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Reports Malaysia

Malaysia stock market and companies daily report (May 23, 2014)

May 23, 2014, Friday, 05:59 GMT | 01:59 EST | 10:29 IST | 12:59 SGT
Contributed by Shares Investment

Perdana Petroleum Allocates RM300m For Capex

- Perdana Petroleum is planning RM300 million in capital expenditure (capex) to build new assets for brownfield production over the next two years.

- The company is looking to build two to four assets as part of its fleet expansion strategy to tap the high growth opportunities in cyclical upturn in offshore support vessels (OSVs) to secure income visibility and stability.

- Perdana Petroleum currently owns and operates 17 vessels with an average age of 4.5 years. Of the 17, 15 are on long-term charters of two to five years and it has an order book to-date of about RM1.4 billion.

Significance: The expansion of fleet would allow Perdana Petroleum to be competitive and it is confident that this would bear fruit in the years ahead and result in potential market capitalisation growth.

Nexgram And Protasco In RM400m Project

- Nexgram Holdings will be making its foray into property development by partnering Protasco for an estimated RM400 million proposed mixed development project in Cyberjaya.

- The 2.4 hectares project site would comprise of residential, office and retail units as well as a data centre. The development is still subjected to the approval of the authorities and expected to be completed in around five years from date of commencement, which has not been determined.

- The proposed development will help Protasco extend its current property portfolio and boost its construction order book, which now stands at RM700 million. Protasco’s order book is expected to cross the RM1 billion by end of the year.

Significance: Notably, the proposed mixed development follows the intention of Nexgram to divest its core business activities as previously announced, while also enabling it to expand its current IT business via the proposed data centre and resource labs.

CIMB Records Lower Net Profit Underpinned By Absence Of A One-Off Gain

- CIMB Group Holdings‘ interest revenue rose 7.7 percent year-on-year to RM3.8 billion in 1Q14. Net profit fell 23.1 percent to RM1.1 billion underpinned by an absence of a net gain of RM365 million from the sale of CIMB Aviva Takaful which was recorded in 1Q13.

- However, on a business as usual basis of RM1 billion in 1Q13, its net profit would have seen a 4.4 percent increase.

- Corporate and consumer banking accounts for 70 percent of CIMB’s pre-tax profit therefore, CIMB is focusing on optimising its balance sheet by deploying its newly enlarged capital base, and managing margins.

Significance: CIMB Group managing director and CEO commented that the operating environment in the regional capital markets as well as Indonesia remain challenging and will have to adjust their growth expectations in Thailand due to political tensions. However, Malaysia and Singapore continue to offer good growth opportunities for our corporate and consumer banking businesses.