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Reports Malaysia

Malaysia stock market and companies daily report (May 16, 2014)

May 16, 2014, Friday, 05:21 GMT | 00:21 EST | 09:51 IST | 12:21 SGT
Contributed by Shares Investment

MAS Falls Further Into The Red

- Malaysian Airline System (MAS) deepened its shade of red as it reported a net loss of RM443.4 million in its first quarter ended 31 March 2014, widening 58.8 percent from a net loss of $278.6 million from 1Q13.

- The loss is also its biggest net loss in over two years and its fifth consecutive quarter of losses.

- The tragic disappearance of MH370 also impacted the company as sales from China fell by 60 percent. The timing also coincided with the MATTA Fair, dampening sales even further.

Significance: With forward sales declining, aviation experts said the airline has to undertake bold measures such as shrinking its network and workforce to survive the turbulence. Some also noted that MAS may have to privatise the airline in light of the bad conditions.

AmFIRST REIT To Refurbish The Summit Subang USJ Mall

- AmFirst Real Estate Investment Trust (AmFIRST REIT) intends to invest RM80 million to upgrade and refurbish the Summit Subang USJ Mall in Subang Jaya. The makeover will enable the trust to obtain the right tenant mix needed to attract a wider range of shoppers around the area.

- The trust aims for a 40 percent to 50 percent upward revision of rentals rates after the completion of its refurbishment.

- The expected return on investment from the refurbishment works is between 15 percent to 17 percent within seven years.

Significance: The refurbishment would enable the mall to be repositioned, and going forward, it is expected to give a good income stream in an escalated manner.

THHE Wins RM2.9b Deal

- TH Heavy Engineering (THHE) has secured a contract for its floating production, storage and offloading vessel (FPSO) with Japan’s JX Nippon Oil & Gas Exploration in a deal worth US$900 million (RM2.9 billion).

- THHE’s FPSO facility will be contracted for the Layang oil and gas field, located off the coast of Sarawak. It will be deployed in early-2016 once the Layang field starts production.

- Sources say the primary contract worth US$400 million (RM1.3 billion) will run for 7.5 years, with an annual renewal option for the next 10 years, said to be worth US$500 million (RM1.6 billion).

Significance: JX Nippon Oil & Gas had received the field development plan approval from Petroliam Nasional for the Layang gas field and said that the project would have an FPSO facility. This has sent THHE’s shares up amidst speculation even before the contract win.

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