Idris Jala 's Star is Rising Faster than MAS

Has PM Najib found the perfect Sarawakian to include into his Cabinet?

Yesterday (27 Aug 2009), Idris Jala, The CEO of MAS, was appointed a minister in the Malaysian Cabinet. As a perfectionist and profesional, PM Najib expects a surgery job from Idris on his non-performing cabinet members. That he inherited the bulk of the Cabinet from the former premier meant plenty of nasty work has to be done by Idris, without fear or favour.

As November approaches, PM Najib will review his Cabinet line-up and dropped those he agreed with Idris, off the precipice! There are many from UMNO that needs replacement. For Najib,a man of vision and mission, he will stop at nothing to achieve his global vision of bringing back Malaysia into the ranks of the democratically run governments, excelling in bringing wealth to his people.

Making Idris to focus on a narrow portfolio of oversighting Key Performance Index (KPI) will make him a man to fear both from the Cabinet ministers, senior civil servants and GLC heads. For many the holiday may just be over, particularly those helming GLCs and overstaying civil servants.

The time has surely come for Najib to make his mark. He does not need all those dead duck albatrosses hanging on his neck.

For the next three months, Idris will be the MAN OF THE HOUR!

Is Mercury Rising for Genting Malaysia?

Will this news propel Genting Malaysia to yet another height?

Ian C. Sayson from Bloomberg has this to report.

Aug. 28 -- Philippine billionaire Andrew Tan and Star Cruises Ltd. will today open their $700 million Resorts World Manila, which may more than double the city’s casino revenue.

“Our expectation is this will contribute to earnings within the first year of operations,” said Kingson Sian, president of Alliance Global Group Inc., the holding company of Tan, the Philippines’ fourth-richest person. “We believe in the potential of Philippine tourism.”

The venture, Travellers International Hotel Group Inc., will open the first floor of a three-level casino at a complex that will include hotels and a shopping mall. Resorts World Manila may earn 21 billion pesos ($430 million) in gambling revenue next year, compared with the city’s 17 billion pesos in 2008, according to Macquarie Group Ltd. analysts.

“This can create a lot of buzz and attract regional players into the Philippines,” said Manila-based CLSA Ltd. analyst Raffy Manalaysay. “It can help the government to get its casino project moving.”

Alliance Global rose 5 percent to 5.10 pesos yesterday in Manila trading, boosting its gain this year to 193 percent. Star Cruises’ Hong Kong-traded and Singapore-listed shares have more than tripled.

The resort will draw 11.1 million visitors and raise $315 million in gambling taxes over three years, Sian said.

On earnings, it is estimated that Travellers Hotels and Casino will make 6.41 billion pesos in net income next year on espected sales of 23.04 billion pesos, Macquarie analysts Nadine Javellana, Edward Ong and Alex Pomento said in an Aug. 10 report. The company’s profit will reach 7.44 billion pesos in 2011 on revenue of 25.02 billion pesos, they added.

Sian declined to comment on Macquarie’s forecasts.

The participation of Star Cruises will allow the project to tap the cruise operator’s network of more than 2.5 million customers, he said. Star Cruises operates casinos on its ships.

The resort will provide bus services for Filipinos living outside Manila, Sian said.

“The whole idea for this kind of investment is to grow the market and not grab from the existing businesses,” he added. We have a product that we can market for tourists to come in a big way. This is not just a casino.”

The project, occupying part of a former military camp near Manila’s airport, will have three hotels with 1,574 rooms, a 30,000 square meter (323,000 square feet) casino and a 30,000 square meter shopping mall.

The resort’s casino will have 300 tables and more than 1,000 slot machines by the end of the year, when all three floors will be ready, Sian said. The 100 tables that will be ready today already make it the Philippines’ biggest casino.

On Asia’s gambling boom, Philippine Amusement, the casino regulator and state-owned casino operator, owns four casinos in Manila with a total of 293 tables, according government data. Pagcor Pavilion, the state-owned company’s biggest casino, has 92 tables. The opening of Resorts World Manila is another step in the Philippines’ effort to tap Asia’s gambling boom. The casino resort could gain a 2 percent share of revenue earned from high rollers in Asia, estimated at $10.9 billion, the Macquarie analysts said.

