Sunway in talks for potential stake sale of healthcare unit

PETALING JAYA: Sunway Bhd has confirmed that it appointed Maybank Investment Bank Bhd to explore strategic investment options for its healthcare portfolio, in line with the company’s objective to enhance shareholder value as the company continues to explore and evaluate various options for all its businesses.

“Should there be any material development, the company will make the necessary announcement, in compliance with the Main Market Listing Requirements of Bursa Malaysia Securities Bhd,“ Sunway said in a stock exchange filing today.

It was reported that Sunway picked the bank to help with a stake sale in its healthcare unit that sources said could fetch at least US$250 million (RM1.03 billion).

The company plans to sell a combination of old and new shares representing a 20% to 25% stake in Sunway Medical Centre Bhd and has reached out to potential suitors, said the sources.

source https://www.thesundaily.my/business/sunway-in-talks-for-potential-stake-sale-of-healthcare-unit-MN3843835

U.S. job growth seen slowing in August, unemployment rate falling below 10%

WASHINGTON: U.S. job growth likely slowed further in August as financial assistance from the government ran out, threatening the economy's recovery from the COVID-19 recession.

The Labor Department's closely watched employment report on Friday would come as companies from transportation to manufacturing industries announce layoffs or furloughs. It could add pressure on the White House and Congress to restart stalled negotiations for another fiscal package, and will likely become political ammunition for both Democrats and Republicans with just two months to go until the presidential election.

Programs to help businesses pay wages have either lapsed or are on the verge of ending. A $600 weekly unemployment supplement expired in July. Economists credited government largesse for the sharp rebound in economic activity after it nearly ground to a halt following the shuttering of businesses in mid-March to control the spread of the coronavirus.

"The pandemic has really torn our economic and social fabric," said Sung Won Sohn, a finance and economics professor at Loyola Marymount University in Los Angeles. "The ending of the fiscal stimulus has not helped the situation."

According to a Reuters survey of economists nonfarm payrolls likely rose by 1.4 million jobs last month, with some of the anticipated gains coming from hiring for the 2020 Census. Employment increased 1.763 million in July and its growth peaked at 4.791 million in June.

Friday's report is one of just two monthly labor market scorecards left on the calendar before the Nov. 3 presidential election.

President Donald Trump, who is trailing in polls behind former Vice President Joe Biden, the Democratic Party nominee, is likely to tout the continued job gains as a sign that the economy is improving after suffering its biggest shock in at least 73 years in the second quarter.

But employment would still be about 11.5 million below its pre-pandemic level. Most of the job gains have been workers being recalled from furloughs or temporary layoffs. Though new COVID-19 infections have subsided after a broad resurgence through the summer, many hot spots remain.

United Airlines said on Wednesday it was preparing to furlough 16,370 workers on Oct. 1. American Airlines has announced its workforce would shrink by 40,000, including 19,000 involuntary cuts. Ford Motor Co said it was targeting 1,400 U.S. salaried jobs for elimination by year end. Mass transit rail operators are also eying furloughs.

A report this week from the Federal Reserve based on information collected from the U.S. central bank's contacts on or before Aug. 24 showed an increase in employment. The Fed, however, noted that "some districts also reported slowing job growth and increased hiring volatility, particularly in service industries, with rising instances of furloughed workers being laid off permanently as demand remained soft."

"Restaurants and other businesses in the services industry are not going to continue calling workers back when demand is not there," said Ryan Sweet, a senior economist at Moody's Analytics in Westchester, Pennsylvania. "We need the stimulus like weeks ago."

SPENDING IN JEOPARDY

The unemployment rate is forecast to have dropped to 9.8% in August from 10.2% in July, according to the Reuters survey. That would leave it just under the 10% peak shortly after the end of the 2007-09 Great Recession.

But the measurement of the jobless rate has been biased downward by people misclassifying themselves as being "employed but absent from work." At least 29.2 million were receiving unemployment benefits in mid-August.

Lydia Boussour, a senior economist with Oxford Economics in New York, estimated that payroll gains in line with expectations would leave one out of two laid-off workers still unemployed, with an increased risk of a prolonged high unemployment spell.

"The fact that the employment is settling into a trend of slow, grinding improvement is a worrisome sign for the broader recovery," said Boussour. "The combination of slow employment progress and poor health conditions along with the absence of fiscal aid risk jeopardizing the consumer spending rebound in the coming months."

Slowing job growth will likely have a limited impact on gross domestic product in the third quarter, which economists estimate could rebound at an annualized rate of as high as 30% after sinking at a historic 31.7% pace in the April-June quarter. But it will hurt fourth quarter GDP, with consumer spending taking a hit.

Though wages surged at the depth of the pandemic, that was because the job losses were concentrated in the low wage services industries like restaurants and bars.

Average hourly earnings are forecast unchanged in August after rising 0.2% in July. That would lower the annual increase in wage to 4.5% from 4.8% in July.

The service sector is likely to account for most the anticipated gains in August. Manufacturing is expected to have added another 50,000 jobs. Government payrolls were likely boosted by the hiring of at least 250,000 workers for the population count, though some it could be offset a decline in education employment at states and local governments.

"We look for education-related employment to be particularly weak as the back-to-school season will be abnormal in many areas," said Daniel Silver, economist at JPMorgan in New York. - Reuters

source https://www.thesundaily.my/business/u-s-job-growth-seen-slowing-in-august-unemployment-rate-falling-below-10-XN3843321

Australia’s ANZ says 15,000 mortgage holders fear they can’t pay

SYDNEY: About 15,000 people with Australia and New Zealand Banking Group Ltd mortgages fear they can no longer pay their home loans due to the economic impact of the coronavirus, the head of Australia's fourth-largest lender said on Friday.

ANZ CEO Shayne Elliott told a parliamentary hearing the bank still did not know the true impact of the virus on the bank's roughly A$246 billion ($179 billion) mortgage book since customers could pause repayments if they could not make them.

However, of the bank's 84,000 customers who had deferred loan repayments, "about 15,000 of those people have said 'right now I'm really uncertain, I've lost my job ... and I probably am going to need more help' and they're the people we're talking to", Elliott told parliament.

"It's going to be devastating for anybody. Thousands of people are going to be in a struggling position."

Australian bank bosses must face questioning in a parliament committee twice a year, and Elliott was the first since COVID-19 prompted a broad shutdown of the world economy. Australia, which has reported 737 deaths related to the virus, recorded its biggest economic slump and confirmed its first recession in three decades this week.

Elliott told parliament the bank believes house prices would fall about 10% nationwide, and that the economy was unlikely to experience a fast - or "V-shaped" recovery - due to its reliance on immigration and free movement of people and goods.

"We think (the peak of insolvencies) is probably more like the middle of next year, that's when the crisis will start to hit the banks," he said.

"We think (gross domestic product) recovers in an absolute sense sometime in 2022."

ANZ's head of retail and commercial banking, Mark Hand, told parliament banks were unprepared for a deluge of inquiries about home loan refinancing when shutdowns began, resulting in weeks-long delays getting approvals.

The bank had since shortened its loan approval time to 10 days, with a target of two to three days this month, he added. - Reuters

source https://www.thesundaily.my/business/australia-s-anz-says-15000-mortgage-holders-fear-they-can-t-pay-KM3842279

Dollar hunkers down before key U.S. jobs report

TOKYO: The dollar steadied against major currencies on Friday as traders awaited key U.S. jobs data that may cast doubt on the strength of economic recovery from the coronavirus outbreak.

The Australian dollar clawed back early losses and stabilised after the country's retail sales accelerated in July, easing concern about the economy.

The greenback has managed to halt its recent slide, but analysts warn sentiment remains weak due to concern about the strength of U.S. economic growth and speculation that the Federal Reserve will keep rates low for a very long time.

"The dollar has rebounded against the euro and could continue to rise a little further," said Junichi Ishikawa, senior foreign exchange strategist at IG Securities in Tokyo.

"However, my main scenario is for the dollar to fall, for stocks to rise and for yields to fall because the Fed is expected to stick with low interest rates."

Against the euro, the dollar stood at $1.1851 in Asia on Friday, extending a pullback from a two-year low hit on Tuesday.

The British pound bought $1.3285, retreating from its highest level in almost a year due to a lack of progress in trade negotiations between Britain and the European Union.

The greenback was quoted at 0.9096 Swiss franc

Against the yen, the dollar traded at 106.18.

Data due later on Friday is expected to show U.S. non-farm payrolls grew by 1.4 million in August, which would be slower than the 1.763 million jobs created in the previous month.

There are growing signs the labour market recovery from the depths of the pandemic is faltering, with financial support from the government virtually depleted.

The U.S. central bank last week overhauled its policy framework to focus more on addressing shortfalls in employment and less on inflation, which would allow it to keep rates lower for longer periods, which is a negative for the dollar.

Chicago Fed President Charles Evans said on Thursday the bank could promise to keep interest rates pinned near zero until inflation reaches 2.5%, well above current low levels and modestly above the inflation target of 2%.

The dollar index against a basket of six major currencies was little changed in Asia on Friday at 92.759.

The dollar's downtrend will continue for at least another three months due to the outlook for the Fed's monetary policy, a Reuters poll of analysts showed on Friday.

The Antipodean currencies initially fell slightly, tracking the broader loss of investor confidence as a sell-off in U.S. tech shares hit Asian stocks and a closely-watched measure of market volatility hit a 10-week high.

However, the looming U.S. jobs data brought investors back to a more measured posture.

