The Star Online: Business
The Star Online: Business |
- New auto sales hit record historic high
- Uptrend seen for Kulim
- Banking sector repairing damage this year
| New auto sales hit record historic high Posted: 23 Jan 2013 05:13 PM PST PETALING JAYA: New auto sales in Malaysia grew 4.6% to hit a record high last year, with total industry volume (TIV) at 627,753 units. It was also the third consecutive year that the TIV had breached the 600,000-unit level, according to data from the Malaysian Automotive Association (MAA). Last year, passenger vehicle sales increased 3.2% year-on-year to 552,189 units, while commercial vehicle sales jumped 16.2% to 75,564 units. MAA president Datuk Aishah Ahmad (pic) said the record new vehicle sales in 2012 was due to factors such as strong economic growth, the implementation of infrastructure projects under the Economic Transformation Programme (ETP), increased consumer spending and consumption due to stable employment and rising disposable income, introduction of new models at competitive prices as well as aggressive sales campaigns by car companies. Aishah also said the Malaysian auto industry had performed well last year despite challenges in the early part of 2012 such as the aftermath of the Thailand floods, which impacted the automotive supply chain, and the implementation of Bank Negara's responsible lending guidelines. Aishah also noted that in 2012, sales of hybrid cars had jumped 84% to 15,355 units (compared with 8,334 units in 2011). The hybrid car sales came from four marques, namely, Toyota (5,653 units), Lexus (979 units), Honda (8,712 units) and Porsche (11 units). Aishah also pointed out that Malaysia's automotive TIV growth was in tandem with increased new vehicle sales in other parts of the Asean region. According to MAA data, for the first 11 months of 2012, Thailand and Indonesia had recorded significant 75% and 26% jumps in TIV to 1.29 million and 1.03 million units, respectively. Meanwhile, MAA has forecast the TIV to grow to 640,000 units this year. Aishah said MAA's forecast accounted for factors such as an expected economic growth of 5.6% in 2013 (based on a survey by the Malaysian Institute of Economic Research), a stable interest rate environment, multiplier effects from the ETP, stability in the employment market, concerns about the fragility of the global economy, introduction of new models to generate buying interest and promotion campaigns by car companies. "We also expect more than 200 new car models and variants to be introduced in the Malaysian market this year, further stirring buying interest," she said. The MAA is also organising the Kuala Lumpur International Motor Show 2013 (KLIMS13) in November, which is expected to provide a further boost to the auto industry. KLIMS13 is due to be held from Nov 15 to 24, 2013, at the Putra World Trade Centre, Kuala Lumpur. The motor show is expected to be a bigger event this year, as the response from automotive players has been strong, with 93% of the exhibition space booked. Themed "Efficiency in Motion", KLIMS13 is expected to occupy close to 30,000 sq m of gross exhibition floor, with more than 150 exhibitors set to attract over 330,000 visitors. |
| Posted: 23 Jan 2013 05:11 PM PST PETALING JAYA: One of the stocks that analysts are eyeing as a buy following this week's market selldown is Kulim (M) Bhd. AmResearch in a note to clients said it is upgrading its recommendation on Kulim from "hold" to "buy" as valuations are now more palatable. The counter has a new fair value of RM4.30 based on a fully-diluted price earnings ratio of 15 times for its financial year ending Dec 31, 2013. (FY13) Kulim ended the day one sen higher to RM3.61 on a volume of 1.25 million shares. The stock had dropped 19 sen over the last two days of the selldown. AmResearch expects a 31% increase in Kulim's net profit of RM325.6mil in FY13 to be underpinned by volume recovery, stabilisation of production cost per tonne and lower minority interest. "We forecast a fresh fruit bunches (FFB) production growth of 14% in FY13 aided by yield enhancements and acquisition of estates from its parent company, Johor Corp (JCorp). In total, Kulim would have an additional 13,687ha of plantation landbank from the acquisition. Production costs per tonne are expected to remain relatively unchanged from FY12's RM1,500 per tonne." An analyst from another local research house concurred. "Kulim should perform better in FY13, with better contributions from the Papua New Guinea side. Production should normalise. The only caveat is if crude palm oil (CPO) prices continue to weaken," he said. Kulim has a 49.54% stake in Papua New Guinea-based palm oil maker New Britain Palm Oil Ltd (NBPOL). Analysts said that some newsflow that could excite the market would include some form of asset acquisition or the