Tuesday, December 31, 2019

S.Korea Dec exports top forecasts as China demand, chip prices recover

SEOUL: South Korean exports fell in December year-on-year but less than expected, which along with a turn to growth in shipments to China and a slowing pace of decline in chip sales added to optimism for global trade.

Exports by Asia's fourth-largest economy shrank 5.2% in the final month of 2019 from a year earlier, trade ministry data showed on Wednesday, just beating a median 6.0% fall tipped in a Reuters poll.

It was the slowest decline in exports since a 2.1% drop in April 2019 and almost half the average rate of decline seen for the past six months as the global prices of memory chips, the country's top export item, showed signs of picking up.

Analysts said Wednesday's data supported their view that exports, the main engine of growth for South Korea's economy, would turn to growth in early 2020 even though growth thereafter could stay low for a considerable period.

"Today's data was positive in that recovery sustained and exports will return to growth from as soon as February, although the strength of recovery will really depend on how much China's exports to the U.S. increase," said Park Sang-hyun, chief economist at Hi Investment & Securities.

The brightest spot in the December data was a turn to growth of 3.3% in exports to China, the first growth in 14 months. China is South Korea's top export market and takes in a quarter of the smaller neighbour's total shipments abroad.

Overseas sales of semiconductors, the country's top-selling item, which accounts for one-fifth of its total exports, fell 17.7% year-on-year, but it was the slowest decline in eight months as global prices are stabilising after a plunge.

Imports dropped 0.7% in December from the year-earlier month, beating both a 13.0% loss in November and a 4.6% decline tipped in the Reuters survey. That brought the month's trade balance to a $2.02 billion surplus versus a $3.34 billion profit in November.

South Korea, the world's leading exporter of chips, smartphones, cars and ships, is the first major economy to report trade data each month, providing an early guide to the health of global trade.

For the whole of 2019, South Korea's exports tumbled 10.3% as global trade cooled and a semiconductor super-cycle crashed, the worst in a decade and the third-worst in the country's modern history.

The trade ministry said exports in 2020 would recover to post growth of around 3%, reflecting a still-shaky recovery in global trade as major economies remained in a slowing mode after years of unstopped expansion.

South Korea's financial markets are closed on Wednesday for the New Year's Day holiday and will resume trade on Thursday. - Reuters



source https://www.thesundaily.my/business/s-korea-dec-exports-top-forecasts-as-china-demand-chip-prices-recover-NG1844942

China’s central bank says economic growth resilient despite large pressure

BEIJING: China's central bank said on Wednesday that economic growth remains resilient despite relatively large downward pressure and mounting external uncertainty.

The People's Bank of China (PBOC) will work on preventing and defusing financial risks amid "profound changes" in the domestic and international economy, it said in a statement following the fourth-quarter meeting of its monetary policy committee.

The PBOC said it will keep the yuan exchange rate balanced and stable and use multiple monetary tools and flexible policy to maintain liquidity.

It also said it will keep M2 money supply and social financing growth in line with nominal gross domestic product (GDP) growth.

China's economic growth has cooled to near 30-year lows.

Though economic activity has shown hints of a pick up recently, analysts widely expect Beijing to roll out further stimulus measures in 2020 to avert a sharper slowdown. - Reuters



source https://www.thesundaily.my/business/china-s-central-bank-says-economic-growth-resilient-despite-large-pressure-GG1844888

Vivendi sells minority stake in Universal to Tencent consortium

PARIS: A consortium led by Tencent agreed to buy up to 20% of Vivendi's Universal Music Group (UMG) in a deal that values the world's largest music label at 30 billion euros ($34 billion) and increases the Chinese company's clout on the global market.

French media conglomerate Vivendi said it had finalised an agreement to sell an initial 10% of UMG - home to artists such as Taylor Swift, Lady Gaga and The Beatles - to the Tencent consortium. Vivendi added that it had started talks over the possible sale of "an additional minority share for a price which would at least be identical," without specifying a potential buyer.

The consortium also had the option to buy on the same price basis up to 10% more of UMG's share capital by Jan. 15, 2021. The transaction gives a 30 billion euro price tag for UMG on an enterprise value basis.

This initial deal would also soon be followed by a second one allowing Tencent Music Entertainment to buy a minority stake in UMG's subsidiary that houses its operations in greater China.

The agreement will allow both companies to expand in a recovering global music market, with Tencent getting more access to U.S. artists while UMG can tap into the Asian market, which features big-selling "K-Pop" Korean pop stars.

Tencent did not immediately respond to request for comment, while Vivendi did not disclose the details of the consortium beyond saying they were "global financial investors".

BOLLORE CASHES IN

Vivendi, controlled by French billionaire Vincent Bollore, is seeking to cash in on the music industry's revival, driven by a growing subscription and ad-based music streaming services.

The tie-up also builds on a partnership struck two years ago, under which Tencent can license Universal's music for distribution over its streaming platforms.

The long-awaited deal should also boost morale among Chinese deal-makers who have had one of the worst years on record for China-outbound mergers and acquisitions (M&A), with activity plunging to a 10-year low amid trade tensions between the United States and China, Refinitiv data shows.

Vivendi shares edged up 0.3% in early trading, with the final terms of the sale being in line with earlier guidance from Vivendi.

Universal was the main sales growth driver for Vivendi in the third quarter, with its revenues jumping by close to 16% to 1.8 billion euros. - Reuters



source https://www.thesundaily.my/business/vivendi-sells-minority-stake-in-universal-to-tencent-consortium-CG1844026

Bursa Malaysia to monitor FBSM’s progress on listing compliance

KUALA LUMPUR: Bursa Malaysia Securities Bhd (Bursa Securities) today said it would continue to monitor the progress of FSBM Holdings Bhd (FSBM) in respect of its compliance with the listing requirements.

In a statement today, Bursa Malaysia said FSBM had triggered the criteria pursuant to Practice Note No. 17 (PN17) of the Main Market listing requirements of Bursa Securities.

FSBM in a filing to Bursa Malaysia yesterday announced that the PN17 criteria were triggered as the auditors have expressed a disclaimer of opinion in the company’s audited financial statements for the financial year ended June 30, 2018 which were announced on Dec 30, 2019.

As at Dec 31, 2019, there are a total of 23 companies under PN17, representing 2.5 per cent of the total number of 929 companies listed on Bursa Securities.

Companies under PN17 are: APFT Bhd, Asia Media Group Bhd, Barakah Offshore Petroleum Bhd, Berjaya Media Bhd, Bertam Alliance Bhd, Brahim’s Holdings Bhd, China Automobile Parts Holdings Ltd, Comintel Corporation Bhd, Daya Materials Bhd, EKANoodles Bhd, FSBM Holdings Bhd, Iqzan Holding Bhd (formerly known as Ire-Tex Corporation Bhd). Kinsteel Bhd, London Biscuits Bhd, Lotus KFM Bhd (formerly known as Kuantan Flour Mills Bhd), MAA Group Bhd, Malaysia Pacific Corporation Bhd, Multi Sports Holdings Ltd, Perisai Petroleum Teknologi Bhd, Scomi Group Bhd, Seacera Group Bhd, Sumatec Resources Bhd and TH Heavy Engineering Bhd. -Bernama



source https://www.thesundaily.my/business/bursa-malaysia-to-monitor-fbsm-s-progress-on-listing-compliance-XN1843981

Euro and pound inch up as growth optimism cheers investors

LONDON: The euro and the British pound rose as the dollar weakened on Tuesday as investors saw global growth improving next year, with the United States and China due to finally sign a Phase 1 trade agreement this week.

The U.S. currency had maintained its strength over the course of the year as investors saw the U.S. economy outperforming the rest of the world.

In thin volumes on the last day of the decade, currencies overall were more volatile than many expected, with the trade-sensitive Australian dollar, Chinese yuan and Scandinavian currencies all rising to their highest levels in weeks.

Sterling hovered around the two-week high it hit on Monday against the dollar, though the possibility of a 'no-deal' Brexit at the end of 2020 kept any gains subdued.

Still, analysts did not attribute the moves to any major particular developments.

"I can't see much reason for the movement in the FX market except end-year position squaring, or just being careful and cutting positions ahead of the New Year's holiday and the start of 2020. As a result I wouldn't draw any big conclusions from it," said Marshal Gittler, currency analyst at ACLS Global.

Chinese Vice Premier Liu He will visit Washington this week to sign a Phase 1 trade deal with the United States, the South China Morning Post reported on Monday.

White House trade adviser Peter Navarro said on Monday the trade deal would likely be signed in the next week, but that confirmation would come from President Donald Trump or the U.S. trade representative.

Investors' appetite for risk helped drive the euro up 0.1% to $1.1206, close to the 4-1/2-month high of $1.1221 reached on Monday.

Signs that the euro zone economy may be stabilising have lifted the single currency in recent weeks as investors unwound short positions, though the currency has shed 2.2% of its value against the dollar in 2019.

Latest CFTC data shows that hedge funds held $9.16 billion of euro shorts, far less than the $14.84 billion seen in May.

The U.S. dollar was weak across the board, though over the course of the year, the index that tracks the dollar against a basket of six currencies has risen by half a percentage point .

MUFG analysts saw a "bearish technical development for the U.S. dollar that signals an increasing risk of further weakness ahead".

"Weakness in the U.S. dollar towards the end of this year has coincided with the renewed expansion of the Fed's balance and the paring back of pessimism over the outlook for global growth," they said.

Versus the Japanese yen, the dollar fell to a near three-week low of 108.625 yen and was last down 0.2%.

Against the Chinese yuan, it shed 0.2% to 6.9674 in the offshore market after dipping to a 2-1/2-week low of 6.9630, as strong Chinese economic data helped boost the Chinese currency.

The Australian dollar rose to a five-month high of 0.7310 versus the U.S. dollar, making it the best performing major currency overnight, according to MUFG.

The New Zealand dollar, however, "remains the stand out performer of the last quarter, surging nearly 8% over the past three months, largely on the back of more positive sentiment about global trade", MUFG analysts said.

Scandinavian currencies also strengthened against the greenback following all-time lows seen this year on the back of global growth fears sparked by U.S.-Chinese trade disputes.

