FBM KLCI to rise to 1,620 level next week

KUALA LUMPUR: Bursa Malaysia is expected to rise to the 1,620 level next week on positive US-China trade talks progress and strong fundamentals.

“The positive progress of the trade talks delivered by the two superpowers is likely to boost market sentiment next week,” said Phillip Capital Management senior vice-president (investment) Datuk Dr Nazri Khan Adam Khan told Bernama.

On the fundamental side, he said Malaysia’s economy expanded 4.9% against the prior expansion of 4.5%.

Furthermore, he said the Cabinet’s approval on the implementation of the National Fiberisation and Connectivity Plan over the next five years at the cost of RM21.6 billion is expected to lift the telecommunication counters.

“Telco players are expected to inch higher, especially with Axiata Group Bhd’s proposed merger with Norway’s Telenor ASA is on track and expected to be completed within the estimated time frame,” he said.

Nevertheless, he said despite the strong domestic fundamentals, the local market is expected to ride on global economic health.

“Hence, investors should look for more rounds of global economic numbers before diving into the market,” he added.

The market will be closed on Monday in lieu of Awal Muharram which falls on Sunday. The operations will resume on Tuesday.

On Friday, the local market was closed sharply higher on improved sentiment amid positive US-China trade development.

Over the week, the market started weaker but rebounded in the last two days amid a recovery in the sentiment influenced by the US-China trade development.

On a Friday-to-Friday basis, the FBM KLCI increased 2.81 points to 1,612.14 from 1609.33.

The FBM Emas Index lost 37.65 points to 11,348.5, the FBMT 100 Index eased 28.7 points to 11,190.63 and the FBM Emas Syariah Index declined 12.14 points to 11,912.05.

The FBM 70 fell 235.74 points to 1944.71 and the FBM Ace Index fell 65.43 points to 4,488.2.

Sector-wise, the Financial Services Index contracted 105.31 points to 15,550.02 and the Industrial Products and Services Index inched down 1.89 point to 148.68, while the Plantation Index advanced 47.79 points to 6,889.48.

Weekly turnover increased to 10.48 billion units worth RM9.64 billion compared with 10.32 billion units worth RM7.00 billion.

Main Market volume contracted to 6.49 billion shares valued at RM6.28 billion from 6.95 billion shares worth RM6.28 billion.

Warrants turnover rose to 2.51 billion units worth RM561.85 million from 1.86 billion units worth RM421.67 million.

The ACE Market volume declined to 1.46 billion shares worth RM347.37 million from 1.54 billion shares worth RM297.51 million. — Bernama

source https://www.thesundaily.my/business/fbm-klci-to-rise-to-1-620-level-next-week-NX1321069

Ringgit to trade range bound next week

KUALA LUMPUR: The ringgit is expected to be range-bound and hold its ground next week, as there were positive developments revolving the US-China trade talks.

Phillip Capital Management senior vice-president (investment) Datuk Dr Nazri Khan Adam Khan said China softened its tone on Thursday to prevent the trade tensions from escalating further.

“Both parties are expected to resume another round of trade talks in September ahead of a looming deadline for additional US tariffs on Chinese goods.

“We expect the improved sentiment on the trade war will send the local market higher ahead of the long weekend holiday,” he told Bernama

According to reports, China indicated that it would not immediately retaliate against the latest US tariff increase announced by US President Donald Trump last week, saying that it was more important to discuss removing the extra duties.

Meanwhile, the foreign exchange market will be closed on Monday in lieu of Awal Muharram which falls on Sunday. The operations will resume on Tuesday.

For the week just ended, the local market was lower as investors cautiously awaited the the US-China trade war developments.

The ringgit ended the week weaker at 4.2030/2080 from 4.1900/1930 last Friday.

The local currency also traded lower against most other major currencies.

It was down against the Singapore dollar at 3.0281/0319 from 3.0213/0237 and depreciated versus the Japanese yen to 3.9487/9545 from 3.9284/9327.

The local unit also edged down vis-to-vis the pound to 5.1230/1308 from 5.1147/1201 and trimmed against the euro to 4.6393/6465 from 4.6333/6383. — Bernama

source https://www.thesundaily.my/business/ringgit-to-trade-range-bound-next-week-AX1321046

Ringgit ends higher as US-China resume trade talks

KUALA LUMPUR: The ringgit closed higher against the US dollar today on positive news as US-China resume trade talks.

At 6pm, the ringgit finished at 4.2030/2080 against the greenback from 4.2150/2200 on Thursday.

A dealer said, however, traders are expected to adopt a wait-and-see attitude on the developments of the trade negotiations.

“The United States and China returned to the negotiating table to resolve their tariff dispute and on hopes that central banks and governments will do more to avert a global growth slowdown,” he said.

The foreign exchange market will be closed on Monday (Sept 2) for the replacement of Awal Muharram public holiday that falls on Sunday (Sept 1).

The market will commence its operations on Tuesday, Sept 3.

Meanwhile, the ringgit was traded higher against other major currencies.

It was traded stronger against the yen at 3.9487/9545 from 3.9671/9729 and versus the euro at 4.6393/6465 from 4.6685/6745 previously.

The local unit was higher against the Singapore dollar at 3.0281/0319 from 3.0370/0410 and vis-a-vis the British pound at 5.1230/1308 from 5.1381/1446. - Bernama

source https://www.thesundaily.my/business/ringgit-ends-higher-as-us-china-resume-trade-talks-BY1320131

AirAsia inks major deals with Airbus

KUALA LUMPUR: AirAsia Group Bhd today signed two major agreements with Airbus, covering the order of an additional 12 A330neo and 30 A321XLR aircraft for US$8.1 billion (RM34.2 billion), as well as a memorandum of agreement to support the development of the Malaysian aerospace industry.

As part of the deal, Airbus will develop further its industrial presence in Malaysia with three new initiatives, including the expansion of Airbus’ wholly-owned maintenance facility Sepang Aircraft Engineering (SAE), the establishment of the Airbus Malaysia Digital Initiative and an increased participation in the Aerospace Malaysia Innovation Centre (AMIC).

The expansion of SAE will include the construction of a new hangar capable of accommodating four single aisle or two widebody aircraft for heavy checks, as well as the addition of new paint and component repair shops. The facilities will be ready to incorporate the latest smart technologies, including data analysis and planning using the Airbus Skywise digital platform and automated inspection techniques.

Under the Airbus Malaysia Digital Initiative, Airbus will work with local stakeholders to develop a master plan and select and perform dedicated projects to enhance the competitiveness of the Malaysian aerospace sector through the application of new digital technologies. The initiative will also contribute to the alignment of Malaysian industrial partners with new processes and systems being introduced by Airbus across its manufacturing and supply chain.

Building on its position as a founding member of AMIC, Airbus will appoint an innovation technical director to support the non-profit organisation and increase its funding for joint research programmes. These will include research at AMIC into the potential production of alternative and sustainable aviation biofuels in Malaysia.

AirAsia also signed an agreement for a firm order of 12 additional Airbus A330neo aircraft, taking the total from 66 to 78 A330neos on order; and 30 state-of-the-art A321XLR aircraft, to join AirAsia’s future long-haul fleet.

The introduction of the A321XLR provides AirAsia X with greater flexibility to better manage capacity on key routes as well as respond to seasonal demand. The A321XLR also gives AirAsia X an advantage when it comes to exploring opportunities to operate non-stop flights between Southeast Asia and secondary cities in countries like Australia, China and Japan.

The agreements were signed by Airbus CEO Guillaume Faury and AirAsia X Bhd chairman Tan Sri Rafidah Aziz for the aircraft purchase and AirAsia Group executive chairman Datuk Kamarudin Meranun for the industrial projects. The signing ceremony was witnessed by Prime Minister Tun Dr Mahathir Mohamad. Also present was AirAsia Group CEO Tan Sri Tony Fernandes.

Airbus is the largest international partner for the Malaysian aerospace industry. Its sourcing and services businesses in the country are now valued at some US$400 million (RM1.68 billion) per annum for the local economy, a figure expected to rise to more than US$550 million every year with these new initiatives.

Kamarudin said Airbus’s commitment to investing to expand its industrial presence here will deliver significant benefits to the economy, through job creation and by transforming industry best practice.

“By ensuring Malaysia remains at the cutting edge of global aerospace developments, we will be able to future proof the local industry and guarantee our future competitiveness,” he said in a statement.

Commenting on AMIC, Kamarudin said AirAsia continues to lead the way in driving sustainable operations and tourism.

“Not only do we invest heavily in new, more fuel-efficient aircraft, we have also begun looking into alternative jet fuel solutions.”

source https://www.thesundaily.my/business/airasia-inks-major-deals-with-airbus-AY1320112

Net profit soars 24% for MBSB in Q2

PETALING JAYA: Malaysia Building Society Bhd (MBSB) saw its net profit jump 24% in the second quarter ended June 30, 2019 with RM106.23 million against RM85.69 million recorded in the same quarter of the previous year due to a lower expected credit losses (ECL).

Revenue for the group rose 3% with RM817.66 million against RM794.14 million reported previously.

“MBSB’s profits in 2Q19 translated to an improved return on equity (ROE) and return on assets (ROA) contributed by lower ECL due to improvements in provisions for retail segment as well as ECL write backs from the corporate portfolio,” said its group president and CEO Datuk Seri Ahmad Zaini Othman in a statement.

Its net profit margin declined to 2.84% compared to 3.23% in 2Q18, while net income stood at RM336.31 million, a 6.09% decline from RM358.10 million in 2Q18.

MBSB’s current financing composition ratio between retail and corporate stands at 74:26 and it continues to move towards a target of 60:40 by the year 2020.

The group recorded a cost-to-income ratio of 31.32%, a year-on-year regression of 4.05% compared to 27.27% in 2Q18.

For the first half of 2019, the group reported a net profit of RM190.06 million, a 52.8% drop from RM402.48 million reported for the corresponding period of the previous year, while revenue remained flat at RM1.60 billion for the period against RM1.61 billion reported previously.

