhile, RAM's CEO Foo Su Yin said the agency expected corporate bond issuances for the whole of Malaysia will total between RM80bil and RM85bil this year from about RM70bil in 2011 noting that issuances had accelerated in the first four months in 2012 compared to the previous year.
“The issuance in the first four months of RM44bil has already exceeded what was (at the level) half year last year so the RM80bil-RM85bil is achievable this year. We expect most of the bond issuances to come from the infrastructure and the banking sector,” Foo said.
On another matter, Yeah said that the Malaysian economy should be fairly protected against any economic shocks that comes out of Europe due to the ongoing economic crisis there and that the first quarter economic growth may even beat analysts expectations.
“Domestic demand has been fairly robust and with slightly firmer exports we should be doing fairly well. Nevertheless the risks still remain substantial because of the, so-called, regime changes that had happened in Europe that put the whole Euro at risk. Malaysia has so far been able to ride through the soft patch in the global economy,” he said.
Meanwhile, on the issue of the growing government debt or also known as deficits of presently about 56% of GDP, Yeah said this figure may hover at about 56%-57% by the end of this year and said debt should ideally be used to finance productive investments to ensure future economic growth.
He also said the risks from the non-bank lending sector also known as the shadow banking system could be limited as its portfolio was relatively small compared to total bank loans portfolio and may not pose a systemic risk to the economy at this point in time.
“We may have however, isolated problems arising but it should not pose a systemic risk to the economy or banking sector,” he added.- The Star Biz
Tag :
Mahsing,
Sector News
联合利华旧址8公顷 马星竞标孟沙黄金地
（吉隆坡25日讯）马星集团（MahSing，8583，主板产业股）证实，参与竞标孟沙一块占地8.09公顷的地皮，并计划发展综合商业与住宅项目。
上述地皮，正是大马联合利华（Unilever）的肥皂和人造奶油制造厂的旧址。
马星集团总执行长兼董事经理丹斯里梁海金向记者披露，基于上述地皮位于黄金地段（位于孟沙路及马洛夫路的交界处），属于主要商用地皮，因此，该公司计划将之发展综合商业与住宅项目。
大选后公布结果
早前有媒体报道，除了马星集团有份竞标该地皮之外，UEM置地控股（UEMLand，5148，主板产业股）和一些官联公司（GLC）也对该地皮虎视眈眈。
据悉，竞标结果要等到大选落幕后才会宣布。
自从大马联合利华在2003年迁出该厂后，该厂房便弃用至今。
早前，这块地皮原属于铁路资产公司（Perbadanan Aset Keretapi），但是后来已转手给房地产投资有限公司（Pelaburan Hartanah Berhad，PHB）。
PHB是土著房地产信托基金（Yayasan Amanah Hartanah Bumiputera）的子公司，后者是政府在2006年的财政预算案里成立的公司，主要是为了促进土著在主要房地产的拥有权。
行内消息指出，PHB在去年便邀请竞标上述地段，计划发展为高档的综合项目，包含了商用以及住宅房产。
至于马星集团所提呈的发展献议的发展总值是多少，梁海金披露：“我们已经有规划，但是目前尚言之过早，等结果出炉后，我们会公布详情。”
另外，有消息指出，竞标者已经向PHB的董事部及独立顾问，介绍了两轮有关他们的发展计划。
“董事部选择发展商的标准，在于潜在收益、项目概念与设计，以及交通疏散系统等。”
另外，一名产业估价师也认为，上述地段最适合发展综合商业与住宅项目。
他预计，该发展项目应该会包括30%至40%的住宅单位，其余的则有办公大楼、酒店、购物中心以及店铺。
他称：“该项目的地积比率应该是介于6至8倍，发展总值预计介于40亿至50亿令吉。”
他补充说，基于该地皮是有期地契，因此，PHB应该向联邦直辖区土地局申请更新地契，最高达99年。
2012-04-25 19:34
EPF working on the master plan for 926ha RRI land
PETALING JAYA: The tender for the re-development of the 926ha out of the 1,215ha Rubber Research Institute (RRI) Malaysia land in Sungai Buloh, that is now controlled by Kwasa Land Sdn Bhd, is expected to be called by the third or fourth quarter of this year, sources said.
The new developments would give the RRI land a huge physical and economic boost that would lift the land value of the area.
Sources said the Employees Provident Fund (EPF) was now working on the master plan for the 926ha site so that it would be able to call for tenders for some parcels of the land as the entire development was supposed to take place over a 10 to 15-year period.
Sources said the parcels were likely to be broken down to between 100 acres and 500 acres and as the RRI land had attracted massive interest, sources believed the tenders were something property developers were waiting for.
The tenders were supposed to be out by June but because this development required considerable scrutiny and strategising, it might take a little longer.
Besides the development led by Kwasa, the original owner of the land, RRI, would remain at the same location.
It will get a new hub and under the agreement with Kwasa, RRI will retain 216ha.
It intends to build the most modern research facilities including a museum, a commodity college, its headquarters and business clusters.
This will be funded by RRI from the proceeds of monetisation of the 1,215 ha that it had once owned.
In an interview with StarBiz, Malaysian Rubber Board (MRB) Director-General Datuk Dr Salmiah Ahmad declined to disclose the amount it would be getting for monetising the 1,215ha to Kwasa.
She also declined to reveal how much it would cost MRB to develop the new facilities.
“The proceeds will be given in different portions (over a period of time).
“In addition to this, the Government will continue to fund MRB for its management and operations,” she said. RRI is one of the three agencies that come under the purview of MRB.
She also could not say when the first portion of funds will be disbursed by Kwasa to MRB.
However, she indicated that MRB must submit its master plan for development of the 216ha by this year to the Government.
She said EPF would pay for the land but the pension fund would be able to recoup much of this when it tenders out the remaining 926ha, or 76% of the 1,215ha.
Of the total land bank, 73ha was allocated for MRT Co to build the Sungai Buloh MRT depot. That portion of land is being cleared by the company currently for development.
The Sungai Buloh land is divided by the Jalan Sungai Buloh-Shah Alam highway which slices the 216ha in the middle.
The northern portion is under the authority of the Shah Alam City Council. It houses the RRIM research station and the MRT depot.
The southern portion comes under the Petaling Jaya City Council. Townships around the area include Kg Baru Sungai Buloh, Kg Sungai Kedondong, Taman Subang Bestari, Tropicana Golf and Country Resort and Damansara Indah.
