Glovemakers slide further on more negative developments

Glovemakers slide further on more negative developments

Written by Loong Tse Min
Thursday, 26 August 2010 15:29


KUALA LUMPUR: Malaysian-listed latex glovemakers’ shares continued to slide yesterday as investors’ concerns on the industry’s prospects appear to intensify this week.

Most glovemakers have been falling so far this week with the world’s second-largest latex glovemaker Supermax Corp Bhd losing about 8% over three trading days to end at RM5.07 yesterday.

Over the last three trading days, Hartalega Holdings Bhd lost 31 sen or 3.9% to close at RM7.63 yesterday, Kossan Rubber Industries Bhd fell 23 sen or 6.35% to RM3.39, Latexx Partners Bhd was down 26 sen or 7.71% to RM3.11, Adventa Bhd shed eight sen or 3.03% to RM2.56 and Rubberex Corp (M) Bhd was down 5.5 sen or 5.73% to 90.5 sen.

The world’s largest latex glovemaker Top Glove Corp Bhd put on 11 sen or 1.8% to RM6.16 over Monday and Tuesday but fell 10 sen or 1.62% to RM6.06 yesterday.

The long list of concerns over the industry was raised about a month ago, which was also highlighted by The Edge Financial Daily.

These include potential overcapacity, record-high latex prices, the appreciation of the ringgit, a potential cut in Malaysian gas subsidies and possibly slower demand ahead due to the economic slowdown and easing H1N1 influenza fears.

The latest developments that seem to support these concerns include the ringgit’s further strengthening, more signs of a slowing US economy and continued high rubber prices.

Following Bank Negara Malaysia’s foreign exchange liberalisation moves, the ringgit reached it highest levels in 13 years at RM3.1320 on Monday. In the US, the deluge of bad economic data continued. On Monday, investors were spooked by data showing that existing home sales for July plunged a record 27%.

Meanwhile, rubber prices continue to hold firm, despite the recent fall in the price of palm oil and other commodities. Standard Malaysian Rubber general purpose FOB current month was priced at RM9.84 per kg yesterday, the highest since May 5.

Among glovemakers, Supermax fell the most yesterday, down 16 sen or 3.06% to RM5.07, as CIMB Research warned yesterday that the company may report a quarter-on-quarter (q-o-q) earnings contraction for its second fiscal quarter. The company is expected to release its results today.

However CIMB Research, which has a buy call on Supermax, defended the stock saying, “We are not worried about the potential q-o-q earnings contraction as this is not the first time glove manufacturers are facing this situation. From our checks, demand for rubber gloves remains healthy and Supermax continues to operate at almost 90% utilisation, supporting our view of sufficient pricing power that will allow glovemakers to pass on any cost increases.”

At the same time, some institutional buyers appear to be nibbling in glovemaker stocks at their current low prices.

This article appeared in The Edge Financial Daily, August 26 2010.

Genting posts record 2Q profit, thanks to S’pore

Genting posts record 2Q profit, thanks to S’pore

Written by Max Koh
Friday, 27 August 2010 13:59

KUALA LUMPUR: Lady Luck is smiling on Genting Bhd.

The group posted its highest quarterly pre-tax profit ever of RM1.59 billion for the second quarter ended June 30, 2010 (2QFY10), up 179% from RM570.45 million a year earlier, boosted by the newly opened Singapore operations.

Its net profit jumped 244.6% to RM739.17 million for the quarter, from RM214.49 million a year earlier. Revenue doubled to RM4.09 billion from RM2.1 billion, while earnings per share improved to 20 sen from 5.8 sen. It also declared a dividend of 3.3 sen per share for 1H10.

Genting said the increase in revenue and profitability came mainly from its leisure and hospitality division with the commencement of the Resorts World Sentosa operations in Singapore.

Within the leisure and hospitality division, its Singapore operations contributed RM2.03 billion in revenue, compared with RM1.2 billion from Malaysia, and RM250 million from UK and others. Another RM607.6 million in revenue came from its power, plantation, property and investment divisions.

The Singapore operations contributed a pre-tax profit of RM1.19 billion for the quarter, compared with RM592.3 million from Malaysia. This gave the Singapore operations a higher pre-tax profit margin of 58.6% versus 49.3% for Malaysia.

“The improved revenue from Resorts World Genting is mainly due to better luck factor in the premium players business. The UK casino business in 2QFY10 also benefited from an increase in business volume. However, the weaker pound translated to lower casino revenue in ringgit terms,” it said in a filing with Bursa Malaysia.

The group’s plantation arm, Genting Plantations Bhd, also saw higher revenue and profit due to higher palm products prices and increased fresh fruit bunch (FFB) production.

However, the group’s power division, Genting Energy Ltd, recorded lower revenue due to lower generation of electricity by the Meizhou Wan power plant in China.