For the second half of the year, MBSB will continue with its plans to enhance the level of its customers’ experience and expand digital banking capabilities.

“MBSB Bank will be transforming 15 of its 47 branches into digital branches and will be introducing the current account and savings accounts (CASA-i) online application platform as well as the e-wallet facility by the end of this year,” said Zaini.

MBSB will also continue to focus to expand the corporate business to reach the desired corporate retail portfolio mix. As a new Islamic banking group in the industry, the group is looking forward to expand its products and services which include trade finance, wealth management and internet and mobile banking to cater various segments of customers and depositors.

source https://www.thesundaily.my/business/net-profit-soars-24-for-mbsb-in-q2-IJ1319965

Former ED sentenced, fined for furnishing false statement to Bursa

KUALA LUMPUR: The Kuala Lumpur Sessions Court has convicted a former executive director of Linear Corp Bhd after he pleaded guilty to a

charge of knowingly authorising the furnishing of a false statement to Bursa Malaysia Securities Bhd in 2009.

Alan Rajendram Jeya Rajendram, former executive director of Linear, was sentenced to seven months jail and a fine of RM100,000 after he pleaded guilty to the offence under section 369(b)(B) of the Capital Markets and Services Act 2007.

The false statement was in relation to an announcement made by Linear on Dec 29, 2009 which stated that Linear’s wholly owned subsidiary, LCI Global Sdn Bhd, had accepted a RM1.6 billion construction project awarded by Global Investment Group, a Seychelles incorporated company, to design and construct a district cooling plant of 350,000 RT (refrigeration tonnes) in Manjung, Perak, for what was termed as the “King Dome project”.

Evidence showed that Alan knew that the said statement was not true, when he authorised the furnishing of the said information to Bursa.

Alan was previously acquitted by the Sessions Court in 2017 at the end of the prosecution’s case but on July 31, 2019, the High Court had overturned the acquittal and ordered Alan to enter his defence to the said charge. Following the High Court’s decision, Alan pleaded guilty to the charge at the Sessions Court yesterday.

source https://www.thesundaily.my/business/former-ed-sentenced-fined-for-furnishing-false-statement-to-bursa-JJ1319946

Bursa Malaysia closes sharply higher

KUALA LUMPUR: Bursa Malaysia closed sharply higher as the global geopolitical environment continued to recover.

The benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) jumped 16.96 points to close at its intra-day high of 1,612.14 after trading between it and the lowest point of 1,601.59.

The market barometer opened 7.06 points higher at 1,602.24.

Phillip Capital Management senior vice president (investment) Datuk Dr Nazri Khan Adam Khan said China softened its tone on Thursday to prevent trade tensions from escalating further as both parties are expected to resume another round of trade talks in September ahead of a looming deadline for additional US tariffs on Chinese goods.

“We expect the following improved sentiment on the trade war will send the local market higher ahead of the long weekend holiday,” he told Bernama.

Among heavyweights, Maybank perked 12 sen to RM8.69, TNB and Petronas Chemicals rose 16 sen each to RM13.96 and RM6.93 respectively and IHH climbed two sen to RM5.79.

Public Bank was flat at RM20.32.

As for actives, Bumi Armada added 3.5 sen to 25.5 sen and Vsolar and TH Heavy Engineering gained half-a-sen each to 14 sen and 6.5 sen, respectively.

KNM lost one sen to 38 sen while MN Wireless was flat at eight sen.

The FBM Emas Index jumped 125.35 points to 11,348.5, the FBMT100 Index was 128.51 points higher at 11,190.63 and the FBM Emas Shariah Index rose 133.52 points to 11,912.05.

The FBM Ace eased 22.19 points to 4,488.2 and the FBM 70 surged 204.8 points to 13,944.71.

Sector-wise, the Financial Services Index rose 179.47 points to 15,550.02, the Plantation Index expanded 71.69 points to 6,889.48, and the Industrial Products and Services Index was 1.82 points higher at 148.68.

Market breadth was positive as gainers outpaced losers 517 to 322, with 395 counters unchanged, 753 untraded and 71 others suspended.

Turnover was higher at 2.22 billion units worth RM2 billion from yesterday’s 1.99 billion units worth RM1.66 billion.

Main Market volume rose to 1.48 billion shares valued at RM1.85 billion from yesterday’s 1.14 billion shares valued at RM1.47 billion.

Warrants turnover decreased to 482.86 million units worth RM102.75 million from Thursday’s 557.23 million units worth RM123.82 million.

Volume on the ACE Market contracted to 248.34 million shares valued at RM47.17 million from 297.79 million shares valued at RM69.45 million previously.

Consumer products and services accounted for 182.32 million shares traded on the Main Market, industrial products and services (157.23 million), construction (64.37 million), technology (133.16 million), SPAC (nil), financial services (54.09 million), property (113.8 million), plantations (13.15 million), REITs (9.23 million), closed/fund (2,000), energy (627.46 million), healthcare (31.05 million), telecommunications and media (46.46 million), transportation and logistics (28.84 million), and utilities (26.75 million). - Bernama

source https://www.thesundaily.my/business/bursa-malaysia-closes-sharply-higher-KJ1319927

Mavcom to announce passenger service charges in a few weeks

KUALA LUMPUR: The Malaysian Aviation Commission (Mavcom) will announce the new rates of the Passenger Service Charge (PSC) in the next few weeks, to be enforced in January 2020.

In a statement today, the commission said the comprehensive study of methodology and the charges for aviation services, including the PSC are in the final stages of completion.

The commission said it would introduce the Regulated Asset Base Framework (RAB Framework) to determine airport charges.

“In doing so, the commission has been conducting a comprehensive study and working closely with all relevant ministries and industry stakeholders, including airlines, airport operators, as well as the investment community since 2017.

“As an outcome of the RAB Framework, the commission will implement differentiated charges in accordance with the size, level of facilities and services available at the airport,” it said.

It added that the methodology would also free the government from subsidising airport operations as per current practice.

The RAB methodology is a globally recognised cost-based mechanism and provides a sustainable funding model for airports, whilealso taking into account impact to airport users. - BERNAMA

source https://www.thesundaily.my/business/mavcom-to-announce-passenger-service-charges-in-a-few-weeks-AI1318662

Sime Darby Plantation posts RM27m net profit in Q2

KUALA LUMPUR: Sime Darby Plantation Bhd saw a net profit of RM27 million for the second quarter ended June 30, 2019, while revenue stood at RM2.88 billion amid weak crude palm oil (CPO) and palm kernel (PK) prices.

There is no comparative for the quarter and half-year period. Due to the change in the financial year end from June 30 to Dec 31, the unaudited condensed consolidated statement of profit or loss for the current quarter and half-year, being the second quarter of the financial year ending Dec 31, 2019 is not comparable with that of the second quarter of the previous financial year ended June 30, 2018.

However, for analysis, its Q2 net profit was 10% lower against RM30 million in the corresponding quarter of the previous year, affected by weak CPO and PK prices.

The average CPO price realised declined by 15% year-on-year (yoy) from RM2,379 per MT to RM2,021 per MT whilst the average PK price realised was lower by 39% yoy from RM1,682 per MT to RM1,020 per MT.

The group’s FFB production of 2.43 million MT in Q2 FY2019 was comparable to the same quarter of 2018 of 2.44 million MT. It also recorded an improvement in OER from 21.11% to 21.27%. Nevertheless, the group’s earnings continued to be negatively impacted by weaker CPO and PK realised prices.

“Low commodity prices continue to impact the industry as well as Sime Darby Plantation’s earnings. We have aggressively put in place measures that would help us navigate through the current market conditions. These include the strategy to balance the profit contribution from both our upstream and downstream segments as a mid-to-long term solution,” said group managing director Mohamad Helmy Othman Basha in a statement.

It recorded a non-recurring profit of RM9 million arising from the disposal of the group’s entire shareholding in a wholly-owned subsidiary, PT Mitra Austral Sejahtera (PT MAS), as compared to a non-recurring loss of RM283 million mainly due to impairment charges in the corresponding quarter of the previous year. The disposal of PT MAS, which was a loss-making subsidiary, is positive to the group and aligns with the group’s strategy to monetise non-performing assets.

For the six months period, it reported a net profit of RM101 million, representing a 64% decrease against the corresponding period of the previous year due to the adverse impact of weaker CPO and PK prices realised, which declined by 16% yoy from RM2,414 per MT to RM2,016 per MT and by 41% yoy from RM1,897 per MT to RM1,116 per MT respectively.

Revenue stood at RM5.88 billion.

source https://www.thesundaily.my/business/sime-darby-plantation-posts-rm27m-net-profit-in-q2-CI1318510

TNB Q2 earnings down 9.8%, declares 30 sen dividend

PETALING JAYA: Tenaga Nasional Bhd’s (TNB) net profit for the second quarter ended June 30, 2019 fell 9.8% to RM1.12 billion from RM1.24 billion a year ago mainly due to the regulatory adjustments which are now accounted for every month starting from this financial year and the MFRS 16 leases.

Revenue jumped 3.0% to RM12.88 billion compared with RM12.50 billion in the previous year’s correspoding quarter.

For the six months period, net profit fell 20.4% to RM2.67 billion from RM3.36 billion a year ago mainly due to the regulatory adjustments which are now accounted for every month starting from this financial year and the MFRS 16 leases which impacted the results by RM112.2 million.

Revenue increased by 5.4% to RM26.12 billion as compared to RM24.77 billion in the same period last year mainly due to the increase in group’s sales of electricity of 5.6%. The group also registered a growth in unit sold of 5.1% during the quarter under review.

The board of directors has approved an interim single tier dividend of 30.0 sen per share in respect of the financial period ended June 30, 2019 amounting to RM1.71 billion. The final dividend for FY2018 was paid on April 11, 2019 totalling RM1.31 billion.

