Published November 13, 2008

Telekom asked to cut broadband cost

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(KUALA LUMPUR) Malaysia's government may ask Telekom Malaysia to trim the costs of a proposed high speed broadband project valued at RM11.31 billion (S$4.7 billion).

'If existing TNB (Tenaga Nasional) infrastructures are suitable, we will ask TM to trim down the project cost,' said Second Finance Minister Nor Mohamed Yakcop when winding up the debate on Budget 2009 at committee stage.

The government's contribution to the project is RM2.4 billion while Telekom Malaysia is to invest RM2.4 billion over 10 years. The company could use existing infrastructure from electricity utility Tenaga to build out the project, Mr Nor Mohamed said.

Malaysia's government is facing higher budget deficits due to lower economic growth and is seeking ways to save money on large infrastructure projects. -- Reuters

Published November 12, 2008

Forex loss puts Telekom in the red

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(KUALA LUMPUR) Telekom Malaysia Bhd, Malaysia's biggest fixed-line operator, posted its first quarterly loss in almost three years because of foreign exchange losses and said that it expects 2008 to 'remain challenging'.

The company posted a loss of RM165.8 million (S$69.9 million), or 4.8 sen a share, in the third quarter ended Sept 30, from a profit of RM658.5 million, or 19.2 sen a share, a year earlier, according to a stock exchange filing. It had a foreign exchange loss of RM195.7 million, compared with a RM49 million gain a year earlier.

Malaysia's ringgit has fallen 11 per cent against the US dollar in the last six months, boosting Malaysian companies' cost of foreign currency loans. Power utility Tenaga Nasional Bhd last month reported a foreign exchange loss of RM288.8 million in its fiscal fourth quarter.

The global financial crisis has had a 'significant impact' on Telekom's results, particularly on its US$1.1 billion bonds, the company said. Foreign exchange fluctuations will continue to affect its results this year, it said.

State-controlled Telekom, which is the best- performing stock on the Malaysian benchmark index this year, added that it is 'committed' to its 2008 dividend policy. Sales dropped 3.1 per cent to RM2.06 billion, as a decline in voice revenue offset gains in broadband and data, it said. - Bloomberg

Published November 12, 2008

Maybank Q1 profit falls by 22.2%

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(KUALA LUMPUR) Malaysia's top lender, Malayan Banking Bhd (Maybank), said yesterday that its first-quarter profit fell by 22.2 per cent, as net interest income fell and recovery of non-performing loans slowed down.

The state-controlled Maybank, which has been on a controversial overseas acquisition spree this year amid rising competition at home, warned of greater non-performing loans (NPLs) and a moderate loan growth amid a global economic downturn.

'The operating environment for the domestic banking sector is expected to become more challenging with moderate prospects for increasing loans growth and heightened risk of greater non-performing loans,' Maybank said in its quarterly report.

It added that net profit for the current financial year, ending June 30, 2009, would be lower than the previous year.

Maybank reported net profit of RM572.17 million (S$241.17 million) for the three months to Sept 30, compared with RM735.43 million in the year-ago period.

Analysts in Malaysia do not provide quarterly forecasts, but predict that earnings at Malaysian banks, like those of their global peers, will fall in coming months as the world economic slowdown curbs demand for new loans and slashes the value of assets such as property, leading to more bad debts.



Maybank's profitability may also be affected by the higher cost of borrowing inflicted by the global credit crunch, as the lender needs to raise funds to maintain capital adequacy ratios, analysts said.

Analysts expect that Maybank will need to raise up to RM11 billion to fund three acquisitions announced this year: Vietnam's An Binh Bank, Pakistan's MCB Bank and Bank Internasional Indonesia. -- Reuters