Monday, April 30, 2012

What's Next for MAS - AIRASIA

WHAT now for MAS? Chances are that the speculation is true, that the Malaysia Airlines(MAS)-AirAsia Bhd swap is being unwound as we speak, with an official announcement out soon.
Collaboration between the two will be maintained, so the theory goes. If so, while AirAsia will continue to get on with its business of providing low-cost connectivity, what will happen to MAS?
Assuming the share-swap agreement wasn't the best fix for MAS, going by those who denounce it, the million dollar (or in MAS' case, the billion dollar) question is, what's it going to take to turn this company around?
Previous suggestions by this writer included flogging it off to the highest bidder. That must remain an option for its largest shareholder, Khazanah Nasional Bhd, which had only recently successfully divested its holdings in another problematic company, Proton Holdings Bhd. But selling MAS won't work if there aren't any takers or the bids aren't high enough.
It will also be interesting to see if MAS does revert to any of the thinking that went on when the share swap was envisaged, namely to focus on the premium market. Other national airlines seem to have made some progress in that direction, such as British Airways and Singapore Airlines.
File picture shows MAS and AirAsia aircraft at KLIA.
Will MAS, with its large staff count and widespread business areas, be able to morph that way? Will it be able to change to meet the rising competition or will there be too much resistance?
Also, it will be interesting to see what rationale is put forward if and when the unwinding of the share swap is announced. It may be that anti-competitive concerns may be the stated rationale, although word on the street is that the decision is more related to the wishes of some quarters within MAS.
If the latter is true, one really wonders if this group of people have any answer on how to fix MAS. It is hoped they or someone else does, because if no plan comes up fast, this company could be nose-diving into more financial trouble if not bankruptcy.
And that must surely mean huge pay cuts or worse, retrenchments.
Hence, those who will be pleased with any decision to unwind the share swap should be just as enthusiastic about what's next for MAS, because left alone, its future may be even more dicey.

PM: Lowest salary set at RM900

The monthly salary has been fixed at RM800 for Sabah, Sarawak and Labuan.
PUTRAJAYA: The minimum wage for workers in Peninsular Malaysia has been set at RM900 a month or RM4.33 per hour while for Sarawak, Sabah and Labuan, the quantum is RM800 per month or RM3.85 an hour, Prime Minister Najib Tun Abdul Razak announced tonight.
He said the minimum wage would cover workers in all sectors of the economy except for the domestic help service or maid, gardener and similar employment categories.
“The minimum wage will take effect six months from the date the minimum wage order is gazetted,” he said in speech when announcing the minimum wage for the private sector, here.
The announcement came in conjunction with the Workers’ Day tomorrow and a gift from the federal government to the country’s workers.
Najib said the government would provide an implementation mechanism so that the minimum wage initiative would not burden the employers or be detrimental to the workers, by allowing part of allowances or fix cash payments to be taken into account when calculating the wage quantum.
However, he said, for micro enterprises, the timeframe to implement the wage structure was 12 months from the date the minimum wage order was gazetted.
The prime minister said the 12-month exemption would not cover professionalfirms such as medical and dental clinics, legal firms, architectural firms and consultancy firms.
For these firms, he said, they would have to implement the minimum wage order in six months even if they only had five workers or fewer.
“Sufficient time is given to allow employers to restructure their business operations as well as the workers’ salaries.
“The government also allows a flexible implementation mechanism so that employers who are genuinely unable to implement the minimum wage policy can apply for an extension of the transition period,” he said.
bag of money
Najib said the government was aware of the demand for the wage be set at between RM1,200 and RM1,500 but stressed that for a start, based on the recommendations by the National Wages Consultative Council and a World Bank study, the quantum should not be set too high.
“If the minimum wage is set at higher than RM900 [basic salary], this is expected to affect the economy, the labour market and the inflow of foreign investments.
“If this happens, the industry cannot operate properly and many workers will lose their jobs. The government cannot allow this to happen because it will be detrimental to the welfare of the workers as well as to the nation’s interest,” he said.
Making adjustments
Najib said the government was also aware that setting a different quantum for the peninsula, and Sabah, Sarawak and Labuan would expose the government to accusations that it was being unfair to the workers in the two states and the Federal Territory.
“The difference in the minimum wage between these two territories has to be put in place because of obvious disparities in the wage structure and cost of living,” he said.
Najib said that within the next two or three years, however, the government hoped to be able to make adjustments to the minimum wage structure in the two states and bring it to be at the same level as that of the Peninsular Malaysia.
He said the minimum wage would not remain static, adding that it would be reviewed from time to time based on the country’s ability, productivity and competitiveness.

