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FBM KLCI 1634.04 4.52 KLCI FUTURES 1635.50 12.00 STI 2756.53 26.68 RM/USD 4.0700 CPO RM2376.00 3.00 OIL US$48.36 1.20 GOLD US$1308.20 13.80

Indonesia approves tax amnesty to fund widening budget gap

PA G E 2

FINANCIAL DAILY

w w w . t h e e d g e m a r k e t s . c o m MAKE

BETTER DECISIONS

PP 9974/08/2013 (032820) PENINSULAR MALAYSIA RM1.60 (INCLUSIVE OF 6% GST)

WEDNESDAY JUNE 29, 2016 ISSUE 2198/2016

4 H O M E B U S I N E S S

5 H O M E B U S I N E S S

6 H O M E B U S I N E S S

8 P R O P E R T Y S N A P S H O T

1 4 H O M E

1 5 H O M E

Customs audit ended; PPI didn’t breach any laws

— Wah Seong

Tropicana ropes in Panasonic’s unit to build smart homes

RHB expects RM340m cost savings per year after restructuring

London’s loss is Asia’s gain

‘Kugan’s family not entitled to exemplary damages’

‘Puchong explosion not an act of terror’

Exercise delayed slightly, expected to be listed as early as September.

Meena Lakshana has the story on Page 3 .

Eco World International will

GO AHEAD WITH IPO

despite Brexit

Nomura cuts Malaysia 2016 GDP forecast to 3.9% after Brexit

3 H O M E B U S I N E S S

President and chief executive offi cer Datuk Teow Leong Seng 5 H O M E B U S I N E S S

6 H O M E B U S I N E S S

8 P R O P E R T Y S N A P S H O T

1 4 H O M E

breach any laws

— Wah Seong

Tropicana ropes in Panasonic’s unit to build smart homes

RHB expects RM340m cost savings per year after restructuring

London’s loss is Asia’s gain

‘Kugan’s family not

Exercise delayed slightly, expected to be listed as early as Sep p p p p p pt t t te e e e e em m m m m m m mb b b b b b b be e e e e e er r r r .

Meena Lak ks s s sh h h h h ha a a a a a a an n n n n n n na a a a a a a h h h h h h h ha as the story on Page 3 .

President and chief f execut utiv iv ve e e e offi offi offi offi offi ffice ffi ffi ffi ffi ffi ce ce ce ce ce er r r r r r D

Da Da Da Da Da

Dat tu tu tu tuk k k k T Te Teow Leong Seng

Th eEdg eProper ty.com

ONLY THE

property po rtal you need

N E W S . N E W L AU N C H E S . L I S T I N G S . DAT A . A N A LY T I C S

(2)

FBM KLCI 1634.04 4.52 KLCI FUTURES 1635.50 12.00 STI 2756.53 26.68 RM/USD 4.0700 CPO RM2376.00 3.00 OIL US$48.36 1.20 GOLD US$1308.20 13.80

Indonesia approves tax amnesty to fund widening budget gap

PA G E 2

FINANCIAL FINANCIAL DAILY

DAILY

w w w . t h e e d g e m a r k e t s . c o m MAKE

BETTER DECISIONS

PP 9974/08/2013 (032820) PENINSULAR MALAYSIA RM1.60 (INCLUSIVE OF 6% GST)

WEDNESDAY JUNE 29, 2016 ISSUE 2198/2016

4 H O M E B U S I N E S S

5 H O M E B U S I N E S S

6 H O M E B U S I N E S S

8 P R O P E R T Y S N A P S H O T

1 4 H O M E

1 5 H O M E

Customs audit ended; PPI didn’t breach any laws

— Wah Seong

Tropicana ropes in Panasonic’s unit to build smart homes

RHB expects RM340m cost savings per year after restructuring

London’s loss is Asia’s gain

‘Kugan’s family not entitled to exemplary damages’

‘Puchong explosion not an act of terror’

Exercise delayed slightly, expected to be listed as early as September.

Meena Lakshana has the story on Page 3 .

Eco World International will

GO AHEAD WITH IPO

despite Brexit

Nomura cuts Malaysia 2016 GDP forecast to 3.9% after Brexit

3 H O M E B U S I N E S S

President and chief

executive offi cer

Datuk Teow Leong Seng

(3)

2

W E D N E S DAY J U N E 29 , 2 0 16 • T H E E D G E F I N A N C I A L DA I LY

For breaking news updates go to

www.theedgemarkets.com

O N E D G E T V

www.theedgemarkets.com

Malaysia’s fi rst private cardiac hospital to open in 2017

BY H A R RY S U H A RTO N O

& E KO L I S T I YO R I N I

Bank of England pumps

£3.1b into lenders

LONDON: British banks yes- terday tapped the Bank of England (BoE) for £3.1 billion (RM16.77 billion) to help bol- ster their balance sheets in the wake of the shock Brexit vote.

Th e central bank, which an- nounced the news in a state- ment, has now injected more than £9 billion into lenders in three funding auctions aimed at calming markets around the June 23 referendum date. It is the fi rst time the BoE has ever held more than one such auc- tion in a month. In the “Indexed Long-Term Repo” operations, banks, building societies and broker-dealers can off er assets such as mortgage loans to the BoE in return for cash, which they repay six months later. Th is helps banks and the wider fi - nancial industry to keep ticking over during periods of market turbulence. — AFP

Europe presses Britain for swift exit to limit fallout LONDON: European leaders told Britain yesterday to act quickly to resolve the political and econom- ic chaos unleashed by its vote to leave the European Union, a move the International Monetary Fund said could put pressure on global growth. European Com- mission president Jean-Claude Juncker told the European Par- liament before meeting British Prime Minister David Cameron in Brussels that he would urge him to clarify London’s position as soon as possible. But he said he did not expect him to launch the two-year withdrawal process

“today, or tomorrow morning”.

— Reuters

US 1Q GDP growth revised up to 1.1%

WASHINGTON: US economic growth slowed in the fi rst quarter (1Q) but not as sharply as previ- ously estimated, with gains in ex- ports and investment in software partially offsetting weak con- sumer spending. Gross domestic product (GDP) increased at a 1.1% annual rate, rather than the 0.8% pace reported last month, the Commerce Department said yesterday in its third GDP esti- mate. 1Q GDP growth has now been revised higher by six-tenths of a point since the advance es- timate was published in April.

Th e economy grew at a rate of 1.4% in the 4Q. — Reuters

I N B R I E F

Publisher and Group CEO Ho Kay Tat EDITORIAL

For News Tips/Press Releases Tel: 03-7721 8219 Fax: 03-7721 8038 Email: eeditor@bizedge.com Senior Managing Editor Azam Aris Executive Editors Kathy Fong, Jenny Ng, Siow Chen Ming, Ooi Inn Leong

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Editors Cindy Yeap, Kang Siew Li Assistant Editors Adeline Paul Raj, Tan Choe Choe, Kanagaraju S Sithambaram

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Sharon Chew (012) 316 5628

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The Edge Communications Sdn Bhd (266980-X)

Level 3, Menara KLK, No 1 Jalan PJU 7/6, Mutiara Damansara, 47810 Petaling Jaya, Selangor, Malaysia

VIETNAM OUTPERFORMS MOST PEERS ... Vietnam’s farming output took a knock in the second quarter because of the worst drought in three decades, data showed yesterday, but the economy remains among the top performers in Southeast Asia. The government has a 6.7% growth target for the year and the economy has benefi ted from a surge in manufacturing exports after companies such as Samsung Electronics Co set up plants there to assemble smartphones.

