CIMB Daybreak - 30 April 2015
MYEG (0138)
In a press release this evening, the Immigration Department announced that effective from 2 May 15, all foreign workers permit renewal nationwide will have to go through MyEG’s online foreign workers working permit renewal services (FWPR). The government will absorb MyEG’s RM38 FWPR fee and MyEG has agreed to give a RM3 discount on its FWPR services to the government (FWPRRM35/fee). The employers’ processing fee for its foreign workers' working permit renewal remains at RM125/transaction. (Bernama)
MAYBANK (1155)
Maybank’s subsidiary in Indonesia, PT Bank Internasional Tbk (BII), posted a higher profit after tax and minority interest (PATAMI) of 255.6bn rupiah (or RM80m) for the 1QFY15, up by 33.5% from 191.5bn rupiah in the same quarter last year. “The improved performance was achieved on the back of the bank’s discipline in pricing for both deposits and lending coupled with an intensified strategic cost management program implemented throughout the bank,” said Maybank.
• During the period, BII’s assets grew by 6.7% to 149.5tr rupiah.
• Maybank said BII’s total loans increased moderately by 6.2% to 107.6tr rupiah during the quarter, due to the slowdown in the economy and challenging business environment.
• Business banking loans grew by 15.3% to 41.6tr rupiah, while retail banking loans increased by 14.7% to 41.6tr rupiah.
• The bank’s total Shariah financing surged 116.2% to 7.4 trillion rupiah, while total Shariah customer deposits improved by 42% to 4.6tr rupiah.
• Commenting on the results, BII President Director, Taswin Zakaria, said the bank’s effort to re-profile its corporate customers toward higher corporate credit quality to enhance cross-sell and liquidity management business had started to bear fruits. He said the strategy aimed at ensuring alignment to the bank’s re-enhanced risk appetite and complement its payment solution business and generation of fee-based income.
• Maybank said BII’s non-performing loan level during the quarter was at 2.8% (gross) and 1.9% (net). “BII remains cautious over loan quality as some businesses are still impacted by the weakening of the commodities and mining sectors, economic slowdown, and weakening of the rupiah,” said Maybank.
• In March 2015, BII’s net interest margin increased to 4.85% from 4.73% recorded in Mar 14. Fee based income expanded by 26% to 621bn rupiah, while total capital adequacy ratio reached 15.9%, with total capital of 18.4tr rupiah from 15.1tr rupiah in the previous year. (Bernama, BT)
MAYBANK (1155)
We are positive on the strong rebound in BII’s 1QFY15 net profit although it was partly due to the lower base a year ago following the plunge in earnings in 1QFY14. Annualising the 1QFY15 net profit, BII would contribute about 4.4% to Maybank’s FY15 net profit, which is largely within our expectation. We think that BII would contribute 5-7% to Maybank’s earnings in the next 1-2 years and this would increase to 10-12% in the longer term (probably in the next 5 years). The recovery in BII’s earnings is one of the earnings catalysts for Maybank in 2015.
Maybank Ageas Holdings will expand to Indonesia and the Philippines as early as 2016 via acquisitions. CEO Kamaludin Ahmad said the group is looking at acquiring small and inexpensive insurance players in both markets and is in talks with several parties for the expansion exercise. "We have been talking to a number of parties. The selection exercise is going to take a while," he said. He pointed out that obtaining the insurance licence in Indonesia and the Philippines is quite difficult and through the acquisitions, the company could leverage on the existing licences to operate there.
Kamaludin added that Maybank Ageas is targeting companies with lower valuation of between three to five times book value but with strong business operations and distribution channels.
• Maybank Ageas is the parent company of Etiqa Insurance and Etiqa Takaful in Malaysia. It made its presence in Singapore last year, providing both general and life insurance products. "Singapore's contribution is going to be 6-7% this year. It will be closer to 10% next year," he added.
• Kamaludin said the company also expects its gross written premium to grow between 10% and 12% in the financial year ending 31 Dec 15 from RM5.02bn last year.
• Maybank Ageas registered a pre-tax profit of RM767m in the financial year ended 31 Dec 14, a 5% increase from RM733m in the previous financial year with a combined ratio of 85.1%, down from 87.8% a year earlier. It has total assets of RM31.6bn as at 31 Dec 14. (Bernama)
MAYBANK (1155)
We see the regional expansion of Maybank's insurance business as a natural progression as it will leverage on its regional network of its commercial bank. We see this as a long-term re-rating catalyst for Maybank though the near-term contributions from the overseas business of Etiqa will still be minimal.
