Kwan in one of his more attentive phases. I hope you were sitting.

Kwan displays his strong work ethic, talking with his bookie.

The Kwan Cartoon.

Gamuda Sees $2 Bln Group Profit Over 30 Years From Selangor Dam 2000-04-24 00:57 (New York)

Kuala Lumpur, April 24 (Bloomberg) -- A consortium led by Gamuda Bhd. could make 7.7 billion ringgit ($2 billion) in profit from the country's largest privatized water project over the next 30 years as demand for water increases.

Syarikat Pengeluar Air Sungai Selangor Sdn., or Splash, as the consortium is known, sees 28 billion ringgit in revenue over that period from selling treated water to the Malaysian government, according to documents obtained by Bloomberg. 

Gamuda, which owns 30 percent of Splash, is banking on the earnings supplementing its income from two urban toll highways beyond 2003, when a water supply shortfall is forecast for Kuala Lumpur and the state of Selangor. 

``I expect Splash to contribute 50 million ringgit to 95 million ringgit to Gamuda over the next two years, or 25 to 40 percent of the group earnings,'' said Terence Wong, vice- president of research at G.K. Goh Research in Kuala Lumpur. 

Splash won the contract in January to build a dam and two water-treatment plants and take over an existing plant outside the capital. It has rights to sell treated water at pre-set rates to the government until 2030. 

When completed in 2005, the treatment plants could supply more than 2 billion liters of water per day to households in central Peninsular Malaysia. Water demand in the region has grown 9 per cent annually over the past decade, led by population and industrial growth. 

Bonds 

Wan Azmi Wan Hamzah -- a major shareholder of Land & General Bhd., Rohas-Euco Industries Bhd. and Bell & Order Bhd. -- holds 40 percent of Splash. State-owned Kumpulan Darul Ehsan Bhd. has 30 percent. 

Splash expects the project to generate a net operating cashflow of 1.1 billion ringgit, yielding a 16.6 per cent return to its shareholders at the end of 2030, the documents said. 

The documents were issued to investors early this month in connection with Splash fund raising. It has secured a 435 million ringgit loan from a group of lenders, and is likely to conclude a 1.4 billion ringgit Islamic bond issue this week. 

``At last count, we had sold 98 percent of the bonds,'' said Lee K. Kwan, general manager of Commerce International Merchant Bankers Bhd., which last week won the mandate to raise the money for Splash. ``We could keep the balance for trading, unless there is last-minute demand,'' he added.

Gamuda shares fell 10 sen, or 1.9 percent, to 5.10 ringgit this morning.)

Islamic Bonds `Righteous' Investment: Rates of Return (Update1) 2000-06-16 01:46 (New York)

Kuala Lumpur, June 16 (Bloomberg) -- Malaysian companies are lining up to sell Islamic investors bonds they can buy without breaking the laws of their faith, including a ban on receiving interest.

Midciti Resources Sdn., which built Kuala Lumpur's Petronas Twin Towers, the world's tallest buildings, raised 2.2 billion ringgit ($566 million) in late 1999 and early 2000 selling Islamic bonds. Intria Bhd., another construction company, and Malaysia International Shipping Corp. are planning Islamic bond sales in coming months. The Malaysia government is issuing these securities through its investment arm, Khazanah Nasional Bhd.

``It's a righteous way to invest,'' said Fahirurazi Yaacob, who buys Islamic bonds for the 1 billion ringgit of funds he helps oversee at Bank Muamalat Malaysia Bhd., the smaller of Malaysia's two Islamic banks. 

Islamic bonds are usually sold at a deep discount, and investors receive all their money at maturity instead of getting some of it in annual interest payments. The feature allows Muslims to obey a command in the Koran that bans interest and promises a ``painful doom'' for offenders. 

A so-called zero-coupon bond, sold by companies as well as the U.S. government, works the same way. Investors receive no interest, sometimes called the coupon rate, and get all their money when the bond comes due. 

How They Work 

The difference is that Islamic bonds are backed by an underlying asset, such as machinery or a building, meant to help keep their value stable as interest rates rise and fall. 