“The oil & gas division also posted lower revenue and profit, as a result of lower share of entitlement in China despite higher average oil prices achieved, as well as higher expenses incurred. The share of results in jointly controlled entities and associates increased in 2Q10, as the results in 2Q09 was impacted by the share of loss in a jointly controlled entity in Genting Singapore Plc arising from lower property valuation of a property in London,” Genting said.

For the first half ended June 30, 2010, the group posted RM971.6 million in net profit on the back of RM7.2 billion in revenue, due to higher contribution from the leisure and hospitality, plantation and property divisions.

The period also saw a net impairment loss of RM1.3 billion and net dilution gain of RM436.3 million, which arose from the company’s shareholding in Genting Singapore, when the remaining S$450 million convertible bonds were fully converted into new ordinary shares of Genting Singapore in 1H10.

“The net fair value gain on derivative financial instruments of RM67.9 million was mainly in respect of Genting Singapore’s fair value gain on derivative financial instruments from the valuation of the conversion option embedded in the convertible bonds,” it said.

For the rest of the year, the group said it was cautiously optimistic as regional competition continued to impact its performance, with better contribution from its Singapore operations.

“With the opening of Marina Bay Sands, Resorts World Sentosa’s business showed resilience and its business model displayed impressive strength.

“It would continue to make improvements to its attractions, facilities and infrastructure to meet the expectations of its valued guests,” Genting said, adding that construction of its West Zone had started and was expected to commence operations next year.

On Wednesday, CIMB Research maintained its outperform call on Genting with the target price raised to RM10.90 from RM9.40. It also raised its FY10-12 earnings per share (EPS) for Genting by 27%-32%.

“The past two months have seen a slew of activities within the Genting group. While the UK asset transfer is largely neutral for the parent Genting Bhd, Genting Malaysia’s winning bid for the Aqueduct racino and our significant earnings upgrade for Genting Singapore following a stellar 2Q10 for Resorts World Sentosa are positive,” it said.

While remaining neutral on Genting Malaysia, CIMB said it was bullish on Genting Singapore due to its strong results.

“The key winner to emerge from these developments is Genting Singapore. The sale of its UK asset will allow management to concentrate on its flagship property, Resorts World Sentosa. More importantly, its strong 2QFY10 results thumped all expectations and stamped Genting Singapore’s mark as Singapore’s gaming market leader in 2Q,” it added.

Genting gained one sen to close at RM9 yesterday with 6.2 million shares traded.


This article appeared in The Edge Financial Daily, August 27 2010.

Nestle’s 2Q net profit rise 17%, declares 50 sen interim dividend

 Nestle’s 2Q net profit rise 17%, declares 50 sen interim dividend

Written by Yong Min Wei
Friday, 27 August 2010 13:48

KUALA LUMPUR: Nestle (M) Bhd’s net profit for the second quarter ended June 30, 2010 (2QFY10) rose 17.2% to RM100.15 million from RM85.45 million a year ago, underpinned by marketing activities and new product launches that leveraged on improved economy and consumer sentiment.

In a filing to Bursa Malaysia Securities yesterday, the group said revenue for 2QFY10 grew 13.9% to RM1.05 billion from RM922.85 million with overall businesses performing well in this quarter, coupled with the strong growth of Nestle Liquid Drinks and Chilled Dairy.

“Another positive note is the robust double-digit growth which was registered by the exports business. The significant investment in production lines over the last three years has made additional capacity readily available to cater to the higher external demand, regionally as well as globally,” Nestle said.

It added that the strong economic performance by neighbouring countries, in particular Indonesia and the Philippines, also contributed to the higher exports for the quarter.

The group posted earnings per share of 42.71 sen for 2QFY10 versus 36.44 sen previously. Its net asset per share stood at RM2.47 as at June 30.

Nestle’s board of directors declared an interim dividend of 50 sen per share in respect of its financial year ending Dec 31, 2010, under the single-tier dividend which is not taxable in the hands of shareholders. The dividend would be paid to shareholders on Oct 5.

For its six months ended June 30, 2010 (1HFY10), the group’s net profit climbed 28.6% to RM238.95 million from RM185.8 million in the same half last year, mainly driven by timing of overhead cost and the favourable leverage of the fixed cost structure.

The group reported revenue of RM2.07 billion year-to-date, an 8.6% gain from RM1.9 billion in the previous comparable half.

Nestle noted that while some commodity prices such as cocoa powder and skimmed milk powder increased sharply during the half year, the stronger ringgit against US dollar helped partially cushion these increases.

In a media statement, Nestle managing director Peter R Vogt said: “With our domestic sales benefiting from the improved local economy and the increase in consumer confidence, along with export levels, we are able to post a strong improvement over last year’s performance.”