Salmiah said MRB would also be monetising other land bank where its facilities were located.
This included Menara Getah Asli which fronts the Petronas Twin Towers in Jalan Ampang, the RRI building in Jalan Ampang, and two others, one each in Jalan Stonor and Jalan Lidcol.
“MRB is blessed with some very strategic properties.
“(But) anything we need to do with these properties would be decided by the board and has to be approved by the Plantation Industries and Commodities Ministry. We also need to consult the Finance Ministry. It is really up to board to decide what it wishes to do with these assets and when it wants to do it.
“Our core activity is research and while we want to realise the value of our assets, (we have to do it systematically). We have to building our new premises before we can move out from our present offices that are located all over the Klang Valley,” she said.
She added that whatever the plans might be for the 926ha was not going to affect MRB, however, being on that site itself, the MRB would have to be kept in the loop, especially those near the 216ha. - The Star Biz
Monday April 23, 2012
Tag :
Sector News
Mistry restates RM4,000 palm oil forecast
Palm oil may gain 15 per cent by the end of June, according to Godrej International Ltd’s Dorab Mistry, restating a year-long call for a rally to RM4,000 (US$1,302) a metric ton after prices dipped.
“I am very happy to reiterate my forecast,” Mistry said in an e-mailed response to questions. The Godrej director, who’s correctly forecast price trends over the past year, has been predicting a rally to that level since at least March 2011.
Wilmar International Ltd, the world’s biggest palm-oil processing company, is Mistry’s favorite palm stock, he said.
While prices in Malaysia have climbed 9.5 per cent this year, in line with Mistry’s outlook, they’ve fallen 4.2 per cent since April 10 amid concern the global recovery may be at risk as economic growth in China slows and the European debt crisis worsens. Shares in Wilmar International, which have dropped over the past 12 months, are “good value,” he said.
Palm oil for July delivery ended little changed at RM3,477 on the Malaysia Derivatives Exchange yesterday, the lowest close for the most-active contract since March 30. That’s down from a 13-month high of RM3,628 on April 10.
“Currently, the macro picture is undergoing a reassessment and that has led some players to de-risk,” said Mistry, who’s traded palm oil for more than three decades. “This sentiment changes from time to time, and as time goes by, each such change lasts for a shorter duration. Time will tell.”
Last year, Mistry predicted that the price of the world’s most-consumed cooking oil, which is used to make instant noodles and candy, would bottom out at about RM2,800 before rebounding. Its lowest price was RM2,754 on Oct. 6. Chandran Sinnasamy, trading head at Kuala-Lumpur based LT International Futures (M) Sdn, said last month that his views are respected by the industry.
China, the biggest user of cooking oils, reported lower- than-expected gross domestic product growth in the first quarter, raising concern that commodity demand may slow. Europe’s resurgent debt crisis has also roiled equity and commodity markets as government bond yields climbed.
Production of palm oil in Malaysia and Indonesia in January and February fell slightly short of forecasts, Mistry said in a speech in Beijing on March 27. The two countries are the world’s largest producers.
March, Malaysian production was 1.21 million tons, according to the nation’s palm oil board. That’s 14 per cent lower than a year ago and 2.1 per cent more than February. Malaysia had a so-called high cycle of production in 2011, resulting in record output of 18.9 million tons. A so-called low cycle that began in January meant output would range between 18.6 million and 19 million tons in 2012, Mistry said March 7.
The ratio of global stockpiles to demand for nine edible oils, including soy and palm, may drop this year to the lowest level since 1977 as drought hurt soybean crops in South America, according to data from the U.S. Department of Agriculture.
“At current prices, Wilmar looks very good value,” said Mistry. “They have by far the most balanced and diversified palm portfolio split between upstream, processing and FMCG,” he said, referring to fast-moving consumer goods. While Singapore- listed Wilmar is one of Godrej’s suppliers, he doesn’t own the company’s stock, Mistry said.
Wilmar shares ended at S$4.89 yesterday, valuing the company at S$31.3 billion (US$25 billion). They’ve dropped 7.2 per cent over the past year, and 2.2 per cent in 2012. Of the 30 analysts’ calls tracked by Bloomberg, there are 11 “buy” recommendations and 14 “holds” on Wilmar stock. -- Bloomberg
Large plantation companies in Malaysia can become the new Petronas of the greentech industry
Malaysia has the potential to become one of the global leading suppliers in green technology parts and components for green technology-based companies worldwide.
Malaysian-German Chamber of Commerce and Industry (MGCC) general manager Thomas Brandt said however, not much had been done by the country to elevate itself to that position.
He said by now, there should be better coordination and concerted efforts between ministries and relevant agencies to promote Malaysia as a hub for greentech companies.
“The local small and medium-scale enterprises will benefit in terms of technology transfer from multinational corporations involved in greentech activities,'' Brandt told StarBizWeek after a briefing on the upcoming Intersolar 2012 here yesterday.
Brandt said Malaysia was the fourth largest producer of solar cells in the world although it had not been actively promoting solar power usage.
He said Malaysia's lack of commitment in this area had dampen the interest of many foreign greentech companies and investors. “If no immediate steps are taken to address the issue, Malaysia risks losing out to other countries in the region especially Indonesia, Singapore and Thailand.''
He said Singapore was ahead in the region when it comes to the greentech industry, while Indonesia and Thailand were actively attracting foreign investors to their shores.
Barndt said the greentech industry was a multi-billion dollar industry as countries all over the world were now looking at new energy sources including renewable energy.
He said Malaysia could fully exploit solar power due to its sunny conditions and produce renewable energy from oil palm-based biomass. “Large plantation companies in Malaysia can become the new Petronas of the greentech industry,” added Brandt.
Meanwhile, the upcoming Intersolar 2012, which will be held in Munich, Germany is slated to be the world's largest gathering of manufacturers, suppliers, distributors, utility and service companies in solar business as it expects the participation of 2,400 exhibitors and 80,000 visitors from 150 countries.
From: The Star
From: The Star
Saturday April 7, 2012
Industry experts forecast better prices for crude palm oil (CPO) this year in 2012
KUALA LUMPUR: Industry experts have different price forecasts for crude palm oil (CPO) this year, but they all seem to agree that 2012 will be a better year for the commodity than the past two years. Their forecast average prices range from RM3,100 to RM3,610 per tonne. In comparison, CPO was traded at an average of RM3,210 in 2011 and RM2,701 in 2010.
