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47 Responses to “Make Money in Stock Market | Buy and Hold Long Term Investment”

1. mtsen on January 18th, 2010 at 6:07 pm

   any justification why these 2 ?

2. alan on January 18th, 2010 at 6:26 pm

   Just look at the History!

   Do You know when you put Money(buy) to Public Mutual Unit Trust, where the Fund Manager Invest in?

   How Much can You be wrong! 🙂

   ** Please the disclaimer before you Invest

3. alan on January 19th, 2010 at 6:31 pm

   Public Bank shares up on robust earnings outlook
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   Public Bank Bhd, the country’s third-largest bank by assets, saw its share price rise to the highest in 10 months after a report showed earnings for the financial year ended Dec 31, 2009 (FY09) may come in above market expectations.

   The stock gained 1.71% to close at RM11.84 yesterday while year-to-date, it has risen 5.71%. The counter has gone up almost 68% since the March 12, 2009 low of RM7.05.

   HwangDBS Vickers Research Sdn Bhd analyst Lim Sue Lin said in a report that FY09 net profit, to be announced this week, could come in at 2% to 3% above market projections of RM2.41bil.

   “We believe Public Bank will meet its loans growth target,” she said, adding that up to the third quarter of last year, loans grew 11% versus the research house’s full-year forecast of 14%.

   Lim said net interest margins were expected to remain flat (at 1.99%) while non-interest income would remain robust (at RM3.98bil versus RM3.72bil in FY08) and asset quality stable.

   She projects a total final gross dividend per share (DPS) of 46 sen while dividend in shares could also be likely as the bank has 80 million treasury shares.

   “We do not discount the possibility of another share dividend as part of the final DPS for capital preservation reasons,” Lim said.

   Meanwhile, OSK Research Sdn Bhd analyst Shin Kao Jack said the bank’s share price could continue to rise sharply with an immediate support at the RM11.36 level followed by the RM11.12 level.

   “To the upside, there is an immediate resistance at the RM12 psychological mark,” he said.

   fr:biz.thestar.com.my/news/story.asp?file=/2010/1/19/business/5497537&sec=business

4. alan on January 19th, 2010 at 6:32 pm

   Public Bank shares rally in early trade Tuesday
   ————-

   Public Bank Bhd’s shares rallied in early trade Tuesday on higher earnings anticipation.

   It’s share rose 16 sen to RM12.00 at 10.05am, after touching a high of RM12.02 while the FBM KLCI was trying to sustain above the 1,300 points level.

   At 10.05am, the market barometer stood at 1300.12, up 2.29 points after touching a high of 1302.36.

   Analysts said the bank’s financial results, to be released soon, is expected to be within expectation or slightly above

   fr:biz.thestar.com.my/news/story.asp?file=/2010/1/19/business/20100119115701&sec=business

5. alan on January 23rd, 2010 at 9:33 pm

   Genting offers more value than Singapore unit
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   The exuberance surrounding Resort World Sentosa might be overdone and one broker has now recommended investors switch their focus on Genting Malaysia for value instead of its Singapore counterpart.

   Citigroup said expectations surrounding Resort World Sentosa were too bullish, making Genting Singapore the world’s most expensive casino stock.

   “According to Bloomberg consensus, Resort World Sentosa will be the world’s most profitable casino by 2011, implying Singapore will be generating twice the revenues of Malaysia. We strongly disagree,” it said.

   “Not least because if consensus estimates are to be believed, Resort World Sentosa would be the most profitable casino in the world in its first full year of operation (2011), a proposition that truly stretches the imagination.”

   At the core of Citigroup’s estimates are visitor projections and just how much money is going to be spent by each person at the resort.

   Even though it says its 2011 earnings before income tax, depreciation and amortisation (ebitda) estimates for Resorts World Sentosa were around 30% below consensus and projects Resorts World Sentosa generating revenue of US$1.2bil in 2011, those were aggressive as the consensus numbers call for Resorts World Sentosa starting operations with a bang, something that they feel is unlikely given the greenfield nature of the casino.

   The broker said its forecasts seem aggressive, as they assume every single visitor to Singapore would visit either of the integrated resorts once and that every eligible Johorean would go twice to the resort. Furthermore, estimates counts on every Singaporean above 21 years of age visiting the casino five times a year and outspending the average visitor in Macau.

   Estimates have projected that each visitor to Resorts World Sentosa would spend US$100, which is 51% higher than that typically spent at Genting Malaysia’s casino (US$66) and higher than the average spend at the Venetian Macau (US$84). That does not include the additional S$100 entry levy that each Singaporean must pay when they enter the casino.

   Calling a sell on Genting Singapore, Citigroup gives another example why the market expectations were too high for Singapore’s Integrated Resorts.

   “According to consensus, Resorts World Sentosa and Marina Bay Sands in their first full year of operations will achieve combined gross gaming revenue equivalent to 50% of Las Vegas at about US$4bil. We estimate the total market size in 2011 to be at US$2.8bil, around 35% below consensus,” it said.

   Citigroup feels Resorts World Sentosa would take significantly longer than currently forecast to achieve the level of visitor arrivals needed to meet the market’s revenue and ebitda projections for its gaming and theme park products.

   The broker, however, has called a buy on Genting Malaysia, calling it the world’s most profitable casino. It expects revenue to fall by 12% by 2011 compared with 2009 due to cannibalisation from Singapore but said that both markets were different entities and the issue of Genting Malayssia losing its 7% of Singaporean visitors as overplayed.

   Citigroup expects Genting Highlands’ mass market day trippers (72% of visitors) to remain loyal due to the huge price differential in the two models. Resorts World Sentosa’s hotel rates are 7 times those of Genting Highlands.

   fr:biz.thestar.com.my/news/story.asp?file=/2010/1/23/business/5531730&sec=business

6. alan on January 28th, 2010 at 7:41 am

   Genting celebrates its 45th anniversary

   THE Genting Group launched its 45th anniversary celebrations at Wisma Genting recently.

   At the launch, Genting Berhad chairman and chief executive Tan Sri Lim Kok Thay said” “As we continue to expand our horizon and meet the demands of a globalised market, we are always mindful that the main catalysts behind our success are our stakeholders, especially our customers and employees.

   “Indeed, our 45th anniversary is an ideal platform for us to thank our stakeholders for the support rendered throughout the years.

   “This year is set to be a significant year for Genting and we plan to show our appreciation by rewarding our stakeholders with exciting rewards and giveaways.”

   Genting Malaysia Berhad, representing the group’s Leisure & Hospitality division will have many offerings to celebrate this special year at Resorts World Genting.

   These offers include discounts on hotel rooms and F&B, lucky draws, exciting giveaways, theme park packages, 45th anniversary special gifts, fun-filled street performances, international shows, concerts and grand sales at retail outlets.

   Customers of the resort will also have the chance to win cars in its Mega 45 Car Draws, among others.

   In addition, Genting will carry out its obligation to society by contributing to the community.

   As a start, Genting Malaysia will be donating to 45 charitable organisations during the Chinese New Year celebration.

   fr:thestar.com.my/metro/story.asp?file=/2010/1/27/central/5511284&sec=central

7. alan on February 20th, 2010 at 7:47 am

   Gold reward for Public Bank customers

   KUALA LUMPUR: Public Bank and Public Islamic Bank are offering RM800,000 worth of gold to reward their customers through the “PB Gold Rush” campaign in conjunction with the Golden Tiger Year this year.

   The campaign, to run until July 31, offers more than six kilogrammes of gold at 99.9 per cent fineness under the bank’s gold investment account.

   A total of 118 prizes are up for grabs, comprising 18 monthly prizes of 18 grammes of gold for a customer every month and 10 main prizes that offer the Grand Prize at one kilogramme worth of gold.

   First prize is half a kilogramme of gold, second prize (1/3kg) and third prize (1/4kg),” the bank said in a statement on Friday.

   The gold investment account allows individual customers to invest in the purest available gold commodity in 99.9 per cent fineness at a daily price for one gramme in Malaysian Ringgit.

   Trading will be conducted via passbook.

   Each new account/investment signed for selected deposits, loans, investment, hire purchase and bank assurance products will put customers in the running to win.

   Chances of winning the gold prizes increase when customers sign up more products with the bank, it said

   fr:biz.thestar.com.my/news/story.asp?file=/2010/2/19/business/20100219152840&sec=business

8. alan on March 2nd, 2010 at 8:47 pm

   Basel 3 poser for banks

   Implementation by end-2012 may see some banks cutting dividend payouts and raising fresh capital

   PETALING JAYA: The Basel 3 proposals, which will be fully implemented by the end of 2012, may affect the capital level of some Malaysian banks, leading them to cut back on dividend payouts and raise fresh capital, analysts said.

   Although the proposals remain vague as they are still at an early stage of development, analysts expect that the proposals would broadly require banks to hold more equity capital and liquidity, strengthen their capital buffers and subject banks to greater regulatory intervention, including potential constraints on dividend payments.

   Citi Investment Research, in a note, observes that although banks in Asia, excluding Japan’s, are generally well capitalised, banking markets like Taiwan’s and Malaysia’s have relatively low equity tier-1 capital and relatively high leverage ratios.

   It notes that Malaysia relies heavily on hybrid capital to bolster tier-1 capital and there seems to be significant amounts of goodwill hidden at the financial holding company level.

   “Since Asian banks are generally well capitalised, we do not anticipate significant capital raising pressure, except in a few specific cases. We think a handful of banks’ equity tier-1 ratios may fall below our assumed 7% minimum by 2011 – Malaysia’s Public Bank Bhd (PBB) is one of them. These banks may face pressure to either reduce dividends and/or raise fresh capital,” Citi Investment Research said.

   “Knowing the future level of minimum requirement will be critical. As an example, if we set the minimum equity tier-1 ratio to 8% instead of 7%, then many more banks may potentially fall into the capital raising zone, including OCBC, CIMB and Maybank,” it added.

   BNP Paribas, in a research note, reckons that the key reforms of Basel 3, among others, would focus on how capital base is being defined.

   In this respect, the report said a key proposal would be that the predominant form of tier-1 capital must be common shares and retained earnings.

   The phasing out of innovative capital securities, the exclusion of minority interest from equity tier-1 and the addition of unrealised gains and losses towards equity tier-1 would be among other key proposals, according to BNP Paribas.

   The minimum capital requirement has not been calibrated but is set to be raised from the current 4% for tier-1 and 8% for capital adequacy ratio, the report said.

   BNP Paribas analyst Ng Wee Siang said a stringent application of these proposals would drag down the tier-1 ratios of banks and that Public Bank would be the most affected given its existing low equity tier-1, while the impact on other Malaysian banks would be manageable.

   This may cause Public Bank to scale back on its dividend payout while the impact on its tier-1 ratio is large enough to bring it down to 6.7%, the lowest among BNP’s coverage universe.

   This, Ng said, was not surprising given Public Bank’s aggressive move in recent years to increase the efficiency of its capital structure by returning equity capital to shareholders and replacing it with non-equity tier-1 capital.

   “In the event the minimum tier-1 ratio is raised, Public Bank will have no choice but to scale back on its aggressive dividend payout (a minimum 80%),’’ Ng said, adding that the broader impact would be that banks would have less flexibility to undertake financial engineering to boost their return on equity (ROE).

   As capital buffers are being built up, ROE would fall and this may over time have an impact on banks’ valuations, according to Ng.

   He also reckoned that the proposed reforms would have zero impact on Hong Leong Bank (HLB) given the bank’s clean balance sheet with zero innovative and non-innovative hybrid securities.

   Post adjustments, HLB’s tier-1 ratio would stand head and shoulders above that of its peers, Ng said.

   Promod Dass, RAM Rating Services Bhd head of financial institution ratings, said Malaysian banks were well capitalised and had survived the global financial crisis without a dent in their capital position.

   “The adoption of Basel II has revolutionised risk management culture and mindset of banks by setting up rigorous risk and capital management requirements designed to ensure that a bank holds capital appropriate to the risk it exposes itself to through its lending and investment practices. Basel 3 would be the next quantum leap,” he said.

   Based on the rating agency’s analysis, Dass noted that domestic banks’ current level of common equity as a proportion of risk-weighted assets was still at a comfortable level.

   As at end-December 2009, the banking industry’s average overall risk-weighted capital adequacy ratio and tier-1 capital adequacy ratio stood at a healthy 14.7% and 13.3%, respectively (end-December 2008: 12.6% and 10.6%).

   Dass said that although the new capital rules to be set by Bank Negara could necessitate the raising of new, costlier capital for certain banks, RAM believed that the approach taken by the bank regulator would be pragmatic.

   “It is important to realise that these proposed capital measures will be onerous for banks but will ensure that the Malaysian banking sector has enough might to continue riding through financial tsunamis,’’ he said.

   Malaysian Rating Corp Bhd vice-president and head of financial institution ratings, Anandakumar Jegarasasingam, feels that in terms of meeting the enhanced capital requirements, the Malaysian banking sector is on a relatively better footing than some other developed markets as banks’ shareholders’ funds account for about 80% of tier-1 capital.

   That said, at this point, it is reasonably expected that the minimum required regulatory capital ratios (tier-1 and total capital ratios) would increase significantly once these proposals are firmed up, according to Anandakumar.

   He said one of the barriers for local banks in implementing Basel 3 was that the need to have a strong capital buffer was overlooked in their search for higher ROE.

   “This is the biggest challenge for Malaysian banks given the predominance of banking stocks on Bursa Malaysia and the resulting high dividend expectations,’’ he added.

   HSBC Bank Malaysia Bhd chief risk officer Paul Norton said the challenges might be in the form of granularity for the new reporting requirements which may require system investment costs.

