Daily news - 2 Oct

SMRT buys stake in China transport firm
SMRT Corp – Has agreed to pay $89.7m for a 49%- stake in a leading road transport company in Shenzhen. Via subsidiary SMRT Hong Kong, SMRT has entered into a deal to buy investment company Shenzhen Zoto Investment's equity interest in Shenzhen Zona Transportation Group (Zona). Zona has a fleet of 803 buses, 142 charter and tourist buses, 78 long-haul coaches, 830 taxis and 260 leased cars in the Shenzhen region. The Zona group comprises 10 subsidiaries and three associated companies. Zona itself will become an associate company of SMRT following the acquisition. SMRT said Zona has grown its bus fleet from just 300 in six years. It is the bus operator in Shenzhen's Bao An district, so growth is expected to be robust. The other 51% of Zona's equity will continue to be held by National Express Transportation Group (NE), a company that provides inter-city bus services in China. The investment in Zona will be accretive to SMRT's earnings but is not expected to have a material impact on the group's financial results for full-year 2009.

CAO back in oil trading with petrochemicals
China Aviation Oil Singapore – CAO, which had postponed its targeted second-half re-entry into oil trading because of volatile oil markets and high prices, will now restart with petrochemicals trading, from this quarter (Q4). CAO maintained that it 'will gradually commence trading of other oil products when market conditions are conducive'. The company, whose core business is supplying jet fuel to China's airports, has meanwhile been trading and hedging aviation fuel. CAO will take over shareholder BP's Asia petrochemicals portfolio - which doesn't have outstanding deals and is clean, a CAO spokesman said - as well as its petrochemicals trading team led by Lim Fang Wei. In a sense, the latest BP move is in line with shareholder BP and parent CAO's plan to inject assets into the once-beleaguered Singapore operations. CAO said that the profit contribution from the petrochemicals trading business for the current financial year is not expected to be significant. The business is however, expected to contribute more significantly to revenue and profit next year, it added.

Noble sees record profit
Noble Group Ltd – The commodities supplier, which has more than doubled second-quarter profit, believes earnings may rise to a record this year as grains, coal and metal shipments grow, CEO Richard Elman said. He said demand for commodities will remain strong even as financial markets tumble, adding that it depends on how well the supply is managed. Soyabeans tumbled to the lowest in 10 months, and corn fell to a seven-month low yesterday on concern that a spreading financial crisis may slash demand for raw materials. US lawmakers rejected a US$700bn bank rescue plan, raising concern more economies will slide into a recession. 'The world is not coming to an end,' said Mr Elman. 'Everybody needs to eat every day, they need electricity every day and they need to build homes.' The company, scheduled to report Q3 results on Nov 10, posted a 92% gain in net income to US$258.1m in 2007.

Source: Kim Eng