Reports » Malaysia

Malaysia stock market and companies daily report (October 10, 2012)

Contributed by Shares Investment

Tenaga Wins Bid for RM3b Power Plant Project
Tenaga Nasional won a bid to build and operate a RM3 billion gas-fired power plant to meet rising energy needs of the country. The 1,071-megawatt plant is expected to begin operations in March 2016 at Prai, Malaysia’s northern Penang state, according to the Energy Commission which awarded the contract. Datuk Dr. Ahmad Tajuddin Ali, the commission’s chairman stated that the country’s electricity demands keeps increasing every year. In the past 6 months, electricity sales have increased at 4.5 percent to 53,005 gigawatt hours from a year ago. The Energy Commission also extended power purchase agreements for three existing gas-fired plants, where Genting Sanyen Power and Segari Energy Ventures were given 10-year extensions, while Tenaga was granted a five- year renewal for its Johor facility. The chairman further added that gas used to fuel these stations will no longer be subsidised.
Significance: The government forecast of between 4.5 to 5.5 percent growth for the country’s economy next year would further boost the country’s energy demand. Tenaga share price has rose 19 percent this year, outperforming an 8.7 percent gain in the benchmark KLCI Index.

Malaysia’s Target Growth Rate In 2013 Within Forecast
Malaysia’s economic growth target of 4.5 percent for  2013 has been within the forecasts of the International Monetary Fund (IMF) and Alliance Research at 4.7 percent and five percent respectively. Alliance Research stated that IMF’s forecast figures factors in the continuous strain of global economic uncertainty on output in both advanced and emerging markets. Alliance forecasts on the other hand, comes under the assumptions of a global economic moderation where timely and substantial measures are taken to resolve the Euro debt crisis. The Eurozone’s real Gross Domestic Product (GDP) is projected to remain at 0.2 percent in 2013, after falling 0.4 per cent this year. The research house further noted that lower budget cuts combined with both domestic and Euro area-wide policies will help revive financial conditions later in 2013.
Significance: The Malaysian economy is expected to strengthen further and projected to grow at a faster rate of 4.5 percent in 2013 supported by improving exports and strong domestic demand based on assumptions that global growth will pick up in particular during the second-half of 2013.

Eversendai Eyeing Jobs Worth RM500m
Eversendai Corporation is confident of securing contracts worth RM500 million in Malaysia within the next few months, according to Executive Chairman and Group Managing Director Datuk A.K. Nathan. At present, the structural steel construction company carries an order book of RM1.7 billion that would last the next three year, said the managing director. The group currently is focused on the Middle East region for project bidding, however has also been exploring opportunities in India with caution. The managing director was also optimistic that the group would achieve the targeted revenue of RM2 billion earlier than the targeted period of  five years. The company therefore aims to reward shareholders better dividends this year. The group is also working on mergers and acquisitions related to the company’s business which may materialise in the next two to three months.
Significance: The company’s current order book stands at RM1.7 billion as of June 30, 2012 where 41 percent of the projects comes from structural steel segment followed by 34 percent in power plant and 25 percent in civil construction segment.