IJM and Genting excluded from investments wealth fund due to severe environmental damage

Environmental issues: IJM and Genting have interests in palm oil operations.

Norwegian fund to call off investments on environmental issue

PETALING JAYA: Norway’s US$871bil sovereign wealth fund Norges Bank has excluded IJM Corp Bhd and Genting Bhd from its investments due to risks of “severe environmental damage”.

Two other companies that the fund said it would not invest in are South Korean steelmaker POSCO and Daewoo International Corp, a trading company and listed subsidiary of POSCO.

“Norges Bank has decided to exclude the companies IJM Corp, Genting, POSCO and Daewoo International Corp from the investment universe of the Government Pension Fund Global.

“The companies are excluded based on an assessment of the risk of severe environmental damage,” it said in a statement. Both IJM Corp and Genting have interests in palm oil operations.

According to the fund’s website, it held US$46mil investments in IJM Corp and US$40.8mil in Genting.

The fund also has investments in IJM Land Bhd and Genting Malaysia Bhd.

The world’s top sovereign wealth fund has a range of ethics criteria for excluding firms from its portfolio, including environmental factors, nuclear weapons-making and labour conditions.

A handful of Malaysian companies are also on Norges Bank’s list of “exclusion of companies”, including WTK Holdings Bhd, Ta Ann Holdings Bhd, Lingui Development Bhd and Samling Global Ltd.

Norges has been one of the largest foreign fund investors in Malaysian equities since 2010. As at end-2014, the fund had invested about US$1.66bil in 139 Bursa Malaysia-listed companies. - Starbiz

Norwegian fund Norges allots RM800mil to invest in Malaysian small, mid-cap stocks

The foreign fund has invested about RM1.7bil in 53 Bursa Malaysia-listed companies.

PETALING JAYA: Norwegian fund Norges has allotted RM800mil more to invest in small to mid-cap stocks in Malaysia.

A market source said the foreign fund appointed Eastspring Investments Bhd about a month ago and was investing in general equity, with a preference for the small to mid-cap equity space.

“There are no specific guidelines as to which sector Norges is keen on. It wants to look at good companies and it so happens the local small and mid-cap space is doing well this year,” the source said.

Norges has been one of the largest foreign fund investor in Malaysian equities since 2010.

In April, StarBiz reported that the foreign fund had invested about RM1.7bil in 53 Bursa Malaysia-listed companies, managed by Kenanga Investors Bhd. At the time, the fund was already sitting on a paper gain of some RM600mil, with its entire holdings in Malaysia valued some RM2.3bil. Its performance in Malaysian equities was attributed to the big run-up in many of the small oil and gas companies since last year.

The source added that Norges was still looking for more fund managers to manage its investment in Malaysia. “It has always had this allocation for Malaysia which it had not entirely fulfilled yet. So it is continuously looking for fund managers,” the source said.

PublicInvest Research in its strategy note for the second half of 2014 said smaller-capitalised stocks in Malaysia have had a good run year-to-date, reflected by the FBM Small Cap Index’s 18.6% gain compared with the FBM KLCI’s 0.3% gain and FBM Mid 70 Index’s 1.2% rise.

Eastspring Investments had about US$105bil (RM334.2bil) in assets under management as at March 31.

The asset management house was named Asia’s leading retail fund manager for 2013 in an annual survey by Asia Asset Management.

Norges, also referred to as the Norwegian oil fund, has a market value of 5,038 billion kroner (RM2.73 trillion) as of end-2013.

Norges is managed by Norges Bank Investment Management, the asset management unit of the Norwegian central bank.

As of end-2013, it is invested in 8,000 stocks in 82 countries and owns 1.3% of the world’s listed companies, delivering annual returns of 5.7% since 1998. - By LIZ LEE Starbiz

Norwegian fund nibbling at Malaysian small and mid caps

PETALING JAYA: Norway-based Norges, one of the largest foreign funds investing in Malaysian equities, has been nibbling small to mid cap stocks that offer exciting upside here.

It has taken up small stakes in 53 Bursa Malaysia-listed companies, with total investments of around RM1.7bil, according to a fund manager.

Norges has a market value of 5,038 billion kroner (RM2.73 trillion) as of end-2013.

Norges began investing heavily in the Malaysian market since 2010 and is now sitting on a paper gain of some RM600mil, giving its entire holdings in Malaysia a value of some RM2.3bil.

