Asia’s factories shaking off COVID gloom, China shines

TOKYO: Asian factories continued to shake off the coronavirus-induced gloom in August as more bright signs in China raised hopes of a firmer recovery in global demand, reducing pressure on policymakers to take more radical steps to avert a deeper recession.

Manufacturing activity in China expanded at the fastest clip in nearly a decade in August, as factories ramped up output to meet rebounding demand, a private survey showed. New export orders rose for the first time this year.

The upbeat findings contrasted with an official survey on Monday, which showed China's factory activity grew at a slightly slower pace in August.

But fears of a resurgence in infections in some economies may discourage firms from boosting capital expenditure and delay a sustained rebound for the Asian region, some analysts say.

"In most major economies, except for China, factories are still running well below pre-pandemic capacity levels," said Ryutaro Kono, chief Japan economist at BNP Paribas.

"The recent recovery is largely due to pent-up demand after lockdown measures were lifted, which will dwindle ahead."

China's Caixin/Markit Manufacturing Purchasing Managers' Index(PMI) rose to 53.1 in August from July's 52.8, marking the sector's fourth consecutive month of growth and the biggest rate of expansion since January 2011.

Japan and South Korea both saw factory output contract at the slowest pace in six months in August, reinforcing expectations the region's export powerhouses have past their worst from a collapse in demand after COVID-19 struck.

The spill-over to other parts of Asia, however, remains patchy. While manufacturing activity rose in Taiwan and Indonesia, they slid in the Philippines, Vietnam and Malaysia.

PANDEMIC, POLITICS DAMPEN SENTIMENT

The global economy is gradually emerging from the health-crisis-led downturn thanks in part to massive fiscal and monetary stimulus programmes.

But many analysts expect any recovery to be feeble as renewed waves of infections dent business activity and prevent many nations from fully re-opening their economies.

Japan's final au Jibun Bank Manufacturing PMI rose to a seasonally adjusted 47.2 in August from 45.2 in July, marking the slowest contraction since February.

The survey followed data on Monday showing factory output rose in July at the fastest pace on record, as automakers ramped up production after facing factory closures in past months.

South Korea's PMI also rose to 48.5 in August from 46.9 in July, the highest reading since February, though it remained below the 50-mark threshold that separates growth from contraction for an eighth straight month.

While South Korea's exports fell for a sixth straight month in August, the trade data - first to be reported among major exporting economies - signalled a gradual recovery in global demand.

"Exports will continue to recover during the second half and turn positive next year," said Chun Kyu-yeon, economist at Hana Financial Investment. "Global demand are clearly showing recovery along with economic resumptions," she added.

Some analysts warn against being too optimistic.

South Korea's latest PMI findings did not fully reflect a recent resurgence in domestic coronavirus inflections in mid- to late-August.

Japanese firms cut capital expenditure by the most in a decade in the second quarter, data showed on Tuesday, a sign the pandemic was sapping corporate appetite to spend.

Japan is also in the midst of a leadership change after Prime Minister Shinzo Abe said last week he will step down, raising uncertainty about the policy outlook.

"There is ... a risk that the leadership transition could bring about a period of policy paralysis and uncertainty, should Japan experience a run of frequent changes in premierships, as occurred prior to 2012," Fitch Ratings said in a research note. - Reuters

source https://www.thesundaily.my/business/asia-s-factories-shaking-off-covid-gloom-china-shines-JF3777649

Fed to resume discussion of next policy steps, says vice-chairman

WASHINGTON: With a new policy framework in place, the Federal Reserve (Fed) will turn to debating possible next steps in the US central bank's fight against the economic fallout of the coronavirus pandemic, Fed vice-chairman Richard Clarida said today.

That discussion is expected to include possible promises by the Fed to link interest rate decisions directly to a return to full employment, and the possible expansion of its monthly asset purchases to further boost the economy.

"Now that we have concluded the review, I imagine we will be returning to a discussion of potentially refining guidance and our balance sheet communication, but I don't want to prejudge where that would end up," Clarida said during an event organized by the Peterson Institute for International Economics in Washington.

The Fed last week said it was shifting its strategy to allow higher inflation to offset periods of weak price increases in hopes of letting job markets tighten, wages rise, and workers gain more of the benefits from economic expansions.

