Rakuten calls a buy on Straits Inter Logistics

Rakuten Trade SdnBhd is calling licenced bunkering company Straits Inter Logistics Bhdits top pick for 2018 following five quarters of consecutive profits and potential new business expansions as the company looks to spread its wings this year.

Quietly too, the increased activity in the shipping sector and downstream oil and gas segment is automatically benefiting players like Straits as bunker players are part of that supply chain.

With increased activity in the downstream segment particularly with Petronas’ Refinery and Petrochemical Integrated Deve-lopment (Rapid) project in Pengerang, some traffic has been returning to Johor Port, which is where Straits operates.

Rakuten first initiated coverage on Straits on Oct 9, with a target price of 31 sen based on 13 times price earnings ratio financial year ended Dec 31, 2018 (FY18).

“Initially there was much scepticism on the stock when it took over the listing status of Raya International Bhd. Now we have seen five consecutive quarters of profits. We will reassess our estimates once they announce their full-year results next month,” said Rakuten Trade research vice-president Vincent Lau.

Furthermore, with Straits’ having garnered a RM45mil bunkering contract in September, Lau says this gives some comfort on more earnings visibility for 2018.

In September, Straits’ 51% owned subsidiary Selatan Bunker (M) SdnBhd won a RM45mil contract from TumpuanMegah Development SdnBhd for bunkering services.

Meanwhile, Straits registered a net profit of RM631,000 for its third quarter of the financial year ending Dec 31, 2017, up from RM10,000 in the corresponding period last year.

Its revenue stood at RM32.9mil, compared to RM20.2mil a year ago.

For the nine-month financial year ending Dec 31, 2017, the company registered a revenue of RM82.9mil, which represents a 65% increase from RM50.3mil a year ago. Its net profit stood at RM1.8mil.

For the uninitiated, bunkering services entails the provision of marine fuels to ships and other ocean faring vessels as well as vessels that are utilised in the upstream oil and gas industry. Think of a mobile petrol station in the sea.

By –The Star

SoftBank succeeds in tender offer for Uber shares

A consortium led by SoftBank Group Corp will buy a large number of shares of Uber Technologies Inc in a deal that values the ride-services firm at $48 billion, Uber said on Thursday, in a victory for new Chief Executive Dara Khosrowshahi.

The price is a roughly 30 percent discount to Uber’s most recent valuation of $68 billion. The deal will trigger a number of changes in the way the board oversees the company, which is dealing with federal criminal probes, a high-stakes lawsuit and an overhaul of its workplace culture.

SoftBank and the rest of the consortium, which includes Dragoneer Investment Group, will own approximately 17.5 percent of Uber, a person familiar with the matter said. That stake includes a share purchase, through a tender offer, from earlier investors and employees at the $48 billion valuation, as well as a $1.25 billion investment of fresh funding at the $68 billion level.

Uber said the deal will close early next year. On Thursday it said that existing investors had agreed to sell enough shares for SoftBank to go through with the transaction.

SoftBank itself will keep a 15 percent stake, while the rest of the consortium will own approximately 3 percent, according to a second person familiar with the matter.

Private equity group TPG was part of the consortium of buyers, a source familiar with the matter said.

Khosrowshahi, who took the top job in August after Travis Kalanick was forced to step down in June, helped negotiate the deal. Uber is losing more than $1 billion each quarter, and a new cash infusion is critical. The company is also planning an initial public offering in 2019.

Uber will use the investment “to support our technology investments, fuel our growth, and strengthen our corporate governance,” a spokesperson, who declined to be named, said.

When the deal is completed, the company will make governance changes, expanding Uber’s board from 11 to 17 members including four independent directors, limiting some early shareholders’ voting power and cutting the control wielded by Kalanick, who remains on the board and is still one of the largest stakeholders.


“The stockholders did the smart thing. The price is less important than locking in the governance changes and securing the support of the world’s most powerful technology investor,” said Erik Gordon an entrepreneurship expert at the University of Michigan’s Ross School of Business.

Rajeev Misra, chief executive of SoftBank's Vision Fund, a $98 billion tech investment vehicle, will join the Uber board, The Wall Street Journal reported. SoftBank will get two seats on the expanded board, a source told Reuters.

Misra said in a statement that SoftBank has “tremendous confidence in Uber’s leadership and employees.” Uber board members agreed in early November to governance changes to pave the way for the SoftBank deal.

Some initial investors in the consortium, including General Atlantic, dropped out over disagreement about the price offered to shareholders, Reuters previously reported.

SoftBank founder Masayoshi Son has taken a keen interest in ride-hailing companies around the world, and already has sizeable stakes in China’s Didi, Brazil-based 99, India’s Ola and Singapore Grab, all of which have competed with Uber. Didi last week raised $4 billion, including some investment from SoftBank.