Among Norges’ investments are a string of mid-sized oil and gas firms such as Alam Maritim Bhd, Daya Bhd, Scomi Energy Services Bhd and Barakah Offshore Petroleum Bhd.

It has even invested in special purpose acquisition companies Sona Petroleum Bhd and Cliq Energy Bhd.

“An investment from Norges is a positive endorsement from an independent party. It shows that the company has fulfilled the international standards of a foreign sovereign fund,” said one fund manager, who tracks Norges’ movements.

In Malaysia, Norges’ appointed fund manager since 2010 has been Kenanga Investors Bhd. Every year since then, sources said that Norges had allocated Kenanga at least RM150mil as it was pleased with its local counterpart’s performance.

Prior to Kenanga Investors, Norges’ appointed fund manager was RHB Investment Bhd.

“Kenanga Investors has been investing in small and mid caps even before the recent run-up in such companies over the last one year. The big run-up in many of the small oil and gas companies has significantly enhanced Norges’ performance here,” said a fund manager familiar with Norges’ strategy.

This indicates that Norges has a lot of interest in the sector, which isn’t surprising considering that Norges itself has gained its funds from the oil and gas revenues of Norway’s state-owned pension fund.

Aside from oil and gas stocks, Norges has also invested in other sectors such as banking and property.

“The reason it has done well is because it identified mid cap investing very early on. While the Employees Providents Fund (EPF) only articulated its interest in investing in mid-sized companies last year, Norges has been doing that for the last 3 to 4 years,” said the source.

Last June, EPF chief executive officer Datuk Shahril Ridza Ridzuan said it was looking at making investments in 40 mid-cap stocks, adding that the fund was already invested in a number of mid-sized companies.

He said the EPF was happy to support companies that fulfilled its investment criteria, which include having ample liquidity, the ability to generate cash flows and dividends, and having good corporate governance practices in place.

Slightly differing from the EPF which oftentimes take substantial stakes, Norges has a policy of not going beyond 3% in any particular stock, sources said.

“Norges is in the business of portfolio management. It isn’t in the business of running companies,” said the source.

Norges, also referred to as the Norwegian oil fund, is managed by Norges Bank Investment Management, the asset management unit of the Norwegian central bank. Norges is mandated to hold 60% in stocks and 35% in bonds, and is aiming to build up a 5% holding in real estate.

As at end-2013, it is invested in 8,000 stocks in 82 countries and owns 1.3% of the world’s listed companies. Between 1998 to 2013, Norges has been delivering annual returns of 5.7%.

 - By LIZ LEE Starbiz

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IJM's outlook downgraded to negative, debt notes reaffirmed by MARC

MARC: IJM Corp outlook downgraded to negative

KUALA LUMPUR: Malaysian Rating Corp (MARC) has affirmed its AA- rating on IJM Corp Bhd’s RM1 billion debt notes but downgraded its outlook to negative from stable.

The ratings agency said decline in palm price to current low levels of RM2,200 per tonne and the weak near-term outlook of the sector would likely drag IJM’s plantation division’s earnings.

MARC also noted that the slowdown in the property sector has seen demand moderating at several of IJM’s projects.

MARC said IJM's RM1 billion debt notes involved the commercial paper/medium-term notes programme (CP/MTN).The outstanding notes under the programme comprise RM300 million CPs and RM250 million MTNs.

“IJM's borrowings have steadily increased, standing at RM6.3 billion as at end-December 2014,” MARC said, adding at the holding company level, the borrowings amounted to RM1.3 billion.

The rating agency highlighted IJM’s funding of infrastructure projects and capital requirements for its oil palm plantings in Indonesia could further pressurise its credit profile.

On the other hand, MARC observes that IJM’s orderbook for construction division has improved to about RM7.2 billion as at end-financial year 2015. “The improved prospects for the construction division may provide some buffer against weaker performance in the other divisions,” it said.

Going forward, MARC may raise the group's outlook to stable if it is able to show financial resilience in restoring cash flow protection measures.- New Straits Times

IJM’s debt notes rating reaffirmed, MARC also revises the company's long-term rating to negative from stable 

PETALING JAYA: Malaysian Rating Corp Bhd (MARC) has affirmed its AA- rating on IJM Corp Bhd’s RM1bil debt notes.

In a statement yesterday, MARC said it had also revised IJM Corp’s long-term rating to negative from stable, due to the challenging outlook for the company’s core business.

“The negative outlook incorporates the challenging prospects for IJM group’s core businesses, namely, the palm oil and property development sectors, from which the group generated a combined 45.3% and 60.6% revenue and pre-tax profit for fiscal 2014,” said the rating house.

