2010 Top 10 Malaysian Companies

Wall Street Journal (WSJ) recently announced the result of Asia 200 survey, which ranked the top 10 companies of selected countries according to financial reputation, corporate reputation, quality, vision, and innovation. Want to know the winners of Malaysia?

Wall Street Journal: "For the second year in a row, Public Bank Bhd ranked 1st overall among Malaysian companies. The bank's profit rose 20% to RM 2.2 billion on a 12% rise in revenue during the first nine months of the year.

Customer deposits grew at an annualized rate of 12.2%. Public Bank, Malaysia's 3rd largest lender by assets behind Malayan Banking Bhd (Maybank) and CIMB Group Holdings Bhd (CIMB), also ramped up its Tier 1 capital ratio while touting a dramatically lower impaired-loans ratio at 1.2%, versus 3.4% for the industry overall."

Source: Wall Street Journal

Meanwhile, CIMB Group this year makes a new showing on the Asia 200 list, with a #7 spot. The group helm under Dato' Sri Nazir Razak, spearhead CIMB as a regional universal bank, setting its foot in Malaysia, Singapore, Indonesia, Thailand, Hong Kong, China, UK, USA, Brunei, Myanmar, Vietnam, Bahrain and Cambodia.

Surprisingly, Malaysia Airlines (MAS) was being ranked as #9 on the list, while AirAsia - the stiff rival - are not included. Anyway, MAS did turnaround recently after suffering from huge losses few years back. A police report against Tan Sri Tajuddin Ramli (former executive chairman) was lodged by MAS in 2002 for allegedly causing the national carrier to suffer losses in excess of RM 8 billion.

Ananda Krishnan's Maxis and Astro earned their place at 4th and 10th respectively. After re-listing of Maxis 2009, the billionaire took Astro, Measat and Tanjong private this year.

Source: Wall Street Journal

Cypark Resources Bhd – Our Environmental Friend

Cypark International is an integrated landscape and environmental services group that provides design and build services, build services and landscape maintenance. Cypark is also a supplier of plant materials, granites, and landscaping and architectural lighting. Cypark currently operates through its own offices and network offices in Qatar, UAE, Saudi Arabia, Thailand, China and Singapore.

Philip Capital Management (PCM):


About Cypark – Cypark is the only locally listed environmental technology & engineering specialist. It was established in 2004 and was listed on the Main Board of Bursa Malaysia on 15 October 2010. Its principal activities involve landfill closure and upgrades, construction of waste transfer stations and operating and maintenance of waste facilities (O&M) (see Picture 1). 

Unlike Alam Flora, Cypark is NOT involved in rubbish collection; its business actually starts from the construction and operation of transfer stations. Transfer stations are centrepoints where the rubbish trucks dump the rubbish. From the transfer stations, Cypark then sends the rubbish to the landfill sites. Cypark is also involved in landfill closure and upgrades which require a leachate treatment plant to discharge the leachate, a dirty toxic liquid composed from rubbish.
 

No strong competitors – As Cypark is the only listed rubbish solutions provider in Malaysia and has good reputation on work done on Taman Beringin site, this will well keep them in good running for similar projects going forward. As per the Cypark prospectus, the key competitors of Cypark are UEM Enviro, KUB-Berjaya and Alam Flora. All these top tier players including Cypark take up 30% of the solid waste and landfill management services market share in Malaysia, whilst the rest are serviced by smaller fragmented players. We believe Cypark, being a Bumiputera company stands a good position to win more waste management jobs going forward given the plentiful landfill closure and upgrades available. Moreover, its competitors are not strong in landfill business.

112 unsanitary landfills throughout Malaysia – According to the management and news reports, there are approximately 112 unsanitary landfills or simply called dump sites throughout Malaysia waiting to be closed and rehabilitated, some of which to be upgraded to sanitary landfills. Consequently, the government has recently in its 10th Malaysia Plan unveiled a total approved budget of RM 1.5 bn for waste management spending. Out of the 112 unsanitary landfills, 16 are currently being closed and upgraded by Cypark, which indicates that Cypark has the experience and is in good stead to secure more of the landfill closure and upgrade contracts.

Federalisation of waste – Since the enactment of Waste Management Act in 2007, waste management had been taken over by the Federal Government (Federal) from respective states. This is an important change whereby all awards of projects will be given by the Federal and there will be less confusion over whom to deal with in terms of the administrative side of waste management projects. This facilitates Cypark's project tendering and collection of revenue from Federal. More importantly, federalisation of waste means funding is not a major issue.

Revised EPF approved funds effective 1 Sept 2010

Effective 1 September 2010, there are 223 unit trust funds approved under the EPF Members Investment Scheme (EPF-MIS). The list of EPF approved funds is updated upon conducting the fund evaluation exercise based on EPF-MIS fund evaluation methodology (FEM).

Under the FEM, funds must meet the set standard criteria, including:-

1. At least 3-years track records
2. Have investment mandate of not exceeding 30% in overseas assets
3. Consistency in return performance among peers/ with benchmark

How frequent will it be reviewed?

By using an international research house rating data as input in the assessment and evaluation of funds, the exercise will be conducted once a year. 

Suspended Funds?

Funds that underperformed their peers will be suspended, until they are qualified to be reinstated. Suspended funds are not allowed to received new investment under the EPF-MIS, yet investments made by investors prior to the suspension are nevertheless allowed to remain in the funds.

