The Star Online: Business

Genting S’pore weaker results weigh on Genting Bhd
As honey bee numbers drop, US sees threat to food supply
Flagstar to pay US$110 million to settle MBIA mortgage lawsuit

Genting S’pore weaker results weigh on Genting Bhd

Posted: 02 May 2013 07:13 PM PDT

Published: Friday May 3, 2013 MYT 10:14:00 AM

KUALA LUMPUR: Shares of Genting Bhd fell to a low of RM10.32 on Friday after its subsidiary Genting Singapore reported a poor set of results for the first quarter ended March 31, 2013.

At 9.52am, Genting was down 12 sen to RM10.38. There were 309,900 shares done at prices ranging from RM10.32 to RM10.50.

Overall market sentiment was also cautious ahead of the weekend while Malaysians go to the polls on Sunday.

The FBM KLCI fell 5.8 points to 1,707.66. Turnover was 93.05 million shares valued at RM152.33mil. Declining stocks beat advancers 229 to 97 while 202 counters were unchanged.

Reuters reported Genting Singapore's January-March adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) fell to S$249.7mil from S$381.4mil a year ago. Five analysts polled by Reuters had on average expected a profit of S$359mil.

Maybank Kim Eng Research said Genting Singapore's poor results were due to a low VIP win rate of 2.12%. Although VIP volume surged 38% on-year, they did not expect this momentum to last.

"We raise our earnings estimates by 2-3% on a higher FY13 VIP volume growth forecast of 20% (10% previously) and enterprise value/ earnings before interest, tax, depreciation and amortisation (EV/EBITDA) based target price by 2% to S$1.70 but with only 6% upside, we downgrade Genting Singapore from Buy to Hold.

"At 12.7 times one-year forward EV/EBITDA, Genting Singapore is on par with mean valuations of the Macau casino sector," said Maybank Research.

As honey bee numbers drop, US sees threat to food supply

Posted: 02 May 2013 07:13 PM PDT

WASHINGTON: Honey bees, which play a key role in pollinating a wide variety of food crops, are in sharp decline in the United States, due to parasites, disease and pesticides, said a federal report released on Thursday.

Genetics and poor nutrition are also hurting the species, which help farmers produce crops worth some $20 billion to $30 billion a year.

Honey bee colonies have been dying and the number of colonies has more than halved since 1947, said the report by the Environmental Protection Agency and the Agriculture Department.

The decline raises doubt about whether honey bees can fulfill their crucial role in pollinating crops that play a role in about one-third of all food and beverages sold in the United States, the report said.

"Overall losses continue to be high and pose a serious threat to meeting the pollination service demands for several commercial crops," the report said.

Pollination demands have increased so much in recent years that California's almond crop alone requires 60 percent of all managed colonies devoted to pollination -- rather than honey or beeswax production.

The United States is not alone in facing this concern: The European Union moved on Monday to protect its own falling bee population by banning three of the world's most widely used pesticides for two years.

The Varroa mite, a parasite first found in the United States in 1987, is the single biggest cause of colony loss in the United States and other countries, the report said.

Another main concern is the effect of pesticides on bee colonies. More research is needed to find out how much pesticide exposure bees get and their effects, the U.S. report said.

U.S. honey bees also lack genetic diversity, the result of many colonies being descended from fewer than 600 queens. That lack of diversity limits bees' ability to develop resistance to new diseases and to develop productive worker bees.

The report also found modern weed control methods, which result in large fields with a single crop, has hurt bees by limiting the range of nutrients in their diet, compared with past decades when bees had access to a wider array of plant foods in a smaller range.

The report is the result of a conference the EPA and Agriculture Department held in October 2012. Its findings will be the basis for a revision of a federal plan to combat the decline in honey bees. Reuters

Flagstar to pay US$110 million to settle MBIA mortgage lawsuit

Posted: 02 May 2013 07:05 PM PDT

NEW YORK: Flagstar Bancorp Inc said Thursday it would pay $110 million to settle a lawsuit by MBIA Inc accusing the bank of misrepresenting the quality of loans underlying $1.1 billion in mortgage-backed securities.

MBIA filed the lawsuit in January in the latest legal spat between bond insurers and banks that packaged mortgage financial products at the center of the 2008 financial crisis.

"Today's announcement represents another major milestone in putting legacy challenges behind us," Flagstar CEO Michael Tierney said in a statement.

MBIA, based in Armonk, New York, in the lawsuit said it had agreed to insure two mortgage-backed transactions by Flagstar in 2006 and 2007. But mortgage defaults mounted, resulting in MBIA paying out $165 million, the lawsuit said.

MBIA CEO Jay Brown in a statement said the settlement amount was "consistent with our recovery expectations."

The settlement has no impact on a separate lawsuit filed in 2011 by another bond insurer, Assured Guaranty Ltd , which following a trial won a $106.5 million judgment against the Troy, Michigan-based lender.

Flagstar is appealing against that decision, which came out of the first trial in the bond insurers' lawsuits against the banks. MBIA's case had been assigned to the same judge, U.S. District Judge Jed Rakoff in Manhattan.

MBIA said Thursday that Flagstar would pay the settlement to its structured finance insurer MBIA Insurance Corporation.

The subsidiary will in turn use the money to partially pay down a secured loan from MBIA's municipal bond insurer, National Public Finance Guarantee Corp.

The amount of the loan outstanding at the time of the settlement was $1.7 billion, MBIA said on February 27 in a filing with the U.S. Securities and Exchange Commission.

The loan was secured in part by any future receivables MBIA expected in pursuing claims against banks over mortgage-backed securities.

MBIA has cases still pending against other banks, including Countrywide Financial Corp, which Bank of America Corp bought in 2008.

The case is MBIA Insurance Corporation v. Flagstar ABS, LLC, U.S. District Court, Southern District of New York, 13-0262. - Reuters

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Khamis, 2 Mei 2013