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Posts Tagged ‘Malaysia’

Unexpected bad April nos. for S’pore, Thailand: M’sia to follow

In Economy on 28/05/2012 at 7:09 am

On Friday, the Economic Development Board (EDB) said April’s manufacturing output shrank 0.3%  from a year ago, after a revised 3.1% drop in March.

This poor showing surprised economists, whose consensus forecast was for manufacturing to grow 4.1%  and could not be blamed entirely on the 7.6%  fall in volatile pharmaceuticals output. The poor showing is because of falling demand from key markets such as Europe and the US especially for electronics.

Thailand has reported a surprise fall in its exports for April because of falling demand from key markets such as Europe and the US. Shipments fell 3.7% from a year earlier. Many analysts had forecast an increase of more than 3% http://www.bbc.co.uk/news/business-18203209. Remember that Thailand has replaced S’pore as the world’s manufacturing hub for hard disks.

Expect weak manufacturing numbers for M’sia.  It too is a big manufacturer of electronics for export. And Najib is planning an election later this yr.

M’sia: Juz wondering? cont’d

In Malaysia on 08/03/2012 at 5:23 am

Ananda Krishnan is nearing a deal to sell his US$3 billion worth of power assets to a M’sian government company. It seems that it is paying top dollar. http://www.reuters.com/article/2012/03/05/malaysia-krishnan-power-idUSL4E8E510C20120305

So was his auction of his power assets all wayang?

(Related post:http://atans1.wordpress.com/2012/03/02/msia-juz-wondering/)

Anyway, strange things are always happening in M’sia. Juz last month, RHB is engulfed in a series of yet-to-be-resolved deals, some of them not of its own making. Aabar Investment group of Abu Dahi reportedly wants to sell its 25 per cent stake in RHB, just six months after buying it. RHB said it does not mind, nor does it make much sense.

Azlan Zainol, Chairman of the RHB Banking Group, said: “(Right now,) the price range in a Malaysian bank could be between 1.8 to two times the book (value). That’s the kind of range right now. If Aabar were to sell, I believe they may not be able to get the price of 10.80 ringgit at which they bought.” http://www.channelnewsasia.com/stories/corporatenews/view/1184226/1/.html

Note that stake was bought from a n Abu Dhabi bank at 2.25 timmes book value, way above the market price.

M’sia: Juz wondering?

In Malaysia on 02/03/2012 at 6:00 am

Wonder if Malaysian tycoon Ananda Krishnan is selling assets (juz put his satellite firm on the market after getting bids for his power plants) because of the expectation of an early general election that could further weaken the governing coalition, or which it could even lose? He benefited over the years from government policies.

In its inaugral ISEAS Monitor, this is what ISEAS* says about M’sia especially the probability of an election soon:

Opposition leader Anwar Ibrahim’s recent acquittal on sodomy charges has dominated the media, and will be asignificant factor in Malaysia’s forthcoming 13th general election.

Barring unforeseen developments,Prime Minister Najib Razak will dissolve parliament and call the election no later than June. Both the Barisan Nasional (BN) government and opposition Pakatan Rakyat (PR) will accelerate preparations for the much anticipated poll.

Although Najib’s administration is saddled with several thorny problems and the election does not have to be held before March 2013, he may feel the need to go early for two reasons.

First, Najib has to consolidate his position within his United Malays National Organisation before UMNO’s own elections are held in the second half of 2012.

The second reason is that a weakening global economy in 2012 can adversely affect largely export dependent Malaysia. With inflation already hurting ordinary Malaysians, a slowing domestic economy will cost votes for the BN. The budget deficit is estimated at 5.4% of GDP in 2011, limiting the government’s ability to provide further stimulus spending in 2012. The government’s hand will be further constrained by the next round of reduction and rationalisation of subsidies, expected soon.

Since 2009, millions of dollars have been spent on public relations efforts to burnish the image of BN and of Najib in particular. The government has awarded bonuses and salary increments to the 1.4 million-strong civil service,and more handouts can be expected in the coming months. In January 2012, Najib toured Perak, Selangor, Penang, Perlis and Perak, as well as the Federal Territory of Kuala Lumpur, to rally support. He is scheduled to visit Terengganu and Johor in February.

UMNO, through the mainstream media,especially the party-owned Utusan Malaysia, and its NGO proxies,spearheaded by PERKASA, can be expected to ratchet up race and religion themes. The mainstream media predictably will publish more reports that detail or generate conflicts within the PR component parties.