Vogt said that the group would continue to make investments in line with its objective of being the leader in nutrition, health and wellness, as well as an industry benchmark for its financial performance and trusted by all stakeholders.

“Despite the concerns over the sovereign debt issue in the eurozone and the sustainability of the economic recovery in the US, the outlook in BRIC countries (Brazil, Russia, India and China) and the Asean economies are still positive,” he said.

Nestle’s share price yesterday closed unchanged at RM39.48 with 11,400 shares traded.


This article appeared in The Edge Financial Daily, August 27 2010.

Namewee might be charged in court!!!

Sin Chew Daily reported that controversial rapper Wee Meng Chee, better known as Namewee, might be charged in court over his latest short film which condemned the principal who allegedly made racist statements. The daily quoted Prime Minister Datuk Seri Najib Tun Razak as saying that if the related authority had enough evidence, Wee could be charged.
However, Wee told the daily that the two school principals who allegedly made racists comments were supposed to be sued instead.
He explained that his short film was made in a positive manner as he disliked racism.

http://thestar.com.my/news/story.asp?file=/2010/8/30/nation/6943653&sec=nation

Fees Matter

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Types of Investors

There are different styles and types of investors that exist in the stock market. Investors use the stock market to build their investment portfolio so that they can see a long term profit that takes place over a long period of time.

Someone who is just using the stock market to make money quickly for a short period of time is called a "trader". Members of an investment group fall into the first category: they are in the investment market for the long haul.

There are different types of investors that use different methods to analyze the market and the market conditions.

These three methods of analyzing the market are:


1. Technical analysis . This method of analysis is used by a "momentum" investor. Technical analysis looks at the price fluctuations that occur in the stock market. The investor bases the decision to buy or sell on what he feels the price will do next.


2. Fundamental analysis #1 . Fundamental analysis is used by the "growth" investor. This type of analysis decides if a certain company is a good investment based on the earnings of the company, growth sales, and margins of profit.

3. Fundamental analysis #2. A "value" investor uses this type of analysis. This method of analysis is similar to the analysis that a growth investor uses but is slightly different. A value investor takes a close look at those companies in the stock market that have a low value. The investor looks at stocks that are currently cheap and low but that have the potential to make a good comeback.

Most stock investment clubs use the fundamental method of analysis to make most of their investing decisions.

They find companies that are listed on the stock market that show good growth, profit, and earnings but that are still cheap to buy and haven’t yet reached their potential.

Members of the investment club buy this stock and hold on to it for several years so long as the fundamentals, as listed previously, continue to hold strong. This type of investment strategy is called "buy and hold".

http://www.investmentclubhelp.com/Types_of_Investors.html

Soros & Buffett Investment Rules

Sunday, April 23, 2006 | 07:33 AM

in Apprenticed Investor | Investing

 

On the face of it, Buffett and Soros investment styles seem to have little in common. A new book suggest that both practice the same mental habits and strategies. They share similar beliefs about the nature of the markets.
In "The Winning Investment Habits of Warren Buffett and George Soros," its author outlines their 23 "winning" investment habits - tactics and strategies that he believes other investors can learn from. Many of these "habits" seem to fly in the face of conventional Wall Street wisdom: for example, Buffett and Soros do not diversify. And when they buy, they always buy as much as they can. Both will say that making predictions about the market or economy has virtually nothing to do with investment success.
Here's the list of 23 habits:

A master investor:

1. Believes the first priority is preservation of capital.
2. As a result, is risk-averse.
3. Has developed his own investment philosophy, which is an expression of his personality. As a result, no two highly successful investors have the same approach.
4. Has developed his own personal system for selecting, buying and selling investments.
5. Believes diversification is for the birds.
6. Hates to pay taxes, and arranges his affairs to legally minimise his tax bill.
7. Only invests in what he understands.
8. Refuses to make investments that do not meet his criteria. Can effortlessly say 'no'.
9. Is continually searching for new investment opportunities that meet his criteria and actively engages in his own research.
10. Has the patience to wait until he finds the right investment.
11. Acts instantly when he has made a decision.
12. Holds a winning investment until a pre-determined reason to exit arrives.
13. Follows his own system religiously.
14. Is aware of his own fallibility. Corrects mistakes the moment they arise.
15. Always treats mistakes as learning experiences.
16. As his experience increases, so do his returns.
17. Almost never talks to anyone about what he's doing. Not interested in what others think of his investment decisions.
18. Has successfully delegated most, if not all, of his responsibilities to others.
19. Lives far below his means.
20. Does what he does for stimulation and self-fulfilment - not for money.
21. Is emotionally involved with the process of investing; but can walk away from any individual investment.
22. Lives and breathes investing, 24 hours a day.
23. Puts his money where his mouth is. For example, Warren Buffet has 99 per cent of his net worth in shares of Berkshire Hathaway; George Soros, similarly, keeps most of his money in his Quantum Fund. For both, the destiny of their personal wealth is identical to that of the people who have entrusted money to their management.

