Greater flexibility in the employment terms of civil servants (such as the exit policy for underperformers) is a welcome move indeed, although its implementation might meet with initial hurdles as the public sector adjusts to the new employment culture. Overall, with prospects of better remuneration, civil servants are set to get a better deal in their employment if such measures were to be properly implemented.

An important implication of better remuneration for highly productive government employees would naturally be the spillover of higher private consumption in the future. It is generally known that the low- and middle-income segments of the population have the highest marginal propensities to consume (MPC). With Malaysia having one of the highest MPC in the region of about 0.53 (according to our estimate), private consumption will likely continue its role as the major pillar that will spearhead the economy in the coming years.

In the short term, however, measures provided by Budget 2012 will not cause a big jump in private consumption, at least not to the level that would have happened if a broad-based salary revision were to be given.

The mounting concerns about the ever-rising cost of living are addressed by measures such as the provision of subsidies not only for food, but also for petroleum products and cash assistance. As such, speedy rationalisation of subsidies is not top of the government’s priority list.

Due to the government’s financial constraints, we observed that many benefits were dished out on a discriminatory basis. In particular, retirees, senior citizens, taxi drivers and the lower-income groups are supported via various measures to ensure that they can withstand the rising cost of living.

We think positively of such measures, but feel that doubling efforts to contain price increases would trump monetary adjustments in tamping inflation in the long run. Indeed, the latter move is unsustainable in that the government would have to continuously fork out higher compensation if prices were to continue escalating over the years. As such, stricter enforcement of price controls and the Anti-Profiteering Act should be the government’s next logical focus.

We are also of the view that one-off cash payments to the poor and needy, while coming in handy at times like this, will not translate into sustained value in the economy as they are not tied to productivity-driven incentives. We are hopeful that such generosity on the government’s part will not promote a “government-dependent” mentality among Malaysians which would consequently breed complacency, a definite negative in the nation’s drive towards attaining high-income status. We feel positive about the measures aimed at improving the living standards of the low-income group, although we think that there is a distinct lack of such initiatives to ameliorate the financial burdens of the middle-income group, particularly those who reside in high-cost urban areas.

The measures instituted to address the problem of inadequate savings amongst retirees are generally positive, as studies show that a whopping 70% of all retirees tend to exhaust their savings within 10 years. A new tax relief of up to RM3,000 on contributions to a Private Retirement Scheme (PRS) and insurance annuity for 10 years, as well as tax deductions on employers’ contributions to a PRS for their employees and exemptions on income of the Private Retirement Fund are meant to lighten retirees’ financial burdens, decidedly a positive for private consumption going forward. We also feel that the mandatory increase in employers’ EPF contributions is bearable for businesses.

We are intrigued by the government’s optimistic target of 2012’s budget deficit of 4.7% of gross domestic product (GDP), which is a shade lower than our projection of 4.9% of GDP, although we do not feel that such a target is out of reach, judging by Malaysia’s relatively high revenue-to-GDP ratio which is among the highest in the region. However, the attainment of this result is predicated on the achievement of actual growth in 2011, which we view to be in the lower range of the government’s projection.

The sharp reduction in the budget gap is probably aimed at taking some pressure off a possible sovereign re-rating, in our view. However, there are reasons for not being overly concerned about Malaysia’s debt and deficit positions.

First, the various macro matrices commonly used for sovereign evaluation indicate that Malaysia still stands rather favourably in relation to its regional peers. At the same time, government revenue as a percentage of GDP is among the highest in the region. As for its debt position, almost 96% of total debt is domestic debt, and second, financing the debt through Malaysian Government Securities (MGS) is never difficult as there is strong demand for the instruments from financial institutions like banks, insurance companies and other government-linked investment companies.

Following the government’s persistent budget deficit, albeit smaller than in previous years, we think that sustained MGS issuance momentum for 2012 will address continuing investor demand for high-quality fixed-income instruments amidst heightened uncertainty that is weighing on corporate debt-raising in the domestic bond market. It is truly a sound strategy to borrow domestically, given the current turmoil in global financial markets that has been exacerbated by sovereign-debt concerns.

While there is a noticeable absence of any groundbreaking capital market-specific measures, the incentives for the Kuala Lumpur International Financial District (KLIFD) could sow the seeds for the future competitiveness of Kuala Lumpur and Malaysia as a global financial centre. Capital market-specific measures were the extension of tax exemptions on the issuance and trading of foreign currency sukuk by three years and tax deductions for expenses incurred in the issuance of sukuk wakala for three years starting 2012. The income-tax exemptions for KLIFD, stretching over a 10-year period, underscores the forward-thinking approach on the part of the government to ensure Malaysia remains a vibrant and competitive financial hub in the years to come.