JAKARTA: Indonesia’s parliament approved a tax amnesty that the government says will draw in bil- lions of dollars needed to fi nance a widening budget gap as it steps up infrastructure spending to spur economic growth.

Lawmakers voted in favour of the bill during a plenary session in Jakarta yesterday, among the fi nal steps before it becomes law.

Individuals who repatriate unde- clared assets held abroad will face a penalty of 2% to 5%, according to the bill.

President Joko Widodo is fac- ing a revenue squeeze in the face of weaker commodity prices and slower growth in Southeast Asia’s biggest economy. To keep the budget defi cit under 3% of gross domestic product (GDP), Widodo

Indonesia affi rms tax amnesty

Central bank estimates immunity to draw in billions of dollars

is banking on the tax amnesty to help plug the shortfall.

Th e central bank estimates the tax programme — which will be implemented in July and run for a maximum of nine months — will help draw 560 trillion rupiah (RM172.9 billion) of funds back to the country. Almost 30%, or 165 trillion rupiah, will flow to the government, Finance Minis- ter Bambang Brodjonegoro said yesterday.

Indonesia’s rupiah and equities gained after the decision. Th e cur- rency strengthened 1.2% to 13,188 against the US dollar as of 4pm in Jakarta, the highest level since May 3, according to prices from local banks. Th e Jakarta Composite In- dex of shares rose 1%.

“[The] tax amnesty could bring the much-needed extra fiscal rev- enue for the government, but it is unlikely to completely remove

the need to widen budget deficits and/or cut spending this year,”

Santitarn Sathirathai, an econo- mist at Credit Suisse AG in Singa- pore, said in a note to clients. The deficit will probably reach 2.9%

of GDP this year, higher than the government’s revised forecast of 2.4%, he said.

The amnesty bill sets a pen- alty of 4% to 10% on individuals who report assets held abroad, but decline to repatriate the funds.

Participants must keep the funds onshore for three years.

In a country of 255 million peo- ple, Indonesia only has 27 million registered taxpayers, according to the government. S&P Global Ratings held off on upgrading the nation’s credit ranking earlier this month from “junk”, saying it wants to see better-quality spending and a declining trend in budget defi - cits. — Bloomberg

KUALA LUMPUR: Th e Malaysian Association of Money Services Business (MAMSB) has assured the public that there is suffi cient supply of British pounds in the market to meet the current de- mand.

This follows media reports of money changers claiming to have run out of pounds after the

Money changer group says enough pounds to meet demand

BY C H R I S T I N A R A M A N I currency slumped in reaction to Britain voting to exit the Europe- an Union.

The MAMSB, in a statement yesterday, said following Brexit, the exchange rates for the pound, along with other major currencies, have seen signifi cant volatility.

“The licensed money chang- ers and wholesale currency busi- nesses in Malaysia will continue to monitor the situation closely and

take the necessary steps to address challenges to the local currency-ex- change market and respond to con- sumers’ needs,” it said.

The association also pointed out that the exchange rates quot- ed for foreign currencies sold by licensed money changers in Ma- laysia are determined by market forces, which depend on factors such as the cost of sourcing for currencies, operation costs and

demand for currencies.

In view of this, the rates off ered by licensed money changers may vary and consumers should shop around for competitive rates, said the MAMSB.

It was reported that some mon-

ey changers in the country claimed

to have run out of pounds after

more people sought to buy the

currency to take advantage of its

sharp fall.

(4)

H O M E B U S I N E S S 3

W E D N E S DAY J U N E 29 , 2 0 16 • T H E E D G E F I N A N C I A L DA I LY

EWI will go ahead with IPO despite Brexit

Exercise delayed slightly, expected to be listed as early as September

BY M E E N A L A K S H A N A

BY A H M A D N AQ I B I D R I S

BY Y I M I E YO N G

KUALA LUMPUR: Eco World Inter- national Bhd (EWI), whose property projects are mainly in the UK and Australia, will go ahead with its initial public off er (IPO) exercise despite the uncertainties caused by Brexit.

“Th ere is never a good time for listing,” said EWI president and chief executive offi cer (CEO) Datuk Teow Leong Seng when the press asked about the timing of the IPO yesterday.

“Of course, the outcome (of the Brexit vote) was not what we expect- ed, but it has its positives. Th e imme- diate positive is that we are going into the listing to raise about RM2.6 billion, so with the weakness of the pound sterling, it will give us additional 10%

fi repower in London,” said Teow.

Some analysts commented that EWI’s IPO might not be smooth sail- ing no thanks to Brexit, which damp- ened the sentiment of the global fi nancial markets including Bursa Malaysia, considering that the com- pany has large exposure to the UK property market.

Teow reiterated that Brexit serves as an advantage to EWI, as UK’s real estate prices are expected to be cheaper by 10% due to the weaker currency.

“[Overseas] sales have been very strong and continue to be very strong, and as long as your sales are there, your costs are under control and it will have no impact on our num- bers,” he explained, adding that 40%

of buyers for EWI’s projects are out- side the UK.

“International buyers now have got a 10% discount on whatever they buy in London,” he said.

Teow pointed out that EWI has a natural hedge for its projects.

“Th e only exposure we have is in the profi ts. So when we convert it to ringgit, it may come off a bit.”

“But because of the profi t recogni- tion method in the UK, we only rec- ognise profi ts upon completion, so that’s only going to happen two years down the line in 2018,” he added.

Teow acknowledged that the list- ing exercise was delayed by the ap- proval process as a result of the entry of a substantial pre-IPO shareholder.

Th e IPO is now expected to take place in September or October. “Th e

KUALA LUMPUR: YTL Power International Bhd said it is not able to quantify the eff ects of the UK leaving the European Union on the group for now, although it does not expect its water services unit in the coun- try to be materially aff ected.

YTL Power said it received a verbal query from Bursa Ma- laysia yesterday on the fi nancial and operational effects that the referendum was expected to have on the group and its subsidiaries.

YTL Power’s share price slid to a 10-month low of RM1.39 on Monday. It closed at RM1.41 yesterday, with a market capi- talisation of RM11.42 billion.

“In light of the uncertain and highly fl uid nature of the current situation, and given that events are still develop- ing with no offi cial indication from the UK government on the future steps to be taken, YTL Power is not able to quantify the eff ects, if any, of the out- come of the Brexit referendum on the group at this time,” the group said in the statement.

YTL Power said its major operation in the UK comprises its 100% stake in Wessex Wa- ter, which provides water and sewerage services in the south- west region of England under a regulatory concession granted by the UK government.

“Due to the regulated na- ture of the business and the geographic concentration of its operations within the UK, Wessex Water is not expected to be materially aff ected by the outcome of the Brexit referen- dum,” it added.

YTL Power said it is mon- itoring events and conduct- ing ongoing assessments of any operational and finan- cial impacts, and will make further announcements in due course.

