S&P: takes action on three Malaysian GREs

Thu Jul 28, 2011 1:01am EDT

(The following was released by the rating agency)

-- On July, 27, 2011, Standard & Poor's Ratings Services lowered the local currency sovereign rating on Malaysia to 'A' from 'A+'.

-- We are, therefore, taking rating actions on three GREs: PETRONAS, Axiata, and Telekom Malaysia.

-- The sovereign rating action has no rating impact on any other corporate entity that we rate in Malaysia.

SINGAPORE (Standard & Poor's) July 28, 2011--Standard & Poor's Ratings Services said today that it took various rating actions on three Malaysian government-related entities (GREs) after the sovereign rating action on Malaysia (foreign currency A-/Stable/A-2; local currency A/Stable/A-1; axAA+/axA-1) (see "Malaysia 'A-' FC Rating Affirmed; Local Currency Rating Lowered To 'A' From 'A+' On Revised Methodology; Outlook Stable," published on July 27, 2011, on RatingsDirect on the Global Credit Portal) as follows:

To From

Downgraded

Petroliam Nasional Bhd. (PETRONAS)

Local currency rating A/Stable/-- A+/Stable/--

ASEAN scale rating axAA+/-- axAAA/--

Axiata Group Bhd.

Foreign currency rating BBB/Stable/-- BBB+/Stable/--

Local currency rating BBB/Stable/-- BBB+/Stable/--

ASEAN scale rating axA/-- axA+/--

Senior unsecured notes BBB- BBB

CreditWatch Action

To From

Telekom Malaysia Bhd. (TM)

Foreign currency rating A-/Watch Neg/-- A-/Stable/--

Local currency rating A-/Watch Neg/-- A-/Stable/--

ASEAN scale rating axAA/Watch Neg axAA/--

Senior unsecured notes A-/Watch Neg A-

Affirmed

Petroliam Nasional Bhd.

Foreign currency rating A-/Stable/--

Senior unsecured notes A-

We lowered the local currency rating on PETRONAS to reflect the company's critical role and integral link with the Malaysian government and its sensitivity to government intervention. We equalized the long-term corporate credit rating on PETRONAS with the sovereign credit rating on Malaysia. We assessed PETRONAS' stand-alone credit profile to be 'aa-'.

We downgraded Axiata to reflect the sovereign local currency rating action because our ratings on the company factor in our view of extraordinary government support. According to our GRE methodology, we have now equalized the ratings on Axiata with our assessment of its stand-alone credit profile of 'bbb'. We continue to believe there is a "moderate" likelihood that the Malaysian government, through its investment holding arm Khazanah Nasional Bhd., would provide timely and sufficient extraordinary support to Axiata in the event of financial distress. This is based on our view that Axiata has a "strong" link with the government, although it has a "limited" role in Malaysia's economy compared with that of other Malaysian GREs.

We consider TM to have a "strong" link with, and an "important" role to, the government. We, therefore, believe there is a "moderately high" likelihood of extraordinary government support to TM, whose stand-alone credit profile we assess to be 'bbb+'. We will resolve the CreditWatch placement on TM, in which Khazanah owns 28.7%, based on our assessment of the company's stand-alone profile and the sustainability of the recent improvement in its financial metrics. A CreditWatch with negative implications indicates that we could lower or affirm the ratings in the next 90 days. Given TM's strong business risk profile, we will consider the company's financial policies in light of its investment and funding plans for the next couple of years.

The sovereign rating action does not affect the ratings on any other corporate entities that Standard & Poor's rates in Malaysia, either privately owned or GREs. These entities include Tenaga Nasional Bhd. (BBB+/Stable/--; axA+/axA-1) and AmanahRaya Real Estate Investment Trust (BBB-/Negative/--; axBBB+/--).

RELATED CRITERIA AND RESEARCH

-- Rating Government-Related Entities: Methodology And Assumptions, Dec. 9, 2010

http://www.reuters.com/article/2011/07/28/markets-ratings-malaysiangre-idUSWNA497420110728

Malaysia eyes first gas in 2013 for $5.1 bln project

Tue Aug 23, 2011 2:57am EDT

* Petronas to develop nine offshore marginal gas fields

* Will also build a 200 km pipeline to transport gas

* Says subsidised gas prices have curbed investment

* Says offshore production facilities running at full capacity 

By Niluksi Koswanage

KUALA LUMPUR, Aug 23 (Reuters) - National energy company Petronas will develop a $5.1 billion gas project off Malaysia's east coast with first delivery expected in two years, helping to bolster the country's slowing output and meet soaring power demand.

