Reports » Malaysia

Malaysia stock market and companies daily report (February 20, 2013)

Contributed by Shares Investment

Bumi Armada Unit Awarded RM2.3b FSPO Contract
The Malaysia-based international offshore oil and gas services provider, Bumi Armada unit has won a US$740 million (RM2.29 billion) contract for a floating production, storage and offloading (FPSO) vessel in India. Its 49.998 percent owned jointly controlled entity, SP Armada Oil Exploration received a notification of award from India-based Oil and Natural Gas Corporation (ONGC) for the charter hiring of one FSPO for the Cluster-7 field located off the western coast of Mumbai, India. Mumbai-based Shapoorji Pallonji holds the remaining stake of the jointly controlled entity. “The contract is for a fixed period of nine years, with an extension option of an additional seven years on a yearly basis. The contract is valued at approximately US$740 million, with an additional US$340 million for the optional extension period,” said Bumi Armada in a filling to Bursa Malaysia. The FSPO will have minimum storage of 510,000 barrels of oil, and will be equipped with oil production and stabilisation, water injection, gas compression/dehydration to meet gas lift/injection and sales requirements and internal weather warning turret.
Significance: At the moment, Bumi Armada has two FPSO contracts in Nigeria and one each in Vietnam, India and Australia. Analysts say the company is bidding for seven FPSO contracts – one each in Malaysia, Indonesia and Angola and two each in Nigeria and the North Sea.

MBC Acquires Bulk Carrier At US$26.6m
Malaysian Bulk Carriers (MBC) via its joint venture (JV) entity, Ambi Shipping entered into a contract with Lepta Shipping for the construction and purchase of a 56,000 deadweight tonne bulk carrier at US$26.6 million (RM82.42 million). Ambi Shipping is a JV between MBC’s wholly owned subsidiary, Lightwell Shipping and Mitsui with the share equity at 70 percent and 30 percent, respectively. In a filling to the local burse, the company noted that the vessel is a 55,600 deadweight metric ton type single screw motor bulk carrier new building. The vessel is targeted to be delivered between 1 January 2015 to 30 June 2015. The purchase price of the vessel is arrived at on a willing buyer willing seller. It will be funded by internally generated funds and there are no liabilities to be assumed by MBC arising from the above acquisition, said the company. The acquisition is expected to be completed by June 2015.
Significance: The acquisition is part of the MBC’s fleet renewal plans to include newer and more economical vessels. MBC expects the deal to contribute positively to its future earnings.

CIMB-Principal Eyes RM41b In Asset Management This Year
CIMB-Principal Asset Management expects its assets under management (AUM) to grow between 10 percent and 11 percent in 2013 to RM41 billion. “Last year was a record year for us. Our AUM grew by 30 percent to RM36 billion and we expect a continued growth this year,” deputy chief executive Munirah Khairuddin said on yesterday after the launch of CIMB-Principal Enhanced Opportunity Bond Fund. She noted that the still resilient domestic demand was supported by robust private consumption, investment and government spending. She highlighted that Southeast Asia is becoming an extremely important foreign direct investment destination. “Despite global uncertainties in 2012, the Asian bond markets have continued to record consistent growth. The launch of the fund today is timely as the Asian Bond markets are expected to provide pretty decent returns and continue to attract foreign interest,” she added. Meanwhile, the CIMB-Principal Enhanced Opportunity Bond Fund is a close-ended fund that will invest in both local and foreign bonds, predominantly in Asian bonds.
Significance: Munirah said Asian Bonds can offer investors consistent attractive returns of about 4.5 to 5.5 percent compared to other developed markets due to the strong fundamentals of Asian economies and corporates in the region. In view of this, investors with a three-year investment goal will be able to benefit from these healthy growth drivers, she added.