Analysts have said the new strategy lacks details and begs the question of what the Fed will do to support its new approach - and in particular when the central bank might announce expected increases in its bond purchases or flesh out the time period used to assess "average" inflation.

Clarida said that latter decision may wait until the economy recovers more.

"I would expect as the economy recovers and as we approach our dual mandate goals there will be further communication," about the Fed's plans, Clarida said in a question-and-answer session after he spoke via a webcast at today's event.

In his prepared remarks, Clarida focused on the fact that the Fed's new approach to monetary policy means a low unemployment rate on its own doesn't warrant higher interest rates, a "robust" change meant to acknowledge the economy is different than that of textbook models.

"A low unemployment rate by itself, in the absence of evidence that price inflation is running or is likely to run persistently above mandate-consistent levels or pressing financial stability concerns, will not, under our new framework, be a sufficient trigger for policy action," Clarida said.

"Econometric models," particularly those including a necessary trade-off with falling unemployment leading to higher inflation, "can be and have been wrong ... A decision to tighten monetary policy based solely on a model ... is difficult to justify."

Clarida's comments, describing the new policy as a "milestone," said the new approach was justified because emerging research showed the economy has changed so much since 2012.

Keeping the same approach as the Fed has used in the interim risked embedding inflation below its 2% target into market and household decision-making - and putting the United States on the same weak growth path as Japan, for example.

"If policy seeks only to return inflation to 2% following a downturn," Clarida said, the previous approach "will tend to generate inflation that averages less than 2%." That, in turn, means the Fed's policy interest rates would be lower than they would be otherwise, and downturns risked being longer with higher unemployment.

The new policy aims to use periods of higher inflation to specifically offset periods of weakness.

The central bank's work, Clarida indicated, isn't done. Now that the long-run policy document is set, the Fed will begin studying changes to its Summary of Economic Projections, the "dot plot" of policymaker forecasts, which may be the vehicle to flesh out issues like how long an averaging period the Fed will use. – Reuters

source https://www.thesundaily.my/business/fed-to-resume-discussion-of-next-policy-steps-says-vice-chairman-ED3731879

Spain’s economy growing more than 10% in third quarter: Minister

MADRID: The Spanish economy has been growing at a rate of more than 10% so far in the third quarter after a record drop in the preceding quarter due to the impact of the coronavirus pandemic, Economy Minister Nadia Calvino said today.

The Spanish economy was one of the worst-hit by the pandemic and subsequent lockdowns in Europe, posting an 18.5% contraction in April-June from the previous quarter as non-essential activities ground to a halt for most of the period. It had contracted 5.2% in the first quarter.

"With all the precaution and prudence, we can expect growth of more than 10% in the third quarter of the year," Calvino told a financial event held in the northern city of Santander.

The growth estimate from Calvino, who also said the labour market was rebounding, is slightly more conservative than that by fiscal watchdog AIReF, which last week upgraded its third quarter GDP expansion forecast to 15.2%.

To repair the ravaged economy, the Spanish government is counting on the €140 billion (RM691 billion) it is due to receive from the European Union's recovery fund, about half of which will be in non-repayable grants.

"A plan that, according to government estimates, will lift up our country's economic growth by more than two percentage points in the long run," Prime Minister Pedro Sanchez told a conference in Madrid.

The Spanish central bank has said the economy could contract by 9%-11.6% in 2020, without ruling out an even sharper contraction of 15.1% due to the possibility of a new wave of coronavirus. – Reuters

source https://www.thesundaily.my/business/spain-s-economy-growing-more-than-10-in-third-quarter-minister-ND3731861

China’s big banks brace for rising bad debt, increased margin pressure

BEIJING/SHANGHAI: China's largest state-owned banks are readied for rising bad debt and increased margin pressure in the months ahead as forbearance policies designed to give borrowers breathing space during the coronavirus crisis expire.

All five banks, which have been raising provisions to counter expected losses due to rising soured loans, have reported their biggest profit falls in at least a decade.

"The external challenges in the second half are unprecedented," Bank of China Ltd (BoC) president Wang Jiang said today.