The North Malay Basin project was unveiled on Tuesday as the Southeast Asian gas exporter faces a shortage due to frequent maintenance shutdowns, forcing state utility Tenaga Nasional to import costly fuels for power generation.

The new project comprises nine discovered gas fields about 300 kilometres (186 miles) off the east coast of peninsula Malaysia. Petronas will also develop a 200 km pipeline to transport the gas from the fields to Terengganu state.

The project is part of a greater drive to secure gas including that with high CO2 content and from marginal domestic fields, as well as taking stakes in overseas fields with an eye for LNG production.

Petronas recently made two other gas discoveries in shallow waters off the Borneo coast, and inked preliminary deals with Qatargas to supply 1.5 million tonnes of liquefied natural gas (LNG) annually over 20 years.

"Petronas expects the additional volume of gas from the North Malay basin project would help sustain supply to its customers in peninsula Malaysia," it said in a statement.

"The project, which entails numerous upstream commitments, is expected to encourage more investments by industry players."

Petronas and its production sharing partners will accelerate the process with first delivery of 100 million standard cubic feet (mmscfd) of gas per day expected by 2013, ramping up to 250 mmscfd by 2015, the company said.

It did not name its partners in the project but Petronas has previously inked production sharing contracts (PSCs) with the likes of oil majors Exxon Mobil Corp and Royal Dutch Shell (RDSa.L).

Shares in Petronas Gas , which controls the gas production facilities and pipelines in the country, rose 0.5 percent to 13.5 ringgit by midday.

LOW GAS PRICES CURB INVESTMENT

Gas demand from Malaysia, the world's No.2 LNG exporter behind Qatar but fell to third place last year, has risen by more than 30 percent thanks to regulated domestic prices that are significantly lower than global market rates.

Prime Minister Najib Razak's government has pledged to raise gas prices every six months, making it more economically feasible to industry players to invest in developing marginal gas fields such as the North Malay Basin project.

"The planned price reform measures will benefit Malaysia by stimulating upstream investment off the peninsular and provide the long-term price signal to ensure security of supply by attracting LNG as well," said Graham Taylor, analyst with Wood Mackenzie in Singapore.

Petronas is scheduled to complete a 3 billion ringgit regasification terminal with an annual capacity of 3.5 million tonnes on mainland Malaysia by the middle of next year. It is studying plans for the second terminal.

Petronas also has long asked for the government to allow it raise gas prices in order to reduce the hefty annual subsidies of about 18-19 billion ringgit it pays out.

"These subsidised gas prices have resulted in minimal investments in the exploration and development of gas projects by oil and gas players, constraining growth in supply capacity," the company said.

"Compounding this tight situation, Malaysia's offshore production facilities have been running at full capacity, exerting tremendous pressure on gas production systems."

Last week, Tenaga Nasional bought 130,000 tonnes of fuel oil for power generation, the third time it has bought large volumes this year, at higher price levels.

The purchases, which started in the second quarter, have been due to a prolonged gas shortage that has resulted in the country's power sector receiving a third less of its allocation by Petronas. ($1 = 2.970 Ringgit) (Additional reporting by Rebekah Kebede in PERTH; Editing by Liau Y-Singand Ramthan Hussain)

http://www.reuters.com/article/2011/08/23/malaysia-petronas-idUSL4E7JN0N020110823?type=companyNews

Malaysia's Tenaga may buy gas from open markets in 2012-report

KUALA LUMPUR | Tue Dec 13, 2011 8:31pm EST

Dec 14 (Reuters) - Malaysia's state utilities firm Tenaga Nasional may start to source gas from the international markets next year to make up for a shortfall in supply for power generation, the New Straits Times reported on Wednesday.

The paper quoted Tenaga President and Chief Executive Officer Che Khalib Mohamad Noh as saying the firm was in talks with oil majors such as Shell, Malaysia's national oil company Petronas, and private suppliers to get the best market price for gas.

The plan to source gas from the open market will be subject to approval from the government that has kept gas and electricity tariff levels low for consumers.

Tenaga officials could not be immediately reached for comment on the report.

Tenaga buys gas from Petronas at a subsidised price of 13.70 ringgit ($4.31) per million metric British thermal units (mmBtu), compared to 30 to 40 ringgit in the open markets.

That has required Petronas to fork out 20 billion ringgit annually to maintain tariff rates.