   He added that for the overall banking industry, if banks needed to set aside very substantial sums to meet liquidity, this might hinder the availability of these funds to support lending.

   Ernst & Young financial services leader for Malaysia, Gloria Goh, is of the opinion that should the regulator in Malaysia set the implementation of Basel 3 proposals at an appropriate time, there would probably be many banks taking prompt action to review and raise their tier-1 capital to meet the new requirements.

   “This could also result in the forced merger of some of the smaller banks as they may not have the capabilities and capacity to do it alone. As for the larger banks, the biggest challenge would be to balance the sudden cost increase and how such costs could be effectively managed,’’ she said.

   Although the framework might pose some challenges to banks, OCBC Bank (M) Bhd country chief risk officer Choo Yee Kwan said bank regulators could exercise “national discretion” with respect to the timing of implementation, and in making revisions to certain prescribed areas.

   fr:biz.thestar.com.my/news/story.asp?file=/2010/3/1/business/5708878&sec=business

9. alan on March 3rd, 2010 at 12:31 pm

   Public Bank will not raise capital this year

   COO: Capital ratios very healthy under Basel II requirements

   KUALA LUMPUR: Public Bank Bhd, the country’s third largest bank by assets, has no plans to raise capital this year in anticipation of the Basel 3 framework which, among other proposals, will require banks to beef up their tier-1 core capital ratio with predominantly common shares and retained earnings.

   Chief operating officer Leong Kwok Nyem (pic) said there would not be any capital raising this year as the Basel 3 proposals were still at their initial stages of consultation. He said banks right now only required to provide feedback to the Basel Committee on Banking Supervision.

   “There will be further consultation by the committee and it’s only by the end of this year that they’re going to come up with the next draft proposal,” Leong said following the company AGM yesterday. He said the Basel 3 framework was only scheduled for implementation by end-2012.

   Public Bank’s core capital ratio stood at 9.9% as at Dec 31, 2009 compared with 7.7% in the previous year, while the risk-weighted capital ratio stood at 14.2%, an improvement from the 13.1% in 2008.

   “At this point, there are no details as to what capital levels are required. It’s very preliminary to consider any capital raising,” Leong said, adding that the capital ratios were very healthy under the Basel II requirements and the bank was very comfortable that the levels were adequate in growing and supporting the business.

   Citi Investment Research had in a report noted that Public Bank’s core capital ratio could fall below the assumed minimum 7% by 2011 when the bank could face pressure in reducing dividends or raise fresh capital.

   It said although banks in Asia, excluding Japan, were generally well-capitalised, Malaysian banks relied heavily on hybrid capital to bolster their core capital ratio with “significant amounts of goodwill hidden at the financial holding company level.”

   Meanwhile, JP Morgan analyst Chris Oh said in a March 1 report that with the Basel 3 initiatives still uncertain at this juncture, “the banks are now less likely to pursue aggressive capital management initiatives until greater visibility exists.”

   Leong said in the event that Basel 3 required higher capital ratios, the RM2.5bil in yearly profits gave the bank leeway in retaining some of the profits to add to the capital ratio although that would need to be balanced with the cash dividend payout ratios to shareholders.

   “In the event that the ratio requirements are higher, then we can always go back to shareholders to raise capital. But that will not be until the ratios are determined, which will be some time in 2011 or 2012,” he said.

   Leong said the return on equity (ROE) would also have to be reviewed should the Basel 3 framework require the bank to keep more equity capital. “We’ll have to review those ROE targets because as capital requirements are increased then the ROE will correspondingly be lower although we’ll still be looking at positive flows.”

   In a statement, bank chairman Tan Sri Teh Hong Piow said the bank’s performance was driven by steady net interest income growth, above industry rate of loan growth, sustained strong asset quality and high staff productivity.

   fr:biz.thestar.com.my/news/story.asp?file=/2010/3/3/business/5779561&sec=business

10. alan on March 9th, 2010 at 9:01 am

    Banking stocks propel FBM KLCI to a two-year high

    PETALING JAYA: Banking stocks are the big winners of a higher interest rate, with their share prices up sharply for a second straight day on expectation that bottomlines will be boosted by fatter margins amid a recovering economy.

    Local sentiment was broadly positive, buoyed by rising equity markets across the region.

    Shares in Public Bank Bhd and CIMB Group Holdings Bhd climbed to new highs, and together with Malayan Banking Bhd (Maybank), were the biggest contributors to the FTSE Bursa Malaysia KL Composite Index’s (FBM KLCI) rise yesterday.

    The three banks made up close to 14 points of the benchmark index’s 24.44-point rise yesterday to 1,324.22 points. This was the index’s highest level since March 3, 2008.

    Analysts said the rate hike was evidence that policymakers believed the economic recovery was intact.

    “When investors talk about economic recovery, banks are the prime beneficiary,’’ ASM Investment Services Bhd chief investment officer Rusli Abu Yamin said.

    Bank Negara on Thursday raised its key overnight policy rate (OPR) by 25 basis points from a historic low of 2% to 2.25%. The move was the first rate hike in almost four years.

    The FBM KLCI had risen 1% on Friday and added another 1.9% yesterday.

    Public Bank yesterday shot up 62 sen, or 5.5%, to a record RM11.94 on volume of 11.5 million shares, while CIMB Group rose 40 sen, or 2.9%, to RM14.12 with 11.46 million shares transacted.

    Maybank rose 12 sen, or 1.6%, to RM7.52 with 30.1 million shares changing hands. It was the stock’s highest level in two years.

    “The gradual rise of the interest rate is positive for the ringgit and the stronger ringgit is positive for the overall market,’’ SJ Securities Sdn Bhd deputy managing director Peter Lim said.

    The rate hike had boosted demand for the ringgit, and at 3.405 against the US dollar yesterday, the local currency was traded at its strongest level against the greenback since Jan 19.

    “The general view is that Bank Negara is only starting to increase interest rates,’’ Rusli said, adding that he saw the ringgit moving towards 3.20 against the US dollar by year-end.

    The stronger ringgit is expected to boost the appeal of ringgit-denominated assets to foreign investors, and this includes crude palm oil (CPO) traded on Bursa Malaysia Derivatives.

    The most active CPO futures yesterday rose RM39 to RM2,709 a tonne. This was the benchmark contract’s highest price since May last year.

    Shares in Sime Darby Bhd, the world’s largest listed plantation owner, rose 15 sen, or 1.7%, to RM8.70 on 12 million shares traded.

    While the top counters saw heavy buying interest, the smaller-sized firms trailed behind.

    The FBM SmallCap Index, which tracks the performance of 98% of listed stocks outside the top 100 companies, advanced at a slower pace of 1.16% against the broader FBM Emas Index’s 1.7% rise.

    In overseas markets, Japan’s Nikkei 255 Average jumped 2.09%, followed by Hong Kong’s Hang Seng Index gained 2% , Singapore’s Straits Times Index rose 1.6% and South Korea’s main Kospi Index climbed 1.56% higher.

    fr:biz.thestar.com.my/news/story.asp?file=/2010/3/9/business/5821767&sec=business

11. alan on March 11th, 2010 at 9:07 am

    Banks may see better earnings this year

    PETALING JAYA: Banks are expected to continue doing well this year, bolstered by a stable margins outlook and an improving economy, analysts said.

    An analyst at a bank-backed research house said most banks have guided for stable or better earnings this year as margins are expected to expand or at least remain stable due to higher lending rates as a result of increases in the overnight policy rate (OPR).

    Most economists are predicting a 50- to 75-basis point rise in OPR this year. Bank Negara has so far lifted the OPR by 25 basis points.

    “A rise in base lending rate is positive for banks as the cost of funds in terms of fixed deposit (FD) rates does not increase as fast as lending rates since FDs will only get re-priced when they mature. This will result in at least a short term expansion of bank margins,” the analyst said.

    MIDF Research banking analyst Kelvin Ong concurred. “Banks would stand to benefit from hikes in lending rates as that would bolster their net interest income.

    “This is due to the immediate re-pricing of interest rates of variable rate loans. Most banks have a higher proportion of variable rate loans compared with fixed rate loans,” he said.

    He added that while interest rates were adjusted immediately for variable rate loans, there would be a lag effect in the adjustment of deposit costs as the interest for existing FD placements would be paid based on the earlier contracted rates, which were lower.

    “In this scenario, it will be positive for banks’ margins,” Ong said.

    TA Securities’ sensitivity analysis indicates that a 10-basis point increase in interest rate would raise the industry’s financial year 2010-2011 net profit by 3.7% on average.

    “Based on our analysis, we believe Alliance Financial Group Bhd, Hong Leong Bank Bhd, EON Capital Bhd and RHB Capital Bhd will stand to benefit from a rate hike,” it said.

    In addition, OSK Research noted that as interest rates were being raised from historical lows, gradually normalising interest rates was unlikely to negatively affect loans growth and asset quality.

    The research house said the current interest rate hike environment was unlikely to dampen the performance of banks as the country was at an early stage of economic recovery and banks’ earnings and thus share price performance, were typically positively correlated to early- to mid-cycles of an economic recovery.

    In addition, the gradual normalisation of interest rates from a historic low was unlikely to have an impact on asset quality and loans growth as long as economic recovery growth was sustained over a period of time, OSK said.

    “Given the potentially bumpy economic recovery, the Government is also unlikely to drastically cut down on stimulus spending, which will bolster demand for credit,” it added.

    fr:http://biz.thestar.com.my/news/story.asp?file=/2010/3/11/business/5835706&sec=business

12. alan on April 16th, 2010 at 8:27 pm

    Public Bank Q1 profit up on strong income growth

    Improved performance in line with analysts’ consensus

    KUALA LUMPUR: Public Bank Bhd’s net profit for the first quarter ended March 31 rose 16.3% to RM685.2mil from RM589.3mil in the previous corresponding period mainly due to strong growth in net interest and financing income, higher non-interest income and lower loan impairment allowances.

    In a filing with Bursa Malaysia yesterday, Public Bank said its pre-tax profit rose to RM922.6mil from RM744.9mil and earnings per share (EPS) increased to 19.7 sen from 17.44 sen before. Revenue for the period stood at RM2.5bil.

    “The improved operating environment in 2010 will provide further leverage for the group to sustain its growth trajectory. Barring unforeseen circumstances, the group is expected to continue to record satisfactory performance for the rest of 2010,” chairman Tan Sri Teh Hong Piow said in a statement.

    The bank’s results were in line with analysts’ consensus.

    Public Bank said net interest and financing income rose by RM159.7mil (14.5%) and other operating income by RM92.7mil (31.5%), due mainly to higher management fee income from the fund management business, higher fee income from sale of trust units, higher brokerage and commission from stockbroking activities and higher income from the foreign exchange business. Loan impairment allowance also decreased by RM16.6mil (10.6%), it said.

    These were partially offset by RM93mil higher other operating expenses, mainly due to the increase in personnel costs resulting from the expansion of marketing sales force and higher business volume, it said adding that the growth in the group’s net interest and financing income was driven by continued strong loans and deposits growth coupled with sustained strong asset quality.

    Total loans and advances grew 13.6% year-on-year to RM142.4bil as at March 31 from RM125.4bil, mainly arising from financing of small and medium-scale enterprises, residential mortgages and financing of passenger vehicles, it added.

    “Based on the strong loan performance in the first quarter, the group is on track and is well positioned to achieve its targeted loan growth rate of 15% for 2010,” Teh said.

    Meanwhile, total deposits rose 12.4% or RM19.3bil from a year earlier, which was partly due to the higher net interest income for the quarter under review.

    Public Bank said its impaired loan ratio remained below 1% in the first quarter compared with the industry’s 3.4% as at end-February.

    Public Bank’s domestic commercial bank recorded a 90.7% higher pre-tax profit of RM833.1mil for the first quarter against the RM437mil achieved in the previous corresponding quarter.

    This was mainly due to higher net interest income, lower loan impairment allowance, higher dividend income from subsidiaries and higher foreign exchange gain in respect of the hedging of the group’s overseas operations, partially offset by higher other operating expenses, it said.

    “The increase in the overnight policy rate by 0.25% in March translated into a direct improvement to the group’s net interest margin.

    “While the positive impact of the recent rate increase had not been fully reflected in the quarterly results, the group’s net interest and financing income improved by RM160mil or 14.5% in the first quarter compared with the corresponding quarter last year, on the back of strong organic growth in loans and customer deposits,” Teh said.

    Public Bank’s capital position remained healthy, with its risk-weighted capital ratio and core capital ratio standing at 13.7% and 9.6% respectively in the first quarter.

    “The bank continues to proactively monitor the latest development in regard to the Basel III proposals and to address its potential impact on the group’s capital requirements by realigning existing capital management strategies from time to time,” Teh said.

    A bank-backed analyst said Public Bank’s improved performance was in line with its research house and the market. He expects other banks to report growth, given Public Bank’s decent results that “pretty much set the tone” for the upcoming results.

    He said the capital market activities were generally strong, particularly in the equity segment. “Corporate exercises and new listings are expected to be strong, creating more room for growth of Public Bank’s non-interest income.”

    AmResearch said it remained positive on Public Bank and maintained its “buy” call with an upgraded fair value of RM13 a share. It said its fair value was based on fair price-to-book value of 3.9 times, derived from return on equity of 25.5% forecast for the financial year ending Dec 31.

    It said Public Bank’s net earnings of RM685.3mil translated into an annualised net earnings of RM2.74bil.