TNB said the performance of the group is expected to remain stable for FY2019.

source https://www.thesundaily.my/business/tnb-q2-earnings-down-9-8-declares-30-sen-dividend-CI1318253

Aussie slips towards 10-yr low as U.S.-China trade hopes ebb

TOKYO: The Australian dollar slipped towards a 10-year trough while the yen hovered off its lows on Friday, as renewed hope that China and the United States could get their negotiations back on track began to fade.

The U.S. currency was also supported by investors' month-end rebalancing needs, which has helped lift the dollar index to its highest level in a month.

The index is last up 0.1% at 98.555.

The Australian dollar, often seen as a proxy bet on the Chinese economy, fell 0.31% to $0.67095, about a third of a cent above its 10-year low of $0.66775 hit on Aug. 7.

Adding to the Aussie's woes, the country's building approvals unexpectedly plunged to a six-year low.

The New Zealand dollar dropped 0.30% to a four-year low of $0.6290. It is the worst performing G10 currency this month with a fall of 4.1%.

The yen held flat at 106.49 per dollar, off this week's low of 106.68 hit the previous day.

Risk assets got a mild lift on Thursday after China's commerce ministry said Beijing and Washington were discussing the next round of face-to-face talks in September, but the effect was short-lived.

Washington is due to start imposing 15% tariffs on $125 billion worth of goods from China on Sunday, affecting a vast number of consumer items from smart speakers to sneakers.

Investors fear the intensifying trade dispute could lead the U.S. economy into a recession, a scenario that has become more of a reality this week after the U.S. bond yield curve inverted, a highly reliable indicator of a recession.

"The talking point is still the U.S. yield curve inversion and whether the U.S. economy heads into a recession...In short, the atmosphere is not so good," said Bart Wakabayashi, Tokyo branch manager of State Street.

In addition, political risks from the UK to Hong Kong and the Middle East added to risks for the global economy and kept many investors on edge.

Despite the dollar's rebound against the yen this week, the Japanese currency is the best performer among major currencies this month, rising 2.2% so far.

The second best was the Swiss franc, which has gained 0.7% so far this month, to 0.9879 per dollar.

"There are so many geopolitical risk factors now. Not to mention U.S.-China trade conflicts, we have Brexit, Hong Kong and the Middle East. So we should expect the yen to jump from time to time," said Minori Uchida, chief currency analyst at MUFG Bank.

The euro eased 0.12% to $1.1043, near a four-week low of $1.1042 touched on Thursday, hurt by a sluggish euro zone economy and likely monetary easing from the European Central Bank (ECB) next month.

Christine Lagarde, the ECB's next president, said on Thursday the central bank still has room to cut interest rates if needed, although this may pose financial stability risk.

German inflation slowed in August and unemployment rose, data showed on Thursday, adding to signs that Europe's largest economy is running out of steam and cementing expectations of a new ECB stimulus package next month.

Sterling traded at $1.2183, on course to post its first weekly loss in three weeks on growing worries about a no-deal Brexit at the end of October.

British Prime Minister Boris Johnson suspended parliament for more than a month to dodge a possible no-confidence vote and take Britain out of the European Union on the Oct. 31 deadline. - Reuters

source https://www.thesundaily.my/business/aussie-slips-towards-10-yr-low-as-u-s-china-trade-hopes-ebb-MI1318079

African lender says China not trying to lead region into ‘debt trap’

YOKOHAMA: China is not trying to lead African countries into a debt trap and provides critical investment along with other countries to close a funding gap for crucial infrastructure projects on the continent, the head of the regional lender said on Friday.

Debt sustainability was a key issue at this week's meeting hosted by Tokyo with African leaders and international lenders on development of the continent, with eyes on China's aggressive lending that some critics say has saddled poorer African countries with mountains of debt.

African Development Bank President Akinwumi Adesina brushed aside such criticism, and urged Japan and China to not compete but play "complementary roles" in filling a massive funding gap for African infrastructure.

"I don't think there is a deliberate plan by China to indebt any country at all. I think China is fulfilling a very important role, which is in terms of infrastructure support," Adesina told Reuters. "Africa is not in a debt crisis."

Japan nonetheless views its regional rival as a competitor for influence around the world, including in Africa and worries that a flood of Chinese money will weaken its diplomatic standing.

Africa today has a financing gap of $68 billion to $108 billion a year for power, ports, rail, and airports, he added.

At the Tokyo International Conference on African Development (TICAD), Prime Minister Shinzo Abe announced on Wednesday Japan will establish trade insurance to spur private investment in Africa. At the last TICAD meeting in 2016, Japan pledged $30 billion in public and private support for infrastructure development, education and healthcare over three years.

Japan's investment pales in comparison with China.

Since launching the Forum on China-Africa Cooperation in 2000, Beijing has boosted its Africa-bound aid, and President Xi Jinping announced another $60 billion over the next three years last September.

Japan is focusing on high-quality infrastructure investment in Africa in a bid to set itself apart from China.

"I don't see a competition at all, I see complementarity. Africa has a tremendous amount of needs. Africa is a friend of China, Africa is a friend of Japan. The China Belt and Road Initiative is highly appreciated," he said, adding that a lot will be used to fund transport corridors, rail and port projects.

Chinese officials say the Beijing summit is aimed at strengthening Africa's role in its Belt and Road initiative to link China by sea and land with Southeast and Central Asia, the Middle East and Africa.

Some critics say China is keen on resource extraction in poorer countries to feed its economy, that the projects it funds have poor environmental safeguards, and that too many of the workers are flown in from China rather then using local labour.

"The interest and engagement of China in Africa is welcome. Will I say there were no mistakes made in the beginning, no I wouldn't say so," Adesina said. "There are issues of sensitivity to local communities, there are issues of making sure you don't displace people in the labour market, but these are a learning curve for China."

The International Monetary Fund says Cameroon, Ghana and other faces a high risk of debt distress, as does Djibouti, already home to the People's Liberation Army's first overseas base.

- Reuters

source https://www.thesundaily.my/business/african-lender-says-china-not-trying-to-lead-region-into-debt-trap-MD1317925

S. Korea central bank holds fire but Oct rate cut seen likely

SEOUL: South Korea's central bank kept its benchmark interest rate unchanged on Friday but is widely expected to ease at the next meeting to support the faltering economy.

The Bank of Korea's (BOK) monetary policy board voted to hold the 7-day base rate at 1.50%, an official announced without elaborating. Governor Lee Ju-yeol is due to hold a news conference from 0220 GMT.

The decision followed a rate cut at its last meeting in July and was in line with the forecasts of 13 of the 18 analysts surveyed by Reuters, while the remaining five saw a cut. Still, 10 of the 13 analysts expect the BOK to trim the rate to a joint record low of 1.25% at the Oct. 17 meeting.

The liquid three-year treasury bond futures September contract fell while the won extended gains against the dollar after the decision, although changes were small as investors awaited the governor's news conference.

"The BOK must have wanted to avoid cutting the rate at two successive meetings and to save the fire power, and I think the BOK is not fully sure lower rates alone could turn things around," said Oh Suk-tae, economist at Societe Generale in Seoul.

"I expect a cut at the October meeting as domestic demand remains weak and as we need to confirm a sustained recovery in exports, especially semiconductor exports that kicked off the country's economic downturn," he added.

A brewing trade conflict with Japan has added to troubles already facing South Korea's trade-reliant economy, such as cooling global demand amid the prolonged Sino-U.S. tariff war, shrinking corporate investment and weak consumer spending.

Japan has tightened procedures on exports of key materials for use by South Korean chip and smartphone makers, including Samsung Electronics Co, and ripped Seoul off the list of countries with favoured partner status.

South Korea responded by removing Tokyo from its own list of trade partners with favoured status and announcing a series of measures aimed at helping the local industries reduce purchases of key materials and equipment from the neighbour.

On Thursday, the government finalised the most aggressive budget spending plan since the 2008-2009 global financial crisis for next year as Asia's fourth-largest economy is buffeted by growing threats both at home and from abroad.

The BOK in July cut the base rate for the first time in three years and trimmed this year's economic growth forecast to 2.2% from 2.5% previously, but that is still far above projections of as low as 1.4% by private-sector organisations.

Recent indicators point to even darker clouds heading toward the country, with a central bank survey showing consumers at their gloomiest mood in 31 months in August and their inflation expectations at the weakest on record.

South Korea's exports this month are expected to fall for a ninth consecutive month from a year earlier while this month's consumer inflation is seen falling to the lowest in more than 20 years, another Reuters survey showed. - Reuters

source https://www.thesundaily.my/business/s-korea-central-bank-holds-fire-but-oct-rate-cut-seen-likely-ED1317273

Lagarde signals plan to stick to Draghi’s ECB expansionary path

FRANKFURT AM MAIN: The ECB's next chief Christine Lagarde signaled Thursday that she would stick with Mario Draghi's controversial expansionary monetary policy that has propped up the eurozone economy amid growing risks to growth.

In a written reply to queries from the European Parliament, Lagarde underlined that inflation has remained stubbornly low in the bloc while growth was stalling.

"It is therefore clear that monetary policy needs to remain highly accommodative for the foreseeable future. The ECB has a broad tool kit at its disposal and must stand ready to act," wrote Lagarde.

"While I do not believe that the ECB has hit the effective lower bound on policy rates, it is clear that low rates have implications for the banking sector and financial stability more generally," she noted.

Over his eight years in office, the ECB's incumbent chief Draghi has brought interest rates to record lows and unleashed billions of euros in quantitative easing to ward off the threat of deflation and drum up growth.

But with the prospects of growth dimming once again, and with Europe's biggest economy Germany on the brink of a recession, Draghi said at the ECB's last monetary policy meeting in July that the bank could fire off a new stimulus package and slash rates further.

Draghi's ultra-expansionary doctrine is however not without its critics.

Too soon to act?

Dutch central banker Klaas Knot told Bloomberg on Thursday that he did not think a new quantitative easing package was necessary at this juncture.

