London Biscuits' net profit plunges to RM804,000

KUALA LUMPUR: LONDON BISCUITS BHD []'s net profit fell sharply to RM804,000 in the third quarter ended March 31, 2011 from RM4.03 million a year ago and the company expected the year to be challenging.

It announced on Monday, June 6 that revenue fell to RM65.10 million from RM50.92 million while earnings per share were 0.84 sen compared with 4.64 sen.

'The group's result is within management's expectation in view of the impact of the strength of the ringgit and increase in raw material cost,' it said.

For the nine-month period, net profit was RM6.22 million compared with RM11.65 million despite higher revenue at RM183.79 million versus RM152.14 million.

#Stocks to watch:* Knusford, MBSB, LonBisc, N2N Connect

KUALA LUMPUR: Stocks which could see trading interest on Tuesday, June 7 include KNUSFORD BHD [], MALAYSIA BUILDING SOCIETY BHD [] (MBSB), LONDON BISCUITS BHD [] and N2N CONNECT BHD [] following the recent corporate developments.

Knusford is teaming up with Pembinaan Hamid Abd. Rahman Sdn Bhd to submit prequalification and/or tender for part of the multi-billion ringgit Mass Rapid Transit project in the Klang Valley,

The portion would be the Sungai Buloh to Kajang stretch. Knusford will hold a 40% stake and'' PHAR 60% in the joint venture company.

Meanwhile, MBSB's additional 506.42 million new ordinary shares of RM1 each issued pursuant to the rights issue with warrants will be listed on Tuesday. MBSB closed three sen lower at RM1.50 on Monday. MBSB's 506.42 million warrants issued pursuant to the rights issue will also be listed on Tuesday.

London Biscuits Bhd's net profit fell sharply to RM804,000 in the third quarter ended March 31, 2011 from RM4.03 million a year ago and the company expected the year to be challenging.

Revenue fell to RM65.10 million from RM50.92 million while earnings per share were 0.84 sen compared with 4.64 sen. 'The group's result is within management's expectation in view of the impact of the strength of the ringgit and increase in raw material cost,' it said.

For the nine-month period, net profit was RM6.22 million compared with RM11.65 million despite higher revenue at RM183.79 million versus RM152.14 million.

The share price closed 1.5 sen lower at 94.5 sen on Monday.

N2N Connect said it was acquiring an 11-storey office building in Bangsar South for RM36 million cash to be partly used as its office space, and to be let out to tenants.

Public Mutual to launch fund focusing on Singapore equities

KUALA LUMPUR: Public Mutual Bhd is launching a new fund -- Public Singapore Equity Fund (PSGEF) on Tuesday, June 7 ' which will focus on Singapore equities.

It said on Monday the fund seeks to achieve capital growth over the medium- to long-term period by investing in a diversified portfolio of Singapore equities.

Explaining the rationale, Public Mutual chief executive officer Yeoh Kim Hong said for the last 10 years from 2001-2010, Singapore has been one of the fastest growing economies in Southeast Asia region with an average real GDP growth rate of 5.7% per annum compared to the Asean average GDP growth of 4.7% per annum over the same period.

She said Singapore has been the largest recipient of foreign direct investments (FDI) in Southeast Asia, which amounted to US$16.3 billion'' in 2009 or 41% of total FDIs in Southeast Asia.

'Investing in PSGEF enables investors to participate in the growth prospects of Singapore's resilient economic and attractive valuations. Investors can ride on the potential upside of the Singapore dollar over time.

'The fund is also suitable for parents who would like to hedge their children's future educational expenses as investments in the country's equities are expected to keep pace with the uptrend in the costs of education over the long term,' she said.

PSGEF is an equity fund that seeks to achieve capital growth over the medium- to long-term period by investing in a portfolio of investments primarily in the Singapore market.

The fund may invest up to 30% of its net asset value (NAV) in the domestic and global markets to achieve increased diversification.

PSGEF would focus on sectors with resilient growth prospects such as banking and finance, PROPERTIES [] and real estate investment trusts (REITS), consumer, offshore and marine engineering groups, services and commodity sectors.

The equity exposure of PSGEF generally ranges from 75% to 98% of its NAV. The fund is suitable for investors with aggressive risk appetite who wish to hedge on currency exposure by participating in the potential appreciation of S$.

The initial issue price of PSGEF is 25 sen per unit during the 21-day offer period from June 7 to June 27.

The minimum initial investment for the fund is RM1,000 and the minimum additional investment is RM100.

During the offer period, the special promotional service charges are as low as 5% of initial issue price per unit.

Investors who opt for direct debit instruction with PSGEF during the offer period will receive a special promotional service charge of 5.25% of net asset value per unit for as long as the direct debit is active.

Sime Darby Plantation ups 37,000 plantation workers' wages

KUALA LUMPUR: In an unprecedented move, Sime Darby PLANTATION [] Sdn Bhd (SDP) has increased the salaries of 37,000 of its estate and mill workers throughout the country, with each of them expected to earn an extra RM200 in basic salary effective July 1st.