ISTA Mielke GmBH (Oil World) executive director Thomas Mielke said CPO prices would average about RM3,450 per tonne, given that the outlook for palm oil output was going to be moderate this year.
“We expect Malaysia will increase its CPO output by only about 0.4 million tonnes to 19.3 million tonnes, while Indonesia is expected to slow its output by 1.6 million tonnes or less, to 25.5 million tonnes,” he said yesterday during the palm oil price outlook session at the Palm & Lauric Oils Conference & Exhibition Price Outlook 2012 with the theme Global Shocks Local Impact. Mistry expects the price of CPO to hover at between RM3,450 and RM3,600 after June.
Another speaker at the conference, Malaysian Palm Oil Board (MPOB) senior research officer Ramli Abdullah, expects CPO prices to range from RM3,100 to RM3,610 per tonne. He said the prices were usually influenced by economic factors such as soybean oil prices, production and crude palm oil. “The production of palm oil for Malaysia is expected to increase to 19.36 million tonnes this year under normal weather situation and increase in new plantings, matured area and replanting,” he added.
LMC International chairman Dr James Fry said he forecast Malaysia's CPO production to be unchanged from the 2011 total at 18.9 million tonnes and forecast CPO price to be at an average of RM3,250 per tonnes if Brent crude oil trades at US$125 (RM375) per barrel. Rabobank International Asia Head of Food & Agribusiness Research & Advisory John Baker forecast Malaysia's CPO production this year to be 19.2 million tonnes, while price was expected to peak to near RM3,500 per tonne before starting to moderate after the second half of 2012.
Godrej International Ltd director Dorab Mistry believes that Malaysia's CPO production this year would be at the range of between 18.6 million tonnes and 19 million tonnes. “I'm expecting a flat production for Malaysia this year as a result of a low cycle for palm trees,” he said. Malaysia's CPO production in 2011 was 18.9 million tonnes. He expects the price of CPO to hover at between RM3,450 and RM3,600 per tonne after June and that it would decline only after evidence of the low cycle end around November. Touching on the export taxes by the Indonesia, he said Malaysia had effectively asked its refiners to fend for themselves. “Malaysia can opt to adopt a carbon copy of Indonesia's export tax regime and do away completely with the duty-free export quota for CPO. As they say, if you cannot beat them, you join them!” he said. It was reported that Indonesia had last year cut export taxes on refined grades that helped its domestic processors restart their factories and offer discounts to overseas buyers. That turned margins negative for refiners in Malaysia and the Government was looking at ways to keep investments flowing into its RM60bil sector. Malaysia usually charges a high duty on crude palm oil shipments to protect its domestic refining industry. It does not impose any export taxes on processed palm oil. The country has 51 refineries with a combined yearly capacity of 22.9 million tonnes. It is planning new capacity of 9.6 million tonnes
3-Mar-12 The Star Biz
“We expect Malaysia will increase its CPO output by only about 0.4 million tonnes to 19.3 million tonnes, while Indonesia is expected to slow its output by 1.6 million tonnes or less, to 25.5 million tonnes,” he said yesterday during the palm oil price outlook session at the Palm & Lauric Oils Conference & Exhibition Price Outlook 2012 with the theme Global Shocks Local Impact. Mistry expects the price of CPO to hover at between RM3,450 and RM3,600 after June.
Another speaker at the conference, Malaysian Palm Oil Board (MPOB) senior research officer Ramli Abdullah, expects CPO prices to range from RM3,100 to RM3,610 per tonne. He said the prices were usually influenced by economic factors such as soybean oil prices, production and crude palm oil. “The production of palm oil for Malaysia is expected to increase to 19.36 million tonnes this year under normal weather situation and increase in new plantings, matured area and replanting,” he added.
LMC International chairman Dr James Fry said he forecast Malaysia's CPO production to be unchanged from the 2011 total at 18.9 million tonnes and forecast CPO price to be at an average of RM3,250 per tonnes if Brent crude oil trades at US$125 (RM375) per barrel. Rabobank International Asia Head of Food & Agribusiness Research & Advisory John Baker forecast Malaysia's CPO production this year to be 19.2 million tonnes, while price was expected to peak to near RM3,500 per tonne before starting to moderate after the second half of 2012.
Godrej International Ltd director Dorab Mistry believes that Malaysia's CPO production this year would be at the range of between 18.6 million tonnes and 19 million tonnes. “I'm expecting a flat production for Malaysia this year as a result of a low cycle for palm trees,” he said. Malaysia's CPO production in 2011 was 18.9 million tonnes. He expects the price of CPO to hover at between RM3,450 and RM3,600 per tonne after June and that it would decline only after evidence of the low cycle end around November. Touching on the export taxes by the Indonesia, he said Malaysia had effectively asked its refiners to fend for themselves. “Malaysia can opt to adopt a carbon copy of Indonesia's export tax regime and do away completely with the duty-free export quota for CPO. As they say, if you cannot beat them, you join them!” he said. It was reported that Indonesia had last year cut export taxes on refined grades that helped its domestic processors restart their factories and offer discounts to overseas buyers. That turned margins negative for refiners in Malaysia and the Government was looking at ways to keep investments flowing into its RM60bil sector. Malaysia usually charges a high duty on crude palm oil shipments to protect its domestic refining industry. It does not impose any export taxes on processed palm oil. The country has 51 refineries with a combined yearly capacity of 22.9 million tonnes. It is planning new capacity of 9.6 million tonnes
3-Mar-12 The Star Biz
Mobile service operators start talks on merger and acquisitions
Wednesday February 22, 2012 By YVONNE TAN
PETALING JAYA: Consolidation talks
have begun in the telecommunication space where as many as nine parties
have licences to offer mobile services. “There are clearly too
many operators for a market like Malaysia and it would naturally result
in some form of consolidation,” said a telco analyst.
Industry sources said that one of the more active players pursuing a merger and acquisition exercise was the YTL Group which has approached Asiaspace Sdn Bhd and Green Packet Bhd . Asiaspace chairman Datuk Abdul Ghani Abdullah said that consolidation was the most “logical” thing to do.
