MRCB eyeing REIT market

January 31 2007

bt@nstp.com.my

MALAYSIAN Resources Corp Bhd (MRCB), which owns and manages the RM2 billion Kuala Lumpur Sentral property development, is eyeing the Real Estate Investment Trust (REIT) market.

MRCB group managing director Shahril Ridza Ridzuan said the conglomerate sees the REIT market as one of the many development funds of the future.

"But we must first allow the assets, revenue and yield to mature before looking into any REIT disposal," Shahril told reporters in Kuala Lumpur yesterday after launching the company's latest RM50 million property project the "Sooka".

On another note, Shahril said the company expects better growth this year riding on its RM400 million property projects in Dubai, United Arab Emirates.

"We are focusing on Dubai but at the same time we are looking at other operations in the region as well," said Shahril.

He reiterated that the group, which also owns a power plant, is ready to propose to the Government with a transmission solution for power to be generated at the Bakun Dam and denied reports that it is eyeing a stake in Talam Corp Bhd.

Shahril said MRCB, which is an engineering, property, infrastructure, construction and power group, currently has an order book of RM1.8 billion and derives 20 per cent of its revenue from overseas.

On the "Sooka" project, Shahril said the leisure centre will be fully completed in the third quarter of this year with an occupancy rate of 85 per cent.

Spanning 180,000 sq feet, the six-storey oval-shaped Sooka can accommodate 40 retailers and has already roped in The Sweat Club, Gold's Gym, Secret Recipe, Nosh, Istmus and Kelantan Delights as part of its tenants.

Axis-REIT records RM40.97m revenue

January 31 2007

AXIS Real Estate Investment Trust (Axis-REIT) recorded RM40.97 million gross revenue and RM33.13 million net rental income for the financial year ended December 31 2006.

During the year, Axis-Reit registered RM33.17 million total trust income and RM26.67 million net trust income.

Axis Reit Managers Bhd (ARMB), the manager of Axis-Reit, said the trust recorded RM10.8 million gross revenue, RM8.91 million net rental income and RM6.7 million net trust income (realised) during the unaudited fourth quarter ended December 31 2006.

ARMB declared RM26.4 million or 98.8 per cent of the year (2006)'s income plus RM309,340 tax exempt income brought forward from 2005.

"This translates into a total income distribution of RM26.67 million, of which RM12.77 million was paid as interim income distribution for the first half of 2006.

"Income distribution for the second half of 2006 amounted to RM13.9 million," it said.

For the year under review, shareholders were paid 12.95 sen, of which 6.2 sen was paid as interim income distribution for the first half of 2006, and 6.75 sen for the second half of the year.

According to ARMB, the revaluation of all the investment properties have also increased the net asset value per unit from RM1.39 to RM1.43 upon incorporation of the revaluation surplus of RM8.09 million on December 31 2006.

Axis-Reit owns a portfolio of nine commercial, office and office/industrial real estate. The properties are Axis Business Park, Menara Axis, Crystal Plaza, Infinite Centre, Axis Plaza, Kompleks Kemajuan and Kayangan Depot, Axis North Port Logistics Centre 1 and Wisma Bintang.

Ogawa listing by end of Q1

January 24 2007

HOME-GROWN provider of healthcare and lifestyle equipment, Ogawa World Bhd, expects to complete its listing exercise before the end of first quarter 2007.

The group has received approval from the Securities Commission (SC) to be listed on the Main Board of Bursa Securities Malaysia Bhd.

"Prospects in the healthcare and lifestyle market remain very promising, driven by growing middle income populations and rising health awareness among general consumers," Ogawa chairman Richard Wong said in a statement.

He said the listing will further enhance Ogawa's brands and provide the group with a stronger platform for growth.

Co-founded by Wong and his business partner, Lim Poh Khian in 1986, Ogawa has successfully grown from the trading of household and electrical products to a dominant retailer of healthcare and lifestyle equipment through its retail outlets in Malaysia.

Its range of equipment and supplementary appliances, including its top selling massage chairs, are marketed under its own brand names, OGAWA and DEKI.