The Australian dollar steadied at $0.7275, supported after local retail sales accelerated in July.

Across the Tasman Sea, the New Zealand dollar erased losses to trade to $0.6712. - Reuters

source https://www.thesundaily.my/business/dollar-hunkers-down-before-key-u-s-jobs-report-ML3841709

Jumping on the healthcare bandwagon

PETALING JAYA: While there appears to be a throng of players venturing into the healthcare sector now, the market is yet to be deemed “saturated”, given that it is still early to gauge when the supply and demand of personal protective equipment (PPE), rubber gloves and other healthcare products will reach equilibrium.

Two days ago, four companies announced their diversification into healthcare-related businesses, including Iconic Worldwide Bhd (into PPE business), LKL International Bhd (glove deal), Vizione Holdings Bhd (glove-making) and MQ Technology Bhd (Covid-19 vaccine).

This is in addition to companies that have diversified into the glove business (Karex Bhd, Inix Technologies Holdings Bhd, AT Systematization Bhd, MSCM Bhd); the PPE business (ACO Group Bhd, Caely Holdings Bhd, Ni Hsin Resources Bhd); face masks (Komarkcorp Bhd, Notion VTec Bhd, Pecca Group Bhd, Titijaya Land Bhd) and more.

Rakuten Trade vice president of equity research Vincent Lau said the prospects of the healthcare sector are good given the strong demand for healthcare products, which is why these companies are jumping on the bandwagon.

“It’s a good sign (that healthcare is booming),“ Lau told SunBiz, adding that businessmen will try their hands at lucrative activities.

“We don’t know how they will perform (by diversifying into this healthcare business). Time will tell. How profitable or whether it is a good move or not, it remains to be seen until we look at their financials.

“With a vaccine or not, glove demand will still be there. Healthcare products, masks, PPE products will still be needed whether we have the Covid-19 or not. It’s the new normal.”

An industry source said a “bubble” will only occur once all the players are in operation.

“Now they’re still in their works to set up their facilities. There will be a bubble once demand dwindles. Glove demand will sustain and stay on the high side for the meantime and won’t drop so fast.”

He added that although the healthcare sector is seeing many newcomers, it is still early to tell when supply and demand will reach equilibrium. Moreover, new players need time to set up their facilities before they can commence operations.

“More visibility of the supply and demand equilibrium can be seen next year, not this year.”

The industry source said many of the non-glove players entered the glove manufacturing market due to strong profit visibility.

“Most of these ventures can pay off. The payback (cash flow generated after initial capex outlay) period is short so people are taking chances. Businessmen need to take risks to make money.”

The addition of these players is also good for the economy, as it strengthens export, expands the supply chain and create more jobs.

However, an analyst opined that it will be challenging for newcomers tap into the market as many have their suppliers already.

“By the time they built their factories, demand will stabilise by then. But more players will be good as it ensures quality products due to the competition,” he noted.

source https://www.thesundaily.my/business/jumping-on-the-healthcare-bandwagon-CI3831136

General Motors and Honda to jointly develop vehicles in North America, deepening collaboration

DETROIT/BENGALURU: General Motors (GM) and Honda Motor Co on Thursday revealed plans to team up in North America to make a range of vehicles, deepening their ties as the auto industry comes under greater pressure to share technology and costs to meet demands for cleaner vehicles.

Under the alliance, Honda and GM said, the companies intend to share common vehicle platforms, including electrified and internal combustion propulsion systems.

The companies still need to complete a definitive agreement and officials said greater details on expected cost savings would be available then, but a person familiar with the matter said the savings would run in the billions of dollars for each company.

The partnership represents a significant expansion of existing collaborations between the two companies on electric and autonomous vehicles, connected vehicle technology and fuel cells. Honda is an investor in Cruise, the self-driving business that GM majority owns.

"Overall, we believe this alliance would help both companies realize significant cost savings in the development of our vehicle portfolios," GM President Mark Reuss said in a statement.

The deal marks another milestone in the consolidation of the global auto industry, as pressures to cut emissions and move toward EVs strain the capital and engineering resources of even the largest players.

Former Fiat Chrysler Automobiles (FCA) chief executive Sergio Marchionne had for years pushed for consolidation in the global auto industry, arguing it was inevitable to manage prohibitive capital costs.

FCA announced a US$50 billion merger with France's PSA last year to create the world's fourth largest carmaker, Stellantis, in a move to address cost and scale issues. That deal is expected to close by the end of the first quarter of 2021.

Japan's Toyota Motor Corp has been expanding ties with smaller Japanese automakers such as Mazda Motor Corp and Subaru. Ford Motor Co and German automaker Volkswagen AG have forged a wide-ranging alliance covering electric and commercial vehicles and autonomous driving technology.

Analysts and GM investors have been pushing for a transformational change at the Detroit automaker, with repeated questions around the spinoff of its EV operations into a separate company. GM CEO Mary Barra has said such an option was not off the table.

GM and Honda said in April they would jointly develop two new EVs for Honda and were planning to explore more ways to expand their alliance. They have already worked together on the design of an autonomous vehicle called Cruise Origin, and also collaborated on fuel cells and batteries.

Honda has for years remained largely independent, staying clear of industry mergers. But the GM alliance will give it economies of scale it cannot achieve on its own, Honda executive vice president Seji Kuraishi said. North America is Honda's largest market and GM's second largest behind China.

GM and Honda said joint development discussions will begin immediately, with engineering work starting in early 2021.

The companies plan to explore vehicle platform-sharing possibilities in more than four core segments including crossovers and midsized pickup trucks, along with propulsion systems, infotainment and connectivity services, advanced driver-assist features, vehicle connectivity and other technology. They also will cooperate on purchasing.

Credit Suisse analyst Dan Levy said in a research note that it was "encouraging" to see the companies teaming up on gasoline-powered engines as that technology still requires investment even as the industry shifts to EVs. – Reuters

source https://www.thesundaily.my/business/general-motors-and-honda-to-jointly-develop-vehicles-in-north-america-deepening-collaboration-EN3834611

US weekly jobless benefits claims dip below 1 million but labour market recovery faltering

WASHINGTON: The number of Americans filing new claims for unemployment benefits fell below 1 million last week for the second time since the Covid-19 pandemic started in the United States, but that does not signal a strong recovery in the labour market.

The drop in initial claims to a five-month low reported by the Labor Department on Thursday largely reflected a change in the methodology it used to address seasonal fluctuations in the data, which economists complained had become less reliable because of the economic shock caused by the coronavirus crisis.

There are growing signs the labour market recovery from the depths of the pandemic in mid-March through April is faltering, with financial support from the government virtually depleted.

"There are new seasonal adjustment factors this week which brings down the joblessness slightly," said Chris Rupkey, chief economist at MUFG in New York. "The labour market looks just as bad as it was and it will be a miracle if economic growth can continue at such a fast clip during this recovery if it has to drag along millions and millions of workers without paycheques."

Initial claims for state unemployment benefits fell 130,000 to a seasonally adjusted 881,000 for the week ended Aug 29. Economists polled by Reuters had forecast 950,000 applications in the latest week. A staggering 29.2 million people were on unemployment benefits in mid-August.

The Labor Department has switched to using additive factors to more accurately track seasonal fluctuations in the series. The government dropped the multiplicative seasonal adjustment factors it had been using because they could cause systematic over-or under-adjustment of the data in the presence of a large shift in the claims series.

Unadjusted claims rose 7,591 to 833,352 last week. The increase in the raw numbers, which many economists prefer to focus on, added to a raft of data suggesting the labor market recovery was ebbing.

A report on Wednesday from the Federal Reserve based on information collected from the US central bank's contacts on or before Aug 24 showed an increase in employment. The Fed, however, noted that "some districts also reported slowing job growth and increased hiring volatility, particularly in service industries, with rising instances of furloughed workers being laid off permanently as demand remained soft."

Private employers hired fewer workers than expected in August. In addition, data from Kronos, a workforce management software company, and Homebase, a payroll scheduling and tracking company, showed employment growth stagnated last month.

Another report on Thursday showed job cuts elevated in August amid layoffs by airlines. United Airlines said on Wednesday it was preparing to furlough 16,370 workers on Oct 1.

The weak labor market reports raise the risk of a sharper slowdown in job growth in August than is currently anticipated by financial markets. The government is scheduled to publish August's employment report on Friday.

According to a Reuters survey of economists non-farm payrolls likely rose by 1.4 million jobs last month after increasing by 1.763 million in July. That would leave nonfarm payrolls about 11.5 million below their pre-pandemic level.

The claims report also showed the number of people receiving benefits after an initial week of aid dropped 1.238 million to 13.254 million in the week ending Aug 22. Part of the decrease in so-called continuing claims was likely because of people exhausting eligibility for benefits.

The number of people receiving unemployment benefits under all programmes jumped 2.2 million to 29.2 million in the week ended Aug 15.

"While Wall Street hits record highs, much of Main Street remains in severe distress," said Ron Temple, head of US Equity at Lazard Asset Management in New York. "The pandemic and the federal failure to sustain necessary assistance to households as well as state and local governments are weakening long-term economic growth and social stability."

Fiscal stimulus boosted economic activity after it nearly ground to a halt following the shuttering of non-essential businesses in mid-March to control the spread of Covid-19. That set up the economy, which plunged into recession in February, for a sharp rebound in the third quarter.