SDP has allocated between RM120 million and RM130 million per annum for this purpose including the increase in EPF and SOCSO contribution, said Sime Darby's President and Group Chief Executive, Datuk Mohd Bakke Salleh at a press conference here on Monday, June 6 to announce the initiative.

With the new salary scheme in place, a rubber tapper to a clerk, including auxiliary police personnel, employed in the estates and mills will enjoy a basic salary of between RM1,050 and RM1,100 per month.

He said Sime Darby decided to improve the quality of life of plantation workers to recognise their contributions, especially in the environment of high crude palm oil prices.

"If you look at the CPO prices trend over the years, we have been very lucky to ride on the increase in the average price. If you go back to 2001, the average CPO price was just RM890 per tonne and this year, we expect the average CPO price for us to be in the region of RM2,800 per tonne.

"We feel the additional earnings will also enhance the productivity of our employees and we are very confident it will translate into that. The benefits coming out of this exercise will far outweigh the cost," he said.

Meanwhile, SDP will also be upgrading housing and other amenities, called the Central Housing Complex, for its plantation workers' gradually with each estate allocated between RM30 million and RM35 million.

Mohd Bakke said the new wage structure would have an impact on the group's production cost per tonne of CPO. However, this is subject to the company's internal guidelines.

Human Resource Minister Datuk Dr S.Subramaniam who was present at the announcement said the significant increase in earnings for plantation workers' would enable them to have savings, provide better education for their children as well as increase their purchasing power.

The government hopes other government-linked companies and organisations will follow suit, he said. - Bernama

Oil below $115 on demand worries

NEW YORK: Brent crude slipped toward $115 a barrel on Monday, June 6 as concern about demand ahead of a key OPEC meeting later this week weighed on the market.

Signs that high prices are destroying demand in the West, confirmed by the worst U.S. jobs report since September, are worrying a group of OPEC's core members led by Saudi Arabia. They will push for a rise in output to reduce prices and support economic growth but are expected to meet opposition from Iran and Venezuela.

"There is no need to increase OPEC production in the 159th meeting of this organization," said Iran's OPEC governor, Mohammad Ali Khatibi, according to reports citing the Oil Ministry website SHANA.

Brent crude was down $1.09 at $114.75 at 0926 GMT (4:26 a.m. ET), while U.S. crude fell 95 cents at $99.27 a barrel.

"Think the job report from Friday is still to be digested by the market. It lowered the probability of rate hikes in the U.S. and the outlook for growth," said Thorbjoern Bak Jensen, oil market analyst at A/S Global Risk.

"Oil should get support from the direction in the EUR/USD, but we have an OPEC meeting coming up and a lower growth outlook," he added.

The dollar .DXY was down 0.04 percent as firmer hopes of a new bailout for Greece and a convincing victory by Portugal's center-right PSD party ended months of uncertainty in debt-stricken country supported the euro.

Deliveries to the U.S. oil hub of Cushing via TransCanada Corp's (TRP.TO) 591,000 barrel-per-day (bpd) Keystone pipeline restarted, one week after being shut by a leak at a Kansas pumping station.

MIDDLE EAST SUPPORTS

A violent weekend in the Middle East could provide a floor to prices by reviving worries about clashes spreading to the world's largest oil and gas producers and disrupting global supplies.

Syria said 23 people were killed in Sunday's protest near the Golan Heights after Israeli troops fired at Palestinian demonstrators marching to the frontier fence.

But protests against Syria's own president Bashar al-Assad were also bloody as the nation's forces shot 31 people dead during demonstrations in a crackdown that has killed at least 1,100 people over the past two months.

And an absent president in Yemen was celebrated by protestors in the streets of Sanaa, who interpreted his absence as a sign he was losing his grip on the country.

President Ali Abdullah Saleh was in Saudi Arabia recovering from an operation to remove shrapnel from his chest.

MARC affirms AAA rating on Cagamas' RM1.55b bonds

KUALA LUMPUR: Malaysian Rating Corporation Bhd has affirmed the AAA rating of Cagamas MBS Bhd's asset-backed fixed rate serial bonds of RM1.555 billion with a stable outlook.

It said on Monday, June 6 the rating action affected the outstanding Series 3 and Series 4 of CMBS 2004-1, totaling approximately RM635.0 million.

MARC said the transaction's affirmed rating reflects strong credit enhancement levels for the outstanding bonds, supported by a collections account balance of RM408.5 million and the outstanding principal of non-defaulted mortgages of RM629.8 million.

The rating agency said the collateral pool, which comprises highly seasoned mortgage loans of high credit quality, continues to show stable performance. The affirmed rating also benefits from satisfactory management of collateral servicing and transaction administration.

Cagamas MBS is a limited purpose entity and a unit of Cagamas Holdings Bhd whose principal activities are restricted to securitising government staff housing loans, originated under both Islamic and conventional principles, from the Government of Malaysia, by issuing asset-backed securities.

UOA Development posts RM130m net profit in 1Q

KUALA LUMPUR: UOA Development'' Bhd, which will be listed on Wednesday, June 8, posted net profit of RM130 million in the first quarter ended March 31, 2011.