"If deflation risks come back on the agenda then I think the asset-purchase programme is the appropriate instrument to be activated, but there is no need for it in my reading of the inflation outlook right now," he said.

Knot's stance echoes Bundesbank chief Jens Weidmann's view, who in an interview published Sunday by the Frankfurter Allgemeine Zeitung warned against launching new stimulus measures out of "panic" or simply for the sake of taking action.

Draghi's policy has proved particularly hard to swallow in Germany as the nation of savers has seen its holdings stagnate in banks.

But the Italian central banker has argued that the ECB could not sit back and wait for economic conditions to worsen before acting, setting the stage for new action at central bankers next meeting on September 12.

Surveys have for months pointed to an economic slowdown in the second and third quarters from the 0.4 percent growth booked in January-March.

Slower growth in turn threatens the central bank's target for area-wide inflation which is just below 2.0 percent.

In June the figure came in at 1.3 percent.

Besides growing fears over US-led protectionism, the economic mood in the bloc was also dampened by the looming exit of Britain from the European Union.

The danger of a no-deal Brexit has also intensified, with Boris Johnson as Britain's new prime minister.

Lagarde voiced confidence however that "EU authorities, including the ECB, have prepared for" a hard Brexit.

"Overall, I am confident that the measures taken so far have limited the impact that the UK's departure from the EU could have on access to financial services in the euro area," she said, adding however that companies should still use the time leading up to the deadline of October 31 to get ready. - AFP

source https://www.thesundaily.my/business/lagarde-signals-plan-to-stick-to-draghi-s-ecb-expansionary-path-XD1317231

China’s Xi sees bigger role for joint development of offshore oil, gas with Philippines

SHANGHAI: Chinese President Xi Jinping said China and the Philippines could take a "bigger step" in the joint development of oil and gas resources in the South China Sea if they can properly handle their dispute over sovereignty.

Xi made the remarks on Thursday, according to the official Xinhua news agency, in a meeting with Philippine President Rodrigo Duterte in Beijing. Duterte has positioned himself as a friend of Beijing but has come under growing pressure at home to push back against its maritime assertiveness.

The visit comes amid a recent rise in tension on several fronts, with Chinese vessels challenging energy assets and the sea boundaries of Malaysia, Vietnam and the Philippines. The United States has accused China of "coercive interference" and holding hostage $2.5 trillion of oil and gas in the region.

Duterte was steadfast in raising the Philippines' concerns, including a 2016 arbitration ruling that invalidated China's claim to sovereignty over most of the South China Sea, according to a statement sent overnight by his spokesman Salvador Panelo.

"In response, President Xi reiterated his government's position of not recognising the arbitral ruling as well as not budging from its position," the statement said.

Duterte has been reluctant to press the issue, repeatedly warning that he risks starting a war if he does. Critics have dismissed that as nonsense and say Duterte is gambling with Philippine sovereignty and getting little from Beijing in return.

Xinhua's report on the meeting made no mention of the ruling.

It said Xi urged the two sides to "set aside disputes, eliminate external interference, and concentrate on conducting cooperation, making pragmatic efforts and seeking development".

"As long as the two sides handle the South China Sea issue properly, the atmosphere of bilateral ties will be sound, the foundation of the relationship will be stable, and regional peace and stability will have an important guarantee," it quoted Xi as saying.

The two sides could take a "bigger step" in the joint development of offshore oil and gas, it quoted Xi as saying.

That could be extremely complex and sensitive, however, as both countries claim jurisdiction over the Reed Bank, the main site of the oil and gas reserves, despite the arbitration award declaring that Manila had sovereign rights to exploit them.

The Philippines is proposing a 60-40 sharing arrangement in its favour.

China's claims in the South China Sea, through which more than $3 trillion in ship-borne trade passes each year, are contested by Brunei, Malaysia, the Philippines, Taiwan and Vietnam. - Reuters

source https://www.thesundaily.my/business/china-s-xi-sees-bigger-role-for-joint-development-of-offshore-oil-gas-with-philippines-ED1317161

Global stocks boosted by China-US talk hopes

NEW YORK: Stocks floated higher on Thursday, lifted by positive sentiment surrounding the US-China trade war, while the pound steadied after a Brexit-fueled slump.

China's Commerce Ministry hinted Beijing could break the cycle of tit-for-tat retaliation in the trade war with the United States, while in Washington US President Donald Trump said the two sides continued to talk.

Hope the countries could avoid catastrophe sent Wall Street higher for a second day while European stocks rebounded and London consolidated gains. Asian bourses were mainly flat.

"People are holding out hope," Maris Ogg of Tower Bridge Advisors told AFP, although that optimism may prove short lived.

"If the trade wars go away or dissipates, clearly you have a healthier economic environment," she said. "But you need some concrete actions for this to have long term impact."

In Milan, the FTSE MIB index gained almost 2.0 percent after Italian President Sergio Mattarella gave Prime Minister Giuseppe Conte a mandate to form a new government.

Investors were mulling the significance of a fall in yields on 10-year US Treasurys, which recently dropped below that for two-year Treasury notes -- widely viewed as a reliable recession indicator.

It comes against a backdrop of slowing global growth.

In foreign exchange, the pound was stable a day after it fell on UK Prime Minister Boris Johnson's shock decision to bring an end to the parliamentary year and not restart it until mid-October.

While he said the extended recess was to draw up a full legislative program, anti-Brexiters were fuming that it would cut short any time they could have to debate a plan to avert a no-deal exit from the EU on October 31, with some calling it a "coup."

Johnson could face a vote of no confidence, which could lead to a British general election and continued uncertainty for the already struggling economy.

The euro fell back as incoming European Central Bank chief Christine Lagarde signaled that she would stick with Mario Draghi's controversial expansionary monetary policy that has propped up the eurozone economy amid growing risks to growth - AFP

source https://www.thesundaily.my/business/global-stocks-boosted-by-china-us-talk-hopes-XD1317099

Japan’s solid factory output masks trouble ahead as retail sales slump

TOKYO: Japan's industrial output rebounded more than expected in July, but retail sales declined sharply and production was set to contract again next month, signalling a bumpy road for an economy facing growing global strains.

Over the past year, Japan's economy and its manufacturers have been pressured by slowing global growth and a protracted trade war between the United States and China, which has disrupted world supply chains and business investment.

Industrial output rose 1.3% in July, government data showed, more than a median market forecast for a 0.3% gain. But that hardly recouped the sharp 3.3% drop in the previous month.

Output was pushed up by increased production of cars and chemicals, offsetting a decline for oil products, the data showed.

"Although the reading for July was positive, it isn't so great seen from a longer perspective," said Akiyoshi Takumori, chief economist at Sumitomo Mitsui DS Asset Management.

"The level of production remains slightly below what it was in April, so looking at it over a three-month period output has declined."

Manufacturers surveyed by the trade ministry expect output to rise 1.3% in August, but fall again by 1.6% in September.

Friday's data set paints a mixed picture for Japan's economy, the world's third-largest, whose outlook has been clouded by global pressures and early signs of weakness in business sentiment.

"These (output) projections tend to be too optimistic and we think that output will be broadly flat in August," Marcel Thieliant, senior Japan economist at Capital Economics, said in a note to clients.

"That means that even if it doesn't fall any further in September, it would shrink a little in the third quarter, consistent with weak GDP growth."

So far, the export-reliant economy has avoided buckling under a slowdown in overseas demand and expanded an annualised 1.8% in the second-quarter, largely thanks to robust household consumption and capital expenditure.

Japanese exporters also hold hopes for a speedy resolution to bilateral trade negotiations between Washington and Tokyo after U.S. President Donald Trump and Prime Minister Shinzo Abe on Sunday announced an agreement on the core principles of a limited trade deal.

But business expectations have dimmed recently. Japanese manufacturers turned pessimistic about business prospects for the first time in more than six years in August as the spectre of a global downturn looms large, the monthly Reuters Tankan survey showed last week.

"If one assumes that business sentiment worsens following the sales tax hike, overseas and domestic demand would both be in bad shape, so that would put downward pressure on output from October onwards," said Takeshi Minami, chief economist at Norinchukin Research Institute.

Japan's exports slipped for an eighth month in July as China-bound sales slumped again in a fresh sign the Sino-U.S. trade war could hurt the economy.

Separate data on Friday showed domestic demand might slow in coming months as retail sales dropped 2.0% in July from a year earlier, reflecting recent weakness in household sentiment. It was worse than a median estimate for a 0.8% drop.

Tokyo's core consumer prices (CPI) index, which includes oil products but excludes fresh food prices, rose 0.7% in August from a year earlier. The figure matched the level seen in June last year and was the lowest since May 2018 when the index grew 0.5%.

The price data yet again underlined the uphill task for the Bank of Japan in its quest to push headline inflation to 2.0%.

Nationwide core inflation, excluding fresh food prices, was running at 0.6% in July, wallowing at a two-year low, despite years of super-easy rates and massive stimulus.

The labour market remained resilient, though, with separate data showing the jobless rate fell to 2.2% in July, while the availability of jobs decreased.

The jobs-to-applicants ratio declined to 1.59 in July, down from June and the median estimate of 1.61. - Reuters

source https://www.thesundaily.my/business/japan-s-solid-factory-output-masks-trouble-ahead-as-retail-sales-slump-JD1317029

Genting Q2 earnings up 56.4%

KUALA LUMPUR: Genting Bhd’s net profit for the second quarter ended June 30, 2019 jumped 56.4% to RM599.68 million from RM383.52 million a year ago, driven by higher contribution from the leisure & hospitality, particularly in Singapore, US and Bahamas.

Its revenue was RM5.45 billion, an increase of 12.9% compared with the previous year’s RM4.82 billion.

The group has declared an interim dividend of 6.5 sen per share for the quarter under review.

For the six-month period, Genting’s net profit rose 17.8% to RM1.16 billion from RM986.22 million, while revenue increased expanded 9.4% from RM10.07 billion to RM11.02 billion.

