1) Malaysia furniture exports hit by slowing US economy. The Deputy Plantation Industries and Commodities Minister said furniture export sales fell by 4.0% to RM4.1bn in 1H08. He continued that "in light of recent trends and economic slowdown in major markets such as US, the exports of Malaysian furniture is expected to remain stable this year". Malaysia may not be able to maintain its position in the top 10 largest furniture makers as China and Vietnam are able to supply to the world at a lower cost.
2) The Anwar Factor. There are plenty of important dates to note in the coming weeks and months. Sep 16 was supposed to be the crossover date for certain candidates over to Anwar's PKR party. Anwar still claims to be able to form government by that date. Eyes will also be on Barisan Nasional, especially UMNO, given the upcoming Division Meetings (9 Oct - 9 Nov) and the year-end Party General Assembly and Election (16-20 Dec).
3) There are strong talk that toll road operators may have to reduce toll rates in exchange for longer concession periods. This has a good chance of coming to fruition as both the opposition and ruling coalition are in favour of significantly reducing toll rates. While NPV neutral, reduced equity cash flows in the intermediate term will affect Litrak's dividend policy. Its share price should be depressed as well. Sector valuations for toll operators will take a tumble to reflect the ad-hoc revisions. Beware of toll operators. The tide is against them. Judging from the aggressive Budget and the insistence on IPP windfall tax, this rumour could be more just just a rumour.
p/s photos: Nabila Syakieb
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