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Weekly Malaysia News 21st - 28th March 2014

26th March 2014

Federal Court Grants Developers Leave To Appeal

PUTRAJAYA: Two developers can proceed with their bid to reinstate their civil suit against Selangor Menteri Besar Tan Sri Abdul Khalid Ibrahim and six others over an alleged land takeover in Ijok, Selangor.

LBCN Development Sdn Bhd and Mujur Zaman Sdn Bhd were granted leave to appeal by a five member panel of the Federal Court here Tuesday against the decisions of the High Court and Court of Appeal which had struck out their civil suit.

The Federal Court panel chaired by Court of Appeal President Tan Sri Raus Md Sharif unanimously allowed the developers' application for leave to appeal.

The developers are seeking to reinstate their civil suit against the Selangor Land and Mines director, Selangor Registrar of Land Title, Kuala Selangor Land Administrator, Selangor Menteri Besar (in his personal and official capacity), Selangor Government and Menteri Besar Selangor Incorporated.

Two questions of law on tort of misfeasance in public office would be deliberated and decided by the Federal Court at the hearing of the appeal proper on a date yet to be fixed.

Justice Raus however rejected the developers' application for an interim order to stay the disposal of the land pending the appeal.

In their statement of claim, the developers contended among others, that the respondents were aware that the property concerned had been alienated to them for the integrated Bukit Cerakah Green Revolution project and other business development projects.

They are seeking a declaration that the respondents' decisions to repossess the land in 2011 and 2012 were unlawful, void and had no legal effect.

The appellants were represented by a legal team led by Tan Sri Cecil Abraham while lawyer Datuk Kamaruzaman Arif represented Menteri Besar Selangor Incorporated; Selangor state legal adviser Datuk Nik Suhaimi Nik Sulaiman appeared for the other respondents.


SP Setia up on link to Syed Mokhtar

KUALA LUMPUR: SP Setia Bhd's shares surged Monday following speculation that Tan Sri Syed Mokhtar Albukhary is looking to buy Permodalan Nasional Bhd's (PNB) stake in the property company.

The stock price moved between RM2.96 and RM3.06 during the trading hours before closing the day eight sen higher at RM3.03, with 4.67 million units changing hands.

The 2.71 per cent rise was on the back of FTSE Bursa Malaysia KLCI gaining 13.37 points to 1,833.85.

A recent news report quoting unnamed sources said Syed Mokhtar had put in an unsolicited proposal to buy a substantial portion of PNB's stake in SP Setia.

Research houses gave mixed views on the speculation.


Macquarie renews ‘outperform’ call on Mah Sing

MACQUARIE Equities Research reiterates its "outperform" call on Mah Sing Group Bhd, saying the stock is trading at 33 per cent discount to its revised net asset value (RNAV) estimate, slightly lower than its peers in Malaysia.

"We believe this discount can narrow further if Mah Sing can continue to deliver strong sales numbers in a slowing market," said Macquarie in a note yesterday.

Despite tightening measures introduced by the government in the past year, Mah Sing management believes that the company can deliver higher sales this year due to its project locations and product mix.

"We are not as bullish as the management on new sales for the year, but believe that the company can nevertheless post at least flat sales for 2014," commented the research house.

It said unbilled sales of RM4.4 billion (2.5x 2013 revenue) provide solid earnings.

Macquarie believes that Mah Sing's continued focus on Klang Valley (60 per cent of gross development value), where the supply-demand fundamentals are still the most favourable for developers in its view, should enable it to record good sales.

27th March 2014

Parliament: Growth In Household Debt Slowed Last Year

KUALA LUMPUR: The growth in household debt slowed to 11.7 per cent last year after increasing 13.5 per cent in both 2012 and 2011 and 15.1 per cent in 2010, said Deputy Finance Minister Datuk Ahmad Maslan.

"The decline is due to various measures taken (by the government) since 2010.