In a research note, MIDF Research commented that a weak pound means transla- tion losses at the YTL Power level, and ultimately for YTL Corp Bhd. It noted that Wessex Water accounts for 56% of YTL Power’s revenue but some 82%

of its bottom line .

MIDF estimates that every 1% change in the pound will impact YTL Power’s bottom line by 2%.

KUALA LUMPUR: Nomura has cut its gross domestic production (GDP) forecast for Malaysia to 3.9%

for 2016, from its previous target of 4.3%, as the UK’s decision to leave the European Union is expected to create waves of contagion on Asian economies.

However, Nomura has recently upgraded Malaysia’s equity mar- ket to “overweight” with an FBM KLCI year-end target of 1,765 points, amid expectations of dim- mer prospects for developed mar- kets following the Brexit.

Nomura Singapore Ltd vice-pres- ident Mixo Das said the lower ex- pectation of economic growth for the year is due to Malaysia’s trade exposure to the UK, as economists expect a 2% correction in the UK’s economic growth this year.

“UK economists are looking at a correction of 2% in terms of eco- nomic growth, compared with the previous expectation of 2% growth, so essentially it’s a four percentage point (ppt) downgrade.

listing was initially planned to take place in July but because of the entry of this property group, we need to clear a few things with the SC (Se- curities Commission),” he said at a press conference.

Teow said EWI was initially look- ing for a cornerstone investor but the prospective investor, which is a property group, wanted to be more than a cornerstone investor.

“Th ey wanted to be at the same level as Eco World Development, so that’s why they are a co-anchor [for the IPO],” he added.

When asked the name of the investor, Eco World Development Group Bhd chairman Tan Sri Liew Kee Sin, who was present, said the partner is “an international player from Malaysia and is a Singaporean

entity”, adding that the identity of the investor could not be revealed before Securities Commission’s approval.

Th e Edge weekly reported that tycoon Tan Sri Quek Leng Chan is keen on owning a major stake in EWI through one of his Guoco-re- lated vehicles, alongside EcoWorld.

Quek owns 76% of Hong Kong-listed Guoco Group Ltd, which in turn, owns about 65% of Singa- pore-listed GuocoLand Ltd.

As at March 31, 2016, EWI chalked up £837 million (about RM4.53 bil- lion) worth of sales from its three projects in the UK and one project in Australia in 11 months.

“Th is is quite a credible eff ort.

We have been selling consistently through the last few months despite the Brexit debate,” Teow said.

Nomura cuts M’sia 2016 GDP forecast to 3.9%

Preliminary new Asia real GDP forecasts post-Brexit

2016

PREVIOUS NEW CHANGE Y-O-Y (%) Y-O-Y (%) PP

China 6.2 6.0 -0.2 India 7.6 7.3 -0.3 Indonesia 5.4 5.2 -0.2 Malaysia 4.3 3.9 -0.4 Philippines 6.5 6.3 -0.2 Singapore 1.8 1.1 -0.7 Thailand 2.7 2.2 -0.5

Source: Nomura

“Then there’s also the 0.5%

downgrade for the euro area’s eco- nomic growth. Th ese factors will obviously weigh on the economic prospects in Asia.

“Currently, our economists are looking at 0.3ppt downgrade for Asia ex-Japan GDP growth forecast for 2016. Specifi cally for Malaysia, it’s a 0.4ppt cut to 3.9% from 4.3%,” said Das in a press conference yesterday.

Note that Nomura’s forecast of 3.9% is lower than the offi cial fore- cast of 4.0% to 4.5% growth in GDP for 2016.

Malaysia is not the only coun- try that Nomura has trimmed its GDP growth forecast. Th e largest percentage point downgrades are for Hong Kong 1ppt and Singapore 0.7ppt, followed by Th ailand 0.5ppt and Malaysia 0.4ppt.

Despite the slower growth ex- pectation for Malaysia, Nomura has an overweight recommendation on the Malaysian equity market sim- ply because the growth prospects of the developed nations are even dimmer.

“Th e main reason for the up-

grade is Brexit. What Brexit does is it changes the macroeconomic out- look. First, it reduces the prospects for developed markets. Secondly, it reduces the prospects for policy tightening and in fact increasing our expectations of policy easing.

“So right now, we are expecting all central banks in the region to cut rates further. Essentially there’s this massive policy easing coming through,” said Das.

Meanwhile, he said the politi- cal risk in Malaysia remains high

although the risks may not esca- late, Das said it will take a while to recover investors’ confi dence.

“Political risk in Malaysia has been high for some time. While I don’t specifi cally see any reason for it to go higher from here, the reduction in political risk will hap- pen at a slow pace over an extended period of time,” he said.

Das added that the issues sur- rounding 1Malaysia Development Bhd (1MDB) is still on the minds of foreign investors, noting that for- eign holdings of Malaysian equities are still at 10-year lows.

“From a fi nancial perspective, I think 1MDB is still extremely solvable. Whatever the case may be, it should be easily digestible with the government’s balance sheet,” he said.

Overall, Das said markets in the Asean region will see a range- bound performance in 2016.

“Like other markets in the region, we see the KLCI to be rangebound this year. Our year-end target is 1,765 points. I think that 1,600 is a semi- hard fl oor for the index,” he said.

YTL Power

does not expect its UK unit to be materially aff ected by Brexit

YTL Power is not able to quantify the

eff ects, if any, of the outcome of the

Brexit referendum on the group at

this time.

(From left) Teow,

Liew, and Eco World

Development Group

president and CEO

Datuk Chang Khim

Wah at the EcoWorld

press conference

in Kuala Lumpur

yesterday. Photo by

Kenny Yap

(5)

4 H O M E B U S I N E S S

W E D N E S DAY J U N E 29 , 2 0 16 • T H E E D G E F I N A N C I A L DA I LY

KUALA LUMPUR: Th e audit and in- vestigation led by the Royal Malaysian Customs Department into Wah Seong Corp Bhd’s indirect wholly-owned unit PPI Industries Sdn Bhd that be- gan in end-February, have been con- cluded with no penalties imposed after four months.

“Hence, there were no penalties imposed and no action being taken against PPI. Th e matter is duly re- solved and closed,” said Wah Seong in a bourse fi ling yesterday.

As such, Wah Seong said PPI’s bank accounts and assets that were temporarily frozen to facilitate inves- tigations have been “unconditionally released” pursuant to a revocation order dated June 10, 2016 and a June 13, 2016 letter from the customs.

Wah Seong said the documents were received on Monday (June 27) and that PPI’s business operation has returned to normal and is now ongoing as usual.

Recall that Th e Edge Financial Dai- ly reported on Feb 25 that more than 10 steel companies had been raided by customs offi cers on Feb 23 and 24, and that the companies that were raided were mainly those involved in the importation of steel pipes or hot-rolled coils (HRCs).

A day after the report, Hiap Teck Venture Bhd confi rmed the raid. It said customs had taken custody of certain documents of two of its sub- sidiaries and frozen a bank account of one of the two subsidiaries “for purposes of audit and investigation”.

Then on Feb 29, the daily re- ported that the Malaysian Iron and Steel Industry Federation (Misif) had lodged a complaint with the min- istry of fi nance (MoF) on concerns its members raised relating to the high handed manner in which the industry-wide audit was conducted.

