Thailand
Mitsui & Co are setting up a
partnership with Thai Union Frozen (TUF) Group by buying existing facilities
and then building new ones on the coast of Thailand. They will own 49% of the
venture that will cost them three billion yen (US$36 million). “This strategy
will help Mitsubishi respond to increasing global demand for food products and
to fulfill the role of providing a stable supply of resources,” the company
said. Chief Executive Officer Ken Kobayashi said that food will be one of their
key areas in the next few years.
Japan’s trading companies have,
for the past decade or so, earned their profit by investing in coking coal and
iron ore, which had a big demand in China. But now, they are shifting their
investments to food, utility and transport businesses due to the waning demand
for bulk commodity prices. Food in particular, has been a source of growth for
these trading companies.
Mitsubishi, Japan’s biggest
trader by market value, invested in meat and livestock in China through Cofco
Corp and went into the salmon fish-farming business in Chile last year. This
2012, they also added to their investment portfolio grain collection and coffee
plantation projects in Brazil and phosphate mines in Peru.
Singapore
Olam has swamped Muddy Waters
with huge volume and a strong rally, this is playing out exactly as we
suggested, I will cover Olam and Muddy Waters tomorrow.
In Olam’s favor also is an
improved outlook for the sector in 2013, food prices are expected to rise and regionally
ASEAN +6 will speed up local GDP.
Of Muddy Waters seven attacks on
companies in China, they all have a common theme, fraud and “accounting
anomalies”, as I have said before they tend to feed off the Western view that
those of us in Asia are somewhat less sophisticated, or more sinister than our
counterparts in the West. Muddy Waters attacks work best when the shareholders
are foreign entities, and Muddy Waters gets to cash in on their existing
mistrust of China/Asia. Of course this is completely untrue, America most
definitely has proven to be the country that produces corporate fraud at a
level so vast it has more than once impacted the global economy.
It is important to remember when
reading all the Muddy Waters press that not all of his targets have collapsed,
and fraud has not always been proven, the Muddy Waters strike rate in relation
to sinking companies or proving criminality is pretty low. What the Muddy
Waters press machine does is create doubts on a company, without proof or
accountability for a quick buck, while there is nothing wrong with making a
quick buck, the Muddy Waters approach is beginning to wear thin, there are now
a trail of innocent investors and managers whose businesses suffer lingering
suspicion but with no proof of having committed any accounting breach.
But I do think it is harder to
scare Singapore investors, wherever they are from. Singapore has a stellar
reputation and rightfully so, that is why I predict that the Muddy Waters
attack on Olam is a strategic error, Muddy Waters will lose this battle.
Malaysia
Scientex Bhd’s earnings rose
20.6% to RM24.87mil in the first quarter ended Oct 31, 2012 from RM20.63mil a
year ago, due to strong growth in its manufacturing and property divisions.
It said on Wednesday its revenue
increased by 13% to RM241.61mil from RM213.76mil. Operating profit was 18.6%
higher at RM31.48mil from RM26.54mil. Earnings per share were 11.57 sen
compared with 9.59 sen.
Scientex said the industrial
packaging manufacturing division’s revenue rose 12.0% to RM172.6mil from
RM154.1mil a year ago, boosted by higher regional exports.
Its property division reported a
15.6% increase in revenue at RM69.0mil due to increased revenue recognition
from ongoing projects.
Earlier at its AGM, shareholders
approved the company’s acquisition of GW Plastics Holdings Bhd’s core assets —
industrial plastic packaging, blown film, and downstream printing and
laminating capabilities — for RM283.2mil.
This acquisition would allow the
group to fast-track its manufacturing division expansion plans.
Scientex said the deal would
expand its capacity to produce 154,000 tonnes of industrial stretch film and
28,000 tonnes of blown film.
“Given plans already put in
motion, the total annual stretch film capacity is expected to hit the 194,000
tonne mark by 2014,” it said, adding the acquisition was expected to be
completed by end-January 2013.
Indonesia
Pembangunan Jaya Ancol, a
recreational park operator in North Jakarta, set the coupon rate on its Rp 300
billion ($31 million) bond sale plan.
The Jakarta-based company will
offer Rp 100 billion worth of three-year bonds at a coupon of 8.1 percent, the
company said in a brief prospectus published by Investor Daily on Tuesday. The
company is also offering Rp 200 billion worth of five-year bonds at 8.4
percent.
Pembangunan Jaya plans to list
the bond on the Indonesia Stock Exchange on Dec. 28.
The company’s bonds coupons are
lower than that offered by its rival Modernland Realty.
Modernland Realty, an Indonesian
property company, is offering Rp 250 billion worth of three year bonds at 10.75
percent, according to a brief prospectus published also published in Investor
Daily on Tuesday. It also offering Rp 250 biliion in seven-year bonds at 11
percent, the prospectus showed.
Typically the coupon of the notes
sold by private companies such as Modernland and Ancol are higher than those
sold by the government. The yield on the government five-year bonds was 4.7581
percent on Tuesday from 4.7594 percent the previous day while the yield on the
three-year bonds was at 4.6656 percent, according to data from Indonesia Bond
Pricing Agency.
Indonesian companies and
commercial banks are selling bonds to capitalize on low borrowing costs in
Southeast Asia’s largest economy.
Pembangunan Jaya said that it
will use the proceeds from the bond sale to finance its expansion plans. It
plans to build residential houses and coastal villas inside the Ancol park
complex in North Jakarta.
Pembangunan Jaya named Indo
Premier Securities and Mandiri Securities as financial adviser for the debt
sale.
The Jakarta government owns 72
percent of Jaya Ancol, with 18 percent owned by Pembangunan Jaya and 10 percent
by other investors.
Company shares rose 1.2 percent
to Rp 850 on Tuesday.
Business & Investment Opportunities
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