    “This is seemingly below our forecast of RM2.81bil and consensus’ RM2.88bil, but the first quarter is usually the lowest quarter of its financial year given a generally shorter working period. Thus, we consider Public Bank’s first quarter net earnings to be in line with expectations,” AmResearch said, adding that the results provided further evidence of the bank’s consistent performance.

    fr:biz.thestar.com.my/news/story.asp?file=/2010/4/16/business/6065969&sec=business

13. alan on April 17th, 2010 at 8:40 am

    Further rise in Public Bank earnings expected

    Analysts: Rate hikes will boost income, given the higher loan and deposit growth

    PETALING JAYA: Analysts expect Public Bank Bhd’s earnings to accelerate further in the coming quarters, with the management looking “comfortable” about growing its loan book and taking more risk.

    “Management appears to be more comfortable with higher growth trajectory as asset risks appear to have peaked,” Kenanga Reserach said in an update yesterday.

    The firm believed Public Bank was investors’ “best bet” to ride on the opportunities from higher interest rates.

    “Rate hikes will benefit the bank in terms of higher net interest income, given the higher loan and deposit growth,” it said.

    Fixed rate loan accounted for 33% of Public Bank’s total loan base.

    “All business segments reported double-digit pre-tax profit growth,’’ TA Research said yesterday.

    It also noted that contribution from the group’s overseas operations had strengthened.

    But the group’s fifth straight quarter of rising net profit announced on Thursday was not enough to inspire a major re-rating on the stock, with the market already predicting another record year for the country’s third largest bank.

    CIMB Research said that while Public Bank’s annualised first quarter ended March 31 earnings came in 14.4% short of its full-year forecast, “we are only cutting our FY10-FY11 earnings forecast by 4% to 6% as we envisage strong quarters ahead.’’

    For the quarter just ended, Public Bank’s net earnings jumped 16.3% to RM685mil compared with RM589mil recorded in the previous corresponding period.

    The stock yesterday slipped two sen to close at RM12.02 from a level that equalled its record high achieved on March 12. At current level, the bank’s market value stood at RM42.45bil.

    “We continue to like the stock for its above-industry growth and asset quality,” RHB Research Institute said yesterday.

    Other reasons to like the stock were its “low” foreign ownership and high weightage in the benchmark stock index, it said.

    Credit Suisse yesterday noted that Public Bank’s foreign shareholding stood at 26% as at end of March, which was close to its all-time low of 25% and well below its historical average of 33%.

    At the peak, foreign investors owned as much as 38% of Public Bank’s shares.

    Meanwhile, Public Bank may lower its dividend payout this year to preserve some capital.

    “Despite uncertainties about Basel 3 and management guidence for a lower dividend payout, we believe there is still value in the stock as the best proxy to the economic recovery in terms of loan growth,” RHB Research said

    Kenanga noted that capital infusion “is the key” as improving capital adequacy would sustain a stronger growth going forward.

    fr:biz.thestar.com.my/news/story.asp?file=/2010/4/17/business/6075629&sec=business

14. alan on May 5th, 2010 at 8:18 am

    Public Bank wins four FinanceAsia awards

    PETALING JAYA: Public Bank Bhd emerged top of the list in four categories of a poll by financial publication FinanceAsia for Malaysia.

    The categories were best-managed company, best corporate governance, best corporate social responsibility and the most committed to a strong dividend policy.

    FinanceAsia, in its 10th annual poll of Asia’s top companies, has collected votes from 300 investors and analysts across the region.

    The results will be published on country-by-country basis throughout this week.

    FinanceAsia only lists the top 10 companies in each category.

    In the best-managed company category, CIMB Group Holdings Bhd came in second while Petronas Gas was in the third place.

    CIMB Group also came in second in the best corporate governance category, followed by British American Tobacco (M) Bhd.

    However, CIMB Group was No.1 in the best investor relations category, followed by Public Bank and Petronas Gas.

    CIMB group chief executive Datuk Seri Nazir Razak also emerged as the best CEO, followed by Public Bank managing director Tan Sri Tay Ah Lek and Fraser & Neave Holdings Bhd chief executive officer Tan Ang Meng.

    AirAsia Bhd was at the top of the best mid-cap company, followed by Malaysian Bulk Carriers Bhd.

    FinanceAsia will reveal the overall results of the best-managed companies in 10 key sectors in the region on Friday.

    fr:biz.thestar.com.my/news/story.asp?file=/2010/5/5/business/6190098&sec=business

15. alan on June 8th, 2010 at 6:41 pm

    S&P: Good time to pick up Asian blue chips

    However, its analysts warn of short-term volatility

    KUALA LUMPUR: A global rout in the equity market over the past one month offers “an opportune time” for investors to pick up Asian blue chip stocks at cheaper prices, said Standard & Poor’s (S&P) Equity Research.

    But before you jump into the market, be wary that the short-term trend is expected to remain volatile – at least until the upcoming month-long World Cup 2010 ends in mid-July, according to analysts at the world’s largest producer of independent equity research.

    “We are still in a bull market,’’ declared Stephen Biggar, the global director and managing director of S&P Equity Research, who was in town yesterday.

    He noted that a well-known summer investment strategy of “sell in May and go away” had certainly panned out this year, but reckoned that equity markets had seen its “four-year cycle low” in March last year.

    “We believe the current global sell-off represents an opportune time for long-term investors to add to or initiate emerging market equity exposure,’’ Biggar said.

    In the equity market yesterday, key bourses across Asia plummeted amid a fresh sell-off sparked by renewed worries about the debt crisis in Europe and slow recovery in the United States.

    News over the weekend that Hungry may faced a Greece-style sovereign debt crisis pummelled the euro against the US dollar and yen.

    Japan’s Nikkei 225 was the worst-hit stock index in the region yesterday after it plunged 3.8% to 9,520 points, followed by a 2.8% drop in Australia.

    Stocks were down by at least 2% in Hong Kong, Taiwan and Indonesia. Almost all major markets in Asia were in the red yesterday.

    At home, the FTSE Bursa Malaysia KL Composite Index fell 8.12 points, or 0.6%, to close at 1,286.27 points, as 24 stocks that made up the 30-counter strong index declined.

    “We maintain that buying opportunities exist in Asia, particularly for better managed blue chips especially in sold down cyclical sectors, but risk aversion may continue to favour a near-term defensive stance,’’ said S&P Equity Research’s Singapore-based vice-president Lorraine Tan.

    Biggar and Tan were joined by the company’s local analysts at a press conference yesterday to unveil its latest 2010 mid-year market outlook. An open seminar on the market outlook was also held for the benefit of local investors.

    Sentiment in Asia is “very externally driven’’ and would probably remain so in the near term as it had been in the past few months, said Alexander Chia, a director at S&P Equity Research, based in Kuala Lumpur.

    “I doubt anyone would be holding their breath about the upcoming 10th Malaysia Plan,’’ he said, noting that recent strong positive economic data at home had failed to cheer investors’ already downcast mood.

    On the bright side, the ongoing equity market “correction” meant the upside to S&P’s year-end target of 1,400 points for the FBM KLCI had widened, Tan said.

    She recommended investors load up on companies with good track records, banks and healthcare providers, particularly glove makers.

    A flow of projects in Malaysia should also be positive for construction counters and those dealing in building materials.

    Tan said the year-end target was “based on valuation ground’’ as the company projected corporate earnings to grow 20% this year.

    However, she conceded that the month-long World Cup would be a “distraction” to the market, although stocks dealing in consumer durables might benefit.

    “While we note that headline news is negative and concerns are valid, we maintain our view that a double dip is unlikely to occur in the global economy,’’ Tan said.

    A positive for Asia, she said, was that there was less pressure to raise interest rates with inflation looking more benign on sliding energy prices.

    Also, Asian fiscal positions are relatively healthy and provide the region with greater flexibility should governments’ spending programmes need to be prolonged.

    fr:biz.thestar.com.my/news/story.asp?file=/2010/6/8/business/6417938&sec=business

16. alan on June 12th, 2010 at 8:11 am

    Mixed views on Genting’s US lottery venture

    PETALING JAYA: Analysts have “mixed feelings” on Genting Malaysia Bhd’s latest interest to develop and operate a video lottery facility at Aqueduct Racetrack in New York, the United States.

    In a filing with Bursa Malaysia on Thursday, the company said it had made a submission via indirect wholly-owned subsidiary, Genting New York LLC (Genting NY) costing US$1mil for the rights to participate in the bidding process to develop and operate the video lottery facility.

    The submission entry fee was placed on June 1 and Genting NY has until June 29 to evaluate the project and formally submit a bid.

    A local gaming analyst said while Genting’s strategy to diversify its casino business abroad was generally seen as positive by retail and institutional investors to reduce its dependency on its local operations for growth, the move to develop and operate the video lottery facility was also perceived to be costly and risky.

    “We understand the project involves billions of dollars,” he said, adding that Genting NY was not a frontrunner in the bid because it did not have a strong track record in the lottery business compared with other rivals.”

    The analyst also said the returns may not justify the capital expenditure for the project.

    It was reported that six bidders, including Genting NY, had placed US$1mil to obtain the rights to participate in the bidding process for the video lottery facility at the Aqueduct Racetrack.

    Market observers say GTECH Corp, a wholly-owned subsidiary of Italian gaming company Lottomatica SpA, was likely the preffered bidder to negotiate for a seven-year contract with the New York Lottery to provide new online lottery solutions and services, and an option to be extended for three more years.

    The analyst said GTECH had been a lottery technology and services provider to the New York Lottery since 1986.

    The New York video lottery business is estimated to be worth over US$550mil over the contract period.

    A foreign gaming analyst was also pessimistic about Genting NY’s chances of winning the bid.

    “Genting NY chance of winning is at best hopeful” he said, adding that the video lottery facility required a different skill set and proven track record in running it.

    The foreign analyst said Genting Malaysia already had a lot on its plate, such as ensuring its recently constructed Singapore casino operations, via 51.8%-stake in subsidiary Genting Singapore Plc, was profitable.

    Genting Malaysia officials could not be reached for comment.

    Genting Malaysia share price closed 2 sen down at RM2.75 on the Kuala Lumpur benchmark stock index.

    fr:biz.thestar.com.my/news/story.asp?file=/2010/6/12/business/6457046&sec=business

17. alan on June 17th, 2010 at 1:30 pm

    Genting eyes bigger US presence

    (BusinessTimes)’Genting Malaysia is aggressively searching for opportunities to invest in the US casino gaming market,’ Justin Leong, head of strategic investments and corporate affairs at group parent Genting Bhd, said in an interview in New York. ‘Our strategy is building a US presence.’

    Armed with US$1.7 billion in cash and being debt free, Genting Malaysia is seeking acquisitions, new markets and potentially a strategic partnership in the US, he said.

    The Kuala Lumpur- based company, which said this month that it may bid to develop a slots casino at Aqueduct Racetrack in New York City, first invested in the US sector last year, buying MGM Mirage bonds.

    ‘It’s unlikely to be a single asset,’ Mr Leong said. ‘If we were to acquire something, it’s more likely to be a portfolio of assets or a substantial stake in a company.’

    Genting Malaysia is also looking at developments and new gambling jurisdictions opening in the US, he said. The company bought MGM Mirage’s secured bonds in May 2009 when the Las Vegas Strip’s biggest casino owner raised cash to avoid a potential bankruptcy. Genting Malaysia has invested in every capital issue by Las Vegas-based MGM since, said Mr Leong, 32.

    ‘Genting Malaysia’s first foray into the US casino market was investing in MGM, and that strategic relationship continues.’ The bid for Aqueduct ‘is another step’.

    fr:businesstimes.com.sg/sub/companies/story/0,4574,390472,00.html?

18. alan on July 1st, 2010 at 8:25 am

    Genting NY lottery bid

    PETALING JAYA: Genting Malaysia Bhd told Bursa Malaysia that its indirect wholly-owned subsidiary, Genting New York LLC (Genting NY), had submitted a formal bid on Tuesday to develop and operate a video lottery facility at the Aqueduct Racetrack in New York city.

    Genting NY had paid a US$1mil entry fee to the New York State Division of Lottery on June 1 and had until June 29 to evaluate the project before deciding on submission of its bid.

    fr:biz.thestar.com.my/news/story.asp?file=/2010/7/1/business/6582249&sec=business

19. alan on July 2nd, 2010 at 9:03 am

    Genting’s chance to win NY lottery bid ‘decent’
    By YVONNE TAN

    PETALING JAYA: The outcome of Genting Malaysia Bhd’s bid to develop and operate a video lottery facility at New York City’s Aqueduct Racetrack is likely to be announced on Aug 3 and analysts say its chances of winning are “decent”.

    “Now there are only three confirmed groups of companies bidding, so chances of Genting emerging as the winner can be described as decent,” said UOB Kay Hian head of research Vincent Khoo.

    A TA Securities analyst who covers the company concurred, saying that “nobody stood out” in particular.

    “Genting, like the other two, stands a decent chance,” he said.

    Genting Malaysia’s subsidiary, Genting New York LLC (Genting NY), together with two other US-based parties – Penn National as well as a third group comprising SL Green, Hard Rock International and Clairvest Group Inc – confirmed on Wednesday that they had submitted a bid for the project.

    This narrows the bidders’ list to three groups from six as previously reported.

    Genting Bhd head of strategic investments and corporate affairs Datuk Justin Leong declined comment when contacted yesterday.

    Leong, in an interview with Bloomberg last month, said Genting Malaysia was “aggressively searching for opportunities to invest in the US casino gaming market’’.

    It is understood the successful bidder will, among other things, develop a designated and dedicated area to house and operate a slot machine-style “racino’’ (a combination of racetrack and casino) with 4,500 video-lottery terminals, and food and retail outlets.