It will be impossible to bring down prices of prepaid reloads to pre-GST (Goods and Service Tax) levels immediately, due to the huge logistics involved in implementing the change, said the Malaysian Communications and Multimedia Commission (MCMC). For now, prices of RM10 prepaid reloads will remain at RM10.60, with 6% GST applied, clarified MCMC chairman Datuk Sri Dr Halim Shafie. (StarBiz)
Telcos
There remains no contention over the charging of GST on mobile services. Telcos are currently conducting a survey to assess whether prepaid subscribers prefer to a) pay the same top-up prices with a reduction in reload credit or b) pay the 6% GST on top of the usual top-up prices with unchanged reload credit. If telcos end up maintaining the prices of top-up cards, they may not be able to fully benefit from GST as some prepaid subscribers may choose to stick with the reload credit they have and pare down usage, instead of reloading more frequently. For more details on the potential impact on Malaysian mobile operator's earnings and target prices, pls see our report, "GST dispute sets uncertain tone", 2 April 2015.
Long-awaited High-speed Rail (HSR)
PM Datuk Seri Najib Razak is expected to announce details of the long-awaited high-speed rail (HSR) linking Kuala Lumpur and Singapore after the annual Malaysia-Singapore Leaders' Retreat next week, said Land Public Transport Commission (SPAD) CEO Mohd Nur Ismal Mohamed Kamal. Najib is scheduled to attend the Sixth Malaysia-Singapore Annual Leaders' Retreat in Singapore starting May 5, which will be hosted by Singapore PM Lee Hsien Loong. (Financial Daily)
AIRPORT (5014)
Travellers at the Kuala Lumpur International Airport (KLIA) will have their very own shopping mall to spend time at, in between catching flights to destinations. The Mitsui Outlet Park KLIA Sepang will open on 30 May and is sited very near the KLIA and directly accessible from the highway. It will feature an exciting array of offerings, ranging from luxury and branded products, fashion apparels and accessories, perfumes and cosmetics, chocolates and confectionery, kids and sports wear, to household items and luggage. It will also offer a scrumptious choice of gastronomic delights and spanning 24,000 square metres of space under the first phase of its development.
• The Mitsui Outlet Park KLIA Sepang is the result of a joint venture (JV) between Mitsui Fudosan Co. Ltd and Malaysia Airports Holdings Bhd (MAHB). The outlet will be managed by the JV company, MFMA Development (MFMA).
• MFMA said the facility will gradually be completed to about 130 stores by late July. (BT, Bernama)
AIRASIA (5099)
For AirAsia X’s proposed rights issue with warrants, the board has determined that (1) the issue price has been fixed at RM0.22 per rights share at an entitlement basis of 3 rights shares for every 4 existing shares, and (2) the exercise price of the warrants has been fixed at RM0.46 for each warrant at an entitlement basis of 1 warrant for every 2 rights shares subscribed for by the entitled shareholders. (BMSB)
WPRTS (5246)
Westports Holdings Bhd expects container traffic growth at the port to slow to 5% to 10% this year, compared with a 12% increase to 8.4m TEUs in 2014. Its chief executive officer Ruben Emir Gnanalingam said nevertheless, it is still expecting positive growth, supported by its three key shipping clients — CMA CGM, China Shipping Container Lines and United Arab Shipping Co — which form the Ocean Three Alliance (O3). "We expect to handle over 9m TEUs this year," he said. Since O3's services commenced on Jan 17 this year, Westports has seen an increase in container volume in the first quarter of this year, said Ruben. (The Edge)
YTL (4677)
YTL Corp is still keen to pursue the development of the high-speed rail (HSR) linking Kuala Lumpur and Singapore on a private sector funding model. Group MD Tan Sri Francis Yeoh had said during the large track session with more than 40 analysts and fund managers at Invest Malaysia last week it would remain fairly competitive if the rollout of the HSR project followed the private sector model. (BT)
MALAKOFF
Malaysia’s largest independent power producer, Malakoff Corporation announced a fixed institutional price and the final retail price of RM1.80 per share each for its initial public offering (IPO). Malakoff said the announcement was made in conjunction with its listing on the main market of Bursa Malaysia Securities Bhd, which is set for 15 May 15. Malakoff is expected to raise RM2.74bn in proceeds from the listing of 1.52bn shares at a maximum indicative price of RM1.80 per share. The IPO will be the largest listing since 2012, representing up to 30.4% of Malakoff’s enlarged issue and paid-up capital. (BT, Bernama)
NCB Holdings Bhd saw its net profit for 1QFY15 rise 144% to RM11.64m or 2.5 sen a share, on better performance from its port operations and lower operating expenditure. NCB attributed the improvements to higher container handling from its port business and 16.9% reduction in operating expenses in 1QFY15. NCB operates Northport at Port Klang. For 1QFY15, the number of containers it handled had increased to 685,091 TEUs from 609,335 TEUs a year ago (+12.4% yoy). The much higher profit was achieved despite a 3.7% fall in 1QFY15 revenue to RM197.98m. The reduction was mainly dragged by 19.6% decrease in revenue from the group’s logistics operations. (The Edge)
VSOLAR (0066)
VSolar Group Bhd was slapped with an unusual market activity (UMA) query by Bursa Malaysia, which it denied knowing the reason for, yesterday following an unusual price movement and rise in volume of the its shares recently. (Sun)
Gulf Cooperation Council+7 (GCC+7)
Total new sukuk from Gulf Cooperation Council+7 (GCC+7) issuers rose 13% year-on-year in the 1Q15 in line with stability in crude oil prices, Fitch Ratings said. It said sukuk accounted for 26% of total new issuance, down from 31% in the fourth quarter of 2014. It noted two notable large sukuk issues in the first quarter of 2015 were by IDB Trust Services Ltd and RAK Capital at US$1bn each.
