Maybank:

Gets approval to raise USD2b, Bio-Xcell gets funding from Maybank. Malayan Banking Berhad (Maybank) has obtained approval from the Securities Commission (SC) to establish a multi currency medium-term notes (MTN) programme of up to USD2b.

Separately, Maybank and Malaysian Bio-Xcell Sdn Bhd (Bio-XCell) has signed an agreement for a RM250m Commodity Murabahah Term Financing - Islamic Facility (CMTF-i). (Source: Bursa Malaysia, The Star)



Axiata:

Celcom signs fiberisation deal with Sacofa. Celcom Axiata Bhd signed a RM168m fiberisation leasing agreement with Sarawak-based Sacofa Sdn Bhd.

With the completion of this project, Sarawakians will be able to enjoy enhanced services such as high-definition voice and video plus high-speed browsing with Celcom. (Source: The Star)



Affin:

To convert Indonesia's Bank Ina into Islamic lender.

Indonesia's conventional bank PT Bank Ina Perdana, which is being acquired by Affin Holdings Bhd will be converted into an Islamic bank - a process that will likely take two years. (Source: Business Times)



Construction:

CMC, UK partner may win RM700m LRT job. CMC Engineering Sdn Bhd and UK's Colas (CMC-Colas) may win a contract worth some RM700m for electro-mechanical (E&M) system for the Kelana Jaya light rail transit (LRT) extension line.

Tenders closed recently and Prasarana may award the contract by early May. (Source: Business Times)



Autos:

Vehicle sales up 12.7% in March. Total vehicle sales surged 12.7% to 63,265 units in March 2011 from 56,139 units a year earlier due to a rush for deliveries and invoicing by companies that have their financial year ending in March. (Source: The Star)



Mining:

Indonesian tin miner to list on Bursa Malaysia. Malaysia Smelting Corp Bhd (MSC) is proposing to list its Indonesian unit, involved in tin mining, on Bursa Malaysia's Ace Market. (Source: The Star)

KeyWest:

It has taken a lunge into the extraction of crude oil from marginal oilfields in Indonesia.

The JV with Indonesia based PT SA petroleum started extraction of crude oil from an onshore field.

The JV has started work on four oil wells and it has the mandate to extract crude oil from another four.

At the moment, its primary income comes from the provision of wholesale telecommunications and long distance telecommunications services for individuals and corporations.

For FY2010 ended Jan 31, its revenue shrink to rm76.6 million.

However, profit before tax at rm2.5 million. It expected venture into the brownfield oil fields to make up the loss of revenue and profit from the telecommunications business.



EON Capital/HL Bank:

The courts will rule in favor of Ng Wing Fai or Rin Kei Mei’s in the sale of EON Cap’s banking assets on April 28, 2011.



Axiata:

The issue of spectrum renewal fee for Robi Axiata Ltd in Bangladesh continued to overhang.

The exact amounts for the fees have not yet been determined, though at present it could be about US$400 million.

Hence, Axiata did not rule out a cash call from Robi. Nonetheless, management hopes to see a resolution in June 2011, given that the licences expire in November 2011.


L&G:

L&G’s remaining 43 acres (17.2ha) of freehold development land is in Sri Damansara, the jewel in the crown.

L&G’s net book value (NBV) for the land is carried at less than RM20 per sq ft. comparison, freehold commercial land in Mutiara Damansara is now valued at more than RM400 psf.

L&G had no borrowings and had cash of RM141.4 million as at Dec 31, 2010, with shareholders’ funds of RM248.2 million.


Proton:

Sources say the government is said to be setting up an advisory council to look into the proposed merger of national carmakers Proton Holdings Bhd and Perusahaan Otomobil Kedua Sdn Bhd (Perodua).

The advisory council would be tasked with coming out with the exact form the consolidation could take.

While several parties had earlier indicated that the merger plans between the two companies were off, Proton and Perodua were requested by government agencies to make a presentation to the Economic Council, headed by Prime Minister Datuk Seri Najib Razak, in Putrajaya in March 2011.

Sarawak elections: Back to the drawing board?

Potential pullback. Although Barisan Nasional (BN) secured more than two-thirds of the state assembly seats, the loss of 15 seats was higher than what political analysts had expected. In the May 2006 state elections where BN lost an additional 9.5% of seats, the KLCI was down 1.4% in the one week after the state elections. Price correction of Sarawak stocks was steeper, with politically linked CMS down 7.7%in one week.

The trend may be similar over the next few days post the 9.9% additional seat loss by BN last Saturday. We view any upcoming weakness as an opportunity to accumulate the Sarawak construction stocks – our pick is Hock Seng Lee (TP: RM2.30).


Results disappointed?

The BN led state government won 55 (77.5%) out of the total 71 seats in the 10th state elections held last Saturday. Chief Minister (CM) Taib’s party, PBB, retained 35 seats (unchanged) but the other two BN component parties had lost out with a total 15 seats falling to the opposition (versus 8 seats lost in the 2006 state elections) with DAP securing 12 seats (+6), and PKR 3 seats (+2).

While the BN led government was expected to continue into the new term, the loss of additional seats to the opposition was higher than the 2-3 additional seat loss which political analysts had predicted.

Market reaction the last time. The BN-led state government lost an additional 9.5% of total seats in the 2006 state elections. The broader KLCI was down 14 pts (-1.4%) in the one week after the state elections.

At the end of the first month, the KLCI had lost 54 pts (-5.8%), due also to external weakness with the DJIA consolidating 1.8% during the same period.

Sarawak stocks saw steeper price decline. Within one week of the May 2006 state elections, politically linked CMS had retraced 7.7%.Others like Encorp and Naim Holdings were down 7.9% and 2.4% respectively.

Sarawak-based construction stock HSL retraced 5.1%.

The bright side.

Commenting on last Saturday’s state elections, PM Najib said that the BN led government will “fulfill all its pledges to the people”. Besides leadership changes, we believe the promises include development and basic water, electricity and infrastructure needs.

On that premise, we continue to expect construction activities to step up,supported by Sarawak’s Corridor of Renewal Energy (SCORE)development programme. Tenders for 27 road packages mostly leading to upcoming new hydro-electric dam projects worth at least RM2b closed last year. We expect construction awards to pick up soon.


13th GE: Uncertainty in timing?

On whether BN’s two-thirds victory can be a gauge for the next general elections (GE), PM Najib was quoted as saying that “it is a yes and a no”. “Yes, because we can
maintain our momentum to win after the previous victories in various other by-elections held and it has inspired us,” but “No, because it is just a state election and does not reflect the situation of the country as a whole”.

Our interpretation of the PM’s remark is that the probability of a snap General Election this year has lowered somewhat compared with prior to the Sarawak State Election when the by-elections were swinging in BN’s favour.