    Based on research house HwangDBS Vickers Research estimates, annual gaming revenue at the facility could hit US$329mil (around RM1.1bil) versus Genting Malaysia’s 2009 revenue of RM5bil.

    Genting Malaysia first marked its presence in the US market last year, buying Las Vegas Strip’s biggest casino owner MGM Mirage bonds when the latter opted to raise funds to avoid a financial meltdown.

    SL Green, meanwhile, is New York’s biggest commercial landlord, while Penn National operates 15 casinos in the United States and Canada.

    Information on the Aqueduct website revealed that the announcement of the winning bid proposal will be made on Aug 3 while the bidding process started about two months ago, with the request for proposal by the New York State Dvision of Lottery issued on May 11.

    Some earlier analyst reports on Genting Malaysia’s possible venture noted that the net profit margins for such a project could be as low as 5%.

    This was because “racinos” had to use large chunks of its net wins to make stipulated legislative welfare contributions as part of the requirements attached to the license, they said.

    Shares in Genting Malaysia closed 1 sen, or 0.37%, higher to RM2.74 yesterday while parent Genting finished 4 sen, or 0.56%, up to RM7.16.

    fr:biz.thestar.com.my/news/story.asp?file=/2010/7/2/business/6589264&sec=business

20. alan on July 2nd, 2010 at 9:03 am

    Genting buys UK casino businesses for RM1.7b

    PETALING JAYA: Genting Malaysia Bhd will acquire its Singapore affiliate’s casino businesses in Britain for £340mil (about RM1.67bil).

    It said in a statement yesterday the acquisition of Genting Singapore PLC’s operations in Britain (Genting UK) complemented its long-term international expansion strategy.

    Genting Malaysia plans to enter Europe and the United States, where it had separately announced that it had submitted a bid for a video-lottery licence.

    President and chief operating officer Datuk Lee Chong Yan said the acquisition would give the company access to established casino brands and an extensive network of casinos already operating across Britain.

    “With our proven track record and decades of experience, we have the expertise to unlock the potential of Genting UK and grow the business in Britain,” he said in the statement.

    The acquisition is subject to approvals from Bank Negara and the British Gambling Commission, as well as from the company’s shareholders at an EGM to be convened.

    Genting Malaysia told Bursa Malaysia the company was optimistic about the outlook of Genting UK businesses as the operating environment gradually strengthened and the economy improved.

    However, it said, the Genting UK businesses were subject to risks inherent to the casino gaming industry, which were broadly similar to those currently faced by the company.

    It said there was no assurance that strategies implemented by the company for Genting UK businesses would produce the desired outcomes.

    fr:biz.thestar.com.my/news/story.asp?file=/2010/7/2/business/6592646&sec=business

21. alan on July 6th, 2010 at 8:41 am

    Genting clarifies RM1.66bil casino plan

    PETALING JAYA: Genting Malaysia Bhd yesterday replied to Bursa Malaysia queries on the proposed acquisition of the casino businesses in Britain from sister company Genting Singapore plc for £340mil (RM1.66bil).

    Genting Malaysia said that as at June 30, the total outstanding advances owed by the acquiree group (Britain casino business) to Genting Singapore plc was about £336,457.

    Such outstanding advances owed by the acquiree group would be settled and/or waived prior to the completion of the proposed acquisition, it said.

    It also said JPMorgan Securities (Malaysia) Sdn Bhd had based its valuation of the equity value of the acquiree group on a variety of intrinsic and public-market based methodologies, which included conducting a discounted cashflow valuation and an analysis on trading comparables.

    The valuation of equity value was between £310mil and £370mil.

    In arriving at the said valuation, JP Morgan had also, among others, reviewed certain publicly available business and financial information concerning the acquiree group and the industries in which they operate.

    Bursa has asked Genting Malaysia to furnish it with the total amount of outstanding advances owed by the acquiree companies to Genting Singapore as at the latest date.

    It also wanted to be informed of the salient features of the valuation of the equity value of the acquiree group as conducted by JPMorgan Securities (Malaysia) .

    The plan, a third-party transaction, has drawn its fair share of criticism from analysts who said the investment was pricey for a risky market, provided little growth catalyst and may require more capital injection in the future

    fr:biz.thestar.com.my/news/story.asp?file=/2010/7/6/business/6612205&sec=business

22. alan on July 6th, 2010 at 8:41 am

    Gaming operators mixed on impact of new betting duty hike
    By LEE KIAN SEONG

    KUALA LUMPUR: Olympia Industries Bhd, Multi-Purpose Holdings Bhd (MPHB) and Berjaya Assets Bhd are the latest listed companies to comment on the effects that the new betting duty hike will have on them.

    In a filing with Bursa Malaysia yesterday, Olympia said the increase in the pool betting duty “is expected to have an adverse financial impact on the operating performance of the group for the financial year ending June 30, 2011.”

    The betting duty was raised last week from 6% to 8% of gross sales proceeds after deducting gaming tax of 8%. The new rate applies to draws held from June 2010 onwards.

    Olympia’s wholly-owned subsidiary, Lotteries Corp Sdn Bhd, is a numbers forecast operator (NFO) in Sabah.

    MPHB, on the other hand, said yesterday that the group’s performance “will not be materially affected” from the increase in the pool betting duty. It said this was because the effects of the duty hike would be “mitigated by the positive contribution from the Jackpot games operated by Magnum Corp Sdn Bhd.”

    Berjaya Assets, which owns 65% of Natural Avenue Sdn Bhd, said the new betting duty was not expected to have a material impact on the group’s results for the financial year ended June 30, 2010 (FY10).

    However, the company did not state the impact on its performance for FY11.

    Natural Avenue is the sole and exclusive agent appointed by Sarawak Turf and Equestrian Club (STEC) to operate the NFO on behalf of STEC.

    The announcements follow that of Berjaya Sports Toto Bhd and Tanjong plc last week.

    Berjaya Sports Toto said that barring any other unforeseen circumstances and taking into account the launch of the new game, Supreme Toto 6/58, in March this year, the directors remained optimistic that the operating performance of the group for the financial year ending April 30, 2011 would be good.

    Meanwhile, Tanjong said the revision was not expected to have a material impact on its results. The respective subsidiaries of Berjaya Sports Toto and Tanjong are Sports Toto Malaysia Sdn Bhd and Pan Malaysian Pools Sdn Bhd.

    A local analyst said MPHB with its successful Jackpot games by Magnum was an important tool in mitigating the impact of the duty hike.

    “The impact on Magnum is lower compared with other gaming players as the others don’t have the Jackpot product like Magnum,” he told StarBiz.

    He said the impact on Berjaya Sports Toto would be higher as the company was a pure NFO player in the industry, compared with Tanjong with only 20% of its earnings derived from the NFO business.

    “It won’t surprise if the Government implements another round of duty hike in the coming budget,” he said.

    He said companies with new products might be key to minimise the impact but it would be hard for the operators to obtain the approvals for their new products, if there were any.

    A local research house previously viewed the higher betting duties would lead to an immediate earnings dilution. Assuming an unchanged prize money structure, it expected net profit margins of gaming companies to fall from 10% to 9%.

    fr:biz.thestar.com.my/news/story.asp?file=/2010/7/6/business/6611510&sec=business

23. alan on July 7th, 2010 at 7:59 am

    Gaming sector takes hits
    By LEONG HUNG YEE

    Not only is there no sports betting licence, NFOs also slapped with duty hike

    PETALING JAYA: There is never a dull moment in the gaming sector over the past couple of weeks. Within that period, the Government has decided to abort sports betting while number forecast operators (NFOs) were served with a letter informing them that the pool betting duty has been increased.

    To recap, the Government announced that no sports betting licence would be issued owing to a public outcry.

    Berjaya Corp Bhd (BCorp) had earlier announced that it had entered a sales and purchase agreement to buy 70% stake in Ascot Sports Sdn Bhd, which is jointly owned by Tan Sri Vincent Tan and his son, Datuk Robin Tan. The Government, however, later said that it had yet to award the licence.

    Subsequently, BCorp has aborted its proposed acquisition of a 70% stake in Ascot Sports from Tan after the Government decided not to re-issue the sports betting licence to Ascot.

    BCorp shares reacted immediately and fell to an almost five-month low after it confirmed that its sports betting deal was off.

    In an unprecedented move, the Government surprised the NFOs with a tax hike last week following its decision not to issue the sports betting licence.

    According to filings with Bursa Malaysia, Berjaya Sports Toto Bhd (BToto), Tanjong Plc, Multi-Purpose Holdings Bhd (MPHB), Olympia Industries Bhd and Berjaya Assets Bhd received a letter from the Finance Ministry informing them that effective June 1, the pool betting duty has been increased to 8% of net revenue (gross revenues less 8% gaming tax) from 6% previously.

    Most NFOs had issued statements on Bursa Malaysia saying that they would not be significantly affected by the tax hike.

    MPHB, which operates Magnum, said the group’s performance would not be materially affected by the increase in pool betting duty while Tanjong, which operates Pan Malaysian Pools Sdn Bhd, said the revision was not expected to have any material impact on its results.

    Berjaya Assets, which owns 65% of Natural Avenue Sdn Bhd, said the new betting duty was not expected to have any material impact on the group’s results for the financial year ended June 30.

    On the other hand, Olympia whose subsidiary Lotteries Corp Sdn Bhd is a NFO in Sabah said the increase was expected to have an adverse financial impact on the operating performance of the group for the financial year ending June 30, 2011.

    According to analysts, the demand for gaming was unlikely to be significantly affected by the recent Government’s move to increase betting duty but the effect was more on individual companies having to deal with higher taxes.

    Industry sources said three NFO operators (BToto, Magnum and Tanjong) would lobby the Finance Ministry to reduce the 4D first prize payout by RM200 to RM2,300 (4D Big) and RM3,300 (4D Small).

    “We do not discount the possibility of more tax or duty increases in the 2011 budget in October,” ECM Libra Investment Research said. It has downgraded the gaming sector to underweight from neutral.

    The last time the pool betting duty saw an increase was in November 1998 at the height of the Asian financial crisis (from 7% to 10%). In December 2002, it was decreased to 6%.

    ECM Libra said one option for NFOs to preserve their margins was to lower their prize payout ratios.

    “In April 1999, the NFOs reduced the first prize on 4D Big and 4D Small by RM200 each to RM2,000 and RM3,000 respectively, in response to the November 1998 pool betting duty increase,” it said.

    It said the alternative was to absorb the increase and suffer margin compression in order to maintain revenue growth.

    “Of the two companies with NFO businesses under our coverage, Tanjong is the least affected as only 20% of earnings are derived from the NFO business,” ECM Libra said, adding that BToto would be more badly hit.

    CIMB Research said a 2% tax increase on an estimated legal market of RM8.5bil would add some RM160mil in tax. The research house said the Government appeared to be signalling that the sin sectors – and gaming in particular – could be in for a round of unfavourable reforms.

    Kenanga Research viewed the hike as negative as the man in the street was not expecting any such measures especially when the trend was seemingly for liberalisation with football betting being allowed initially. It agrees with ECM Libra that the impact (of pool betting duty hike) would be felt mostly by pure gaming operators such as BToto.

    The research house said a possible RM200mil would be added to government coffers from this exercise.

    Should the payout be reduced as a corollary, topline growth could slow as punters switch their preference towards the illegals, it added.

    CIMB said the spotlight may later turn to the country’s sole casino operator Genting Malaysia Bhd, whose 25% gaming tax rate had been unchanged since 1999.

    However, an analyst said Genting seems to have hedged its position as a regional casino player well.

    While the hike has no impact on Genting, the casino operator may have irked some investors with yet another related-party transaction on its plan to acquire the group’s gaming operations in Britain (Genting UK) from Genting Singapore Plc for £340mil, which analysts said was at the higher end of peers’ valuation.

    Previously, Genting Malaysia (then known as Resorts World Bhd) has paid Genting group chairman Tan Sri Lim Kok Thay US$69mil for a 10% stake in US gaming patent company Walker Digital Gaming.

    fr:biz.thestar.com.my/news/story.asp?file=/2010/7/7/business/6617242&sec=business

24. alan on July 13th, 2010 at 8:13 am

    Foreigners hold 26% of PBB shares

    KUALA LUMPUR: Public Bank Bhd (PBB) announced yesterday that 26.62% of its issued shares were held by foreigners.

    The bank said the percentage was computed based on the total of PBB shares in issue and after excluding PBB shares bought back by PBB and retained as treasury shares as at June 30.

    Meanwhile, Hong Leong Bank Bhd said the shareholdings in the bank held by foreigners totalled 7.26% while HLG Capital Bhd’s foreign shareholdings in the company stood at 1.5% as at June 30

    fr:biz.thestar.com.my/news/story.asp?file=/2010/7/13/business/6653703&sec=business

25. alan on July 18th, 2010 at 2:33 pm

    Genting’s ‘racino’ proposal faces uncertainty
    By YVONNE TAN

    PETALING JAYA: The delay in the proposed development and operation of a video lottery facility at New York City’s Aqueduct Racetrack does not bode well for Genting Malaysia Bhd which is now the sole surviving contender for the project, according to analysts.

    “For now we are assuming that it’s a no-go,” an analyst who tracks developments in the company said.

    He said the legal processes which were causing the delay could take a long time to get sorted out.

    In an update on Genting Malaysia yesterday, Hwang DBS said the halt in the bidding for the rights to develop and operate the facility “could negatively affect” its bid, the outcome of which was initially scheduled for Aug 3.

    “No one really knows what to expect now. To be fair, no one ever said that it was going to be easy from day one,” he added.