• In the first quarter of 2015, the total sukuk issuance volume rated by Fitch grew 3.5% to US$45.1bn, with sovereigns and corporates taking near equal shares of sukuk issuance at 37% and 36% respectively, followed by financial institutions at 26%.
• It added total sukuk and bond issuance in the first quarter of 2015 increased 47% from the fourth quarter of 2014 when volumes were exceptionally weak due to falling oil prices and rising geopolitical tension. (Bernama)
SEDANIA
Sedania Innovator, mobile service enabler, has signed an underwriting agreement with Kenanga Investment Bank, to pave the way for its upcoming initial public offering (IPO) on the ACE Market of Bursa Malaysia Securites. MD Datuk Noor Azrin Mohd Noor said the company hopes to raise funds from the IPO for research and development, as well as, enhance its airtime sharing (ATS) solution. "We also aiming to expand our R&D team to 40 from 18 persons as at end-2014,” he said, "we are confident that this will propel our next growth trajectory.” (Bernama)
Iskandar Malaysia
Iskandar Malaysia, the major development corridor in Johor, recorded a total cumulative committed investments of RM158bn in the fourth quarter of 2014. Iskandar Regional Development Authority (IRDA) chief executive, Datuk Ismail Ibrahim, said the targeted cumulative committed investments wa
RM383bn. “Since its establishment in 2006, domestic investments have been growing steadily, making up 67% of RM158bn and 33% foreign investments,” he said, “We are optimistic that from this year, we can expect a year-to-year of RM25-30bn.” (BT)
Mass Rapid Transit Corporation Sdn Bhd (MRT Corp)
Mass Rapid Transit Corporation Sdn Bhd (MRT Corp) plans to start construction of the Sungai Buloh-Serdang-Putrajaya Line (MRT Line 2) by June next year. The MRT Line 2 aims to connect Sungai Buloh to Putrajaya through Serdang via elevated and underground train lines. According to MRT Corp director of Strategic Communications and Public Relations Mahmood Razak, the Detailed Environment Impact Assessment (DEIA) public display will run for a month until May 19 and the feedback received before June 2015, at the 27 locations. (Sun)
Bank Negara Malaysia (BNM)
Bank Negara Malaysia (BNM) has appointed Mohd Adhari Belal Din as an Assistant Governor effective May 1, 2015. In a press release on Tuesday,
BNM said that Adhari’s responsibility comprises of strategic management, human capital development centre, IT services and strategic human capital departments. BNM added that previously, Adhari served as the Director of the strategic human capital department as well as Strategic Management and risk management departments. (StarBiz)
SME Bank
SME Bank is confident Malaysia will continue to lead in the development of Islamic finance globally with the introduction of Chartered Islamic Development Banker (ChIDB) programme. Its group MD, Datuk Mohd Radzif Mohd Yunus, said the ChIDB was the banking industry's first certification programme aimed at producing well-trained and highly-competent personnel and executives in the Islamic finance industry. "The programme is jointly developed by SME Bank's unit, Centre for Entrepreneur Development and Research Sdn Bhd (SME-CEDAR), and Islamic Banking and Finance Institute (IBFIM). It offers professional certificate programmes in Malaysia financial marketplace. (Bernama)
United Overseas Bank (UOB Malaysia)
United Overseas Bank (UOB Malaysia) has launched a new endowment plan, PRUwealth gain, to help Malaysians boost their retirement savings. UOB Malaysia said PRUwealth gain combines savings elements with life insurance protection and offers an annual cash payout through its guaranteed Survival
Benefit. “Customers can also use PRUwealth gain payouts for significant occasions such as buying a house or funding their children’s education,” it said.(BT, Bernama)
Source: CIMB Daybreak - 30 April 2015