Their forecasts highlight the impact of the pandemic and the economic slowdown on China's banks, which have been asked by Beijing to step up and lend to flagging sectors, while sacrificing profits in a bid to revive the country's fortunes.

Borrowers are struggling to repay debt after months of lockdown and some sectors, such as those in the travel industry, are battling to survive under the shadow of coronavirus.

Second-quarter loan-loss provisions were up 61% to 436% compared to the same period last year at ICBC, CCB, AgBank and BoC, data from China International Capital Corp (CICC) showed.

The crater in first-half profit was mostly down to provisioning ordered by regulators, CICC said, noting that second-quarter profit growth would otherwise have been 1.5% to 5.1% for those four lenders.

"As forbearance policies that help companies to recover expire in the first half of next year, the impact of non-performing loans will increase," chief risk officer Jin Yanmin of China Construction Bank Corp (CCB) said during a news briefing.

Agricultural Bank of China (AgBank) president Zhang Qingsong said bad loan pressure was rising, as short-term policies aimed at keeping firms afloat expired, adding its profit growth faces pressure from a "declining loan prime rate, fee cuts and an increase in loan loss provisions".

Ji Zhihong, CCB vice president, predicted that net interest margins, a key profitability indicator, will narrow further.

Industrial and Commercial Bank of China (ICBC) , the world's largest commercial lender by assets, will face higher pressure on loan risk controls in the second half and will increase efforts on provisions to guard against "significant turbulence," its vice president Liao Lin said.

Overall, Chinese commercial banks recorded a 9.4% drop in first-half net profit to 1 trillion yuan (RM600 billion), data from the China Banking and Insurance Regulatory Commission showed.

By the end of the June quarter, the average non-performing loan ratio for commercial banks was at 1.94%, data from the commission showed, the highest since 2009.

And banks are likely to keep boosting provisions in the third quarter, Everbright Securities analyst Wang Yifeng said.

However, CICC analysts said the first-half is likely to mark the start of the sector's bottoming-out and they expect the industry to post profit growth again in 2021 as economic activity gradually recovers.

Non-performing loan ratios rose at the big five banks during the reporting period, with ICBC's increasing to 1.5% by the end of June from 1.43% three months earlier, and that of CCB rising by 0.07 percentage points in second quarter to 1.49%.

"Consumer behaviour changes and reshuffle of industries accelerated by the pandemic will have an uncertain impact on the economy," Moody's Investor Service analyst Nicholas Zhu said.

In the second half and early 2021, big banks are expected to step up the sale of capital bonds to help counter deteriorating asset quality, Zhu said.

China's biggest banks still have a estimated shortfall of US$500 billion (RM2.086 trillion) by 2025 to meet global capital requirements, Moody's estimates.

Net interest margin – a key gauge of bank profitability – fell at ICBC, BoCom, CCB and AgBank, although it improved slightly at BoC. – Reuters

source https://www.thesundaily.my/business/china-s-big-banks-brace-for-rising-bad-debt-increased-margin-pressure-XD3731660

India’s central bank announces measures to maintain market stability

MUMBAI: The Reserve Bank of India (RBI) announced new measures today to maintain stability in the financial system during the coronavirus pandemic, including two more tranches of special open market bond operations in its 'Operation Twist'.

The central bank said it would also raise the ratio of securities that banks can hold until maturity within their statutory liquidity ratio (SLR) or mandatory bond holding requirement, which would help limit losses due to market volatility.

"The RBI remains committed to use all instruments at its command to revive the economy by maintaining congenial financial conditions, mitigate the impact of Covid-19 and restore the economy to a path of sustainable growth while preserving macroeconomic and financial stability," the central bank said in a statement.

RBI said it will conduct two more tranches of 100 billion rupees (RM5.69 billion) each of simultaneous sale and purchase of bonds in September, or 'Operation Twist' as it is popularly known.

Indian bond yields had risen in recent weeks due to high government borrowing, rising inflation and reduced expectations of interest rate cuts following the release of minutes of the RBI's monetary policy committee's latest meeting.

Some analysts, however, said the RBI's measures did not go far enough.

"It's a band aid for the market but the steps also show RBI doesn't have space for outright OMOs (open market operations)," said A. Prasanna, chief economist at ICICI Securities Primary Dealership.