The pound was up 0.3% at $1.3144, close to the $1.3150 high seen on Monday, and a notch stronger against the euro at 85.41 pence.

Sterling has gained nearly 3% against the dollar and 5% versus the euro this year, jumping to as high as $1.35 recently after Prime Minister Boris Johnson's overwhelming win in a parliamentary election, which eliminated a measure of uncertainty. - Reuters



source https://www.thesundaily.my/business/euro-and-pound-inch-up-as-growth-optimism-cheers-investors-NN1843942

Tan Kay Hock denies George Kent exit rumour

PETALING JAYA: George Kent (Malaysia) Bhd (GKM) chairman Tan Kay Hock has refuted allegations that he is looking to sell his entire stake in the group and that he is unsuccessful in exiting due to “legacy issues”.

Tan was responding to an online news, which he claimed that the reported statements were entirely fictitious with no truth in them.

“I have every intention of further contributing my experience and knowledge for the benefit of GKM and its continued expansion and development,” he said in a statement.

Tan said it is preposterous to suggest that he is actively seeking to divest his shareholding in GKM and he has not sought nor spoken to any party about selling his shares. He added that he will seek legal recourse in the matter.

Tan is believed to own a 4.77% direct stake in George Kent and indirectly controls an additional 37.42% stake, according to the report.



source https://www.thesundaily.my/business/tan-kay-hock-denies-george-kent-exit-rumour-DM1842599

Monday, December 30, 2019

Substance requirements: ALTC urges Finance Ministry to intervene

LABUAN: The Association of Labuan Trust Companies (ALTC) has urged the Ministry of Finance to intervene in the quandary faced by Labuan entities (trading companies) over the newly-enforced Substance Requirements.

Its president Datuk Chin Chee Kee feared the entities might choose to leave Labuan for jurisdictions like Singapore which is offering lower taxation at 18 per cent and Hong Kong at 16.5 per cent, should the issue be ignored.

“We have stated very clearly to Minister of Finance Lim Guan Eng in our letter dated Dec 24, that based on Labuan IBFC Market Report 2018, a total of 4,007 out of the 6,031 active entities in Labuan are carrying out Labuan trading activities and service providing activities (TASPA) and investment holding activities (IHA).

“And this accounts for 66.5 per cent of the total active entities in Labuan which are excluded in the regulations,” he told Bernama today.

During the Budget 2019 announcement in November last year, several amendments were proposed to the Labuan Business Activity Tax Act (LBATA) 1990, to promote the competitiveness of Labuan as an International Business and Financial Centre (IBFC) and ensure compliance with the internationally agreed tax standards.

LBATA was amended and gazetted at end-2018 and came into effect on Jan1, 2019.

The changes include the Substance Requirements for 21 categories of business/entities, and those not on the list would not be deemed as Labuan entities and automatically taxed at the prevailing rate of 24 per cent pursuant to the Income Tax Act.

“As it stands now, TASPAs and IHAs are not included in the regulations and according to the Inland Revenue Board, their profits will be taxed under the Income Tax Act 1967 at the prevailing tax rate of 24 per cent on their chargeable income.

“We’d like to appeal to the minister to reconsider their exclusion from the regulations,” Chin said.

According to him, the association made a survey on the net profits of TASPA and IHA entities for 2018, involving 20 of its 50 members, and the figures showed up to US$3,431,988,387 which is equivalent to RM14,414,351,225.

“By letting them into the regulations and taxed at three per cent, the tax revenue would come to RM432,430,537. If each of the TASPAs and IHAs employs two full-time employees, the employment of people in Labuan would come up to 8,000...the licensed entities only earned total profits of US$741 million in 2018.

“The inclusion of TASPAs and IHAs will result in the government collecting RM432,430,537 or more tax under LBATA, and 24 per cent from employment, businesses in Labuan and also from property rental income giving a multiplier effect to the economy of Labuan and also revenue collection,” he said.

Chin pointed out that the government would not be able to collect the taxes if the TASPA and IHA entities were to leave for foreign jurisdictions.

“The inclusion will certainly improve our real gross domestic product, employment in Labuan, exchange rate, balance of payments and confidence in our financial system,” he stressed.

He opined the exclusion of the 4,007 TASPAs and IHAs from the regulations did not portray a good image of Labuan IBFC, its regulator and the government, especially to international industry players and investors.

“The cornerstone of a successful international financial centre is to have certainty and consistency in the application of laws and regulations and economic stability and changes in laws and regulations, if unavoidable, should be made known early to the industry players so that suitable preparatory planning and mitigating actions can be taken early in order to comply with such changes,” he said.

He said the tax structures in Labuan IBFC had always been different and were well accepted by the global business community.

“Indeed, the laws and the international regulation have changed and we fully support Malaysia’s commitment to the requirements of the international supervisory bodies.

“However, Labuan IBFC needs to be practical and competitive in order for us to compete with the other 50 jurisdictions worldwide,” he added. - BERNAMA



source https://www.thesundaily.my/business/substance-requirements-altc-urges-finance-ministry-to-intervene-CM1842400

Dealmakers eye cross-border M&A recovery as mega mergers roll on

NEW YORK/LONDON: A rise in large mergers and acquisitions (M&A) helped offset a plunge in cross-border deals in 2019, and many dealmakers say they expect subsiding geopolitical risk emboldening companies to pursue more tie-ups across regions in 2020.

The value of M&A globally totaled about $3.9 trillion in 2019, making it the fourth strongest year for dealmaking, according to preliminary figures published by financial data provider Refinitiv. This is only slightly lower than the $3.96 trillion in deals recorded in 2018.

Cross-border M&A totaled $1.2 trillion, down 25% year-on-year to its lowest level since 2013, as rising geopolitical uncertainty and regulatory scrutiny of deals made many corporate chiefs and boards wary of expanding beyond their home markets.

"Companies were more comfortable this year doing deals within their own regions given the macroeconomic risks such the trade tariffs and Brexit, so cross-border M&A was down," said JPMorgan Chase & Co global M&A co-head Chris Ventresca.

Large deals, on the other hand, were on the rise, as companies were spurred on by their strong stock performance and cheap financing to pursue transformative acquisitions.

The number of M&A transactions worth more than $10 billion increased 8% year-on-year to 43 this year, their highest level since 2015, according to Refinitiv. Some 21 deals, each worth more than $20 billion, accounted for almost a quarter of global volume in 2019.

"Mega-deals were the main feature of this year's deal-making, especially in the United States, where the bulk of these transactions took place," said Goldman Sachs Group Inc global M&A co-head Gilberto Pozzi.

The biggest deals of the year included U.S. drug maker Bristol-Myers Squibb Co's $74 billion acquisition of Celgene Corp; U.S. defense contactor Raytheon Co's merger with the aerospace business of United Technologies Corp into a $135 billion company; and U.S. pharmaceutical company AbbVie Inc's $64 billion purchase of Botox maker Allergan Plc.

The United States accounted for close to half of global M&A volume in 2019, with $1.8 trillion worth of deals announced, up 6% from a year ago. Europe and Asia tied for a distant second, with a little over $740 billion worth of M&A transactions announced in each region.

"Europe has been hit by macroeconomic headwinds in key markets, including Britain, Germany and France, where Brexit uncertainty, slow growth and social unrest have been some of the main hurdles," said Pier Luigi Colizzi, Barclays Plc's head of M&A for Europe and the Middle East.

In Britain, Europe's largest M&A market, dealmaking dropped 4% year-on-year to $220.6 billion, with much of the year dominated by political debate over when and how Britain will leave the European Union.

"Market uncertainty in the UK has played in favor of private equity funds, which have been very active and have carried out a number of take-private deals, including Merlin Entertainments, Sophos and Cobham," said Cyrus Kapadia, chief executive officer of Lazard Ltd's British operations.

In Asia, China's economic slowdown led to M&A volume in the country dropping 14% year-on-year to $380.3 billion, while the political turmoil fueled by Hong Kong's pro-democracy turmoils unnerved dealmakers in the wider region.

ROOM FOR M&A TO PICK UP

After world stocks added over $25 trillion in value in the past decade, and a bond rally put $13 trillion worth of bond yields below zero, some investors have been asking whether a recession could be around the corner that would put the brakes on the wave of dealmaking.

Yet companies have not been holding back on M&A because of concerns about an economic slowdown, deal advisers say.

"The next economic downturn is not expected to be as severe as the 2008 financial crisis, and when it happens many well-capitalized companies may seek to capitalize on a drop in corporate valuations to pursue their dream deals," said Perella Weinberg Partners Chief Executive Officer Peter Weinberg.

The U.S. economy grew 2.9% in 2018, but forecasts for 2019 are for around 2.5% growth, due to the fading impact of U.S. President Donald Trump administration's tax-cut package and slowing global growth. At this level, dealmakers say the environment would be conducive for more transactions.

"A lukewarm economy is ideal for acquisitions, because companies need M&A to ensure growth, and business sentiment is sufficiently strong for CEOs and boards to be comfortable with pursuing deals," said Sullivan & Cromwell LLP partner Frank Aquila.

Moreover, some of the geopolitical risks that weighed on cross-border M&A in 2019 are gradually dissipating. The United States and China are close to signing their Phase 1 trade deal, while a strong electoral victory for Britain's Conservative Party earlier this month offered clarity on the country's timetable for Brexit.

"About a month and a half ago, activity levels started to pick up, and it seems people feel a lot better about the M&A pipeline," said Alan Klein, co-head of Simpson Thacher & Bartlett LLP's M&A practice.

Despite the boom in dealmaking over the last few years, global M&A volumes are below their long-term average when viewed against the value of equity markets or global economic growth. Some deal advisers cite this to argue M&A volumes are not close to reaching a ceiling.

"In real terms, we have a good but not great level of M&A activity, with the potential for upside," said Citigroup Inc global co-head of M&A Cary Kochman. - REUTERS



source https://www.thesundaily.my/business/dealmakers-eye-cross-border-ma-recovery-as-mega-mergers-roll-on-JM1842290

E&O, Japan’s Mitsui Fudosan to develop luxury residences in Damansara Heights

KUALA LUMPUR: Eastern & Oriental Bhd (E&O) and Japan’s Mitsui Fudosan Co Ltd have entered into a joint venture agreement to develop luxury residences in Damansara Heights.

