Bursa Price Target: 'Buy' call on Tenaga, 'hold' for YTL Powe r- Hwang DBS

HwangDBS Vickers Research has maintained its "buy" call on Tenaga Nasional Bhd (TNB) with a RM8.10 target price based on a stronger financial year 2012 forecast (FY12F) earnings.

In a research note today, the research firm expects TNB's base tariff hike to take effect by next year.

It added, TNB would also be getting an additional subsidised gas supply from the new Petronas Gas Liquefied Natural Gas (LNG) plant, which supports the case for a subsidy review and base tariff adjustment.

"We estimate that for every one per cent increase in base tariff, TNB’s FY12F net profit will rise by 8.7 per cent while every one per cent hike in average coal price reduces FY12F net profit by 4.1 per cent," it said.
Meanwhile, the research firm also maintained its "hold" call for YTL Power International Bhd (YTLP) for a sum-of-parts (SOP) derived target price of RM2.75 per share on concerns over its lower internal rate of return from the power purchase agreement (PPA) extension but still with an enhanced value.

"YTLP, which has a 21-year PPA with TNB until 2015, has a positive potential extension for its first generation PPA as a power plant in operation is better than an idle one," it said.

HwangDBS also maintained its "hold" call with a target price of RM11.40 on Petronas Gas Bhd (Petgas), as the owner and operator of the regasification plant in Melaka.

It said, Petgas had a good yield with an upside, from its regasification plant. --Bernama
Source: Business Time, 29 March 2011

Khazanah shortlists 3 for stake in Pos

The three are DRB-HICOM, Nationwide Express Courier Services and a joint venture between Amanah Reit and loss-making Malaysia Pacific.

Khazanah Nasional Bhd has shortlisted three companies to buy its 32.21 stake in Pos Malaysia Bhd (4634), the country's sole national postal service company, people familiar with the tender process said yesterday.

Business Times understands that the shortlisted parties will make a second and final presentation today.

The three are DRB-HICOM Bhd, Nationwide Express Courier Services Bhd and a joint venture between Amanah Reit Bhd and loss-making Malaysia Pacific Corp Bhd.

Two other companies had also placed bids for Pos Malaysia, namely Scomi Bhd and Tricubes Bhd.
Most of the bidders had placed a RM15 million deposit, and the money will be returned to the rejected bidders.

Bidders who have qualified and have eventually been selected to buy the stake risk losing their deposit if they cannot come up with the financing to acquire the stake.

The shortlisted companies were notified on Friday and yesterday that they will be making their presentation to representatives of Khazanah and McKinsey & Co, who are advising the government's investment arm on the share sale exercise.

While most of the bids were based on cash and how they can leverage on Pos Malaysia's landbank, it is understood that one of the bids involves injecting a bank into the postal company.

It is further understood that the shortlisted candidates for the stake had bid between 2.2 times and three times of Pos Malaysia's book value per share, which stood at RM1.54 as at end-December 2010.

Pos Malaysia shares closed at RM3.32 yesterday, valuing Khazanah's 32.21 per cent stake at about RM574.28 million.

The shares were actively traded yesterday due to knee-jerk reactions on news that Pos Malaysia was proposing to pay a special dividend of 7.5 sen on top of a final dividend of 10 sen a share.

For its financial year ended December 31 2010, Pos Malaysia recorded sales of RM1.01 billion, while net profit stood at RM67.11 million.

At the group level, Pos Malaysia has small gearing, with the total debt level at about RM40 million.


Tuesday, March 29, 2011, 08.12 PM

New lending rules for banks in Q3 - Bank Negara Malaysia

The aim is to inculcate 'responsible lending practices' by financial institutions in dealing with retail customers

Bank Negara Malaysia (BNM) will introduce new lending guidelines to banks in the third quarter of this year as part of preemptive measures to deal with household debt.

Governor Tan Sri Dr Zeti Akhtar Aziz said the aim is to inculcate "responsible lending practices" by financial institutions in dealing with retail customers.

"The new lending practices are to ensure prudent and responsible conduct for retail financing as part of measures to preserve household sector resilience," she told pressmen at the presentation of BNM Annual Report 2010 in Kuala Lumpur yesterday.

BNM has already issued the concept paper with the banking sector. By the third quarter of 2011, all financial institutions will have to put the proper mechanism in place.
Under the new rules, banks will have to test if a borrower can afford a loan and provide information on the product. This will include its borrowing rate, repayment obligation, applicable charges, implications of non-repayment, risk associated with the product, and assistance and redress mechanism.

The new rules are not intended nor expected to affect the availability of loans or cause delays in processing.

"The banking sector is well-positioned to make the assessment of affordability. They also know the exposure or the credit worthiness of the borrower, and this is important," said Zeti.

BNM noted that the rising trend of household indebtedness could potentially become an area of concern.

During the 2000-2009 period, household debt grew at an annual rate of 13.5 per cent, while household debt-to-gross domestic income ratio increased from 46 per cent in 2000 to 76 per cent in 2010.