A US$600 weekly unemployment supplement expired in July and funding programmes for businesses have also lapsed, leaving the outlook for growth uncertain. – Reuters

The number of people receiving unemployment benefits under all programmes jumped 2.2 million to 29.2 million in the week ended Aug 15. – AFPPIX

source https://www.thesundaily.my/business/us-weekly-jobless-benefits-claims-dip-below-1-million-but-labour-market-recovery-faltering-FN3834337

US job cuts so far this year skyrocket 231% from same period in 2019: Report

WASHINGTON: US job cuts so far this year surged 231% compared to the same period of 2019 as the coronavirus wreaked havoc on the once-healthy economy, according to a new report today.

Though the pace of announced layoffs is slowing, the number of job cuts announced by US-based employers through August already surpassed the previous full-year record set in 2001, according to outplacement and coaching firm Challenger, Gray & Christmas.

The data are the latest indication of the awful employment situation facing many American workers as the country weathers the world's worst coronavirus outbreak.

All told, employers have announced nearly two million cuts this year, and Covid-19 was cited as the reason for more than half.

"The leading sector for job cuts last month was transport, as airlines begin to make staffing decisions in the wake of decreased travel and uncertain federal intervention," said Andrew Challenger, the firm's senior vice president.

"An increasing number of companies that initially had temporary job cuts or furloughs are now making them permanent."

Airlines have been badly hit by a slump in passenger demand caused by the pandemic, and transport has cut 131,571 jobs this year, nearly 500% higher than 2019, the report said. And that was before United Airlines on Wednesday announced another 16,000 layoffs in October.

Around 27 million people continue to receive some form of government unemployment assistance, according to the latest Labor Department data, and the Challenger reports sheds further light on the grim hiring situation in the world's largest economy.

Entertainment and leisure companies – like the bars and restaurants forced to close by social distancing orders – recorded the second-highest number of announced layoffs in August, and a stomach-churning 8,128% increase in cuts compared to the first eight months of 2019.

States have started lifting lockdown restrictions in a bid to revitalize the economy, and the report indicated the pace of layoffs seemed to be slowing, with the August total of 115,762 down 56% from July. – AFP

Latest Labor Department data show that around 27 million people continue to receive some form of government unemployment assistance. – REUTERSPIX

source https://www.thesundaily.my/business/us-job-cuts-so-far-this-year-skyrocket-231-from-same-period-in-2019-report-KN3834149

Coronavirus stings Greek economy by 15% in Q2

ATHENS: The coronavirus dealt a huge single-quarter blow to Greece's economy, official data showed today, although Athens hopes that recent months will show a tourism-driven rebound.

"The Covid-19 pandemic and the restriction measures that were put into place" sent gross domestic product (GDP) plunging by 15.2% in the second quarter compared with the same period a year earlier, the state statistics agency said.

Exports collapsed by almost one-third and consumption also dropped sharply.

Greece reopened its borders from July 1 to limit the harm to its vital tourism sector, but then saw coronavirus cases surge in August.

More than half the country's 10,500 cases were recorded last month and officials have blamed the spike in infections on flouting of social distancing rules in restaurants, bars and public gatherings.

But even with a general lockdown ruled out, the number of visitors has not lived up to expectations.

The Greek tourism confederation warned last month that tourism revenue would fall well short of a hoped-for €5.0 billion (RM24.5 billion) influx – itself a fraction of last year's income.

Prime Minister Kyriakos Mitsotakis has warned that Greece will fall into a "deep recession" this year before rebounding in 2021.

The Bank of Greece forecasts the economy will contract by 5.8% in 2020, while the International Monetary Fund's forecast is more pessimistic at 10%.

In comparison, business activity fell by 7.1% in 2011, the biggest annual drop during the decade-long Greek debt crisis.

Athens nonetheless remains able to raise money on financial markets, which was not the case then.

Between 2009 and 2018, Greece suffered its worst economic crisis in modern times, and had begun to slowly regain some of the lost ground before it was hit by the impact of coronavirus restrictions. – AFP

source https://www.thesundaily.my/business/coronavirus-stings-greek-economy-by-15-in-q2-HG3833977

France puts jobs at heart of economic rescue plan

PARIS: The French government said today that employment would be paramount as it unleashed a colossal spending plan for its virus-hit economy that has been hemorrhaging jobs.

Prime Minister Jean Castex promised 160,000 new jobs next year as part of a recovery plan worth €100 billion (RM490 billion), launched at a time when daily virus numbers in France are again on the rise.

"The ambition and size of this plan are historic," Castex told reporters after a cabinet meeting backing the stimulus package, which he said would help return the French economy to its pre-pandemic level by 2022.

The economy has experienced its worst downward spiral since 1945, with gross domestic product (GDP) plunging by 13.8% in the second quarter, after a drop of more than 5% in the first.

The government has said French companies could shed 800,000 positions this year.

"Our absolute priority is jobs," Castex said.

The budget boost – a combination of new spending and tax breaks, mostly for companies – comes on top of hundreds of billions already spent in an early pandemic response. Some €40 billion of the plan are to be covered by funds from a €750 billion European Union-wide deal agreed after much acrimony in July, Castex said.

France expects to present the programme next month to EU partners whose approval is needed to unblock the funds, European Affairs Minister Clement Beaune said.

Castex also vowed that the package would trigger no new taxes.

Kathrin Muehlbronner, a vice president at rating agency Moody's, said the "reasonably large" package at around 4.5% of GDP would not change the agency's view on France's fiscal strength or credit profile.

The new stimulus is "not just designed to dress the wounds from the crisis," Castex told Le Figaro daily in an interview before today's presentation.

"It lays the groundwork for the future," he said, echoing President Emmanuel Macron's assertion that its emphasis on decarbonising the economy, improving corporate competitiveness and creating jobs would usher in "the France of 2030."

Castex said France would now revive the job of high commissioner for planning, more than a decade after the position was ditched, to help the government identify strategic economic choices for the next decade. He said the job would go to Francois Bayrou, a respected centrist, former government minister and presidential candidate.

"The time for a relaunch has come," tweeted Macron.

Much of the new plan targets the corporate sector, which will get €35 billion worth of help.

But Philippe Martinez, head of the leftist CGT union, faulted the government for failing to extract promises from companies that they would safeguard jobs in return. "They gave money to Air France and Renault and for what? Job cuts. Is that what public money is for?" he said.

Some €30 billion are earmarked for greener policies.

Activists said this was too little, and called on the government to make companies commit to environmental targets.

"The government is presenting a recovery plan from a bygone era," said Jean-Francois Juilliard, head of Greenpeace France. "There's nothing about cutting road or air traffic, nothing on any reduction of meat, egg or dairy production which would be needed to cut greenhouse gas emissions," he said.

The government has resisted calls for specific measures to bolster consumer spending, saying its heavy financing of continued salaries for those out of work was enough.

French households have accumulated €80 billion in savings since March, significant firepower if they could be induced to spend, analysts say.

Opposition politicians meanwhile said the new money might come too late to save many companies.

"This should have been done before the summer," said centre-right LR party head Christian Jacob.

European stock markets welcomed the stimulus plan, seeing it as a "huge statement of intent," according to Craig Erlam, an analyst with the Oanda trading firm. "Combined with the (eurozone) recovery package, it's clear the bloc is not going down without a fight," he told AFP.

source https://www.thesundaily.my/business/france-puts-jobs-at-heart-of-economic-rescue-plan-YG3833771

US trade gap surges to US$63.6 billion in July on jump in imports

WASHINGTON: US imports jumped nearly 11% in July, driving the trade gap up to US$63.6 billion (RM263.5 billion) in the month, the Commerce Department reported today, far more than economists had expected.

Although American exports also rose in July, it was far less than imports, contributing to the US$10.1 billion jump in the overall deficit – nearly 19% higher than June, according to the report.

Though trade has picked up pace it "remained below pre-pandemic levels, reflecting the ongoing impact of Covid-19, as many businesses continued to operate at limited capacity or ceased operations completely, and the movement of travelers across borders remained restricted," the Commerce Department said in the report.

However the report said it could not quantify or separate the impact of the pandemic on the trade data.

"A strong and sustained rebound in trade flows is uncertain given a still weak global growth and demand backdrop," said Rubeela Farooqi of High Frequency Economics.

Jim Watson of Oxford Economics was more stark, saying that "with the domestic and global recoveries looking vulnerable, we think trade will struggle to keep its strong pace. Downside risks are clear, and we expect total trade volumes to fall a record 14% in 2020."

Big increases were seen in imports of vehicles, parts and engines, industrial supplies and consumer goods in July. Petroleum imports also surged by US$21.5 billion.

The trade deficits in goods alone increased sharply with China and Mexico, to US$28.3 billion and US$11.5 billion respectively.

With trade in services included, the deficit with China in the second quarter – the latest period for which data is available – surged to US$75.8 billion, while the gap with Mexico jumped to US$15 billion, the report said.

Meanwhile, the massive US services sector continued to recover in August, but was growing at a slower pace than in the prior month and employment continued to contract, according to an industry survey released today.

The Institute for Supply Management's services index slipped 1.2 points to 56.9%, with 15 services industries reporting growth.

But that marked the third consecutive month of growth for the sector that comprises about two-thirds of the world's largest economy after contracting in April and May amid the coronavirus pandemic.

Anything above 50% indicates growth.

The last time the sector experienced a downturn was in November and December 2009 during the global financial crisis.

However, the employment index continued to slow last month, with the index at 47.9%, although that was a sharp improvement over July and points to an improving job market, the report said.

"Employment still contracting" but "it's slowing in its rate of contraction, so that's a good sign," ISM survey chairman Anthony Nieves told reporters.