Same wavelength:
From left: Puan, YTL Communications executive chairman Tan Sri Francis
Yeoh, Tan and Abdul Ghani.
Last
year, the Malaysian Communications and Multimedia Commission named nine
companies as recipients of the 2.6 GHz spectrum, to be used for the
roll-out of long-term evolution (LTE) or 4G services. These are the four 3G players namely DiGi.Com Bhd , Celcom Axiata Bhd , Maxis Bhd and U Mobile Sdn Bhd ; and four WiMAX players Asiaspace, Packet One Networks Sdn Bhd or P1 (a subsidiary of Green Packet), REDtone International Bhd and YTL Communications Bhd .
The ninth player named was Puncak Semangat, a company controlled by billionaire Tan Sri Syed Mokhtar Al-Bukhary
.
Abdul Ghani said consolidation would enable players to combine their spectrum to offer more efficient services to customers, and hence, help solve the issue of spectrum being spread too thin among too many players.“However, the (consolidation) talks are still at an early stage,” said one industry source.
Aside from the three incumbents in the telco voice market, namely DiGi, Celcom and Maxis, the other players that have made the most inroads in the 4G industry are YTL Communications, P1 and U Mobile which is controlled by tycoon Tan Sri Vincent Tan .
YTL Communications launched its YES 4G wireless network in November 2010 and as at November last year, the company was said to have a subscriber base of more than 300,000. It was reported that the company would break even when it had one million subscribers.
Green Packet has also been keeping busy with its investments in the area of broadband. For the third quarter ended September 2011, Green Packet reported net loss of RM24.3mil compared with net loss of RM13.7mil a year earlier, largely due to such investments. “But it will be an historic year for P1 this year, as in less than four years it will turn EBITDA (earnings before interest, tax, depreciation and amortisation) positive. You must realise that we are in an industry where the gestation periods are long,” said group managing director C.C. Puan recently.
As for U Mobile's financial position, this cannot be immediately ascertained as it is privately owned.
Meanwhile, amid reports that U Mobile was seeking to be listed, a source said that Green Packet had been approached by investment banks to consider an initial public offering of P1. “If Green Packet turns EBITDA positive this year, PI should be in a good position for a listing,” said the source.
Industry sources said that one of the more active players pursuing a merger and acquisition exercise was the YTL Group which has approached Asiaspace Sdn Bhd and Green Packet Bhd . Asiaspace chairman Datuk Abdul Ghani Abdullah said that consolidation was the most “logical” thing to do.
A telco analyst points out that there are too
many operators in a market like Malaysia and it would naturally result
in some form of consolidation.“Capital expenditure is so high in this industry that it is impossible for smaller companies to survive,” he told StarBiz when contacted yesterday.YTL had not answered StarBiz queries at press time while Green Packet officials declined to comment.
The ninth player named was Puncak Semangat, a company controlled by billionaire Tan Sri Syed Mokhtar Al-Bukhary
.
Abdul Ghani said consolidation would enable players to combine their spectrum to offer more efficient services to customers, and hence, help solve the issue of spectrum being spread too thin among too many players.“However, the (consolidation) talks are still at an early stage,” said one industry source.
Aside from the three incumbents in the telco voice market, namely DiGi, Celcom and Maxis, the other players that have made the most inroads in the 4G industry are YTL Communications, P1 and U Mobile which is controlled by tycoon Tan Sri Vincent Tan .
YTL Communications launched its YES 4G wireless network in November 2010 and as at November last year, the company was said to have a subscriber base of more than 300,000. It was reported that the company would break even when it had one million subscribers.
Green Packet has also been keeping busy with its investments in the area of broadband. For the third quarter ended September 2011, Green Packet reported net loss of RM24.3mil compared with net loss of RM13.7mil a year earlier, largely due to such investments. “But it will be an historic year for P1 this year, as in less than four years it will turn EBITDA (earnings before interest, tax, depreciation and amortisation) positive. You must realise that we are in an industry where the gestation periods are long,” said group managing director C.C. Puan recently.
As for U Mobile's financial position, this cannot be immediately ascertained as it is privately owned.
Meanwhile, amid reports that U Mobile was seeking to be listed, a source said that Green Packet had been approached by investment banks to consider an initial public offering of P1. “If Green Packet turns EBITDA positive this year, PI should be in a good position for a listing,” said the source.
Indonesia’s withdrawal of ownership ruling to benefit M’sian banks
Thursday February 16, 2012
PETALING JAYA: The move by Indonesia to
drop a controversial policy that would limit ownership of its banks is
good news for Malaysian banking groups with a position there, but the
market's reaction has been muted.
Malayan Banking Bhd (Maybank) and CIMB Group Holdings Bhd , who stand to lose if Indonesia went ahead with the ruling, were unchanged at the close yesterday. Maybank added one sen to RM8.53, while CIMB lost one sen to RM7.30. Maybank has a 95% stake in Bank Internasional Indonesia (BII) and CIMB a 97% stake in PT Bank CIMB Niaga TK .
A Maybank spokesman said that although it welcomed the announcement, it was awaiting further details from the Indonesian authorities on this issue. “Until then, we are not in a position to provide any comments,” he said. Maybank is due to release its financial results next week. CIMB said it was unable to comment on the matter.
Alliance Research analyst Cheah King Yoong noted that CIMB would be the biggest beneficiary should the proposed policy be reversed as its Indonesian subsidiary contributed to more than 30% of the group's earnings last year. In comparison, BII's contribution to Maybank was only 6% of pre-tax profit, CIMB Research said in a note to clients.
Reuters had on Tuesday quoted Indonesia's Deposit Insurance Agency (LPS) as saying the country would backtrack on the proposal to impose a shareholding cap on its domestic banks as it did not want to scare off potential foreign investors from the sale of state-owned Bank Mutiara. However, Alliance's Cheah said the news had come from a government-linked agency rather than as an official guideline from the central bank itself.
Nonetheless, he told StarBiz that it was unlikely the policy would be revisited in the near term as it would stoke investor unease and go against Asean's current wave of liberalisation. Bank Indonesia, the central bank, courted controversy last year when it first suggested the ruling, which would have forced offshore investors and banks to cut their stakes in local lenders. Takeovers in the banking sector were also temporarily barred pending a final decision from Bank Indonesia. Foreign banks are currently allowed to own up to 99% of local banks. It is learnt that LPS has been trying to sell Bank Mutiara since last year, following its takeover of the ailing company in 2008.