RBI, however, also said there were indications that food and fuel prices were stabilising and the recent rise in the rupee was helping to contain imported inflationary pressures.

The bank said that it will also conduct term repo operations for a total of 1 trillion rupees at the current repo rate in mid-September to assuage pressures from advance tax outflows.

"This move does not take away the problem of supply overhang, the impact of this move in (keeping bond yields in check) will only be temporary," said Ashhish Vaidya, head of trading and asset liability management at DBS Bank India.

"What the market requires, due to the bond supply overhang, is some sort of decisive move in terms of OMO purchases, like what the central banks in developed markets have demonstrated."

RBI said banks would now be allowed to hold up to 22% of their SLR securities under the held-to-maturity category until March 31, 2021, up from the current limit of 19.5%. – Reuters

source https://www.thesundaily.my/business/india-s-central-bank-announces-measures-to-maintain-market-stability-ED3731622

VAT reduction pushes German August inflation into negative territory

BERLIN: German annual consumer prices fell for the first time in more than four years in August due to a VAT cut as part of the government's stimulus push to help Europe's largest economy recover from the coronavirus shock, data showed today.

German consumer prices, harmonised to make them comparable with inflation data from other European Union countries, fell 0.1% year on year after stagnating in the previous month, the Federal Statistics Office said.

This compared with a Reuters forecast for 0.0% and was the first negative reading since May 2016.

"The inflation rate is influenced, among other things, by the VAT cut that came into effect on July 1, 2020," the office said in a statement.

Germany's stimulus package includes a cut in VAT – value added tax – for regular goods to 16% from 19% and for food and some other goods to 5% from 7% from July 1 until Dec 31. The reduction is estimated to cost the federal government up to €20 billion (RM99.4 billion).

The government hopes that its rescue and stimulus measures will help companies and consumers recover more quickly from the coronavirus shock which plunged the economy into its deepest recession on record in the second quarter.

ING economist Carsten Brzeski said the VAT cut was most visible in prices for food and clothing, while inflation for services remained almost stable.

While higher unemployment and weak pricing power for companies generally suggest deflationary trends during the pandemic, monetary and fiscal stimulus eventually speak in favour of more inflationary pressure, Brzeski said.

But the German inflation data showed that at least "for the time being, the deflationary threat is clearly more pressing than any inflationary one", Brzeski added.

The European Central Bank has a target of keeping inflation close to but below 2% in the euro zone.

ECB board member Isabel Schnabel told Reuters in an interview published today that the central bank has no reason for now to add to its stimulus measures as disruptions related to the recent surge in coronavirus infections were already factored into its policy.

On the month, harmonised prices fell by 0.2%, the preliminary data showed. A Reuters poll had predicted an unchanged reading, the preliminary data showed. – Reuters

source https://www.thesundaily.my/business/vat-reduction-pushes-german-august-inflation-into-negative-territory-BD3731605

India’s economy shrinks record 23.9% year on year in June quarter

NEW DELHI: India's economy contracted at its steepest pace on record of 23.9% in the June quarter as the pandemic lockdown cut consumer and business spending, putting pressure on the government and central bank for additional stimulus and a rate cut.

The gross domestic product (GDP) data released today showed consumer spending, private investments and exports all collapsed during the world's strictest lockdown imposed in late March to combat the Covid-19 pandemic.

The read-out for the June quarter was worse than the 18.3% contraction forecast of analysts in a Reuters poll. It was also lower than a 3.1% growth rate for the previous quarter and upwardly-revised 5.2% growth in June quarter of 2019.

Some private economists have said the fiscal year that began in April could see a contraction of nearly 10%, the worst performance since India won independence from British colonial rule in 1947 and likely to push millions into poverty.

Prime Minister Narendra Modi announced a US$266 billion (RM1.1 trillion) stimulus package in May, including credit guarantees on bank loans and free food grains to poor people, but consumer demand and manufacturing have yet to recover.

Sujan Hajra, chief economist at Anand Rathi Securities, Mumbai, said the economic slump was widely expected as India was under lockdown for almost half of the quarter.

"This (GDP number) improves chances of rate cut in October slightly," he said.