For their part, the opposition parties will use the alternative and social media to highlight the government’s corrupt and crony practices. It will promise clean and transparent governance, using the example of members of the Executive Council of the Democratic Action Partyled Penang state government declaring their assets. It will also offer to revise the lucrative terms granted to highway toll operators and independent power plant companies, and pledge to retain if not expand subsidies to ease the plight of Malaysians in anticipation of the economic slowdown.

Key points: What impact will freshly acquitted Anwar have on the elections,especially in view of the prosecution’sdecision to appeal? How are the election results likely to affect relations between Singapore and Malaysia?

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*”The Institute of Southeast Asian Studies is a regional research centre dedicated to the study of socio-political, security and economic trends and developments in Southeast Asia and its wider geostrategic and economic environment”. It is also a statutory board whose funding comes from the S’pore government.

High Oil Prices: M’sia Boleh

In Energy, Malaysia on 22/03/2011 at 11:21 am

Consider four metrics: a country’s oil intensity (how much oil it takes to produce a unit of output), its energy trade balance, its current level of price inflation, and the government’s fiscal position. The first two give an indication of a country’s exposure to higher prices; the latter two suggest how much scope it has to absorb and defray them through fuel, electricity and food subsidies. By that reckoning, Malaysia may come out best. Its oil intensity is just the wrong side of the Asian average, on BP data. But as one of only two net exporters of oil and gas in Asia, its terms of trade should benefit. Aggressive monetary tightening, moreover, has so far helped to keep inflation tamed. The fiscal picture could be prettier: this chronic over-spender has run five budget surpluses in the past 40 years. But while subsidies remain a big burden – second only to Indonesia, as a percentage of gross domestic product – they are cushioned by oil revenues.

FT Lex

Oil at US$120: Buy M’sia

In Energy, Indonesia, Malaysia on 26/02/2011 at 5:45 am

As Asia’s largest net energy exporter, only Malaysia will benefit significantly from higher energy prices. With crude oil, natural gas and palm oil making up almost 30% of total exports, the country is experiencing a significant positive terms-of-trade shock, says Barclays Capital.

It says US$120 oil would add 3.1 percentage points to  Malaysia’s current account balance as a percentage of GDP, and 0.9 percentage points to Indonesia’s.

Nomura: Bullish on M’sia

In Malaysia on 14/12/2010 at 5:40 am

Malaysia is likely to benefit from a consumption boom says Nomura, “[T]he most powerful theme would be the consumption theme in Malaysia. We have added a lot of the middle class segment of the population. That really explains why we are seeing more demand for property, higher value property,”

Despite the KLCI having risen about 30% this year, Nomura analysts see 20% rise in 2011.

Nomura’s top picks in Malaysia are property, palm oil and bank stocks.Among the firm’s buy calls are CIMB, Maybank, AMMB, Media Prima, SP Setia, Sime Darby and Genting Malaysia.

Outlook for S’pore’s major export

In Economy on 14/08/2010 at 10:51 am

The near-term outlook for the information, communication and technology (ICT) sector is stable. The North American semiconductor book-to-bill ratio stood at 1.12 in May 2010. This  indicates that orders are still stronger than shipments and point to an expansion in the months ahead.

This is continued good news for  Singapore, and Malaysia and Thailand, which also have sizeable ICT sectors.

DBS: What the new chairman should be looking at II

In Banks, China, Corporate governance, India, Indonesia on 30/03/2010 at 6:04 am

He should ensure that any acquisition in Indonesia, India, Malaysia and Thailand,  the countries where DBS says it would look for acquisition opportunities is disciplined in terms of valuation, strategic fit and execution.  Investors still remember the Dao Heng fiasco, overpaying and having to take billion dollar impairement charge. And the purchase of POSB was not such a gd deal as anti-government subversives like to imply that it is.

Better still he shld relook at the rationale for these M&A activities.

DBS is  Singapore and Hong Kong centric. But, in February, it said it was aiming to have 30 per cent of its revenue from South and South-east Asia, excluding Singapore, 30 per cent from Greater China and 40 per cent from Singapore within five years.

Morgan Stanley estimates that DBS would have to grow at a compounded annual growth rate of 40 per cent a year in South and South-east Asia to achieve its stated target in that region i.e. it would have to grow via acquisitions.

BTW last Friday BT reported that DBS’s CEO had said DBS had identified unnamed acquisition targets in Indonesia which shld worry investors.

Previous post on topic

http://atans1.wordpress.com/2010/03/24/dbs-what-the-new-chairman-shld-be-looking-at/

He shld be relooking at FT policy — both in principle and execution.

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