On the hot issue of the budget deficit, we feel that the government should take a long-term perspective about containing future expenditures to ensure that its fiscal position will continuously be in check. For instance, medical expenses incurred by an ageing population will represent a significant burden on government coffers due to changing demographics in the years to come. As such, we feel that measures such as withdrawals from the Employees Provident Fund (EPF) for the purchase of medical insurance should not only be introduced, but also be actively promoted by the government.

At the same time, we opine that the government needs to exercise stricter control on the size of the public sector so as not to cause undue acceleration in operating expenditure going forward. In addition, the focus on monitoring expenditure on supply and services should never waver. Indeed, this suggestion stems from the National Audit Department’s report which indicated that there is considerable room for improvement in the supervision of certain areas of expenditure.

We applaud the government’s efforts to address the citizenry’s housing needs – however, the revision to the real property gains tax (RPGT) structure is too mild to be effective, in our view. The 5% increase in the tax imposed on those who sell their properties within two years of acquisition will not likely have a material effect, especially on those who speculate in this sector.

While we are cognisant of and understand the opposing perspectives (particularly from industry players who are concerned about the repercussions of the higher RPGT), we hold fast to the view that the proposed revision will still not address the froth in the property sector at this juncture. Indeed, with the prevalence of relatively easy credit ties provided by the banking sector,
property prices look set to remain on their upward trajectory in the near term.

We deem the overall macro assessment as fair, although the government seems more optimistic than private economists about the strength of private investment. Indeed, despite experiencing a strong rebound in 1H2011, a possible increase in risk aversion (should the global economy take a turn for the worse) could well dampen the sustainability of private-investment strength.

We also maintain that the speed at which construction projects are implemented is of paramount importance in ensuring growth proceeds apace. In terms of GDP growth, our projection of 5.2% for 2012 is in the lower range of the government’s forecast as we remain cautious about the investment momentum that is not attributed to any lack of efforts on the government’s part, but due to the return of risk aversion within the investor fraternity.

– by Malaysian Rating Corporation Bhd

Malaysia Company of Malaysia Budget 2012 Overview Details

Malaysia Budget focuses on long-term growth
KUALA LUMPUR — Prime Minister Najib Razak has unveiled Malaysia’s 2012 Budget that isn’t populist but focuses on long-term growth, contrary to market expectations.

Malaysia budget expected to tackle inflation fears
KUALA LUMPUR: Malaysian premier Najib Razak is expected to unveil measures Friday to spur domestic demand and help consumers cope with inflation in a budget likely to be his last before he calls snap polls.

Najib says Budget 2012 to ease cost of living, but experts sceptical
Stung by accusations that his administration was spendthrift and only zoomed in on pie-in-the-sky projects worth trillions that could only see the light of day in the very distant future, Prime Minister Najib Razak promised that Budget 2012 would be down-to-earth and target reducing the cost of living for the masses.

By Soo Jin Hou (Kuantan Environmental Watch Group)

If everything goes as planned, by September this year, the largest rare earth refinery in the world will start operating in Gebeng Industrial Zone, some 25 km away from Kuantan town, home to almost half a million people. This plant will cast a shadow over Kuantan town. Real estate price will plunge, residents who are able to relocate will flee and those who are not will be in constant fear of radiation exposure.

The authorities have learnt nothing from the Asian Rare Earth (ARE) debacle in Bukit Merah, Perak. The ARE plant was operated by Mitsubishi Chemical and it extracted rare earth from old tin mine slag. Unfortunately the waste contains high level of thorium, which is a perpetually radioactive substance because its half life is 14.05 billion years! The residents there blamed the plant for birth defects and eight leukemia cases, 7 of whom have since died. As a result of strong public opposition, the ARE was finally closed in 1992 and is currently undergoing a massive RM303 million cleanup.

It is not difficult to see why the authorities have not learnt their lesson from the ARE disaster. Until this very day, the authorities refused to acknowledge that the radioactive waste was responsible for sudden escalation of health problems among the residents. On 26 April 2011, Deputy Science, Technology and Innovation Minister Datuk Fadillah Yusof claimed that the waste in Bukit Merah poses no threat to the public or the environment. This is in stark contrast with the evidence, whereby the 8 leukemia cases occured within 5 years in a community of 11,000.

However, the massive cleanup effort belies the government’s assertion. If the waste is safe, why would such an extensive cleanup be necessary? When the cleanup is completed, the waste will finally be buried deep inside a nearby hill under 20 feet of clay and granite. If the waste poses no threat, why the need to bury it?

Similarly, for the new rare earth refinery, the point of contention is the waste management. Since the beginning, public disclosures from the authorities and Lynas Corporation from Australia, the owner of the plant have been sparse and contradictory. Despite the huge stake Kuantan residents have, no public consultation was held prior to approval of the project. In fact, if not for a report in the New York Times on 8 March 2011, many residents would still be oblivious to the existence of this plant.

Lynas will import rare earth ores from Mount Weld in Australia to be processed in Gebeng. The finished products will be exported overseas while the radioactive waste dumped in Gebeng. From the press statements, one can surmise that the waste management is not even finalized yet.