The latest move to buy gas comes as Petronas cut its subsidised gas allocation to Tenaga due to a domestic shortage, forcing the power company to import expensive distillates that have eaten into its profits.

But in early December, Tenaga said the government agreed to implement a fuel cost sharing mechanism to share extra costs incurred from buying distillates and other expensive fuels to offset the gas shortage.

The costs would be shared between Tenaga, Petronas and the government.

http://www.reuters.com/article/2011/12/14/idUSL3E7NE0B820111214?type=companyNews

UPDATE 1-Malaysia's Tenaga seeks 100,000 T Nov fuel oil

Fri Oct 7, 2011 7:53am EDT

By Yaw Yan Chong

Oct 7 (Reuters) - Malaysia's national power utility, Tenaga Nasional , has issued a tender seeking 100,000 tonnes of November-delivery fuel oil after buying similar volumes for this month, traders said on Friday.

The utility started buying large volumes of fuel oil regularly from the second quarter of this year and is expected to continue doing so until early next year, because the country's power sector has been receiving only two-thirds of its natural gas allocation from Petronas .

"They will probably have to pay more for their cargoes this time round, given the severely imbalanced state of the market currently," a Singapore-based Western trader said.

The utility is seeking four 20,000 tonne parcels and two 12,500 tonne lots of low 0.98 density, all for delivery Nov. 1-28 to Kapar in Selangor and Pasir Gudang in Johor, via the tender, which closes on Monday.

It last purchased a total of 105,000 tonnes, mostly from oil major Shell (RDSa.L), at premiums of $25-$30 a tonne to Singapore spot quotes on a free-on-board (FOB) basis.

So far, Tenaga has bought about 450,000 tonnes for April delivery onwards, mostly from Shell and European trader Mercuria.

Tenaga's demand, regarded as unexpected and irregular before April, is expected to squeeze the market for low-density cargoes, which is already tight due to a seven-month high in Western arrivals at 3.9-4.0 million tonnes for this month, leading to severe quality imbalances.

Reflecting this, the market's prompt structure has been severely backwardated for about the past three weeks since the start of the October pricing month, with October/November at seven-month highs of above $9 a tonne for the past week.

Tenaga had earlier said it has spent 400 million ringgit ($134.4 million) a month to buy power-generation fuel, draining its cash flow and eating into its reserves.

Petronas usually allocates 1,350 million standard cubic feet per day (mmscfd) of gas to the power sector. Supply has fallen below 1,000 mmscfd since the start of 2011 and now hovers between 900-950 mmscfd.

In its third-quarter financial results, Tenaga posted a net loss after it spent an additional 1.3 billion ringgit on fuel. (Editing by Jane Baird)

http://www.reuters.com/article/2011/10/07/malaysia-tenaga-fueloil-idUSL3E7L71LA20111007?type=companyNews

Malaysia's Tenaga seeks Nov fuel oil, continues rare purchase

SINGAPORE | Fri Oct 7, 2011 6:59am EDT

Oct 7 (Reuters) - Malaysian power utility Tenaga Nasional has issued a tender seeking 100,000 tonnes of fuel oil for November, after buying similar volumes for this month, traders said on Friday.

The utility is seeking four 20,000-tonne parcels and two 12,500-tonne lots of low-0.98-density. All are for delivery Nov. 1-28 to Kapar in Selangor and Pasir Gudang in Johor. The tender closes on Monday.

It only started buying large volumes of fuel oil regularly from the second-quarter this year, and is expected to continue doing so till early next year, because Petronas has cut natural gas allocation to the country's power sector by a third. (Reporting by Yaw Yan Chong; Editing by Manash Goswami)

http://www.reuters.com/article/2011/10/07/malaysia-fueloil-tender-idUSL3E7L71IO20111007

in

MIDCAP-Utilities sector tops analysts' revision in Malaysia

Mon Dec 12, 2011 7:08am EST

Dec 12 (Reuters) - Malaysia's utilities are seeing earnings upgrades by analysts and the sector tops Thomson Reuters StarMine's Analyst Revisions rankings in the south east Asian country with a high score of 80.

While analysts are upbeat on the country's utilities sector, they are bearish on the materials sector, which has the lowest score of 24.

This indicates that analysts are expecting defensive sectors such as utilities to perform better than cyclical stocks, which include metals and mining companies.

Malaysia's national power producer Tenaga Nasional has the best Analysts Revision Model (ARM) score of 97 among its peers. Since Nov. 29, seven out of 21 analysts have raised their earnings estimate on the company by an average of 33.2 percent for the year ending August 2012.

