EDGE summaries 21 January - 27 January

IDR lagging in the property price battle

• IDR property value pales in comparison to the those seen in Singapore. Why?
• The expatriate population are said to be responsible for pushing the property price to record levels
• The international schools are filled to the brim and the expat families don't look like they are leaving the Republic anytime soon
• Another strong catalyst is their casino resort project; this will attract immigrant workers of a different status class, they would demand for a proper accommodation
• So can IDR replicate Singapore property success story?
• The only money coming in right now comes from our local players (even these group of investors are venturing into IDR cautiously!) and potentially, the Middle Eastern investors
• IDR does not have Singapore expat population size and casinos will not be considered
• The message is clear, IDR need to emulate and follow Singapore's lead if they want to see similar property boom- a drastic policy change is required

Jetstar picks KLIA

• Budget carrier Jetstar will use KLIA
• However rival carrier Tiger Airways says it prefer to operate in LCCT as the terminal facilities fit in nicely with their business model
• KLIA is considered expensive, but Jetstar is betting on KLIA connectivity and comfort to entice more customers and therefore considered the higher landing and parking charges as insignificant
• At present, a random fare comparison puts Jetstar in front, they offer the lowest fair to Singapore from KL compared to the other budget carriers
• So who has the better "airport use" strategy?

MISC to buy a stake in Ramunia

• Petronas-owned MISC to take a stake in oil & gas fabricator, Ramunia
• MISC is likely to inject its engineering arm, MMHE into Ramunia
• The crown jewel for Ramunia is its fabricator yard in Teluk Ramunia, Johor and Petronas is keen to acquire it
• The deal is expected to be concluded and the final details to be announced soon, as the controlling shareholders has been looking to exit
• This is positive news for Ramunia minority shareholders as more fabrication work is expected to trickle down to Ramunia from Petronas once the deal is sealed
• 2008 will see some RM10bil worth of fabrication work to be put out for tender

Proton to tap into niche market

• Proton will look to India's Tata Group with great envy
• Tata Group has tapped into the low-cost segment with the introduction of US$3056 Tata Nano car
  
• It will have the home-market advantage that Proton don't, and Proton also do not have the might of the big players
• So which business direction should Proton opt for?
• Investors are keen to see Proton export strategy following announcement of its expansion plans into China, India and Russia
• But the low-cost segment seems to be Proton preferred choice

Who will get the RM2.5bil railway signalling work?

• Gamuda-MMC secured the government northern portion of the double tracking railway project, and now they have to find the right company to install the signalling system
• EDGE reported intense lobbying for this job, mentioning Italy's Ansaldo and UK's Balfour Betty (via a tie-up with Ingress Corp Bhd) as front runners
• With the postponement of other projects (second Penang bridge; Trans Peninsular (doomed?) pipeline project), the goverment and industry watchers are keen for the double tracking project to take off

Genting going to South Korea

• Genting is exploring the possibility of investing in a hotel-casino project in Hadong-gun city, South Korea
• This follows Berjaya Land recent move into S Korea (BLand recently entered a MOA to develop a mixed development, which includes a casino, in Jeju Free International City Development)
• Genting representatives indicated that the regional government is interested in their project
• Genting group currently has 46 casino properties in UK, they are venturing into online gaming business and are also beefing up their Singapore investment

TM's Spice not getting the desired answer

• TM's Spice Communications are appealing before a tribunal for a chance to be a pan-Indian operator, so far they only have license to operate in 4 regions (or circles, as they call it in India)
• If they are unsuccessful, they could be a M&A target
• India's Department of Telecom rejected Spice initial application on grounds that their net worth do not fulfil the minimum requirements to go pan-India
  
• Currently they are the 8th largest telco player in India
• Analysts are still expecting news flow on the potential entry of a foreign strategic partner into TMI (RegionCo)

YNHProp sold 50% of its KL Office Tower Project to Kuwait Finance House

• The RM920mil payment from KFH will be made on a staggered basis; this values the entire 45-storey block of Menara YNH at 1.84bil
• Cash flow from the sale would be sufficient to finance the whole project without a JV partner
• Although YNH Prop head of corporate sales said that they are still open for a strategic alliance if the new partner can add value to their development or can help them venture abroad
• The sale of this block will lead analysts to revise their numbers
• OSK values YNHProp at RM4.08 per share based on its revised net asset value per share