The expansion in services is "still not at pre-pandemic levels, but all signs indicate unless we have a derailment in the next few months that will continue to see this growth going forward," he said.

He noted that survey respondents were "mostly optimistic" as businesses are starting to reopen, but those that have not opened their doors continue to worry about the uncertainty.

"Our business activity is now thriving again, after modifications to our operations," said one firm in accommodation and food services, which pointed to tariff threats as a bigger concern especially regarding aluminum, as well as the rapid rise in lumber costs.

But a wholesale trade company said: "We are significantly down from the pre-Covid-19 level. While month-over-month business activity is picking up, the pace is very slow and very slight." – AFP

source https://www.thesundaily.my/business/us-trade-gap-surges-to-us-636-billion-in-july-on-jump-in-imports-AG3833460

Sovereign sukuk dominate issuance in first-half 2020

PETALING JAYA: Despite expectations of a sluggish performance by the global sukuk market this year, lower yields and key sukuk markets’ Covid 19-induced stimulus packages took centre stage in first-half 2020 (H1’20), which Sovereigns and corporates took advantage of low interest rates to lock in cheaper financing, RAM Ratings said in a statement.

Global sukuk issuance fell 9.1% year on year in H1’20, bringing the total issuance value to US$65.6 billion, compared to US$72.1 billion during the first half of last year. The weaker showing followed a 17.1% reduction in sovereign issuance to US$39.2 bil in the same period, from US$47.2 billion in H1’19.

Despite the general contraction, the impressive spikes in sovereign sukuk issuance by Turkey (+56.2%) and Indonesia (+46%) helped cushion the declines in other key sovereign sukuk markets such as Malaysia (-69.3%) and Saudi Arabia (-46.5%).

“The slower time-to-market in sukuk issuance may have prompted some key sukuk markets to choose conventional bonds to fund their fight against Covid-19. That said, additional funding for stimulus packages may keep setting the pace for sukuk issuance in 2H’20,” RAM Ratings said.

It noted that the quasi-government and corporate sectors posted a 6.1% growth, with US$26.4 billion coming to market in H1’20.

Malaysia remained the leading global sukuk market in both the corporate and quasi-government sectors, taking up the lion’s share of 41.5% (US$11.0 billion), followed by Saudi Arabia (26.3% or US$6.9 billion) and the United Arab Emirates (15.3% or US$4 billion).

source https://www.thesundaily.my/business/sovereign-sukuk-dominate-issuance-in-first-half-2020-JH3832946

UWC's fourth-quarter net profit soars 85% from a year ago

UWC’s fourth-quarter net profit soars 85% from a year ago

PETALING JAYA: UWC Bhd’s net profit for the fourth quarter ended July 31 soared by 85.1% to RM18.65 million, from RM10.07 million in the same quarter of the previous year, attributed to improved manufacturing efficiencies, higher product value and lower expenses due to the absence of listing fees incurred previously.

Revenue stood at RM61.41 million, a 31% increase from RM46.91 million previously.

For the full financial year, the group posted a net profit of RM57.76 million, a 59.4% improvement from RM36.24 million in the previous financial year. Revenue rose by 51.7% to RM219.05 million, from RM144.35 million previously.

UWC has proposed an interim single tier dividend of 2 sen per ordinary shares amounting to RM11 million.

In its Bursa Malaysia filing, the group said it remains optimistic over its prospects ahead despite unfavourable economic conditions due to the Covid-19 pandemic disruption to the global supply chain and economic sentiment.

Citing data by US-based Semiconductor Equipment and Material International which projected a 13% growth in semiconductor test equipment for 2020 and a 13% growth in wafer fabrication equipment in 2021, UWC said its growth momentum will continue on the back of 5G demand.

Subsequently, it expects stronger demand for these testers in the quarters to come.

The group highlighted that the life science industry is also a catalyst to its growth plans with its involvement in the manufacturing of Covid-19 equipment.

On the whole, executive director and group CEO, Datuk Ng Chai Eng said, the results were proof of the group’s strategic execution of supply chain management to resolve shortages, due to the implementation of the movement control order.

“Moving forward, UWC maintains an optimistic outlook on the back of increased number of enquiries from existing and potential customers for both the semiconductor and life science industries. We will gradually move into the front-end semiconductor supply chain for better margins and the deployment of 5G as catalyst for growth.

“We will gradually move into the front-end semiconductor supply chain for better margins and the deployment of 5G as catalyst for growth,” he said.

source https://www.thesundaily.my/business/uwc-s-fourth-quarter-net-profit-soars-85-from-a-year-ago-DB3829746

CEOs in Asia Pacific turn more pessimistic on global economic growth prospects: KPMG survey

PETALING JAYA: Only 22% of chief executive officers (CEOs) in Asia Pacific remain confident on the global economy’s growth prospects over the next three years, a significant drop from 67% reported in January, according to the 2020 KPMG Global CEO Outlook report.

At the same time, the CEOs surveyed are more assured of the resilience of their own business, as 63% expressed confidence in their company’s growth for the same time period.

The report aims to measure how CEOs’ priorities and concerns have changed during the global pandemic by conducting two surveys, at the onset of the pandemic in January and a second survey in July/August.

The study found business leaders have shifted their perspectives as businesses and governments around the world continue assessing the long-term impact of Covid-19, which translates to a shift in prioritising digital transformation, talent and environmental, social and governance (ESG) factors at the top of their agendas during this period of uncertainty.

KPMG Malaysia’s managing partner, Datuk Johan Idris, commented that a majority of CEOs have undertaken critical measures to bolster their company’s medium-term resilience.

He pointed out that this is evident by the decision to maintain business-as-usual activities by business leaders worldwide in response to the movement restrictions at the height of the crisis.

“With the extension of the recovery movement control order (RMCO) until Dec 31, 2020, business leaders are forced to relook at their operational strategies and key to this is the ability to move away from short-term measures and prepare for mid and long-term growth,” Johan said in a press release.

One of the efforts towards long-term growth has been the allocation of resources towards digital transformation initiatives, with 46% of CEOs reporting that progress for their digitisation of operations has sharply accelerated, putting them years in advance of where they expected to be.

In addition, 61% stated they plan to prioritise more capital investment in buying new technology and digitisation.

CEOs have identified talent risk, which encompasses recruitment/retention, overall wellbeing and health of staff, as the highest perceived threat to long-term growth. This could reflect the challenges faced with recruiting and retaining personnel while motivating the workforce despite disruption to the usual ways of working.

According to the report, 72% of CEOs said remote working caused them to make significant changes to their policies to nurture culture, while 69% reported how remote working has widened their potential talent pool for future hires.

There has also been a rise in supply chain concerns, as 72% surveyed have had to rethink their global supply chain approach given the disruptive impact of the pandemic.

In addition, the report saw 78% of CEOs in Asia Pacific to develop a stronger emotional connection to their organisation’s purpose, with 66% stating how they responded to the pandemic by shifting focus towards the ‘Social’ component of their Environmental, Social, and Governance programme.

There has been a rise in supply chain concerns, as 72% of the CEOs surveyed have had to rethink their global supply chain approach given the disruptive impact of the pandemic. – REUTERSPIX

source https://www.thesundaily.my/business/ceos-in-asia-pacific-turn-more-pessimistic-on-global-economic-growth-prospects-kpmg-survey-FA3828601

RAM Ratings expects Malaysian banks' profits to remain subdued despite improvements in second-half 2020

PETALING JAYA: Malaysian banks’ earnings are expected to improve in the third and fourth quarters of 2020, but the sector’s profit performance is likely to remain subdued through the rest of the year amid the economic downturn and highly uncertain operating landscape, according to RAM Ratings.

It pointed out that the banks’ earnings declined significantly in second-quarter 2020 (Q2’20), dragged down by hefty modification losses and pre-emptive provisions as well as markedly thinner net interest margins (NIMs).

Subsequently, the average pre-tax return on assets and return on equity of eight selected local banks fell to an annualised 0.7% and 6.8%, respectively, in the same period (Q1’20: 1.10% and 10.7%).

The rating agency’s co-head of financial institution ratings, Wong Yin Ching, noted that banks’ NIMs were severely crimped by the aggregate 75 bps cut in the Overnight Policy Rate in Q2’20, compounded by modification charges arising from non-accrual of interest (or profit) on deferred instalments of fixed-rate car and Islamic financing under the six-month moratorium.

Although some respite in NIMs is expected as deposits are repriced at lower rates, she said the 25 bps cut in the key rate and the likelihood of more cuts will limit the extent of this recovery.

“The recently announced targeted extension of the loan moratorium beyond September for selected borrowers will also trigger another round of modification losses, although to a much smaller degree,” said Wong.

RAM Ratings highlighted that with a large proportion of loans on payment holiday, the banking system’s gross impaired loan (GIL) ratio clocked in at an all-time low of 1.43% as at end-July 2020, compared with 1.53% at end-December 2019.

It opined that the true underlying asset quality will only become apparent after the expiry of Covid-19 loan relief measures.

Despite the still-benign GIL ratio, the rating agency said banks have been proactively building up their provisions in anticipation of heightened defaults next year. This has led to the average credit cost ratio of the eight selected banks going up to 91 bps (annualised) in Q2’20 (Q1’20: 62 bps) and is likely to remain elevated in the second half of the year.

On the whole, the industry recorded a 4.5% year-on-year loan growth in July 2020 (2019: 3.9%), underscored by the automatic six-month moratorium on individual and SME loan repayments as well as various government funding programmes.

