Reports » Malaysia

Malaysia stock market and companies daily report (February 05, 2013)

Contributed by Shares Investment

Strong Finish To A Record Year For Capital Raising
The Securities Commission of Malaysia (SC) said 2012 proved to be a significant year for the local capital market. Last year the capital market registered a record amount of RM145.9 billion in funds raised through corporate bonds and Initial Public Offerings (IPOs), which represents a substantial increase of 89 percent compared to the RM77.2 billion raised in 2011. The SC also noted that RM123.8 billion worth of issuances were made in the corporate bond market, a 73 percent increase from RM71.2 billion in the previous year. This represents the highest amount raised to date with Sukuk issuances amounting to RM97.5 billion, or 79 percent of the total bond issuances. Furthermore, funds raised from IPOs more than tripled from RM6.0 billion in 2011 to RM22.1 billion. In 4Q 2012, 26 Private Debt Securities (PDS) and six IPO applications, expected to raise RM25.2 billion of funds were approved. Besides that, 29 new collective investment schemes and eight private retirement schemes were also approved during the same period.
Significance: The SC received 46 applications for corporate proposals in the last quarter of 2012, which represents an increase of 31 percent compared to 35 applications in Q3 2012. There was also an increase in IPO applications received for the Main Market with six applications in Q4 2012, compared to five in the previous quarter.

ECERDC In Talks For RM11b Worth of Investments
The East Coast Economic Region Development Council (ECERDC) is in various discussions with investors involving some RM11 billion worth of investments. According to the Chief Executive Officer Datuk Jebasingam Issace John, the majority of these talks have yet to be finalised, nonetheless, few are close to finalisation. Jebasingam said ECERDC has set a modest target of RM10 billion in committed investments this year, in which the council is likely to exceed this target. The expectation is based on the Malaysia-China Kuantan Industrial Park (MCKIP) project which will be launched today and the other investments which are coming into the East Coast Economic Region (ECER). In 2012, ECER secured RM12 billion worth of committed investments, RM2 billion more than the original target. He said this year, the launch of MCKIP which will involve the upgrading of Kuantan Port, will further boost ECER’s progress. “ECER is well-positioned now to be a competitive investment destination given the infrastructure and the strategic location of the port. With the incentives provided by the government, ECER is poised to become a high potential investment region,” he said.
Significance: According to Jebasingam, the MCKIP project, which will see the first phase completed in 2015 if not earlier, will play a pivotal role in the socio-economic transformation of the region. Along with its sister park in China, the China-Malaysia Qinzhou Industrial Park, will promote cross-border movement of goods and services between Malaysia and China, for re-distribution worldwide.

Felda R&D Arm Making Profits Of More Than RM100m A Year
Felda Global Ventures Holdings’ (FGVH) associate company, Felda Agricultural Services (FASSB) has been registering earnings of over RM100 million per year from 2007 to 2011. FASSB, being one of the few oil palm research and development (R&D) units that is self-sustainable in Malaysia, had been paying out dividends over these years to reward its stakeholders. Currently the company’s major shareholders are Felda Holdings (a 49 percent owned subsidiary of FGVH) and Koperasi Permodalan Felda. FASSB was the only oil palm research unit that generated sufficient income to fund its operations in Malaysia, an analyst said. Its income is mainly contributed from the selling of planting materials. It was able to capture 35 percent of the planting material market, said its managing director S. Palaniappan. He further explained that the business was lucrative due to the intellectual patent. Last year, its oil palm nursery in Tekam, Pahang was considered the best by the Malaysian Palm Oil Board.
Significance: FASSB is also involved in the R&D formulation to support the group’s downstream processes. Palaniappan believes the downstream segment of Felda Group would pose vast potential for growth, and the unit would support the parent through the formulation enhancement and product development.