At the time, Misif said the probe was under the Anti-Money Laundering Act, and that the audit had raided 12 of its members, six of which were

public-listed companies. Hiap Teck aside, the fi ve other aff ected listed companies were Southern Steel Bhd, Ann Joo Resources Bhd, Wah Seong, Amalgamated Industrial Steel Bhd and Prestar Resources Bhd.

Following Misif’s statement, the fi ve separately confi rmed that they too had been visited by the customs, with certain shipping and accounting records relating to the importation of HRCs taken into custody.

In confi rming the raids in a bourse fi ling on Feb 29, Wah Seong had said PPI’s business premise in Penang had been subjected to what it termed

“steel-related industry-wide audit visits” by the customs, the police, the MoF, and the Attorney-General’s Chambers on Feb 23.

It had also said then that RMCD had taken custody of certain re- cords and documents of PPI’s, while some of PPI’s bank accounts had been temporarily frozen to facilitate the customs’ audit and investigation.

Customs audit ended;

PPI didn’t breach any laws — Wah Seong

Its accounts have also been released after near 4-month freeze

YANGON: OCK Group Bhd has se- cured a US$40.2 million (RM163.2 million) loan to help fi nance the con- struction of 920 telecommunications towers in Myanmar — the telecom- munications network service provid- er’s maiden investment in the Asean region outside of Malaysia.

Th e syndicated term loan facility was signed here yesterday by OCK’s wholly-owned subsidiary OCK Yan- gon Pte Ltd with a consortium of banks comprising OCBC Bank Ltd, Malayan Banking Bhd, United Over- seas Bank Ltd and Bangkok Bank PLC.

OCBC is one of the joint mandated lead arrangers as well as the facility agent and offshore security agent for the loan. Recall that OCK in last December signed a master services agreement with Telenor Myanmar, a subsidiary of the Norwegian Tel- enor Group, to build and lease more than 900 towers in the country. Th e project, targeted to be completed by end-2016, is expected to contribute recurring revenue to OCK.

“We have already carried out surveys on more than 80% of the sites, and have gained approval of over 67% from Telenor Myanmar to proceed with land lease acquisition and relevant permits,” said OCK

KUALA LUMPUR: UEM Edgen- ta Bhd has secured a RM42.99 million contract from Malaysia Airlines Bhd for facilities man- agement services for the nation- al carrier.

According to its bourse fil- ing yesterday, the group said its 80%-owned subsidiary KFM Holdings Sdn Bhd had entered into a related party transaction with Malaysia Airlines for the above contract.

Under the contract, UEM Edgenta will provide Malaysia Airlines with facilities manage- ment, hotel management, mail- ing and cafeteria services.

It will also collect a RM4.1 mil- lion sinking fund from Malaysia Airlines, which will be used for

facilities maintenance based on certain terms and conditions set by Malaysia Airlines.

Malaysia Airlines is a whol- ly-owned subsidiary of Malaysia Aviation Group Bhd, which in turn is wholly-owned by Khazan- ah Nasional Bhd — the holding company of UEM Group Bhd.

KFM Holdings is an 80% sub- sidiary of UEM Edgenta, in which UEM Group owns a 69.14% stake.

Hence, it is deemed a related party transaction.

UEM Edgenta expects the con- tract to contribute positively to its earnings for the fi nancial years ending Dec 31, 2016 (FY16) to FY18.

The stock closed at RM3.43 yesterday, up nine sen or 2.69%, with 76,700 shares traded and a market value of RM2.78 billion.

KUALA LUMPUR: Apollo Food Holdings Bhd’s net profit for the fourth quarter ended April 30, 2016 (4QFY16) fell 73.2% to RM1.75 million, from RM6.54 million a year ago, due to the fl uctuation in the ringgit against the US dollar and Singapore dol- lar in the quarter.

Th e fl uctuation led to more foreign exchange (forex) loss- es and the provision of impair- ment loss on one of the leasehold buildings, the group said, adding that the lower profi t was also due to annual salary increments.

Revenue for the quarter was up 1.1% to RM53.1 million, from RM52.6 million in 4QFY15.

For the full FY16, net profi t increased 17.8% to RM29.8 mil-

lion from RM25.3 million in FY15.

Revenue slipped 2.1% to RM208.2 million from RM212.6 million.

Th e group expects its operat- ing environment to be tougher in both FY16 and FY17 in view of the increase in costs of raw materials and the volatility of the ringgit against foreign currencies.

“Th e market will remain com- petitive especially in maintaining input costs so that the margin will not be adversely aff ected by mar- ket conditions,” it said in a fi ling with Bursa Malaysia.

Apollo expects to maintain its market position by implementing prudent measures and improving operational efficiency to safe- guard its profi tability.

Th e group has proposed a sin- gle-tier fi rst and fi nal dividend of 30% for FY16.

KUALA LUMPUR: Subur Tiasa Holdings Bhd registered a net loss of RM13.9 million in the third quarter ended April 30, 2016 (3QFY16) compared to a net profi t of RM2.71 million in the corresponding quarter a year ago.

According to its bourse fi ling yesterday, the decline in earnings was mainly due to lower average free on board export selling prices of logs, plywood and sawn tim- ber; higher raw material costs for manufacturing of timber prod- ucts; and higher volume of fer- tiliser applied to higher acreage of mature oil palm trees.

Th e group’s revenue for 3QFY16 decreased 37.6% to RM110.2 mil- lion from RM176.7 million.

For its cumulative nine-month period ended April 30, 2016 (9MFY16), it recorded a net loss of RM15.6 million compared to

the net profi t of RM5.96 million in 9MFY15.

Th e loss was mainly due to a decrease in export sales volume for logs and timber products, an increase in raw material costs for timber products, and a higher overhead unit cost for logging operation and manufacturing of timber products.

On prospects, it said: “The slowdown in global economy is expected to continue in year 2016. Th is together with current low commodity prices will have negative impact on the global outlook.”

However, it noted that log pric- es are expected to be favourable in view of prevailing tight supply of logs and the strong US dollar against the ringgit.

It also said the upcoming peak crop season will see an increase in fresh fruit bunch production in Subur Tiasa’s oil palm plantation.

UEM Edgenta bags RM42.99m contract from Malaysia Airlines

Apollo Food’s 4Q net profi t falls 73%

due to forex and impairment losses Subur Tiasa slips into the red in 3Q on lower selling prices, higher costs

MOST VIEWED STORIES ON theedgemarkets.com

BY G H O C H E E Y UA N BY S A N G E E T H A A M A RT H A L I N G A M

BY A L E X C H O N G

BY B I L LY TO H BY B I L LY TO H

OCK secures US$40m loan to build 920 telecom towers in Myanmar

chairman Datuk Syed Norulzaman Syed Kamarulzaman.

“Sites handover to Telenor has started since May and we are on track to complete and hand over all the 920 sites by end of this year,”

he added.

Th e group’s managing director cum largest shareholder, Sam Ooi, said OCK is continuously seeking to expand regionally in line with its mission to become an Asean tower company.

“Th e telecommunications indus- try in Myanmar has grown tremen- dously over the past few years, and it still presents enormous growth opportunities in view of the grow- ing demand for more telecommu- nications towers,” he said.