Looking ahead, Genting said Genting Singapore is embarking on the implementation phase of Resorts World Sentosa’s SG$4.5 billion mega expansion plans, which will again elevate its position as the region’s premier integrated resort destination.

In the UK, Genting Malaysia will continue reviewing its operations to identify streamlining opportunities to improve operational efficiencies.

In the US, Resorts World Casino New York City maintained its position as market leader in terms of gaming revenue in the Northeast US region.

Nevertheless, Genting said the group remains focused on executing various initiatives to drive visitation and frequency of play at the property.

Meanwhile, it noted that construction of Resorts World Las Vegas (RWLV) continues to progress well.

“As of Aug 10, 2019, RWLV has completed concrete work for both the West and East Towers, topping off at the 69th level. Structural steel construction has been completed for the low-rise casino podium. Total development and land costs incurred as of June 30, 2019 were approximately US$1.5 billion (RM6.3 billion).”

source https://www.thesundaily.my/business/genting-q2-earnings-up-56-4-BF1315021

Cut-off date for finalising highway deals extended

PETALING JAYA: The cut-off date for the takeover of four toll concessionaires has been extended for two months.

MOF Inc, Kesas Holdings, Litrak Holdings, Sprint Holdings and Smart Holdings have mutually agreed to extend the cut-off date to negotiate and finalise the terms of the definitive agreement from Aug 30 to Oct 31, 2019 in relation to the government’s acquisition of highways.

In June, the Ministry of Finance (MoF) offered to acquire four toll concessionaires with an enterprise value of RM6.2 billion.

The four toll highways are the Damansara-Puchong Highway (LDP), Sistem Penyuraian Trafik KL Barat (Sprint), Shah Alam Expressway (Kesas) and the Stormwater Management and Road Tunnel (Smart), with offer prices of RM2.47 billion, RM1.98 billion, RM1.38 billion and RM369 million, respectively.

Gamuda owns 43.6% in Lingkaran Trans Kota Sdn Bhd (Litrak), Kesas (70%), Sprint (51.8%) and Smart (50%).

source https://www.thesundaily.my/business/cut-off-date-for-finalising-highway-deals-extended-BF1315003

CIMB: Expected rate cut will have minimal impact on net interest margin

KUALA LUMPUR: CIMB Group Holdings Bhd CEO Tengku Datuk Seri Zafrul Aziz said an Overnight Policy Rate (OPR) cut within the year will squeeze its net interest margin (NIM) by only one to two basis points.

“From the expected rate cut, we are expecting a contraction of one to two basis points in our NIM for the whole group,” he said at a media briefing to release its 1H19 financial results today.

Its 1H NIM contracted 7bps to 2.46% from 2.53% a year ago.

CIMB posted a 23.8% decline in net profit to RM1.51 billion for the second quarter ended June 30, 2019 against RM1.98 billion in the same quarter a year ago.

This was due to a one-off gain of RM928 million from the disposal of its stake in CIMB-Principal Asset Management and CIMB-Principal Islamic Asset Management in the previous corresponding period.

Excluding the one-off item, its profit would have been 43.3% higher.

Its revenue was down 8.1% to RM4.47 billion from RM4.86 billion.

The bank has proposed to declare an interim dividend of 14 sen per share for the quarter under review, representing a payout ratio of 50.4%.

CIMB’s first-half net profit slipped 17.8% to RM2.7 billion from RM3.29 billion in the same period a year ago. Revenue came in at RM8.63 billion, 5.8% lower than the RM9.17 billion achieved previously.

For the period under review, the bank’s operating income rose 4.8% to RM8.64 billion. Net interest income grew 3.3% driven by the 6.9% expansion in loans growth, while the 8.5% increase in non-interest income was on the back of better capital market activity.

The group’s gross impairment ratio stood at 3.1% as at end-June 2019, with an allowance coverage of 96.6%. Its net interest margin was lower at 2.46% mainly from the spread compression in Malaysia.

As at June 30, 2019, CIMB’s total capital ratio stood at 16.6% while the common equity tier 1 capital ratio at 12.9%.

On the whole, the group is positive that it will be able to achieve the return on equity target of 9-9.5% for the year on the back of a strong loan growth and cost efficiency measures.

“If we continue to have the same run rate as had in the first half, I am confident that we’ll hit the 6-7% loan growth target,” said Zafrul.

He is also optimitic of its overseas operations in anti-cipation of better consumer banking segment in Indonesia, Thailand and Singapore.

Meanwhile, he disclosed that CIMB will be allocating RM2 billion in capital expenditure in the next two years for long-term growth.

source https://www.thesundaily.my/business/cimb-expected-rate-cut-will-have-minimal-impact-on-net-interest-margin-EE1314969

Ringgit ends easier over fears of global economic slowdown

KUALA LUMPUR: The ringgit closed easier against the US dollar today amid the US-China trade tussle, stoking concerns among traders of a slowdown in the global economy.

At 6pm, the ringgit finished at 4.2150/2200 against the greenback from 4.2110/2150 on Wednesday.

A dealer said investors are awaiting data on the China Manufacturing Purchasing Managers Index (PMI) for August 2019, which is scheduled to be released on Aug 31, 2019.

Meanwhile, the ringgit was traded mixed against other major currencies.

It was traded stronger against the yen at 3.9671/9729 from 3.9798/9847 and versus the euro at 4.6685/6745 from 4.6704/6753 previously.

The local unit was lower against the Singapore dollar at 3.0370/0410 from 3.0330/0370 and vis-a-vis the British pound at 5.1381/1446 from 5.1353/1419. — Bernama

source https://www.thesundaily.my/business/ringgit-ends-easier-over-fears-of-global-economic-slowdown-KE1314792

Bursa Malaysia closes firmer on buying interest in selected heavyweights

KUALA LUMPUR: Bursa Malaysia closed firmer today on buying interest in selected heavyweights and amid positive developments in US-China trade tensions.

The benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) strengthened 5.36 points to 1,595.18 after trading between 1,584.83 and 1,597.39.

The market barometer opened 3.54 points higher at 1,593.63.

A dealer said the FBM KLCI reversed losses in the morning session to end higher on fresh comments from China that Beijing and Washington were in discussions and would try to resolve the year-long trade dispute between both economies.

“The new development also helped improve sentiment in the region which saw most market rebound,” he said.

Within Southeast Asia, the benchmark indices in Singapore, Thailand, Indonesia, Laos and the Philippines all recorded gains with the exception of Vietnam.

On the local bourse, Maybank added four sen to RM8.57, TNB gained six sen to RM13.80 and IHH earned two sen to RM5.77.

Public Bank was flat at RM20.32, while Petronas Chemicals lost 13 sen to RM6.77.

As for actives, Vsolar and Opcom slipped half-a-sen each to 13.5 sen and 63 sen respectively.

Ekovest bagged 1.5 sen to 82.5 sen and MNC Wireless and Sapura gained half-a-sen each to eight sen and 27 sen respectively.

The FBM Emas Index improved 9.681 points to 11,223.15, the FBMT100 Index was 11.771 points higher at 11,062.12 and the FBM Emas Shariah Index increased 10.74 points to 11,778.53.

The FBM Ace eased 27.88 points to 4,510.39 and the FBM 70 fell 91 points to 13,739.91.

Sector-wise, the Financial Services Index edged up 17.74 points to 15,370.55 and the Plantation Index expanded 59.9 points to 6,817.79, while the Industrial Products and Services Index was 0.5 of-a-point lower at 146.86.

Market breadth was negative as losers outpaced gainers 451 to 338, with 401 counters unchanged, 401 untraded and 64 others suspended.

Turnover was higher at 1.99 billion units worth RM1.66 billion from Wednesday’s 1.93 billion units worth RM1.54 billion.

Main Market volume was flat at yesterday’s 1.14 billion, but value increased to RM1.47 billion from RM1.34 billion on Wednesday.

Warrants turnover rose to 557.23 million units worth RM123.82 million from yesterday’s 434.90 million units worth RM91.45 million.

Volume on the ACE Market contracted to 297.79 million shares valued at RM69.45 million from 356.73 million shares valued at RM104.18 million previously.

Consumer products and services accounted for 163.02 million shares traded on the Main Market, industrial products and services (165.57 million), construction (99.69 million), technology (102.97 million), SPAC (nil), financial services (40.86 million), property (120.21 million), plantations (14.18 million), REITs (11.22 million), closed/fund (21,000), energy (219.02 million), healthcare (13.28 million), telecommunications and media (150.33 million), transportation and logistics (19.41 million), and utilities (23.07 million).

The physical price of gold as at 5.00pm stood at RM201.91 per gramme, up 17 sen from RM201.74 at 5.00pm yesterday. — Bernama

source https://www.thesundaily.my/business/bursa-malaysia-closes-firmer-on-buying-interest-in-selected-heavyweights-AE1314772

CIMB’s Q2 profit down on absence of one-off gain

PETALING JAYA: CIMB Group Holdings Bhd posted a 23.8% decline in net profit to RM1.51 billion for the second quarter ended June 30, 2019 against RM1.98 billion in the same quarter a year ago.

This was due to the absence of one-off gain of RM928 million from the disposal of its stake in CIMB-Principal Asset Management and CIMB-Principal Islamic Asset Management in the previous corresponding period.

Excluding the one-off item, its profit would have been 43.3% higher.

Its revenue was down 8.1% to RM4.47 billion from RM4.86 billion.

The bank has proposed to declare an interim dividend of 14 sen per share for the quarter under review, representing a payout ratio of 50.4%.

CIMB’s first-half net profit slipped 17.8% to RM2.7 billion from RM3.29 billion in the same period a year ago. Revenue came in at RM8.63 billion, 5.8% lower than the RM9.17 billion achieved previously.

For the period under review, the bank’s operating income rose 4.8% to RM8.64 billion. Net interest income grew 3.3% driven by the 6.9% expansion in loans growth, while the 8.5% increase in non-interest income was on the back of better capital market activity.