On one hand, Lynas’ executive chairman Nicholas Curtis claims that they have permission from the government to store the waste onsite forever. On the other, AELB’s (Atomic Energy Licensing Board) director general Raja Datuk Abdul Aziz Raja refutes that claim in saying that the plant can only store waste temporarily. If the onsite storage is temporary, where will the waste be shipped to next? It will definitely not be bound for its place of origin Australia, after Western Australian minister for mines and petroleum, fisheries and electoral affairs Norman Moore flatly rejected calls to take back Lynas’ radioactive waste.

Moreover, Raja Aziz claims that Lynas’ waste is safe enough to be scattered everywhere if Lynas can keep the thorium level in its waste to 1,600 parts per million. Then again, if the waste is safe, why is it necessary for Lynas to build storage pools for it, and why does Raja Aziz refuse permission for Lynas to store the waste permanently? The most plausible explanation is that neither Lynas nor AELB are confident that the ‘safe’ thorium level can be met. If that is the case, the authorities have betrayed the people of Kuantan by exposing them to unknown and unnecessary health risks.

The flippant attitude of the authorities is on full display in a town hall style meeting with Kuantan residents, where Raja Aziz said that Lynas will only be told to cease operation if they breach the threshold thorium concentration limit. Yet, he admitted that there was no fixed safety requirements for radiation, and that the concentration is just an indicator. How can such a project be approved without due consideration to the health and safety of the residents? To allay fears of radiation exposure, Lynas harp on a Radiological Impact Assessment report that claims that the waste is safe. However, until this day, this report has not been disclosed to the public for scrutiny.

It would not be difficult to imagine that if Lynas is willing to incur substantial transportation cost to ship the ores all the way from Australia to be processed in Gebeng, the waste is probably something nobody wants in their backyard. This explains Lynas’ rather secretive modus operandi. Despite the claim of low thorium levels, Lynas will be processing 10 times the amount of ores compared to the ARE.

Environmentalists contends that the much larger volume causes thorium levels to build up over time, to which Lynas has yet to provide any reply. Lynas also conveniently skipped the issue of radon gas, another potent carcinogen, which is discharged when the ores are cracked. Finally, Lynas refuses to disclose whether they will process uranium bearing ores in Gebeng from their newly acquired Malawian mine in Gebeng.

Malaysia is littered with ventures where profits are privatized and losses are socialized. If the people of Malaysia are not vigilant, the Lynas plant may very well turn out to be the next radiation disaster.

Lynas Malaysia Sdn Bhd, is a subsidiary of Lynas Corporation Ltd, a multi-national, public listed company registered with the Australian Stock Exchange (code LYC). Our primary focus is to develop and lead the growth of the global Rare Earths industry by creating a reliable, fully integrated supply from mine direct to our customers. To realize our vision to be the world leader in Rare Earths, we are now constructing an Advance Materials Plant within the Gebeng Industrial Estate (GIE) in Kuantan, Pahang to process the ore from our mine in Mt Weld.

• 21 years of age, earning more than RM 2,000 or annual income of more than RM 24,000 are eligible to apply for credit cards. (Before the annual income of RM 18,000)
• Monthly income of RM 3,000 or less, can only apply for two credit card banks, credit card limit can only be paid double. (Before the annual income of RM 36,000 and credit card number is not restricted).
• The monthly income of more than RM 3,000 was not affected.

Under the new credit card regulation, a monthly income of RM 3,000 or less can only choose two bank credit card, if a third bank credit card, must make a choice, to cancel a credit card this year before December 31, must select one bank to cancel the credit card. If you do not cancel after the expiration of the period when the credit card reached, the credit card will automatically expire. In addition, the main and subsidiary card of the swipe card limit will be divided into half.

Charge Card or Debit Card was not affected, so the monthly income of less than RM 2,000 can still use Debit Card to shop, to the new guidelines can reduce credit card debt or for young people, the new regulation to overcome credit card debt problems for young people financial planning will certainly help.

Source: BNM Press Statement

Discover Enterprise has been working with several acquirers and financial institutions world widely in order to meet requirements of e-commerce merchants. We support multi-currency processing in USD, EURO, GBP, JPY and MYR; multi-currency settlement in all these 5 currencies.

You can choose to process in more than one currency, which we believe this will encourage your customers to order from your website rather than from your competitors who only trade in single currency. Furthermore, there will be ZERO lost in currency conversion when the processing currency is same as the currency of the settlement, e.g. transaction is processed in GBP; payment is settled in GBP. In other words, you charge your customers in GBP, and we’ll remit your settlements in GBP.

We serve those: ~
· Malaysian-based merchants who would like to sell their products from Malaysia to other countries.
· Merchants outside Malaysia who would like to use multi-currency processing.

Please contact us if you would like to process in multi-currency. If you wish to process in other currencies other than USD, EURO, GBP, JPY and MYR, do let us know because we are able to come out with different solutions.