Originally a maintenance and engineering (M&E) company, OCK has grown into a turnkey solutions provider with four key business divi- sions covering telecommunications network services, green energy and power solutions, M&E engineering services and trading of telecommu- nications and network products.

Over the years, the company has been expanding its presence across Southeast Asia and look- ing to position itself in key emerg- ing economies such as Myanmar, Cambodia, Indonesia and China.

OCK’s share price rose 0.63% to 80.5 sen on Bursa Malaysia yester- day with 1.72 million shares trad- ed, and a market capitalisation of RM633.8 million.

(From left) Syed Norulzaman, Central Bank of Myanmar foreign exchange

management department director-general U Win Thaw, Malaysian Ambassador to

Myanmar Mohd Haniff Abd Rahman and Ooi.

(6)

H O M E B U S I N E S S 5

W E D N E S DAY J U N E 29 , 2 0 16 • T H E E D G E F I N A N C I A L DA I LY

Bina Puri expects

order book, earnings to pick up from 2Q

Executive director confi dent of securing potential projects

KUALA LUMPUR: Tropicana Corp Bhd has appointed Japan-based Panasonic Group’s subsidiary Pana- Home Malaysia Sdn Bhd as its turn- key contractor to build smart homes for the third phase of the property developer’s RM12.4 billion Tropi- cana Aman township in Selangor.

Tropicana group chief executive offi cer (CEO) Datuk Yau Kok Seng said the RM168 million turnkey con- tract involves the construction of 272 semi-detached houses. Under the contract, PanaHome will also be providing smart home technology to these residential units, said Yau.

Th e third phase of the 345ha town- ship near Kota Kemuning is known as Cheria Residences, which has a gross development value of RM358 million. Expected to be launched next month, the project is scheduled for completion by 2019, said Yau.

“PanaHome Malaysia aims to make a difference by creating an EcoNation where one can work, live and play in a healthy environment.

We share the same vision to cre- ate a better community with our future smart homes, thus this is a very strategic partnership,” he told reporters at the signing ceremony of

KUALA LUMPUR: Malaysia Airlines Bhd’s outgoing chief executive of- fi cer (CEO), Christoph Mueller, is expected to take a position in Emir- ates once he leaves the Malaysian fl ag carrier in September, according to a German business publication.

Manager Magazin, citing insid- ers, said the 54-year-old German will join the Dubai-based airline as chief transformation offi cer, largely responsible for technology and dig- italisation issues.

Mueller announced on April 19 that he is resigning his current post due to “changing personal circum- stances”, and would leave in Sep- tember, less than halfway through his three-year contract.

Tropicana ropes in Panasonic’s unit to build smart homes

Outgoing Malaysia Airlines CEO Mueller to join Emirates — report

BY TA N S I E W M U N G

BY C H E S T E R TAY

BY C H E S T E R TAY

BY B I L LY TO H

the turnkey contract with Panasonic here yesterday.

Cheria Residences will make up part of Tropicana’s RM1.5 billion worth of projects lined up for the second half of the year, said Yau.

“We have to be very careful in today’s market environment. If you noticed, we did not launch anything in the past six months. Th e timing is very important because that will aff ect our cash fl ow. Property de- velopment is not just about sales.

How we manage our cash and credit

is also very crucial,” he explained.

Yau added that the group was fo- cused on selling its existing projects prior to this.

“Now, we are starting some launches, but we have to be diff er- ent from our peers, especially in times like this. Th at is why we sign our col- laboration today (yesterday) to create value for homebuyers,” he added.

Tropicana shares settled un- changed at RM1 yesterday, with a market capitalisation of RM1.43 billion.

A spokesman for Malaysia Air- lines, when asked about the report in Manager Magazin, said: “Malay- sia Airlines does not comment on speculation, and any questions re- garding Mr Mueller’s future should be directed to him.”

Mueller is known in the airline industry as a turnaround special- ist. He revived Ireland’s Aer Lingus when he served as CEO from 2009 to 2015.

He was headhunted by Malaysia Airlines, then known as Malaysia Airline System Bhd, to nurse the carrier after the MH370 and MH17 tragedies.

Under him, Malaysia Airlines has reduced its overall fl eet size from 97 to 82 aircraft, giving up, among oth- ers, its eight remaining Boeing 777s.

KUALA LUMPUR: Bina Puri Hold- ings Bhd, whose net profi t slumped 34.5% in the first quarter ended March 31, 2016 (1QFY16), is con- fi dent of getting about RM1 billion new jobs and achieving its net profi t growth target of 20% in FY16, un- derpinned by massive local infra- structure works.

The group is bidding for up to RM10 billion jobs this year, of which it expects to grab some 20%.

Its executive director Matthew Tee Kai Woon told Th e Edge Financial Daily after Bina Puri’s annual gener- al meeting yesterday that he expects the group’s earnings to pick up in the 2Q, due to potential projects that he is confi dent of securing.

Tee said the group’s 1QFY16 re- sults were dragged by overall weak sentiment in the construction and property markets, higher expenses incurred on higher steel prices, for- eign labour cost, and the goods and services tax.

He also noted that the proper- ty segment that used to contribute signifi cantly to the group’s bottom line had not shown strong growth in recent years.

Th e group’s net profi t declined to RM812,000 in 1QFY16, from RM1.24 million a year ago, as revenue fell 13%

to RM294.48 million, from RM338.41 million.

Th e group’s slow order book re- plenishment has been a concern for analysts, though this may have been allayed after the group secured a RM73 million contract for the ex- ecution of pipe sleeper and under- ground services for Package-22 of the Rapid project.

“We are a bit slow in getting new projects in the fi rst half, but we are quite optimistic about the second half,” Tee said.

Among the projects the group is bidding for are the Damansara-Shah Alam Highway, the Shah Alam-Ulu Kelang Expressway, the Duta-Ulu Klang Expressway 3, the Pan Borneo Highway, the Bus Rapid Transit and PR1MA’s aff ordable homes.

Th e group’s unbuilt order book stands at RM1.6 billion, which is ex- pected to sustain its earnings for the next three years. Currently, 85% of the group’s turnover is from construction.

Meanwhile, Tee said the group had rescheduled the launching of new property projects amid soften- ing of the property market.

However, he expects property earnings contribution to rise slight- ly from last year, underpinned by Th e Opus serviced apartment project, which carries a gross development value (GDV) of RM338.1 million.

Th e group has about 11 property projects, with a total expected GDV of RM3.1 billion. Th e property segment contributed only 6% of the group’s earnings in FY15, compared with 9%

in FY14, due to softer take-up rates, partly due to more stringent loan application requirements.

Meanwhile, Tee is expecting a 20% annual earnings growth for its power plant business, supported by the group’s hydro plant, which began commissioning last month.

Th e group’s power supply’s profi t before tax for FY15 stood at RM4.19 million.

Despite Brexit-led uncertainties, Tee said Bina Puri’s power arm list- ing plan remains intact. Th e group plans to raise US$4 million (RM16.24 million) via the initial public off er- ing of its Indonesian energy arm, PT Megapower Makmur Tbk.

