Jumaat, 10 Januari 2014

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The Star Online: Business

Property circles will soon know the name Lee Yeow Seng

Posted: 10 Jan 2014 08:00 AM PST

LEE Yeow Seng, a name that the property scene will soon know very well, has recently shot into the limelight following his appointment as chief executive officer of IOI Properties Group Bhd.

Unlike his older brother Datuk Lee Yeow Chor, newly appointed chief executive officer of IOI Corp Bhd who is already a familiar face in the plantation scene, Yeow Seng, who was roped into IOI Corp Bhd back in 2008, has been kept behind the scenes up until news broke of IOI Properties' relisting.

Fresh faced and just 35 years of age, all eyes are now on Yeow Seng and how he will propel IOI Properties to greater heights. With the listing ceremony only a couple of days away, analysts anticipate the stock's re-entrance to the Main Market of Bursa Malaysia to do well.

Yeow Seng has quite a tall order to meet. With a landbank of 10,000 acres to work with, he has set an ambitious sales target of RM2.5bil to RM3bil in less than two years' time, a target that is seen as too aggressive by some.

"His appointment by his father signals Yeow Seng's readiness to do the job. He has been shown the ropes on how the group's businesses are run since joining IOI Corp in 2008," an industry observer says.

Not only do Yeow Chor and Yeow Seng's appointments mark the conclusion of the demerger exercise, which sees the separation of IOI Properties from IOI Corp, it is also part of IOI Group founder Tan Sri Lee Shin Cheng's succession plan.

Summary of estimated GDV over the next three years.

While Shin Cheng has now taken a backseat, it is definitely not a sign that he will be retiring soon.

"I am still very healthy, strong and handsome. I can work for at least another 10 years. IOI Corp and IOI Properties were both founded by me. I want to see them grow bigger and become even more successful companies," he jokingly told the media at a recent briefing.

Although the decision-making process is now in the hands of his two sons, Shin Cheng says he will continue to monitor and assist them closely. As executive chairman of both companies, he will still be hands-on in assisting Yeow Chor and Yeow Seng in bettering the two companies.

But Yeow Seng's appointment comes at a time when the property market is not at its peak. In fact, a lot of unrest and uncertainty have arisen among from the cooling measures introduced by the Government during Budget 2014.

Measures such as the hike in real property gains tax and the abolishment of the developers interest-bearing scheme have dampened sentiments from both developers and property investors alike.

Analysts are already expecting a setback for sales momentum to occur this year. This will only prove a challenge for Yeow Seng to meet his targeted sales of RM2.5bil to RM3bil by the financial year ending June 30, 2015.

IOI Properties' landbank chart.

"If he can get through this subdued year, it will be proof that he is more than capable in helming the property business," says an analyst.

The demerger deal

The demerger exercise sees a clear segregation in the group's plantation and property businesses, with Yeow Chor helming the first and Yeow Seng the latter. After the demerger, IOI Corp will become a pure integrated palm oil player.

The exercise allows both companies to fully focus on the respective businesses.

"With this demerger, IOI Corp will become one of the purest integrated plantation plays listed on Bursa Malaysia and could regain its throne as 'the' premium big-cap plantation player," says RHB Research analyst Hoe Lee Leng.

Many research houses have adjusted their target prices for IOI Corp downwards to reflect the demerger.

Yeow Chor intends to maintain IOI Corp's previous dividend per share, indicating that the company will have to increase its dividend payout, as earnings will be reduced due to the removal of property contribution, which accounts for 30% to 35% of its earnings previously.

He adds that the company will be more aggressive in sourcing for more plantation land locally as well as overseas in countries such as Indonesia.

"Re-rating catalysts to look out for include further acquisition of significant tracts of brownfield or greenfield hectarage and CPO (crude palm oil) prices trend up higher than expected due to supply related issues like unfavourable weather," says Alliance Research's Arhnue Tan.

IOI Properties will be listed by way of distribution-in-specie and a restricted offer for sale (ROS) involving 3.24 billion shares to shareholders of IOI Corp.

The exercise entails the distribution-in-specie of one IOI Properties share for every three IOI Corp shares, and an ROS of one IOI Properties share for every six IOI Corp shares.

An in-specie distribution is the distribution of an asset in its present form, rather than selling it and distributing the cash.

Each IOI Properties share is priced at RM1.76 under the ROS, representing a 30% discount to the reference price of RM2.51.