Interesting stuff . . .
>
Source:
Inside the strategy of Soros and Buffett
JENNIFER HILL
The Scotsman, Sat 8 Apr 2006
http://business.scotsman.com/index.cfm?id=538662006
Becoming Rich : The Wealth-Building Secrets of the World's Master Investors Buffett, Icahn, Soros
Mark Tier
St. Martin's Press (April 1, 2005)
http://www.amazon.com/exec/obidos/ASIN/0312339860/thebigpictu09-20/

Charlie Munger's 10 Rules for Investment Success

By Morgan Housel
December 13, 2007

  Those of you lucky enough to attend a Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) annual shareholder meeting have undoubtedly heard Charlie Munger say, "I have nothing to add."
In reality, the guy has quite a bit to add. Thankfully for us, Munger is almost as forthcoming with his investment thoughts as his pal Warren Buffett. In his must-read book, Poor Charlie's Almanac, Munger puts forth a 10-step checklist that even the most inexperienced investors could benefit from.
 
1. Measure risk All investment evaluations should begin by measuring risk, especially reputational.
It's crucially important to understand that from time to time, your investments won't turn out the way you wanted. To protect your portfolio, don't set yourself up for complete failure in the first place. Giving yourself a large margin of safety, avoiding people of questionable character, and only taking on risk when you can be sure you'll be satisfactorily rewarded are all steps in the right direction. Companies like Chipotle (NYSE: CMG) might have perfectly bright futures, but when their shares are priced for perfection, they might nonetheless prove too risky for savvy investors.
 
2. Be independent Only in fairy tales are emperors told they're naked.
With stockbrokers often rewarded for activity, not successful investments, it's critically important to make sure you believe that what you're doing is right. Chasing others' opinions may seem logical, but investors like Munger and Buffett often succeed by going against the grain. Big Berkshire investments such as Coca-Cola (NYSE: KO), and more recently Petrochina (NYSE: PTR), were largely ignored by the masses when they were first made.
 
3. Prepare ahead The only way to win is to work, work, work, and hope to have a few insights.
It shouldn't surprise you that the best investments aren't the ones we typically read about in the paper. The diamonds in the rough are out there, but finding them requires effort. Buffett reads thousands of annual reports to cultivate ideas -- even if he only comes up with a few candidates each year. Munger advocates a constant curiosity for nearly everything in life. If you never stop asking the "whys" in what you do, you won't have trouble staying motivated.

 

4. Have intellectual humility Acknowledging what you don't know is the dawning of wisdom.
Perhaps most crucially to Berkshire's success, its leaders never stray away from their comfort zones. In investing, a clear idea of what the business will look like in the future counts most. If you struggle to comprehend what the business does today, you might as well be throwing darts. While companies like Google (Nasdaq: GOOG) and Boston Scientific (NYSE: BSX) are certainly titans in their own right today, they might look drastically different in five to 10 years.

5. Analyze rigorously Use effective checklists to minimize errors and omissions.
The numbers don't lie. When researching investments, Buffett and Munger like to try to estimate the security's worth before they even look at its price. They are businessmen, not stock-market junkies. They focus their brainpower on the value of businesses, not convoluted economic forecasts or intricate market-timing techniques. Munger is incredibly brilliant, but the analytical rigor of his investment decisions is based around simplicity, not complexity.

6. Allocate assets wisely Proper allocation of capital is an investor's No. 1 job.
In the early days of Munger's investment partnership, he held very few securities. When good ideas came, he poured significant capital into them; otherwise, he simply enjoyed the California sun. The amount of money employed in each of your investments should relate directly to its attractiveness. When you find a great investment, don't be afraid to bet big on it. 

7. Have patience Resist the natural human bias to act.
Munger said it best himself: "Half of Warren's time is sitting on his ass and reading; the other half is spent talking on the phone or in person to a highly gifted person that he trusts and trust him." While it can be tempting to jump in and out of the market, true fortunes are made from big commitments in quality companies, held indefinitely. When you're done with that, find a hobby. Spending all day watching stock tickers won't do you much good. 

8. Be decisive When proper circumstances present themselves, act with decisiveness and conviction.
This also goes back to not following the herd. When others are jubilant, you should be scared, and vice versa. Don't let others' emotions sway you; the market masses should help you find opportunities in their absence, not guide you down their own path to mediocrity. 

9. Be ready for change Accept unremovable complexity.
Investing success requires us to accept inevitable changes. Munger and Buffett hated railroads for decades, but as the times changed, they threw their old thoughts out the door and invested billions. The world around us won't always conform to our preferences and prejudices, and sometimes our best ideas will prove incorrect. If you aren't willing to roll with a changing market, you may find yourself fighting a lost cause.