“Th is is not a big listing. I think the appetite is there as not many companies are listed in Indonesia, and we are one of the few,” he said.

SapuraKencana’s 1QFY17 profi t

down sharply

KUALA LUMPUR: SapuraKencana Petroleum Bhd’s (SKP) fi rst quar- ter ended April 30, 2016 (1QFY17) earnings came in above analysts’

expectations after the recent round of earnings downgrades, but ana- lysts said margin compression and replenishment of engineering and construction contracts remain a concern.

SKP reported a net profit of RM110.31 million for 1QFY17, down 58% from RM260.69 million a year ago, as the group encoun- tered lower demand for its rigs as most oil majors slowed down their upstream operations.

Th e group said the decline in revenue was “mainly attributable to lower revenue from the drilling and energy business segments”. It noted that certain rigs were “off contract”

during the fi nancial quarter.

Meanwhile, SKP yesterday also announced that its wholly-owned subsidiaries had won new con- tracts and contract extensions with a combined value of about US$125 million (RM507.5 million).

In a fi ling with Bursa Malaysia, SKP said its subsidiary SapuraKen- cana Drilling Tioman Sdn Bhd had secured one new contract; Sapu- raKencana Drilling Jaya Ltd had ex- tended one of its existing contracts;

SapuraKencana HL Sdn Bhd had won three; and SapuraKencana Australia Pty Ltd had bagged two contracts.

Against the backdrop of soft crude oil prices and capital spend- ing cuts among oil majors, SKP said it was focusing on order book re- plenishment in key markets. Due to declining capital spend, the group said it expects to face stiff compe- tition, which may cause a margin squeeze.

SKP acknowledged that it antici- pates the challenging environment to persist over the medium term.

Hong Leong Investment Bank Research analyst Lim Sin Kiat com- mented that SKP’s 1QFY17 earnings

SapuraKencana’s net profit

(RM ’000)

-1,500,000 -1,200,000 -900,000 -600,000 -300,000 0 300,000

FY171Q 4Q 3Q 2Q 1Q FY16

260,694 104,085 129,856 -1,286,191 110,311

were about 65% of his annual fore- cast profi t for FY17.

“[Th e] fi rst-quarter results are more than half of our forecast, but we are not revising the earnings for now. Perhaps we will just wait until the second-quarter results before any revision,” he told Th e Edge Fi- nancial Daily after attending SKP’s fi nancial results briefi ng yesterday.

Lim said SKP’s management is conservative in the outlook.

“Looking at the numbers, things are slightly positive now.

Th ey emphasised a lot on Petro- bras (Petróleo Brasileiro SA), where they are having close to 100% utili- sation of their PLSVs (pipe-laying support vessels) because they think that the market is overly concerned about operations in Brazil,” he said.

Nevertheless, Lim believes that SKP’s long-term prospects remain positive. “Their gas reserves are quite huge, but might need a longer time to monetise them all,” he said.

SKP on Monday announced that it had entered into a gas sales agree- ment with Petroliam Nasional Bhd to sell gas reserves in the B15 Gas Field. Th e fi rst gas delivery is tar- geted for the fourth quarter of 2017.

SKP’s share price rebounded from a record low of RM1.32 yes- terday, up 10 sen or 7.6% to close at RM1.42, giving it a market cap- italisation of RM8.45 billion. Year to date, the counter has slid 26.8%.

(From left) PanaHome managing director Haruhiko Kuwano, Yau, Panasonic &

PanaHome Corp corporate advisor Yasuteru Fujii, Panasonic Malaysia managing director Cheng Chee Chung, Tropicana deputy group CEO Datuk Dickson Tan, PanaHome Corp executive offi cer Kenji Koyama and Tropicana group managing director (project) Daniel Teh at the signing ceremony in Petaling Jaya yesterday.

Photo by Mohd Izwan Mohd Nazam

(7)

6 H O M E B U S I N E S S

W E D N E S DAY J U N E 29 , 2 0 16 • T H E E D G E F I N A N C I A L DA I LY

RHB expects RM340m cost savings per year

After the completion of its restructuring exercise

KUALA LUMPUR: PUC Found- er (MSC) Bhd has teamed up with the Federation for Motor and Credit Company Associa- tion of Malaysia (FMC) to pro- vide fi nancing to independent car retailers, small car super- markets and dealers.

In a statement, PUC Found- er said its wholly-owned sub- sidiary Founder Pay Sdn Bhd (FPSB) signed a memorandum of understanding with FMC yesterday to undertake the col- laboration.

Th e group said a fi nancing scheme developed by FPSB called ‘Vehicle Stocking Ad- vance (VSA) Scheme’ could further expand the group’s business segment and gener- ate more income.

The scheme, it added, would be used by vehicle deal- ers in Malaysia who satisfy the criteria set by FPSB as work- ing capital.

FPSB said a feasibility study would be conducted to ascer- tain the scheme’s commercial viability, and “create a win-win situation for both parties” that can enhance the used car in- dustry.

FMC is a trade association established to safeguard the interest of car dealers and cred- it providers, and also help to promote motor trade and its related credit and insurance businesses in Malaysia.

Th e association, which also intends to promote the motor credit business, has about 3,200 registered and active members from a total of 4,500 used car dealers nationwide.

PUC Founder group chief executive officer Hiew Wai Yoon said the group has ob- tained the Money Lending Li- cense approved by the Urban Wellbeing, Housing and Local Government Ministry.

“It is one big leap for us mov- ing forward in the fi nancial ser- vice segment. Th rough the VSA scheme, we hope to further expand the business segment and generate more income for the group,” Hiew said.

PUC Founder to provide fi nancing for small car

retailers, dealers

BY A H M A D N AQ I B I D R I S

BY S A N G E E T H A A M A RT H A L I N G A M

KUALA LUMPUR: RHB Bank Bhd, which has assumed RHB Capital Bhd’s listing status on the Main Mar- ket of Bursa Malaysia yesterday, ex- pects cost savings of RM340 million per year with the completion of the group’s restructuring exercise.

RHB group’s managing director Datuk Khairussaleh Ramli said the group’s restructuring exercise, which included a career transition scheme last year, has reduced the group’s cost-to-income ratio.

“With the interest and other sav- ings, we potentially could save about RM160 million per year. Apart from that, we also did a massive career transition scheme last year. We pro- jected that that would also save about RM180 million in costs every year.

“In our fi rst quarter, our cost-to- income ratio has come down from 56% in the last quarter of last year, to about 48.5%. Th e eff orts have trans- lated quite nicely in terms of our fun- damentals and numbers,” he said.

Analysts said the savings gener- ated from the group’s streamlining is substantial, and will support the group’s performance in the current uncertain environment.

“Th e savings generated is signifi - cant. RHB’s net profi t last year stood at RM1.5 billion, and the savings from the restructuring already totalled more than RM300 million.

KUALA LUMPUR: AirAsia Bhd group chief executive offi cer Tan Sri Tony Fernandes will be meeting Transport Minister Datuk Seri Liow Tiong Lai today to discuss the klia2 branding issue.

Th ere have been continuous ar- guments between Malaysia Airports Holdings Bhd (MAHB) and AirAsia over the airline’s plan to rebrand the klia2 hub as LCCT2.

