The Star Online: Business
The Star Online: Business |
- JPMorgan hammered over London Whale carrying US$6.2bil loss
- Analysts trim earnings forecast for BToto
- Ensuring maximum returns Corporate exercises in GLCs included listing on the stock exchange
| JPMorgan hammered over London Whale carrying US$6.2bil loss Posted: 19 Mar 2013 06:37 PM PDT THE big one has landed this time, it is called the London Whale carrying US$6.2bil of losses. Across the continent, the drama has shifted to the United States where the Senate subcommittee on investigations had been hammering JPMorgan bank executives on the losses. JPMorgan claimed it had kept the Senate subcommittee informed of the mounting losses, which was flatly denied by the subcommittee. In turn, the subcommittee had lambasted it for 'believing it was too big to fail, ignoring warnings about the escalating losses and deliberately withholding information,'' according to The Guardian. Chief executive officer Jamie Dimon, who had initially described media coverage of the debacle as a "tempest in a teapot", had already taken the hit by giving up half of his bonus of US$11mil to cover the losses. These are trading losses and big money is involved. Equally serious are the implications. Retiring Democratic senator Carl Levin, who chaired the hearing, was quoted as saying the testimony painted "a very disturbing picture, not just at JPMorgan in particular, but about how derivatives are valued." Besides traders, the blame was also put on a risk model called VaR which cut the appearance of risk being taken into half even as the traders were taking riskier bets, said the report. The finger pointing and witch hunts now span the two financial centres London and New York. "Firing a few traders and their bosses won't be enough to staunch Wall Street's insatiable appetite for risky derivative bets or to stop the excesses. More control is needed," said Levin in his opening statement. The rage of the regulators is evident in all the cases. From hefty fines to salary cuts, they seem hell-bent on teaching these unethical bankers a lesson and drive the fear of repercussions into them. JPMorgan is America's largest bank with assets of US$2.3 trillion. It houses the world's biggest investment bank by fee income and a retail bank with US$1.1 trillion of depositors' cash. The statement that more control is needed is an indication that more restrictions may be on the way. At the World Economic Forum, Dimon had put up a strong stand that regulators were becoming "overwhelmed" by all that had been happening. Nevertheless, the regulator spotlight continues to be targeted especially on major banks. Another telling sign is the constant accusation that banks make big mistakes because they think they are too big to fail. Serious debate is ongoing in Britain on the breaking up of banks. The Royal Bank of Scotland, a taxpayer-owned bank, has already cut back its huge investment banking business when it received a £45.5bil state lifeline following the 2008 financial crisis. There are already restrictions such as separation of proprietary trading; however, in view of the continuing scandals, more restrictions could be on the way. For the regulators, it is not enough that bankers bear the costs of the mistakes by giving up part of their bonuses. They want to see a fundamental change in the way business is conducted to avoid a repeat of the same big mistakes that had put a burden on taxpayers, the ultimate bailout channel. |
| Analysts trim earnings forecast for BToto Posted: 19 Mar 2013 06:35 PM PDT PETALING JAYA: Analysts have trimmed their earnings forecast for Berjaya Sports Toto Bhd (BToto) to reflect continuous competition in the gaming industry, but have not made any changes to their dividend forecast. In a report to clients, Alliance Research said it was trimming its financial year 2013-2015 earnings forecasts between 5.5% and 6.3% for the numbers forecast operator, mainly to reflect lower revenue forecast in view of the continued competitive environment, and a higher share of losses from its associates. It has also trimmed its net dividend per share for 2013 to 16 sen, but is maintaining its dividend forecast for 2014-2015 at 19 sen and 20 sen, respectively. BToto's net profit for the third quarter ended Jan 31 shrank by 23.6% to RM86.1mil, mainly due to lower revenue recorded by principal subsidiary Berjaya Sports Toto Sdn Bhd (Sports Toto). Sports Toto recorded a decrease in revenue and pre-tax profit of 9.8% and 15.1%, respectively, compared with the previous year's corresponding quarter. For the nine-month period, net profit was flattish at RM309.3mil against RM310.5mil in the corresponding quarter of 2012, attributable to the results of Sports Toto, which recorded a marginal drop in revenue and pre-tax profit of 0.3% and 0.4%, respectively, compared to the previous year's corresponding period. Alliance Research pointed out that the group did not declare a dividend payment for the third quarter since it was undertaking a major restructuring, which would lead to the listing of Sports Toto as a business trust (STM Trust) on the Singapore exchange. "Given that the group is unlikely to declare more dividends until the listing of STM Trust, we have conservatively anticipated no dividend to be declared in the fourth quarter calendar year 2013," the research outfit said. It said stripping out exceptional gains on disposal of investments amounting to RM18.6mil reported in the first quarter of financial year 2013, BToto's nine-month results were below expectations and market consensus. The group's nine-month core earnings dropped by 6.4% year-on-year to RM290.7mil, merely accounting for 68% and 70% of its and street full-year earnings forecasts, respectively. Kenanga Research in its report, meanwhile, said that Btoto's third-quarter results came in within expectations, with the nine-month core earnings making up 74% and 72% of its full-year estimate and that of market consensus, respectively. |