The joint venture will be undertaken between KCB Holdings Sdn Bhd (KCBH), an indirect wholly owned subsidiary of E&O and Mitsui Fudosan (Asia) Malaysia Sdn Bhd (MFAM), an indirect wholly owned subsidiary of Mitsui Fudosan, via a new joint venture company. The new joint venture company will be 51% held by KCBH while MFAM will hold the remaining 49%.

Upon incorporation, a sales & purchase agreement will be executed between the new joint venture company as purchaser with Ambangan Puri Sdn Bhd (a wholly owned indirect subsidiary of E&O) to acquire 14 plots of freehold land located along Jalan Teruntung, Damansara Heights measuring 15,962.2 square metres for RM88.33 million.

E&O managing director Kok Tuck Cheong said it is honoured to partner Mitsui Fudosan, Japan’s renowned and reputable property developer. The partnership, its third joint venture with Mitsui Fudosan, is an extension of its earlier collaborations on The Mews & Conlay, two noteworthy luxury apartments in Kuala Lumpur City Centre.

“This joint venture comes at an opportune time as there is ongoing demand for exquisitely designed properties in the most prime locations and the prestige of the Damansara Heights district is what all other residential neighborhoods aspire to become. We experienced excellent take-up rate for our earlier projects in this location, namely Seventy Damansara and Idamansara. Riding on our past experiences, we believe that we can bring along further improvements to this project and repeat our earlier success in this niche market and prime location”, said Kok in a statement.

The development land enjoys a strategic address within the highly sought after Damansara Heights location and is slated to be developed into three-storey villas/condominiums totalling 54 units with a gross development value of RM348 million. The development is expected to be launched in the second half of 2020 and will contribute positively to the earnings of E&O from 2021 onwards.

The first milestone in E&O’s relationship with Mitsui Fudosan was a marketing collaboration agreement with Mitsui Fudosan Realty Co Ltd signed in 2011 to market E&O properties to high net worth clientele of Mitsui Fudosan in Japan. In 2013, both companies signed an agreement to jointly develop The Mews serviced apartments in Jalan Yap Kwan Seng and in 2015, another agreement was signed to jointly develop Conlay serviced apartments located on Jalan Conlay.



source https://www.thesundaily.my/business/eo-japan-s-mitsui-fudosan-to-develop-luxury-residences-in-damansara-heights-EM1842161

TDM to buy 70% stake in plantation company

PETALING JAYA: TDM Bhd today entered into a heads of agreement (HOA) with TH Plantations Bhd (THP) for the acquisition of a 70% stake in THP-YT Plantation Sdn Bhd for RM7 million.

THP-YT is the registered owner of three parcels of plantation land in Mukim of Caluk and Marang, all in the district of Setiu, Terengganu with a total land area of 2,594ha, known as Ladang Bukit Bidong. A total area of 2,307ha had been planted with oil palm plantation with an age profile ranging from two to nine years old.

The HOA will enable THP and TDM to negotiate and finalise the terms for the exercise. Upon completion of the proposed acquisition, THP-YT will be a subsidiary of TDM.

Since the estate is located in close proximity to TDM existing plantations and its palm oil mill, the proposed acquisition would optimise TDM processing capacity and lower the mill processing cost/mt fresh fruit bunch at its Sungai Tong mill. The age profile of the estate ranges from two to nine years. The exercise will improve TDM average age profile and contribute positively to TDM’s cashflow.

Upon completion of the acquisition, TDM’s total planted oil palm area in Terengganu will increase from 31,346ha to 33,653ha.

TDM chairman Raja Datuk Idris Kamarudin said looking further ahead, it is rolling out its business development plan to strengthen the platform for sustained growth into the future.

“The acquisition is part of the group’s overall strategy to improve the average age profile and reduce fluctuation in revenue. TDM is strategically positioning itself to stay competitive in highly challenging market conditions.”

TDM’s wholly-owned subsidiary, namely TDM Plantation Sdn Bhd has been certified sustainable by the Roundtable on Sustainable Palm Oil and Malaysian Sustainable Palm Oil.

“TDM’s believes that the strategic value creation to be derived from the proposed acquisition will translate into operational efficiencies thus improving profitability in the long run,” said Idris.

TDM is also looking forward to the Securities Commission’s (SC) review in May 2020 and the potential reinstatement of TDM as a syariah-compliant security. TDM believes that it has in principle complied with the SC’s requirements and now awaits for the outcome of the review by the SC in May 2020.



source https://www.thesundaily.my/business/tdm-to-buy-70-stake-in-plantation-company-DM1842072

China’s stocks set to beat Wall St in 2019 as markets shake tariff phobia

SHANGHAI: China's stock market has clawed its way from the bottom of the major global index rankings toward the top this year, with a more than 35% jump in the main blue chip index set to trump the roaring rally in its Wall Street counterparts.

Investors have largely shrugged off the economic damage wreaked by the Sino-U.S. trade war, and are chasing consumer and technology stocks, encouraged by Beijing's stimulus and bold capital market reforms.

By lunch break on Tuesday, the last session of 2019, China's bluechip CSI300 Index traded near an eight-month high at 4,082.56 points, up 35.6% from the start of the year. The Shanghai Composite Index is up 21.8% for the year, trading at 3,038.26 points.

In contrast, the S&P 500 has gained 28.5% and Dow Jones Industrial Average is up 22.01%.

"At the end of 2018, investors were dumping stocks amid fears of an unprecedented trade war. Today, investors are more composed, knowing all the cards Washington has, and more confident of the Chinese government's counter-measures," said Wu Kan, head of equity trading at Shanghai-based Shanshan Finance.

But Wu cautioned there are already signs of overheating in some sectors, such as consumer and tech, predicting volatility in 2020.

U.S. President Donald Trump formally launched a tariff war with China in 2018, leaving its stocks down 25% that year, the worst performance among major markets. But China's CSI300 rebounded 28.6% in the first quarter of 2019, as investors pounced onto battered shares while Washington and Beijing moved toward a cease fire.

That rally stalled in early May after trade talks hit a wall, with Chinese stocks fluctuating in a relatively narrow range as trade negotiations went on-and-off. The market resumed its upward trend this month, up more than 6%, as both sides agreed on an interim deal to de-escalate trade tensions.

Although China's economy has ground to its weakest pace in three-decades this year, hit by the trade war, investors were encouraged by Beijing's stimulus measures, bold market reforms, and heavy foreign inflows.

"The sharp correction in 2018 pushed valuations of China stocks to record lows, prompting a recovery in 2019, as Beijing rolled out supportive measures to boost the economy," said Zhou Longgang, analyst with Huachuang Securities.

Among the measures, China suspended a deleveraging campaign that spooked investors in 2018, and started easing monetary policy moderately. Beijing also stepped up fiscal spending on infrastructure investment.

The stock market also benefited from a slew of measures to reform China's stock market, including the launch of the Nasdaq-style STAR Market in Shanghai, and the inclusion of China A-shares into global benchmarks by index publishers such as MSCI and FTSE Russell.

By the end of September, foreigners held a record 1.77 trillion yuan ($253.14 billion) in Chinese equities, up nearly 40% in a year, according to the latest data from the People's Bank of China.

But performance has diverged sharply.

Tech shares surged over 60% as Beijing vowed to boost technology self-reliance, while an index tracking consumer staple stocks jumped about 80% on government stimulus measures.

In contrast, cyclical sectors including resources and energy far underperformed the broader market.

Also lagging the wider China rally was Hong Kong's stock benchmark Hang Seng, which rose 9.1% in 2019, partly battered by the city's anti-Beijing protests. The index dropped 0.5% to 28,189.75 points on Tuesday in a half-day trading session.- REUTERS



source https://www.thesundaily.my/business/china-s-stocks-set-to-beat-wall-st-in-2019-as-markets-shake-tariff-phobia-XL1841990

PPI for local production up 1.2% in November 2019

PETALING JAYA: The Producer Price Index (PPI) for local production, which went up for the first time in 12 consecutive months, increased 1.2% in November 2019 to 106.5 from 105.2 in the same month of the preceding year.

Chief statistician Malaysia Datuk Seri Dr Mohd Uzir Mahidin said this was the first positive yearly basis change since November 2018.

Out of 1,063 items covered in PPI, 35.5% items showed an increase in November 2019 compared to November 2018. On the contrary, 42.1% items showed a decline while 22.4% items were unchanged.

The index of agriculture, forestry & fishing showed a double digit increase of 19.9%, followed by mining (6.4%) and electricity & gas supply (0.6%) indices. In contrast, the water supply and manufacturing indices declined 2.3% and 0.7% respectively.

On a monthly basis, the PPI for local production rose 1.3% in November 2019, supported by the agriculture, forestry & fishing (10.5%), mining (8.9%) and water supply (0.1%) indices. The index of electricity & gas supply decreased 0.3%, while the manufacturing index fell 0.2%.



source https://www.thesundaily.my/business/ppi-for-local-production-up-12-in-november-2019-CL1841501

Oil prices steady, on track for biggest yearly rise since 2016

SEOUL: Oil prices held steady on the final day of the year on Tuesday, heading for their biggest annual rise since 2016, supported by a thaw in the prolonged U.S.-China trade dispute and supply cuts.

Brent crude futures for March delivery, the new front month contract, were at $66.66 a barrel, down 1 cent, by 0258 GMT. Brent for February delivery closed on Monday at $68.44 .

U.S. West Texas Intermediate (WTI) crude for February was down 3 cents at $61.65.

Brent has gained about 24% in 2019 and WTI has risen roughly 36%. Both benchmarks are set for their biggest yearly gain in three years, backed by a breakthrough in U.S.-China trade talks and output cuts pledged by the Organization of Petroleum Exporting Countries (OPEC) and its allies.

The White House's trade adviser said on Monday that the U.S.-China Phase 1 trade deal would likely be signed in the next week.