Macau, the only city in China where casinos are legal, surpassed the Las Vegas Strip as the world’s biggest gambling hub in 2006. In Singapore, Las Vegas Sands Corp. is building the Marina Bay Sands casino resort, estimated to cost more than $5.25 billion, to compete with the S$6.6 billion ($4.6 billion) project being built by Malaysian casino operator Genting Bhd.

Travellers is one of four groups that won approval last year to build hotels and casinos within the $20 billion Pagcor City on Manila Bay, a project of the government’s Philippine Amusement & Gaming Corp. Sian said Travellers may start building its share of the project as early as next year. The venture last year committed to spend $1.1 billion to develop 91 acres in Pagcor City into a complex of hotels with 3,400 rooms and a theme park.

Star Cruises is controlled by Genting and its Chairman Lim Kok Thay, according to data compiled by Bloomberg. Genting shares have gained 78 percent this year.

Can we cystal ball gaze the potential price of Genting and Genting Malaysia when this project come on steam? Any ball park prices?

GDP Q2-Better than Expected!

The Malaysian economy contracted only 3.9 per cent in the second quarter of 2009. This was much better than market expectation of minus 5.1 per cent.

The smaller than expected contraction was a major improvement over the country's Q1 shrinkage of 6.2 per cent. With the latest numbers, the central bank summed up the economy retreated 5.1 per cent in the first half of the year.

Compared with other Asian economies, stimulus packages announced by Prime Minister Najib showed little sign of kicking in, with public consumption growing just one per cent.

Manokaran Mottain, an economist with the Arab-Malaysian Banking Group while saying that "it's an impressive performance, given that most of us thought it would be worse,” added the figure seems to suggest that the pump-priming stimulus money has not made the desired effect upon the economy.

The better than expected performance shows that Malaysia, like the rest of Asia, is exhibiting “green shoots”.Kuala Lumpur must certainly be worried about the economy's seeming lack of response to Najib's stimulus packages announced as far back as March.

The GDP figures, released by the central bank yesterday, showed the economy's better performance was driven largely by services (1.6 per cent) and construction (2.8 per cent).

Manufacturing was hit hardest, shrinking 14.5 per cent in Q2 after a Q1 decline of almost 18 per cent. This is not good.

Equally worrisome was the Malaysia 's export performance. Output shrank 17.3 per cent, while imports registered a 19.7 per cent correction. Bank Negara attributed this to “weak external demand”.

Surprisingly, the central bank provided no figures for investment — neither public nor private — although it did say total consumption grew 0.6 per cent in Q2, after contracting 0.2 per cent in Q1.

Inflation continued to fall. In July it dipped 2.4 per cent, allowing the central bank to keep interest rates low and conducive to growth. On Monday, the bank maintained its overnight policy rate at a historic low of 2 per cent. And with near-deflation persisting, it is likely to keep rates low until the second half of 2010.

“We expect a gradual recovery,” central bank governor Zeti Aziz told a news conference. The economic contraction in 2009 will be smaller than expected, she said without elaborating.

Any one for some more crystal ball gazing?

Please Ensure Safety and Security for Tourists, Minister Advised...

Ministers must ensure they perform a duty of care for the target group under their portfolio. And that was the situation Ng Yen Yen the Tourism Minister found herself. It was quite a spot for her when she met up with Malaysia' richest man at his Shangrila Hotel in Hongkong.

According to Robert Kuok, he is always concerned about things back home. Kuok, 85, dubbed the Sugar King expressed this concern pointedly if he was to help in promoting tourism in Malaysia.

Kuok told her that public security was the main concern among tourists when they were travelling in foreign countries, as they were frightened of ending up as snatch theft victims or robbed.

“Nowadays, tourists are very concerned about their personal security, especially tourists from China and Japan. Therefore, public security must be taken into account in attracting tourists,” he said.