10. Stay focused Keep it simple and remember what you set out to do.
In chasing little, unimportant things, we often overlook huge and critical factors. But by keeping it simple, we can fixate on what really matters: buying good companies at a good price, and holding them until they're fully priced.
Charlie Munger often gets overshadowed by his more famous partner, but don't assume that's any reflection of Munger's own genius. He's undoubtedly been a guiding light for Buffett himself, and by any count, he should go down as one of the greatest investors of all time.

For related Munger-esque Foolishness:

• Munger on Human Misjudgements
• The Best of Charlie Munger
• Munger Goes Mental

http://www.fool.com/investing/general/2007/12/13/charlie-mungers-10-rules-for-investment-success.aspx

OSK Research maintains Buy on Tenaga, FV RM9.90

OSK Research maintains Buy on Tenaga, FV RM9.90

Written by OSK Research
Wednesday, 25 August 2010 08:45


KUALA LUMPUR: OSK Research is keeping its earnings forecast for TENAGA NASIONAL BHD [] intact and maintains its Buy call on the power giant and its discounted cashflow fair value of RM9.90

The research house said on Wednesday, Aug 25 that with the ringgit strengthening to RM3.13 versus the US dollar and Australian coal prices falling back to US$86 per tonne from a recent high of US$108 per tonne, there has been some buying interest on TNB.

“Nonetheless, given the volatility of coal prices, we are keeping our effective cost of coal for FY11 and beyond unchanged at US$98 per tonne. With our earnings intact, we maintain our Buy call on Tenaga and our DCF fair value of RM9.90,” it said.

Tenaga announced on Tuesday it has received a letter of offer from the Energy Commission (EC) to develop the 1x1000MW coal fired power plant on Tenaga’s existing power plant site in Manjung, Perak.

The plant is expected to have its commercial operation date on March 1, 2015 and still has to secure approvals for its environmental impact assessment, power purchase agreement and bidding selection for the engineering, procurement and commissioning contractor.

http://www.theedgemalaysia.com/business-news/172439-osk-research-maintains-buy-on-tenaga-fv-rm990.html

CIMB Research ups CI Holdings target price to RM4.20

CIMB Research ups CI Holdings target price to RM4.20

Written by CIMB Equities Research
Thursday, 26 August 2010 08:53

KUALA LUMPUR: CIMB Equities Research said CI Holdings’ (CIH) record FY6/10 net profit of RM38 million exceeded its forecasts and consensus estimates by 6%.

The research house said on Thursday, Aug 26 that it had underestimated CIH’s sales volume growth which kept going, even after the Chinese New Year selling campaign. Another pleasant surprise was the full-year DPS of 11 sen, higher than its forecast of 10 sen.

“We raise our EPS forecasts by 5.5% for FY11 and 9.5% for FY12 for higher sales assumptions. We also up our DPS forecast from 11 sen to 12 sen for FY11.

“Our target price goes up from RM3.90 to RM4.20, pegged to an unchanged 20% discount to our 15x target market P/E in view of the stock’s relatively low liquidity. CIH remains firmly a BUY,” it said.

http://www.theedgemalaysia.com/business-news/172523-cimb-research-ups-ci-holdings-target-price-to-rm420.html

F&N to subscribe 23.08% new Cocoaland shares at RM1.38 each

F&N to subscribe 23.08% new Cocoaland shares at RM1.38 each

Tags: Cocoaland | Fraser & Neave Holdings | new shares
Written by Joseph Chin
Thursday, 26 August 2010 11:45


KUALA LUMPUR: Fraser & Neave Holdings Bhd will subscribe for 39.5 million new COCOALAND HOLDINGS BHD [] shares or 23.08% at RM1.38 each.

This was sharply below Cocoaland’s last traded price of RM2.87, based on the announcement made by Cocoaland on Thursday, Aug 26. The acquisition of the shares would amount to RM54.64 million.

“The issue price of RM1.38 was arrived on a negotiated basis,” said Cocoaland. The issue price represents a price-to-book ratio of approximately 1.64 times and 1.57 times over the audited and unaudited consolidated net assets per share of Cocoaland of RM0.84 as at Dec 31, 2009 and 88 sen as at March 31, 2010 respectively.

“Having considered the rationale for the proposed subscription and the benefits from the entry of F&N as a key shareholder of Cocoaland, the board is of the opinion that the issue price is reasonable to Cocoaland,” it said.

Cocaland said the board believed this strategic tie-up with F&N will broaden the group’s growth prospects as well as open new horizons in terms of brand building, product and market development for Cocoaland Group.