On the other hand, steel producer Lion Industries Corporation Bhd has the worst ARM score of 1 in Malaysia's Materials sector. Since Nov. 30, two out of four analysts have cut their EPS estimates on the company by an average of 30.5 percent for the year ending June 2012.

CONTEXT

Malaysia's Tenaga says to share additional fuel cost with government, Petronas.

StarMine's Analyst Revisions model is a percentile ranking of stocks based on changes in analyst sentiment, with 100 representing the highest rank. This model tracks analysts' upward revisions in earnings and revenue estimates and rating changes.

On its Intrinsic Valuation model, StarMine adjusts for the usually optimistic bias in analysts' EPS forecasts and then uses the resulting growth rate and dividends to determine the valuation. (Reporting by Patturaja Murugaboopathy; Editing by Saumyadeb Chakrabarty)

http://www.reuters.com/article/2011/12/12/midcap-malaysiautilities-idUSL3E7NC3TZ20111212

MIDCAP-DiGi's earnings quality makes it a stand-out in Malaysia

Wed Dec 21, 2011 4:28am EST

Malaysia's third-largest mobile operator DiGi.com has the best earnings quality in the country, indicating strong profits and a faster growth than its peers in 2012.

The company scores 99 on StarMine's Earnings Quality (EQ) model -- the highest among 141 companies in Malaysia with a market value of more than $50 million and covered by three or more analysts.

DiGi's free cash flow of 548 million ringgit ($172.41 million) for the July-September quarter is at its highest level in the last four years, and exceeds its net income by a wide margin.

StarMine's research has found that earnings backed by strong cash flows tend to be more sustainable than non-cash earnings.

Digi's EQ handily tops bigger rivals Maxis and Axiata, which have EQ scores of 85 and 70, respectively.

In the past 30 days, analysts have raised their EPS estimates on DiGi by an average of 3.6 percent for 2012.

The stock has risen 46.75 percent this year, making it the best performer in the broader Malaysian market.

Starmine dataset comparing Malaysia's top four telcos:link.reuters.com/naw65s

CONTEXT:

For the fourth quarter of 2011, DiGi.Com backed its target of achieving a high single-digit revenue growth. The company has reported Q-o-Q revenue growth for nine quarters in a row.

A high score on the StarMine Earnings Quality model signals strong earnings sustainability over the next 12 months based on a company's past operating performance. ($1 = 3.1784 Malaysian ringgit) (Reporting by Patturaja Murugaboopathy; Editing by Saumyadeb Chakrabarty)

http://www.reuters.com/article/2011/12/21/midcap-digi-idUSL3E7NL1GJ20111221?type=companyNews

Investors hit by bumper losses after a year in which every stock market index lost money

Investors hit by bumper losses after a year in which every stock market index lost money
The UK was the ninth best performing market, falling by 11pc, according to Standard & Poor’s.

The UK was the ninth best performing market, falling by 11pc, according to Standard & Poor’s. Photo: AFP/GETTY IMAGES

By Paul Farrow

11:39AM GMT 21 Dec 2011

It is a far cry from the beginning of the year when stock market pundits were in an optimistic mood but the Japan tsunami disaster and a full-blown eurozone crisis in the summer blew any predictions widely off course.

According to Standards & Poor’s the top developed market was the US, which fell by 4.6pc, while the top performing European markets was Ireland, which was down 10.01pc.

Not surprisingly, Greece suffered the worst performance, falling by 60pc, but nations expected to deliver the goods also suffered badly.

The BRIC nations – which many expected to be immune from the developed nations’ meltdown, also had a dire year with Brazil shares falling by 26pc, Russia by XX pc, China by 22pc and India which fell by 37pc.

The top emerging markets were Indonesia (-0.71pc), Philippines (-2.47pc) and Thailand (-4.44pc).

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Many experts are still in a cautious mood. Mike Lenhoff at Brewin Dolphin said: “Our expectation of how well the equity markets can do in 2012 is limited but we still hopeful that the FTSE 100 will end 2012 at around 5850. Much will depend on what progress emerges on the eurozone’s ‘fiscal compact’. However, we also expect equity markets to gain support from a more encouraging outlook for the US economy. Also, in view of the scope for conventional policy stimulus in the developing economies, we remain optimistic about the contribution they, and notably China, will make to the global economy in the latter part of the year and beyond.”

http://www.telegraph.co.uk/finance/personalfinance/investing/8970135/Investors-hit-by-bumper-losses-after-a-year-in-which-every-stock-market-index-lost-money.html

5 Things Parents Should Do Before a Daughter Gets Married

by Jessica Willis

There's more to do than simply picking out the dress.