"Oil prices have followed the general de-risking drift into year-end despite a rise in Middle East tensions and last week's bullish-for-oil-price inventory draws as the broader markets appear to be losing some of that holiday cheer," said Stephen Innes, chief Asia market strategist at AxiTrader.

Tensions remain high in the Middle East after U.S. air strikes on Sunday against the Katib Hezbollah militia group in Iraq and Syria. Operations resumed at Iraq's Nassiriya oilfield resumed on Monday after protesters briefly halted production.

Looking ahead, U.S. crude inventories are expected to fall by about 3.2 million barrels in the week to Dec.27, heading for a third consecutive weekly fall, a preliminary Reuters poll showed on Monday. U.S. stockpiles fell by 5.5 million barrels in the week to Dec. 20. The figures will be released on Friday.

Innes said traders would also closely watch the EIA's U.S. October crude production figures, set to come out later on Tuesday.

"It's expected to show robust continuous growth in the agency's short-term outlook," he said.

The United States is on track to become a net petroleum exporter on an annual basis for the first time in 2020, with output expected to rise by 930,000 barrels per day (bpd) to a record 13.18 million bpd next year, the EIA said earlier this month.

Brokers and analysts expect growing U.S. supplies to offset cuts from OPEC in 2020 amid sluggish worldwide demand, weighing on oil prices.

"Oil prices, though largely expected to trade positive, will face headwinds from subdued global growth momentum and robust U.S. shale output levels in the first quarter," said Benjamin Lu, analyst at Singapore-based brokerage Phillip Futures. - REUTERS



source https://www.thesundaily.my/business/oil-prices-steady-on-track-for-biggest-yearly-rise-since-2016-JL1841290

China’s Huawei says ‘survival first priority’ after 2019 sales fall short

BEIJING: Chinese telecommunications giant Huawei said Tuesday that "survival" was its first priority after announcing 2019 sales were expected to fall short of projections as a result of US sanctions.

Chairman Eric Xu said Huawei -- banned from working with American firms over national security fears -- estimates sales revenue will reach 850 billion yuan for 2019 (US$121 billion) -- up roughly 18 percent from the previous year, but much lower than initially expected.

In January this year, the company forecast sales revenue of US$125 billion.

In a New Year's message addressed to employees, Xu said the US government was in the midst of a "strategic and long-term" campaign against the company that would create a "challenging environment for Huawei to survive and thrive".

"Survival will be our first priority" in 2020, said Xu, the current chairman under the company's rotating leadership scheme.

He said Huawei would need to "go all out" to build up its mobile services ecosystem -- its answer to the Google apps and services -- to "ensure that we can keep selling our smartphones in overseas markets".

While telecom experts consider Huawei a global leader in 5G equipment -- in terms of both technology and price -- the company has faced obstacles and suspicion from the US and other foreign nations wary of its close relationship with the Chinese government.

US intelligence chiefs state flatly that Huawei cannot be trusted and its equipment is a threat to national security -- an accusation the company has dismissed.

Founded in 1987 by former People's Liberation Army engineer Ren Zhengfei, Huawei was dragged into the spotlight a year ago when Ren's daughter, senior Huawei executive Meng Wanzhou, was arrested in Canada at the request of the United States.

Washington wants to put her on trial for allegedly lying to banks about violating Iran sanctions.

The backlash against Huawei has only grown since Meng's arrest.

Washington has banned US companies from selling equipment to Huawei, locking out the smartphone giant from access to Google's Android operating system.

European telecommunications operators including Norway's Telenor and Sweden's Telia have also passed over Huawei as a supplier for their 5G networks as intelligence agencies warned against working with them.

Australia and Japan have meanwhile taken steps to block or tightly restrict the firm's participation in their rollouts of 5G networks. Earlier this month, Prime Minister Boris Johnson also strongly hinted that Britain would follow suit.

Chinese law requires individuals and organisations to assist and cooperate with national intelligence efforts.

Xu also said cybersecurity and user privacy were at the "absolute top" of Huawei's agenda, and that the company would "continue to adhere to all related laws and regulations in the markets where we operate". - AFP



source https://www.thesundaily.my/business/china-s-huawei-says-survival-first-priority-after-2019-sales-fall-short-XL1841110

Ringgit hits near year high on positive US-China trade deal

KUALA LUMPUR: The ringgit hit near a year high today against the US dollar on the last trading day of 2019, lifted by a softer greenback coupled with progress on the US-China trade deal.

The ringgit was traded at 4.0980/1010 versus the US dollar compared with yesterday’s close of 4.1045/1085 - its highest since Jan 30.

AxiTrader chief Asia market strategist Stephen Innes said the local note was tracking the firmer Chinese yuan, supported by the anticipation of the US-China ‘phase one’ trade deal to be signed early next year.

“The yuan is the purest barometer to understand the broader US dollar movement amid the US-China friction, while the greenback is anticipated to trade lower in the months ahead,” he told Bernama.

Innes said traders, however, remained cautious on the ringgit, amid a fairly weak external environment.

“The ringgit was playing a bit of year-end catch up to its currency peers,” he said.

Meanwhile, the ringgit was traded mostly higher against a basket of major currencies.

It improved against the Singapore dollar to 3.0389/0430 from yesterday’s 3.0424/0458 but depreciated against the Japanese yen to 3.7665/7703 from 3.7608/7655.

The local currency increased against the British pound to 5.3749/3793 from 5.3839/3908 and strengthened against the euro to 4.5914/5956 from 4.5966/6019. - Bernama



source https://www.thesundaily.my/business/ringgit-hits-near-year-high-on-positive-us-china-trade-deal-MK1840718

Bursa Malaysia opens lower on wall street weakness

KUALA LUMPUR: Bursa Malaysia reversed yesterday’s gains to open lower while entering the final trading day of the year, taking the cue from the overnight weakness on Wall Street.

A dealer said profit taking also came into play after the key index closed at a fresh four-month high on Monday.

At 9.05am, the FTSE Bursa Malaysia KLCI (FBM KLCI) fell 4.98 points to 1,610.69 from Monday’s close of 1,615.67, after opening at 1,609.37.

Market breadth was negative, with losers outpacing gainers 125 to 86, while 227 counters remained unchanged, 1,533 untraded and 39 others suspended.

Turnover amounted to 109.47 million shares worth RM41.96 million.

Despite the fall at the opening bell, Malacca Securities Sdn Bhd expects the key index to sign off 2019 on a positive note, backed by the firmer ringgit against the US dollar, coupled with the strong commodity prices.

“We still think that the local bourse may end the month on a flourishing note as the key index looks to play catch-up with the gains across global equities this year,“ it said, adding that the key index is poised to re-test the 1,621 resistance level.

“Should the aforementioned level be breached, the next resistance is pegged at the 1,635 level,“ it said.

On the flip side, the brokerage firm said the immediate support would be located at the 1,600 psychological level, followed by the 1,590 level.

Among heavyweights, Maybank slipped three sen to RM8.69, Public Bank retreated eight sen to RM19.90, Tenaga was 10 sen easier at RM13.44, Petronas Chemicals slipped five sen to RM7.35 while CIMB was flat at RM5.31.

Of the actives, TDM gained one sen to 41.5 sen, Pelikan added 1.5 sen to 31.5 sen, Salcon inched up half-a- sen to 2.5 sen while Dynaciate and Astral Asia were unchanged at eight sen and 18.5 sen, respectively.

Top gainer Carlsberg advanced 26 sen to RM29.54 while top loser Nestle dipped RM1.50 to RM146.60.

The FBM Emas Index shed 26.17 points to 11,446.37 and the FBM Emas Shariah Index was 25.76 points weaker at 12,064.51.

The FBM 70 trimmed 0.10 point to 14,249.52, the FBMT 100 Index declined 26.59 points to 11,239.49 but the FBM Ace was 23.32 points firmer at 5,213.45.

Sector-wise, the Industrial Products and Services Index shed 0.41 point to 153.42, the Financial Services Index decreased 54.84 points to 15,651.46 while the Plantation Index contracted 2.19 points to 7,847.45. - Bernama



source https://www.thesundaily.my/business/bursa-malaysia-opens-lower-on-wall-street-weakness-EK1840655

Cypark Q4 profit higher at RM39m

PETALING JAYA: Cypark Resources Bhd’s net profit soared 23.3% to RM38.87 million for the fourth quarter ended Oct 31, 2019 against RM31.53 million in the previous corresponding period, mainly due to the effect of adoption of MFRS 15 and the higher margin yielded from environmental engineering and greentech & renewable energy divisions.

Revenue for the quarter rose 5.4% to RM99.7 million from RM94.59 million.

Profit before tax for the environmental engineering segment increased substantially by RM11.4 million or 40.5% to RM39.6 million from RM28.2 million.

Meanwhile, the greentech & renewable energy division’s profit before tax jumped RM5.8 million or 118.8% to RM10.7 million from RM4.9 million, underpinned by the specialist works performed and the further savings in finance costs.

Cypark’s full-year net profit also rose 11.7% to RM91.28 million from RM81.75 million on the back of a 6.8% increase in revenue to RM376.74 million from RM352.82 million.



source https://www.thesundaily.my/business/cypark-q4-profit-higher-at-rm39m-BA1839993

Fitch: CPO price rise unlikely to sustain

PETALING JAYA: Fitch Ratings said while the uptrend in crude palm oil (CPO) prices will continue into early 2020, it could moderate later due to higher supply on the back of better weather conditions and fertiliser input.

Malaysian benchmark CPO prices have jumped to around US$700 (RM2,883)/tonne since October after remaining below US$500 for most of the year.

However, the rating agency said the average for 2019 of around US$510 is lower than the US$555 in 2018. For 2020, it is expected to average US$550.

CPO output fell in 2019 with November production declining 17% year-on-year (yoy) after rising 10% in Q1’19. The inventory level in November also fell 30% from the December 2018 peak and by 25% yoy.

Fitch said drier weather conditions for most of 2019 and cuts to fertiliser inputs, especially by the smaller players in response to weak prices, have been the key factors behind the reduction in industry yields.

However, it believes that the recent CPO price spike should improve producers’ cash flows and encourage an increase in fertiliser input, which in turn gradually boost output.