The agency has a mandate to fix and sell the bank within three to five years after the acquisition, according to The Jakarta Post. Under Indonesia's law on state bailouts, LPS has to sell the bank for at least the price the agency paid. Besides Maybank and CIMB, RHB Capital Bhd and Affin Holdings Bhd have expressed interest in Indonesian banks. RHB is reportedly eyeing an 80% stake in PT Bank Ina Perdana worth RM1.16bil, and Affin is said to be keen on PT Bank Ina Perdana.
Earlier this week, BIMB Holdings Bhd subsidiary Bank Islam was reported to be in early talks to buy a stake in PT Bank Muamalat Indonesia .
Malayan Banking Bhd (Maybank) and CIMB Group Holdings Bhd , who stand to lose if Indonesia went ahead with the ruling, were unchanged at the close yesterday. Maybank added one sen to RM8.53, while CIMB lost one sen to RM7.30. Maybank has a 95% stake in Bank Internasional Indonesia (BII) and CIMB a 97% stake in PT Bank CIMB Niaga TK .
A Maybank spokesman said that although it welcomed the announcement, it was awaiting further details from the Indonesian authorities on this issue. “Until then, we are not in a position to provide any comments,” he said. Maybank is due to release its financial results next week. CIMB said it was unable to comment on the matter.
Alliance Research analyst Cheah King Yoong noted that CIMB would be the biggest beneficiary should the proposed policy be reversed as its Indonesian subsidiary contributed to more than 30% of the group's earnings last year. In comparison, BII's contribution to Maybank was only 6% of pre-tax profit, CIMB Research said in a note to clients.
Reuters had on Tuesday quoted Indonesia's Deposit Insurance Agency (LPS) as saying the country would backtrack on the proposal to impose a shareholding cap on its domestic banks as it did not want to scare off potential foreign investors from the sale of state-owned Bank Mutiara. However, Alliance's Cheah said the news had come from a government-linked agency rather than as an official guideline from the central bank itself.
Nonetheless, he told StarBiz that it was unlikely the policy would be revisited in the near term as it would stoke investor unease and go against Asean's current wave of liberalisation. Bank Indonesia, the central bank, courted controversy last year when it first suggested the ruling, which would have forced offshore investors and banks to cut their stakes in local lenders. Takeovers in the banking sector were also temporarily barred pending a final decision from Bank Indonesia. Foreign banks are currently allowed to own up to 99% of local banks. It is learnt that LPS has been trying to sell Bank Mutiara since last year, following its takeover of the ailing company in 2008.
The agency has a mandate to fix and sell the bank within three to five years after the acquisition, according to The Jakarta Post. Under Indonesia's law on state bailouts, LPS has to sell the bank for at least the price the agency paid. Besides Maybank and CIMB, RHB Capital Bhd and Affin Holdings Bhd have expressed interest in Indonesian banks. RHB is reportedly eyeing an 80% stake in PT Bank Ina Perdana worth RM1.16bil, and Affin is said to be keen on PT Bank Ina Perdana.
Earlier this week, BIMB Holdings Bhd subsidiary Bank Islam was reported to be in early talks to buy a stake in PT Bank Muamalat Indonesia .
Setting price for plywood
Saturday February 18, 2012 By JACK WONG
KUCHING: Malaysia is coming up with a
“constructed” price for plywood in the wake of its manufacturers being
penalised by South Korean authorities on charges of dumping their panel
products. This proposed price is being worked out by the International Trade and Industry Ministry, together with input from the Sarawak Timber Industry Development Corp (STIDC) and plywood manufacturers.
“As most of the manufactured plywood is for the export market, there is at present no domestic selling price,” Sarawak Timber Association (STA) general manager Dr Peter Kho told StarBizWeek.
The proposed constructed price will be determined based on several factors including the production and transport costs of plywood and will serve as a guide to plywood exporters to check against any dumping charges.
To recap, the Korean Trade Commission (KTC) imposed anti-dumping duties on the imports of Malaysian plywood last March, ranging from 5% to 38% for three years.
Possible solution: Setting the domestic selling price for plywood will hopefully end South Korean charges of dumping. The
imposition of the duties followed KTC's probe into complaints by the
Korean Wood Panel Association that nine Malaysian plywood exporters
eight from Sarawak and one from Sabah were allegedly selling their
products below production costs, thereby hurting many South Korean
plywood manufacturers.
The anti-dumping duties imposed on the eight Sarawak plywood suppliers are between 5.12% and 9.75%. The suppliers include Subur Tiasa Plywood Sdn Bhd (5.12%), Jaya Tiasa Timber Products and Hwa Seng Veneer and Plywood Industry Sdn Bhd (6.43%), Shin Yang Plywood Sdn Bhd , Forescom Plywood Bhd , Menawan Wood Sdn Bhd , Shin Yang Plywood Bintulu Sdn Bhd and Zedtee Plywood Sdn Bhd (the five companies are owned by Shin Yang group) (9.75%). The duties on Sabah-based Sinora Sdn Bhd is the highest at 38.1% while it is 8.76% on all other Malaysian exporters.
The anti-dumping duties on some of the Sarawak suppliers were significantly reduced following their appeals. The duties have adversely affected exports of Sarawak plywood to South Korea, a traditional key market.
“As most of the manufactured plywood is for the export market, there is at present no domestic selling price,” Sarawak Timber Association (STA) general manager Dr Peter Kho told StarBizWeek.
The proposed constructed price will be determined based on several factors including the production and transport costs of plywood and will serve as a guide to plywood exporters to check against any dumping charges.
To recap, the Korean Trade Commission (KTC) imposed anti-dumping duties on the imports of Malaysian plywood last March, ranging from 5% to 38% for three years.
The anti-dumping duties on some of the Sarawak suppliers were significantly reduced following their appeals. The duties have adversely affected exports of Sarawak plywood to South Korea, a traditional key market.