“We understand that we do not have the right to rename the termi- nal, but we still want to push this as a marketing strategy to tell the world that the terminal is low-cost,” Fer- nandes told reporters after the Ma- laysia Pitch@Palace event yesterday.

Fernandes urged MAHB to work together with AirAsia in attracting more travellers to use klia2 as a con- necting terminal, saying this would

translate into more jobs and tour- ism receipts.

Furthermore, he said, klia2 lacks integration with the main terminal Kuala Lumpur International Airport given the absence of airside trans- portation, with its only form of con- nectivity being the Express Rail Link service, which charges RM2.

“It is the only airport in the world that charges you to move from ter-

minals. Th at does not help with in- tegration. “We brought up this issue after two years [of operating in klia2]

because before this, we never had any connecting product and this segment is now growing rapidly,” he added.

Citing an example, Fernandes said an increasing number of trav- ellers fl ying with AirAsia use klia2 as a connecting terminal to the rest of Southeast Asia. — Bernama

KUALA LUMPUR: Sarawak Hidro Sdn Bhd, the state-owned develop- er of Malaysia’s biggest hydropower project, plans to off er US$1.3 billion (RM5.27 billion) of sukuk without a government guarantee as it seeks to ease the nation’s fi scal burden.

Sarawak Hidro, owned by the fi nance ministry, will use the pro- ceeds to repay existing debt that has a state guarantee, managing director Zulkifl e Osman said on Monday in an emailed response to Bloomberg queries. Th e compa- ny aims to sell the Islamic bonds

in July, the statement shows. Th e planned sukuk off ering has a pre- liminary AAA rating from local as- sessor RAM Rating Services Bhd, according to Zulkifl e.

Th e electricity generator is wean- ing off government guarantees for its latest sukuk programme as a way to reduce the nation’s debt burden, even as sales of such securities have climbed to a record this year. Sar- awak Hidro’s power plant on Bor- neo Island is part of Prime Minister Datuk Seri Najib Razak’s US$444 billion development plan, which

includes improving infrastructure as the country seeks to become a developed economy by 2020.

“Th e move is positive for the gov- ernment to manage the risk of con- tingent liabilities, by leaving compa- nies with healthy cash fl ows to have their stand-alone rating,” Fakrizzaki Ghazali, a strategist at RHB Research Institute Sdn Bhd, said in an email on Monday. Th e limited supply of local AAA-rated debt this year could support demand for the off ering, according to Ghazali.

Malaysia aims to cut its ratio of

debt to gross domestic product to 45% by 2020, from 54.5% at the end of last year, the fi nance ministry said in an emailed response to Bloomberg queries last week. Sales of govern- ment-guaranteed sukuk in Malaysia, the world’s biggest syariah-compli- ant debt market, have risen to a re- cord RM12.1 billion so far this year, data compiled by Bloomberg show.

Sarawak Hidro appointed Ma- layan Banking Bhd and RHB Invest- ment Bank Bhd as joint lead man- agers for the off ering, according to Monday’s statement. Th e company

last sold government-guaranteed Is- lamic bonds in 2013, when it priced RM500 million of 2028 sukuk with a coupon rate of 4.58%, data compiled by Bloomberg show. Th e yield on the securities has dropped 61 basis points this year to 4.63%, according to the data.

The planned offering would be used to refinance a govern- ment-backed loan from the Em- ployees Provident Fund used to complete the Borneo power plant, Zulkifl e said in the statement on Monday. — Bloomberg

“However, the incremental gains from the career transition scheme will be less, as part of the savings had already been realised last year,”

said an analyst with a local invest- ment bank.

Meanwhile, MIDF Research ana- lyst Kelvin Ong said the RM180 mil- lion of savings from the career tran- sition scheme disclosed accounts for about 10% of the research house’s forecasted net profi t of RM1.92 bil- lion for the financial year ending Dec 31, 2016.

“Although the percentage is not as

big, in this current challenging en- vironment, the savings will provide some support for RHB’s performance going forward,” he said.

Th e listing of RHB on the local exchange yesterday, following the delisting of RHB Capital, marked the completion of the group’s restruc- turing eff orts.

Despite a muted start, with RHB shares opening at a five sen or 1.1% discount to its offer price of RM4.69, the counter closed 15 sen or 3.2% higher at RM4.84, which gave the group a market

capitalisation of RM19.41 billion.

RHB’s Khairussaleh said the lower opening was not surprising, consid- ering the current volatile conditions.

“We are quite pleased with the share price. From a share price of RM4.69, our shares opened at RM4.64. It’s only a fi ve sen decrease, compared with certain markets that have dropped 7% due to the vola- tility. So it’s not too bad, given the sentiment globally,” he said during a press conference in conjunction with the bank’s listing.

Going forward, he said the group is looking to expand its operations overseas, using Singapore as a base to grow in the Asean region, as the city-state is seen as a key fi nancial centre for the group.

“We have had a presence in Sin- gapore for more than 50 years, but [it was] only in the last few years that we have realised that it is a gem for our organisation. For the last two to three years, we have actually been growing our operations in Singapore quite well. Especially with the merger with OSK Investment Bank Bhd, we now have a distribution platform in Singapore for our investment bank- ing business.

“Our intention for Singapore is not just to do business. It could be a centre for us to do business in other parts of the region as well, for exam- ple Indonesia, Th ailand and other countries,” Khairussaleh said.

AirAsia’s chief to meet transport minister

Sarawak Hidro plans US$1.3b Islamic bond sale

(From left) RHB Bank chairman Group Tan Sri Azlan Zainol, Bursa Malaysia chief

executive offi cer of Datuk Seri Tajuddin Atan, and Khairussaleh at the listing of RHB

Bank Bhd in Kuala Lumpur. Photo by Sam Fong

(8)

H O M E B U S I N E S S 7

W E D N E S DAY J U N E 29 , 2 0 16 • T H E E D G E F I N A N C I A L DA I LY

Jaks expects to sell Evolve Concept Mall in a year

Disposal part of group’s strategy to lower gearing and unlock value for shareholders

BY G H O C H E E Y UA N

KUALA LUMPUR: Jaks Resourc- es Bhd, which expects to divest its Evolve Concept Mall near Ara Da- mansara, Selangor, in 12 months, is in talks with several parties for the disposal.

“We are in initial discussions with several parties in relation to the di- vestment of the mall,” said Jaks senior corporate strategy manager Steven Ang Si Eeng, adding the disposal is part of the group’s strategy to low-

SINGAPORE: Top Glove Corp Bhd does not expect the UK’s exit (Brexit) from the European Union (EU) to have any impact on its overseas business, said chairman Tan Sri Dr Lim Wee Chai.

He said although the market experienced a knee-jerk reaction from Brexit, it would not affect Top Glove following the growing demand for medical gloves.

“Our business in terms of med-

ical gloves has continued to grow.

The demand for medical gloves is increasing every year because of the improved standard of liv- ing with the growing health-con- scious population,” he told Malay-

sian reporters after the company’s debut on the Mainboard of the Singapore Exchange (SGX) yes- terday.

Commenting on the compa- ny’s secondary listing on SGX

yesterday, he was pleased with the exercise as it would improve Top Glove’s image and reputa- tion while enhance investor reach and diversify its investor base.

