Najib: Malaysia can become manufacturing hub for carmakers
By EUGENE MAHALINGAM
eugenicz@thestar.com.my
KUALA LUMPUR: Malaysia has the potential to become the manufacturing hub for global carmakers given the country’s ability to attract foreign investors and ease of doing business, Prime Minister Datuk Seri Najib Tun Razak said.
“The increasing entry rate of respected multinationals into the Malaysian market reflects the growing confidence that foreign investors have in our economy and investor policies,” he said at the signing ceremony of the collaboration and licence agreement between DRB-Hicom Bhd and Volkswagen AG (VW) yesterday.
Najib said under the National Automotive Policy, the Government provided a range of customised incentives, including tax relief, to entice foreign carmakers to move their operations to Malaysia.
“Our emphasis has been on attracting successful carmakers that utilise high value-added manufacturing techniques and the latest technology – companies like VW.
“We expect global players like VW to create a competitive fervour within the local automotive industry.
“This can push our capabilities to a new level and help us achieve our national objective of becoming an automotive hub for the region,” he added.
Under the collaboration and licence agreement, DRB-Hicom will produce VW vehicles at the former’s production plant in Pekan, Pahang, starting with the Jetta and Passat models, from the fourth quarter of 2011.
The models will initially be produced for the Malaysian market and subsequently for the Asean region.
Najib said by bringing together one of Europe’s best car manufacturers and Malaysia’s own automotive leader, such a venture could transform the country into a VW manufacturing hub for the region.
IN MY OPINION, ......
The title of this write up is "new post or older post". The reason why i come out with this title is because readers of my blog feel weird as i keep maintaining the buy call on drb even after it went up so much... from 1.20(1month ago)-1.99 (yesterday). Percentage gained considered to be very high. However, I'm stil maintain the buy call on this counter. If u guys noticed, the date for the signing of contract is told earlier. Everyone should know that the contract will be sign on 21st of dec but one day earlier which is 15th of dec, the share price went up 15c and on the day of the signing of contract it went up another 6c (1.99).
The share price is now 1.92(down 2c). Today, all the newspapers published the news saying drb and vw ink production pact worth RM1b. Logically, the share should go up? no? I asked some of the experienced investors why is it so... the only answer they can give is..."buy on rumours, sell on fact/news".. Well , i don't agree with it at all. All of us know that drb is signing contract with vw on 21st of dec. the news is publicly available. It is not private/insider news. So, the share price should have adjusted for that news.
All these are just my opinion, I'm still learning as well. Those who have a better explanation can always drop me a msg. :)
Ok.. Besides that, drb has received the LOI from the government to provide new armor vehicle. The project worth RM8billion. When is the Letter of intent(LOI) will turn into letter of award? Probably this month? or following month? I'm sure the project will definitely add value to the company significantly. Lets assume, Letter of award come in early next month+ super bull run(rumours) + window dressing+ probably take over offer?..... Nobody knows ... pe for drb-hicom is about 8times, whereas the klci is trading at the pe of 17times. Drb is now 1.92, how much is drb's share if its trading at pe of 17times? OK all these are just my dream..lol lets wait n see how it goes.
BUY CALL - DRB-Hicom CB (super low premium+expired on oct 2011) Best buy !!
DRB -Hicom (capital appreciation+ (Dividend?) Long term investment
Update
Dialog- cost (1.50)
increased almost 40c b4 profit taking. HOLD !!!!
new call:
Gamuda- buy
BUY AT YOUR OWN RISK!!!! :)
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