Data showed that manufacturing has already entered recession as the output fell 39.3% in June quarter after falling 1.4% in the previous quarter.

The number of novel coronavirus cases has been spreading in India faster than anywhere else in the world, with more than 3.6 million already infected and a death toll of over 64,400.

However, with an annual growth of 3.4% in the April-June quarter, the farm sector, which accounts for 15% of economic output, gave some hope the rural economy will be able to support millions of migrant workers who have returned to their villages. – Reuters

source https://www.thesundaily.my/business/india-s-economy-shrinks-record-239-year-on-year-in-june-quarter-DD3731588

Reliance Industries future-proofs retail arm as it woos investors

NEW DELHI: Reliance Industries' US$3.38 billion (RM14.1 billion) deal to acquire Future Group's retail business pitches the conglomerate as an even more formidable force in India, making its retail arm more attractive to the potential investors it seeks to woo.

The oil-to-telecoms group controlled by India's richest man, Mukesh Ambani, announced late on Saturday that it will acquire Future Group's retail and wholesale business as well as its logistics and warehousing operations.

The acquisition of Future Group's 2,000 retail stores and Big Bazaar grocery chain will help Reliance, which sells everything from groceries to electronics through 11,000-plus stores, to broaden its extensive reach across the country.

But with Ambani set to sell stakes in Reliance Retail, the Future-Reliance deal makes it an even more attractive proposition for investors in a market that Boston Consulting Group expects to grow to US$1.3 trillion by 2025.

"With this deal, Reliance's dominance in the Indian market increases further and the valuation that Reliance Retail will now command will be even more," said Arvind Singhal, chairman of retail consultancy Technopak Advisors.

Reliance, which has raised a little more than US$20 billion from global investors including Facebook Inc by selling stakes in its Jio Platforms digital business, has said it aims to attract investors in Reliance Retail over the next few quarters.

"We've received strong interest from strategic and financial investors in Reliance Retail," Ambani told shareholders at the company's annual general meeting in July.

The acquisition will also help Reliance to extend its lead over its competitors, Singhal added.

Mumbai-based Reliance is well known for its ability to win over customers with financial muscle and its breadth of offerings.

Shares in its rivals reflected as much today.

Avenue Supermarts, which runs popular grocery chain DMart, fell as much as 5.4% while Aditya Birla Fashion and Retail closed 2.6% down and V-Mart Retail lost 4.4%.

JioMart, the new Reliance e-commerce venture that offers free express delivery from neighbourhood stores, will also gain a leg-up from the Future Group deal thanks to a wider wholesale supplier base.

JioMart delivers groceries, apparel and electronics in more than 200 cities, challenging established online retailers such as Amazon's India unit and Walmart's Flipkart.

"Reliance has essentially removed one competitor from the market and added Future's loyal customer base to its own portfolio," said Harminder Sahni, founder of retail consultancy Wazir Advisors.

"It's a very serious challenge not just for Flipkart or Amazon, but for the likes of DMart, too." – Reuters

source https://www.thesundaily.my/business/reliance-industries-future-proofs-retail-arm-as-it-woos-investors-ID3731569

Malaysia still faces fiscal constraints despite raising government debt ceiling, says Fitch Solutions

PETALING JAYA: In spite of the temporary raising of the government debt limit to 60% of gross domestic product (GDP), there is still binding fiscal constraints on Malaysia following stimulus spending to support the economy against Covid-19 headwinds, according to Fitch Solutions.

“While the government is unlikely to begin the process of paying its debt down in earnest in 2021, we note that the raised debt limit expires in 2022 and is likely to see constrained fiscal spending over the coming two years at least as the government endeavours to stay below the limit,” it said.

As such, it is maintaining its fiscal balance forecast at -6.1% for 2020, due to the heavy pressures that revenues will likely face due Covid-19’s impact on the economy and the government’s foregoing of revenues as part of its fiscal stimulus package.

Meanwhile, the same stimulus package also means expenditures are unlikely to fall as much as revenue, resulting in what is likely to be the largest fiscal deficit since 1987.