Property play

IOI Properties was once listed on the Main Market of Bursa Malaysia, but subsequently privatised in 2009 to pursue various landbank acquisitions. Analysts say the stock was also fairly illiquid back then.

But during those four years, the company did not stay silent. Instead it aggressively expanded locally, as well as to the overseas markets, namely in Singapore and China.

IOI Properties made its first mark in Xiamen, China, a sub-provincial city of Fujian province, not too far away from Shin Cheng's ancestral home in Yongchun, Quanzhou in Fujian province.

IOI Park Bay in Xiamen, a mixed development comprising a shopping mall, boutique offices, a five-star luxury hotel and luxury high-rise residences, is set to be complete in 2018.

RHB Research analyst Leong Kok Wen says its overseas projects give IOI Properties the flexibility to be responsive to changes in market conditions.

"The debut of the Xiamen project was successful, with all 480 units launched in September 2013 taken up. Earnings from China are expected to kick in from financial year ending June 30, 2014 onwards.

Upon listing, IOI Properties is set to have a market capitalisation of at least RM8.31bil, making it second to UEM Sunrise Bhd by market value.

Although shareholding of the major shareholders post listing has yet to be confirmed, analysts anticipate that Shin Cheng's shareholding in IOI Properties to likely be around 45%.

Some say that IOI Properties would provide investors with an alternative to S P Setia Bhd.

Others argue that it would depend if valuations are cheap enough to be able to choose one over the other.

IOI Properties' ongoing and future developments for the next three years have a gross development value (GDV) of RM10bil in Malaysia, S$3bil in Singapore and five billion yuan in China.

Renoir worth US$100,000 bought for US$7 at flea market ordered returned

Posted: 10 Jan 2014 03:23 PM PST

ALEXANDRIA, Virginia: A napkin-size Renoir painting bought for $7 at a flea market but valued at up to $100,000 must be returned to the museum it was stolen from in 1951, a federal judge ordered on Friday.

The 1879 Impressionist painting "Paysage Bords de Seine," dashed off for his mistress by Pierre-Auguste Renoir at a riverside restaurant, has been at the center of a legal tug-of-war between Marcia "Martha" Fuqua, a former physical education teacher from LovettsvilleVirginia, and the Baltimore Museum of Art in Maryland.

Judge Leonie Brinkema, in a hearing in the U.S. District Court for the Eastern District of Virginia, dismissed Fuqua's claim of ownership, noting that a property title cannot be transferred if it resulted from a theft.

"The museum has put forth an extensive amount of documentary evidence that the painting was stolen," Brinkema said, citing a 1951 police report and museum records.

"All the evidence is on the Baltimore museum's side. You still have no evidence - no evidence - that this wasn't stolen," said Brinkema to Fuqua's attorney before ruling in favor of the museum.

Fuqua bought the unsigned "Paysage Bords de Seine," or "Landscape on the Banks of the Seine," at aHarpers FerryWest Virginia, flea market in late 2009 because she liked the frame, she said in a court filing. She paid $7 for the painting, along with a box of trinkets.

Although the frame carried the nameplate "Renoir 1841-1919," Fuqua was unaware the 5-1/2-by-9-inch oil painting was genuine and stored it in a garbage bag for 2-1/2 years, she said.


Her mother, an art teacher and painter, urged her in July 2012 to get the painting appraised. Fuqua took it to the Potomack Co, an Alexandria, Virginia, auction house, which verified it was as an authentic Renoir.

After media reports about the painting, the Baltimore Museum of Art said in September 2012 it had been stolen while on loan to it. The Federal Bureau of Investigation then took custody of it.

What happened to the painting in the time after the theft in November 1951 and the time it surfaced at a flea market is not known.

Fuqua had contended that "Paysage Bords de Seine" should be returned to her since she was unaware of it having been stolen or of it being genuine.

The Potomack Co had estimated the painting's value at $75,000 to $100,000, but an appraisal done for the FBI said it was worth about $22,000.

The painting is soiled and "there is a distinct lack of enthusiasm for paintings by Renoir now considered a more old-fashioned taste," appraiser Ted Cooper said, quoting an art market report.

Renoir painted the work for his mistress on a linen napkin, while at a restaurant near the Seine River, Cooper said, quoting museum curatorial notes.

Questions about its ownership also have diminished the painting's value, said the appraisal, which is part of court filings.