The group's listing exercise is advised by Public Investment Bank Bhd (formerly known as PB Securities Sdn Bhd).

Petra Energy gets SC nod for listing

January 24 2007

PETRA Perdana Bhd subsidiary Petra Energy Bhd has received Securities Commission approval to list on the main board of Bursa Malaysia.

"The timing is just right for Petra Energy to take its Brown Field operations to the next level. We are confident of expanding our role not only in the domestic but also in the regional market," Petra Perdana executive chairman and chief executive officer Tengku Datuk Ibrahim Petra said in a statement.

He said although the price of crude oil is hovering around the US$50 per barrel range, lower than what it was before, there is still potential for maintenance, operations and retrofitting services for existing oil and gas platforms as oil companies seek to maintain or increase production output.

Market studies show that about 150 of the 270-odd oil and gas platforms in Malaysia and more than 600 platforms in the region exceed 20 years of age, he added.

Petra Energy's listing will entail a public issue of 46 million new ordinary shares of RM0.50 each and a bonus issue of 65 million new shares to be issued to all shareholders of Petra Energy prior to the listing on the basis of one new share for every two shares held after the public issue.

The listing exercise is expected to be completed in the second quarter of 2007.

Based on the indicative issue price of RM2.49 per share (or a theoretical ex-bonus price of RM1.66 per public issue share), Petra Energy expects to raise a total of RM114.54 million.

Tengku Ibrahim said the listing would also improve the group's gearing, resulting in a healthier balance sheet and enabling continued expansion into the Brown Field market.

Alliance Investment Bank Bhd has been appointed adviser, underwriter and placement agent for the listing of Petra Energy.

Boustead REIT to distribute 98% of earnings from Islamic plantation REITs

bizedge.com

Boustead REIT Managers Sdn Bhd plans to distribute 98% of the distributable earnings from the Al-Hadharah Boustead REITs (real estate investment trusts), which is scheduled to be listed on the Main Board on Feb 8.

Its chairman Tan Sri Lodin Wok Kamaruddin said on Jan 15 the Al-Hadharah Boustead REITs would be well positioned to declare a dividend distribution of 7.38 sen per unit for the next three years, beginning from 2008.

The projected earnings before taxation for the REIT, which is the first Islamic plantation REIT on Bursa Malaysia, is RM34.51 million for the financial year ending Dec 31, 2008 and RM34.82 million for FY09.

Boustead REIT Managers, a subsidiary of Lembaga Tabung Angkatan Tentera (LTAT), will manage the REIT.

The listing exercise involves 20 million units offered to the public at a retail price of 99 sen per unit. Another 198 million units would be offered top institutions and selected investors at RM1.05 per unit.

Lodin, who is also Boustead Holdings Bhd group managing director, was speaking to reporters after the release of the prospectus in Kuala Lumpur on Jan 15 by Second Finance Minister Tan Sri Nor Mohamed Yackop.

He said the initial REIT would involve eight oil palm estates and two palm oil mills in Peninsular Malaysia, valued at RM472 million.

Lodin said the current flood in Johor did not have an impact on the REITs as the plantation in Kota Tinggi was on high land. He added the only problem was to transport the fresh fruit bunches.

"The only issue is with accessibility. However, at the current CPO (crude palm oil) prices, we do not see this as a major problem,” he said.

On the PSC Industries Bhd (PSCI), Lodin said he expected it to perform well this year.

“There are many positive things happening for the company. We will be making the announcement at the appropriate time. PSCI is moving in the right direction, which we hope could help it turn around this year,” he said.

Boustead owns 32.5% or 56.57 million PSCI shares as of July 2005. PSCI posted a net loss of RM47.78 million for the third quarter ended Sept 30, 2006 compared with RM391 million net loss in the previous year.

Short selling makes comeback in Malaysia after 9-year ban

Biz time online

MALAYSIA began yesterday to allow short selling of a limited group of company shares, lifting a nine-year ban imposed in the wake of the 1997/98 Asian financial crisis.

Malaysia, which had banned short selling to halt speculative sell-offs, will allow the practice for 70 selected stocks to boost foreign interest in the market.

