TIME dotCOM (FV RM0.87 ' BUY) Corporate News Flash: FullSpeed Ahead

Last Friday, Time dotCom (TDC) announced that the High Courtof Malaya had granted its approval for TDC's proposals to conduct: (i) acapital restructuring, and (ii) a capital repayment of RM0.02/share. We viewthe approval by the High Court positively, in the run-up to themuch-anticipated acquisition of Global Transit entities and AIMS Group, which is slated to be completed by 2HFY12. Withtheir inclusion into TDC's current business structure, we  expect the new enlarged entity to leverage on each other's strengths to providea more holistic one-stop solution to their wholesale customers since theenlarged group would  have an extensiveregional footprint with connectivity from Asia all the way to the US. We thinkthat with the multiple proposals in the pipeline, there may be a rerating ofthe stock especially when the operations of the acquirees are consolidatedtogether with TDC's later during the year. We are reiterating our BUY recommendationon the company at a fair value (FV) of RM0.87 based on a sum-of-thepartsvaluation.

Heads south.  The FBM KLCI was down 4.77 pts to close at1591.85.  News over the weekend include:the consumer price index (CPI) for March increased 2.1% y-o-y to 104.5, AirAsiaBhd enters  into distribution and calloption agreements with  Tune Ins HoldingsSB and Tune Money SB in relation to the provision of insurance products to AirAsiacustomers as well as the right to purchase Tune Ins shares, Ajiya Bhd invests RM30mto set up a safety glass processing plant in Thailand and  total advertising expenditure in the countryslipped 0.9% y-o-y to RM856.2m according to Nielsen. Meanwhile, the jointventure of MMC Corp Bhd and Gamuda Bhd has accepted the RM8.8bn contract forthe underground works package for the Klang Valley Mass Rapid Transit and Bank Negara's international reservestotalled RM416.6bn as at 13 April 2012. Finally, US markets closed mix whilethe crude oil price closed higher  lastFriday. The price of crude oil edged up by USD1.21 to close atUSD103.78/barrel.

The tender for the re-development of the 926ha out of the1,215ha Rubber Research Institute (RRI) Malaysia land in Sungai Buloh, that isnow controlled by Kwasa Land SB is expected to be called by the third or fourthquarter of this year, sources said. The new developments would give the RRIland a huge physical and economic boost that would lift the land value of thearea. The tenders were supposed to be out by June but because this developmentrequired considerable scrutiny and strategizing, it might take a little longer.(StarBiz)

Petroliam Nasional (Petronas) made a major coup in the pasttwo weeks, securing two gas supply deals in Singapore and Indonesia. In thelatest deal, Petronas signed a gas  salesagreement with Keppel Energy, a subsidiary of Singapore-listed Keppel Corp tosupply 43m standard cubic feet per day of natural gas to the latter, a dealwhich is believed to be worth USD2.2bn (RM6.74bn). (BT)

Far East Organization, Singapore's largest privatedeveloper, plans to redevelop a commercial site in Old Klang Road, here, intoan integrated lifestyle mixed development in three years. Chief operatingofficer, Chia Boon Kuah said the group had commenced  a feasibility study on the supply and demandsituation and the best product mix for the area. The group is consideringhigh-rise condominiums targeting the upper-middle income group, and retailcomponents. (BT)

AirAsia Bhd has entered into a distribution agreement withTune Ins Holdings SB, which will see the latter provide insurance products tothe company's customers, and a call option agreement with Tune Ins and Tune MoneySB for the right to purchase shares in Tune Ins. The agreement would helpimprove performance of the travel insurance business and reduce costs, said thecompany. (Malaysian Reserve)

Malaysian  AirlineSystem Bhd's (MAS) engineering and maintenance unit expects to expand itstraining programme for licensed aircraft engineers and technicians by settingup a training school in Hyderabad, India, under its joint-venture project withGMR Hyderabad International Airport. The move is expected to help the nationalflag carrier to generate more revenue and meet the demand for well-trainedaircraft maintenance facility personnel, MAS senior vice president, engineeringand maintenance, Subang, Khairuddin Hamzah said. (Malaysian Reserve)