Transforming cellular companies
Saturday January 28, 2012 By B.K. SIDHU
With the data boom, cellular firms have to transform to stay relevant
THERE is already a washing machine that can be programmed by its user using the Internet. And maybe, one day your favourite potted plant may tweet you that it needs to be watered. A report says that beverage companies are already tracking the weather to know the change so that they can serve their customers better and retailers are finding new ways to reach out to new markets. The extent of which the Internet has infiltrated our daily lives might seem a bit of a joke for some, but the cellular companies are not seeing the funny side of that.In fact, the data boom is already threatening their once bread-and-butter voice revenues which have stagnated as people use the Internet for much of their communication, bypassing the use of traditional avenues the cellular companies were built on. Companies are the first to jump on the bandwagon in terms of data, using software and technologies that drive efficiency and profits. Now, the man-in-the-street is doing the same to make their lives a lot easier in an ever-increasing demanding world.
“Emerging academic research suggests that companies that use data and business analysis to guide decision making are more productive and experience higher returns on equity than competitors that don’t,” says McKinsey in a report.
Need for change
Over the past two years, Malaysian celcos have been reshaping and re-inventing themselves. Their objective is to keep users on their networks. Celcom Axiata Bhd has been in transformation over the past two years. In its journey, it sees that by 2015, 50% of its revenues will come from data and the remaining 50% from voice. Data contribute just under 40% of revenue today. The have set up consumer labs and paid top dollar to experts to know what their users want. It has also flattened its decision-making processes into three three units where its CEO Datuk Seri Shazalli Ramly heads one and the most important of all – the one that zeroes in on the customer.
“Where the industry is going depends on different facets. Companies like us have to make a choice as where to specialise in, where to dominate and what to be good at. We may want to drop things that we do not want and approaching the market as a single mass may no longer be applicable. We will see companies taking unique positions and giving unique offerings,” he says. The battle lines have been drawn and for Shazalli, Celcom has to be seen as a company where a customer has access to from every possible angle and circumstances.
DiGi.Com Bhd too is on a transformation journey ever since its new CEO Henrik Clausen came on board in May 2010. Its tagline of “Internet for all” is the direction the company is focused on. Maxis Bhd , the largest cellular company in the country by subcribers, is on a similar journey. Its CEO Sandip Das says: “It is not an option but a need and there may be many life cycles.” Even Das has reorganised the group so that there is strong operating leadership combination with two COOs.
U Mobile Sdn Bhd under Dr Kaizad Heerjee has been making some noise and is gaining traction in the broadband world. It is not easy when there are three big players but operators like U Mobile, Packet One Networks Sdn Bhd (P1) , RedTone International Bhd and YTL Communications Bhd have a place in the market space and they are providing Internet connections to their customers and continue to skirmish against the big three. All operating cellular and wireless players are in expansion mode and in the same direction.
Puncak Semangat, REDtone big 4G spectrum winners
Written by Cindy Yeap
Wednesday, 07 December 2011
REDtone International Bhd and billionaire Tan Sri Syed Mokhtar Al-Bukhary’s Puncak Semangat Sdn Bhd have a tad more to cheer about among the nine fourth generation (4G) spectrum winners. All nine will receive the coveted resource after their business plans are approved by the Malaysian Communication and Multimedia Commission (MCMC), sources said.
“While Puncak Semangat’s 30Mhz [of 4G spectrum] is at least 10Mhz bigger than all other winners, everyone else has existing spectrum — 900Mhz, 1800Mhz, 1900Mhz [3G] or 2.3Ghz [WiMAX]. From that perspective, the bigger existing players still have more spectrum,” said a source close to the regulators.
“The decision was made to bring in new entrants and allow room for market forces, and in that light the spectrum allocations are equitable, though not entirely equal,” the source told The Edge Financial Daily. “We believe Puncak has the financial resources for a decent rollout,” the source said.
The 4G allocation will give REDtone, whose existing 2.3Ghz WiMAX licence is limited to Sabah and Sarawak, a licence to roll out mobile services in Peninsular Malaysia and a more level playing field relative to the remaining three WiMAX spectrum holders, the source said. Its challenge, however, will be to secure the necessary funds for a wider rollout, an observer said.
To recap, all four 3G spectrum assignment holders — Maxis Bhd, Celcom Axiata Bhd, DiGi.Com Bhd and U Mobile Sdn Bhd — stand to receive 20Mhz of 4G spectrum. Like REDtone, two other WiMAX spectrum holders — Green Packet Bhd’s Packet One (Networks) Sdn Bhd and YTL Communications Sdn Bhd — will also receive 20Mhz of 4G spectrum in January 2013, if their business plans are accepted by the MCMC.
The remaining WiMAX spectrum holder, Asiaspace Sdn Bhd, will be given a 10Mhz block of 4G spectrum, provided its business plan gets MCMC’s go-ahead. Asiaspace, will also need to settle a sizeable fine first for not meeting rollout commitments made in its WiMAX business plan submission, another source added.
All nine winners will need to submit their 4G rollout plans to the MCMC by Dec 15 and pay a RM5 million irrevocable guarantee for every 10Mhz of spectrum.
But why not just give bigger blocks of spectrum to the big boys? After all, only three out of seven newcomers in the mobile telecoms space have decent-sized coverage and service offerings close to five years since the powers that be decided to sidestep incumbents and allow new entrants. Didn’t one 3G pectrum winner even make money from transferring its 3G spectrum?
Moreover, easily 94% of Malaysia’s 35.7 million mobile phone users are with the big three — Maxis, Celcom and DiGi — and they have the most money to invest, going by their earnings pool. Wouldn’t giving them more spectrum help on network quality?
“Yes, incumbents have a lot more subscribers, but they still have a lot more spectrum than the new entrants. Their spectrum allocation is already bigger than the likes of Vodafone in the UK, which has a bigger population size and wider geographical area to cover,” an industry observer pointed out. This could not be independently verified at press time.
“Are you satisfied with your current mobile phone service?” the observer asked, drawing attention to the sizeable earnings margins of 45% to over 50% that the big boy operators here command.
“Those margins are very high by industry standards. I’d call 30% a decent margin. From where I stand, that level of margins either means operators are not investing enough money in network or they’re charging customers too much,” the observer added.
Maxis, the leader in terms of earnings before interest, tax, depreciation and amortisation (Ebitda) margin, has maintained that its 50% plus margins are ahead of Celcom’s 45% and DiGi’s 46% because it has a bigger pool of higher spending subscribers.
To be fair, Maxis, Celcom and DiGi have spent an average of RM1 billion a year on improving their networks. And if that level of investment is not enough, only time will tell if the solution is to bring in new players, especially those with smaller purses.
What is certain is that more competition is on the way for existing players and the cost of delivering seamless Internet on-the-go is much higher than enabling voice and plain text message.