    The successful firm which gets the approval for the project will, among other things, develop a designated and dedicated area to house and operate a slot machine-style “racino” (a combination of racetrack and casino) with 4,500 video-lottery terminals, and food and retail outlets.

    It is believed that Genting Malaysia’s key management people are currently in the US to address any outstanding issues pertaining to the proposed development.

    Genting Malaysia parent Genting Bhd’s head of strategic investments and corporate affairs, Datuk Justin Leong, did not respond to StarBizWeek’s queries yesterday.

    To recap, on June 30 Genting Malaysia’s subsidiary, Genting New York LLC, together with two other US-based parties confirmed that they had submitted a bid for the project.

    This narrowed the bidders’ list to three groups from six as earlier reported.

    The other two US groups have since been disqualified for not fulfilling certain requirements.

    A US State Supreme Court earlier this week halted any further developments to the proposed racino so that it could consider whether a previous winner of the same project – Aqueduct Entertainment Corp (formerly Aqueduct Entertainment Group) – had been wrongly rejected. A hearing is expected to take place next Friday.

    Kenanga Research head Yeonzon Yeow said in view of the legal complications, Genting Malaysia “may be able to look at other more lucrative opportunities.”

    Some earlier analyst reports on Genting Malaysia’s possible venture noted that net profit margins for such projects could be as low as 5%.

    This was because racinos had to use large chunks of their net wins to make stipulated legislative welfare contributions as part of the requirements attached to the licence, they said.

    At the close yesterday, shares of Genting Malaysia were up 0.75% at RM2.70.

    fr:biz.thestar.com.my/news/story.asp?file=/2010/7/17/business/6680913&sec=business

26. alan on July 21st, 2010 at 8:12 am

    Public Bank net profit jumps 20% for Q2
    By LEONG HUNG YEE

    Bank posts 14% higher revenue at RM2.68bil

    KUALA LUMPUR: Public Bank Bhd’s net profit jumped 20.2% to RM734.1mil for the second quarter ended June 30, from RM610.7mil a year ago, on the back of strong loans and deposits growth and improved asset quality.

    Its revenue for the quarter was 14% higher at RM2.68bil from RM2.35bil a year ago. It reported earnings per share of 20.96 sen versus 17.70 sen a year ago.

    The bank also announced a first interim dividend of 25% less 25% taxation, which will result in a total payout of RM657mil.

    For the first six months, Public Bank’s net profit was higher at RM1.42bil, or 40.66 sen per share, on revenue of RM5.19bil.

    According to chairman Tan Sri Teh Hong Piow, the bank is expected to continue to record satisfactory performance for the rest of 2010 barring unforeseen circumstances.

    “We expect that the first half performance will carry forward into the second half given the very stable interest rate conditions, as well as the strong loans approval in the first half of this year,” chief operating officer Leong Kwok Nyem said at a briefing yesterday.

    Managing director Tan Sri Tay Ah Lek said interest rates were expected to remain accommodative, low and stable to support economic growth.

    “We expect the economy to grow by 6% this year, exceeding official forecast,” he said.

    The total loans and advances of the group grew by RM10bil to RM146.7bil as at end-June, particularly driven by strong lending growth in the domestic market at an annualised rate of 16.8%.

    The bank’s domestic core customers deposits grew at an annualised rate of 15.2% while total assets increased to RM219bil as at June 30.

    Public Bank’s gross impaired loans ratio remained low at 1.2% compared with the industry gross impaired loans ratio of 3.5% and an improvement from the gross impaired loans ratio of the group of 1.3% as at end-2009.

    Tay expects its loan impairment to remain low.

    He added that the further improvement from its operations in Hong Kong and Cambodia contributed to its low loans impairment ratios.

    Tay said the group had adopted a more stringent criteria on the classification of impaired loans under FRS139.

    “Under the more stringent criteria, certain loans which are less than three months in default are now classified as impaired,” he added.

    Tay said based on the strong loan growth for the first half of 2010, the group was on track and well positioned to achieve its targeted loan growth rate of 15% for 2010.

    Public Bank’s core capital ratio and risk-weighted capital ratio remain at 10% and 13.9% respectively as at June 30, after the payment of the first interim dividend.

    Tay said the recent increase in overnight policy rate by 0.25% should result in further improvement to the group’s net interest margin in the second half of the year.

    For the first half of 2010, Public Bank continued to promote SME activities with the approval of RM5.5bil of loans to domestic SMEs, accounting for more than 20% of the group’s total domestic loans approved of RM26.9bil in the same period.

    The bank’s loan impairment allowances decreased by 7% despite the strong loan growth in the first half due to continued improvement in asset quality, particularly in the group’s operations in Hong Kong.

    Commenting on its dividend, Tay said the bank would maintain dividend payout of 50% to 55% this year, the same level achieved in previous years.

    Tay said Public Bank continued to proactively monitor the latest developments in regards to the Basel III proposals and to address its potential impact to the group’s capital requirements by realigning existing capital management strategies from time to time.

    Leong said the group was well prepared to meet the requirements of Basel III international standards for banks.

    He said the group would pursue continued proactive capital management in order to maintain a healthy level of capital at all times to support the group’s business growth whilst maximising shareholders’ returns.

    Going forward, Public Bank would continue to pursure strong organic growth in its lending and deposit taking businesses, accelerate its fee-based revenue and further improve its productivity and cost efficiency, Tay said.

    According to Thomson Reuters, Public Bank’s first half profit accounted for about 48% of consensus estimates for the full-year.

    Bloomberg consensus estimates expect Public Bank to post RM2.9bil in net profit for the full year.

    Meanwhile, Public Bank hit an intra-day high of RM12.24 – also a record high – before closing up 10 sen, or 0.83%, to RM12.20 yesterday.

    fr:biz.thestar.com.my/news/story.asp?file=/2010/7/21/business/6703455&sec=business

27. alan on August 6th, 2010 at 10:31 am

    Genting plans more attractions for Johor Premium Outlets
    By ZAZALI MUSA

    KULAIJAYA: Genting Bhd is planning to develop additional attractions such as a hotel and an international water theme park to complement its Johor Premium Outlets (JPO) here.

    Chairman and chief executive Tan Sri Lim Kok Thay said it had conducted the study a year ago, and if there was a need, the attractions would be built in the second development stage of the JPO.

    “We have not looked at how much will be invested on the additional attractions and they will be build according to market needs,” he said yesterday.

    Lim was speaking at the groundbreaking ceremony of the JPO outlet in Genting Indahpura mixed development township here by Johor Mentri Besar Datuk Abdul Ghani Othman.

    The project is a 50:50 joint venture between Genting’s 54.6% owned subsidiary Genting Plantations Bhd and Premium Outlets, a division of US-based Simon Property Group.

    The RM149mil outlet with 330,000 sq ft built up area on a 17.8ha site, is the first of its kind in South-East Asia – there are 52 outlets in the United States, Mexico, Japan and South Korea.

    Expected to open in the third quarter of 2011, it offers a wide selection of branded items such as designer fashions, sportswear, children’s wear, jewellery, shoes and fashion accessories at attractive discounted prices.

    “We have plans to bring visitors at our Resorts World Sentosa and also Singaporeans via shuttle bus services to shop for branded items here,” said Lim.

    He said apart from Singaporeans, the company would be targeting at rich Indonesians living in the republic and Indonesians from Jakarta and cities in Sumatra and Thais to come here.

    Meanwhile, Ghani said the number of flights landing at Senai International Airport nearby, would be increased to cater the rise of visitors.

    He said AirAsia in principle, had agreed to increase its flight frequencies to Senai when the JPO opened next year and in 2012, when Legoland Theme Park started operations.

    fr:biz.thestar.com.my/news/story.asp?file=/2010/8/6/business/6807292&sec=business

28. alan on August 11th, 2010 at 8:33 am

    RAM sees limited impact on Genting’s credit profile

    KUALA LUMPUR: The proposed gaming venture by Genting Bhd’s indirect subsidiary, Genting New York LLC (Genting New York), in New York will have limited impact on the group’s credit profile, according to RAM Ratings Services Bhd’s preliminary view.

    In a statement yesterday, RAM Ratings said Genting’s respective long and short term corporate credit ratings currently stood at AAA and P1 while the RM1.6bil medium term notes programme (2009/2024) of its wholly owned GB Services Bhd carried an enhanced issue rating of AAA(s), backed by an unconditional and irrevocable corporate guarantee from its parent.

    It said both long term ratings have a stable outlook.

    On Aug 3, the New York State Division of the Lottery Evaluation Committee announced it would recommend that Genting New York be awarded the rights to develop and operate a video lottery facility at the Aqueduct Racetrack.

    The concession will run 30 years, with an optional 10-year extension.

    The project is still pending approval by legislators.

    Based on Genting New York’s proposal, the gaming facility will be opened in phases and will be equipped with 4,525 video lottery terminals once completed.

    The company’s investment in the project could amount to around US$730mil (about RM2.3bil), consisting of an upfront licensing fee of US$380mil and an initial capital expenditure of approximately US$300mil to US$350mil.

    RAM Ratings said the project was envisaged to have minimal impact on Genting’s credit profile given the latter’s strong balance sheet and noted that the group was currently in a net-cash position.

    “Genting’s consolidated cash and cash equivalents of RM15.8bil in total as at end-March 2010 are more than sufficient for the group to finance this investment. Although we expect a portion of this to be debt-funded, the erosion in Genting’s cashflow-protection measures is expected to be immaterial,” said RAM Ratings’ consumer and industrial ratings head Kevin Lim.

    It said although this was Genting’s first foray into the US, RAM Ratings derived comfort from the group’s track record in commissioning new gaming facilities overseas.

    In February, Genting opened the S$6.6bil Resorts World Sentosa in Singapore, as scheduled.

    fr:biz.thestar.com.my/news/story.asp?file=/2010/8/11/business/6831728&sec=business

29. alan on August 13th, 2010 at 5:57 pm

    Genting New York wins racino franchise bid

    PETALING JAYA: Genting Malaysia Bhd’s subsidiary Genting New York LLC won a 30-year franchise to redevelop the Aqueduct Racetrack in Ozone Park, New York, according to a Singapore Straits Times report.

    The franchise will give Genting New York the licence to operate the city’s first slow machine-styled “racino” video lottery terminals.

    The Singapore Straits Times yesterday said Genting New York had won the bid, but the deal was “not fully in the bag” yet pending approvals from the city’s top politicians.

    New York State Division of Lottery had on Aug 3 recommended a bid by Genting New York to implement the “racino” project.

    Yesterday, Bloomberg report said the state Senate majority leader John Sampson announced he had accepted a lottery commission recommendation for Genting New York to be awarded the licence to install 4,500 slot machine-styled “racino” terminals at the Aqueduct site in the borough of Queens.

    Governor David Paterson has pledged to back the bidder recommended by the lottery. The project award needs the approval of Assembly speaker Sheldon Silver to proceed.

    The Straits Times report said there were several steps remaining before actual construction could begin.

    After the governor and legislative leaders sign the memorandum of understanding, the contract goes to the attorney general’s office for approval. Then it goes to the comptroller for approval and filing in his office.

    “Under the state Finance Law, a contract isn’t binding on the state unless the comptroller approves and files it,” Lottery spokeperson Jennifer Givner said.

    The process could take up to several weeks, Straits Times said.

    fr:biz.thestar.com.my/news/story.asp?file=/2010/8/13/business/6848545&sec=business

30. alan on August 14th, 2010 at 2:59 pm

    Genting impresses analysts
    By DANNY YAP

    PETALING JAYA: Genting Bhd, which holds a 52% stake in Genting Singapore PLC, has been re-rated to a “buy” or “outperform” call by most analysts based on the latter’s impressive second-quarter profit performance of S$396.5mil, compared with a loss a year earlier.

    Genting Singapore’s (formerly Genting International Public Ltd) revenue surged to S$979.3mil in the three months to June 30, compared with S$120.1mil previously boosted by improved earnings from its new RM4.7bil integrated casino resort, Resorts World Sentosa.

    A local analyst said Genting Singapore’s good performance was expected to have a “meaningful” impact on Genting’s bottomline, seeing that the gaming company had a major and sizeable stake in it.

    “There were some doubts by investors when Genting invested in Genting Singapore but the venture is showing to be fruitful,” he said.

    The analyst, who had an “outperfrom’ call on the stock, said Genting’s second-quarter results ending June 30 (expected to be out by Aug 25) should be “interesting.”

    He said Genting had been diversifying its earnings beyond the local shore for some years and was on the lookout to acquire and/or operate casino-related businesses abroad as a business growth strategy. “This (purchase of a major stake in Genting Singapore) looks very promising, despite earlier apprehension,” he said.

    Another local analyst said positive earnings from Genting Singapore were a big plus to bolster Genting’s overall financial results as the gaming business represented a significant portion of its revenue stream. “To put things in perspective, Genting’s gaming business represents over 70% of its earnings stream,” he added.

    Genting’s other businesses include plantation, biotechnology, property, energy and leisure and hospitality.

    A foreign analyst said the recent proposal by Genting’s unit, Genting Malaysia Bhd, to acquire Genting Singapore’s affiliate UK casino businesses for £340mil (RM1.7bil) had drawn some concern, especially among investors.

    “The deal is expected to be completed at month-end but some quarters are apprehensive about it,” he said, adding that time would tell how the deal would play out.

    He said in view of the gaming operating business and environment in the UK remaining very challenging, especially in recent years, Genting’s foray (vis-a-vis Genting Malaysia) to own and operate 46 casinos in the UK might take some time to turn around.

