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SP Setia unit to buy land in Johor for RM169.26m, planned GDV RM1.5b
Thu, 09 Sep 2010 09:45:47 +0100
KUALA LUMPUR: SP Setia Bhd’s unit is buying 259.1 acres of land in Johor for RM169.26 million cash to replenish its land bank as the Setia Indah Johor development was at its tail-end. S P Setia said on Thursday, Sept 9 its unit Setia Indah Sdn Bhd had entered into a conditional sale and purchase agreement with from Kelana Ventures Sdn Bhd to acquire the land. Based on a preliminary feasibility study and revised layout plan, the proposed development is expected to have a gross development value of RM1.5 billion. Development was expected to start by end of 2011 and span over eight  years. “However, it is currently too preliminary to ascertain the total development cost, the expected completion date of the development and the expected profits to be derived from the development of the land,” it said. S P Setia said the acquisition would be wholly in cash from internally generated funds and/or external borrowings. It said the acquisition would enable the company to continue to benefit from the strong branding it had achieved in that locality. It is also in line with the group's wider strategy of continuing to acquire strategically located prime land in Johor Bahru, it said. The company said site was near other matured developments such as Taman Mount Austin and Taman Daya and hence also offered several important advantages, in particular the sustained potential demand from upgraders in the area desiring to move-up to larger, newer and better designed houses. “Another source of demand is from young adults planning to move out of their parents' homes without having to leave the comforts of the local support network that they have grown accustomed to. “Further, the existing population of the surrounding matured housing projects will also form the core catchment area for the proposed development's commercial components,” it said. S P Setia was confident that the proposed development of mixed residential and commercial project on the land would be well received, and contribute positively to its future earnings and cash flow. “The proposed development will also ensure S P Setia's continuing presence and efforts in building residential properties in Johor,” it said.

FTSE falls as retailers slide on weak outlook
Thu, 09 Sep 2010 09:16:11 +0100
LONDON:  Britain's top share index fell on Thursday, Sept 9 as retail stocks dropped on downbeat comments from Home Retail and Wm Morrison Supermarkets, outweighing a rise in banks ahead of the BoE's rate decision. By 0739 GMT, the FTSE 100 was down 4.65 points, or 0.1 percent at 5,425.09, having closed up 0.4 percent, at 5,429.74. Home Retail, Britain's No. 1 household goods retailer, fell 2.1 percent after it forecast a 20-25 percent reduction in first-half profit, with sales at its Argos stores continuing to fall as low-income shoppers cut back spending. The announcement triggered a sell-off among the retailers, with Kingfisher and Marks and Spencer down 1.6 and 1.2 percent respectively. Wm Morrison Supermarkets, Britain's fourth-biggest grocer, fell 4.3 percent after it said it will open convenience stores and may sell groceries online as it seeks to broaden its growth avenues in what it expects to remain a tough market this year. Mid-cap British music, books and games retailer HMV Group fell 11.3 percent, having soared ahead on Wednesday, as it reported a 10.6 percent fall in sales for the first quarter as the soccer World Cup distracted customers from DVDs and books. This is a shoe that has been waiting to drop for some time, said Jeremy Batstone-Carr, strategist at Charles Stanley, said. Given the extent to which consumers are retiring debt rather than living on credit and bunkering down ahead of what Nick Clegg (UK Deputy Prime Minster) described as 'choppy and uncertain times ahead' this is all going to have an adverse affect on discretionary spending. After a fairly directionless first half of the week there will be plenty of macroeconomic data on Thursday for investors to chew on. UK July trade data is due at 0830 GMT and is expected to show the trade deficit widened from the previous month, while at 1100 GMT the Bank of England is expected to keep interest rates on hold at 0.5 percent for the 18th month running. All 60 economists in a Reuters poll forecast no change in rates on Thursday and most said they expect no rise until the second quarter of 2011 at the earliest. COMMODITY FALLS Energy and mining stocks showed some weakness following recent strength and weighed by falls in commodities, which softened after a sell-off overnight in China. On the upside, banks gained, having been on the back foot recently on worries over the health of the European economic recovery. Lloyds Banking Group, up 1.2 percent, was among the top risers after agreeing to sell its stake in housebuilder Crest Nicholson to U.S. investment company Varde, continuing to shed non-core assets and refocus on its core lending activities. The UK bank was also helped by Barclays Capital which raised its rating to equalweight from underweight. ARM Holdings, which has been mentioned as a potential bid target, extended recent gains, up 3.3 percent. The chipmaker also unveiled its cortex-a15 mpcore processor, which won its first licensee, Texas Instruments. - Reuters