Analysts welcomed the move, saying it showed the Malaysian Government's effort to further develop its stock market.

"Short selling sends a signal to the market that Malaysia doesn't have a restrictive framework and it is up with most developed markets in the ability to short sell," said Jay Moghe, managing director of Opes Prime Asset Management Pte Ltd in Singapore.

"Most institutional investors prefer the ability to hedge in a stock market... it's a key component of hedge fund activity."

Short-sellers borrow shares and sell them in expectation that prices will have declined by the time they need to buy them back and return them to the share lender.

Typically, they are a feature of developed markets, enhancing market liquidity and boosting returns for fund managers who lend out their shares for a fee.

But analysts say they did not expect a high level of short selling in Malaysia yet. Investors have largely been bullish on Asian equity markets after a strong 2006.

"Short selling has not been ignored, but no one wants to take a chance," said Kuala Lumpur-based Kenny Yee, head of research at OSK Research.

"With the market on an uptrend and everyone entering the new year expecting the Malaysian market to touch 1,200-1,300 points, how can you find anyone with the guts to short sell the market?"

The KLSE Composite edged up 1.9 per cent at 1,117.09 points.

Malaysia wanted to resume the practice by the end of September, but put it off due to technical problems. In October, the stock exchange said short selling could begin in January.

Under the new rule, owners of stock will get a 2 per cent return on lending a minimum of 50,000 shares to a central lending pool, with Bursa Malaysia as the counter party. Lenders previously received 1 per cent, analysts said.

Short-sellers may borrow a minimum of 100 shares, paying a 2.2 per cent charge and a RM100 borrowing fee.

They are also required to provide at least 105 per cent collateral on the amount they borrow, which can be in a combination of cash and shares and only on the list of 70 stocks which are listed as acceptable shares.

Despite the change, some investors said they still feared a repeat of 1998, when Malaysia imposed capital controls to shield the economy from the effects of the Asian financial crisis.

"There would be two broad things. One is the legacy of 1998 when Malaysia did impose capital controls and it can do so at any time. That is a legacy financial players don't forget," said a Singapore-based hedge fund manager who declined to be identified.

"Secondly, Malaysia is not a market with a large volume. I think the flood of global money coming into this part of the world would target Singapore before Malaysia. The basic summary is - yes a positive move, but don't expect to see an enormous flood going in."

Among the 70 permitted stocks available for short selling are low-cost carrier AirAsia Bhd, which rose 7.3 per cent to close at RM1.62 yesterday on an anticipated global alliance.

They also include smallest local mobile phone operator DiGI.Com Bhd, whose shares have more than doubled to RM16 in 12 months and gaming firm Genting, whose stock has gained 64 per cent to RM34.50 in the same period. - Reuters

EPF restructures members’ accounts

The Employees Provident Fund (EPF) will restructure its members’ accounts with effect from Jan 2, 2007, in a move to enable its members to increase their savings for retirement.

The EPF said on Dec 29 under the restructuring, the current three accounts would be consolidated into two.

The current three accounts are Account One (60% of members’ savings), Account Two (30%) and Account Three (10%).

With effect from Jan 2, the number of accounts would be consolidated into Account One (70% of members’ savings) and Account Two (30% of members’ savings).

“The savings currently in Account Three, which are used for critical illness-related withdrawals, will be incorporated into Account Two initially. Subsequent contributions after Jan 2, 2007 will be channeled into Account One and Account Two in the proportion of 70% and 30% respectively,” it said.

The EPF said this would result in the members having a larger amount for housing, education or medical withdrawals.

“With the changes, members will have to prioritise their pre-retirement withdrawals carefully. This is because all these withdrawals will be made from the same account – Account Two,” said EPF senior public relations manager Nik Affendi Jaafar.

He said the restructuring of the members’ accounts from three to two would bring a multitude of benefits to members in the long run in the form of increased funds for retirement and greater flexibility and control over the management of their funds for their current needs.

Account One cannot be withdrawn by members before they reach 55. However, the members can invest a portion of their savings in Account One in investments managed by approved external fund managers.