THE EDGE summaries 7 April - 13 April

Maybank entering Pakistan soon

• Maybank is exploring the possibility of acquiring a small (but meaningful) stake in Pakistan bank - MCB
• MCB is currently trading at 5 times its book value; it has a large monopoly in the low deposit market in Pakistan
• Its ROE is over 30%, but the risk of doing business in Pakistan is also high
• Strong performances in Pakistan banks have attracted a wave of foreign banks, including global and regional players like Stan Chartered, ABN Amro, Nomura Holdings, Bank Muscat and Barclays
• But given the response of investors following Maybank's recent Indonesian bank stake purchase, will they put this plan on hold?

Genting - a gamble too many

• Last week, Genting's HK-listed Star Cruises Ltd announced plans to develop hotels and casinos in Newport City, near Manila's airport
• It will be a JV with Alliance Global Group, a major property and F&B group
• Star Cruises will also acquire half of Travellers International Group which has reportedly applied for a provisional gaming license for US$335mil
• In addition, Star Cruises will JV with Travellers to develop another project in Pagcor City - a casino-tourism complex close to Manila Bay
• Worthy of mention, the gaming market (and also the governance and regulations!) is dominated by the Pagcor Group
• Currently, according to an analyst, it is still early to examine the impact of Star Cruises venture into the Phillipines on the Genting group
• Political instability appears to be one of the grey clouds surrounding Genting's ventures: its casino project in Muslim-dominated Indonesia and now the Phillipines - will they pay off?

Weakened UMNO puts projects in jeopardy

• The effects of UMNO's poor performance in the March 8 general election are beginning to be felt in the corporate world
• A RM160mil road maintenance project in Selangor is hanging in a balance
• Protasco Bhd which has a long term concession to maintain federal roads, when the state was run by the previous Selangor Menteri Besar Khir Toyo, was slated for the road maintenance
• The Penang Monorail, the 2nd Penang Bridge, and the West Coast Highway stretching from Selangor to Taiping are also under scrutiny
• But the biggest of the contracts that has been taken away is the RM1.3bil Lahad Datu coal-fired power plant in Sabah
• Sabah Chief Minister Musa Aman cited "irreversible damage to environment" as reason for the cancellation
• But EDGE says it is more of a snub to UMNO's style of politics than an environmental issue, because until last week, the environment was never an issue!
• Sabah UMNO is indeed pulling ranks on federal government-sanctioned UMNO sympathisers
• Remaco's (Tenaga subsidiary) partner had always been Yayasan Sabah (a vehicle linked to UMNO Sabah), but when the tender results were announced, 3 unfacied names emerged: EDEN, Nova Nusantara and Maser - this basically demonstrated than UMNO at federal level was just too strong
  
• Now Sabah recognised its place/part in the new government given the latest election results, it is beginning to show some musle (worth noting, Musa Aman's brother Anifah Aman has rejected outright an offer to be a deputy minister in the new federal cabinet- the message sent out is clear: they want bigger and more important portfolios!)