| Ensuring maximum returns Corporate exercises in GLCs included listing on the stock exchange Posted: 19 Mar 2013 06:24 PM PDT PETALING JAYA: Four out of the 33 government-linked companies (GLCs) earmarked for divestment under the Economic Transformation Programme saw corporate exercises last year, bringing the number of divestments by the Government so far to 15. Under the Strategic Reform Initiative (SRI) to reduce the Government's role in business, 33 firms owned by six government-linked investment companies (GLICs) were identified in 2011 as ready for divestment, either through a listing, stake pare-down or outright sale. The GLCs involved have decided on the appropriate strike prices to ensure maximum returns on the Government's investments, and the divestments will be automatically triggered when the share price crosses the strike price. Of the proposed 33 companies, seven are to be floated on the stock exchange, five will see the Government paring down its stake and 21 will be sold. According to the Performance Management and Delivery Unit's (Pemandu) annual report, the Government had targeted to divest its stakes in 24 companies between 2011 and last year. Eleven such exercises were carried out in 2011 and four in 2012, translating into a success rate of 63%. The four divestments last year were RHB Capital Bhd (RHB Cap), Felda Global Ventures Holdings Bhd (FGVH), Johan Ceramics Bhd and Tanjung Offshore Bhd. The Employees Provident Fund had trimmed its interest in RHB Cap to 40.7% via the latter's RM1.95bil merger with OSK Investment Bank Bhd, which created the country's largest stockbroker and investment bank by assets. FGVH's initial public offering (IPO) in June was the world's third largest in 2012 and also Malaysia's third biggest with a market capitalisation of RM16.6bil. The listing saw the agri-business giant integrating its upstream and downstream operations in logistics, fertilisers and palm oil. In September, Lembaga Tabung Angkatan Tentera completed the sale of its 97% holding in ceramic tile-maker Johan Ceramics to Boustead Holdings Bhd, in which the Armed Forces board owns 61.8%. Finally, state-linked private equity firm Ekuiti Nasional Bhd (Ekuinas) sold its 24% stake in Tanjung Offshore and upped its interest in the latter's offshore support vessel unit Kota Bayu Ekuiti Bhd to 93.3%. Tanjung Offshore was Ekuinas' second investment and its first divestment. "In spite of positive developments in the GLIC divestment programme, factors such as companies not reaching their sale trigger price, low valuations and uncertain market conditions have hindered the sale of some of the companies under the plan. "The Government is also aware that these divestments must be completed at prices which are fair to shareholders. Nonetheless, the outlook remains positive for these divestments to continue once the market has sufficiently recovered," Pemandu said in the report. "This SRI will continue to monitor the remaining 18 GLIC companies under the divestment programme. "While challenges remain, the SRI is committed to achieving its targets under the programme, and is on track with the implementation of the ministry-level divestment plan. "Additionally, state governments are also expected to ramp up their divestments in the coming year," the agency added. Besides the 33 firms, Pemandu said some GLICs had taken it upon themselves to sell down their holdings. Khazanah Nasional Bhd listed IHH Healthcare Bhd in July, raising RM6.3bil for Asia's largest hospital operator. The state investment fund also sold national carmaker Proton Holdings Bhd to DRB-Hicom Bhd, invited tenders for the purchase of its property investment firm STLR Sdn Bhd, and sold 60 million shares in Tenaga Nasional Bhd worth RM406.8mil via a private placement, cutting its stake to 34% from 35.2%. In December, Khazanah opened a three-stage tender process for its entire 45% in Time Engineering Bhd. Last August, the Finance Ministry hived off its 40% stake in Kedah Aquaculture Sdn Bhd to SKS Realty Sdn Bhd for RM45mil. Permodalan Nasional Bhd has also invited interested parties to tender for a number of its companies, including FEC Cables (M) Sdn Bhd, U-Travelwide Sdn Bhd, U-Insurance Sdn Bhd and Inobel Sdn Bhd. At the state government level, Johor has been chosen as the pilot state for the initiative, with Pemandu and Johor Corp (JCorp) having held preliminary discussions on streamlining the firm's key businesses. This is part of JCorp's rationalisation programme to focus on its core holdings in oil palm plantations, healthcare, property and the food industry. To date, JCorp has completed several corporate exercises, such as its privatisation of KFC Holdings (M) Bhd and QSR Brands Bhd, and Kulim (M) Bhd's exit of its retail food business. Kulim is also considering selling some of its hotel assets and reinvesting the money to drive earnings from its hospitality business, the report stated. Meanwhile, a ministry-level Divestment Plan was drawn last year, with nine firms under four ministries ready for divestment from 2012-2016. |
| You are subscribed to email updates from The Star Online: Business To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 20 West Kinzie, Chicago IL USA 60610 | |
0 ulasan:
Catat Ulasan