    “This (turnaround) is shareholders’ main concern,” he said, adding that the gambling environment was different in Asia.

    Genting and related parties collectively have a 49% stake in Genting Malaysia.

    The foreign analyst said Genting believed there were growth opportunities in having a major stake (via its unit) in the largest casino operator in Britain and saw good synergistic opportunities to build upon with its existing gaming business.

    In addition, he said, Genting Malaysia’s subsidiary, Genting New York LLC (Genting NY), had recently won the bid to develop and operate a video lottery facility at the Aqueduct Racetrack in New York with a proposal that included RM1.2bil (US$380mil) as an upfront licensing fee.

    “Seeing that Genting has a substantial interest in these companies’ performance as a result of its units having sizeable stakes in these companies, be they US, Britain or Singapore-based, it’s also fair that shareholders are concerned with Genting management’s global investment strategy,” he said.

    The foreign analyst, however, concurred with local analysts that the Singapore casino investment appeared favourable.

    For the first quarter ended March 31, Genting posted RM232.4mil net proft on revenue of RM2.1bil.

    fr:biz.thestar.com.my/news/story.asp?file=/2010/8/14/business/6856640&sec=business

31. alan on August 17th, 2010 at 9:49 am

    Genting shares soar to 34-month high

    PETALING JAYA: Genting Bhd rose to its highest level in 34 months yesterday after Citigroup Inc raised its rating on the stock to “buy” from “hold”.

    Asia’s second-biggest listed casino operator saw its stock close up 6.7% to RM8.72 yesterday, its highest since Oct 29, 2007.

    Genting, which holds a 52% stake in Genting Singapore PLC, has been re-rated to a ‘’buy’’ or ‘’outperform’’ call by most analysts based on the latter’s second-quarter profit of S$396.5mil from a loss previously.
    fr:biz.thestar.com.my/news/story.asp?file=/2010/8/17/business/6868204&sec=business

32. alan on August 18th, 2010 at 8:43 am

    Genting to invest US$1.3bil in NY video lottery project
    By TEE LIN SAY

    PETALING JAYA: Genting Malaysia Bhd’s unit Genting New York LLC, which has won the bid to operate a video lottery terminal facility in New York, plans to invest US$1.3bil (RM4.19bil) in the project.

    It had earlier been speculated that Genting New York had won the bid, but the deal was “not fully in the bag” yet, pending approvals from the city’s top politicians.

    A source close to the company said that Genting New York had signed the agreement last week but only made the announcement in New York yesterday.

    According to a copy of the proposal submitted by Genting to the New York lottery authority, Genting New York will pay a licensing fee of US$380mil (RM1.22bil), above the minimum US$300mil (RM966mil) required by the state.

    Genting New York intends to spend a further US$350mil to develop the facility, which upon full completion will span 413,000 sq ft and contain more than 4,500 video lottery terminals or electronic slot machines.

    Dubbed Resorts World New York, the proposed three-storey facility will also contain several restaurants, water features, an outdoor terrace connected to the Aqueduct racetrack which will be able to accommodate up to 10,000 people and a 2,200-bay car park.

    Genting New York aims to complete the entire development within 12 months from the date it obtains formal approval from the state to proceed.

    As part of a wider development plan, Genting New York is also proposing to build three hotels of differing standards, shopping, recreation, spa and other resort facilities at a total cost of US$650mil (RM2.09bil). That will take the proposed outlay for the entire project to over US$1.3bil.

    Meanwhile, Genting Malaysia has also been on a roadshow ahead of its EGM to drum up support for its plans to acquire Genting Singapore plc’s whole UK casino operations for £340mil (RM1.7bil).

    The EGM is on Aug 24, and Genting Malaysia may want to ensure it has enough support to ensure the deal goes through.

    Presently, Genting Bhd owns 47.33% of Genting Malaysia. On Tuesday, Genting Malaysia rose to its year-high of RM3.11 and closed the day at RM2.99, 17 sen up. Genting Singapore closed S$1.52 (RM3.58).

    Genting Bhd, parent to both Genting Malaysia and Genting Singapore Plc, rose 21 sen to RM8.93, a three-year high.

    The shares of all three stocks have rallied since Genting Singapore reported a second quarter profit on Aug 12 after opening a casino resort in the city-state.

    Meanwhile, some shareholders have not been happy with Genting Malaysia’s plan to acquire the UK casino operations as it is viewed as a related party transaction. Furthermore, they feel the acquisition price is high compared to its current value.

    “Genting Malaysia is saying that they are buying the UK operations cheaper. After all, in 2006, Genting Singapore acquired Genting UK for £699.4mil. Furthermore, they see growth in Genting UK,” said one analyst who met up with Genting Malaysia’s management.

    For £340mil, Genting Malaysia will get 44 casino licences for the UK operations, as well as properties with a net book value of £289mil (RM1.45bil), not inclusive revaluation gains.

    The analyst, however, cautioned that the operating environment in the UK was still tough. In recent years, the casino market has been affected by legislation, including a smoking ban in enclosed public areas. Gaming operators are also now imposed with higher taxes. Hence, the underlying value of the casinos could be lower than the £340mil paid, according to the analyst.

    fr:biz.thestar.com.my/news/story.asp?file=/2010/8/18/business/6872883&sec=business

33. alan on August 23rd, 2010 at 8:18 am

    Spotlight on Genting EGM

    Some analysts pessimistic about UK casino purchase due to challenging operating environment

    By TEE LIN SAY

    PETALING JAYA: While the investing community may now be re-looking at Genting Malaysia Bhd due to its new flavour as an international play, just earlier this year this casino operator did not have a compelling story to tell.

    Sure, profits were decent and it was sitting on a cash pile of some RM5bil, but that cash hoard was becoming more of a hurdle as all that money wasn’t doing anything.

    Then came the announcement in early July that Genting Malaysia was setting its sights on its United Kingdom (UK) casino operations following the proposed acquisition of four casinos from Genting Singapore plc.

    Analysts and shareholders kicked up a fuss, with what was seen as a clear-cut related party transaction.

    Genting Malaysia announced that it was proposing to acquire Genting Singapore’s UK casino operations for £340mil (about RM1.67bil). Genting Singapore first bought Genting UK in 2006 at £626.91mil (RM3.13bil)

    The UK casino operations comprise four companies – Nedby Ltd, Palomino Star Ltd, Palomino World Ltd and Genting International Enterprises (Singapore) Pte Ltd – collectively known as Genting UK.

    Gambling in the UK is regulated by the Gambling Commission on behalf of the government’s Department for Culture, Media and Sport under the Gambling Act 2005.

    There have been significant updates to UK’s gambling laws, including increasing tax on poker profits from 15% to as high as 50% depending on profitability. There have also been increased rates on all categories of amusement machine licence duty.

    These measures are likely to continue to dampen the gaming enviroment in the UK and some analysts are pessimistic because of the challenging operating environment.

    There are concerns that Genting Malaysia could be buying Genting UK at a time when the economy is not only weak, but faces a double whammy of the casino industry facing tough legislation.

    Hence, all eyes will be on Genting Malaysia’s EGM tomorrow to approve the acquisition of Genting UK from Genting Singapore Plc Genting Malaysia’s second quarter results to June 30, will be also released on Aug 26.

    Genting Malaysia has been on a roadshow in the last few weeks to meet up with its shareholders and to explain the rationale and potentential of buying into the UK casino operations.

    Last week at Genting Singapore’s EGM, the resolution in respect of the sale of UK casino assets to Genting Malaysia passed by shareholders.

    It is however interesting to note that over the last two days, Genting Malaysia has bought back a total of 11.2 million shares at an average price of RM3.03. This brings its cumulative treasury shares held at 3.71%.

    The group has announced its intention to purchase up to a further 376 million shares (representing 6.4% of share cap) within the next 10 months.

    Meanwhile last week, Genting Malaysia Bhd obtained all the necessary approvals and signed the agreement to develop the Aqueduct New York racino.

    Genting New York is expected to invest US$1.3bil which consist of US$380mil (RM1.22bil) of licencing fee, US$350mil (RM1.12bil) initial capital expenditure (4,500 video lottery terminals), and US$650mil (RM2.08bil) to build three hotels of differing standards, shopping, recreation, spa and other resort facilities.

    Dubbed Resorts World New York, the proposed three-storey facility will also contain several restaurants, water features, an outdoor terrace connected to the Aqueduct racetrack which will be able to accommodate up to 10,000 people and a 2,200-bay car park.

    Genting New York aims to complete the entire development within 12 months from the date it obtains formal approval from the state to proceed.

    As part of a wider development plan, Genting New York is also proposing to build three hotels of differing standards, shopping, recreation, spa and other resort facilities at a total cost of US$650mil (RM2.09bil). That will take the proposed outlay for the entire project to over US$1.3bil.

    “If we assume daily win per terminal of US$300 (similar to the more successful Yonkers racino closer to New York city centre), Resorts World New York may contribute RM595mil and RM196mil to Genting Malaysia’s revenue and profit after tax respectively by 2013,” said an analyst from HwangDBS Research.

    UOBKayHian reckons that the project is neutral to Genting Malaysia’s revised net asset value but is slightly earnings-accretive over the long term, assuming that the Aqueduct would be eventually given a license to operate table games.

    The research house estimates the slot facility could provide a payback period of 5.5 years (on full expansion), while the payback period for the rest of the facilities could be significantly longer.

    “Conservatively, Aqueduct could pull in revenue and operating profit of US$468mil and US$84mil respectively when it is fully expanded.

    “This accounts for about 14% of Genting Malaysia’s forecasted 2012 operating profit,” said the research house.

    The recent spotlight on the entire Genting group has been brought about by Genting Singapore’s sterling results and the re-rating of casino sector in Singapore. Genting Singapore is 52% owned by Genting Bhd.

    Genting Singapore’s second-quarter results took the investing community by surprise, when it beat analysts and consensus estimates.

    For the second quarter ended June 30, Genting Singapore posted a net profit of S$396.5mil (RM925.9mil) compared with a net loss of S$50.7mil a year earlier.

    Revenue soared to S$979.3mil from S$120.1mil previously. This translated to a profit margin of about 40%.

    fr:biz.thestar.com.my/news/story.asp?file=/2010/8/23/business/6893286&sec=business

34. alan on August 24th, 2010 at 8:58 am

    Genting M’sia pays RM15.7m in share buy-back

    KUALA LUMPUR: Genting Malaysia Bhd spent RM15.71mil to buy five million of its own shares yesterday and announced that it intends to acquire more within the next 10 months.

    The shares represented just below a quarter of the 20.527 million Genting Malaysia shares traded yesterday.

    Genting Malaysia closed five sen higher at RM3.14.

    In a filing with Bursa Malaysia, the company said it intended to purchase up to a further 362.207 million of its shares (representing 6.13% of the issued and paid-up share capital) within the next 10 months.

    Its cumulative net outstanding treasury shares now comprised 228.501 million or 3.87% of its issued and paid-up capital of 5.907 billion shares as at Aug 23.

    The share buy-back was part of continuing efforts under its capital management programme, which the company constantly monitored together with its strategies of business expansion (through organic growth or acquisitions) and capital distribution, Genting Malaysia said.

    The company said it would continue to pursue share buy-back efforts when opportunities presented themselves, pursuant to the mandate approved by its shareholders on June 9. — Bernama

    Standard Chartered Plc and RHB Investment Bank Bhd helped Abu Dhabi Commercial sell the notes. The securities are ranked AAA by RAM Ratings, Abu Dhabi Commercial said Aug 16

    fr:biz.thestar.com.my/news/story.asp?file=/2010/8/24/business/6907541&sec=business

35. alan on August 25th, 2010 at 11:20 am

    Genting M’sia gets nod for UK casino purchase
    By FINTAN NG

    Shareholders approve the deal after initial misgivings

    KUALA LUMPUR: Shareholders of Genting Malaysia Bhd voted yesterday in favour of resolutions to acquire the British casino operations collectively known as Genting UK from Genting Singapore plc despite initial misgivings over the related party transaction nature of the deal.

    It is understood that shareholders mainly asked questions on the rationale for the acquisition and on profitability, as Britain is not seen as a growth market due to prevailing economic conditions and tougher operating conditions.

    “Shareholders wanted more clarification on the acquisition and whether it’ll be profitable,” a shareholder said, adding that HSBC Nominees and Cartaban Nominees called for a poll before the voting.

    The vote was 60.39% or 1.17 billion shares, for the acquisition, which was worth RM1.67bil. Genting Malaysia, the owner and operator of Resorts World Genting, is 47.33% owned by Genting Bhd, which also owns a 52% stake in Genting Singapore.

    The over-lapping shareholding among certain institutional shareholders in Genting Malaysia and Genting Singapore could have been a major catalyst in the way the voting turned out as it did. Blackrock Fund Advisors and Vanguard Group Inc were among those with stakes in both companies.

    Genting and its chairman cum chief executive officer Tan Sri Lim Kok Thay did not take part in the voting.

    An analyst with a foreign investment bank told StarBiz that the voting pattern showed that these shareholders preferred to see the British casino operations, which faced quite a few obstacles including higher taxes and a tougher operating environment, under Genting Malaysia.

    Analysts in recent reports said the British casino operations were a better fit for Genting Malaysia rather than for Genting Singapore.

    As for Genting Singapore, the analyst said this would look good for the company, which would be able to concentrate on the integrated resort business.

    Moreover, the gaming industry in Singapore was recently re-rated with Genting Singapore showing sterling results.

    A market observer noted that in a situation where there were overlapping institutional investors and better prospects in Singapore, it was “normal to make Genting Malaysia a sacrificial lamb to help Genting Singapore”.