Comstock/Thinkstock

You watched her play in the sandbox, lose her first tooth, go on her first date, graduate from high school and live on her own for the first time. Now your little girl isn't so little anymore -- and she's getting married! You're reliving the memorable moments in her life with fondness and looking forward to the days ahead as your daughter becomes a wife … and maybe even a mother.

However, as you think about all you need to do to prepare for her wedding day, you may wish you'd started planning sooner! There are a lot of items on your to-do list before your daughter ties the knot, but what are some things you can do emotionally, financially and legally to prep yourself for her big day?

We've got five must-do tasks before your daughter walks down the aisle! First up, we'll explain why money and matrimony are so closely linked.

5: Get Your Finances in Order

Traditionally, the bride's family foots the bill for the wedding ceremony and reception. If this is the route your family decides to take, a wedding can be an awfully big expense, so you want to be sure you're prepared! Many modern couples foot the bill of the wedding themselves, or they'll split the bill in some way with their families.

Whether your daughter is five or 15 years away from "I do," start saving now. Depending on how old your daughter is, it may seem too soon to be thinking about her wedding, but it'll be here before you know it. A great way to start saving is to open a separate account for her wedding fund and put away a set amount of money each month. This way, you can save a little at a time and not feel rushed.

If she's already engaged and you haven't been saving, don't panic. Evaluate your finances and determine how much you can afford to spend on the wedding. Once you've got that number, you can build the wedding budget.

If you can squeeze it in, one last family vacation is an experience you'll cherish.

Design Pics/LJM Photo/Thinkstock

4: Spend Time With Her

Your daughter will soon become someone's wife, and you'll want to spend as much time with her as possible before she has a new role and responsibilities. You should spend time with her together as a family, but each parent might want to carve out some one-on-one time so she feels special attention from both Mom and Dad. After all, you both have valuable experiences and marriage advice to share!

Need a few bonding ideas? Pull out old photo albums and cozy up on the couch. This is a fun way to remind your daughter who she is and where she came from before she starts a new chapter in her life. And, she can snag photos she may want to use in her rehearsal dinner slideshow. If you've got the funds, plan one last family vacation. Or, set aside the first Thursday of every month until the wedding for a family dinner.

3: Befriend Her Future In-laws

If an engagement is in the works or has already happened, you'll want to spend some time getting to know your daughter's future in-laws. It's safe to say that when two people unite in marriage, two families are also united, and it will be important for you to get along well with your daughter's new family. Establish a good relationship so you can amicably divvy up holidays and so your kids maintain a connection to their families as they're building a new one.

Invite the future in-laws over for dinner, or take your daughter's future mother-in-law to see the ceremony and reception venues. Also, don't be afraid to spend time with them on your own without your daughter and her fiancé. After all, they'll become your family, too!

Help ensure that your daughter's in tip-top condition for her big day.

Comstock Images/Thinkstock

2: Take Care of Medical Issues

Even if your daughter isn't on your insurance plan anymore, you can help advise her and offer assistance if she's undergoing any medical procedures.

Make sure that any medical or health issues are taken care of (and paid off!) before your daughter's big day. Go ahead and schedule surgeries, dental work (including braces, fillings or cosmetic procedures) and any other checkups while she's under her current medical insurance. Some things can be considered pre-existing conditions when she switches to her new insurance with her husband, and they might have to be paid out-of-pocket. You don't want your daughter going into her marriage with medical debt or issues that could be emotionally and financially taxing on her relationship.

1: Mend Broken Family Relationships

There's nothing worse than having to plan and attend a wedding with family where there are heavy issues that need to be resolved. Take a stand and mend any strained relationships before the big day. You want your daughter to enjoy her wedding day as much as possible, and a big part of that includes avoiding family drama.

Lingering family tensions that can't be fixed with a visit, phone call or letter should be neutralized. For instance, if certain relatives don't get along, place them at different tables at the reception and rehearsal dinner. If you and your husband are divorced, agree to a peace period between your daughter's engagement and her wedding. Cooperating to plan a beautiful day for your daughter should be something you can both agree on!

http://tlc.howstuffworks.com/family/5-things-parents-should-do-before-daughter-gets-married.htm

http://tlc.howstuffworks.com/family/5-things-parents-should-do-before-daughter-gets-married6.htm

Lots More Information

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