Islamic bonds are also sometimes structured to simulate coupon-bearing bonds, with investors receiving a series of securities that mature at set intervals, handing buyers a regular payment. 

There are about 25 billion ringgit of Islamic bonds trading in Malaysia, a nation of 10 million Muslims whose holidays include yesterday's observance of the prophet Muhammad's birthday. 

Malaysian companies started issuing these bonds as early as 1990, though sales came almost to a halt when Malaysia fell into recession two years ago. Sales totaled 341 million ringgit in 1998 and climbed to 1.7 billion ringgit in 1999, according to the central bank. Sales have already passed 1999's level this year. 

The increase in Islamic bonds comes as Malaysia's government tries to build religious values into its policies and administration, to increase public support after the main opposition Islamic Party won more seats in Parliament and took control of a second state government in the nation's last election in November. 

Islamic Mutual Funds 

Muslims might also consider investing in one of the Amana mutual funds run by Saturna Capital Corp. of Bellingham, Washington, which invest according to Islamic principles, though they focus mostly on capital growth and dividends from U.S. stocks. 

They shun companies with businesses in liquor or gambling and steer away from banks that make profit from charging interest on customer loans. 

``Any other way of investing would be a grievous sin,'' said Brian Ingram, a Saturna analyst. 

In Malaysia, demand for Islamic bonds has been strong enough to hand investors a gain. 

An investor who purchased the Khazanah Nasional bonds due 2009, buying on Oct. 1 after the securities were sold in September, would have reaped a 6.3 percent return as of this week, according to Bloomberg analytics. 

Malaysia's ringgit-denominated government bonds due in 2009 rose 4 percent during the period. 

Buyer Demand 

``There's more money chasing after a limited supply of Islamic instruments,'' said Lee K. Kwan, general manager of treasury and structured products at Commerce International Merchant Bankers Bhd. 

Malaysia's Islamic financial institutions are becoming some of the biggest buyers. 

The nation's two Islamic banks, Bank Muamalat and Bank Islam Malaysia Bhd., last year had 5.2 billion ringgit to invest, according to the central bank. At least a portion went to Islamic bonds, said Yazit Yusof, head of treasury dealing at Bank Islam. 

Yazit said his bank is among the investors looking for Islamic bonds to buy, and demand is strong enough that he expects more sales. ``More companies are tapping these funds.'' 

Islamic bonds may become a savior for Pilgrims Fund Board in Kuala Lumpur, an investment company akin to a U.S. mutual fund company, that caters to Muslims. Many of its 3.7 million customers are saving for a pilgrimage to Mecca, Saudi Arabia, something every Muslim tries to do at least once. 

Hamidun Ibrahim, who manages 2.2 billion ringgit at Pilgrims Fund, said the growing market for Islamic bonds gives him more investment opportunities away from low-yielding money-market securities. 

``We have managed to achieve 8 percent income this year, partly because we are trading more bonds, compared with other instruments that yield half as much,'' Hamidun said. ``It has been a blessing.''

Malaysia Upgraded by Moody's, Citing Robust Economy (Update5) 2000-10-17 06:21 (New York) 

Kuala Lumpur, Oct 17. (Bloomberg) -- Malaysia's foreign currency ratings were raised one notch by Moody's Investors Service because of a strengthening economy, making it cheaper for Malaysia and some of its companies to borrow overseas. 

The upgrade underlines the extent to which Malaysia has recovered since the Asian financial crisis of 1997-1998, which prompted it to peg its currency to the U.S. dollar and prevent funds fleeing the country. Moody's said the economy looks set to improve further, though foreign investment remains muted amid concern about the political environment. 

Investors have expressed disquiet about the treatment of Anwar Ibrahim, Malaysia's former deputy prime minister, who in August was sentenced to nine years in jail for sodomy. Some investors remain wary of returning to Malaysia even after capital controls were partially lifted. 

``I'm still feeling uncomfortable in Malaysia -- the upgrade does not reduce political interference or low corporate governance that exists there,'' said Alain Barbezat, who helps manage $500 million in Asia excluding Japan at Darier Hentsch Asia Ltd. 