Suspended Funds are loss-making funds?

Not necessary. FEM is just a measure of relative performance, as suspended funds may still generate strong profits, but not as high as their peers.

Please click "EPF approved funds" for the list of 223 funds.

Related links:-

Tax Benefits of Unit Trust YOU must know

Reconciling Tax Cuts with Long Term Debt Issues

Hail to the Wall Street Journal! In one short paragraph the Journal has summed up the heart of the US debt problem and why keeping all of the Bush tax cuts in force make sense as well. In today's Journal and I quote:

"While in a hopey-changey mood, let's note for his (Obama's) benefit that the real fiscal problem today is not the immediate deficit, which does not call for radical action. The real problem is a system of health-care and retirement finance that deters us from saving and budgeting for our own needs while at the same time piling up disencetivizing taxes on those who work and whom we expect to pay for us in old age. Fix this and the government is solvent again."

Wow! The WSJ nailed it. .

3 wrong perceptions on Malaysia's Properties

In Malaysia, property investment is gaining momentum since last year. And, the property sector seems unstoppable with record breaking sales. New launches are fully taken up within few hours. Speculators are becoming greedier than ever. Calming down, figuring out, is it so attractive after all? Let's have a look at the 3 big wrong perceptions…

Wrong perception #1: 
Malaysia's properties still attractive?

No doubt, many analysts and researchers comment that the local market price is still low if comparing to regional markets, such as Singapore and Hong Kong. This was wrong because we cannot simply compare with islands, where land is limited. We cannot simply compare with China, where billions of people chasing for limited supply of houses.

Wrong perception #2: 
KL Developers are going high-end?

Yup… KL developers are focusing at launching those high-end residential units. But, do not come into conclusion just that. First, we must look into the locations of these new launches, especially those at golden triangle. Locations play a vital role of setting the price of properties. Second, the cost of acquiring a particular land, and the cost of constructing sure will add to the price where buyers have to bear. Third, I noticed that many super high-end units are located on hills top. Difficulties to get the relevant approvals and moving machines up there was included into the selling price of course. Though, I can't deny there are developers trying to mark-up the price, as buyers think that the costlier the better.

The Pearl @ KLCC

Wrong perception #3: 
Malaysians household debt is high because of house loan?

Generally, house loan could easily be our biggest "earning-eater". House installments eat into our monthly salary. While there is good debt and bad debt, I categorized property as good and car loan as bad debt. Malaysians high household debt is caused by the high car price, which is not worth to have if comparing with a house. And, my previous article "Proton loves Perodua to avoid extinction?" highlighted the problems of local car industry which directly affecting our daily lives.

Two cents for Government’s Talent Retaining Program

First, congratulates Talent Corp for continuing trying to achieve the objectives of bringing back Malaysian or foreign talent back home. Indeed, this was a very tough task, as Malaysians already implant the thinking inside. Every year, our "bright stars" migrate to other countries searching for their dream jobs.

Cartoon In: Economist, August 11, 2005.

Why it happens?

• It was started when those bright graduates being in love with the countries they studied. Many of them pursue their degree in US, UK, and Australia. And, after they graduate, they became in love with these countries, and tend to get a job there, stay there, and forget here.
  
• Highly specialized jobs are unavailable to these professional locally, such as doctors, engineer, scientists, new technology innovators… If you're hand phone innovator, would you join Apple or Nokia abroad or remain here?
  
• Professional tends to feel proud by doing something that they can showcase their skills or capabilities. This is another reason for them to venture aboard, because Malaysia is not a niche nation for something unique. Example, fashion in France, soccer in UK, technology in US. No wonder Datuk Jimmy Choo, yet another proud Malaysian, found his success in UK.

Picture from www.frederatorblogs.com

How to prevent brain drain?

• Improving our Universities to be on par with US, UK and Australia, so that Malaysians need not chase for overseas educations
  
• Improving our living standard and lifestyle, especially in KL, to make our graduates proud of
  
• Move up the value chain of businesses
  
• Move towards high income nation (we're on the right track)
  
• Identified our very own niche or selling point, and plan to develop it until recognized globally
  

KNM – Good & Bad

Recently, KNM is coming back to the limelight in Bursa Malaysia. After the 4 to 1 share consolidation exercise, KNM is inching up since securing a contract worth RM680 million in Uzbekistan. Then, KNM held a briefing with research outfits indicating that the company was on the road to recovery after a hiatus one-and-a half year.

Good facts:

• Order book had grown to RM2.4 billion
  
• Tender book grown to RM16 billion
  
• Better capacity utilization
  
• Re-surging of crude oil price which touches USD90 per barrel now
  
• Malaysia government's intention to spur oil & gas sector
  
• Listing of Petronas' subsidiaries enhancing the viability of local listed companies
  
• Impending projects roll-out by Petronas soon
  
• Planning to tap into nuclear industry in Africa

IR. LEE SWEE ENG
Executive Chairman / Chief Executive Officer

Bad facts:

• Foreseeable losses in its operations in Brazil, Canada and Indonesia
  
• High debt levels with RM1 billion borrowings, against net cash balance of RM300 million
  
• Future cash flows constraint would jeopardize the company credit rating
  

Would BUY Calls from ECM, OSK, HwangDBS, and RHB gave you some confidence?