During the year, BNM introduced a comprehensive series of policies that included capping mortgage limits, new credit card measures and strengthened requirements for banks to adopt prudent and responsible lending practices.


Source: Business Times, 24 March 2011

Sell on Hai-O, but ups Target Price to RM1.93 -OSK Research

KUALA LUMPUR: OSK Research said Hai-O's nine-month results for the period ended Jan 31, 2011 were within its full year forecast of RM27.2m. The research house said on Thursday, March 24 that due to its poor multi-level marketing results, revenue plunged 60% to RM165m while net profit fell by an even wider 64.2% to RM20.3m. 'In tandem with the poorer results, YTD EBIT came in at 17.5% versus 19.5% in 9MFY10. Despite the weaker numbers, management says MLM sales have started to pick up. 'We raise our FY12 earnings forecast by 1.7% to RM32.6m to factor in a stronger RM against USD. Our TP is raised to RM1.93 from RM1.61 previously (based on 12x PE) as we roll over our valuation to FY12. Maintain SELL,' OSK Research said. Source: The Edge, 24 March 2011

Hai-O Q3 pre-tax profit shrinks to RM9m

Hai-O Enterprise Bhd's pre-tax profit for the third quarter ended Jan 31, 2011 declined to RM9 million from RM25.2 million in the same quarter last year.

Revenue fell to RM57.6 million from RM131.3 million previously.

In a filing to Bursa Malaysia, Hai-O said the drop in revenue and pre-tax profit was mainly due to lower contributions by its principal subsidiary, the multi-level marketing division. -- Bernama 23 March 2011

Bank Negara may raise inflation forecast to 3pc-4pc

Credit Suisse says the new forecast would be around 3 per cent to 4 per cent, assuming the government hikes fuel prices two more times - in June and November

Bank Negara Malaysia may announce a higher inflation forecast for 2011 when it releases its latest annual report today.

Credit Suisse economist Wu Kun Lung said the new forecast would be around 3 per cent to 4 per cent, up from 1.7 per cent in 2010.

He expects the Consumer Price Index, the inflation barometer, to rise to 3 per cent by mid-2011 and hover between 3 per cent and 3.5 per cent in the second half of the year.

"This is assuming the government hikes fuel prices two more times - in June and November, by a similar magnitude as last year's hikes."
Bank Negara appeared to be more concerned about inflation in its monetary policy statement in March, noting that "the degree of monetary accommodation may be reviewed given the sustained growth in the economy and risks to inflation".

However, given industrial production and exports remain well below pre-crisis levels, he expects the central bank to only resume rate hikes in the second half of the year.

"We expect BNM to resume its rate hikes in the third quarter, but it could be earlier (in May) if the government hikes retail fuel prices in the first half amidst a strong pick-up in domestic growth."

Malaysian consumers are less affected by higher global commodity prices as fuel and essential food items are subsidised.

He expects the Overnight Policy Rate (OPR), now at 2.75 per cent, to be hiked to 3.25 per cent by the end of 2011 and 3.5 per cent by the end of 2012.

The statutory reserve requirement ratio, which was raised to 2 per cent in March, could also be incrased further.

Credit Suisse is keeping its 5.6 per cent economic expansion target for 2011.

Higher commodity prices should boost incomes for farmers and companies in the plantation and oil and gas sectors, which should in turn lead to increased consumption and investment.

A 10 per cent rise in palm oil prices would add about 0.3 percentage points to Malaysia's real gross domestic product (GDP) growth, while a 10 per cent rise in oil prices or rubber prices would add around 0.2 percentage points to growth.

"Although some commodity prices, namely palm oil and rubber, have softened in recent weeks, their prices remain well above the average in 2010. Barring a sharp drop, we think the overall impact on 2011 growth should remain positive."

The agricultural and mining sectors together accounted for about a quarter of Malaysia's GDP in 2010.

Source: Business Times, 23 March 2011

America President Obama Salary per annum.

Working for the government is often referred to as public service. The term implies sacrifice or taking less than what could be earned in the private sector or in an entrepreneurial position. Many government workers seem overpaid but are probably underpaid when you consider the scope of their responsibilities. Indeed, many in the private sector would not want to stand up to the scrutiny required of a top public service job or to get elected to public office.

The salary of the President of the United States is actually a token sum considering the responsibilities of the office. Still, officials in other public service jobs seem egregiously overpaid. People who hold these jobs are "set for life" after their public service ends because they are in demand for paid speaking gigs, memoirs and consulting roles in private industry.

24/7 Wall Street has gathered data from many public sources to ferret out how much these top government officials earn. Salaries of some jobs are shielded from public scrutiny because of national security reasons. We did not consider the healthcare and retirement packages, security and transportation benefits and more. In some cases, our public service executives have actually taken considerable pay cuts to serve.

One thing also needs to be considered here. Some government salaries are actually shielded under executive order. Some of the shielded pay grades may be well into the hundreds of thousands or even more. Some information, intelligence, and cloak and dagger positions are shielded and above our pay grade when it comes to identifying how much they are.