MARC added that the sharp decline in palm oil prices from last year and the weak near-term outlook for the sector would drag the group’s plantation division earnings.

“The sharp decline in palm oil prices since April 2014 from RM2,800 per tonne to about RM2,200 per tonne currently and the weak near-term outlook for the sector would further weigh on the group’s plantation division earnings.”

The rating agency also said the slowdown in the property sector had seen demand moderating for several of IJM’s property development projects.

“Against this backdrop, MARC observes that group borrowings have steadily increased, standing at RM6.3bil as at end-December 2014. At the holding company level, its borrowings stood at RM1.3bil as at end-December 2014,” it said.

Meanwhile, MARC said the RM1bil debt notes involve the commercial paper/medium-term notes programme (CP/MTN). The outstanding notes under the programme comprise RM300mil CPs and RM250mil MTNs.

It said the funding for the group’s infrastructure projects and capital requirements could add further pressure on its credit profile.

MARC noted, however, that the group’s orderbook for its construction division had improved to about RM7.2bil as at end-financial year 2015.

“The improved prospects for the construction division may provide some buffer against the weaker performance of the other divisions,” it said.

Going forward, the rating agency said it may revise the group’s outlook to stable, if the group was able to show financial resilience in restoring cashflow protection measures, reflecting the credit strength.

“The long-term rating, however, could be lowered should key financial metrics deteriorate due to weakening performance of key business segments and/or additional increase in borrowings,” it said.

Separately, BIMB Securities Research said it was optimistic on the related-party transaction involving the transfer of The Light Waterfront development in Penang from Jelutong Development Sdn Bhd to Aura Hebat Sdn Bhd (AHSB). Both companies are subsidiaries of IJM Corp.

“We are positive on the development, as it will provide an avenue for prodigious development on the land.

“No significant impact to our 2015 and 2016 earnings forecast, as construction will start later in the year,” said the research house.

AHSB will acquire The Light Waterfront development from Jelutong Development, an 80%-owned subsidiary of IJM Properties Sdn Bhd, for RM402.8mil, subject to, among others, the receipt of documents of title to the property from the relevant Penang authorities..

Sources: The Star/Asia News Network

Like father, like daughter: Young Malaysian property developer making her mark in Melbourne

Teh(pic), 27, co-founder of Beulah International, strides proudly in the footsteps of her father, Datuk Teh Kean Ming, chief executive officer/managing director of IJM Corp Bhd, who has been in the construction and property development industry for over 35 years.

MELBOURNE: Adelene Teh, a second-generation Malaysian property developer, is quickly making her mark in the competitive property development market here.

Teh, 27, co-founder of Beulah International, strides proudly in the footsteps of her father, Datuk Teh Kean Ming, chief executive officer/managing director of IJM Corp Bhd, who has been in the construction and property development industry for over 35 years.

Teh, a graduate from the University of Melbourne with a Master’s degree in architecture, was born and raised in Malaysia.

“I fondly remember my father taking me for walk-throughs on project sites and explaining the details. I am proud of what he was doing,” he told Bernama.

She attributed much of her own interest in property sector to her father, whose dedication and passion have influenced her career path.

Teh has collaborated with internationally-renowned global architects, Woods Bagot and multi-award winning landscape architect, Jack Merlo, to offer sophisticated first-class lifestyle in her new project, Gardenhill.

The A$76.5mil 11-storey, 136-unit apartment project offers luxury living in Doncaster, a prestigious eastern suburb here.

The prices range from A$360,000 to A$405,000 for one-bedroom units while two-bedroom units range from A$490,000 to A$745,000.

The estimated yields are between 4% and 6%.

In a recently-published article in The Age newspaper, Andrew Leoncelli, managing director of CBRE Residential Projects, said the location, perched high above Doncaster Hill and just 15km to Melbourne CBD, is a huge draw.

“Being high on the hill means amazing city and park views, while being directly adjacent to such a good shopping centre, with a host of luxury brands makes it an excellent prospect in real estate terms,” Leoncelli said.

Together with her partner, Jiaheng Chan, co-founder of Beulah International, they are the driving force behind the success of Gardenhill.

Malaysians will have the opportunity to attend and select the units at the KL Westin preview this weekend before the public Melbourne launch.

With already 30% of the units sold and scores of registrations before the public launch, Gardenhill is set to be a resounding success.

Like her family heritage, Teh’s property development skills have been well honed.

— Bernama

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