RAM Ratings noticed that loan applications and approvals rebounded strongly in June and July, fuelled mainly by the household segment, after having shrunk in April and May in the earlier stages of the lockdown,

Overall, the rating agency expects credit expansion to come in at 3-4% in 2020.

source https://www.thesundaily.my/business/ram-ratings-expects-malaysian-banks-profits-to-remain-subdued-despite-improvements-in-second-half-2020-AA3828442

Maxis launches retransformation campaign

KUALA LUMPUR: Telecommunications services provider Maxis Bhd has launched its retransformation campaign, a mission to change the game for large-scale digitalisation of all corporates in the country and to enable them to always be ahead in a changing world.

Chief enterprise business officer Paul McManus said the campaign is aimed at encouraging organisations in the country to rethink and re-evaluate their digital transformation strategies, in light of the Covid-19 pandemic.

As for Maxis, he said the movement control order and Covid-19 situation have forced the company to accelerate its digital transformation journey by at least two years in advance.

The situation has also recognised that Maxis is playing a significant role during the tough period, given the fact that businesses are at greater risks without technology and communication, he said.

“We already have strategies (for transformation) and invested in that strategies which (will) transform Maxis and its capabilities.

“The situation has forced us to turbo-charge many of our initiatives.. the digital, analytic, Internet of Things (IoT), and cloud capabilities have enabled Maxis to respond and accelerate our digital transformation,“ he said at the launch of the campaign here today.

McManus said the call for retransformation action was reinforced by the findings of a survey -- Digital Technology Assessment 2020, which was jointly developed with the International Data Corporation (IDC).

Featured in an IDC InfoBrief, the survey provided a comprehensive overview of the digitalisation efforts of Malaysian companies in key technologies.

Key findings from the survey revealed that organisations lack the long-term strategies required to transform their businesses. – Bernama

source https://www.thesundaily.my/business/maxis-launches-retransformation-campaign-FA3828142

Public Islamic Bank launches “Go Green” campaign for EEVs

PETALING JAYA: Public Islamic Bank Bhd is participating in Value Based Intermediation (VBI), an initiative from Bank Negara Malaysia by launching its energy effiecient vehicle (EEV) campaign under AITAB Hire Purchase-i Financing.

The VBI aims to align Islamic finance business models towards realizing the objectives of shariah to generate positive and sustainable impact to the economy, community and environment.

The promotion of the campaign from April 1 - Dec 31, 2020, with an exclusive financing rate of 2.2% per annum with tenure up to nine years.

This campaign is designed to support local growth and usage of EEVs in Malaysia to reduce carbon emission into the environment. This promotion is only applicable to selected new vehicle models.

Public Islamic Bank will also be launching a residential solar panel financing program with attractive financing rates to benefit its existing customers.

“This solar program is expected to produce positive sustainable effect to the environment and contribute towards cost savings for our customers,” it said.

source https://www.thesundaily.my/business/public-islamic-bank-launches-go-green-campaign-for-eevs-JJ3830597

Nikkei hits 30-year high in dollar terms as stimulus hopes spur sentiment

TOKYO: Japan's Nikkei share average hit a six-month high on Thursday and reached its highest level in three decades in dollar terms, as hopes of more global and domestic economic stimulus boosted sentiment.

Nikkei rose 0.94% to 23,465.53, its highest close since Feb. 21. Converted to dollars, that put the index at its highest since 1990.

"Coronavirus infections are slowing in many parts of the world as various social distancing and hygienic measures have been taken. So clearly, we can say the economy is improving after a brief lull in August," said Nobuhiko Kuramochi, market strategist at Mizuho Securities.

"The Japanese government is likely to extend support for employment and the U.S. yield curve is not pricing in any hike until 2024, prompting investors to buy risk assets," he added.

The broader Topix rose 0.48% to 1,631.24, a six-month high.

Fast Retailing, which has a heavier weighting on the Nikkei compared to Topix, rose 3.6% after reporting strong domestic sales for August.

Semiconductor-related shares also climbed, with Shin-etsu Chemical, manufacturer of semiconductor wafers, rising 3.7% and small motor maker Nidec gaining 1.8%.

Game maker Nintendo rose 1.6% to a 12-year high.

Cable TV operator Sky Perfect JSAT Holdings soared 15.7% after posting a surprise jump in profit, partly due to a fall in costs as the cancellation of various professional sports events led to lower payments for broadcast rights.

SBI Holdings rose 5.7% after a media report said its president discussed a plan to extend a union on regional banks it leads to about 10 banks.

Japan's Chief Cabinet Secretary Yoshihide Suga, who looks set to succeed Prime Minister Shinzo Abe, said there were too many regional banks, fanning expectations he would push for consolidations.

Fukushima Bank jumped 21.6%, while Daito Bank rose 10.0% and Tsukuba Bank gained 8.4%. - Reuters

source https://www.thesundaily.my/business/nikkei-hits-30-year-high-in-dollar-terms-as-stimulus-hopes-spur-sentiment-AN3825651

Eyes on the future with Taiwanese medical technology

PETALING JAYA: The increasing demand for ophthalmic medical materials driven by rising global elderly population has propelled Taiwan’s advancement of ICT into new ophthalmology technologies.

Taiwan External Trade Development Council (Taitra) president and CEO Walter Yeh lauded Taiwan’s ophthalmic medical equipment industry that has grown steadily in recent years, with a turnover of US$7 billion (RM29 billion).

“We firmly believe that Taiwan is capable of providing superior quality medical services to the world. The global ophthalmic medical equipment market is estimated to reach US$58.4 billion by 2023,“ he said at the “Smart Medical Express: Eyes on the Future” Taiwan Excellence online product launch on Wednesday, which showcased the latest Taiwanese ophthalmic medical technologies.

The auxiliary and remedial category, the so-called “contact lens industry”, has the most outstanding performance. Its export ratio is about 75%, reaching NT$12.6 billion and accounting for global sales of 1.53%. Diagnostics equipment accounts for 0.3% of global turnover, combining technologies including optics, electronics, motors, and big data calculations.

“Taiwan is highly proficient in ICT technology, and with this significant advantage, our ophthalmology industry has great potential. As a trusted world partner, Taiwan Excellence upholds the spirit of innovation by selecting products that best represent the image of Taiwan’s industries,“ added Yeh.

Jointly organised by Taiwan’s Bureau of Foreign Trade and Taitra, the online product launch featured four Taiwan Excellence Award winners, including Crystalvue Medical Corp, Medimaging Integrated Solution Inc, BenQ Materials Corp and In-Trust Technology Co Ltd.

The non-mydriatic auto fundus camera from Crystalvue provides real-time health report of the retina and the eyes. It is equipped with automatic 3D tracking and focusing, and can capture images with just one click.

The 5MP Eye Care Total Solution from Medimaging allows switching of the lenses to become eye surface camera, eye anterior camera and eye fundus camera, making it easy for optometrists to do a diagnostic.

Miacare Confidence daily colour contact lens from BenQ transforms the conventional silicone molecules into hydrophilic structures without using any solvent treatment to form a hydrophilic film.

The Aurai hot & cool eye massager from In-Trust is the first in the world to use water circulation and water wave massage to reduce intraocular pressure without risk of harm.

“Taiwan Excellence award-winning products showcase the best of Taiwan’s industries, which provide smart solutions for our daily lives,“ said Yeh.

More events focusing on medical products, including dentistry and assistance devices for the elderly, will be held in the coming weeks.

source https://www.thesundaily.my/business/eyes-on-the-future-with-taiwanese-medical-technology-CM3824172

BOJ’s Kataoka urges bolder easing to battle deflation risk

TOKYO: The Bank of Japan must take bolder monetary easing steps to fight the heightening risk of deflation, board member Goushi Kataoka said on Thursday, warning of a darkening outlook for consumption and capital expenditure from the pandemic.

The BOJ must buy government bonds aggressively and make clear it is ready to cut interest rates further to ease the burden on households and firms, said Kataoka, among the most dovish in outlook of the policymakers in the nine-member board.

The central bank should also strengthen its commitment to combat deflation by setting specific conditions under which it will ramp up stimulus, Kataoka said.

"By taking action to show our determination we won't tolerate deflation, we can improve the credibility of our price target," he said in a speech to business leaders in Okinawa, southern Japan.

Kataoka has been a lone dissenter to the BOJ's decisions to maintain its interest rate targets, arguing that rate cuts are needed to pre-empt rising deflationary pressure.

The coronavirus pandemic has deepened Japan's recession and heightens challenges for the new prime minister, who is set to succeed incumbent Shinzo Abe later this month after Abe's abrupt decision to step down.

Kataoka said the hit to demand from COVID-19 was weighing on consumption and inflation, making it hard to expect price growth to accelerate toward the BOJ's 2% target.

"The job market is worsening due to the pandemic, which will drag on consumption," he said, adding that capital expenditure was also starting to fall.

"If the pandemic's impact is prolonged and hurts companies' medium- to long-term growth expectations, they may be forced to slash future demand projections and adjust capital spending plans," Kataoka said. - Reuters

source https://www.thesundaily.my/business/boj-s-kataoka-urges-bolder-easing-to-battle-deflation-risk-EG3822060

Fed’s Daly sees ‘no pressing need’ for further rate guidance

San Francisco Federal Reserve President Mary Daly on Wednesday signaled no urgent need to ease monetary policy further, saying markets and households understand borrowing costs will stay low until inflation accelerates and employment returns to healthier levels.

"I don't see a pressing need in terms of a misalignment of expectations relative to our policy," Daly said in a question-and-answer session with reporters.