“The board opines that having F&N as a strategic shareholder will generate greater shareholder value for Cocoaland,” it said.

http://www.theedgemalaysia.com/business-news/172534-fan-to-subscribe-2308-new-cocoaland-shares-at-rm138-each.html

Supermax 2Q earnings jump 77.9% to RM45.8m

Supermax 2Q earnings jump 77.9% to RM45.8m

Written by Joseph Chin
Thursday, 26 August 2010 13:36
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KUALA LUMPUR: Supermax Corp Bhd posted RM45.85 million in earnings in the second quarter ended June 30, up 77.9% from RM25.78 million a year ago, underpinned by strong revenue growth, cost savings and productivity.

The glove maker said on Thursday, Aug 26 group revenue rose by 24.6% or RM46.34 million to RM234.82 million from RM188.48 million a year ago, on the back of strong global demand for rubber gloves as well as higher selling prices.

“However, despite a challenging operating environment, the group did well to record profitability growth over the corresponding quarter a year ago,” it said.

Supermax said profit before tax and profit after tax rose by 55.8% (RM17.5 million) and 77.9% (RM20.1 million) respectively. The improvement in profitability is attributed to the revenue growth as well as cost savings from higher efficiency and productivity from improved processes and refurbished lines.

It declared dividend of 2.5 sen a share.

http://www.theedgemalaysia.com/business-news/172547-supermax-2q-earnings-jump-779-to-rm458m.html

Tenaga proposes 1-for-4 bonus issue of up to 1.12b shares

Tenaga proposes 1-for-4 bonus issue of up to 1.12b shares

Written by The Edge Financial Daily
Thursday, 26 August 2010 23:42

KUALA LUMPUR: TENAGA NASIONAL BHD [] has proposed a one-for-four bonus issue of up to 1.12 billion shares of RM1 each with the entitlement date to be announced later.

As at May 31, 2010, its paid-up capital stood at RM4.35 billion, comprising 4.35 billion shares, while there were 129.85 million outstanding ESOS options.

In a statement to Bursa Malaysia Securities yesterday, Tenaga said the bonus issue would be carried out by capitalising up to RM1.12 billion from its share premium account, which amounted to RM5.27 billion as at Aug 31, 2009.

It said the proposal would reward existing shareholders and increase its capital base that would better reflect its size of operations, as well as improve the liquidity of its shares in the market. AmInvestment Bank Bhd has been appointed as the adviser to the proposal, which is expected to be completed by first quarter next year.

Nestlé rises after OSK Research ups target price

Nestlé rises after OSK Research ups target price


Written by Surin Murugiah
Friday, 27 August 2010 09:19

KUALA LUMPUR: Nestlé (M) Bhd share price rose on Friday, Aug 27 after OSK Research raised its target price for the stock to RM38.53 from RM31.49 previously, and maintained its neutral recommendation on the stock.

At 9.15am, Nestlé was up 40 sen to RM39.88.

In a note on Friday, Aug 27, OSK Research said Nestlé's 1HFY10 earnings were above its own and consensus estimates, making up 61.8% of the research house's full-year forecast.

It said Nestlé's year-on-year earnings swelled 28.6% on the back of improving export sales, mainly from its new coffee and non-dairy creamer lines in Shah Alam.

"Earnings before interest and tax margins rose from 12.9% to 14.5%. Meanwhile, quarter-on-quarter earnings declined 27.8% as marketing expenses rose during the quarter, with new products such as Nescafe Ipoh White Coffee and Maggi whole wheat noodles being launched.

"We revise upwards our earnings forecasts for FY11 and target price to RM38.53 from RM31.49. Maintain Neutral," it said.

http://www.theedgemalaysia.com/business-news/172610-nestle-rises-after-osk-research-ups-target-price.html

Malaysia's rubber imports may top 600,000 tonnes this year

Malaysia's rubber imports may top 600,000 tonnes this year
Published: 2010/06/19

Malaysia, the world's third largest rubber producer, may have to import as much as 600,000 tonnes of the commodity this year to meet global demand despite rising domestic output, an official said yesterday.

Malaysian Rubber Board director general Dr Salmiah Ahmad said the country has to continue importing as capacity utilisation was rather low at 60 per cent to 70 per cent of 1.3 million tonnes a year at a time of strong demand from China.

"We have to import more this year as, Chinese demand is moving from strength to strength," she said at the sidelines of a regional conference. "It could go above 600,000 tonnes even." said Salmiah.

She was referring to China's booming car industry that has been posting double-digit growth for the past five months thanks to state-driven incentives to boost consumption.

China imports up to 700,000 tonnes of rubber from Malaysia yearly, industry data shows.

The global car industry swallows 70 per cent of natural rubber output that is dominated by Thailand, Indonesia and Malaysia.

Regional traders said Malaysia usually buys about 400,000 to 500,000 tonnes of natural rubber from top producer Thailand, and to some extent Indonesia and West Africa.

