rightcoastconservative

Gas Malaysia Berhad (GMB) was established to sell, market and distribute natural gas and Liquefied Petroleum Gas (LPG). GMB is also responsible for the construction and operation of the Natural Gas Distribution System (NGDS), which is a system comprising 1,800km of gas pipelines and stations within Peninsular Malaysia owned by GMB. NGDS is connected to the Peninsular Gas Utilisation (PGU), which is the gas transmission pipeline across Peninsular Malaysia owned and operated by PGB. GMB’s core business to sell, market and distribute natural gas to industrial, commercial and residential customers in Peninsular Malaysia via NGDS. In other words, GMB purchases natural gas from PGB and sells to GMB’s own customers at a profit margin. There are currently two players in Peninsular Malaysia’s natural gas distribution industry, comprising GMB and PGB. However, both serve different sets of customers, whereby GMB’s customer base consists of us...

Essentially, with the uncertainties in Europe continuing amid a potential global slowdown in the economy, we will continue to see market volatility in the next few months. As such, we continue to advise investors to be patient and focus on Defensive counters , while looking out for opportunities to Trade. We continue to advocate Buying into Weakness when the KLCI falls towards the 1,300-pt level, focusing on Banks, O&G and Construction stocks while we advocate Selling into Strength on the same three sectors when the market rallies towards 1,500 pts. Festive Cheer in December? While we remain fairly defensive over the mid term, December may still be a bright spot amid the gloom. There is still a possibility of the traditional year-end rally and the just announced joint effort by various central banks, including the US Federal Reserve, the European Central Bank, the Bank of Japan, the Bank of England, the Swiss National Bank and the Bank of Canada to provide liquidity may just convin...

Well, well, well... The newly announced Budget 2012 seems to be a very holistic one, which covers almost everyone (even the opposition MPs). In the budget, a total of RM232.8 billions was allocated to implement all Government development plans, which include the projects and programs under various plans, focusing on the well-being of the rakyat . But, there are a few interesting questions that Finance Malaysia would like to highlight here. 1) Is it too optimistic? As we all know, the external environment is becoming more challenging once again due to slowdown in US, Europe and Japan (if not double-dip recession). This would definitely impact Malaysia as manufacturing sector still playing a crucial role in our country's growth. While IMF is revising downward the global growth next year, our Government is projecting a 5 - 5.5% growth this year, and 5 - 6% for 2012. I think we should be very happy if Malaysia can grow more than 4.5% for 2011 and 2012. 2) Budget Deficit to come down...

With oil prices hovering around USD80-85 per barrel currently, what is the outlook for Malaysia oil & gas (O&G) industry? Dubbed as " Black Gold ", crude oil is one of investors favorite asset classes, which is highly volatile.  Here, we examined the implications of lower oil prices, current scenario of the industry, and sustainability of oil price going forward. Feel free to share this out via our Facebook page ( www.facebook.com/financemalaysia ). What drags down oil prices? As most of you already know, US and Europe is main culprit for the sliding oil prices. High debt issues still lingering the global economy since 2008 global financial crisis. As such, the potential slowdown in the global economy as per investors perception, droves oil prices lower to current level. What is the implications? Actually, the correction of oil prices is driven by sentiment of traders, whom thinking that the demand is going ton be weak soon. What would you do if you're a CEO ...

Petronas Caragali Sdn Bhd, the exploration unit of Petroliam Nasional Bhd (Petronas), may be listed on Bursa Malaysia next year and it is expected to attract a large number of foreign funds. "The mother of all initial public offerings (IPO) next year will be Petronas Carigali. We need companies like this to make Bursa attractive," said MIDF Amanah Investment Bank Bhd senior vice president and head of research, Zulkifli Hamzah.   Petronas officials could not be reached for comment. Zulkifli said analysts have been told by Bursa officials of a possible IPO for Petronas Carigali. OSK Research head Chris Eng said Petronas Carigali should be the largest IPO ever in Malaysia, with a potential market value of close to RM150 billion . This would eclipse current leader Malayan Banking Bhd, with a market value of RM62 billion as at yesterday. PETRONAS E&P Business Quick Facts Malaysia’s hydrocarbon reserves stand at 20.18 billion barrels of oil equivalent (boe) with an average pr...