While Indonesia is targeting a 45% jump in the consumption of biodiesel made from CPO in 2020 to 9.6 million kilolitres, Fitch pointed out that a sustained CPO price rise may discourage the government from pursuing its target aggressively as it will eliminate the discount to regular diesel prices.

“The sharp rally in CPO prices has also reduced its attractiveness via-a-vis competing edible oils such as soybean oil, which could affect demand from price-sensitive markets such as India.”



source https://www.thesundaily.my/business/fitch-cpo-price-rise-unlikely-to-sustain-BA1839939

FSBM slips into PN17 on disclaimer of opinion

PETALING JAYA: FSBM Holdings Bhd has triggered the Practice Note 17 (PN 17) criteria, following a report issued by its auditors expressing a disclaimer of opinion on the group’s audited financial statements for the financial year ended June 30, 2018.

The information technology service and systems provider is required to submit a regularisation plan to the Securities Commission Malaysia or Bursa Securities Bhd within 12 months.

“The company is looking into formulating a regularisation plan to address its PN17 status. The company will make the necessary announcement on the regularisation plan in due course,” it said in a Bursa filing.

In a separate filing, FSBM’s auditors Moore Stephens Associates PLT said it had been appointed to audit the group’s financial statements on Oct 21 upon the resignation of the previous auditors on Sept 13.

However, it said it was not able to obtain enough appropriate audit evidence to provide a basis for an audit opinion.

“During the course of the audit, the group and company’s management represented they did not have sufficient time to locate the very old historical records to provide us with the requisite documentation and information.

“Consequently, we were unable to perform the opening balances verification of the group and company which had resulted in the inability to obtain sufficient audit evidence of the following account balances, transactions and related disclosures as at July 1, 2017,” it said.

Moore Stephens also noted that it was unable to obtain sufficient audit evidence on the carrying amounts on the items specified under the opening balances paragraph of the group and company for its financial statements for FY18.

Other items the auditor said it did not have adequate audit evidence for included: amounts due from Technitium Sdn Bhd, unreconciled differences, recoverability of amounts due from Technitium, recoverability of other receivables, and liabilities, contingent liabilities & commitments.

Stephen Moores also said the financial statements for the group and company were prepared on the assumption that it would continue to operate as going concerns, despite the group and company incurring a net loss of RM669,000 and RM4.66 million respectively for the year ended June 30, 2018.

The company’s current liabilities also exceeded its current assets by RM8.23 million, while its shareholders’ equity posted a deficit of RM8.17 million.

“The ability of the group and company to continue as going concerns is dependent on the formalisation and successful implementation of the regularisation plan of the company to restore its financial position and achieve sustainable and viable operations,” said Moore Stephens.



source https://www.thesundaily.my/business/fsbm-slips-into-pn17-on-disclaimer-of-opinion-HA1839898

Ringgit extends gains to close higher against US dollar

KUALA LUMPUR: The ringgit extended last week’s gains to close higher versus the US dollar for the fourth consecutive trading day, backed by buying interest for the local note as well as greenback sell-off, said an analyst.

At 6 pm, the ringgit was traded at 4.1045/1085 against the US dollar from 4.1260/1290 last Friday.

AxiTrader chief Asia market strategist Stephen Innes said the ringgit was tracking the firmer Chinese yuan, supported by the anticipation of the US-China “phase one” trade deal being signed early next year.

“The ringgit’s move to the 4.10 level against the US dollar was a bit quicker that I had expected due to the positive direction of the trade truce. This is good for the ringgit,” he told Bernama.

Innes also anticipated that there would be no year-end funding pressure on the US dollar this year, which was why traders were confident to take profits off the greenback.

The ringgit’s appreciation was also thanks to higher oil prices.

At the time of writing, the benchmark Brent crude has risen almost one per cent to US$66.93 per barrel.

Meanwhile, the ringgit was traded mostly firmer against a basket of major currencies.

It improved against the Singapore dollar to 3.0424/0458 from 3.0491/0524 on Friday last week and strengthened against the Japanese yen to 3.7608/7655 from 3.7680/7718.

The local currency increased against the British pound to 5.3839/3908 from 5.3927/3970 but depreciated against the euro to 4.5966/6019 from 4.5951/6001. -Bernama



source https://www.thesundaily.my/business/ringgit-extends-gains-to-close-higher-against-us-dollar-NA1839780

No branches rule a hurdle for digital bank venture

PETALING JAYA: The requirement that digital banks are not allowed to establish any physical branch under the Licensing Framework for Digital Banks might disincentivise existing traditional banks to acquire the digital bank licence, according to MIDF Research.

The research house said this would mean that existing banks will have to create a digital bank subsidiary and with that, it could tie the banks with additional capital.

“Besides, existing banks’ licences already allowed it to offer its products digitally. However, we understand that CIMB, Affin, Hong Leong Bank, AMMB and Standard Chartered have expressed interest. Of these, CIMB is the only one with experience after it had set up a digital-only bank in Philippines and Vietnam,“ said MIDF in a report today.

A licensed digital bank is required to establish a registered office in Malaysia but this is to facilitate communication with Bank Negara Malaysia or face-to-face customer complaints.

“We understand that some countries allows for digital banks to have one branch. However, we speculate that this is to push the digital banks to offer its products through digital innovation.”

Interestingly, it said a limit is also placed on total asset size and not on type of customers.

“We had expected the limit will be applied on the type of customers such as retail and SMEs only. Also, we had expected there would be restriction on a per customer basis. Nevertheless, we believe that the RM2 billion total asset is an implicit limit. We opine that this will steer the digital banks towards more micro lending offerings.”

With five licences going to be issued, it believes the most likely candidate for applying for the licence will be the prominent ones such as Boost, Grab, Touch ‘N’ Go and BigPay.

“Overall, we believe that it is still early days for digital banks to be a threat to existing banks in the short to medium term. We believe that it is most likely that the digital bank licences will be issued by end 2020 and operational by 2021.”

In addition, it said the type of banking products have been implicitly limited during the foundational years and banks are already investing heavily to enhance its digital offerings.

“Therefore, we maintain positive on banks at current juncture with Maybank, CIMB and RHB as its top picks.”

Meanwhile, HLIB Research thinks digital banks are not major threats and that they can co-exist harmoniously with their conventional counterparts.

Also, with an asset threshold of less than RM2 billion, collectively, it said the five combined digital banking licensees (RM10 billion) may potentially shave away only less than 1% share of system loans.

“We estimate that every 1% slowdown in loans growth could reduce sector earnings by 0.5%,“ said HLIB.

Maintaining a neutral call on the sector, it said the modest growth outlook coupled with rising asset quality and interest rate risks prevented HLIB to be more bullish on banks, despite attractive valuations.

“However, for long-term investors who favour sector exposure, we advise to adopt a selective stock-picking strategy. Our preferred pick is Maybank given its above-average dividend yield of 6-7% and low foreign shareholding (19%) versus larger domestic peers (30-35%).”



source https://www.thesundaily.my/business/no-branches-rule-a-hurdle-for-digital-bank-venture-NA1839582

Bursa ends higher on window dressing, higher commodity prices

KUALA LUMPUR: Bursa Malaysia bucked most of its regional peers to close higher on the last two trading days of 2019, propelled by further year-end window dressing amidst price hikes in both crude palm oil and crude oil.

At 5pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) climbed 5.06 points, or 0.31 per cent, to finish at 1,615.67 compared with last Friday’s close of 1,610.61, with the key index moving between 1,608.76 and 1,617.43 throughout the day.

The benchmark index opened 1.16 points easier at 1,609.45.

Market breadth continued to stay positive, with gainers beating losers 460 to 378, while 409 counters were unchanged, 730 untraded and 45 others suspended.

Turnover increased to 2.34 billion shares worth RM1.63 billion versus 2.23 billion shares worth RM1.47 billion last Friday.

Rakuten Trade Sdn Bhd vice-president of research Vincent Lau said the rally in CPO prices, which breached the RM3,000 mark per tonne, along with benchmark Brent crude oil price which rose to US$$68.33 a barrel in the mid-afternoon trading session, had sent the plantation and energy-linked counters higher today.

“Malaysia’s economy is heavily reliant on commodities, so the increase in both CPO and crude oil prices had boosted buying interest in the related stocks,“ he told Bernama.

Earlier today, Malacca Securities Sdn Bhd said in a morning note that the gains on the local bourse would be supported by the spikes in CPO prices, which surged above RM3,000 per tonne, and West Texas Intermediate crude oil, which advanced to a three-month high last Friday.

Among heavyweights, plantation-linked counters such as KLK bagged 30 sen to RM25.10 while Sime Darby Plantation advanced 10 sen to RM5.56, oil and gas counters like Petronas Chemicals increased four sen to RM7.40 and Petronas Dagangan firmed 18 sen to RM23.30, while utility counter Tenaga gained 28 sen to RM13.54.

Of the actives, palm oil-linked counters TDM perked six sen to 40.5 sen and Rimbunan Sawit was 5.5 sen better at 45 sen, Astral Asia climbed 3.5 sen to 18.5 sen, Dynaciate ticked up half-a-sen to eight sen while Sapura Energy slipped half-a-sen to 27 sen.

Top gainer Dutch Lady propped up 80 sen to RM50 while top loser F&N retreated 58 sen to RM34.00.

The FBM 70 garnered 66.59 points to 14,249.62, the FBMT 100 Index elevated 39.42 points to 11,266.08 and the FBM Ace was 64.87 points higher at 5,190.13.

The FBM Emas Index advanced 41.95 points to 11,472.54 and the FBM Emas Shariah Index was 35.23 points firmer at 12,090.27.

Sector-wise, the Plantation Index leapt 135.31 points to 7,849.64, the Financial Services Index jumped 57.72 points to 15,706.30 and the Industrial Products and Services Index edged up 0.05 point to 153.83.

Main Market volume rose to 1.72 billion shares worth RM1.48 billion from 1.63 billion shares worth RM1.33 billion last Friday.

Warrants turnover narrowed to 242.02 million units valued at RM42.99 million against 250.82 million units valued at RM44.11 billion previosly.

Volume on the ACE Market went up to 375.15 million shares worth RM115.09 million as compared with 345.89 million shares worth RM92.36 million previously.