A new policy framework released last week, promising the Fed will address "shortfalls" in employment and aim to push inflation moderately above 2%, went "a long way" in setting those expectations, she said.

Her remarks pushed back on the view expressed this week by former Fed chairs Ben Bernanke and Janet Yellen that the U.S. central bank will need to follow up its framework soon with clearer guidance on how long it will keep interest rates low, and how much bond-buying it intends to do.

Some analysts have also faulted the Fed for not spelling out in its new framework how much of an inflation overshoot the Fed will tolerate, or for how long.

Daly said it is that very vagueness that allows the Fed to adjust policy as needed.

"What I really want to push away from is this idea that there's a rule," she said. "I don't have a specific number in mind because to me that would tie me up and constrain me."

The Fed next meets to set policy in mid-September.

Daly acknowledged "we can always do more forward guidance" and bond-buying when the economy actually could benefit from the boost.

Right now, she said, the labor market is in a "deep hole" after massive job loss during the pandemic shutdown, and cannot fully recover until the virus is better controlled.

Congress needs to take "forceful action" to provide fiscal aid, she said. - Reuters

source https://www.thesundaily.my/business/fed-s-daly-sees-no-pressing-need-for-further-rate-guidance-HJ3821797

Anchanto aims to enchant traditional logistics players with its warehouse management system Wareo

PETALING JAYA: Anchanto aims to assist traditional logistics players embrace digital solutions for e-commerce with its warehouse management system (eWMS), Wareo.

Its founder and CEO, Vaibhav Dabhade (pix) observed that the majority of logistics players relied on inventory management systems, order management systems or other traditional enterprise resource planning solutions for all their logistics needs, while a minority employed outdated eWMS solutions.

“What they need to understand is that they need a comprehensive solution/system that can cater to all their requirements at once, while aligning with their existing processes and workflows,” he told SunBiz in a recent interview.

With that in mind, Dabhade said, Wareo was built to cater to the current environment, where the system interfaces with multiple software applications to ensure the best productivity from the operations team.

Hence, the solutions are able to furnish businesses such as third party logistics (3PLs), warehousing, brands, e-distributors, service providers and postal associations with e-commerce capabilities.

He said Wareo offers ready integration with the rest of the ecosystem partners that ship the orders, with over 35 last-mile delivery companies to facilitate seamless shipping for warehouse operators.

In addition, Wareo has ready integrations with leading marketplaces such as Lazada, Zalora, Shopee, PrestoMall, Etsy and eBay, among others.

This year, Anchanto has expanded into Australia, New Zealand, Thailand, Korea and Hong Kong, in addition to its existing markets in Malaysia, Singapore, the Philippines, Indonesia and India.

Dabhade said the decision to enter a new market centres on its e-commerce growth trends and potential.

“Another important factor is the cross-border e-commerce & import-export potential in the region,” Dabhade said.

“For instance, cosmetics from Korea are quite popular across multiple markets in Southeast Asia and Australia. Similarly, there is heavy demand for Australian wine, dairy products and health supplements in China.”

Moving forward, Anchanto has set a target for itself in 2020, which is to hit a threefold increase in its revenue from the previous year.

“Due to the recent outbreak of Covid-19 pandemic, we are facing challenges to schedule meetings & meet potential customers,” said Vaibhav, explaining that building close relationships are the key to its success and event cancellations have hindered them from building such relationships.

Despite the setbacks, he is quite confident of achieving its ambitious target, as the startup has rolled out upgrades for its platform, SelluSeller.

“Moreover, we are continuously hiring new team members to join us across our offices in India, Singapore, Malaysia, Australia, Indonesia and Philippines and we are also working to launch two new products this year.

“With a massively upgraded platform, team members, and new senior leadership onboard, we are confident of achieving our targets, and offering an enchanting experience to all our customers,” he said.

For the future, Dabhade said Anchanto is exploring new markets and potential partners across the Middle East, North Africa, North America and Europe.

source https://www.thesundaily.my/business/anchanto-aims-to-enchant-traditional-logistics-players-with-its-warehouse-management-system-wareo-BX3808517

Weak Q2 corporate earnings not a surprise to analysts

PETALING JAYA: Weak second-quarter earnings reported by Bursa Malaysia-listed companies are not surprising, according to analysts, as the three-month period coincided with disruptions to the economy attributed to the Covid-19 pandemic and the containment measures.

Despite the poor results, Public Investment Bank (PIVB) Research said, the market is likely to have seen the worst, barring a second wave of coronavirus infections, which could lead to targeted shutdowns.

For the second quarter, earnings disappointments were aplenty, although it thought that post-first-quarter earnings reductions were already sufficiently accounted for.

PIVB Research listed sectors most vulnerable to “economic standstills” such as banks, property, real estate investment trusts, airlines and gaming as the standouts.

With that, the research house has revised its growth assumption for 2020 and 2021 to -21.4% and +26.2% from its first-quarter estimate of -12.8% and +15.9%, respectively, due to prevailing weak conditions.

“While adjustments to earnings this current quarter should result in a reduction of our end-2020 FBM KLCI target to 1,430 points, we are maintaining our expectation of a 1,480-point closing this year-end owing to liquidity-driven ‘exuberances’,” it said in a report.

PIVB Research elaborated that the market appears to be still underpinned by expectations at this juncture, such as a V-shaped recovery in earnings and in economic growth.

“The flush liquidity amid interest rates which have been cut to all-time lows, conditions we last saw in 2008/2009, is feeding the hunger for investment returns, hence the market not reacting particularly negatively to supposedly ‘bad’ earnings reports, this quarter and the last (1Q’20).”

In terms of its sector picks, the research house said manufacturing, banks, construction and power (renewables) may garner interest in 2021.

“For stocks, we retain our preference for smaller-capitalised names with strong growth stories, near-term challenges notwithstanding, namely Johore Tin, Magni-Tech Industries, Mega First, Sarawak Plantations, Serba Dinamik, SKP Resources, Chin Hin Group and D&O Green Technologies,” it said.

CGS-CIMB, however, has lowered its end-2020 FBM KLCI target to 1,520 points, from 1,550 points previously, to reflect earnings downgrades made during the results season.

For the second quarter of the year, it has seen companies that posted results above its expectations rise to 25% from 13% in first-quarter 2020, as well as a lower share of underperformers of 36% from 44% in the previous quarter out of 130 companies it actively covers.

The research house revealed that its key takeaways for the results season were the improving earnings revision ratio attributed to higher overachievers in the quarter, the 56% year-on-year decline in corporate earnings due to the movement control order, and interim dividends were mostly below expectation for banks.

CGS-CIMB noted that most of the companies that were loss-making were in the airline, auto, construction, property, media and gaming sectors.

“Following our latest earnings revisions, we now expect the KLCI’s 2020 core net profit to decline by 16% (vs 11% previously), as we adjust for earnings downgrades in the Genting Group, Tenaga, MISC and IHH,” it said.

“We expect corporate earnings to be stronger quarter-on-quarter in 3Q’20F and in 2H’20F, as earnings recover from the lockdown due to pent-up demand, rebuilding of inventory and stimulus measures.”

For its top three picks, the research house has replaced Top Glove with Public Bank and Yinson with MPI, while retaining Tenaga Nasional, to reflect its view that investors are likely to rotate in the later part of the year to cyclical sectors which will benefit from the recovering economy post-Covid-19.

Its top picks also include IJM Corp, KPJ Healthcare, MPI, Pentamaster, Petronas Gas, and Ta Ann.

source https://www.thesundaily.my/business/weak-q2-corporate-earnings-not-a-surprise-to-analysts-HK3804955

United Airlines to start laying off up to 16,000 workers on Oct 1

NEW YORK: United Airlines said Wednesday it plans to lay off up to 16,000 workers starting in October amid a prolonged industry downturn due to the coronavirus.

The big US carrier, which had previously said as many as 36,000 workers could be terminated, said early retirement and other programmes had lessened the need for even deeper cuts, but the "devastating" impact of Covid-19 on airline travel still required layoffs.

Even with those voluntary programmes and other cost-cutting, the savings "have not been enough to avoid involuntary furloughs entirely," the company said.

"Today, each of our operations leaders communicated directly with their teams to share the heart-wrenching news that approximately 16,000 United employees will be notified of an involuntary furlough effective as early as October 1."

The cuts affect nearly 7,000 flight attendants and almost 3,000 pilots, among other staff.

"The pandemic has drawn us in deeper and lasted longer than almost any expert predicted, and in an environment where travel demand is so depressed, United cannot continue with staffing levels that significantly exceed the schedule we fly," the company said.

"Sadly, we don't expect demand to return to anything resembling normal until there is a widely available treatment or vaccine."

United was among the airlines that received federal funding under the federal Cares Act, which barred involuntary staff cuts through the end of September.

United said it was working with its unions to press the government to provide another emergency aid package with an extension of payroll support for airline workers. However, that bill remains stuck in a partisan fight in Washington. – AFP

source https://www.thesundaily.my/business/united-airlines-to-start-laying-off-up-to-16000-workers-on-oct-1-CL3814271

TikTok suitors said to be pursuing four options in effort to revive talks

NEW YORK/BEIJING/HONG KONG: TikTok's prospective buyers are discussing four ways to structure an acquisition from its Chinese owner ByteDance, which include buying its US operations without key software, after Beijing stalled a deal which could be worth US$30 billion (RM124.4 billion), sources said.