To maintain the kind of margins and dividends that their investors have come to expect, telecoms players are already cutting back everything they can and are now letting rivals piggy-back on their networks.
They have even resorted to no longer absorbing the 6% service tax on prepaid users to help shore up margins — or at least they tried. It is understood hat regulators have asked the operators to pass on the cost of the service tax to prepaid users on a staggered basis, instead of doing it at one go.
All that throws into question whether the high margins the big boy operators are enjoying will hold. To be sure, chances are that margins will not immediately collapse, but investors may need to start considering the possibility of smaller growth numbers and, in turn, lower dividend payouts — at least until the mobile broadband space matures.
This article appeared in The Edge Financial Daily, December 7, 2011.
Related Posts:
1.數碼網絡 (Digi) 正與立通國際（REDTONE)探討合作
2. All nine telecoms players given smaller blocks of 4G spectrum (2.6GHz)
3. Transforming cellular companies
REDtone International Bhd and billionaire Tan Sri Syed Mokhtar Al-Bukhary’s Puncak Semangat Sdn Bhd have a tad more to cheer about among the nine fourth generation (4G) spectrum winners. All nine will receive the coveted resource after their business plans are approved by the Malaysian Communication and Multimedia Commission (MCMC), sources said.
“While Puncak Semangat’s 30Mhz [of 4G spectrum] is at least 10Mhz bigger than all other winners, everyone else has existing spectrum — 900Mhz, 1800Mhz, 1900Mhz [3G] or 2.3Ghz [WiMAX]. From that perspective, the bigger existing players still have more spectrum,” said a source close to the regulators.
“The decision was made to bring in new entrants and allow room for market forces, and in that light the spectrum allocations are equitable, though not entirely equal,” the source told The Edge Financial Daily. “We believe Puncak has the financial resources for a decent rollout,” the source said.
The 4G allocation will give REDtone, whose existing 2.3Ghz WiMAX licence is limited to Sabah and Sarawak, a licence to roll out mobile services in Peninsular Malaysia and a more level playing field relative to the remaining three WiMAX spectrum holders, the source said. Its challenge, however, will be to secure the necessary funds for a wider rollout, an observer said.
To recap, all four 3G spectrum assignment holders — Maxis Bhd, Celcom Axiata Bhd, DiGi.Com Bhd and U Mobile Sdn Bhd — stand to receive 20Mhz of 4G spectrum. Like REDtone, two other WiMAX spectrum holders — Green Packet Bhd’s Packet One (Networks) Sdn Bhd and YTL Communications Sdn Bhd — will also receive 20Mhz of 4G spectrum in January 2013, if their business plans are accepted by the MCMC.
The remaining WiMAX spectrum holder, Asiaspace Sdn Bhd, will be given a 10Mhz block of 4G spectrum, provided its business plan gets MCMC’s go-ahead. Asiaspace, will also need to settle a sizeable fine first for not meeting rollout commitments made in its WiMAX business plan submission, another source added.
All nine winners will need to submit their 4G rollout plans to the MCMC by Dec 15 and pay a RM5 million irrevocable guarantee for every 10Mhz of spectrum.
But why not just give bigger blocks of spectrum to the big boys? After all, only three out of seven newcomers in the mobile telecoms space have decent-sized coverage and service offerings close to five years since the powers that be decided to sidestep incumbents and allow new entrants. Didn’t one 3G pectrum winner even make money from transferring its 3G spectrum?
Moreover, easily 94% of Malaysia’s 35.7 million mobile phone users are with the big three — Maxis, Celcom and DiGi — and they have the most money to invest, going by their earnings pool. Wouldn’t giving them more spectrum help on network quality?
“Yes, incumbents have a lot more subscribers, but they still have a lot more spectrum than the new entrants. Their spectrum allocation is already bigger than the likes of Vodafone in the UK, which has a bigger population size and wider geographical area to cover,” an industry observer pointed out. This could not be independently verified at press time.
“Are you satisfied with your current mobile phone service?” the observer asked, drawing attention to the sizeable earnings margins of 45% to over 50% that the big boy operators here command.
“Those margins are very high by industry standards. I’d call 30% a decent margin. From where I stand, that level of margins either means operators are not investing enough money in network or they’re charging customers too much,” the observer added.
Maxis, the leader in terms of earnings before interest, tax, depreciation and amortisation (Ebitda) margin, has maintained that its 50% plus margins are ahead of Celcom’s 45% and DiGi’s 46% because it has a bigger pool of higher spending subscribers.
To be fair, Maxis, Celcom and DiGi have spent an average of RM1 billion a year on improving their networks. And if that level of investment is not enough, only time will tell if the solution is to bring in new players, especially those with smaller purses.
What is certain is that more competition is on the way for existing players and the cost of delivering seamless Internet on-the-go is much higher than enabling voice and plain text message.
To maintain the kind of margins and dividends that their investors have come to expect, telecoms players are already cutting back everything they can and are now letting rivals piggy-back on their networks.
They have even resorted to no longer absorbing the 6% service tax on prepaid users to help shore up margins — or at least they tried. It is understood hat regulators have asked the operators to pass on the cost of the service tax to prepaid users on a staggered basis, instead of doing it at one go.
All that throws into question whether the high margins the big boy operators are enjoying will hold. To be sure, chances are that margins will not immediately collapse, but investors may need to start considering the possibility of smaller growth numbers and, in turn, lower dividend payouts — at least until the mobile broadband space matures.
This article appeared in The Edge Financial Daily, December 7, 2011.
Related Posts:
1.數碼網絡 (Digi) 正與立通國際（REDTONE)探討合作
2. All nine telecoms players given smaller blocks of 4G spectrum (2.6GHz)
3. Transforming cellular companies
Palm oil exports to rise in 2012
KUALA LUMPUR: Palm oil exports from Malaysia, the world's second largest producer, may climb as much as 10% this year, expanding faster than local output and helping to drive down stockpiles and support prices, an industry group forecast.
Exports may climb to a record 19.8 million tonnes from last year's 18 million tonnes as demand in India and China gained, Malaysian Palm Oil Council chairman Lee Yeow Chor, said in an interview. The price may advance 3.9% to RM3,300 per tonne in 2012, according to Lee.