Thai dealers have increasingly taken long positions in the Tokyo Commodity Exchange rubber futures and hedge contracts with Malaysian buyers.

The November rubber contract slipped 0.5 per cent to 274.8 yen a kg at 0509 GMT.

Benchmark Thai RSS3 for July was unchanged at US$3.60 (RM11.74) and off 12 per cent from a record high of US$4.10 (RM13.37) a kg in April while Malaysia rubber grades were at US$2.90 (RM9.45).

Fears of supply disruptions due to El Nino-driven hotter weather earlier this year sapping yields have lifted all rubber grades including Malaysian prices that in turn boosted tapping activities in the first quarter, Salmiah said.

She said based on that scenario, Malaysia's production could hit 900,000 to 1 million tonnes this year from about 850,000 tonnes in 2009.

"Although hot weather from El Nino affected yields, the lack of rainy weather and good prices saw tapping days rise significantly," she said.

But the Malaysian Rubber Board's forecast still below output figures of about 1.1 and 1.2 million tonnes seen two or three years ago . - Reuters

Read more: Malaysia's rubber imports may top 600,000 tonnes this year http://www.btimes.com.my/Current_News/BTIMES/articles/RUBGROW/Article/#ixzz0xylQn3F0

Palm oil sector aims for RM170b earnings

Palm oil sector aims for RM170b earnings

By Zaidi Isham Ismail
Published: 2010/08/05

Malaysia, which is the world's second largest palm oil producer, aims to more than triple its earnings in the sector to an estimated RM170 billion by 2020.

The commodity contributed RM49.5 billion in export earnings in 2009 or 7.5 per cent of the country's gross domestic product.

Plantation Industries and Commodities Minister Tan Sri Bernard Dompok said out of the RM170 billion, the upstream, downstream and biodiesel expansion is expected to provide new business opportunities estimated at RM74.6 billion by 2020.

"The government has accorded this industry as the country's second most important sector after oil and gas under the 12 National Key Economic Areas.

"So, we will continue to provide the necessary enabling framework including investments in the necessary infrastructure and supporting facilities such as ports, bulking installations and research and development facilities," Dompok said in his speech in Kuala Lumpur yesterday during the 2010 Palm Oil Industry Award dinner.

Read more: Palm oil sector aims for RM170b earnings http://www.btimes.com.my/Current_News/BTIMES/articles/POPILA/Article/#ixzz0xyja4Kmg

Bright Net Profit Numbers for Malaysian Banks

Solid Q2 signals record year for Malaysia banks
By Adeline Paul Raj
Published: 2010/08/28

Earnings will continue to be on an uptrend in the next two quarters on the back of loan expansion, say analysts

Banks, as expected, turned in solid report cards in the second quarter, pointing to full year that could see record earnings for the industry as loans continue growing and provisions fall.

Analysts believe earnings, which probably came in at the highest ever for the April-to-June period, will continue to grow on a quarter-to-quarter basis this year.

Earnings will continue to be on an uptrend in the next two quarters on the back of loan expansion, especially on the retail side, and better fee-based income, said banking analyst Wong Chew Hann of Maybank Investment Bank Research.

"It should be another year of record earnings," she remarked.

Top banker Datuk Seri Nazir Razak concurred.

"This most likely will be a record year on continued loan expansion and as capital markets continue to be active," the chief of the country's second largest lender, CIMB Group Holdings Bhd CIMB, told Business Times yesterday.

The industry's loan growth has so far had been better than expected, coming in at 12.5 per cent as at end June from a year ago.

Some analysts are now looking to raise their loan growth forecasts for the year. Wong plans to raise hers to around 12 per cent compared to about 10 per cent before.

The industry seems to be in good health in terms of asset quality and banks also appear to have much better control over costs, analysts noted.

The only concern they had for the industry was the recent creeping in of much stiffer competition in the mortgage and hire-purchase loan segments, as well as in customer deposits, which could hurt margins.

Even foreign banks have been in the action, going all out to grab higher market shares in those areas by offering attractive rates and innovative packages.

"That puts pressure on margins but the OPR (overnight policy rate) hikes earlier may help cushion the pressure somewhat," said David Chong, an analyst at RHB Research Institute.

On the whole, banks' second quarter earnings were either in line with analysts' expectations, or slightly better than expected.

Analysts cited top lender Malayan Banking Bhd (Maybank) as having the best results as well as the best dividends of the nine local banking groups.

An analyst from a foreign research house felt that Alliance Financial Group Bhd, the smallest banking group, was the most disappointing in terms of loan and deposit growth.

Banks like Maybank and CIMB saw earnings from their overseas operations, especially Indonesia, come in strongly for the quarter.