Discover Enterprise Sdn Bhd Location Map

Discover Enterprise Sdn Bhd
Address: Lot 4.13, 4th Floor, Kompleks Antarabangsa,
Jalan Sultan Ismail, Kuala Lumpur, 50250, Malaysia.
Tel: +60-3-2144.2923 Fax: +60-3-2144.2925
Web URL: http://www.discoverenter.com
E-mail: sales@discoverenter.com

Tricubes Bhd – TCUBES (0062) is a Malaysia-based investment holding company. The Company is principally engaged in information technology. Its subsidiaries are Tricubes Computers Sdn Bhd, which is engaged in the design and development of information technology solutions and provision of after-sales service to clients, TricubesNCR JV Sdn Bhd, which is engaged in marketing of the Company’s products and services to the government and the private sectors, Tricubes Engineering Sdn Bhd, which is an investment holding company, Tam Tam Sdn Bhd, which is engaged in marketing the Company’s telecommunications prepaid business and email solutions and Tricubes Transport Technology Sdn Bhd., which is engaged in marketing the Company’s traffic control and enforcement solutions.

Tricubes is a company listed on Bursa Malaysia which provides enabling technologies to two key market segments, Enterprise Mobility and Identity Authentication. Tricubes Berhad is the market leader in Malaysia in Identity verification with over 170 organisations as customers and over 50,000 smartcard and biometrics verification devices installed. In the Enterprise Mobility segment , tricubes provides solutions to three of the largest enforcement agencies namely the Royal Malaysian Police, Kuala Lumpur City Hall and the Road Transport Department. With a dedicated team of design engineers and software developers, Tricubes believes in providing the best value to our customers whether they are in Government, Telecommunication or Financial Institution.

Malaysia Company of Tricubes Bhd Corporate Profile in Business Directory News, Financial Statement, Annual Report & Market Share Prices

8. E-mail job a boon to Tricubes prospects
FINANCIALLY-distressed Tricubes Bhd has seen a tremendous change in its fortune after an announcement that it has obtained a contr act to under take the 1Malaysia e-mail project.

E-mail job a boon to Tricubes prospects
FINANCIALLY-distressed Tricubes Bhd has seen a tremendous change in its fortune after an announcement that it has obtained a contr act to under take the 1Malaysia e-mail project.

Tricubes sasar tarik lebih 5 juta pengguna myemail
TRICUBES Bhd, pengendali projek portal e-mel 1Malaysia, myemail, menyasarkan untuk menarik sehingga 5.4 juta pengguna perkhidmatan itu menjelang akhir tahun ini, selepas ia dilancarkan pada Julai. Perkhidmatan itu menjadi platform komunikasi sehenti secara selamat kepada rakyat untuk mendapatkan perkhidmatan dalam talian bagi urusan rasmi dengan beberapa agensi kerajaan, termasuk membabitkan …

Tricubes to charge 50 sen per email, confirms CEO
{youtube}4z0TPEPDMgo{/youtube} Or watch at: http://www.youtube.com/watch?v=4z0TPEPDMgo Tricubes Bhd has confirmed that it will charge government agencies about 50 sen for every email sent to Malaysians who are account-holders.

Tricubes mum on Microsoft fee for myemail project
Kuala Lumpur: Tricubes Bhd, which is at the centre of the myemail Entry Point Project (EPP), is unable to disclose how much its main technology partner Microsoft Corp will receive for providing the platform to power the e-mail service. “We can’t answer that now,” its chief executive officer Khairun Zainal Mokhtar told reporters at a briefing by the company to clarify the myemail project …

Tricubes Berhad – Stock Market Performance

TRICUBES BERHAD ^623442-M
Suite 13.1, Level 13 Menara Great Eastern,
303, Jalan Ampang,
50450 Kuala Lumpur Malaysia.

Tel : 03-4264 4000
Fax : 03-4264 4100
Website : www.tricubes.com
Email : info@tricubes.com

In the Oleochemicals field Timur Oleochemicals Malaysia focuses its interests mainly on Refined glycerin, Crude Glycerin, Soap Noodles, fatty Alcohols, Cetyl Alcohol, Cetyl Stearyl Alcohol, fatty acids, Stearic Acid, Stearic Acid Cosmetic Grade, Staeric Acid Rubber Grade, Lauric Acid, Distilled Coconut Fatty Acid, DCFA, Oleic Acid, Palm Acid Oil, SLES, CDE, Texapon N70, SLS, methyl esters, Palm Oil derivatives and it is a basic raw materials to various industries specializing Pharmaceutical, Cosmetics, Care Chemical washing agents, and household cleaning agents as well varnishes, paints, lubricants, Agro Chemical and Nutritional Animal Feed.