OECD urges stimulus due to slowing economic recovery
Thu, 09 Sep 2010 09:12:49 +0100
PARIS (Reuters) - The global recovery looks to be slowing more than expected as growth weakens in the world's rich economies, and monetary stimulus should be extended or stepped up if the slowdown proves more than momentary, the Organisation for Economic Co-operation and Development said on Thursday, Sept 9. The OECD forecast growth across the G7 group of major economies to average an annualised 1.4 percent in the third quarter and 1.0 percent in the fourth, down from 3.2 and 2.5 percent in the first and second quarters respectively. It forecast annualised U.S. growth rates of 2.0 and then 1.2 percent in the third and fourth quarters, after 1.6 percent in the second quarter and 3.7 percent in the first quarter. Recent high-frequency indicators point to a slowdown in the pace of recovery of the world economy that is somewhat more pronounced than previously anticipated, it said. It is not yet clear whether the loss of momentum in the recovery is temporary ... or whether it signals greater underlying weaknesses in private spending at a time when public support is being removed, the Paris-based organisation said. For Germany, France and Italy combined, the OECD forecast expansion to plunge to an annualised 0.4 and 0.6 percent respectively in the third and fourth quarters of the year, from 5.1 percent in the second quarter. Germany's economy, which grew 2.2 percent quarter-on-quarter in the second three months of 2010, or an annualised rate of nearly 9 percent, would expand just 0.7 percent in annualised terms in the third quarter, it predicted. For Japan, it forecast 0.6 and 0.7 percent annualised GDP rises in the third and fourth quarters respectively, mildly better than a second-quarter figure of 0.4 percent annualised. For Britain, the OECD predicted 2.7 percent and 1.5 percent annualised growth in the third and fourth quarters after a second-quarter rise of 4.9 percent annualised versus the previous quarter. The OECD's latest forecasts were limited to forecasting GDP developments in figures for the G7 countries, but it did add that growth remained robust in large emerging market economies. On the downside, the OECD said there was a risk that weak house prices and high unemployment could restrain recovery in domestic consumption. If the ongoing slowdown is temporary, the appropriate policy response would be to postpone withdrawal of monetary stimulus for a few months while maintaining planned budget consolidation, OECD chief economist Pier Carlo Padoan said. On the other hand, if the slowdown reflects longer-lasting forces bearing down on activity, additional monetary stimulus may be needed in the form of quantitative easing and commitment to close-to-zero policy interest rates for a long period, he said. Where public finances permit, planned fiscal consolidation could be delayed, he said in a written statement. - Reuters

UK watchdog fines Goldman Sachs $27 million
Thu, 09 Sep 2010 09:11:17 +0100
LONDON: Britain's financial watchdog slapped a 17.5 million pounds ($27 million) fine on Goldman Sachs on Thursday , Sept 9 for inadequate disclosure of a U.S. probe into the Wall Street powerhouse. The fine -- one of the biggest ever imposed in Britain -- was related to Goldman's troubled Abacus mortgage-security product, which resulted in the investment bank being investigated by the U.S. Securities Exchange Commission (SEC). In July, Goldman agreed to pay $550 million to settle civil fraud charges over how it marketed the Abacus subprime mortgage product, ending months of negotiations that rattled the bank's clients and investors. The Abacus product was marketed by French banker Fabrice Tourre. Tourre, who had dubbed himself as Fabulous Fab, denied allegations that he or the bank had misled investors over the high-risk Abacus product. Britain's Financial Services Authority said on Thursday that Goldman had not adequately informed it of the American investigation into the Abacus affair. Goldman Sachs International did not set out to hide anything, but its defective systems and controls meant that the level and quality of its communications with the FSA fell far below what we expect of an authorised firm, FSA director Margaret Cole said in a statement. In a seven-word response to the FSA fine, a Goldman Sachs spokeswoman said: We're pleased the matter is resolved. - Reuters

Loh Loh, JV partner secure RM828.33m Terengganu hydro project
Thu, 09 Sep 2010 08:44:20 +0100
KUALA LUMPUR: Loh Loh Corporation Bhd and its joint venture partner Sinohydro Corporation Ltd have received the letter of acceptance from Tenaga Nasional Bhd for the RM828.33 million Hulu Terengganu hydroelectric project. Loh Loh said on Thursday, Sept 9, work on the project would be within 130 days after the receipt of the letter of acceptance. Sinohydro Corporation Ltd-Loh Loh Constructions Sdn Bhd Joint Venture is an unincorporated joint venture between Sinohydro Corporation Ltd and Loh Loh Constructions Sdn Bhd, a unit of Loh Loh.

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