Malaysia Most Wanted IPOs in 2012

Initial Public Offering
The year 2011 almost reaches its end with 4 big IPOs listed in Bursa Malaysia. These IPOs were MSM MalaysiaBumi ArmadaUOA Development, andPavilion REIT.
MSM Malaysia & Bumi Armada IPO were performing very well since listing. On the other hand, UOADevelopment performed badly with the current price almost half of the listing price. Performance of Pavilion REIT IPO remained to be seen when it will be listed on 7th December.
In 2012, there will be 3 most-wanted IPOs namely, Felda Global Ventures Holdings, Integrated Healthcare Holdings (IHH) and Gas Malaysia. Probably, there will be more big IPO in 2012 but no details are currently available.

Felda Global Ventures Holdings

Felda Global is the commercial arm of the Federal Land Development Authority (Felda), the world’s largest estate owner. The company business focused on palm oil, rubber and sugar caneprocessing and cultivation.
Felda has been tasked to help rural settlers to develop plantations of agricultural commodities such as oil palm and rubber.
The company also has businesses in the U.S., Canada, Australia, China, Pakistan, Sri Lanka andSouth Africa. In June 2011, Felda Global listed its sugar unit MSM Malaysia Holdings Bhd in Bursa Malaysia.
Felda Global will have about 880,000 ha of plantation land. However, only 350,000 ha of plantation land will be included in the IPO. The remaining half-million ha is belonging to the settlers’ cooperative in the IPO.
The IPO would raise approximately RM5 billion to RM6 billion ringgit (US$1.6-US$1.9 billion). Proceeds from the IPO will go towards expanding its core businesses.

Integrated Healthcare Holdings (IHH)

Integrated Healthcare Holdings is controlled by Malaysia’s state investor Khazanah Nasional Bhd, which owns 70 percent stake of the company. The remaining 30 percent stakes are belonged to Mitsui & Co, Japan’s second biggest trading company.
Mitsui & Co purchase the 30 percent stake from Khazanah Nasional in April 2011 for RM3.3bil
The listed IHH would have assets of Singapore’s Parkway Holdings as well as Khazanah’s stakes in Pantai Hospitals and the International Medical University in Malaysia. The IPO will also include Turkish hospital chain.
In June 2010, Integrated Healthcare offered S$3.5bil (RM8.6bil) for the rest of Singapore’s Parkway Holdings Ltd, beating a rival bid fromFortis Healthcare Ltd.
Currently, Integrated Healthcare was in advanced talks to buy a majority stake in Turkey’s Acibadem Saglik Hizmetleri & Ticaret AS for about US$1billion.
IHH also has an investment in India Apollo Hospitals.
IHH is expected to be listed in Bursa Malaysia in 2H2012. The IPO will raise about US$2.0 billion (RM6.3 billion).

Gas Malaysia

MMC Corp Bhd, the flagship company of Tan Sri Syed Mokhtar al-Bukhary, plans to list Gas Malaysia Sdn Bhd on the Main Board of Bursa Malaysia in 1Q2012. Previously, the IPO was postponed a few times.
Gas Malaysia is the country’s sole supplier of natural gas to the non-power sector.
MMC-Shapadu holds 55 percent stake in Gas Malaysia. The remaining 45 percent stake, held by Tokyo Gas-Mitsui & Co (Holdings) Sdn Bhd and Petronas Gas Bhd with 25 and 20 percent stake, respectively. Petroliam Nasional Bhd also has a golden share in Gas Malaysia.
Upon listing, MMC’s effective stake in Gas Malaysia will be diluted to 30.9 percent from 41.8 percent.
Gas Malaysia Bhd unit may sell shares at RM2.20 a piece. The total net proceeds is estimated at RM300.9 million.