"(But) public servants and members of the public who are eligible to borrow can (still) get access to financing despite the government's measures to curb mounting household debt," he said at the Dewan Rakyat here Wednesday in reply to a question from Dr Lee Boo Chye (PKR-Gopeng) who wanted to know the amount of household debt and as a percentage of the gross domestic product (GDP).

Ahmad said household debt last year totalled RM854.3 billion, or a projected 86.8 per cent of GDP.

Households borrow from banks, non-bank financial institutions, Treasury Housing Loan Divison and development financial institutions, he said.

"House purchases accounted for the largest portion of household debt last year at RM377.7 billion or 44.2 per cent, followed by vehicle purchases (RM149.9 billion), personal loans (RM141.5 billion), non-residential property purchases (RM65.2 billion), purchases of shares or securities (RM54.9 billion), credit card purchases (RM35.5 billion) and other purposes (RM29.6 billion)," Ahmad said.

Measures taken by the government to alleviate the debt burden on households include improving the remuneration structure for civil servants, providing cash aid to the people, improving the public transport system and building affordable houses, he said, adding the measures were introduced gradually to ensure better coordination in the financial system and economy.


Department To Shorten Processing Period For Applicants Of Inherited Property

KUANTAN: Beginning next year, the federal lands and mines department will shorten the processing period for its land and inherited property service to three months.

Previously, the processing period was between six months and a year.

With the new move, the department's director-general, Datuk Seri Azemi Kasim hoped applications for the division of inheritances by applicants or the next-of-kin could be processed quickly.

He noted that generally, communities were unaware they should make an application to enable division of inherited property, upon the owner's demise.

As a result, such ignorance had resulted in other problems such as increase in the numer of family members and overlapping deaths, he told reporters after attending a state-level seminar on management of inherited property here Wednesday.

Meanwhile, Azemi also encouraged applicants or next-of-kin who wanted to claim inherited property to apply via the My-eTaPP system which could be done online through the website


Paramount Corp's Share Traded Higher On Land Acquisition News

KUALA LUMPUR: Paramount Corporation's share was traded higher this morning following news that the investment holding company plans to buy a 31-acre land in Batu Kawan for RM67 million.

The company's share gained three sen to RM1.61, with 202,000 lots changing hands as at 9:58 am.

"The land acquisition is in line with our strategy to increase our landbank at locations with strong growth potential," said Paramount in a filing to Bursa Malaysia Tuesday.

The company said the acquisition would generate economic benefits and contribute positively to its future earnings, given that Batu Kawan is set to become the next property magnet in Penang due to its strategic location.


Transaction Volume Of Penang's Secondary Property Likely To Decline Amid Credit Tightening

GEORGE TOWN: The transaction volume of Penang's secondary property market for the first half of this year is likely to decline due to the banks' credit-tightening measures, says Malaysian Institute of Estate Agents (MIEA) Penang.

Committee member, Michael Geh, said although the volume was expected to decline, the value, however, would not fluctuate amid rising interest in secondary homes due to expensive newly-launched properties.

"MIEA Penang expects the secondary property market to see a 15 per cent decline in volume. However, the activity would remain stable with increasing value," he told a media briefing on the coming Malaysian Secondary Property Exhibition (MASPEX) Penang 2014, here Wednesday.

Geh said the new release of post-Developer Interest Bearing Scheme properties for sale as well as affordability factors were likely to boost the secondary property market.

He said the Sultan Abdul Halim Mu'adzam Shah Bridge (Second Penang Bridge) would also positively impact the secondary market, with demand likely to focus on Batu Maung (on the island), Batu Kawan, Bukit Tambun and Sungai Bakap on the mainland.

Geh said Penang's secondary property market recorded a sales transaction of RM2.63 billion with 7,087 units sold during January-June last year, while some 15,964 units valued at RM5.26 billion were transacted in 2012.

The MASPEX Penang 2014, which will be held on June 20-22, 2014 at the Penang Times Square, will offer affordable houses ranging from RM500,000 to RM3 million.