Glycerin
Refined Glycerine
Refined Glycerine 99.5% Min USP
Refined Glycerine 99.7% Min USP
Crude Glycerin 80% Min
Crude Glycerin

Soap Noodles
Soap Noodles 80:20
Soap Noodles 85:15
Soap Noodles 75:25
Soap Noodles 70:30
Soap Noodles 90:10
Soap Noodles TFM 72% Min
Laundry Soap Noodles

Fractionated Fatty Acid
Caprylic Acid C8-98
Capric Acid C10 -98
Caprylic – Capric Acid C8-C10
Lauric Acid C12-99
Palmitic Acid C16-99
Myristic Acid C14-99
Stearic Acid Rubber Grade
Stearic Acid Triple Pressed Cosmetic Grade
Stearic Acid Triple Pressed – 40%
Stearic Acid Triple Pressed – 45 %
Stearic Acid Triple Pressed – 52 %
Stearic Acid Triple Pressed – 65 % -98%

Distilled Fatty Acid
Distilled Palm Kernel Fatty Acid PK8-8
Distilled Topped Palm Kernel Fatty Acid PK12-18
Distilled Topped Hydrogenated Palm Kernel Fatty Acid HPK 12-18
Distilled Coconut Fatty Acid K8-8 -DCFA
Distilled Topped Coconut Fatty Acid K12-18 -DCFA
Split Hydrogenated Coconut Fatty Acid HK8-8
Distilled Topped Hydrogenated Coconut Fatty Acid HK 12-18
Distilled Palm Stearin Fatty Acid
Distilled Hydrogenated Palm Stearin Fatty Acid
Distilled Hydrogenated Palm Oil Fatty Acid
Oleic Acid
Oleic Acid – 75% Min

Fatty Alcohol
Cetyl Alcohol
Stearyl Alcoho
Cetyl Stearyl Alcohol
Octyl Decyl Alcohol C8-C10
Lauryl Alcohol C12-98% Min
Myristyl Alcohol C14-98% Min
Lauryl Myristyl Alcohol C12-C14
Cetyl Stearyl Alchol C16-C18 30:70
Cetyl Stearyl Alchol C16-C18 50:50
Cetyl Alchol C16-98% Min
Stearyl Alchol C18-98% Min
Lauryl Mystryl Alcohol C12-C14

Esters
Isopropyl Myristate IPM-98
Isopropyl Palmitate IPP-98
Medium-Chain Triglycerides (MCTs)

GLYCEROL MONOSTEARATE -GMS [ SE/NSE]
Glycerol Monostearate GMS-40 & 60

Methyl Esters
Coconut Methyl Ester
Palm Oil Methyl Ester
Palm Kernel Methyl Ester
Stripped Coconut Methyl Ester
Stripped Palm Kernel Methyl Ester
Caprylic Acid Methyl Ester 98 Min C8-98
Caproic-Capric Acid Methyl Ester C6-C10
Capric Acid Methyl Ester 98 Min C10-98
Lauric Acid Methyl Ester 98 Min C12-98
Myristic Acid Methyl Ester 98 Min C14-98
Lauric Myristic Acid Methyl Ester C12-14
Palmitic Acid Methyl Ester 98 Min C16-98

Palm By Product
Palm Fatty Acid Distillate, PFAD
Palm Kernel Fatty Acid Distillate , PKFAD
Distilled Fatty Acid Pre Cut
Palm Acid Oil , PAO
Palm Kernel Acid Oil, PKAO
Palm Sludege Oil
PreCut Stearin
Pitch Oil
Used Cooking Oil, UCO
Coconut Fatty Acid Distillate, CFAD
Coconut Acid Oil, CAO
Soya Acid Oil

Care Chemical
Sodium Lauryl Ether Sulfate TN-N70 , SLES 70% , TEXAPON N70
Sodium Lauryl Sulfate – SLS 92% OCN -Needles Form
Sodium Lauryl Sulfate – SLS 95% OCP -Powder Form
Coconut Fatty Acid Diethanolamide , CDE
COCAMIDE DIETHANOLAMINE (COCONUT DIETHANOLAMIDE)

Animal Feed , Rumen Bypass Fat [ Nutritional Diets ]

Palm Refinery Product
RBD Palm Oil
RBD Palm Olein
RBD Palm Kernel Oil
RBD Coconut Oil
RBD Castor Oil
Vegetable Ghee
RBD Palm Oil Shortening 36-39
RBD Palm Oil Shortening 42-44

Timur Oloechemicals Malaysia Sdn.Bhd.
No. 26 Lorong Bayu Tinggi 1B/KS6,
Batu Unjur , 41200 Klang
Selangor , Malaysia
Tel : 00603-33249852
Fax : 00603-3324985
Mobile :0060-166270860
Email:mitul@timuroleo.com
Web: www.timuroleo.com

1. The Inland Revenue Board (IRB)
2. Employees Provident Fund (EPF)
3. Human Resources Development Fund (HRDF)
4. Social Security Organization (SOCSO)
5. Small and Medium Enterprise Corporation Malaysia (SME Corp. Malaysia)

MyCoID Gateway
“MyCoID Gateway enables automatic population of data for simultaneous registration with the relevant Government Agencies upon incorporation.” Malaysia Company ID.