Consumer products and services accounted for 188.53 million shares traded on the Main Market, industrial products and services (269.66 million), construction (161.29 million), technology (134.71 million), SPAC (nil), financial services (28.75 million), property (119.76 million), plantations (344.78 million), REITs (4.65 million), closed/fund (31,200), energy (363.07 million), healthcare (10.84 million), telecommunications and media (38.50 million), transportation and logistics (30.58 million), and utilities (30.12 million). -Bernama



source https://www.thesundaily.my/business/bursa-ends-higher-on-window-dressing-higher-commodity-prices-BA1839425

Japan’s MUFG Bank to book $1.9 bln hit after Indonesian unit's stock plunge

TOKYO: The banking unit of Japan's Mitsubishi UFJ Financial Group Inc (MUFG) on Monday said it would book a one-off charge of about 207.4 billion yen ($1.9 billion) for the quarter ended Dec. 31 due to a drop in the share price of an Indonesian subsidiary.

PT Bank Danamon Indonesia Tbk, of which MUFG Bank Ltd owns 94.1%, closed at 3,950 rupiah on Monday on the Indonesia Stock Exchange's last trading day of 2019.

Under accounting rules, if Danamon's shares close below 50% of the average price MUFG paid for its stake, the Japanese bank is required to reassess the value of the holding and book a one-time charge.

MUFG does not disclose the price level where it would be required to book an extraordinary charge. It has built up its stake through a series of acquisitions since 2017. In April it more than doubled its holding to 94% from 40%, paying 9,590 rupiah a share, according to a filing.

But shares of Bank Danamon have tumbled since and this month hit their lowest in nearly three years, at 3,640 rupiah. The shares are down by nearly half this year, and were hit particularly hard in May after index provider MSCI removed the bank from its Global Standard index due to low liquidity.

Exclusion from a benchmark index usually triggers selling by passive funds that track the index. - Reuters



source https://www.thesundaily.my/business/japan-s-mufg-bank-to-book-19-bln-hit-after-indonesian-unit-s-stock-plunge-BA1839322

Saudi Arabia may cut light crude prices to Asia in February

SINGAPORE: Saudi Arabia, the world’s biggest oil exporter, may cut the prices of its light crude grades sold to Asia in February on signs of slowing demand ahead of the region’s peak refinery maintenance season, six trade sources said on Monday.

The official selling price (OSP) of flagship Arab Light crude in February could fall by 20-30 cents a barrel, four of six respondents in a Reuters survey said.

State oil company Saudi Aramco raised the Arab Light OSP to the highest in six years in January, the fourth month of increases.

Aramco may cut the OSP as the price structure for Middle East crude benchmark Dubai indicated falling crude demand in February as cargoes loading that month are likely to arrive when Asian refineries begin shutting for maintenance in March, the sources said.

The average backwardation between the first and third month cash Dubai price so far this month narrowed by 15 cents from the previous month, Reuters data showed.

In a backwardated market prompt prices are higher than those in future months.

The OSPs are also likely to drop as the gross product worth, which measures the value of a crude in terms of the fuels it yields after refining, for Saudi oil grades are lower than last month because of falling refining margins, one of the respondents said.

“Refining margins are under pressure,“ he said.

Arab Extra Light may see a bigger price cut in February after naphtha cracks weakened this month, the sources said.

However, firm demand for January-loading cargoes and rebounding fuel oil margins will support the OSPs for heavier Saudi oil, they said.

Most of the survey respondents expect the February OSP for Arab Medium to remain unchanged or drop slightly while the view was split between an expected price hike and price cut for Arab Heavy.

Supplies of these grades could remain tight as demand from new Chinese refineries will continue to rise in 2020 even as Saudi Arabia and Kuwait are working on resuming output from their joint production in the Neutral Zone between them.

Saudi crude OSPs are usually released around the fifth of each month, and set the trend for Iranian, Kuwaiti and Iraqi prices, affecting more than 12 million barrels per day (bpd) of crude bound for Asia.

Saudi Aramco sets its crude prices based on recommendations from customers and after calculating the change in the value of its oil over the past month, based on yields and product prices. Saudi Aramco officials as a matter of policy do not comment on the kingdom’s monthly OSPs. -Reuters



source https://www.thesundaily.my/business/saudi-arabia-may-cut-light-crude-prices-to-asia-in-february-CA1839150

Thai Nov exports fall 7.7%, current account surplus widens

BANGKOK: Thailand's current account surplus was $3.38 billion in November, up from $2.91 billion in October, the central bank said on Monday.

Exports declined 7.7% in November from a year earlier, after falling 5% in October.

Imports slumped 13.9% in November from a year earlier, after falling 9.2% in the previous month.

November saw a trade surplus of $1.97 billion, compared with October's $2.09 billion surplus.

Private consumption in November dropped 0.4% from the previous month, while private investment contracted 1.6%.

The economy is expected to grow close to 2.5% in the fourth quarter from a year earlier, a central bank official said. - Reuters



source https://www.thesundaily.my/business/thai-nov-exports-fall-77-current-account-surplus-widens-FB1838557

Sunday, December 29, 2019

The decade of debt: Big deals, bigger risk

NEW YORK: Whatever nickname ultimately gets attached to the now-ending Twenty-tens, on Wall Street and across Corporate America it arguably should be tagged as the "Decade of Debt."

With interest rates locked in at rock-bottom levels courtesy of the Federal Reserve's easy-money policy after the financial crisis, companies found it cheaper than ever to tap the corporate bond market to load up on cash.

Bond issuance by American companies topped $1 trillion in each year of the decade that began on Jan. 1, 2010, and ends on Tuesday at midnight, an unmatched run, according to SIFMA, the securities industry trade group.

In all, corporate bond debt outstanding rocketed more than 50% and will soon top $10 trillion, versus about $6 trillion at the end of the previous decade. The largest U.S. companies - those in the S&P 500 Index - account for roughly 70% of that, nearly $7 trillion.

What did they do with all that money?

It's a truism in corporate finance that cash needs to be either "earning or returning" - that is, being put to use growing the business or getting sent back to shareholders.

As it happens, American companies did a lot more returning than earning with their cash during the 'Tens.

In the first year of the decade, companies spent roughly $60 billion more on dividends and buying back their own shares than on new facilities, equipment and technology. By last year that gap had mushroomed to more than $600 billion, and the gap in 2019 could be just as large, especially given the constraint on capital spending from the trade war.

The buy-back boom is credited with helping to fuel a decade-long bull market in U.S. equities.

Meanwhile, capital expenditure growth has been choppy at best over 10 years. This is despite a massive fiscal stimulus package by the Trump administration, marked by the reduction in the corporate tax rate to 21% from 35%, that it had predicted would boost business spending.

One byproduct of stock buy-backs is they make companies look more profitable by Wall Street's favorite performance metric - earnings per share - than they would otherwise appear to be.

With companies purchasing more and more of their own stock, S&P 500 EPS has roughly doubled in 10 years. Meanwhile net profit has risen by half that, and far more erratically.

The corporate bond market has not only gotten bigger, it has gotten riskier.

With investors clamoring for yield in a low-rate world, debt rated only a notch or two above high-yield - or junk - bond levels now accounts for more than half of the investment-grade market, versus around a third at the dawn of the decade. - Reuters



source https://www.thesundaily.my/business/the-decade-of-debt-big-deals-bigger-risk-KB1838369

Oil price rise muted in 2019 despite sanctions, supply cuts, attack in Saudi Arabia

NEW YORK/SINGAPORE: Oil prices rose more than 20% this year but there were no sharp spikes and crude futures barely sniffed $70 a barrel despite attacks on the world's biggest oil producer, sanctions that crippled crude exports of two OPEC members and gigantic supply cuts from big oil producing countries.

The price gains in crude oil benchmarks were all in the first quarter of 2019, even as the next several months featured supply shocks that in the past would probably have propelled crude past the $100 mark.

Prices are likely to remain rangebound in 2020 as swelling supplies, particularly from the United States, offset cuts from the Organization of the Petroleum Exporting Countries and weakening worldwide demand, brokers and analysts said.

U.S. crude oil is on track to end 2019 roughly 35% higher. Since the end of March, it is up just 3%, after rallying early in the year after the United States introduced sanctions on Venezuela. Brent has gained 26%, but is off by 1% since the first quarter.

Investors and analysts say U.S. production and weak demand kept prices under control. The United States is on track to be a net petroleum exporter on an annual basis for the first time in 2020. Output is expected to average 13.2 million bpd, an increase of nearly a million bpd from 2019.

"Demand growth cratered while U.S. production continued to barrel along at high rates and geopolitical risk eased," Bob McNally, president of Rapidan Energy Group.

"And now, at the end of the year, weary investors are looking to next year and seeing a tsunami of oil."

Investor concern over peak oil demand is expected to weigh on prices next year, particularly as the urgency around action against climate change has increased. Also, a long-term resolution of the U.S.-China trade war seems elusive, keeping market watchers wary of predicting energy demand growth in the world's two largest economies.

"There is growing concern around the long-term sustainability of U.S. oil and gas companies for investors in an ESG (environmental, social and governance) driven world," said Greg Sharenow, portfolio manager at PIMCO, who co-manages more than $15 billion in commodity assets.

The U.S. Energy Information Administration expects average crude oil prices will be lower in 2020 than in 2019 because of rising inventories. Outside the United States, production is expected to continue to grow in Brazil, Norway, and Guyana.

Prices did spike, but only briefly after drone attacks on Saudi Arabia's biggest oil facility and U.S. sanctions on Venezuela and Iran. September attacks on Aramco facilities briefly pushed Brent above $72 a barrel, but within 10 days, oil prices sank back as Aramco brought production back online.

Notably, the market barely wavered in its view of where prices would end up. Implied volatility, a sign of how the market prices future gyrations in WTI and Brent futures, was largely muted in 2019 after a see-saw 2018, a sign that investors focused on broader supply trends.

Both Brent and U.S. West Texas Intermediate (WTI) futures were locked in a $22-$23 a barrel range during the year, well below last year's levels.