The Uber investment comes after a year of troubles for the company, including a lawsuit by Alphabet Inc’s self-driving car unit Waymo that alleges trade-secrets theft and federal investigations that span possible bribery of foreign officials in Asian countries and the use of software to evade regulators.

Over the past year, a former employee’s charges of endemic sexual harassment led to an internal review, London said it is stripping Uber of its license and Uber revealed it had covered up a major hack.

Venture capital firms Benchmark, which owns 13 percent of Uber, had indicated that it would sell a portion of its shares, SoftBank said last month. Menlo Ventures, another large shareholder, would tender shares, Managing Director Shawn Carolan said at the time. Carolan on Thursday praised the deal without describing Menlo’s participation. Benchmark did not respond to a request for comment.

By– Reuters

Oil marks highest January opening price since 2014

Oil prices had their highest January opening since 2014 on Tuesday, supported by ongoing supply cuts led by OPEC and Russia as well as strong demand.

Only rising U.S. production, which is on the verge of breaking through 10 million barrels per day (bpd), is somewhat hampering the outlook into 2018.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $60.29 a barrel at 0119 GMT, down 13 cents, or 0.2 percent, from their last settlement of 2017, but starting the year above $60 a barrel for the first time since 2014.

Brent crude futures LCOc1 - the international benchmark for oil prices - were at $66.79 a barrel, down 8 cents, or 0.1 percent, since their last close of 2017. It is also the first time since 2014 that Brent opened a year above $60 a barrel.

Traders said Tuesday’s prices dips were due to the full return of the 450,000 bpd capacity Forties pipeline system in the North Sea, as well as ongoing repairs at a Libyan pipeline, which had cut output there by 70,000 bpd to 100,000 bpd.

Global oil markets have been supported by a year of production cuts led by the Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC) and Russia. The cuts started in January 2017 and are scheduled to cover all of 2018.

Strong demand growth, especially from China, has also been supporting crude.

“Oil inventories have been declining since March 2017 and OPEC have agreed to extend production cuts until the end of 2018 so it is probably uncontroversial to say that the fundamental outlook for oil has improved since the beginning of 2017,” said William O‘Loughlin, investment analyst at Australia’s Rivkin Securities.

“On the other hand, the higher prices are expected to stoke U.S. shale output,” he said.

U.S. commercial crude oil inventories have fallen by almost 20 percent from their historic highs last March, to 431.9 million barrels.

U.S. oil production C-OUT-T-EIA has risen by almost 16 percent since mid-2016, to 9.75 million bpd at the end of last year.

However, consultancy Rystad Energy said “U.S. crude oil production capacity has reached 10 million barrels per day.”

By – Reuters

Spotify hit with $1.6 billion copyright lawsuit

Music streaming company Spotify was sued by Wixen Music Publishing Inc last week for allegedly using thousands of songs, including those of Tom Petty, Neil Young and the Doors, without a license and compensation to the music publisher.

Wixen, an exclusive licensee of songs such as “Free Fallin” by Tom Petty, “Light My Fire” by the Doors, (Girl We Got a) Good Thing by Weezer and works of singers such as Stevie Nicks, is seeking damages worth at least $1.6 billion along with injunctive relief.

Spotify failed to get a direct or a compulsory license from Wixen that would allow it to reproduce and distribute the songs, Wixen said in the lawsuit, filed in a California federal court.

Wixen also alleged that Spotify outsourced its work to a third party, licensing and royalty services provider the Harry Fox Agency, which was “ill-equipped to obtain all the necessary mechanical licenses”.

Spotify declined to comment.

In May, the Stockholm, Sweden-based company agreed to pay more than $43 million to settle a proposed class action alleging it failed to pay royalties for some of the songs it makes available to users.

Spotify, which is planning a stock market listing this year, has grown around 20 percent in value to at least $19 billion in the past few months.

From – Reuters

Aptiv, Lyft discuss engagement beyond self-driving ride partnership

Aptiv Plc and ride-hailing firm Lyft are discussing further engagement beyond showcasing self-driving rides in Las Vegas during the Consumer Electronics Show (CES) this month, the U.S auto parts supplier said on Tuesday.

Aptiv, formerly known as Delphi Automotive Plc, has partnered with Lyft to allow passengers to request self-driving rides from the Las Vegas Convention Center’s Gold Lot.

However, Aptiv told Reuters it does not have plans to publicly announce its further engagement with Lyft yet.

The company said the rides, which will be available from Jan. 9 to 12 to more than 20 locations in Las Vegas, will demonstrate Aptiv’s automated system and Lyft’s user platform.

In 2017, Lyft secured a permit to test autonomous vehicles in California and struck a research collaboration with Alphabet unit Waymo. It has also secured deals with Ford Motor Co and startupNutonomy to incorporate self-driving cars in its fleet.

By – The Star

Potential Excelerate Group 9 Temasek Boulevard Suntec Tower 2 #09-01 Singapore 038989
+65 6407 1344