Recently, KNM is coming back to the limelight in Bursa Malaysia. After the 4 to 1 share consolidation exercise, KNM is inching up since securing a contract worth RM 680 million in Uzbekistan. Then, KNM held a briefing with research outfits indicating that the company was on the road to recovery after a hiatus one-and-a half year. Good facts: Order book had grown to RM 2.4 billion Tender book grown to RM 16 billion Better capacity utilization Re-surging of crude oil price which touches USD 90 per barrel now Malaysia government's intention to spur oil & gas sector Listing of Petronas' subsidiaries enhancing the viability of local listed companies Impending projects roll-out by Petronas soon Planning to tap into nuclear industry in Africa IR. LEE SWEE ENG Executive Chairman / Chief Executive Officer Bad facts: Foreseeable losses in its operations in Brazil, Canada and Indonesia High debt levels with RM1 billion borrowings, against net cash balance of RM300 million Future...

The government has endorsed a new plan of tax incentives proposed by Petronas which will be incorporated in the Petroleum Income Tax Act , Prime Minister said today. “By lowering risks and increasing the rewards for investment, this initiative will potentially lead to additional petroleum-generated revenue of more than RM 50 billion for Malaysia over the next 20 years” he said when announcing 9 new developments and Entry Point Projects of the Economic Transformation Program. Najib said there would be a notional trade-off of about RM 8 billion in the form of revenue foregone from investment tax allowances, reduced tax and the export duty waiver for marginal fields. The 5 new incentives are:- Investment tax allowance of capital expenditure. Reducing tax rate from 38% to 25% for marginal oil field development Accelerated capital allowance of up to 5 years from 10 years. Qualifying exploration expenditure transfer between non-contiguous petroleum agreements with...

After the successful listing of MMHE , Petronas is going ahead with the listing of another subsidiary - Petronas Chemicals Group Bhd (PCG). The IPO, which could raise as much as RM 13.02 bn (US$4.2bn), would be the largest in Southeast Asia, according to term sheet. Below is the summary of the IPO: PCG is one of the leading integrated petrochemicals producers in Southeast Asia region, with 45% of revenue derived locally. Better profit margin in rising crude oil environment as prices of raw material was supplied by Petronas. The management has earmarked to 50% payout of its earnings, which translates to a dividend yield of about 4% . Valuations... At retail price of RM5.05, the historical price-earnings ratio (PER) works out to be about 16 times. Upon listing... EPF and Kumplan Wang Persaraan will be cornerstone investors. To expand its business and synergistic-growth acquisitions for the next 5 years. To consolidate its petrochemicals activities to increase the efficiency and profitab...

MMHE is a wholly-owned subsidiary of MISC, which is 65% owned by Petronas . It has two main divisions namely engineering and construction (E&C), and marine conversion and marine repair . Its two fabrication yards were in Pasir Gudang (Johor) and Kiyanly (Turkmenistan). Being one of the 7 licensed offshore fabricators in Malaysia , MMHE tops both in terms of annual tonnage capacity and market share, mainly because backed by Petronas. Other fabricators were Sime Darby, Kencana, Boustead Heavy Industries, Brooke Dockyard, Ramunia and Oilfab. Meanwhile, its marine conversion business could expect more demand on its floating production system , driven by increased developments in deepwater oil and gas fields. In comparison, installation of fixed structures is not economical in water depths over 300m, thus, giving floating production an advantage. Key investment points: Almost guaranteed jobs from Petronas. International opportunities and technical know-how enhanced by strategic ...