Malaysia's March CPI didn't bear surprises, with a moderateincrease of 2.1% to 104.5 y-o-y. The index for food and non-alcoholic  beverages and non-food showed increases of2.9% and 1.7% y-o-y respectively for March. The CPI remained unchanged at 104.5m-o-m. The CPI for 1Q2012, meanwhile, rose 2.3% y-o-y. All main groups advancedwith the exception of communication, clothing and footwear. Food andnon-alcoholic beverages, in particular, rose 3.6%. (StarBiz) Please seeaccompanying report

Indonesia's push to lure investment is at risk from 'policyslippages' such as the failure to cut fuel subsidies, said Standard &Poor's, the only company with a non-investment-grade rating for the SoutheastAsian nation. If the government's subsidy spending alters the fiscal outcome ormarkedly deteriorates the quality of expenditure or if policy measures deterfresh foreign direct investment, then the ratings could stabilize at thecurrent level, according to S&P. Indonesian lawmakers last month rejectedthe government's proposal for a 33% increase in subsidized-fuel prices from 1April, instead allowing it to raise rates only if the Indonesia Crude Priceexceeds the state budgetary assumption of USD105 a barrel by 15% over asix-month period. (Bloomberg)

Japan's absence of 'concrete reform plans' for the nation'sfinances may be contributing to deflation and sluggish economic growth bydiscouraging spending by the public on concerns over future fiscaldevelopments, central bank Governor Masaaki Shirakawa said. Shirakawa haspledged to extend 'powerful' easing until a 1% price goal is in sight and hispolicy board next meets on 27 April. The nation's borrowings will exceed JPY1,000trn(USD12.4trn) for the first time in this fiscal year, the Finance Ministryprojects, while the OECD predicts Japan's public debt will reach 219% of GDP.(Bloomberg)

Demand for loans from Japanese companies, households, andlocal governments rose in the first quarter as the nation's economy  rebounded from a contraction in 2011. Anindex showing companies' demand climbed to 6 from minus 2 in the previous threemonths, while gauges for local governments and households jumped to 7 fromzero. The figure adds to evidence that Japan is recovering from last year'searthquake, tsunami and nuclear disaster. The Bank of Japan's setting of a 1%inflation target and expansion of its asset-purchase program by JPY10trn(USD122bn) in February caused the yen to weaken, helping exporters. (Bloomberg)

Europe's governments were told the onus for fixing theirdebt woes lies with them as the Group of 20 warned the two-year crisis stillthreatens global growth. Canada and Australia joined the IMF and US in pressingEurope to intensify efforts to quell the turmoil as it spreads to Spain. TheG-20 cited 'the situation in Europe' first in a list of drags on the worldeconomy. (Bloomberg)

UK retail sales rose at the fastest pace for more than ayear last month as the warmest March for half a century boosted purchases ofclothing and gardening products and panic buying lifted auto-fuel demand. Salesincluding auto fuel gained 1.8% from February, when they fell 0.8%. The dataadd to evidence that the economy returned to growth in the first quarter,though the outlook remains fragile as inflation outpaces wages, continuing the squeezeon household budgets. Sales were boosted by the warmest March since 1957,increasing demand for clothing and footwear and spending at garden centers.Fuel sales rose 4.9% from February. Sales at non-food stores rose 3%, withclothing sales climbing 2.3% and purchases at department stores increasing1.6%. (Bloomberg)

The biggest gain in consumer spending in a year probablyhelped the US economy keep expanding in the first quarter even as fuel costsclimbed. GDP is expected to rise at a 2.5% annual rate after advancing 3% inthe previous three months. The Commerce Department will release the figure on27 April. Consumer purchases that account for about 70% of the economy climbedby the most since the end of 2010, the survey of economists showed. Jobcreation and warmer winter weather helped Americans overcome higher prices atthe gas pump as auto sales powered ahead and retailers enjoyed more foot traffic.At the same time, the pace of growth may not be enough  to convince Federal Reserve policy makersmeeting this week to stray from their plan to keep borrowing costs low through2014. (Bloomberg)

Source: OSK188