While the rate of annual U.S. production growth is expected to slow, the country should still account for about 85% of the increase in global oil production to 2030, according to the International Energy Agency. PIMCO's Sharenow said U.S. crude supply would need to slow for the price outlook to brighten.

"If we can move down to supply growth in a much more sustainable way of about 500,000-600,000 bpd, then all of a sudden the world is much better in 12 months," Sharenow said. - Reuters



source https://www.thesundaily.my/business/oil-price-rise-muted-in-2019-despite-sanctions-supply-cuts-attack-in-saudi-arabia-CB1838172

Poh Kong foresees better gold prices next year

KUALA LUMPUR: Poh Kong Holdings Bhd is forecasting an uptick in gold prices next year to between US$1,600 and US$1,700 per ounce.

At the time of writing, gold was trading at US $1,514.85 per ounce.

Speaking to the media after the group’s AGM today, executive chairman and group managing director Datuk Choon Yee Seiong said that while the outlook for gold prices depends on a number of factors, gold prices are generally seen to be higher next year.

“There are many uncertainties now, so gold is seen as a safe haven. Of course, higher prices are also good for us,“ he said.

He added that he expects the performance for FY2020 ending July 31 to be satisfactory.



source https://www.thesundaily.my/business/poh-kong-foresees-better-gold-prices-next-year-AB1838130

Carimin Petroleum bags IHUC contract from Petronas Carigali

PETALING JAYA: Carimin Petroleum Bhd has accepted a letter of award for the provision of integrated hook-up and commissioning (IHUC) services for Petronas Carigali Sdn Bhd.

The company told Bursa Malaysia that the contract will be for a duration of four years, from January 1, 2020 and will expire on December 31, 2023.

Carimin expects the contract to contribute positively to its earnings over the duration of the contract.

At the midday break, Carimin’s share price was down 2 sen to RM1.27 on 345,600 shares done.



source https://www.thesundaily.my/business/carimin-petroleum-bags-ihuc-contract-from-petronas-carigali-BB1838056

Singtel to team up with Grab for Singapore digital bank licence

Singapore Telecommunications Ltd (Singtel) is partnering with Southeast Asian ride-hailing firm Grab Holdings Inc to apply for a digital full banking licence in Singapore, the two companies said on Monday.

The pair in a joint statement said they will establish a consortium with Grab owning 60% and Singtel holding the remainder, with the aim of offering a variety of digital banking services.

The move comes as Singapore's biggest liberalisation of its banking sector in two decades seeks to enable online-only banks that can operate at lower costs and therefore offer different services than those of traditional lenders such as DBS Group Holdings Ltd and Oversea-Chinese Banking Corp Ltd .

Singtel, the region's largest telecom operator, and Grab are among the best-known names in Southeast Asia and both have been expanding outside their traditional businesses.

Singtel has been pushing into areas such as mobile wallets and online gaming, while Grab has expanded into food delivery and a range of financial services.

"The natural next step is to build a truly customer-centric digital bank that will deliver a variety of banking and financial services that are accessible, transparent and affordable," Reuben Lai, senior managing director at Grab Financial Group, said in a statement.

The city-state's central bank is set to issue up to two digital full bank and three wholesale bank licences. Digital full banks can accept deposits from and offer services to both retail and non-retail customers but must be led by a Singapore-based company.

Wholesale banks will mostly serve small and mid-sized enterprises. - Reuters



source https://www.thesundaily.my/business/singtel-to-team-up-with-grab-for-singapore-digital-bank-licence-NK1837953

Gold hits 2-month peak on dollar weakness, US strikes

Gold prices rose to their highest in more than two months on Monday in thin year-end trading as the dollar dipped and U.S. military strikes in the Middle East drove investors towards the safe-haven metal.

Spot gold rose 0.3% to $1,514.94 per ounce by 0359 GMT. Earlier in the session, prices hit their highest since Oct. 25 at $1,515.80. U.S. gold futures were unchanged at $1,518.

"We are looking at pre-positioning for next year and a rebalancing of portfolios ahead of year end, overlaid with very low liquidity levels, that are essentially exacerbating the volatility and making these moves appear exaggerated," said Ilya Spivak, a senior currency strategist at DailyFx.

Gold is receiving modest support from the U.S. airstrikes in the middle east, Spivak added. The U.S. military on Sunday carried out successful air strikes in Iraq and Syria against an Iran-backed militia group, spurring market uncertainty and geopolitical tensions.

Gold is a considered a safe investment in times of geopolitical and economic uncertainty. Further helping gold, the dollar slipped against a basket of rivals, making gold cheaper for holders of other currencies.

Gold prices have risen about 18% this year and were on track for its best year since 2010, mainly due to the 17-month-long Sino-U.S. tariff war and its impact on global economic growth.

"But from a pure macro and risk perspective, it currently makes little sense for gold to be trading above $1,500/oz. The surging equity market and higher gold prices seldom, if ever, exist in the same time frame and simultaneously moving higher," said Stephen Innes, a market strategist at AxiTrader in a note.

On the trade front, China's Commerce Ministry on Sunday said it has "proactively dealt with" trade frictions with U.S. this year. Market participants, however, remained wary even after Washington and Beijing have made progress in their tariff dispute and an official ratification of an initial trade deal was close.

Indicative of investor sentiment, holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust , rose 0.1% to 893.25 tonnes on Friday, the highest since Nov. 29. Among other precious metals, silver rose 0.9% to$17.92 per ounce, while platinum climbed 0.2% to $946.62. Palladium was flat at $1,905.28 per ounce. - Reuters



source https://www.thesundaily.my/business/gold-hits-2-month-peak-on-dollar-weakness-us-strikes-CK1837895

TNB’s Jimah East Power fully operational

KUALA LUMPUR: The second of two coal-fired power plants owned and run by Tenaga Nasional Bhd’s (TNB) subsidiary, Jimah East Power Sdn Bhd (JEP) has commenced its commercial operation date (COD) last Friday.

With the powering up of the 1,000 megawatt (MW) plant, TNB has reinforced Peninsular Malaysia’s power supply to 25,981MW.

The development of JEP in Port Dickson, Negeri Sembilan took 49 months since construction started in 2015. The first 1,000MW power plant achieved its COD on Aug 22, 2019.

Both plants utilise ultra-supercritical technology (USC), an efficient coal-burning technology with 40% efficiency as against conventional coal-fired power plant which has a 36% efficiency.

Apart from JEP, TNB has two other coal-fired plants using USC, namely Manjung 4 and Manjung 5 in its Sultan Azlan Shah Power Station in Lumut, Perak.

TNB owns a 70% stake in JEP while Mitsui & Co Ltd and The Chugoku Electric Power Co Ltd hold 15% each.



source https://www.thesundaily.my/business/tnb-s-jimah-east-power-fully-operational-AK1837626

Petronas completes 50% stake buy in Brazil oil concessions

KUALA LUMPUR: Petroliam Nasional Bhd’s (Petronas) subsidiary Petronas Petróleo Brasil Ltda (PPBL) has completed the acquisition of a 50% equity in the Tartaruga Verde producing field (BM-C-36 concession) and Module III of the Espadarte field (Espadarte concession), both located in deep waters of the Campos Basin, offshore Brazil.

PPBL signed a sales and purchase agreement with Petróleo Brasileiro SA (Petrobras), Brazil’s petroleum multinational corporation on April 25, 2019. Petrobras, who is the operator, holds the remaining 50% equity.

The signing of the closing agreement to mark the completion of the acquisition was held in Rio De Janeiro, Brazil last Friday.

Petronas executive vice president & CEO of upstream Adif Zulkifli said the completion of the acquisition of Tartaruga Verde and Module III of Espadarte, as well as the three exploration blocks won in the recent bid rounds in Brazil is testament to Petronas’ steady progress in expanding its oil business in South America.

“We also look forward to this new partnership with Petrobras to meet Brazil’s energy aspirations,” he said in a statement.

Aside from expanding its portfolio in South America, Petronas also signed six new production sharing contracts (PSC), of which four PSCs in Malaysia and two in Gabon, in addition to the acquisitions of two offshore blocks in Egypt. This is in line with Petronas’ three-pronged growth strategy to secure opportunities in prolific basins in expanding its core business for future cash generation.



source https://www.thesundaily.my/business/petronas-completes-50-stake-buy-in-brazil-oil-concessions-EK1837547

Foreigners bought RM69.9m last week

PETALING JAYA: International investors acquired RM69.9 million net of local equities last week compared to RM68.7 million net bought in the week before.

“Offshore investors continued to enter Malaysia for the second week. In 2019, international funds were net buyers for a total of 18 weeks,” MIDF Research said in its fund flow report today.

It said Bursa began the week on the right foot as international funds mopped up RM74.7 million net of local equities last Monday. As such, the local stock barometer was lifted higher by 0.3% to close at 1,614.2 points, a level not observed since August 2019.

The eve of Christmas then saw foreign investors retreating to the sidelines as they disposed local equities at a tune of RM19.6 million net, dragging the local bourse by 0.6% to settle at 1,604.2 points.

As markets reopened on Thursday, international funds continued to reduce exposure in local equities but at a very slow pace of only RM1.8 million net. The reduction in foreign net selling was mainly attributable to the news that the US and China will have a signing ceremony to commemorate the first phase of the US-China trade deal agreed this month.

International funds later turned net buyers on Friday, snapping up RM16.6 million net of local equities following the rally in local plantation stocks in line with the rise in crude palm oil price.

“With two more trading days before the month of December ends, the month has so far seen a foreign net outflow of RM1.06 billion. As such, 2019 is set to be another year of foreign net outflow for Malaysia with the year-to-date foreign net outflow as of last Friday standing at RM10.99 billion, lower than last year’s total foreign net outflow of RM11.69 billion,” said MIDF.

In terms of participation during the festive week, it was no surprise that foreign investors experienced sharpest decline in average daily traded value amongst the other investor groups, dropping 61.4% to reach below the RM1 billion mark at RM489.5 million.



source https://www.thesundaily.my/business/foreigners-bought-rm699m-last-week-YK1837450

Dollar trims annual gains in low volatility year, more action seen in 2020

SYDNEY: The dollar was on the defensive on Monday in light year-end trading after suffering a setback the previous session, as hopes of a U.S.-China trade deal lifted investors' risk appetite, sapping safe-haven demand for the greenback.