The group’s gross impairment ratio stood at 3.1% as at end-June 2019, with an allowance coverage of 96.6%. Its net interest margin was lower at 2.46% mainly from the spread compression in Malaysia.

As at June 30, 2019, CIMB’s total capital ratio stood at 16.6% while the common equity tier 1 capital ratio at 12.9%.

source https://www.thesundaily.my/business/cimb-s-q2-profit-down-on-absence-of-one-off-gain-EE1314547

As another rate cut looms, Maybank expects flat NIM this year

KUALA LUMPUR: Malayan Banking Bhd (Maybank) foresees its net interest margin (NIM) to be flat this year with the expectation of another rate cut by 25 basis points (bps).

Its NIM compressed 9bps to 2.24% in 1H19 on lower Malaysian loan yields as a result of an Overnight Policy Rate (OPR) cut and higher deposit cost in overseas markets.

Maybank group president and CEO Datuk Abdul Farid Alias (pix) said a 25bps cut in OPR will impact its NIM by 1bps.

“We may change our funding structure and loan portfolio,“ he told a press conference after announcing its 1H19 financial results here today.

source https://www.thesundaily.my/business/as-another-rate-cut-looms-maybank-expects-flat-nim-this-year-YE1314144

Utusan Melayu likely to be delisted tomorrow

PETALING JAYA: Utusan Melayu (Malaysia) Bhd is likely to be delisted tomorrow as it has not made an appeal to Bursa Securities.

The group had to make the appeal on or before August 27 to avert delisting following its Practice Note 17 (PN 17) status.

However, it said in a filing with the stock exchange that no appeal had been made.

Trading in its shares was suspended yesterday with last traded price of 5.5 sen.

Utusan Melayu became a PN 17 company in August last year after it defaulted on loan payments to Maybank Islamic and Bank Mualamat totaling RM1.18 million.

Due to cash flow constraints and the losses incurred in the first two quarters of the year, the group has not been able to meet the requirement to uplift the status.

In addition, it also failed to secure an investor to revive its business due to its huge debt burden amouting to RM139.19 million as at June 30, 2019.

In an effort to remain in operations, the group has increased the cover price for its Utusan Malaysia and Kosmo! by 50 sen, after nearly ceasing publications due to a strike by its employees over unpaid wages.

For the first half of 2019, Utusan Melayu reported a net loss of RM12.09 million against RM52.66 million in revenue.

source https://www.thesundaily.my/business/utusan-melayu-likely-to-be-delisted-tomorrow-EY1313868

Ireka to tender for more projects

KUALA LUMPUR: Ireka Corp Bhd says it will focus on replenishing its order book this year by tendering for more external and internal projects.

Group managing director Datuk Lai Vooh Hon said over the next three years, the construction division would have about RM850 million worth of work out of the RM1.4 billion gross development value (GDV) from the current targeted project launches.

The outstanding works on hand now stand at about RM250 million.

“The construction sector of our core business has been slow to grow last year due to delays in approvals for the continuation of large infrastructure projects, coupled with a slowdown in both the commercial and residential sectors.

“With the recommencement of civil engineering projects like the East Coast Rail Link (ECRL), Ireka has been shortlisted to tender for the forthcoming projects,” he told reporters after the company’s annual general meeting here today.

On July this year, Ireka entered into a joint venture and shareholders’ agreement with CRRC Urban Traffic (Europe) Co Ltd (CRRC UT Europe) to pursue urban transportation business opportunities in Malaysia and Southeast Asia.

A 51:49 joint venture company known as Mobilus Sdn Bhd was established to spearhead its urban transportation business.

Lai said Ireka will be focusing on the supply of electric transportation vehicles, in particular electric buses and Automated Rapid Transit (ART) vehicles and implementation of urban transportation and transit oriented development (TOD) projects.

“Ireka has started talks with various authorities including state governments and city councils for development opportunities on ART.

“Although in its early stages, the responses have been encouraging and we are currently working on various opportunities in different locations,” he added.

The group expects the TOD project to contribute positively to the group’s earnings in future. - Bernama

source https://www.thesundaily.my/business/ireka-to-tender-for-more-projects-YY1313573

Maybank posts lower Q2 profit, pays 25 sen dividend

PETALING JAYA: Malayan Banking Bhd’s (Maybank) net profit for the second quarter ended June 30, 2019 fell marginally by 0.9% to RM1.94 billion from RM1.96 billion, due to lower effective tax rate in the previous corresponding period.

Its revenue, however, rose 13.4% to RM13.05 billion from RM11.51 billion previously.

It has declared an interim dividend of 25 sen per share amounting to RM2.81 billion. It also represents a payout of 74.9% of net profit for the period.

For the six-month period, Maybank’s net profit fell 2.1% to RM3.75 billion from RM3.83 billion in the previous year, while revenue increased 13.1% to RM26.03 billion from RM23.02 billion.

During the period, the bank’s net operating income expanded 1% to RM11.75 billion, thanks to a 1% rise in net fund based income to RM8.47 billion on the back of a 4.6% growth in group loans.

Gross loans increased 4.6%, with Indonesia, Malaysia, Singapore and other international markets rising 6.1%, 4.2%, 2.3% and 3.2%, respectively.

Nonetheless, net interest margin for the first half of the year slipped 9 basis points (bps) to 2.24% mainly as a result of the drop in base lending rates following the revision in the overnight policy rate during the period.

Asset quality-wise, Maybank’s gross impaired loans ratio improved to 2.62% from 2.64% in June 2018 while net credit charge off was better at 38 bps compared with 44 bps last year.

Its common equity tier 1 ratio was higher at 14.23% from 13.16% a year ago, while total capital ratio increased to 17.98% from 17.78% previously. The group’s liquidity coverage ratio came in at 145.4%, well above the regulatory requirement of 100%.

At 3pm, Maybank’s share price was trading 2 sen higher at RM8.55 on 2.99 million shares done.

source https://www.thesundaily.my/business/maybank-posts-lower-q2-profit-pays-25-sen-dividend-YY1313625

Sime Darby Property to dispose of non-core land in Kedah

KUALA LUMPUR: Sime Darby Property Bhd is looking to continue with its asset monetisation initiatives moving forward, with the aim of disposing of its non-core land in Kedah measuring approximately 526.09 hectares in the next two years.

Acting group chief executive officer Datuk Wan Hashimi Albakri Wan Amin Jaffri said proceeds from the disposal will be used, among others, for future developments and keeping the group’s net gearing ratio manageable.

“It’s not easy to find a buyer who are willing to buy all the 529.09 hectares of land at once, and the land is also scattered in several places, with one big piece measuring about 404.69 hectares and it’s not easy to find a buyer who can afford that.

“There must be monetisation (activities) for our non-core land, as it is not giving us any profit if we keep holding them. We might as well sell (it), take the money and invest in the Klang Valley,“ he told a media briefing on the group’s second quarter ended June 30, 2019 financial results announcement here today.

He said the land in Kedah was under the low-yeilding assets for the group and outside Sime Darby Property’s common area of projects.

Among other asset monetisation initiatives for the current financial year to date include the disposal of 121.41 hectares of industrial land in Kedah for RM88.9 million, as well as the disposal of its hospitality asset overseas, namely Darby Park Executive Suites and an apartment unit in The Orion, Singapore, with a total value of RM290.9 million.

As at June 30, 2019 the group’s total borrowings amounted to RM3.23 billion, consisting of 35 per cent or RM1.12 billion short-term borrowings and RM2.11 billion long-term borrowings.

Meanwhile, chief transformation officer Fairuz Radi said the property developer’s industrial and logistics segment is expected to contribute towards the group’s target of achieving 10 per cent recurring income by the financial year ending Dec 31, 2023 (FY23).

“We really want to focus on developing industrial and logistics development capabilities within our business unit so that we can grow it as the key business segment moving forward.

“This helps us to create future recurring income by developing build-to-suit and lease industrial asset that we can lease to tenants,” he said.

Fairuz said most of the company’s landbank is situated near residential areas, allowing them to focus on logistics and warehouse facilities development. - Bernama

source https://www.thesundaily.my/business/sime-darby-property-to-dispose-of-non-core-land-in-kedah-KY1313518

BNM Governor: Affordable housing a shared responsibility

KUALA LUMPUR: Decent affordable housing is fundamental to the health and well-being of people, and to the smooth functioning of economies. Yet around the world, in developing and advanced economies alike, cities are struggling to meet that need.

In line with the country’s commitment to provide adequate and affordable housing for all income levels, particularly for the lower-income group, Bank Negara Malaysia (BNM) Governor Datuk Nor Shamsiah Mohd Yunus stressed that affordable housing is a shared responsibility and that the government is looking at how infrastructure providers could play their part in reducing the cost of houses.

“There are three components which make up the biggest proportion of the cost, namely land, construction and infrastructure,” she said in an exclusive interview with Bernama recently.

“There is a greater recognition now on the need to reduce costs. For land costs, the government is collaborating with the state government on mechanisms to reduce costs; and for construction costs -- that is where the government is looking to leverage technology such as the IBS (Industrialised Building System) to bring down the cost,” she pointed out.

Explaining further, the Governor said “more importantly is to adopt strategies to raise income levels of households to make housing more affordable to the rakyat.”

Over the period 2007-2016, growth in house prices have outpaced household income.

Based on the median multiple approach, a house is deemed to be unaffordable if it is priced more than three times the annual household income. Malaysia’s is at 4.8 times.

“Let’s take the B40 for example. With their median monthly income of RM3,000, they can only afford houses up to around RM108,000 -- three times their annual income.

“If you look at the 68 per cent of total unsold residential units, they are above RM300,000. That is why we also have to address the supply-demand mismatch.

“While there is demand for affordable housing, the developers are building outside the affordable reach of the majority of Malaysians,” said Nor Shamsiah.

Recently, the central bank expanded the eligibility criteria for those seeking to purchase property under the BNM’s RM1 billion Fund for Affordable Homes.