Other options being considered include asking for Chinese approval to pass TikTok's algorithm on to the acquirer of the short video app's US assets, licensing the algorithm from ByteDance, or seeking a transition period from a US national security panel overseeing the deal, three sources said.

ByteDance had been looking to pick a buyer for TikTok assets by this week so it can finalise a deal by mid-September and comply with President Donald Trump's order to divest them, after US officials raised concerns over the safety of the personal data of US citizens handled by TikTok.

"TikTok is loved by 100 million Americans because it's a home for entertainment, self-expression, and connection. We're committed to continuing to bring joy to families and meaningful careers to those who create on our platform for many years to come," a TikTok spokeswoman said in a statement.

Beijing last week updated its export control rules to restrict the sale of technology such as the one used by TikTok to recommend videos to users, raising questions over whether it would veto a deal and giving prospective buyers Microsoft and Oracle pause for thought.

ByteDance and the bidders for the TikTok assets are now discussing four ways to structure the deal, the sources, who requested anonymity, told Reuters.

It is not clear which, if any, of the options will be pursued. As days pass, the odds of a deal lengthen as TikTok faces a US ban on Sept 20 if no sale agreement has been reached. It has challenged this ban in court.

One possibility being discussed is to sell TikTok without the algorithm it uses to make recommendations to users. While this would circumvent China's export control rules, it would present a significant gamble for Microsoft and Oracle, which would have to quickly come up with a substitute.

Another option is to negotiate a transition period of up to a year with the Committee on Foreign Investment in the United States (CFIUS), which is overseeing the deal talks, the sources said. It is not clear, however, whether China's new rules would allow this in the time frame required.

A third option is seeking approval from China to pass on TikTok's algorithm to the buyer of its US assets, the sources said. This would amplify the geopolitical risk, given worsening relations between the world's two largest economies over trade, cyber security and the spread of the coronavirus.

The fourth scenario involves ByteDance licensing the algorithm to the buyer of the TikTok assets, the sources said. However, this could worry CFIUS, which wants ByteDance to forego any relationship it has with TikTok in the United States.

ByteDance, Microsoft and Oracle declined to comment. The White House, CFIUS and China's Commerce Department did not immediately respond to requests for comment.

TikTok is functionally and technically similar to ByteDance-owned Douyin, which is available only in China, and shares technical resources with it and other ByteDance-owned properties, sources have previously said.

While the code for the app, which determines the look and feel of TikTok, has been separated from Douyin, algorithms for moderating and recommending content and the management of user profiles are shared.

While TikTok is best known for videos of people dancing going viral among teenagers, US officials have expressed concern that user information could be passed to Beijing. TikTok has said it would not comply with any request to share user data with the Chinese authorities.

ByteDance has been in talks to sell TikTok's North American, Australian and New Zealand operations since last month. And in a sign of founder and CEO Zhang Yiming's concern, TikTok engineers were told last week to make contingencies should it need to shut down its U.S. operations.

Walmart Inc said last week it was joining Microsoft in its bid for TikTok's US assets, hours after the app's recently named chief executive, Kevin Mayer, said he would step down.

Oracle, whose chairman Larry Ellison is one of the technology world's few supporters of Trump, has partnered with some of ByteDance's investors, including General Atlantic and Sequoia, on its bid for the TikTok assets. – Reuters

source https://www.thesundaily.my/business/tiktok-suitors-said-to-be-pursuing-four-options-in-effort-to-revive-talks-NL3814249

Investors shun Thailand as economic growth weakens, political protests hot up

SINGAPORE/HONG KONG: A selloff in the Thai baht, underperforming stocks and pressure on the bond market reflect growing concern from global investors over political instability and the growth outlook in Southeast Asia's second-biggest economy, analysts and fund managers say.

Thailand suffered its deepest economic contraction in two decades last quarter and a long haul to recovery looms as the Covid-19 pandemic has hammered its mainstay tourism industry.

At the same time, the government is facing a student protest movement which is gathering momentum and disruption to its policy agenda by the surprise resignation of Finance Minister Predee Daochai on Tuesday, after less than a month in the job.

"I think no other country has these two or three problems going on at the same time, as if the Covid-19 situation isn't bad enough," said OCBC Bank economist Howie Lee.

Prime Minister Prayuth Chan-ocha has said Predee's exit, for health reasons, would not affect economic plans, but he did not outline a timetable for appointing a new minister.

"If there is no minister, then there are deputies and assistants," Prayuth told reporters after a meeting of a special economic task force. "I also drive the policy myself as head of the economic team."

The government announced measures on Wednesday worth 68.5 billion baht (RM9 billion) to add jobs and spur consumption.

Prayuth said he saw no impact on confidence from Predee's exit.

Experts say his departure could create uncertainty in policymaking and the government's efforts in managing billions of dollars of stimulus to aid an economy that could shrink a record 8.5% this year.

"This may delay some matters we are waiting for," said Vichit Prakobgosol, president of Association of Thai Travel Agents. "We want to have a new finance minister quickly so that the economy can move ahead".

Business wants Prayuth's multi-party government to prevent "internal politics" from affecting policies, said Supant Mongkolsuthree, chairman of The Federation of Thai Industries. "If not, it will be difficult. Protests are another issue to monitor," he said, referring to frequent anti-government demonstrations.

"We hope they can get the right people as soon as possible," said Stanley Kang, chairman of the Joint Foreign Chambers of Commerce in Thailand. "This position cannot be vacant for a long time ... this is a very challenging time".

Prayuth urged the public to have faith in the government.

"I want everyone to be confident and I want to convey my message overseas. We are moving forward in all dimensions like before," he said.

The baht fell and has dropped about 0.6% on the dollar since Tuesday on the news, its steepest two-day slide in about two weeks. It now sits where it traded in June despite a slide in the greenback over the past few months.

Thailand's benchmark stock index is down 17% for the year, having suffered foreign outflows in every month till August – lagging a 5% gain in Asian markets.

"The only foreigners left in Thai equities really are the passive investors, the ETFs and the funds which track the index. The active managers are gone," said Jeep Chatikavanij, founder of the Ton Poh Fund which manages US$150 million (RM621.8 million).

A global selloff in longer-dated government bonds has also hit Thailand slightly harder than elsewhere, as investors struggle to digest the big debt sales that are paying for governments' spending.

Widening corporate credit spreads, as investors demand a greater premium for lending to Thai firms, also shows creeping default risk, said BNP Paribas' head of Asean Economics, Arup Raha.

"With headline inflation now being negative for several months, income growth is poor. That is causing some stress in the corporate sector." – Reuters

source https://www.thesundaily.my/business/investors-shun-thailand-as-economic-growth-weakens-political-protests-hot-up-NJ3812917

Returning to public debt markets after six years, Dubai gets US$2 billion

DUBAI: The government of Dubai sold US$2 billion (RM8.29 billion) in dual-tranche bonds on Wednesday, its first sale in public debt markets in six years, as it seeks to boost finances hit by the coronavirus crisis.

Dubai sold US$1 billion in 10-year sukuk, or Islamic bonds, at 210 basis points (bps) over mid-swaps and US$1 billion in 30-year conventional bonds at 4%, according to a document issued by one of the banks leading the deal and seen by Reuters.

It received more than US$6.5 billion in orders for the sukuk and over US$3.5 billion for the bonds.

"There is no value in the sukuk but there will be local buyers," a fund manager who declined to be named said on the initial pricing, which was tightened during book-building by 40 bps for the sukuk and 37.5 bps for the conventional notes.

"It's attractively priced for Dubai ... less money on the table for investors," said Tim Ash, emerging markets senior sovereign strategist at BlueBay Asset Management.

The Middle East trade and tourism hub's first public debt issuance since 2014 comes amid a sharp economic downturn that has revived concern over its finances and revived memories of the 2009 debt crisis that wobbled its economy.

That crisis caused Dubai's real estate market to crash, threatening to force some state-linked companies to default on billions of dollars of debt. Its oil-rich neighbour Abu Dhabi and the United Arab Emirates (UAE) central bank provided Dubai US$20 billion of debt in its aftermath, facilities that were refinanced for five years in 2018 and 2019, a bond prospectus showed.

Dubai has budgeted a US$3.2 billion deficit this year, the prospectus showed. It also showed that while the government's direct debt amounted to nearly US$34 billion at the end of June, Dubai had no consolidated estimates for the outstanding total debt of government-related entities.

"It's always been one of the big negatives of Dubai, but it's really the worst-kept secret. Clearly the market doesn't take the numbers at face value either," a second fund manager said, adding spreads on Dubai's existing bonds are not "commensurate with what the headline debt and deficit numbers suggest". The fund manager also declined to be identified.

Dubai is unrated, which may exclude a pool of investors from its debt offering, said advisory and research firm Azure Strategy.

"A rating process would require a more granular disclosure of Dubai's credit profile," it said in a report on Tuesday.

In July, ratings agency S&P said Dubai's economy could shrink 11% this year, as it cut the credit ratings of two of the emirate's biggest property firms to "junk" status.

The issuance comes as the UAE and Israel work to promote investment between the two countries, after agreeing to normalise relations last month. – Reuters

source https://www.thesundaily.my/business/returning-to-public-debt-markets-after-six-years-dubai-gets-us-2-billion-HJ3812900

India bans 118 more mobile apps, including Tencent’s PUBG

U NEW DELHI: India on Wednesday banned another 118 mobile apps including Tencent Holdings's popular videogame PUBG, as it stepped up the pressure on Chinese technology companies following a standoff with Beijing at the border.

The list of 118 mostly Chinese apps also includes applications from Baidu and Xiaomi's ShareSave.