"Paysage Bords de Seine" came to the Baltimore museum through one of its leading benefactors, collector Saidie May. Her family bought the painting from the Bernheim-Jeune gallery in Paris in 1926 and May lent it, along with other works, to the museum in 1937.

May died in May 1951 and the collection was willed to the museum. As its ownership was going through legal transfer, the painting was stolen while still listed as being on loan.- Reuters

For US stocks, earnings take center stage

Posted: 10 Jan 2014 03:19 PM PST

NEW YORK: After the S&P 500's impressive 30 percent return in 2013, Wall Street will get a better picture of reality next week as the pace of companies reporting earnings picks up.

A number of big banks are due to report their quarterly and full-year results next week, including JPMorgan Chase & Co <JPM.N> and Wells Fargo & Co <WFC.N> on Tuesday, Bank of America Corp <BAC.N> on Wednesday, Goldman Sachs Group Inc <GS.N> and Citigroup Inc <C.N> on Thursday, and Morgan Stanley <MS.N> on Friday.

Their results will help determine whether earnings forecasts for 2014 need to come down and whether stock values have become overblown.

"There isn't much left to happen to this market, in terms of the view of an expanding economy. It is generally agreed by everyone that the economy is improving. What isn't clear is whether earnings are improving at the same pace the market is. That's the next big test for equities," said Rick Meckler, president of LibertyView Capital Management in Jersey CityNew Jersey.

Investors may get a better sense of how quickly the central bank will reduce its market-friendly bond purchases from a number of Federal Reserve officials due to speak next week. A much weaker-than-expected December payrolls report on Friday raised new questions about both the strength of the economy and the aggressiveness of Fed stimulus.

Federal Reserve Bank of Atlanta President Dennis Lockhart is scheduled to speak at events on Monday and Wednesday, while Fed Chairman Ben Bernanke is set to speak on Thursday.

The Fed's Beige Book is due on Wednesday.

A batch of December data will be released next week, with retail sales on Tuesday, the U.S. Producer Price Index on Wednesday, the U.S. Consumer Price Index on Thursday and housing starts on Friday. Another number to note on Friday will be the preliminary January reading on U.S. consumer sentiment from the Thomson Reuters/University of Michigan Surveys of Consumers.


For the whole S&P 500, fourth-quarter profit growth is expected to have increased 7.7 percent from a year ago, while revenue is expected to have risen just 0.4 percent, Thomson Reuters data showed. The benchmark S&P 500 rose 9.9 percent in the fourth quarter of last year, while it jumped 29.6 percent for 2013, its best year since 1997.

Among other earnings to watch next week, General Electric Co <GE.N> ix expected to report a spike in fourth-quarter profit on Friday with the help of the record $229 billion backlog of orders for jet engines, oil pumps and healthcare equipment.

American Express Co's <AXP.N> fourth-quarter results on Thursday are expected to beat estimates, helped by increased card spending and lower default rates among customers.


Retail stocks have been attracting increased options activity this week as major retailers came out with their disappointing holiday sales figures.

Investors will get more insight into the consumers' state of mind next week as about 150 consumer-related companies are due to participate in the annual ICR XChange conference from Monday through Wednesday.

The annual gathering comes after many large U.S. retailers slashed their earnings forecasts recently because of steep discounts they offered during the holidays to persuade reluctant consumers to buy.

"I wouldn't judge the health of the economy off of brick-and-mortar retailers," said Paul Zemsky, head of asset allocation at ING Investment Management in New York.

"The economy was strengthening into the end of the fourth quarter," and there was sufficient growth to keep earnings growing and people buying the market.

Options volume on Five Below <FIVE.O> jumped more than six times the norm on Friday. The value retailer's stock fell 7.2 percent to close at $40.46 a day after the company announced disappointing holiday sales. Five Below is expected to present at the ICR XChange conference on Monday.

Out of the total 6,975 options contracts traded on Friday in Five Below, 2,565 were calls and 4,410 were puts with the most activity seen in January $45 calls. Goldman Sachs had recommended buying January $45 calls for a relief rally in the stock following the ICR update.

Domino's Pizza <DPZ.N> options volume also rose with a total of 861 contracts traded, compared with average daily volume of 520 contracts. The stock has moved about 8.5 percent up or down during the past nine conferences, moving in the positive direction during seven of the nine events, according to Goldman Sachs. The company's presentation at the ICR XChange conference is set for Wednesday.- Reuters

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