Malaysia Company Identity
For MyCoID detailed information: http://www.ssm-mycoid.com.my

You may also register the MyID/MyCoID via PANTAS online or MyIPO service counter. For search and query for applications using MyID/MyCoID, it can be made via the Application Status Enquiry Online at https://pantas.myipo.gov.my/workflow/ENG/index.cfm

Scigate is an automation solution provider with a highly efficient sales network. Being a think tank, we solve the most complex tasks in the field of automation. Being a partner, we listen to our customers. We work closely with our customers to determine their needs and what they value in products and service from us. We constantly scan globally for latest technology to provide the most suitable product to deliver to the local industry. We deliver the right product to solve your application problem.

Pro-face Product Service & Repairs
Our repair service assures that your Proface products are repaired or replaced expediently to protect your automation investment. Our experienced technicians evaluate, repair, and test virtually all Proface Industrial Automation products. We provide the genuine Proface replacement parts from Japan and the lowest Proface replacements cost in Malaysia.

For better understanding, please email your enquiry to raysontey@scigate.com.sg

Sciengate (JB) Sdn Bhd (Johor Bahru)
No.72-01 Jalan Molek 1/28,
Taman Molek,
81100 Johor Bahru, Malaysia.
Tel: (60) 07 3519806, 07 3578806
Fax: (60) 07 3519807

Asian share markets buckled under the pressure of a combination of factors yesterday which included market downgrades, political unrest and natural disasters.

Investors across the region dumped their stocks after Japan’s debt rating outlook was downgraded to negative from stable by Moody’s Investors Service.

Sentiment was further dampened by the continued political unrest in the Middle East and North African regions and a major earthquake in Christchurch, New Zealand.

At the close, key equity markets like Japan’s Nikkei 225, Hong Kong’s Hang Seng and Singapore’s Straits Times were all down by an average of almost 2% each.

Investors wasted no time in turning to “safe havens” like the US dollar as well as gold and silver, both of which reached multi-month highs only recently but retreated slightly in Asia’s evening trade yesterday on profit-taking.

At home, the local benchmark FTSE Bursa Malaysia KLCI index was down 0.80% or 12.22 points to 1,513.63.

Wider market breadth was negative with 880 counters down, 112 up and 169 traded unchanged.

Airlines stocks where crude oil, trading at a two-year high is a huge cost component took a huge beating with AirAsia Bhd and Malaysia Airlines shedding 22 sen and 6 sen respectively to RM2.54 and RM2.02.

“I don’t advise bargain hunting in this kind of environment where the risk of the political turmoil spreading to other countries is still very real,” Pong Teng Siew, head of research at Jupiter Securities, said.

The political tensions with the aim of toppling governments began in Tunisia, spreading to other parts of North Africa and the Middle East regions and driving oil prices above US$90 per barrel yesterday the highest levels in two years on supply concerns.

Both regions are oil-producing regions with Libya, the latest to be dragged into the turmoil, having the largest reserves in Africa, pumping up to 1.6 million barrels a day of oil last month, equivalent to 8% of US consumption, according to Bloomberg.

“We have had high agricultural prices of late due to bad weather, which is putting pressure on inflation levels. Now we have this additional element of rising energy commodities these are bad for equity markets,” Pong said.

Japan’s economic and fiscal policies “may not prove strong enough to achieve the government’s deficit reduction target and contain the inexorable rise in debt,” Moody’s said in a statement yesterday on its downgrade of Japan’s debt rating outlook.

According to a Bloomberg report, Japan’s public debt is set to exceed twice the size of the economy this year and reach 210% of gross domestic product in 2012. It would probably swell to 997.7 trillion yen (US$12 trillion) in the year starting April 1, Japan’s Finance Ministry was quoted by Bloomberg as saying.

Japan was overtaken by China as the world’s second-largest economy last year.

In the currency markets yesterday, the New Zealand dollar slumped to its lowest level this year against the greenback opening at US$0.7641 and falling to US$0.7543 after the earthquake.

The ringgit was also lower against the US dollar yesterday. As at 5pm, it declined to 3.0480/0505 from Monday’s close of 3.0340/0370.

Meanwhile AP reported from New York Tuesday(Wednesday morning in Malaysia) that US stocks fell sharply and oil prices spiked to their highest level in two years Tuesday as unrest in Libya worsened.

Oil prices jumped 6.4 percent to $95.42 a barrel. The fight between protesters and forces loyal to the Libyan leader Moammar Gadhafi threatens oil production from the world’s 15th largest oil exporter, accounting for 2 percent of global daily output. Libya also sits atop the largest oil reserves in Africa.