Effective Sept 1, 2019, individuals planning to apply for financing to purchase affordable houses would be eligible to do so if they have a maximum monthly household income of RM4,360, up 86 per cent from the earlier threshold income level of RM2,300 per month.

Plus, the maximum property price will be increased to RM300,000 from RM150,000. These new terms would help buyers from this income group to obtain financing to purchase their first house.

Meanwhile, the Governor reiterated the importance of the Guidelines on Responsible Financing.

“The Guidelines on Responsible Financing is still relevant because the main objective of these guidelines is to ensure that borrowers are able to afford the loan and can benefit from it.

“So, if a customer is taking the loan to buy a house, the customer should eventually own the house at the end of their loan tenure. Ultimately, the banks and the borrowers should also be responsible in the decision. It works both ways,” she added.

The central bank’s responsible financing guidelines are in place to protect the interest of borrowers by ensuring that those who borrow are within their capacity to honour the financial obligation until the end of the loan tenure and eventually own the property.

This is as opposed to merely buying the house upfront and then fall behind their obligations and end up losing the property.

On that note, the Governor said a lot is being done to educate consumers on areas relating to credit and financial management, especially through the Credit Counselling and Debt Management Agency, or commonly known as Agensi Kaunseling & Pengurusan Kredit (AKPK), which has gained greater traction.

AKPK is an agency established by BNM to help individuals take control of their finances through prudent financial management and financial education.

Financial literacy is among the factors that can contribute to sustainable and inclusive economic growth. It is the first line of defence for consumers to protect their rights when dealing with unfair market practices.

At the same time, to alleviate the public’s burden in coping with the rising cost of living, particularly for the M40 and B40 groups, the Governor said BNM has been emphasising the importance of improving technical skills, reforming the labour market and education system.

“There needs to be greater collaboration between training providers and the industry players to ensure Malaysia produces graduates with the right skills,” said Nor Shamsiah.

During the interview, the Governor also explained at length several other key issues pertaining to the country’s economic growth, the banking industry, the vital need to increase consumer awareness, as well as the importance of education, reskilling and upskilling in order to stay relevant in a challenging and constantly changing economy. - Bernama

source https://www.thesundaily.my/business/bnm-governor-affordable-housing-a-shared-responsibility-MY1313493

Axiata returns to black in Q2 with RM204m profit

PETALING JAYA: Axiata Group Bhd swung to the black registering a net profit of RM204.09 million for the second quarter ended June 30, 2019 against a net loss of RM3.36 billion reported in the previous corresponding period, underpinned by strong operational performance across most of its markets and discontinuation of losses related to the group’s investment in India.

The group reported RM6.15 billion in revenue, a 4.9% increase from RM5.87 billion previously.

The telco has proposed to declare a dividend of 5 sen per share for the quarter under review.

According to the group’s filing with the stock exchange, earnings before interest, taxes, depreciation and amortisation (ebitda) for the Malaysian operation increased 39.1% to RM218.2 million as a result of lower operating cost.

Net profit for its infrastructure business in Malaysia fell 34.8% to RM47.8 million due to higher depreciation and amortisation as well as forex losses.

In Indonesia, it recorded a net profit of RM43.0 million in Q2 as opposed to net loss of RM28.7 million in Q2 18 on the back of higher revenue.

Axiata’s operations in Sri Lanka was affected by higher depreciation and amortisation as well as finance cost, hence resulting in a 32.6% drop in net profit to RM47.9 million.

In Bangladesh, it registered a net loss of RM15.8 million for the quarter due to higher tax recorded as a result of changes in tax law for minimum tax rate from 0.75% to 2.0% on revenue effective January 1, 2018.

Subsequently, its Nepal operation’s net profit sank 18.4% to RM154.0 million due to changes in telecommunication services charge in Nepal introduced in July 2018.

In Cambodia, group reported a 13.3% increase in net profit to RM73.9 million increase, attributed to higher top line despite being partly offset by higher depreciation and amortisation and tax expense.

For the first half of the year, Axiata’s net profit stood at RM913.15 million against a net loss of RM3.5 billion in the same period last year.

Its revenue came in at RM12.1 billion, a 4.2% improvement from RM11.62 billion.

Barring any unforeseen circumstances, regulatory and external disruptions, Axiata said the group is likely to exceed its headline key performance indicators (KPIs) for ebitda growth and return on invested capital, which were initially targeted to range between 5% to 8% and 5.2% to 5.6% respectively for its financial year ending December 31, 2019.

“The year’s headline KPI for revenue growth is expected to remain in line with the targeted range of 3% to 4%, whilst capex for 2019 is likely to be below guidance of RM6.8 billion on the back of ongoing capex rationalisation.”

At the midday break, Axiata’s share price gained 2 sen to RM5.02 on 610,700 shares done.

source https://www.thesundaily.my/business/axiata-returns-to-black-in-q2-with-rm204m-profit-BY1313425

Malaysia’s PPI contracts by 2.2% in July

PETALING JAYA: Malaysia’s Producer Price Index (PPI) recorded a 2.2% contraction year-on-year (yoy) in July 2019 with mining reporting the highest decline at 9.9%, followed by agriculture, forestry & fishing (-6.5%), water supply (-2.8%) and manufacturing (-0.9%).

“However, the index of electricity & gas supply edged up by 1.5%,” according to Statistics Department chief statistician Datuk Seri Dr Mohd Uzir Mahidin in a statement today.

Compared to the previous month, Malaysia’s PPI declined by 0.1% in July, with mining reported the highest rate of decline at 1.2%, followed by water supply and manufacturing which saw a 0.4% and 0.1% drop, respectively.

Meanwhile, agriculture, forestry & fishing rose 1.3%, while electricity & gas supply increased 0.2%.

From January to June, PPI decreased by 2.0% compared to the same period last year.

The chief statistician revealed that in July PPI for local production production by stage of processing (SOP) declined by 2.2%, due to decline in crude materials for further processing (-7.7%) and intermediate materials, supplies & components (-1.8%).

“Conversely, the index for finished goods increased 1.3%.” he said.

On a monthly basis, the PPI local production by SOP for July 2019 decreased

0.1% contributed by a drop of 0.7% in crude materials for further processing.

On the other hand, the index of Intermediate materials, supplies & components increased by 0.1%, while finished goods remained unchanged.

source https://www.thesundaily.my/business/malaysia-s-ppi-contracts-by-2-2-in-july-LX1312782

Pound dives on increased no-deal Brexit prospect

NEW YORK: The pound fell against the dollar and euro on Wednesday as Britain's government moved to extend the suspension of parliament, increasing the likelihood of a no-deal Brexit.

Meanwhile, global stocks had a mixed day, with Wall Street staging a late rally, shrugging off its fears for the slowing world economy.

In London, British Prime Minister Boris Johnson announced that the annual suspension of parliament would be extended until October 14 -- just two weeks before the UK is set to leave the European Union.

Britain's currency slid by more than one percent against the dollar and euro in early business, before paring some of the loss.

"The pace of sterling's drop demonstrates yet again the currency's susceptibility to Brexit fears," said Han Tan, market analyst at FXTM trading group.

The pound's plunge helped London's benchmark FTSE 100 index outperform as it features many multinationals with most of their earnings in dollars -- whereas construction companies notably saw their shares take a tumble.

Anti-Brexit MPs said Johnson's move amounted to a coup and a declaration of war, branding the prime minister a dictator.

In New York, the gloom lifted as energy stocks benefitted from a plunge in crude oil inventories, pointing to sustained demand for fuel, a sign of economic health.

In light-volume, late-summer trade, Wall Street climbed out of the red and rallied, casting aside worries about Brexit, the escalating US-China trade war and Brexit.

Adam Sarhan said the lower prices early in the day had attracted bargain hunters.

"Every time the market fell off the last month, we've seen the buyers show up and curb the selling," he told AFP.

Earlier Wednesday, yields on 30-year Treasury bonds touched a fresh all-time low while the spread between 2- and 10-year Treasury notes widened the most since 2007, indicating waning confidence in the longer-term outlook and drawing more attention to this closely-watched recession indicator.

Major European bourses fell. But a poll showed German consumer sentiment is stabilizing after three months of decline and despite fears of a looming recession in Europe's biggest economy.

Energy shares also were supported by Iranian President Hassan Rouhani's call for the United States to lift all sanctions against his country before he would meet Trump, after the US leader had said he would be open to talks.

In government bond markets, Italian bond yields fell below 1 percent, their lowest level ever, on hopes that a new government can be formed without fresh elections. - AFP

source https://www.thesundaily.my/business/pound-dives-on-increased-no-deal-brexit-prospect-KX1312286

New China tariffs a ‘job killer,‘ US industry tells Trump

WASHINGTON: President Donald Trump's new tariffs on Chinese goods are a "job killer" that will slam consumers and could make a recession more likely, industry groups said Wednesday.

The latest cry for peace in Trump's year-long trade war came just days before the first in series of tariff increases is due to go into effect -- potentially raising prices ahead of the crucial holiday shopping period.

In a sharp deterioration in the US-China trade war, Trump last week ramped up the punitive duties for the vast majority of US imports from China.

The five percent increases, which will take the tariffs to 15 percent and 30 percent, are due to roll out in stages through December and target some popular items, such as laptops, mobile phones and some shoes.

More than 200 footwear manufacturers and retailers, including major brands such as Nike and Foot Locker, signed onto the letter alerting that the new tariffs could cost US consumers an additional $4 billion a year and increase the chances of an economic downturn.

A broad array of 160 other trade groups -- including software and electronics manufacturers, as well as retailers, liquor producers and others -- also warned Trump of higher prices and damaged consumer confidence and urged him to abandon the tariff strategy.

"We've been telling the White House since the beginning that tariffs will be paid by Americans in the form of higher prices, and that due to our already high import taxes, this will be a job killer," Matt Priest, president of the Footwear Distributors and Retailers of America, said in a statement.

The footwear group directly disputed Trump's claim that China is bearing the cost of the tariffs.