    He added that based on the number of shares, it appeared that these institutional shareholders were quite active in voting.

    Meanwhile, Genting Malaysia deputy chairman Tun Mohd Haniff Omar said all proposals to expand the business were looked at based on merits by the company’s board, including those involving related party transactions.

    “We’ve this opportunity in Europe (with Genting UK), we hit the ground running with a going concern that is already cash flow positive following the remedial measures taken by Genting Singapore,” he said.

    fr:biz.thestar.com.my/news/story.asp?file=/2010/8/25/business/6915195&sec=business

36. alan on August 27th, 2010 at 9:13 am

    Genting profit soars a whopping 244.6%
    By DANNY YAP

    PETALING JAYA: Genting Bhd posted a whopping 244.6% jump in net profit for its second quarter ended June 30 to RM739.2mil compared with RM214.5mil in the same quarter a year ago.

    Revenue stood at RM4.1bil compared with RM2.1bil previously.

    Genting said in a statement that the increase came mainly from its leisure and hospitality division following the commencement of Resorts World Sentosa (RWS) in Singapore.

    It said the improved revenue from RWS was largely due to better luck in the premium players business, which also contributed to improved profit.

    Genting said its casino in Britain benefited from an increase in business volume but the weaker pound sterling translated into lower casino revenue in ringgit terms.

    It said revenue and profit from Genting Plantations Bhd was higher in the quarter as a result of better palm product prices and improved fresh fruit bunches production.

    However, its power energy division Genting Energy Ltd recorded a lower revenue due to lesser generation of electricity by its Meizhou Wan plant in China.

    Genting’s oil and gas division also posted a drop in revenue and profit due to lower share of entitlement in China.

    The company said, overall, its better performance in the quarter was due to share of results in jointly controlled entities and associates.

    For the six months ended June 30, Genting posted a 124% increase in net profit to RM971.6mil compared with RM427.6mil in the corresponding period a year ago.

    Revenue jumped 71.4% to RM7.2bil from RM4.2bil before.

    The company said it was cautiously optimistic about its prospects as regional competition continues.

    “While business has been resilient, the management will continue to closely monitor the competitive environment and intensify its plans to meet growing competition.”

    Genting also said that with the opening of Marina Bay Sands, RWS’s business had showed resilience and its business model had displayed impressive strength.

    “RWS continues to be optimistic with its business model for the rest of the year,” it said.

    It added that the resort hosted a series of high-profile entertainment events and promotions and would continue to fill the rest of its year-long calendar with activities to encourage fresh and repeat visitations.

    It said RWS would continue to improve its attractions, facilities and infrastructure to meet guest expectations. Construction of the West Zone has started and it is expected to commence operations next year.

    Genting also said the performance of its power division was expected to be impacted by the Meizhou Wan plant, which was experiencing lower-than-expected tariff increases and reduced generation hours.

    The performance of its plantation division remains satisfactory.

    Genting has declared a gross interim dividend of 3.3 sen per ordinary share of 10 sen each, less 25% tax, for the first half of 2010.

    This represents a 10% increase compared with 3 sen per ordinary share of 10 sen each, less 25% tax, in the first half of last year.

    fr:biz.thestar.com.my/news/story.asp?file=/2010/8/27/business/6931158&sec=business

37. alan on September 3rd, 2010 at 10:14 am

    Genting chairman sells shares

    KUALA LUMPUR: Genting Bhd chairman and chief executive Tan Sri Lim Kok Thay has disposed of 269,000 and 260,000 shares in Genting Bhd and Genting Malaysia Bhd respectively.

    According to a filing with Bursa Malaysia, Lim sold 169,000 shares of Genting Bhd at RM9.016 per share on Aug 27 and another 100,000 at RM9.413 on Aug 30.

    He still holds a total of 10.1 million shares, or 0.2732% direct shareholdings in Genting Bhd.

    In a separate filing, Lim disposed 160,000 shares in Genting Malaysia on Aug 27 for RM3.001 per share and another 100,000 shares on Aug 30 at RM3.013 a share.

    The transaction saw his direct interest in Genting Malaysia reduced to 1.4 million shares, or 0.0247%.

    fr:biz.thestar.com.my/news/story.asp?file=/2010/9/3/business/6973474&sec=business

38. alan on September 15th, 2010 at 9:33 am

    Genting M’sia gets final nod for New York ops
    By TEE LIN SAY

    The approval paves way for its first video lottery facility in US

    KUALA LUMPUR: Genting Malaysia Bhd announced that its indirect wholly owned subsidiary, Genting New York LLC, has received the final approval for it to be the developer and operator of a video lottery facility at the Aqueduct Racetrack in New York, the United States.

    The approval brings Genting NY closer to kick-starting works to roll out its first-ever video lottery facility in the United States.

    “This changes the profile of Genting Malaysia. Now that it will have operations in the United States and the United Kingdom, Genting can be viewed as a global gaming stock,” said a gaming analyst.

    Genting Malaysia shareholders recently approved the resolution to acquire Genting UK from Genting Singapore for about RM1.67bil.

    The Office of the New York State Comptroller announced on Monday its approval for Genting NY to be selected as the developer and operator of the video lottery facility.

    The company had earlier received approvals from New York State leaders and offices of the New York State Attorney-General.

    Genting NY will pay US$380mil (RM1.18bil) as upfront licensing fee to the State of New York within 10 business days.

    It has proposed a further US$325mil to roll out its operations. The net project cost, however, is less than US$325mil because there will be a US$250mil grant given by the authority for this project.

    A gaming analyst said the potential impact on Genting Malaysia’s earnings for its financial year 2012 to 2013 could be an increase between 4% and 14%, assuming a US$300 daily win per terminal and a 60% gaming tax.

    The analyst is also estimating a payback period of some eight years on the US$480mil capital expenditure (netting of the US$250mil construction grant), but added that the payback could be shorter with the introduction of table games.

    Another gaming analyst is neutral on Genting, as he feels that growth in Asia remains more exciting.

    “It does provide an earnings platform, and one which is more stable and less volatile. It is also a more efficient use of their cash hoard. However, the US market is a mature market. The earnings profile may not be so exciting,” the analyst said.

    As of June 30, 2010, Genting had a cash pile of some RM5.55bil on its books.

    A KAF Research analyst said in a report dated Aug 17 that overall, the Aqueduct business can contribute US$16mil to US$17mil a year to Genting Malaysia.

    “This is not a significant amount as it constitutes just 4% of Genting Malaysia’s 2010 net profit,” the report said.

    For the six months to June 30, 2010, Genting Malaysia announced an 11.4% increase in revenue to RM2.57bil but its net profit fell 4.6% to RM578.05mil.

    The New York project has been dubbed Resorts World New York. The proposed three-storey facility will have several restaurants, water features, an outdoor terrace connected to the Aqueduct Racetrack, which will be able to accommodate up to 10,000 people and will have a 2,200-bay carpark.

    Genting NY aims to complete the entire development within 12 months from the date it obtains formal approval from the state to proceed.

    As part of a wider development plan, Genting NY is also proposing to build three hotels of differing standards, shopping, recreation, and other resort facilities at a total cost of US$650mil (RM2.09bil). That will take the proposed outlay for the entire project to over US$1.3bil.

    fr:biz.thestar.com.my/news/story.asp?file=/2010/9/15/business/7034863&sec=business

39. alan on September 16th, 2010 at 10:39 am

    From 2012 Genting M’sia shares won’t depend on Genting Highlands alone
    By TEE LIN SAY

    It will soon enjoy the benefits of a global gaming pie

    KUALA LUMPUR: Beginning 2012, Genting Malaysia Bhd will no longer be your domestic stock which merely depends on visitors coming up for fun rides in Genting Highlands.

    It will soon enjoy the benefits of a global gaming pie when its Aqueduct Racetrack in New York is fully operational.

    Genting has received its final approval to kick start works to roll out its first ever video lottery facility in the United States.

    Some analysts continue to be neutral on the deal, as they feel there is minimal earnings uptick from its global expansion drive.

    Based on Bloomberg’s survey, there are currently 10 analysts with a “buy” call, nine with a “hold” call and eight with a “sell” call.

    As it is, there are concerns on its foray in the UK due to the difficult operating environment.

    To recap, last month, Genting got the nod from its shareholders to acquire Genting UK from Genting Singapore for a cash consideration of £340mil (about RM1.67bil).

    On the US foray though, KAF Research in its Aug 7 report estimated that Aqueduct could eventually contribute 4% of Genting’s 2010 net profit when all 4,500 electronic slot machines were commissioned.

    This is based on the assumption of an average win per machine of US$300 per day.

    This estimate is extrapolated from studying the financials of Empire City Inc’s video lottery operations, which own Monticello Casino and Raceway, the next nearest casino to Aqueduct Racetrack.

    Genting’s investment for the racetrack will range between US$705mil and US$730mil, based on the US$380mil upfront licence fee and between US$325mil and US$350mil capital expenditure programme.

    Assuming the US$250mil grant can be used to directly offset the capital expenditure, Genting’s net outlay will be between US$455mil and US$480mil.

    “The Aqueduct deal appears promising, with its key appeal being its strategic location just two subway stops from the New York subway. Given the ready catchment surrounding Brooklyn and its proximity to the John F. Kennedy International Airport and downtown Manhattan, we believe that the Aqueduct site could be one of the most strategically-located gambling venues,” said CIMB Research in its report dated Aug 25.

    Meanwhile, an analyst from DBS Research feels that the Aqueduct Racetrack should boost Genting’s 2011 to 2012 operating earnings by 5% to 19%.

    “The return on investment is estimated at 17%, assuming a six-year payback period, with potential upside from introduction of table games,” he said.

    The analyst added that the US$480mil project could be easily funded by Genting’s RM5.5bil cash and RM1.4bil operating cashflows per annum.

    This could lead to a 6% to 9% fall in 2010 to 2011 earnings due to interest income loss. This will, however, be temporary, before turning positive in the long run.

    Maybank Investment Bank Research is calling a “sell” on Genting, with its report titled: “Pouring huge sums into a tiny apple in the Big Apple”.

    The Maybank analyst said it was a mere 3% earnings per share accretion, which would give a low 6% return on equity on the intended multi-billion ringgit investment in Resorts World New York.

    “It is just US$29mil net profit on a US$500mil investment in New York. Our generous base case assumes US$300 win per unit per day from the 4,500 machines, exceeding the current US$286 highest in New York.

    “We also assume a 35% operating margin and the US$250mil state grant is payable in cash and will off set the US$325mil development cost,” the analyst said in the report.

    Maybank said a good case assumptions of 5,000 slots, US$400 win per day and 40% operating margins would see the earnings per share uplift by just 9% and return on equity by 11%.

    Meanwhile, over the past month, Genting had purchased 35 million shares for RM105mil at an average price of RM3.05, bringing its treasury shares to 243 million or 4% of share capital.

    Genting had mentioned that it intended to acquire up to 10% over the next 10 months.

    fr:biz.thestar.com.my/news/story.asp?file=/2010/9/16/business/7044319&sec=business

40. alan on September 22nd, 2010 at 11:29 am

    Genting’s UK casino acquisition price up

    PETALING JAYA: Genting Malaysia Bhd’s acquisition price of a casino business in the United Kingdom from Genting Singapore plc would be increased to £351.5mil from £340mil.

    It told Bursa Malaysia yesterday that the revised acquisition cost was due to the lower net debt position at £74.4mil as at June 20 compared with the net debt amount of £85.9mil as at May 31.

    “In accordance with the terms of the sales and purchase agreement, the purchase consideration will be revised by the net debt difference from £340.0mil to £351.5mil to reflect the reduction in net debt,” it said.

    Genting Malaysia also said it had, on Sept 20, obtained approval from the British Gambling Commission for the proposed acquisition.

    To recap, last month, Genting Malaysia got the nod from its shareholders to acquire Genting UK from Genting Singapore for a cash consideration of £340mil (about RM1.67bil).

    The company was among the top 10 gainers on Bursa Malaysia yesterday, up 41 sen to close at RM3.64 with a total of 40.9 million shares traded.

    fr:biz.thestar.com.my/news/story.asp?file=/2010/9/22/business/7078737&sec=business

41. alan on September 22nd, 2010 at 11:53 pm

    Capital gain versus dividend – which one is better?
    Personal Investing – By Ooi Kok Hwa

    DESPITE the high FTSE Bursa Malaysia KL Composite Index levels, a lot of investors have been complaining about not getting the desired returns by investing in the stock market.

    This is because they are holding shares in companies that have poor fundamentals, and the majority of the sestocks are still selling at very cheap prices.

    As a result, most investors not only incur capital losses due to low prices but al so not get any dividends from these companies. In this article, we will look into the importance of capital gain versus dividend.

    When we look at the performance of listed companies, we find that the majority of companies t hat have performed well in terms of stock prices are companies that pay good dividends; for example Nestle (M) Bhd, Dutch Lady Milk Industries Bhd, Public Bank Bhd etc.

    Most investors are aware of these stocks that pay good dividends. However, some would not consider buying into these stocks because to them, the stock prices are too high or too expensive.

    Instead, some investors prefer to take the chance and buy penny stocks, which they think are cheap and have higher probabilities of getting huge capital gains.

    Unfortunately, most of them find that after a few years, they are still not receiving any dividends from these stocks, while the stock prices are still far from their targets, some of them even below their purchase prices.

    Investors wh o buy stocks that pay good dividend s need to have the mindset and habit of holding stocks for long-term.

    Normally, people who prefer to invest in di vidend-paying stocks will not speculate on these stocks but keep them for the long-term as the companies have been rewarding them with good dividend payments over the years.