These "apps collect and share data in a surreptitious manner and compromise personal data and information of users that can have a severe threat to the security of the State," India's technology ministry said in a statement.

It added the apps threatened India's sovereignty and integrity.

Tencent declined to comment, while the Chinese embassy in New Delhi did not immediately respond to a request for comment.

The latest ban comes a day after a senior Indian official said troops were deployed on four strategic hilltops after what New Delhi called an attempted Chinese incursion along a disputed Himalayan border.

Tension between nuclear-armed India and China has simmered since June when 20 Indian soldiers were killed in a border skirmish with Chinese troops.

New Delhi has since begun eroding China's dominant position in India's internet economy. It began with a ban on 59 apps, which included ByteDance's popular video-sharing app TikTok, Alibaba's UC Browser and Xiaomi's Mi Community app.

Following that ban in June, New Delhi outlawed some mobile apps of Chinese companies, such as Xiaomi and Baidu, sources told Reuters last month.

This prohibition on about 47 apps comprised mostly clones, or different versions of the already-banned apps, but also some new apps. – Reuters

source https://www.thesundaily.my/business/india-bans-118-more-mobile-apps-including-tencent-s-pubg-BJ3812883

Bank of England policymakers warn UK economy facing bigger risks

LONDON: Bank of England (BoE) deputy governor Dave Ramsden and another interest-rate setter, Gertjan Vlieghe, warned today of risks that Britain's economy could suffer more damage than spelt out by the central bank last month.

Ramsden told lawmakers that the BoE had estimated the level of Britain's economic output would permanently be about 1.5 percentage points lower than it would have been without the pandemic.

"For me all the risks are really that that number will be greater than 1.5%," Ramsden said.

Vlieghe said there was "a material risk" that it could take several years for Britain's economy to return to full capacity after its coronavirus shock.

The BoE said in August it expected Britain's economy to recover its pre-Covid-19 size by the end of next year.

Britain's economy shrank by more than 20% in the April-June period, worse than any other big industrialised nation. That was partly because the country locked down later than many of its European peers.

In an annual report to parliament's Treasury Committee, Vlieghe said some sectors might not be able to return to their pre-pandemic size, leading to a reorientation of the economy.

"Based on these considerations, there is a material risk in my view that it could take several years for the economy to return to full capacity and inflation to return sustainably to target, even with monetary policy at its current settings," he said in the report.

Governor Andrew Bailey told the lawmakers in today's online session that inflation might not be as weak as estimated by the BoE last month, citing evidence that many businesses had not passed a value-added tax cut on to customers as much as had been expected.

"So that will tend to cause short-run inflation to be higher than we thought it would be, and it probably won't now go negative."

Asked for his views on the recovery in the economy after its lockdown, Bailey said the bounce back in consumption had been very fast while investment had been weak.

He also said a geographic breakdown of spending data showed that London had seen the weakest revival of credit card spending since the lockdown.

The capital has been particularly hard hit by the reluctance of many workers and their employers to get back to their usual places of work. Prime Minister Boris Johnson this week repeated his calls for people to return to their workplaces. – Reuters

source https://www.thesundaily.my/business/bank-of-england-policymakers-warn-uk-economy-facing-bigger-risks-XJ3812044

Saudi Arabia to allow foreigners to invest directly in debt instruments

RIYADH: Saudi Arabia's Capital Market Authority (CMA) said today it will allow foreigners to invest directly in debt instruments, furthering open the Saudi market to outside investors.

The market regulator said resident and non-resident foreigners would be able to invest in listed and non-listed debt instruments.

Saudi Arabia's reforms to develop and open up its capital markets are part of Vision 2030, an economic reform plan aimed at boosting growth in the private sector and at diversifying the country's economy beyond oil.

The Saudi main stock exchange, Tadawul, opened to foreign investors in 2015. The kingdom has since introduced a raft of reforms to attract overseas share buyers and issuers as part of efforts to lure foreign capital and diversify the oil-dependent economy.

This decision will help "enhance the investment environment attractive for foreign investors, thus contributing to raising the efficiency of the market and increasing its competitiveness regionally and internationally", the CMA said in its statement.

Non-resident foreigners will not be able to invest as direct investors in listed debt instruments and at the same time invest as a qualified foreign investor or an ultimate beneficiary in swap agreements, a vehicle that allows foreigners to buy into listed stocks through intermediaries.

In addition, foreigners who invest directly in debt instruments may not covert them into shares listed in the main market unless they are among the categories allowed to invest directly in listed shares in the main market or become an an ultimate beneficiary in a swap agreements, according to the statement. – Reuters

source https://www.thesundaily.my/business/saudi-arabia-to-allow-foreigners-to-invest-directly-in-debt-instruments-CJ3812026

US private payrolls miss expectations, point to slowing labour market recovery

WASHINGTON: US private employers hired fewer workers than expected for a second straight month in August, suggesting that the labour market recovery was slowing as the Covid-19 pandemic drags and government money to support workers and employers dries up.

Large businesses accounted for the bulk of the job gains shown in the ADP National Employment Report today, with small enterprises posting a modest increase. A US$600 (RM2,490) weekly unemployment supplement expired on July 31, while a programme that gave businesses loans that can be partially forgiven if used for employee pay has also lapsed.

"The recovery in jobs lost in this pandemic recession was always a weak one," said Chris Rupkey, chief economist at MUFG in New York. "But for a second month in a row it is looking like the jobs are not going to come back unless there is more stimulus from Washington to bolster economic demand and keep business activity and consumer spending growing."

Private payrolls increased by 428,000 jobs last month. Data for July was revised up to show hiring gaining 212,000 jobs instead of the initially reported 167,000. The revision still left the July tally out of alignment with the 1.462 million rise in private employment reported by the government last month.

Economists polled by Reuters had forecast private payrolls would increase by 950,000 in August.

The ADP report, jointly developed with Moody's Analytics, has fallen short of the government payrolls count since May because of methodology differences. The ADP report is based on active employees on company payrolls.

The Labor Department's Bureau of Labor Statistics (BLS) counts a worker as employed if they received a paycheck during the week that includes the 12th of the month.

When businesses were shuttered in mid-March, millions of workers were either laid off or furloughed. Some economists believe that the return of furloughed workers when most businesses reopened in May boosted the employment numbers reported by the government.

Moody's Analytics chief economist Mark Zandi told reporters he expected the gap between the ADP and BLS private payrolls narrowed in August. The government is scheduled to publish August's employment report on Friday.

According to a Reuters survey of economists, private payrolls probably increased by 1.265 million jobs in August after rising 1.462 million in July. Such a gain would result in non-farm payrolls advancing by 1.4 million jobs last month after increasing 1.763 million. That would leave nonfarm payrolls about 11.5 million below their pre-pandemic level.

The moderation in job growth suggested by the ADP report is in line with other labour market indicators. Weekly new applications for unemployment benefits are hovering around 1 million.

Data from Kronos, a workforce management software company, showed an increase in shifts in August, but the rise was heavily influenced by the late summer return to school.

Adjusting for back-to-school seasonality, weekly shifts fell on average. Data from Homebase, a payroll scheduling and tracking company, showed little change in employment in August from July.

"The jobs market continues to climb out the dark hole of the pandemic, but the climb out is slowing and risk is high that it will fall back in," said Zandi.

Large businesses accounted for 298,000 jobs last month, while small business payrolls increased 52,000.

Most of the increase in employment last month was in industries directly impacted by the pandemic, including restaurants, leisure and hospitality. There were also gains in temporary help, reflecting the uncertain economic environment. – Reuters

source https://www.thesundaily.my/business/us-private-payrolls-miss-expectations-point-to-slowing-labour-market-recovery-HJ3812009

Brazil’s economy to shrink 5% this year, rebound 4% or more in 2021: Central bank head

BRASILIA: Brazil's economy is on course to shrink by about 5% this year and grow by 4% or more next year, central bank chief Roberto Campos Neto said today, stressing the importance of the government resuming its agenda of strict fiscal discipline.

Speaking in an online interview with Bloomberg, Campos Neto said the huge emergency spending triggered by the Covid-19 pandemic was a "detour" and that a return to a credible fiscal path was essential to securing a sustainable recovery and keeping inflation and interest rates low.

Campos Neto acknowledged the importance of direct transfers to millions of Brazil's poorest people in preventing an even steeper economic slump, but said those and other emergency measures expire on Dec 31 and should not be extended.

"We need to take care of the poor ... but we need to take care of the fiscal limitations," he said.

Brazil's economy shrank by a record 9.7% in the second quarter, with household spending tumbling 12.5%. That was despite millions of families receiving monthly stipends of 600 reais about US$112 (RM485), which the government has extended through the end of the year, but at 300 reais a month.

Economists warn that the sudden removal of that support could have severe consequences for the recovery.

Campos Neto repeated his view that any room for further cuts to the benchmark Selic interest rate, currently at a record-low 2%, was "small."

Any bond buying from the central bank should be done to address issues of market liquidity and dysfunction, he said, not for monetary policy purposes. Using the bank's balance sheet for fiscal policy should be avoided because that tends to "end badly."

On foreign exchange, Campos Neto said market volatility was higher than it should be, likely due to record-low interest rates and fiscal uncertainty. The central bank lacks the tools to tackle it right now, but intervention is always an option if needed, he said. – Reuters

source https://www.thesundaily.my/business/brazil-s-economy-to-shrink-5-this-year-rebound-4-or-more-in-2021-central-bank-head-KG3811941