Here's what we have for the week

Significant Event

• Bank Negara Malaysia (BNM) has announced that multilateral development banks and non-resident financial institutions can now issue ringgit bonds and provide ringgit financing to Malaysian businesses. As participation in ringgit financing grows, regulations on MYR may be further relaxed. The ultimate goal might be to liberalize the Ringgit foreign exchange market.
• Five feed millers, including Leong Hup Feedmill Malaysia Sdn Bhd, Malayan Flour Mills Bhd, PPB Group Bhd's 80%-owned FFM Bhd, Gold Coin Feedmills (M) Sdn Bhd, and Thai CP Group Ltd, have been fined RM 415.5 million for colluding in a 'chicken feed cartel' to fix poultry feed prices.
• Temasek Holdings is selling a 28% stake in the Malaysian telecom provider U Mobile, reducing its stake from 48% to 20%. The acquirer of this stake is Mawar Setia, a company 70% owned by Vincent Tan, the founder and chairman of U Mobile, and 30% owned by the daughter of Yang di-Pertuan Agong Sultan Ibrahim Sultan Iskandar.

*Shareholders of U Mobile

• Kawan Food Bhd, a frozen food manufacturer, is venturing into the IT equipment supply business by acquiring Realtech Automation for RM 2.5 million. Realtech Automation was recently appointed as the agency and distributor for Super Micro Computer Inc in Malaysia. Super Micro recently cleared itself from an accounting fraud allegation by Hindenburg Research after an internal investigation.

Real Estate Industry 

• OSK Group, a conglomerate that owns 10% of RHB Bank, is expanding its land bank by acquiring 330 acres in Sungai Petani, Kedah. Sungai Petani, with a population of approximately 270,000, is becoming increasingly popular among property developers due to its proximity to industrial parks in Penang. Eupe Corp and Lagenda Properties are among the developers that have been expanding their land banks in Sungai Petani over the past few months.
• Pavilion REIT is acquiring Banyan Tree KL and Pavilion Hotel KL for RM 140 million and RM 340 million, respectively. Banyan Tree KL has 55 rooms, while Pavilion Hotel KL has 325 rooms. This transaction prices each room at RM 2.54 million for Banyan Tree KL and RM 1.05 million for Pavilion Hotel KL.

Cash Call

• Malton Bhd, a property development company owned by the same owner as Pavilion REIT, plans to raise up to RM 19.47 million through a private placement of shares to third-party investors. This funding will support its ongoing property development projects.

Privatization

• Suntec REIT has received a mandatory conditional offer of $1.16 per unit from Gordon and Celine Tang. The offer price is at a significant discount to Suntec REIT's net asset value of $2.097.

Portfolio of Suntec Reit

Company Expansion Plan/ Capex Plan

• Dialog Group is re-entering the upstream oil industry by winning the RAJA cluster small field asset Production Sharing Contract (PSC) with Petroliam Nasional Bhd.
  

What is a Production Sharing Contract (PSC)?
A Production Sharing Contract (PSC) is an agreement between a government and a resource extraction company, where the company bears the exploration, development, and production costs. In return, the company is entitled to a share of the production, while the government retains ownership of the resources. The terms of the share vary depending on the agreement but generally include the government receiving a portion of the production as compensation.  

Location of Raja Cluster