Sunday, April 29, 2012

4 Approaches introduced by Najib to Encourage the Growth of Entrepreneurs and Local Businesses

In June 2011, Malaysian Prime Minister, Dato’ Seri Najib Tun Razak unveiled the 4 Approaches for Entrepreneurship Growth and to create a vibrant environment to cultivate more interest towards pursuing Entrepreneurship and to create competitive companies, products, services and Brands to compete on a global scale. We thought it would be a great recap of the 4 Strategies that was introduced by the Prime Minister in committing the government’s support towards Entrepreneurship.
Here is an abstract from the Prime Minister’s own blog at which summarizes the Prime Minister’s intent to empower and to build a supportive, competitive and vibrant Entrepreneurial eco-system in Malaysia. We have slightly modified the article for our readers’ pleasure, highlighting main points mentioned by the Prime Minister and the launch of a business fund (Read until the end of the article).
PUTRAJAYA, Sept 22 (Bernama) — Prime Minister Datuk Seri Najib Tun Razak on Thursday unveiled four approaches for entrepreneurship development in the country to be more successful and viable.
(’s Comments: The 4 basic approaches that the Prime Minister described, tend to mirror the patterns of businesses that Tony Fernandes of AirAsia had launched in the past. The iconic budget airline and now Football and F1 teams owner’s concept of creating businesses could be traced to have very powerful branding elements, innovative business models and use a lot of Social Media and its Online Appeal to draw customers to their businesses – Hence, WHY this picture was used)
He said the  4 approaches are;
  • Introducing new ideas which are more creative
  • Inject innovations in business
  • Applying stronger and popular branding
  • Using websites to expand the market for products
“Nevertheless, we should not be disappointed for not being fully successful but we can already see the signs of success. What is needed is to increase successful entrepreneurs.
“We don’t want them to be merely small-scale businessmen but we want them to be regional and global champions whom we can be proud of,” he said when launching rural entrepreneurs’ carnival 2011.
Najib said among the approaches or new ideas that should be practised was to look at areas where the business competition was not that intense to the extent the margin or profit to entrepreneurs was negligible.
“If we look at many businesses, tens of shops will be selling almost the same goods. This makes our business is not that profitable.
“Profit is the basis to enhance and expand our business. When talking about entrepreneurship, it does not mean we just jump into it blindly.
“We want entrepreneurs who have the acumen to choose sustainable business that can flourish and have expansion prospects,” he said.
Najib said the move to link small-time businessmen, especially in rural areas, with the wider market via the “Kedai Runcit 1Malaysia” (1Malaysia Sundry Shop” concept, led by Mydin Mohamed Holdings Bhd, was a new idea that can yield big profit to retailers.
That is why, he said, the government encouraged networking so that the product of an entrepreneur was not only sold in the domestic market but also ationwide.
The Prime Minister said entrepreneurs must also inject innovation when producing their products as it could create new demand for the product.
Citing an entrepreneur who wanted to manufacture a new design liquefied petroleum gas cylinders which are lighter and durable, Najib said the product has big potential and can yield good profit.
“I want far-sighted entrepreneurs. I don’t want a generation of primitive mindset. If we hold to our old ways of thinking, we will not prosper (in life) and be successful in managing our sustainable business,” he said.
On branding, Najib said, it was important and be given attention because if a brand was accepted by consumers, it could give big profit to the entrepreneur.
“Branding has premium and value. (for instance) the cost of a product may be RM10,000 but with intensive branding, we can sell for RM20,000 to consumers,” he said.
Najib said entrepreneurs should also take full advantage of websites like the internet to sell their products.
He said the government had earlier launched the Rural Transformation Programme in Gopeng, a fresh initiative towards empowering the rural entrepreneurial sector.
He said the programme would function as a agro-food supply and agribusiness centre which links manufacturers and consumers countrywide.
This initiative was introduced to intensify market network for products produced by cottage industry entrepreneurs in rural areas, he added.
At the carnival launch, the Prime Minister announced RM50 million initial allocation under the Small-Scale Dynamic Entrepreneur Programme to help traders, particularly in rural areas.
Credit to the source:

Thursday, April 26, 2012

KWSP / EPF Top 30 Equity Investments in Bursa Malaysia, Q1 2012

Every 3 months, since March 2010, EPF reveals its top 30 equity investments in Bursa Malaysia. The aimfor this is to promote greater transparency and to reassure members that investment undertaken are in the best interest of growing their retirement savingsand in accordance to best practices in investment and governance.
For Q1 2012, when compared to December 2011, EPF increasing their share in Plantation companies such as United Plantation, Kuala Lumpur Kepong, IJM Plantation & IOI Corporation. Public Bank also emerged in the top 10.
The most notable changes were UMW Holdings,  Cycle & Carriage Bintang, SP Setia and Telekom no longer under EPF Top 30 Equity Investments. Replacing the position are Public Bank, Kencana Petroleum, POS Malaysia & IOI Corporation
The table below are the Top 30 Equity Investments in companies listed on Bursa Malaysia as of 31st March 2012.
No.Stocks% Holdings
1Msian Building Society Bhd65.50
2RHB Capital Bhd44.99
3Msian Resources Corp Bhd42.20
4Media Prima Bhd18.52
5Shell Refining Co. Bhd17.03
6Public Bank Bhd16.83
7WCT Bhd16.34
8Digi.Com Bhd16.29
9Dialog Group Bhd14.87
10Genting Plantations Bhd14.52
11Tenaga Nasional Bhd14.36
12IJM Corporation Bhd14.35
13United Plantations Bhd13.36
14Kuala Lumpur Kepong Bhd13.29
15Alliance Financial Group Bhd13.25
16Petronas Chemical Group Bhd13.00
17Star Publication (M) Bhd12.93
18IJM Plantation Bhd12.81
19Axis Reit Managers12.48
20AMMB Holdings Bhd12.43
21Sime Darby Bhd12.38
22Petronas Gas Bhd12.21
23Kencana Petroleum Bhd12.08
24KPJ Healthcare Bhd12.08
25Hong Leong Bank Bhd12.02
26IOI Corporation Bhd11.74
27Axiata Group Bhd11.71
28CIMB Group Holdings Bhd11.65
29Malayan Banking Berhad11.44
30POS Malaysia Bhd11.38

Source: KWSP Malaysia