Declining stockpiles in Malaysia, which have held above 2 million tonnes since September, may help futures extend a 15% rally since October, boosting profits at growers IOI Corp Bhd and Sime Darby Bhd. Credit Suisse Group AG raised its forecast for 2012 prices 28% to RM3,200 on Feb 1, saying supplies will be capped, while demand remains strong.
“The market hasn't completely accounted for the amount of vegetable oil demand that's going to be shifting to palm oil this year,” said Erin FitzPatrick, an analyst at Rabobank International in London. Prices were holding above RM3,000 on prospects for lower global soybean oil and rapeseed oil output, FitzPatrick said by phone on Wednesday.
The April-delivery contract fell as much as 1% to RM3,166 on the Malaysia Derivatives Exchange yesterday before trading at RM3,177 at 11.55am. While the price is little changed this year, it's rallied from a 12-month low of RM2,754 on Oct 6.
Dorab Mistry, director of Godrej International Ltd, has forecast a bull market in palm oil this year as demand growth outstrips the projected increase in production. The price may reach RM4,000 by June, Mistry forecast in December.
Global soybean oil exports may decline to 8.56 million tonnes this year from 9.5 million in 2011, according to a forecast from the US Department of Agriculture. Months of dryness caused by the La Nina weather pattern have parched crops in South America. Palm-oil stockpiles may drop to “healthy levels” from April as shipments from Malaysia rose on growing production after the seasonally low-output months of January and February, Lee said. Global vegetable oil demand may grow by 3% to 5% in 2012, said Lee, who's also executive director at IOI Corp, Malaysia's second largest listed producer.
“If we can reduce the stocks to around 1.7 million tonnes, it will be a very positive development,” said Lee, who forecast an increase in shipments of 5% to 10%. Growing demand from China, India and African countries would offset slowing imports in European countries caused by a reduction in biofuel usage and sustainability issues, he said.
Malaysian output would show “moderate” growth of less than 5% in 2012 after a “significant” increase last year, Lee said.
Output climbed 11% to 18.9 million tonnes in 2011 from 16.99 million tonnes a year earlier, according to data from the Malaysian Palm Oil Board. Production may be 19 million tonnes this year as more plantations mature, Plantation Industries and Commodities Minister Bernard Dompoksaid on Jan 19.
Malaysia was promoting new uses for the tropical oil, which included anti-oxidants such as tocotrienols and phenolics, as well as furniture made from the wood from the oil palm's trunk, said Lee.
Indonesia, the biggest producer, cut the maximum tax rate on crude palm oil exports last October and imposed lower duties on processed products to help the local refining industry.
If the export duty in Indonesia was helping its mid-tier refineries, one strategy for Malaysia was to go further up the so-called value chain, said Lee. “Those are very competitive” products, he said, referring to output such as oleochemicals, food esters and specialty chemicals and fats. - Bloomberg
Tag :
Batu Kawan,
BLD Plantation,
IOI,
Jaya Tiasa,
Kim Loong,
KLK,
Kwantas,
Sector News,
Ta Ann,
TSH
Indonesia to set up US$5.6b plantation firm
JAKARTA, Feb 2 — Indonesia’s government plans to create one of the world’s largest palm oil and rubber firms in March by combining state planters with total assets of US$5.6 billion (RM16.91 billion), a government minister told Reuters today.
A planned listing of the firm will tap investor interest in a country with a recently acquired “investment grade” rating and create a rival to top regional planters such as Malaysia‘s Sime Darby and Singapore‘s Wilmar.
The government will consolidate the assets of 15 state firms, whose revenues last year stood at around 40 trillion rupiah (US$4.45 billion), under parent company PT Perkebunan Nusantara III.
“This holding will become one of the largest plantation firms in the world with one million hectares of palm oil and rubber,” State Enterprises Minister Dahlan Iskan said in an interview.
The sprawling archipelago of 17,000 islands is the world’s biggest exporter of palm oil, second biggest producer of rubber and robusta coffee and third biggest producer of cocoa. The state firms produce all these commodities as well as tea, rice, cassava and sugar.
Analysts said the consolidation of the state firms would produce some economies of scale but would not have a dramatic impact on commodity supply.
“They have been producing. It is not new supply coming into the market. This is just a rationalisation of government linked assets,” said Carey Wong, an analyst with OCBC Bank in Singapore.
The last mega-plantation merger was in 2008 when Malaysia’s government pushed for the tie-up of three state-linked planters to form Sime Darby, which it touted as the largest plantation firm by assets.
Borneo rice bowl
Indonesian state plantation firms will combine to produce an extra 500,000 tonnes of rice from planting 100,000 hectares of new paddy fields in east Kalimantan on Borneo island, Iskan said, without giving a timeframe for the production.
Indonesia, the world’s fourth largest country by population, is trying to become self-sufficient in production of its staple grain. But it surprised regional markets last year with hefty imports from Thailand and Vietnam. Expanding paddies could help its aim not to import again this year.
“I expect Indonesia could produce an additional 280,000-300,000 tonnes of paddy from the newly planted areas of 100,000 hectares,” said Chookiat Ophaswongse, the honorary president of the Thai Rice Exporters Association.
Plantation firms have been restricted this year from expanding in forested areas such as Borneo by Indonesia‘s two-year moratorium on new forest clearance and land acquisition is in any case seen as a hurdle in a country known for red tape.
Indonesia in December passed a land bill designed to speed up land acquisition for state projects deemed in the public interest and the law could enable the new firm to get access to land for rice.
Top landbank
Iskan said the combined profits of the firms to be amalgamated were around 3.6 trillion rupiah. The government plans to first list one of the firms, PT Perkebunan Nusantara VII, as a unit of the holding firm this year on Jakarta‘s stock exchange.
“After PTPN VII, we’re open for other units to list on the stock exchange but eventually we will list the parent company and I don’t think we should retain a majority stake once it is listed,” Iskan said.
The combined palm oil and rubber landbank of the holding company Perkebunan Nusantara III will be bigger than that of the main existing listed regional planters. Sime Darby currently tops the list with 525,795 hectares for palm oil and has a market value of US$18.2 billion.
Analysts said the new Indonesian merger’s hefty landbank would pull in investors.
“It is massive. They are talking about a million hectares. That would be massive. I’m sure the stock market will be very excited,” said John Rachmat, a palm oil analyst at the Royal Bank of Scotland in Singapore. — Reuters