10. Secretary of State: Hillary Clinton

Annual Base Salary: $186,600
Maximum Job Length: Generally 8 Years
Previous Job: Senator From New York

Job Description: The Secretary of State is appointed by the president to serve as chief diplomatic representative of the U.S. Besides overseeing all State Department operations, including the operations of the U.S. embassies and representation in the UN, Secretary of State Clinton is responsible for the foreign operations of the CIA, the Defense Department, and the Department of Homeland Security. Clinton is also fourth in the chain of succession for presidency.

9. Secretary of Treasury Timothy Geithner

Annual Base Salary: $191,300
Maximum Job Length: Generally 8 years
Previous Job: President of the Federal Reserve Bank of New York

Job Description: Appointed by the President, the Secretary of the Treasury serves as the principal economic advisor for the President. According to the Department of the Treasury: "The Secretary is responsible for formulating and recommending domestic and international financial, economic, and tax policy, participating in the formulation of broad fiscal policies that have general significance for the economy, and managing the public debt." Geithner is a proxy for many other presidential cabinet members, who make the same amount, including Secretary of Homeland Security Janet Napolitano.

8. Senate Majority Leader: Harry Reid

Annual Base Salary: $193,400
Maximum Job Length: Indefinite, usually 4-8 years, or until Senate changes hands
Previous Job: Governor of Nevada

Job Description: The Senate Majority Leader did not exist until the beginning of the 20th century. According to the U.S. Senate website: "The leader must keep himself briefed and informed on national and international problems in addition to pending legislative matters. On the floor of the senate he is charged by his party members to deal with all procedural questions in consultation with them and his party's policy-making bodies." Additionally, Reid must be in contact with all of the various committees and maintain a line of communication between them and the senate. This position stands as proxy for the minority and majority leaders in both the Senate and House, who all make the same amount.

7. Chairman of the Federal Reserve: Benjamin Bernanke

Annual Base Salary: $199,700
Maximum Job Length: 14-28 years
Previous Job: Professor of Economics at Princeton

Job Description: The Chairman of the Federal Reserve is in charge of the Federal banking system of the U.S. As head of the fed, Bernanke dictates and explains the direction of U.S. fiscal policy and works with the Department of the Treasury.

6. Chief Justice of Supreme Court John G. Roberts

Annual Base Salary: $217,400
Maximum Job Length: Life
Previous Job: Judge on the Washington, D.C. Court of Appeals

Job Description: As the Chief Justice of the nine-member Supreme Court, Roberts is the head of the U.S. Federal court system, and is effectively the Leader of the Judicial branch of the government. The Chief Justice is the spokesperson for the court, deciding who writes its opinions. Roberts is also responsible for setting the court's agenda.

5. Chairman of the Joint Chiefs of Staff: Admiral Michael Mullen

Annual Base Salary: $220,734.36
Maximum Job Length: 8 Years
Previous Job: Chief of Naval Operations

Job Description: While the president is technically the commander of the U.S. Armed Forces, the Chairman of the Joint Chiefs of Staff — the combined panel of the Army, Air Force, and Navy — is the functional leader of the military. The Chairman is appointed by the President.

4. Speaker of the House: John Boehner

Annual Base Salary: $223,500
Maximum Job Length: Potentially Unlimited, Generally 4-8 Years
Previous Job: Member of the U.S. House of Representatives From Ohio

Job Description: The Speaker of the House does not legally need to be a member of the House of Representatives, but there has never been a speaker appointed from outside the legislative branch. The speaker is third in line for the presidency. The speaker's role includes presiding over the house and setting his party's agenda. This position stands as proxy for the House Minority Leader, who makes the same amount.

3. Vice President: Joseph Biden

Annual Base Salary: $227,300
Maximum Job Length: 8 Years
Previous Job: Senator from Delaware

Job Description: While the Vice President of the United States is the second-in-command of the executive branch, and aids the president in all of his bureaucratic and diplomatic efforts. The VP is also officially the President of the Senate, and presides over all meetings, although his only important role is to serve as the tiebreaker in the event of a voting deadlock. Vice President Biden is also next in line for the presidency should Obama die or become incapacitated.

2. Postmaster General: Patrick R. Donahoe

Annual Base Salary: $245,000
Maximum Tenure: 8 years
Previous Job: A number of executive positions in the U.S. Postal Service

Job Description: Donahoe is the leader of the U.S. postal service, a position which is older than the U.S. Constitution. Once a presidential cabinet position, appointments for the position now come from within the service. Donahoe helps set postal rates and services, and oversees all major regulation changes.

1. President: Barack Obama

Annual Base Salary: $400,000
Maximum Job Length: 8 Years
Previous Job: Senator from Illinois

Job Description: The President is the head executive branch, the Commander in Chief of the armed forces, and the nation's leader and figurehead. Obama is responsible for a great number of bureaucratic appointments and nominations, and many of the people on