The dollar index was stable at 96.942 against six major currencies after sliding 0.6% on Friday for its biggest single day percentage drop since June.

With Friday's loss, the index's gains for the year have shrunk to under 1%, putting it on track for the smallest annual change in six years.

Against the Japanese yen the dollar was treading water at 109.41, on track to end the year where it started in January.

The big gainers in recent weeks have been the risk-sensitive and commodity-linked currencies of Australia and New Zealand.

The Aussie and the kiwi scaled five month peaks on Monday to $0.6990 and $0.6717 respectively, boosted by higher commodity prices and expectations the United States and China would sign a trade deal soon.

Last week, Chinese authorities said Beijing was in close contact with Washington about an initial trade agreement. Prior to those comments, U.S. President Donald Trump had talked up a signing ceremony for the recently struck Phase 1 trade deal.

But despite recent rallies, the annual performances of the antipodean currencies are still dreary with the Aussie down 1% so far this year and the kiwi off a shade.

"What's really noticeable is the narrow range of currencies during the year," said Marshall Gittler, Cyprus-based chief strategist at ACLS Global, pointing to "economic and monetary policy convergence."

"I expect less of both in 2020, for two reasons," he said, noting the expected end of the Sino-U.S. trade war which should lead to broader economic recovery across the world.

The second reason, Gittler said, was that inflation seemed to have bottomed.

"As (inflation) accelerates, countries are less likely to cut rates and maybe, possibly, conceivably some countries could start thinking about hiking rates, which would encourage monetary policy divergence."

Elsewhere, the euro rose for a sixth straight session on Monday to $1.1186.

Bleak European economic data had prompted hedge funds to bet on a weaker euro during 2019, but some strength in recent Eurozone data along with weakness in other currencies have lifted the euro.

The common currency has jumped 2.6% in this quarter but that was still not enough to wipe out this year's losses.

Sterling was higher after European Commission President Ursula von der Leyen said the European Union may need to extend the deadline for talks about a new trade relationship with Britain.

Even with the recent UK general election smoothing the path for Britain's exit from the European Union, Britain's ability to strike a new trading deal between the EU in a relatively short span of time remains a concern for some investors.

The pound was last up 0.15% for its fifth straight session of gains at $1.3096.

Later in the day, investors will stay tuned for the Chicago Purchasing Management Index, also known as the Chicago Business Barometer for clues about the health of the U.S. economy. - REUTERS



source https://www.thesundaily.my/business/dollar-trims-annual-gains-in-low-volatility-year-more-action-seen-in-2020-BK1837344

Tesla begins deliveries of China-made Model 3 cars

SHANGHAI: U.S. electric vehicle maker Tesla Inc on Monday began delivering Model 3 vehicles built at its Shanghai factory, marking the occasion with a ceremony during which 15 of its employees received cars they had purchased.

The event means the plant has started delivering cars to customers just 357 days after the factory's construction started, setting a new record for global automakers in China.

The China-made cars are priced at 355,800 yuan ($50,000) before subsidies and Tesla had said it wanted to start deliveries before the Lunar New Year beginning on Jan. 25.

The Shanghai plant is part of the Silicon Valley automaker's plans to bolster its presence in the world's biggest auto market and minimise the impact of the U.S.-China trade war. Previously, Tesla imported all of the cars it sold in China.

"From now onwards China-made Model 3 vehicles will start running on China's large streets and small lanes," Tesla Vice President Tao Lin said at the delivery ceremony, during which Model 3s in colours including black, white and blue were handed over to customers. - REUTERS



source https://www.thesundaily.my/business/tesla-begins-deliveries-of-china-made-model-3-cars-LK1837296

Bursa Malaysia opens easier on profit-taking

KUALA LUMPUR: Bursa Malaysia opened easier on the second last trading day of the year, as profit-taking activities kicked in after the key index jumped 7.06 points at last Friday’s closing.

At 9.05am, the FTSE Bursa Malaysia KLCI (FBM KLCI) inched down 0.68 of-a-point to 1,609.93 from last Friday’s close of 1,610.61.

The key index opened at 1,609.45.

Market breadth, however, was positive, with gainers outpacing losers 148 to 93, while 216 counters remained unchanged, 1,520 untraded and 45 others suspended.

Turnover amounted to 172.23 million shares worth RM42.35 million.

Despite the decline at the opening, Malacca Securities Sdn Bhd expected the year-end window dressing activities to send the FBM KLCI higher today.

“We foresee more window dressing activities as the market looks to take advantage of the buoyant global market environment, which would help the key index end the month on a good note,” it said.

In a note today, it said the gains would also be supported by firmer crude palm oil prices which had surged above RM3,000 per tonne amid higher West Texas Intermediate crude oil prices that had advanced to a three-month high last Friday.

The brokerage firm said with the key index approaching the 1,621 resistance level, it expected the benchmark to be breached with relative ease backed by continuous strong institutional support.

“Further upsides are seen at the 1,635 level. Meanwhile, immediate support lies at the 1,600 psychological level, followed by the 1,590 level,“ it added.

Among heavyweights, Maybank ticked up one sen to RM8.62; Public Bank, Tenaga and Petronas Chemicals were unchanged at RM19.28, RM13.26 and RM7.36, respecitively; while CIMB was down two sen to RM5.28.

Of the actives, Dynaciate and Dolphin International increased half-a-sen each to eight sen and 15 sen respectively; Bina Puri warrant climbed three sen to 3.5 sen; TDM rose one sen to 35.5 sen; while Eduspec was half-a- sen easier at 2.5 sen.

The FBM Emas Index gained 3.79 points to 11,434.38 and the FBM Emas Shariah Index advanced 4.31 points to 12,059.35.

The FBM 70 garnered 38.67 points to 14,221.70, the FBMT 100 Index accumulated 3.57 points to 11,230.23 and the FBM Ace was 17.92 points firmer at 5,143.18.

Sector-wise, the Industrial Products and Services Index shed 0.26 of-a-point to 153.52, the Financial Services Index decreased 3.57 points to 15,645.01 but the Plantation Index perked 8.72 points to 7,723.05. - Bernama



source https://www.thesundaily.my/business/bursa-malaysia-opens-easier-on-profit-taking-AK1837103

2019: Bumper listing year

PETALING JAYA: While 2019 has not seen Bursa Malaysia record its best performance due to various factors such as the US-China trade war, a drop in exports and a net outflow of foreign institutional investors, this has not been a deterrent for those seeking to float their company’s shares on the market.

There were 30 listings done this year, the highest number since 2006. Of these, four were on the Main Market versus two in 2018, 11 on the ACE Market (2018: 9) and 15 were on the LEAP Market (2018: 11).

Best performer: Uni Walls APS Holdings Bhd

Year to date, the best performer of the stocks listed this year is building façade services provider Uni Walls, with a year-to-date share price increase of 445.5%. The company listed on the LEAP Market on Jan 15.

Uni Walls’ IPO entailed issuing 45.7 million new shares, raising a total of RM7.31 million. Of the total proceeds, 47.9% or RM3.5 million will be used to set up a new factory in Semenyih, Selangor with an estimated total cost of RM13.2 million.

The remaining capital expenditure of approximately RM9.7 million will come from internally generated funds and bank borrowings.

Another 41.2% or RM3.01 million will be allocated for working capital, and the remaining 10.9% or RM800,000 to defray the listing expenses.

While most of the company’s projects are based in Malaysia, it is also looking to expand its presence in Australia. However, in its half-yearly earnings report, Uni Walls said the slowdown of Australia market condition and increase in competition has resulted in a significant decrease in project scale and margin.

For its first half ended June 30, Uni Walls posted a five-fold increase in net profit to RM5.38 million, from RM1.07 million while revenue also increased to RM19.4 million from RM4.7 million previously.

Worst performer: Tashin Holdings Bhd

Tashin Holdings, a steel processor and manufacturer, debuted on the ACE Market on Aug 1, but thus far it has been the worst-performing. Based on its closing price of 27.5 sen on Dec 27, Tashin’s shares have fallen 43.3% from its first-day close of 48.5 sen.

Its IPO entailed an issuance of 59.33 million new shares at 58 sen per share with RM34.41 million raised to build a new factory.

For its third quarter ended Sept 30, Tashin posted a net loss of RM2.8 million, on the back of RM55.3 million in revenue.

Looking ahead, Tashin said the general outlook for the Malaysia economy and business environment for the steel industry, in particular, will remain cautious in view of the US-China trade war.

As local steel manufacturers are facing stiff competition and squeezed margin amid decreased global steel prices, the company said it will adopt a continuous and pragmatic approach in carrying out its business plan.

Most anticipated: Leong Hup International Bhd

Poultry and livestock feed provider Leong Hup returned to the stock market after a seven-year hiatus with a much-anticipated IPO entailing an issuance of up to 937.5 million shares comprising an offer for sale of up to 687.5 million existing shares and a public issue of 250 million new shares.

It raised RM275 million from its listing, which took place on May 16. Based on its closing price of 87.5 sen on Dec 27, the stock has declined 20.5% from its first-day close of RM1.10.

Established in 1978, Leong Hup is involved in the production of poultry, egg and livestock feed across the entire poultry value chain in Southeast Asia such as Malaysia, Singapore, Indonesia, Vietnam and the Philippines.

In 2017, it was the largest integrated poultry producer in Malaysia and one of the top three integrated poultry producers in Indonesia and Vietnam, with a total production of 495.6 million day-old-chicks, 1.7 billion eggs and almost two million tonnes of feed.

It was delisted in April 2012, following the privatisation exercise by Emerging Glory Sdn Bhd, a company owned by the group’s founding Lau family.

For its third quarter ended Sept 30, Leong Hup’s profit rose 26.1% to RM44.38 million from RM35.21 million on the back of improvement seen in its revenue, which grew 7.4% to RM1.53 billion from RM1.42 billion in the corresponding quarter a year ago.



source https://www.thesundaily.my/business/2019-bumper-listing-year-XM1835990