KUALA LUMPUR, THURS:

Telekom Malaysia Bhd (TM) has reiterated that its dividend policy remained unchanged and it had the ability to support it for 2009 and beyond.

But an analyst, OSK Research, is unconvinced.

TM said in a statement today that it was able to distribute yearly dividends of RM700 million or up to 90 percent of its normalised profit after tax and minority interests (PATAMI), whichever is higher.

TM said the dividend policy remained unchanged for 2009 and beyond with the company currently able to meet it.

TM said it had sufficient consolidated cash and bank balances of RM1.144 billion as at Sept 30, 2008 and was confident that TM International Bhd would be able to meet the RM4.025 billion due to it by April 2009.
In the event of a downturn in performance due to unforeseen circumstances, TM said its recurring cash generation ability is sufficient to meet the current dividend policy.

TM said its retained earnings is also sufficient to support this current dividend policy in the event of unforeseen shortfalls in normalised PATAMI.

“Given the unprecedented volatility in global markets, the company will continue to examine the likely impact on its business, cashflow generation, capital structure and methods in which excess cash beyond the dividend policy and prudent level of cash required for operations, can be efficiently distributed to our shareholders,” it said.

However, after a conference call yesterday with the TM management, OSK Research said it sensed that the company was no longer certain of its plan to return excess cash to shareholders, going forward.

OSK Research was of the view that the market had been overly bullish on TM’s ability to distribute stronger dividends, as the benefit of conserving cash clearly outweighs that of a payout now, as financial markets are in a tailspin and huge investments are required to roll out its high speed network and triple play services.

Contrary to expectations, the management did not provide any clarity on its dividend outlook or plans to return excess cash to shareholders, OSK Research added.

This is clearly disappointing as the market had anticipated some form of guidance with the benefit of the RM4.02 billion (RM1.12/share), owing from TMI scheduled to be repaid in full within five months, it said.

There are no indications as to whether part of the amount owing will be repaid to TM by next month -as indicated by TMI previously- and if it would accede to a possible request by TMI to extend the April 2009 deadline for repayment, it said.

It added that TMI faced a delicate task in refinancing its existing US$1.8 billion bridging loan and meeting its obligation to TM.

TM seems to be more guarded in its statements on future dividends, said OSK Research, adding that it would not be surprised if extra cash is conserved for new investments in triple play services and the High Speed Broadband (HSBB) Project.

OSK Researh believed that the current payout policy of RM700 million or 90 percent of normalised net profit, is intact for financial year 2008, but was doubtful after that.

OSK Research cut its target price for TM to RM2.80 per share from RM3.50 earlier.

“We believe the uncertainties clouding TMs dividend outlook will continue to weigh down share sentiment, notwithstanding the sharp de-rating on its share price,” it explained.

New Straits Times

SINGAPORE: Second-hand stores are seeing more customers selling their possessions for cash.

“Cash Converters”, a local chain of such shops, says sales went up by four times in the last six weeks.

Cash Converters has five outlets in Singapore.

The company says its outlet in Toa Payoh has seen about 100 customers a day since last month.

Most customers wanted the extra money for emergency use.

But the store is also seeing more customers buying second-hand products.

It says sales have gone up by about 15 per cent compared to the same period last year.

Popular items include electrical appliances like phones and irons.

- CNA/ir

Channel News Asia

BEIJING: Authorities in a southern Chinese city have offered a cash payment to the relatives of a motorcyclist whose death prompted hundreds of rioters to attack police, state media reported on Sunday.

The city of Shenzhen in Guangdong province was calm on Sunday, police told AFP, following riots that broke out Friday afternoon and raged into the early hours of Saturday.

The violence was sparked by anger over the death of Li Guochao, 31, who crashed into a lamppost after a local police official threw a walkie-talkie at him as he sped away from a checkpoint, according to police officials.

The local government has offered a 20,000 yuan (US$2,930) cash payment to Li’s family, who had led the protests, the Beijing Youth Daily reported.

Li’s family had initially demanded 60,000 yuan, but the compromise amount was reached through negotiations with local government officials, it said.

The government would recoup the payment from those deemed “responsible” for the death, it said.

“The relatives have agreed to accept the payment,” the paper said.

The paper gave no further details on who the responsible party was, but Shenzhen police had said earlier that the official who threw the walkie-talkie had been detained.

The official is a staffer in the Shenzhen police propaganda department, state media said.

Li had been stopped at the checkpoint in the city’s Bao’an district. When he sped away the official threw the walkie-talkie at Li, who lost control of his motorcycle and crashed, a police statement said.

Li died in hospital a few hours later.

Calm had been restored by Saturday morning, witnesses told AFP, albeit amid a visibly heightened police presence in the district.

“The situation is back to normal. There are no new developments,” a Shenzhen police spokesman told AFP by phone on Sunday.

Li’s relatives had gathered a mob that swelled to more than 400 people late Friday, the police statement said. They threw stones and set fire to a police car, it added.

They were dispersed around 2:00 am on Saturday. There were no other reports of injuries.

- AFP/yb

Channel News Asia