New Incentives Plan for Oil and Gas‏

The government has endorsed a new plan of tax incentives proposed by Petronas which will be incorporated in the Petroleum Income Tax Act, Prime Minister said today.

“By lowering risks and increasing the rewards for investment, this initiative will potentially lead to additional petroleum-generated revenue of more than RM50 billion for Malaysia over the next 20 years” he said when announcing 9 new developments and Entry Point Projects of the Economic Transformation Program.

Najib said there would be a notional trade-off of about RM8 billion in the form of revenue foregone from investment tax allowances, reduced tax and the export duty waiver for marginal fields.

The 5 new incentives are:-

1. Investment tax allowance of capital expenditure.
2. Reducing tax rate from 38% to 25% for marginal oil field development
3. Accelerated capital allowance of up to 5 years from 10 years.
4. Qualifying exploration expenditure transfer between non-contiguous petroleum agreements with the same partnership or sole proprietor
5. Waiver of export duty on oil produced and exported from marginal field development

Source: Bernama

Finance Malaysia (FM):-

"This is definitely a good perks for the oil & gas sector. The main objective here is to encourage deep water exploration, which is capital intensive and requiring more technical know-how."

"MHB which was listed recently could be the main beneficiary, judging by its expertise and available resources and technical in this field."

"Following the listing of MHB and Petronas Chemical Group, any good news announced would definitely excite the market. FM believe this is just one of the good news prior to the next general election, reportedly early next year".

QSR shares is "flying", because KFC is "frying"?

Yet, another lesson could be learned in Bursa Malaysia last week. In the midst of series of corporate activities happening, how could you left out QSR Brands Bhd and its jewel KFC Holdings (M) Bhd (QSR holds 50.6% of KFCH)?

Below is the important date and announcements made:-
19th Nov : QSR received a take-over proposal, but in preliminary stage (closing at RM5.76)
20th Nov : Halim Saad was said proposed to take-over QSR at RM5.60 per share only
21th Nov : QSR shares dive 6.4% to RM5.39
25th Nov : US private equity fund Carlyle Group make an RM6.20 offer for QSR shares

For me, there are some very strange things happening, especially on the timing of announcements.

1. Halim's real announcement was made on Saturday (20th Nov) on Bursa Malaysia website. Saturday?
2. Halim's offer price is lower than the previous closing price.
3. Another offer came few days later, which commands a much higher premium.

QSR's recent share price movements

What does this reflect?
Would someone trying to "goreng" the shares of QSR and KFC?

If I know about the Carlyle's offer one week before, I would try to bought QSR shares. However, the shares is too high already. How?

I would try to "cause" the share price come down, so that, I could accumulate the shares at a cheaper price. Lastly, just wait until Carlyle's good news. By then, I would have making a 15% profits on my investment in  merely 5 days.

The question is: "Did Halim know about the soon to be announced Carlyle's offer?"

UnEthical "Ipoh Bean Sprout Chicken Rice" Restaurant... Beware!!!

Beware, especially KL people. There is a famous "Ipoh bean sprout chicken rice" which do business in its own way - unethical. And, for your information, this restaurant have many outlets in KL. I am wondering how it can expand so rapid with the experience of mine as below:-

The story...

Last night, I went for dinner at this outlet in Puchong. Here is my order:

• One white chicken rice. And, I stressed that I want the "normal" one.
• One Ipoh chicken Hor Fun.

However, it turned out as following:

• One famous "farm chicken" which cost RM1 more.
• One Ipoh chicken Hor Fun with beef balls (sure more expensive la...).

When I confront with the waitress, who took my order. She said: "Oh... We have changed the menu , and we only have Ipoh chicken Hor Fun with beef-balls or fish-balls. Since we do not have fish balls already, I just give you beef-balls today."

Picture by Rasa Malaysia

After charging the bill, I complain to the manager. Because, this is not the first-time I visit the restaurant, and I know the price and what is available on the menu quiet clearly. And, this is not the first-time I order the "normal" white chicken rice, but they gave me the specially more expensive one.

As expected, the manager said there is normal white chicken rice and pure Ipoh chicken Hor Fun available in the menu. Then, she gave me back RM1 for the extra white chicken rice charged. Since then, they lost a few customers like me.

Back to financial-related angle, does it mean that ethical business would not make money?

After analyzing, I believe the said restaurant teaches their server to do it the "more profitable" way, to add-value, and to squeeze customers. Because, I have been served for 3 times before, and they are acting the same. Why can't we do business in a more ethical way? If the food is in good taste, customers sure will return. If the service is good, customers sure will be loyal. Correct?

Finance Malaysia sure will boycott those unethical business. Don't you?

New Fund: Public Islamic Infrastructure Bond Fund

Public Islamic Infrastructure Bond Fund is an Islamic bond fund that seeks to provide annual income to investors through investments in sukuk of companies in the infrastructure sector.

The fund allows investors to access the sukuk market, which is usually inaccessible to the average investor as it is a market for institutions where the standard transaction lot is RM5 million. Sukuk issued by companies in the infrastructure sector are generally underpinned by predictable cash flows and stable income stream over the respective issuer's concession period. Example, companies with power plant concessionaires, telecommunication service providers, toll-road concessionaires and port operators.

The fund invests up to 98% of its NAV in a portfolio of sukuk of companies involved in the infrastructure sector and the balance of its assets in Islamic money market instruments. To achieve increased diversification, the fund may invest up to 25% of its NAV in foreign sukuk, which includes Singapore, United Kingdom, Japan, Australia, Hong Kong and other permitted markets.

The fund is suitable for investors seeking the stability of annual income with some safety of principal via participating in sukuk issued by companies in the infrastructure sector.

Source: Public Mutual

New Fund: Public Islamic Alpha-40 Growth Fund

Public Islamic Alpha-40 Growth Fund is an Islamic equity fund that seeks to achieve capital growth by investing up to a maximum of 40 selected Shariah-compliant blue chip stocks, index stocks and growth stocks listed primarily on Bursa Securities and regional markets.

The fund adopts a more focused investment strategy and is able to achieve potentially higher returns over the mid to long term as it concentrates its investment in a portfolio of not more than 40 stocks. Currently, 88% of securities listed on local bourse are Shariah-compliant representing about two-thirds of Bursa Malaysia's market capitalization.

The equity exposure will generally range from 75% to 98% of its NAV. To achieve increased diversification, the fund may invest up to 30% of its NAV in selected foreign markets, which include Singapore, Taiwan, South Korea, Japan, Australia, New Zealand, Hong Kong, China, Thailand, Indonesia, Philippines and other markets.

Source: Public Mutual