— Bernama er its gearing and unlock value for

shareholders. As at Dec 31, 2015, its gearing stood at 0.8.

Though the divestment comes amid an ongoing slowdown in the property sector, which has eroded property developers’ profits, Ang is confi dent of securing a buyer for the mall soon.

“With the mall’s prime location

— it is next to the upcoming [Subang Depot] LRT (Light Rail Transit) Sta- tion — the fair market value will in- crease once the LRT line is opera-

tional,” he told reporters after the company’s annual and extraordinary general meetings yesterday.

With a net lettable area of 460,000 sq ft, Evolve Concept Mall’s current fair value stands at RM390 million, said Ang. Its website lists LOGO, Foodzine, Celebrity Fitness, Jaya Gro- cer and Peninsula Chinese Cuisine as its anchor tenants.

Th e mall’s occupancy rate cur- rently stands at 76%. Ang said a Taiwanese cinema operator, which would take up about 25,000 sq ft of

the lettable space in the mall, will commence operations by year end.

He did not specify what the asking price for the mall is, but noted that the most recent transaction involving a mall nearby was the Da:Men USJ, which was sold at RM1,150 per sq ft.

Meanwhile, Ang said Jaks will not be pumping anymore capital into its US$1.87 billion (RM7.59 billion) coal- fi red thermal power plant project in Vietnam. “We will reinvest the profi ts generated from the second phase of the engineering, procurement and

construction contract. Contribu- tion from the Vietnamese operation will be relatively small in the second quarter, but will pick up in the second half of the year,” he said.

Meanwhile, Ang said the group is tendering for RM1.5 billion worth of sewerage and road infrastructure jobs, and expect some new jobs to be announced by year end.

“We still have RM800 million worth of outstanding order book that could support our earnings for the next two to three years,” said Ang.

Top Glove expects no Brexit impact on overseas business

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(9)

8 P R O P E RT Y S NA P S H T

W E D N E S DAY J U N E 29 , 2 0 16 • T H E E D G E F I N A N C I A L DA I LY

MOST READ ON

TheEdgeProperty.com

trend analysis

latest classifi ed

listings

and more FREE

transaction

data news analytics

BY P O OJ A T H A KU R

A recent view of Singapore’s skyline. The island nation, Hong Kong and Australia may see money fl owing into property as investors fl ee to safer assets. Photo by Reuters

Tropicana plans RM1.5b worth of launches this year Asia Square Tower 1 sets record deal Maybank joint arranger for

US$219m fi nancing of Manhattan tower S P Setia set to

launch ViiA Residences in August

Ideal Sun City to buy commercial buildings for RM50m

Penang Gerakan questions diff erence in cost of undersea tunnel project

What are developments priced in Taman Desa?

The Analytics are based on the data available at the date of publication and may be subject to revision as and when more data becomes available.

Taman Desa top 5 most expensive condominiums/apartments

by average price per sq ft

Taman Desa top 5 least expensive condominiums/apartments

by average price per sq ft

• Today, we continue our focus on Taman Desa by looking at average prices on a per sq ft (psf ) basis. Based on transactions analysed by Th eEdgeProperty.com, the average price of non-landed homes in this area was RM480 psf in 1Q2015.

• Taman Desa is known for being a quiet, affl uent residential enclave close to the Kuala Lumpur city centre. In the 12 months to 1Q2015, about half (49.1%) of the secondary non-landed residential transactions fell within the RM401–

RM600 psf range. Another 15.7% fell within the RM601–RM800 psf range.

• Th e most expensive project on a psf basis is Papillon Desahill Condominium, with an average price of RM737 psf. In November 2014, a 1,711 sq ft unit here had transacted for RM818 psf, earning the title as the most expensive unit sold during the review period.

• Next is Faber Heights (RM652 psf ), which is located right next to Papillon Desahill. Prices here have performed relatively well, considering that Faber Heights was completed almost 30 years ago in 1989. Capital values may have been buoyed by its proximity to its neighbour as well as its smaller unit sizes, which keeps the overall price quantum low.

• In comparison, the latest project, Desa Green by UOA Group, appears

attractively priced. Th e fi rst two towers were reported to have been launched at over RM600 psf, and the third tower, almost RM800 psf.

Source: TheEdgeProperty.com Source: TheEdgeProperty.com

SINGAPORE: London may have just shed its safe-haven property market tag with the UK’s vote to break away from the European Union(EU). Th at is good news for real estate markets in Asia that off er stability.

Singapore, Hong Kong and Aus- tralia, which face headwinds in- cluding oversupply and high prices, may see money fl owing into prop- erty as investors fl ee to safer assets as volatility picks up, according to global commercial real estate ser- vices fi rm CBRE Group Inc.

“Capital will look for safe havens, countries that off er stability,” Henry Chin, head of research for Asia-Pa- cifi c at CBRE, said in an interview in Singapore. “Mature, developed markets will look attractive again.”

Britain’s vote to secede from the EU wiped almost US$4 trillion (RM16.24 trillion) off the value of global equities, with investors sell- ing riskier assets amid concerns that trade snarls and political paral- ysis will disrupt an already-fragile global economic recovery.

Japan may also benefi t from the Brexit fallout.

“Th e world recognises Japan as a safe haven,” Takeshi Akagi, national director at Jones Lang LaSalle Inc, said. “Because of that, Asian money that has been looking to invest in

London’s loss is Asia’s gain

Europe will come to Japan. As un- certainties unfold in Europe and spread out to global markets, Japan would, relatively, be considered as a predominant place to be.”

Commercial property values could fall about 10% over the next year, led by declines in oversup- plied central London, BlackRock Inc said in a note. Reduced tenant demand and a shift toward shorter lease terms are anticipated, while overseas investors are set to de- mand a larger risk premium, or

more compensation, for holding UK assets, BlackRock said.

London offi ce rents could fall 18% within two years of Article 50

— which would set in motion the process to extricate the UK from the EU — being invoked, Jeff eries LLC analyst Mike Prew said last Friday. International businesses could move 100,000 jobs out of the UK following the vote as they may lose their passporting rights, Prew wrote. Th at’s bad news for developers, which plan to build

the equivalent of 50 skyscrapers the same size as the Gherkin, the iconic London offi ce tower, in the next four years, he said.

Private banks are also urging investors to stay away from UK property, with UBS Group AG pre- dicting pressure in the real estate market, especially in London, as banks move to other locations in Europe. While Credit Suisse Group AG is neutral on UK property as interest rates could remain “very low for long,” the bank’s wealth managers expect UK real estate investment trusts to underperform other real estate markets.

“Investor sentiment will deterio- rate further, subduing capital fl ows in the short to medium term,” Chris Ireland, chief executive offi cer for the UK at JLL, said. “London sectors remain most vulnerable to a correc- tion given current keen pricing and their multinational occupier base.”

Still, for opportunistic funds, the UK will become attractive as the currency declines and prices drop, according to CBRE and JLL.

“With the Brexit event, one thing

is a given: that interest rates are go-

ing to remain low for a long time

and that’s good for the property

markets,” CBRE’s Chin said. “We

will see value emerge in the UK

over time but no deals are going to

happen in a hurry.” — Bloomberg

(10)

References

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