    Companies that pay good and consistent dividends also reflect the sharing attitude of the companies’ owners.

    There have been instances wher eby some listed compan ies, when in need of funds, would raise the money from investors through various types of capital calls.

    However, when the companies start to accumul ate excess cash, they do not reward investors with special dividend payments.

    Instead, if their stock prices were selling below the net cash per share of the companies, they woul d consider taking the companies private so that they can have direct access to the cash.

    Hoping for capital gains Many companies refuse to pay dividend s to investors because they claim they need to retain profits for future expansion.

    Even though there are cases where future expansions turn ou t to be successful and generate good profits to the companies, there are als o cases where expansion projects fail.

    We notice that st ock prices for companies that either pay very low or no dividends would fluctuate according to t he overall sentiment of the stock market, whereas stock prices for companies that pay good dividends tend to be relatively more stable.

    Most investors know the need to buy low and sell high to make money. However, most do not know when to sell their stocks. We cannot sell a stock just because we have bought it cheap.

    According to Benjamin Graham, we should only sell a stock when the fundamentals of the company deteriorates.

    We should not sell the stock if the stock price is temporarily above its intrinsic value as it is not easy to identify a company with good quality management.

    Besides, this type of company usually pays stable and growing dividends as it usually has a fixed dividend payout policy to reward investors.

    However, most investors may sell their stocks too early. Companies that are unable to pay dividends are usually companies that incurhigh capital expenditure for future expansion.

    These companies not only do not have any excess cash to pay dividends, they also have high gearing and need to retain all profits for expansion. Hence, investors who buy these stocks will have to bear higher risks.

    In short, it is safer to buy into companies that p ay good dividends.

    As mentioned earlier, companies that pay good dividends reflect the attitude of the companies’ owners, whether they are willing to share profits with minority shareholders.

    This is important as we have growing cases of companies with issues on corporate governance.

    # Ooi Kok Hwa is an investment adviser and managing partner of MRR Consulting.

    fr:biz.thestar.com.my/news/story.asp?file=/2010/9/22/business/20100922091347&sec=business

42. alan on October 15th, 2010 at 8:09 am

    Genting gets nod for UK casino buy

    KUALA LUMPUR: Genting Malaysia Bhd has obtained the relevant consent from the acquiree group’s creditors for the proposed acquisition of casino businesses in Britain from sister company Genting Singapore plc.

    It told Bursa Malaysia yesterday that all conditions precedent of the proposed acquisition had been met and was now unconditional.

    Genting Malaysia is acquiring Genting Singapore PLC’s casino operations in Britain for £340mil (RM1.67bil) cash.

    In an earlier statement, the company said the acquisition was in line with its strategy of growing its core businesses – leisure, hospitality and entertainment – internationally.

    fr:biz.thestar.com.my/news/story.asp?file=/2010/10/15/business/7232275&sec=business

43. alan on October 19th, 2010 at 9:26 am

    Public Bank Q3 net profit up 22.5%
    By SHARIDAN M.ALI

    Higher net interest, finance and operating income are main contributors

    PETALING JAYA: Public Bank Bhd’s net profit soared by 22.5% to RM782.7mil in the third quarter ended Sept 30 against the previous corresponding quarter bouyed by higher net interest, finance and operating income.

    Revenue for the period under review was up by 18% to RM2.88bil.Earnings per share was up to 22.35 sen from 18.52 sen a year ago.

    In terms of its nine-month performance, Public Bank’s net profit grew 19.7% to RM2.2bil while revenue increased to RM8.06bil reflecting a 11.7% rise from a year ago.

    Earning per share for the period under review jumped by 17% to 63 sen.

    According to chairman Tan Sri Teh Hong Piow, the improved profit performance of the group for the first nine months was mainly attributed to the strong growth in net interest and finance income and higher non-interest income.

    “The three increases in the overnight policy rate this year totalling 0.75% translated into an improvement to the group’s net interest margin.

    “The improved net interest margin, coupled with the strong organic growth in loans and core customer deposits, led to the group’s net interest and finance income improving by RM525mil or 15% in the first nine months this year from a year ago,” he said.

    Teh added that the non-interest income of the group also recorded a growth of 18% from last year.

    “The group also recorded a strong increase in total loans and advances by 10.3% growth for the first nine months to RM151.7bil as at end of September,” he said.

    The lending activities of the group remained focused on the retail sector, particularly in loans to mid-market commercial enterprises, residential properties and passenger vehicles which accounted for 78% as of September.

    Other financial details for the first nine months saw total assets increased to RM220.6bil.

    The gross impaired loans ratio of the group as of September remained low at 1.2% as compared with the industry’s ratio of 3.4%.

    Its overseas operations recorded a 14% improvement in earnings, due mainly to the decline in loan impairment allowances for the period under review.

    OSK Research said Public Bank’s nine-month results were largely in line with consensus and its full-year estimates.

    “The nine-month results represented 72% and 79% of consensus and our full-year forecast respectively, which we deem largely in line.

    “We expect stronger sequential performance underpinned by higher net interest income from a larger loans base and stable net interest margin, coupled with stronger unit trust management fees as a result of higher assets under management,” it said in a note yesterday.

    OSK maintained its “buy” call and target price of RM14.20.

    “The stock has been a laggard, with its immediate term catalysts being lower provisions, stronger net interest margin and upside surprise to loans growth,” it said.

    fr:biz.thestar.com.my/news/story.asp?file=/2010/10/19/business/7250276&sec=business

44. alan on October 21st, 2010 at 9:55 am

    Genting M’sia, Apollo Resorts in joint venture
    By Lee kian seong lks@thestar.com.my

    JV to look for opportunities in the UK casino and entertainment industry

    KUALA LUMPUR: Genting Malaysia Bhd’s two indirect wholly owned subsidiaries have entered into two different agreements with Apollo Resorts & Leisure Ltd (Apollo), Sevco, and Apollo Resorts & Leisure Casinos Ltd (Apollo Casino) to pursue business opportunities in the leisure and entertainment industry and casino business in the United Kingdom.

    In a filing with Bursa Malaysia, Genting Malaysia said Genting Ibico Holdings Ltd had entered into a joint-venture (JV) agreement with Apollo and Sevco (5036) Ltd, which would be renamed as Apollo Genting London Ltd.

    It said the JV company’s principal activities would be obtaining a long-term lease or to acquire land located at the Royal Docks, Silvertown Quays, Newham.

    It plans to develop and operate a leisure entertainment destination and explore opportunities at the Olympic Festival Village.

    The JV company will also lease, sell or sub-lease parts of the development to each of the parties for separate developments.

    This will be conditional on a casino licence being granted to Apollo and transferred to Genting Casinos UK Ltd (Genting Casinos).

    “Upon execution of the JV agreement, Genting Ibico and Apollo will contribute equity totalling £2.95mil (RM14.5mil) into the JV company,” it said.

    Both parties would hold 50% equity interest in the JV company.

    Genting Ibico is expected to fund its investment in the JV through internally-generated funds and where appropriate, externally-raised funding.

    Meanwhile, Genting Casinos has entered into a casino agreement with Apollo and Apollo Casino.

    Genting Malaysia said the London Borough of Newham was tendering for a single “large” casino licence and had invited applications for the licence. Alternatively, a provisional statement, if granted, would enable the holder to apply for the licence.

    Genting Casinos and Apollo had separately made an application for the provisional statement and both applications had been approved in principle.

    The applications would now go through the second part of the two-stage procedure due for submission to the borough in November. Genting Casinos and Apollo had agreed to work together for Apollo to submit the “stage 2” Apollo application under the casino agreement.

    “If the stage 2 Apollo application is successful, Apollo will apply to convert the provisional statement into the licence,” it said.

    Upon successful conversion, an application will be made to the borough to transfer the licence from Apollo to Genting Casinos for an aggregate consideration of £5mil (RM24.6mil).

    Genting Malaysia said it was intended for Genting Casinos to be the sole owner and operator of the casino. It said Genting Casinos would have a casino licence to construct and operate a “large” casino in the Docklands area in Newham if the Apollo application was successful. The company added that the outcome of the stage two Apollo application was expected to be known in February next year.

    “If selected, Genting Casinos expects the only large casino in Newham to be a successful future addition to Genting Malaysia’s 46 existing casinos in the UK,” it said.

    The work on the Genting development was expected to start by the third quarter of 2012, with the casino planned to be opened in 2013.

    fr:biz.thestar.com.my/news/story.asp?file=/2010/10/21/business/7267941&sec=business

45. alan on November 12th, 2010 at 8:00 am

    Genting Singapore Q3 net profit slightly down from Q2

    SINGAPORE: Earnings by Genting Singapore, which operates one of the two casinos in the city-state, fell slightly in the quarter ended September from the previous quarter, but overall revenues at the two gaming resorts remain healthy.

    Genting Singapore posted earnings before interest, taxes, depreciation and amortisation (EBITDA) of S$347.6mil in the third quarter, down from S$503.5mil in the three months ended June.

    The Singapore casino recorded revenue of S$731.8 million in the third quarter, a decrease from S$860.8mil in the second quarter.

    Singapore legalised casino gaming in 2005.

    The city-state’s two multi-billion-dollar casino-resorts began operating earlier this year – Resorts World in February and Las Vegas Sands’ Marina Bay Sands in April.

    Marina Bay Sands, a US$5.7bil casino resort, generated US$241.6 mil in EBITDA for the quarter ended September.

    CLSA estimates that the size of Singapore’s casino market could match the Las Vegas strip by next year. The brokerage expects Singapore’s casino market to be worth US$6.5 bil by 2011, matching the Las Vegas Strip, before surpassing Sin City in 2012 with a market size of US$8.1 bil, said Jon Oh, an analyst at CLSA.

    “Both Las Vegas Sands and Genting understand the Asian market better than others and they both know how to deepen spending at their casinos,” Oh said.

    fr:biz.thestar.com.my/news/story.asp?file=/2010/11/12/business/7414516&sec=business

46. alan on November 16th, 2010 at 5:38 pm

    Joint takaful licence for Public Bank, ING

    PETALING JAYA: Bank Negara has approved the joint application by Public Bank Bhd (PBB), Public Islamic Bank Bhd (PIBB) and ING Management Holdings (M) Sdn Bhd for a family takaful licence.

    In a joint statement, the three companies said they would set up a joint-venture (JV) company to carry out the family takaful business, with ING holding a 60% equity stake, PBB 20% and PIBB 20%.

    The JV company is targeted to be fully operational by the first half of 2011.

    According to the statement, it was envisaged to be a leading family takaful provider with 15,000 agents in the long term.

    “The takaful products will be promoted via the multi-distribution channel of tied agency, bancatakaful and employee benefits which currently exists in ING and the PBB group,” the companies said.

    ING and the PBB group began their 10-year strategic bancassurance alliance in 2008. “Together, they have become the fastest growing bancassurance provider in the country,” the statement said.

    ING Insurance Bhd has over 1.5 million customers nationwide and total assets worth RM12.4bil as at end-2009.

    fr:biz.thestar.com.my/news/story.asp?file=/2010/11/16/business/7434187&sec=business

47. alan on November 19th, 2010 at 6:52 pm

    ING-Public Bank JV to show profits by 4th year

    It plans to expand into Indonesia and Hong Kong

    KUALA LUMPUR: ING Insurance Bhd and Public Bank Bhd’s new takaful firm aims to be profitable by its fourth year of business as it taps Malaysia’s underserved insurance market, and eventually expand into Indonesia and Hong Kong, its owners said yesterday.

    The insurer, which received one of four family takaful licences awarded in September, will launch its first product in April in Malaysia where acceptance of takaful is limited and insurance penetration is among Asia’s lowest.

    Penetration of life insurance is very low in Malaysia compared with some regional markets. It’s an immature market, ING chief executive officer Nirmala Menon said in an interview.

    We need to get to a stage where its like Taiwan or Korea where each person has six-seven policies and understands the need to have them.

    Malaysia has the world’s largest sukuk market and Islamic assets account for about a fifth of the total banking system but takaful has struggled to make a mark in the country.

    There are eight Islamic insurers in Malaysia but the takaful penetration rate was only 10.5% as at June this year compared with 42.3% for conventional insurance, according to central bank data.

    The total insurance penetration rate of 52.8 is much lower than Hong Kong’s 120% and Japan’s 200% as estimated by some industry players.

    Menon said the joint venture was expected to break even in its third year of business although it had to work to overcome the low awareness and misconceptions about Islamic insurance among Malaysians.

    In the Chinese market, life insurance penetration is close to 80%-85% whereas in the Muslim market the penetration is below 10% so the maximum opportunity is within the booming Muslim market in Malaysia, she said.

    Under the takaful model, participants contribute to a takaful fund. Contributions are separated from the takaful operator’s assets and participants have an ownership interest in the fund.

    When the fund makes money, the surplus is shared between the participants and, in some cases the takaful operator. When there is a loss, participants could be asked to contribute but the takaful operator will typically provide an interest-free loan.

    Public Bank managing director Tay Ah Lek said the joint venture would tap the regional market after it secured its domestic business on a strong footing.

    We see Indonesia as a key market. It is something that we would be looking at very aggressively, he said.

    We already have a partnership with Public Bank in Hong Kong and that is also an area where there’s an ability for us to transport this sort of things.

    Total takaful contributions could reach US$7.7bil (RM24bil) a year by 2012, Ernst & Young forecast. But global takaful contributions are less than 1% of the total insurance premium spend annually, according to industry lawyers Clyde & Co.

    fr:biz.thestar.com.my/news/story.asp?file=/2010/11/19/business/7457817&sec=business