disposal of its remaining shipping assets. Observers said management could be mulling over the listing of its shipping arm, although no timeline has been given. "We reckon that it would take time for Kulim to seek and evaluate acquisitive proposals. Alternatively, we believe that a faster option would be for Kulim to increase its shareholding in NBPOL," noted AmResearch. The research house estimated that it would cost Kulim about RM42mil to increase its equity interest in NBPOL by 1 percentage point. Kulim's dividend income from NBPOL is expected to be RM40.6mil for FY12. Currently, Kulim owns 49% of NBPOL. Aside from that, there has been speculation that Kulim and NBPOL could also end up becoming privatisation targets of JCorp. This follows the recently-concluded exercise by JCorp to take QSR Brands Bhd and KFC Holdings (M) Bhd private. The RM5bil acquisition of QSR and KFC by a consortium comprising JCorp, the Employees Provident Fund and CVC Capital Partners was part of a bigger restructuring by JCorp to streamline its businesses. The speculation is that JCorp may consider embarking on another round of restructuring with its stable of assets and that could involve Kulim and NBPOL. |
| Banking sector repairing damage this year Posted: 23 Jan 2013 05:05 PM PST THE global financial services sector kicked off the year with some powerful news. Jamie Dimon, JP Morgan chief and probably the highest profile Wall Street banker, had his salary halved to US$11.5mil (US$1.5mil in pay and US$10mil in shares last year) (RM34.92mil) due to a US$6bil rogue trading loss, The Telegraph reported. Over in London, the Bank of England was getting sweeping powers to force banks to hold more capital, with the Royal Bank of Scotland and Lloyds Banking group being among the first to be given a deadline to plug an estimated £30bil shortfall, said The Telegraph further. The Bank of England's new financial policy committee was also getting specific powers, which it could use to force banks to hold more capital against mortgages with high loan-to-value (LTV) ratios, or a high loan-to-income ratio, said The Guardian. This is in view of the resurgence in confidence in the London property market, which some surveys have dubbed the most expensive, and where prices are expected to stabilise. At Barclays Bank, new chief executive officer (CEO) Antony Jenkins has issued standards in ethical banking, asking staff to either sign up or quit. Towards the end of last year, it was governments and regulatory authorities that were actively on the scene, fining banks for various reasons. The descriptions of these offences had gone wild, accusing banks of money laundering and aiding terrorists and drug barons. The authorities also showed their teeth in the hefty fines and arrests made on the Libor interest rate rigging. Beginning this year, however, it looks like the banks or employers themselves are initiating stern action against their staff, from top down. If these indicators are anything to go by, then it looks like the banking sector is seriously tackling its woes, ranging from reputational damage to ethics. Making the CEO take responsibility by halving his salary is a drastic step and sets a precedent for action elsewhere, should other banks also face similar woes. Dimon, who had initially described the London Whale trading loss as a "tempest in a teapot,'' in the end said: "You make mistakes that you acknowledge and you fix." Getting down to business, Barclays' Jenkins is making sure his staff are fully aware of his new "purpose and values'' blueprint. They have to sign up and agree to practise ethical banking. Sometimes people don't practise what they preach. In this case, the new boss is getting everybody back down to earth with the basics of banking. Barclays, rocked by the Libor interest rate-rigging scandal, is seeking to rebuild customer trust. Making the staff sign up on corporate governance and imposing LTV are unglamorous things done in the East. The Western world of banking is generally associated with high finance and the sophistication of a derivatives-related world. Of course, the West has its tradition of solid investment bankers and fund managers who manage piles of money belonging to, among others, governments, pensioners and families. But as they say, things always come back in full circle, and most of the time, we have to pay for our mistakes. The credit bubble of 2008 revealed severe weaknesses in the risk management of derivatives-related trades. Now, bankers around the world seem to be increasingly on an international platform, using the same weapons to fight unethical behaviour and pre-empt credit bubbles. It looks like there could be some interesting developments in relation to these concerns in banking and finance worldwide this year. |
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