The rating on Malaysia's foreign currency-denominated bonds and notes was raised to ``Baa2,'' Moody's second-lowest investment grade, and the rating on bank deposits was raised to ``Baa3,'' its lowest investment grade rating. The outlook is stable though Moody's said the ratings will remain lower than their level of `A1' in 1997, four notches higher than their current level. 

``A less-than-complete recovery in foreign direct investment and some increase in political uncertainty, means that Malaysia's ratings are likely to remain depressed relative to their pre- crisis level,'' Moody's said. 

Malaysia's Neighbors 

The upgrade was the first of Malaysia by Moody's since 1995, and means the country is rated higher than Southeast Asian neighbors Indonesia and the Philippines -- both of which have a `junk' rating -- and Thailand, which is rated ``Baa3.'' 

Moody's also upgraded the long term debt of state-owned oil company Petroliam Nasional Bhd. and senior debt of phone company Telekom Malaysia Bhd., both by one notch to ``Baa2'' from ``Baa3,'' as a result of the upgrade in Malaysia's own ratings. The move affects $5.9 billion and $850 million of their respective debt securities. 

Analysts said the move was positive for Malaysia's equity and debt markets. 

``The credit spread over U.S Treasuries will narrow for large companies that plan to sell debt,'' said Kwan Lee, head of treasury and structured products at Commerce International Merchant Bankers Bhd. ``The equity market may get a knock-on effect in terms of improving sentiment.'' 

Malaysia's benchmark Composite Index rose as much as 1.3 percent after Moody's announcement, which cited Malaysia's strengthening external position. It closed 0.1 percent lower at 765.2 points. 

Future Upgrades 

Last month, Standard & Poor's raised Malaysia's ratings outlook to ``positive'' from ``stable.'' The country's ratings, including its ``BBB'' sovereign rating, were affirmed by S&P in September. 

That's good news for Tenaga Nasional Bhd. and Telekom Malaysia Bhd., two of the nation's biggest foreign currency borrowers. Telekom, the biggest Malaysian phone company, is looking to sell bonds this year. 

The financial crisis of 1997-1998 ``demonstrated the low vulnerability of the country to even severe external shocks,'' Moody's said. 

Malaysia's economy expanded 10.3 percent in the first half of 2000 from a year before, after shrinking 7.5 percent in 1998. 

Local currency ratings were not under review by the rating company, which said it was re-evaluating Malaysia's ratings in July.

Malaysia 5-Yr Bonds Gain as Investors Turn to Safety of Debt 2002-07-08 22:08 (New York) 

Kuala Lumpur, July 9 (Bloomberg) -- Malaysian local-currency five-year bonds rose for the first day in four, tracking U.S. Treasuries, as investors turn to the safety of fixed-income debt after accounting concerns eroded the appeal of equities. 

The five-year 6.9 percent bond maturing in March 2007 rose 0.02, or 20 sen per 1,000 ringgit face amount, to a price of 115.73, according to the central bank's Bond Information Dissemination System. Its yield fell 1 basis point to 3.25 percent. A basis point equals 0.01 percentage points. 

``A lot of money is leaving equities because corporate earnings are being questioned,'' said Lee K. Kwan, head of treasury and structured products at Commerce International Merchant Bankers Bhd. That's helping sustain demand for bonds, he said. 

Investors are seeking a haven from declines in stocks, after U.S. drug company Merck & Co. said a unit booked $14.1 billion in sales it didn't receive. The Kuala Lumpur Composite Index fell 1.2 percent yesterday, the first drop in three days. 

Bonds' appeal is also being buoyed by a government report yesterday that the country's industrial production and exports rose less than expected in May, fueling demand for longer maturity debt. 

``The economy is not expanding at a very fast pace,'' said Lee. 

Five-year bonds are yielding 18 basis points more than three- year securities, narrowing from 40 basis points at end-May, according to the central bank. The spread between 10-year and five- year paper also narrowed to 70 basis points from 105 over the same period.