28th March 2014

Berjaya Corp Q3 Pre-tax Profit Soars To RM162.9 Million

KUALA LUMPUR: Berjaya Corp Bhd's pre-tax profit for its third quarter ended Jan 31, 2014 jumped to RM162.91 million from RM96.88 million in the same period last year.

In a filing to Bursa Malaysia Wednersday, the group said the increase in pre-tax profit came mainly from property investment as well as development and marketing of consumer products and services.

Revenue jumped to RM2.36 billion in the quarter against RM1.76 billion recorded in the same period last year.

Earnings per share rose to 40 sen compared to 10 sen previously.

Berjaya Corp expects its performance to continue to remain challenging in the remaining quarter of the financial year ending April 30, 2014, given the group's diverse businesses and current economic outlook.


Khazanah's Think City concept to go nationwide

GEORGE TOWN: Khazanah Nasional Bhd plans to expand its Think City model nationwide this year with community-based urban regeneration projects.

Its deputy chairman Tan Sri Nor Mohamed Yakcop said yesterday Think City Sdn Bhd, which was set up as a special-purpose vehicle by the government's investment holding arm, will extend its activities to the Klang Valley, Iskandar Malaysia and Sabah and Sarawak in three months.

It was initially set up to manage the rejuvenation of the George Town World Heritage site.

"Think City's direction will anchor on its experience in George Town.

"Its focus in other cities will be community and heritage-based, bringing out the cultural values of the sites," he said after delivering a keynote address at the launch of a book, "Sejarah Masjid dan Keramat di Pulau Pinang 1730-an - 2012", by Yang di-Pertua Negeri Tun Abdul Rahman Abbas.

The book was authored by Universiti Sains Malaysia academician and historian Associate Professor Datin Dr Mahani Musa.

Also present were Khazanah executive director Hamdan Abdul Majeed and Think City chairman Datuk Anwar Fazal.

Nor Mohamed did not disclose the amount of funds for the Think City projects.

The George Town Grants Programme by the Federal Government was to provide seed-funding for urban rejuvenation projects at heritage sites.

Nor Mohamed said since its inception in 2009, Think City had supported 206 projects worth RM16.5 million, including the restoration of a dome of Masjid Kapitan Keling.


New Contract Announcement Sparks Buying Interest In Kimlun Shares

KUALA LUMPUR: Kimlun Corp Bhd's announcement of a contract award sparked buying interest in the company's shares on Bursa Malaysia this morning.

The shares rose five sen to RM1.64, with 814,800 lots transacted as at 10.54 am.

On Wednesday, Kimlun announced that its wholly-owned subsidiary, SPC Industries Sdn Bhd, has been awarded a RM51.3 million contract from Shanghai Tunnel Engineering Co Ltd for the supply and delivery of precast concrete segments (TLS) to Contract T206, Thomson Line of the Singapore MRT (SMRT) system.

The supply of the TLS is expected to spread over a period of about 36 months.

Kenanga Research said they are neutral on the contract win as it makes up part of the research firm's financial year (FY) 2014 manufacturing orderbook replenishment assumption of RM200 million.

"We also understand from the management that the upcoming Thomson Line and the Eastern Region Line comprise a total length of 51km, and the total TLS requirement for this line is estimated at S$130 million (RM338.06 million).

"We believe similar projects could be awarded to Kimlun in the later part of the year, based on its experience and good track record for the ongoing Downtown Line," it said in a note.

Going forward, Kenanga Research said the new contract win has further boosted Kimlun's total outstanding orderbook closer to RM2.3 billion, providing earnings visibility for the next two years.

Earnings in the property division should pick up in FY14, thanks to its strong unbilled sales of RM125 million from its maiden property development, The Hyve in Cyberjaya.

The research firm has maintained its core earnings forecast on Kimlun for FY14 at RM51.6 million as the contract value is well within its orderbook replenishment assumptions.

It has also maintained its "underperform" recommendation on Kimlun with an unchanged target price of RM1.55.