The Dow Jones industrial average sank 178.46 points, or 1.4 percent, to close at 12,212.79. Bond prices rose as investors sought safety.

Libyan leader Moammar Gadhafi vowed to fight to his “last drop of blood” and roared at his supporters to take to the streets against protesters demanding his ouster.

The Standard & Poor’s 500 index fell 27.57, or 2 percent, to 1,315.44. It was the worst day for the S&P since Aug. 11.

The Nasdaq fell 77.53, or 2.7 percent, to 2,756.42.

Among traders, the main worry is that unrest will spread to other oil-rich countries in the Middle East and North Africa. Protests toppled longtime dictators in Libya’s neighbors Tunisia and Egypt in the past month, and protests are continuing in Yemen and Bahrain.

Jim Ritterbusch, an energy analyst, said a “fear premium” has added about $10 a barrel to oil prices in recent days. Prices could tumble once the region settles down, he said.

Oil producers rose with the prospect of a drop in oil supply. Chevron Corp. gained 1.6 percent, the largest gain among the 30 large companies that make up the Dow Jones industrial average. Exxon Mobil Corp. rose 1 percent.

Higher fuel costs hurt airline stocks. Delta Air Lines Inc., American Airlines parent AMR Corp., United Continental Holdings Inc. and US Airways Group Inc. all dropped by 5 percent or more.

Investors drove into the relative safety of Treasurys, pushing their prices higher and lowering their yields. The yield on the 10-year Treasury fell to 3.46 percent from 3.59 percent late Friday.

Brian Bethune, an economist at IHS Global Insight, said a $10 rise in the price of oil subtracts roughly 0.4 percentage point from economic growth. An increase to $150 or $160 a barrel could knock the economy into a recession, Bethune and other economists say.

Higher oil prices also pinch U.S. consumers by pushing up the price of gas. “This puts a damper on consumer optimism, which is really critical at this stage of the recovery,” said Alan Gayle, senior investment strategist for RidgeWorth Investments.

Wal-Mart Stores Inc. fell 3 percent after revenue at stores open at least a year fell for the seventh straight quarter. That raised worries about the company’s ability to turn around its U.S. business this year.

Barnes & Noble Inc. fell 14 percent after the bookseller said its net income fell 25 percent. The company also suspended its dividend and said it would not forecast its fourth-quarter or full-year earnings following last week’s bankruptcy filing by Borders Group.

Falling stocks outnumbered rising ones nine to one on the New York Stock Exchange. Volume was 1.3 billion shares.

10 Things You Need To Know Before The Opening Bell
Good Morning. Here’s what you need to know. Asian indices were down in overnight trading with the Shanghai Composite diving 2.60% . Major European indices are down and US futures indicate a negative open.

Markets slip on Asian cues
Markets opened on a soft note this morning, following cues from Asian indices.

USD 42 bn UN pension fund scouts for investment opportunities in India
By Devirupa Mitra, New Delhi, Feb 15 : In a boost for Indian stock markets, the United Nations is looking to ramp up the India portfolio of its USD 42 billion pension fund with more investments, especially in private projects in infrastructure and real estate.

$42 bn UN pension fund scouts for investment opportunities in India
New Delhi, Feb 15 (IANS) In a boost for Indian stock markets, the United Nations is looking to ramp up the India portfolio of its $42 billion pension fund with more investments, especially in private projects in infrastructure and real estate.

UN pension fund proposes higher investment in India
By Devirupa Mitra, New Delhi, Feb 15 : In what could give a big push to Indian stock markets, the United Nations and its affiliate agencies want to invest more from their USD 42-billion corpus of pension funds in this country, especially in infrastructure and realty.

According to the Securities Commission (SC), key changes incorporated into the Malaysian Takeovers and Mergers Code 2010 benefit shareholders and include protection for investors of foreign companies and real estate investment trusts listed on Bursa Malaysia, shorter settlement periods and enhanced disclosures in offer documents and independent advice circulars.

The new regulations, which come into force today, replace the Malaysian Code on Takeovers and Mergers 1998.

However, the changes do not address the controversial issue of preventing the privatisation of companies via the asset and liability (A&L) route, which is part of the Companies Act.

According to bankers familiar with the regulations, the SC is looking at curtailing the takeover of companies via the A&L route through changes to listing requirements as it would be less cumbersome.

“Changes to the asset-disposal route can’t be done as we can’t touch on the Companies Act (CA),” said one banker.

The controversy surrounding the takeover or privatisation of companies via the A&L route lies in the fact that it requires only the approval of 50% of shareholders plus one share. Other takeover methods require at least 75% shareholder approval.

A few months ago, the SC had issued a consultative paper seeking the opinions of stakeholders on a proposal to raise the level of shareholder approval in privatisations or takeovers of companies via the A&L route, to bring them in line with the rules in other countries. In Hong Kong and New Zealand, for example, the approval of at least 75% of the shareholders of a target company is required.