It said on Monday, June 6 that its revenue was RM145.7 million and profit before tax of RM155.7 million. The current period profit after tax was arrived at after expensing RM21.9 million for administrative and general expenses and RM22.1 million for tax expense.

'Total expenditure for the quarter under review of RM21.9 million comprises marketing expenses of RM10.2 million, property maintenance expenses of RM1.7 million, finance costs of RM0.7 million and administrative and operating expenses of RM9.3 million,' it said.

UOA Development said the group's profit and revenue were mainly derived from progressive recognition from on-going development projects which include The Horizon Phase II, Kepong Business Park and Binjai 8, and sales of inventories.

'During the quarter, the Group also recognised fair value gains amounting to RM92.3 million due to the completion of Blocks 3 and 4 of The Horizon Phase II which are held as investment PROPERTIES [],' it said.

UOA Development also said the group planned to launch two other projects -- the Ceylon Hotel Suites located within the Kuala Lumpur Golden Triangle and Kiara IV in Segambut.

It said together, the two development projects would have an estimated gross development value of about RM400 million.

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N2N Connect buys officer tower in Bangsar South for RM36m

KUALA LUMPUR: N2N CONNECT BHD [] is acquiring an 11-storey office building in Bangsar South for RM36 million cash to be partly used as its office space, and to be let out to third party tenants.

In a filing Monday, June 6, N2N said it had entered into sale and purchase agreement with Bangga Istimewa Sdn Bhd to acquire the building known as Block 6 (Type G) as the The Horizon, Phase 1 in Bangsar South.

N2N said it planned to occupy four storeys of the property for its own use and rent out the remaining floor space to third party tenants.

'Based on conservative management estimates of current office rental rates in the vicinity of the property of RM5 per sq ft per month, it is estimated that the rental income to be generated is approximately RM1.76 million per annum, assuming the leasing out of the entire seven storeys of the property to third party tenants,' it said.

N2N said it would finance 75% or RM27 million of the purchase price via borrowings, while the remaining RM9 million would be through funded internally.

The company said the The Horizon, Phase 1, was a commercial development comprising 14 blocks of 11-storey stratified office buildings erected on a three-level basement car park.

The entire blocks of The Horizon, Phase 1, are MSC-compliant and completely broadband enabled, it said.

'The Horizon, Phase 1, forms part of the ongoing integrated township development known as Bangsar South.

'When fully-developed, Bangsar South will consist of Grade-A offices, retail avenues, boutique condominiums, service suites, a clubhouse and a boulevard,' it said.

N2N said that acquisition would provide it savings on its current rental expenses; a hedge against future increase in rental expenses; potential capital gains arising from the expected appreciation in value of the property; and secure sufficient office space to cater for the future expansion of N2N to be housed all under the same roof as the property is designated as a MSC Malaysia Cybercentre.

'It is a conducive environment to promote growth of N2N as a MSC Malaysia status company,' it said.

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Knusford inks JV to bid for MRT job

KUALA LUMPUR: Knusford Berhad has signed a joint venture agreement with Pembinaan Hamid Abd. Rahman Sdn Bhd (PHAR) to bid for the Klang Valley mass rapid transit (MRT) project.

In a filing Monday, June 6, Knusford said pursuant to the agreement, the name of the JV would be Pembinaan Hamid Abd. Rahman Sdn Bhd ' KNUSFORD BHD [] JV.

Knusford will hold a 40% stake in the JVB while PHAR will hold the remaining 60%.

The company said the JV was for the purpose of submitting prequalification and/or tender for the MRT Project known as 'Projek Mass Rapid Transit Lembah Kelang:'' Jajaran Sungai Buloh ' Kajang ' CONSTRUCTION [] and Completion of Elevated Civil Works Package'.

'In the event that the contract for the project is awarded to the JV, the contract shall be jointly undertaken by Knusford and PHAR and if it is''not awarded to the JV, the JV agreement will be automatically be terminated,' it said.

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Priceworth unit inks agreements for logging in Solomon Islands

KUALA LUMPUR: Priceworth International Bhd has signed two agreements to carry logging activities in the Solomon Islands.

In a filing Monday, June 6, Priceworth said its wholly owned unit PWP (SI) Ltd had entered into two management and TECHNOLOGY [] agreements with DP Development Ltd to carry out the logging activities on two concession areas.

It said PWP was appointed as the operator to carry out the logging operations on the concession areas with a combined land size of 8,346 hectares, and that PWP would jointly market the logs witj DP Development.

Priceworth said PWP would receive 57% of the export/sale proceeds as the cost of production of logs.

It said the appointment as operator was valid for a period of five years for each of the two concession areas, with one parcel expiring on Aug 31, 2015 and the other on March 21, 2016.

On the rationale for the agreements, Priceworth said the involvement of PWP as operator for the concession areas would provide it with continuous source of supply of logs for consumption of its plywood mill and sawmill

It said PWP would finance its operations via internally generated funds, adding that the project was expected to enhance its future earnings.

'The concession areas are estimated to have a combined log volume of approximately 309,716m3 which can be processed into sawn timber, plywood and downstream wood products.

'The logs will be partly utilised for the group's internal consumption and for export purpose,' said Priceworth.