"There is no doubt that tariffs act as hidden taxes paid by American individuals and families," its letter said.

Long a powerful voice in Washington, US industrial lobbies have been unable to persuade Trump to avoid escalating his year-old trade war with China.

The Information Technology Industry Council agreed China needs to change its unfair trade practices, but said in a statement Wednesday that "the current tool of tariffs has simply not worked, and we're continuing to see the negative results."

Recession risk

The companies agreed with economists that recession risks are rising, warning Wednesday that uncertainty caused by the confrontation with Beijing was rattling the wider economy -- a sensitive subject as Trump seeks reelection next year.

"An economic downturn will take away disposable income from US consumers, even as they have to pay more for products," they said.

Already high US import duties on footwear have continued to rise in recent years even as shoe prices have eased, according to the letter, meaning new tariffs almost certainly will be passed onto consumers.

US officials have delayed or canceled tariffs on some popular items until December, including some shoes, preventing price hikes from hitting just before the holiday shopping period.

But, even before they take effect, the tariffs threaten to drive up prices by straining manufacturers outside China to meet a sudden rush of demand, the letter said.

Trump has blown by turns hot and cold this month, thundering last week that US companies should withdraw from China but optimistically predicting a deal on Monday.

Trump's recent, more moderate tone helped stanch bleeding on Wall Street but was quickly met with skepticism by investors since Beijing did not seem to share that optimism. - AFP

source https://www.thesundaily.my/business/new-china-tariffs-a-job-killer-us-industry-tells-trump-KX1312268

Argentina asks IMF to restructure debt payments

BUENOS AIRES: Argentina asked the International Monetary Fund to restructure its debt payments on the $56 billion bail-out loan agreed last year in a bid to calm market turbulence, Finance Minister Hernan Lacunza said Wednesday.

Following the announcement, the IMF said in a statement that it will "continue to stand with Argentina during these challenging times."

Recession-hit Argentina has suffered market volatility since business-friendly President Mauricio Macri was trounced in party primaries three weeks ago by leftist challenger Alberto Fernandez.

Debt repayments are due to begin in 2021 while the latest loan disbursement of $5.4 billion is expected next month.

Lacunza said the government has "proposed the start of a dialogue to roll back the debt repayments."

However, he said that while those talks would begin before the October 27 general election, they would not be finished until after the new government takes over on December 10. The request for repayment extensions aims to allow the next government to "deploy its policies without financial restrictions."

An IMF delegation was visiting Argentina this week to review the loan, but is now returning to Washington as scheduled, the fund's spokesman Gerry Rice said in a statement that described talks with Lacunza and others as "productive."

"Regarding the debt operation announced by the Argentine authorities today, Fund staff is in the process of analyzing them and assessing their impact," Rice said.

'Important steps'

"Staff understands that the authorities have taken these important steps to address liquidity needs and safeguard reserves," he added.

Lacunza also announced other initiatives to postpone the payment of bonds to institutional investors, relieving the pressure on international reserves so they can be used to stabilize the currency.

The Central Bank bought $300 million in pesos on Tuesday to try to calm markets but the currency still depreciated by almost 2.5 percent.

The currency weakened by 20 percent alone in the week after the primaries while the Buenos Aires stock exchange dropped by 30 percent.

Just under two weeks ago, ratings agencies Fitch and S&P downgraded Argentina's credit rating from "B" to "CCC" and "B-" respectively.

Fernandez had romped to victory, in what was essentially a de facto opinion poll, with 47 percent of the vote to Macri's 32 percent.

Such a result in October's election would send Fernandez -- who has been highly critical of the IMF loan -- to the presidential palace without need for a run-off in November.

"The loan received by the country and the set of conditions associated with it have failed to generate any of the desired results," Fernandez's team said in a statement on Monday after his meeting with IMF representatives in Buenos Aires.

"There has been no letup in the contraction of the economy, a worsening of employment and the situation of businesses and families. There hasn't been a sustained drop in inflation and public debt hasn't ceased to grow," the statement said. - AFP

source https://www.thesundaily.my/business/argentina-asks-imf-to-restructure-debt-payments-FX1312250

Oil prices pegged back by mounting concern over U.S. economy

TOKYO: Oil prices fell on Thursday for the first time in three days after San Francisco Federal Reserve President Mary Daly sounded a note of concern about the strength of U.S. economy.

Brent crude was down 30 cents, or 0.5%, at $60.19 a barrel by 0202 GMT while U.S. crude was down 15 cents, or 0.3%, at $55.63 a barrel. Oil prices rose around 1.5 percent in the previous session.

Concerns about a slowdown in economic growth due to the trade war raging between the United States and China, along with the potential hit to oil demand, are keeping prices in check.

Daly said on Thursday she believes the U.S. economy has "strong" momentum, but uncertainty and a global growth slowdown are having an impact.

Daly was speaking to reporters after a speech in Wellington, New Zealand and said she was in "watch and see" mode in assessing the need for another U.S. interest-rate cut.

U.S. President Donald Trump said on Monday he believed China was sincere about wanting to reach a trade deal, but concerns arose on Tuesday after China's foreign ministry declined to confirm a telephone call between the two countries on trade.

"Trade tensions (are) hanging like a dark cloud threatening to rain over oil prices," said Jeffrey Halley, senior market analyst at OANDA.

The market shrugged of a big drop in U.S. inventories, which fell last week by 10 million barrels, compared with analysts' expectations for a decrease of 2.1 million barrels, the Energy Information Administration said.

U.S. gasoline stocks fell by 2.1 million barrels, compared with analysts' expectations in a Reuters poll for a 388,000-barrel drop.

Distillate stockpiles, which include diesel and heating oil, fell by 2.1 million barrels, versus expectations for a 918,000-barrel increase, the EIA data showed.

The crude drawdown confirms "that OPEC supply cuts are effectively working by depleting U.S. reserves," said Stephen Innes, managing partner at Valour Markets.

The Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers have been restraining supply for most of the period since Jan. 1, 2017. The alliance, known as "OPEC+", in July renewed the pact until March 2020.

U.S. weekly crude production also rose 200,000 barrels per day to a new record at 12.5 million bpd in the week to Aug. 23. - Reuters

source https://www.thesundaily.my/business/oil-prices-pegged-back-by-mounting-concern-over-u-s-economy-BX1312232

Ringgit continues downtrend to open lower against US dollar

KUALA LUMPUR: The ringgit extended its downtrend from yesterday to open lower against the US dollar on the strengthening of the greenback amid heightened worries about the US-China trade dispute, dealers said.

At 9.05am, the ringgit was trading at 4.2120/2150 against the greenback from 4.2110/2150 on Tuesday.

News reported that the United States will levy an additional five per cent tariff on US$300 billion worth of Chinese goods starting Sept 1.

The tax, originally set at 10%, will now take effect at 15%.

The ringgit was also tracking the Chinese yuan which continues to dip against the US dollar following the trade dispute.

On Aug 5, the Chinese yuan reportedly dropped to its lowest level in over a decade, when it was worth over seven per US dollar.

“The bearish skew remains intact as the ringgit is being held hostage by a weaker Chinese yuan as the stronger US dollar has its predictable wrecking ball effect in Asian capital markets compounding the already negative trade war effect,” said VM Markets Pte Ltd managing partner Stephen Innes.

Meanwhile, the ringgit was traded mixed against other major currencies.

The local unit was slightly easier against the Singapore dollar at 3.0337/0370 from 3.0330/0370 on Wednesday but mildly recovered against the yen to 3.9743/9783 from 3.9798/9847.

It was traded higher versus the euro at 4.6686/6723 from 4.6704/6753 yesterday but was weaker vis-a-vis the British pound at 5.1441/1482 from 5.1353/1419. - Bernama

source https://www.thesundaily.my/business/ringgit-continues-downtrend-to-open-lower-against-us-dollar-YX1312023

Bursa Malaysia rebounds at opening on firmer Wall St

KUALA LUMPUR: Bursa Malaysia rebounded at opening today lifted by a firmer Wall Street in overnight trade.

At 9.08am, the FTSE Bursa Malaysia KLCI increased 2.8 points to 1,592.62 after opening 3.54 points higher at 1,593.63 compared with yesterday’s close of 1,589.82.

A dealer said US stock markets rebounded with the Dow Jones, S&P 500 and Nasdaq gaining 1.0%, 0.7% and 0.4%, respectively, as bargain hunting activities took precedence.

“We think that a downside is likely to find support around the 1,580-1,590 levels in the near term but with few positives, we also think that any recovery could be measured with 1,600 points the likely resistance target and further gains likely to be difficult to come by over the foreseeable future,” he said.

Among heavyweights, Maybank added one sen to RM8.54, Public Bank and TNB perked six sen each to RM20.38 and RM13.80 respectively and IHH gained four sen to RM5.79.

Petronas Chemicals lost one sen to RM6.89.

For actives, SMTrack inched up half-a-sen to 23 sen and Opcom and KNM added 1.5 sen each to 65 sen and 39.5 sen, respectively.

Berjaya and Sumatec slipped half-a-sen each to 25.5 sen and 2.5 sen, respectively.

On the scoreboard, the FBM Emas Index increased 7.86 points to 11,221.33, the FBMT 100 Index was 7.92 points higher at 11,058.27 and the FBM Emas Shariah Index edged up 3.44 points to 11,771.23.

The FBM Ace went up 7.93 points to 4,546.2 but the FBM 70 fell 37.98 points to 13,792.93.

Sector-wise, the Financial Services Index rose 39.73 points to 15,392.54, the Plantation Index climbed 7.29 points to 6,765.18 and the Industrial Products and Services Index was 0.07 point higher at 147.43.

On the broader market, gainers edged losers 145 to 105, with 172 counters unchanged, 1,554 untraded and 64 others suspended.

Turnover stood at 157.91 million units worth RM62.12 million. - Bernama

source https://www.thesundaily.my/business/bursa-malaysia-rebounds-at-opening-on-firmer-wall-st-EB1311987