Read more: Solid Q2 signals record year for Malaysia banks http://www.btimes.com.my/Current_News/BTIMES/articles/bankq2-2/Article/index_html#ixzz0xykGjOxy

Gambling hard for the money

Saturday August 28, 2010
Gambling hard for the money

INSIGHT DOWN SOUTH
By SEAH CHIANG NEE

Singapore is winning big thanks to the new casinos in the city-state. But the high-rollers are also losing large amounts of money, causing consternation among the public. The gambling habit, it seems, has become deeply entrenched.

SIX months ago, Singapore’s history took a crucial turn when it opened the first of its two casino resorts that cost US$10 billion to build.

Today, both of them seem to be packing the crowd in, including high rollers who believe that they have to bet big to win big.

So far the winners are Marina Bay Sands (MBS) and Resorts World Sentosa (RWS) and, of course, the Singapore economy.

Like their peers elsewhere, the new industry here is beginning to accumulate something resembling its own Hall of Misfortunes.

On top of the list is local businessman Henry Quek, who lost S$26.3 million after a few day’s work at the baccarat table in the Malaysian-owned Sentosa casino.

According to Today newspaper, his misadventure began in March only a few weeks after its launch when he was granted a credit line of S$500,000.

It was eventually raised higher and higher to S$2 million, and his losses mounted.

At one stage, his girl companion cried for the casino to stop providing him any more credit.

In a single day, the managing director of a seafood-processing and trading company had lost S$18million, playing at S$400,000 a hand.

Quek, in his 50s, initially lost a larger amount, but managed to reduce it to S$16.3 million, a close friend told a reporter.

He has since paid part of it, but still owes the operators S$11 million.

The moustachioed Quek is also the president of the Seafood Industries Association Singapore. Normally loud-talking, he is now rather quiet, according to his high-roller friend.

There have been others. Two days later, Chinese newspapers reported that Taiwan pop star Jay Chou lost S$2 million playing at Marina Bay.

An online source said 12 gamblers had chalked up unpaid losses of S$5-S$11 million, and about 200 Malaysians and Chinese still had unpaid losses ranging from S$500,000 to $2 million.

Blogger Merl Haggard reported he knew of another wealthy Singaporean who was worth “at least S$300 million” also lost S$26 million at Sentosa, but there has been no confirmation.

Despite disincentives, Singapo­reans are believed to make up one third of the total casino gamblers.

The rest are foreigners who come from Malaysia, China and the region.

There have been winners, too, but unlike losers – the big ones are often publicised. The most common are winnings of S$100,000 to S$200,000 each.

Early this month, an ethnic Chinese from Indonesia won the biggest jackpot payout of S$2.2 million.

In April, a French tourist struck a S$1.66 million jackpot.

Today, the sentiment has changed dramatically compared to the gloomy projections just before the launch, when most analysts were predicting failure.

Some even labelled the investment a potential disaster. Today, the opposite is happening.

The two casinos are earning more than S$16 million a day - or a prospective S$6 billion a year.

Resort World Sentosa alone could hit a S$1 billion profit jackpot in 2010.

Revenue-wise, the overall big winner is Singapore which has attracted some four million new tourists.

It has become the second biggest casino market in Asia after Macau, and looks set to replace Las Vegas as the second biggest revenue earner after Macau in three years’ time

Despite its size, Quek’s story pales in comparison to the tragedy of Chia Teck Leng, nicknamed Singapore’s “King of Gamblers.”

In 2005, Chia, 44, was sentenced to 42 years imprisonment for committing the largest commercial fraud in history.

The then finance executive of an MNC, he swindled four banks of S$117 million to feed his gambling habit.

He gambled big and lost big in casinos in Australia, Britain, Hong Kong, Malaysia, Cambodia and the Philippines, which sometimes flew him there in private jets.

Chia’s precise losses were not known, but it was not too far behind the world record held by US businessman, Terrence Watanable, who lost US$127 million over a year in Las Vegas.

The others included Zhenli Ye Gon, who blew US$125 million at The Strip and Australian billionaire, Kerry Packer, who reportedly lost up to US$40 million in 10 months.

The recent cases of mega-losses have stirred up more public derision than sympathy.

But the society’s overriding concern remains the potential negative impact on society at large.

Before the casinos came, Singa­poreans were already spending S$6 billion a year on legal gambling, plus another $1.5 billion in cruises and offshore casinos.

Two years ago, a government survey found about 1.95 million Singaporean adults – or 54% - had indulged in some form of gambling in the previous year.

“Pathological gamblers” make up to 1.6%, or 56,000 people.

To minimise widespread casino gambling, the government has imposed a S$100 entry fee per day, and allows families to apply to stop a habitual gambling member from going in.

Has it worked? It does not seem so.

Sadly, up to a million Singapo-reans are predicted to want to try their luck this year.

http://thestar.com.my/columnists/story.asp?file=/2010/8/28/columnists/insightdownsouth/6934153&sec=insightdownsouth

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