Ng tried to allay his fears by conveniently saying that Prime Minister Najib had put this into focus in his six national key results areas recently and crime prevention is one of them.

We know that Malaysia is not an easy country to govern. MCA Ministers are always second rated and they hardly have the wherewithal to keep any promises they make....

Another Rerating for Genting Malaysia

In spite of poor inbound travel and local patronage at the casino, the ancillary facilities of Genting continues to receive support. Expect the second quarter result of Genting Malaysia to be reduced too.

However, Maybank Investment Bank Bhd has meantime, raised the target price on Genting Malaysia Bhd, to RM3.25 from RM3.10, reflecting higher valuations at its cruise affiliate.

At noon break, the shares of Genting Malaysia advanced 0.7 per cent to RM2.77, set for the highest level since August 20.

So, those with spare cash may want to have a second look at this defensive stock.

Will this Impact Time Engineering?

TIME dotCom Bhd (TdC), through wholly-owned subsidiary, Hakikat Pasti Sdn Bhd, has disposed of 27.75 million shares in DiGi.Com Bhd for RM604.95 million, or RM21.80 apiece, via private placement.

CIMB Investment Bhd, in an announcement to Bursa Malaysia on behalf of TdC, said the sale would reduce TdC's interest in DiGi.Com to 27.5 million shares, or 3.5 per cent.

“The disposal will result in an estimated gain about RM5.33 million (before taking into account tax effects, if any) to TdC for the financial year ending Dec 31, 2009,” it said.

It said TdC was also expected to enjoy pre-tax interest savings of RM23.4 million per annum going forward as a result of the full repayment of bank borrowings with the net proceeds from the disposal.

"However, it will no longer enjoy any future dividends declared on the shares disposed," it said.

On the rationale for the disposal, CIMB said market conditions had improved recently, as evidenced by the performance of the FTSE Bursa Malaysia KLCI Index, which has been recording an uptrend since its 52-week low of 829.41 points on Oct 29, 2008 to 1,171.09 points on Aug 25, 2009.

It said the price performance of DiGi.Com shares had improved from their 52-week low of RM17.32 on Oct 31, 2008 to RM21.98 on Aug 25, 2009.

CIMB said given the current improved market conditions and DiGi's share price, and in line with its prudent debt management practices, TdC has decided to fully settle its borrowings which were taken to finance its investments in securities.

"The disposal will enable the TdC group to raise funds to achieve this objective," it said.

So how would this new development going to impact upon a newly restructured Time Engineering Berhad? would its share in TdC be worth much more now?

Genting Revenue dropped by 26%

It was to be expected.

Malaysian conglomerate Genting reported lower second quarterly earnings for 2009 as the economic crisis hit its casinos and palm plantation businesses.Genting is mildly expectant that its casino takings may improve given improved prospects for the economy.

"With the forecast turnaround in the global economic outlook, Genting Malaysia Group is cautiously optimistic (concerning) its prospects," it said in a statement.

However, its casinos in the United Kingdom is expected to remain weak due to the still gloomy economic outlook there, it said.

Second-quarter net profit fell 26 per cent from a year ago to 214.49 million ringgit ($60.86 million).

"The Genting Highlands Resort experienced weaker luck ... in the premium players business" though volumes rose, added Genting.

In the UK, higher revenue was offset by a weakening of the pound against the ringgit.

Analysts in Malaysia do not provide quarterly earnings forecasts, but 20 analysts polled by earnings tracker IBES ahead of the results projected Genting's full-year net profit at 1.02 billion ringgit.

In June, Genting bought a 3.2 per cent stake in MGM Mirage, the biggest casino operator on the Las Vegas Strip, sparking market talk Genting could buy out MGM's stake in its Macau's business.

Its unit Genting Singapore is building Singapore's second integrated casino resort and is also the largest casino operator in the United Kingdom.

Genting also has interests in oil palm plantations, power generation and property development. Its associate Star Cruises is Asia's largest cruise operator.

Genting shares have gained 78 per cent so far this year, outpacing the wider market's 34 per cent gain. They traded up 1.1 per cent ahead of the results announcement.