“But the response we received was mixed. There are groups with totally opposing views so the implementation will not be so soon,” said one banker.

“The new changes reflect some of the measures required to enhance investor protection. The previous regulations are 12 years old,” he added.

Among the more notable changes to the Takeover Code are:
• The requirement to be more transparent in the announcement on potential takeover offers. Under the new rules, potential offerors or offerees are required to make an announcement on possible offers when there are unusual changes in the company’s share price. They cannot hide behind the excuse of being unaware of developments involving major shareholders. This applies particularly to independent directors who would be required to make themselves aware of developments. If the potential offeror or offeree denies a takeover, they cannot undertake such an exercise within a period of six months.
• If material changes occur after the dispatch of documents, such as circular to shareholders, the SC must be notified immediately. For instance, during a takeover or privatisation exercise, if the promoters are undertaking other negotiations pertaining to the asset that is to be privatised, they have to inform the SC. This is to ensure shareholders are well informed of developments. An exmaple of this is when Maxis was privatised in 2007, less than two months later the promoters entered into a deal with Saudi Telekom. Under the new rules the promoters must inform the SC if they are negotiations with external parties.
• The new rules allow a voluntary offer to take over a company to be carried out at a higher threshold as a condition. At the moment, in most cases, a voluntary takeover offer is normally conditional upon the offeror getting 50% of the shares. Now the condition can be increased to 90%. This effectively means that that promoters cannot use excuse of “uncertainty” as a reason to use the A&L route to take over companies, especially financial institutions.
• The conduct of all parties, namely offerors, advisers and the boards of offerees are codified. These parties, especially the independent directors of the board are required to give timely disclosure to shareholders and are prohibited from undertaking actions that could frustrate an offer. This effectively means that independent directors are required to ensure that any offer for the company should be put before shareholders to decide on.

Though many will welcome the new regulations as signs of a maturing market, merchant bankers are likely to heave a sigh of relief that the changes do not plug the loophole for the privatisation of companies via the A&L route.

“Many were of the opinion that the revisions would adversely affect takeovers via the A&L route and bankers were concerned it would slow down corporate deals,” says one banker.

However, others disagree. They cite Hong Kong as an example. When the rules there covering the A&L route were changed and the threshold was increased to 75%, it did not affect deal flows.

According to the proponents who favour changes to the rules to prevent the A&L route from being used to take over or privatise companies, over time the rule was well received in Hong Kong.

“It can’t just be amended and implemented immediately. Hong Kong took a year to implement it [the changes in its Companies Act] ,” says a banker.

Hong Kong made amendments to its Companies Act in 2008 under which parties seeking to buy assets of listed firms are required to secure the approval of at least 75% of shareholders of the target company and not more than 10% of shareholders oppose the deal.

Directors who would be required to make themselves aware of developments. If the potential offeror or offeree denies a takeover, they cannot undertake such an exercise within a period of six months.

• If material changes occur after the dispatch of documents, such as circular to shareholders, the SC must be notified immediately. For instance, during a takeover or privatisation exercise, if the promoters are undertaking other negotiations pertaining to the asset that is to be privatised, they have to inform the SC. This is to ensure shareholders are well informed of developments. An example of this was when Maxis was privatised in 2007, and less than two months later the promoters entered into a deal with Saudi Telekom. Under the new rules the promoters must inform the SC if they are negotiations with external parties.

• The new rules allow a voluntary offer to take over a company to be carried out at a higher threshold as a condition. At the moment, in most cases, a voluntary takeover offer is normally conditional upon the offeror getting 50% of the shares. Now the condition can be increased to 90%. This effectively means that promoters cannot use excuse of “uncertainty” as a reason to use the A&L route to take over companies, especially financial institutions.

• The conduct of all parties, namely offerors, advisers and the boards of offerees are codified. These parties, especially the independent directors of the board are required to give timely disclosure to shareholders and are prohibited from undertaking actions that could frustrate an offer. This effectively means that independent directors are required to ensure that any offer for the company should be put before shareholders to decide on.

Though many will welcome the new regulations as signs of a maturing market, merchant bankers are likely to heave a sigh of relief that the changes do not plug the loophole for the privatisation of companies via the A&L route.

“Many were of the opinion that the revisions would adversely affect takeovers via the A&L route and bankers were concerned it would slow down corporate deals,” said one banker.

Others disagree. They cite Hong Kong as an example. When the rules there covering the A&L route were changed and the threshold was increased to 75%, it did not affect deal flows. According to the proponents who favour changes to the rules to prevent the A&L route from being used to take over or privatise companies, over time the rule was well received in Hong Kong.

“It can’t just be amended and implemented immediately. Hong Kong took a year to implement it [the changes in its Companies Act] ,” said a banker.

Hong Kong made amendments to its Companies Act in 2008 under which parties seeking to buy assets of listed firms are required to secure the approval of at least 75% of shareholders of the target company and not more than 10% of shareholders oppose the deal.