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Malaysia Daily Bulletin – 4/12/12
Malaysia Daily Bulletin | 04 December 2012

Supermax To Expand Into South America
Supermax Corporation is planning to tap into a new market in Latin America and Mercosul Free Trade Agreement countries. The company is currently exploring South America for a suitable location to set up its production facilities, according to its executive chairman and group managing director Datuk Seri Stanley Thai. The glove maker would probably begin with a small scale facility that has at least 20 production lines with each producing 10 million gloves a month, he said.  Thai also noted that Supermax was considering the various business incentives, investment opportunities, political backdrop in its survey of four Latin American countries (Argentina, Brazil, Paraguay and Uruguay). He said these countries needed to have adequate infrastructure and support services to make Supermax’s investment feasible there. While no decision has been made so far, the managing director did indicate that Paraguay seems to offer the “best” incentives among the four countries. However, recent political changes in Paraguay will be a major factor for consideration before Supermax makes its final decision.

Significance: Supermax’s plan to manufacture rubber gloves in South America would place the company in a more competitive position as governments there have imposed a 35 percent duty on imported natural rubber examination gloves in the region, thus making foreign-made gloves more expensive.

Analysts Optimistic On Blue-chip Firms In Near-term
The recent quarterly financial reporting season showed many blue-chip companies recording lower earnings, but analysts are still optimistic that the worst is already over and brighter times lay ahead. For the July to September reporting season, 10 FTSE Bursa Malaysia KLCI component companies and several other heavyweights recorded lower earnings.Over the past four weeks, the benchmark index fell by almost four percent.The lower numbers did not surprise analysts, as the third quarter was filled with many negative news on uncertainties in Europe and the United States, as well as news on slowing growth in China. On the other hand, the fourth quarter has been fairly filled with optimism where recent economic data has suggested that the US economy is on the path of recovery, while European leaders appeared to be moving closer to resolving the Eurozone crisis. Analysts believe that the improving economic landscape will help boost demand for goods and services, local export-driven companies as well as higher commodity prices (such as crude palm oil prices), will benefit from the global economy recovery.

Significance: As the situation in the west as well as China continues to improve, local companies and stocks will receive a much-needed lift, according to Mercury Securities head of research. In a recent report, it was indicated that the re-election of President Barack Obama and the transition of China’s leadership should also boost the country’s and the region’s stock markets in the near term.

Genting Plantations To Boost Oil Palm Yield With Genomic Research
Genting Plantations is betting on genomic research and precision breeding to enhance its fresh fruit bunch (FFB) yield by 15 percent to 27 tonnes/hectare/year, said president and chief operating officer Yong Chee Kong. The company’s current average FFB yield stands around 23 tonnes/hectare/year. The statement came after Genting Plantations’ biotechnology unit, ACGT signed on to American chemical company DuPont’s marker-assisted selection technology. In the next 30 months, DuPont has agreed to assist ACGT in developing the necessary skills, tools and techniques aimed to heighten oil palm yields. The collaboration between ACGT and DuPont is aimed at bringing down research cost. Through DuPont’s marker-assisted selection technology, the current traditional selection system which takes 11 years can be shortened to a research tenure of six year,” said ACGT chief executive officer Derrik Khoo.

Significance: Genting Plantations, a 55 percent unit of Genting , owns agricultural landbank of 66,000 hectares in Malaysia and another 162,000 hectares in Indonesia, through joint ventures. The company has so far planted up to 10 hectares of experimental plot, according to ACGT’s CEO.


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