On Aug 24, Parliament passed legislation raising the government debt limit to 60% of GDP, from 55% previously. This law expires in 2022, at which point the limit is set to revert to 55% in the absence of an extension. This places Malaysia as having one of the highest debt limits in emerging Asia, along with Thailand, which also has a 60% government debt limit.

Fitch noted that with public debt at 59% of GDP, had the government not raised the limit, it would not have much space to borrow to counter any future negative shocks that may arise over the coming quarters, increasing Malaysia’s vulnerability.

“Our core view is for the government to maintain the debt limit at 60% over the coming two years at least, in the absence of another major negative shock. Indeed, the economy is likely to recover strongly in 2021, with the recovery likely to become more resilient once a rollout of mass vaccinations in achieved likely sometime later in 2021,” it said.

It is forecasting real GDP to expand by 6.3% in 2021, however, should another grave economic threat emerge next year, Fitch Solutions said its expects the government to raise the debt ceiling and borrow more to finance stimulus.

The research arm of Fitch Ratings also said it expects Bank Negara Malaysia (BNM) to act to relieve any pressure in the bond markets resulting from increased government borrowing, as it appears to have done in April.

“While total government debt is likely to remain elevated over the coming years, the burdens posed by interest repayments are likely to remain manageable with borrowing rates likely to be kept in check by the central bank,” it said.

Between March 31 and April 15, BNM sharply increased its holdings of MGS by 235%, to a total of RM9 billion. As of Aug 14, the total has reached RM10.7 billion which has likely helped to curb a spike in government borrowing costs.

source https://www.thesundaily.my/business/malaysia-still-faces-fiscal-constraints-despite-raising-government-debt-ceiling-says-fitch-solutions-HD3731485

Digital asset exchanges essential for Malaysia 5.0

THE Malaysia Digital Economy Corporation (MDEC) has been known for its primary task to manage and take the lead Malaysia’s digital economy forward. As MDEC is positioned to ramp up the Malaysia 5.0, a concept that will work towards and contribute to a more sustainable and circular economy. This will be done via the development of a national-level digital ecosystem with a unified alliance of stakeholders, both from within government and across private enterprise that will enable business and societal migration onto the digital age.

Malaysia 5.0 directly addresses financial inclusion, access, performance and growth through the Fourth Industrial Revolution (4IR) tools, such as fintech, blockchain and artificial intelligence. These digital initiatives and hubs will emerge as core components for next-generation infrastructure of every country. They will be the ones facilitating the interoperability of goods and services that are flowing through them with interconnectivity between various market sectors.

Digital asset exchanges will play an important role as they offer participants the ability to monetise their activities over digital infrastructure, essentially serving as the capital markets for Malaysia 5.0.

These digital exchanges are, primarily, dynamic asset conversion facilities that will bridge current legacy marketplaces with new e-marketplaces. More importantly, they ensure both platforms can co-exist for the foreseeable future.

Challenges that businesses face currently include the inability to deploy capital and move assets seamlessly between legacy platforms. This is a historic problem for exchanges that persisted since their inception as floor-based marketplaces and are still present even after legacy platforms moved over to electronic trading. As legacy systems were still operating as stand-alone pools of liquidity, interoperability between newer and older systems are difficult to manage, expensive and only possible via multiple intermediaries.

The advent change for digital exchanges will offer necessary redundancies in capital markets and even provide enhanced liquidity and transparency. As is, legacy exchanges work well for blue-chip companies, in the same way banks function as efficient lenders for the larger multinational corporations. However, for startups and small- and medium-sized enterprises (SMEs), these options carry massive costs and overhead expenses.

As for the future of exchanges, it will combine digital and traditional assets in ways that can potentially change the decades-old exchange model. The impact of such changes will be dramatic, especially for start-ups and SMEs. Tokenisation and blockchain-based solutions will revolutionise the ability for smaller companies to raise capital as it makes the process more streamlined and cost-effective.

For MDEC, as the primary digital change agency, its role focuses on supporting and managing such transformational shifts. The need for robust institutional-grade digital asset exchanges in trusted environments is, now, greater than ever. In fact, this trend is already starting to happen in regulated environments as opposed to the “Crypto Wild West”.

Globally, digital asset exchanges represent a huge opportunity – the Southeast Asia region included. The market for digital assets has evolved substantially as security tokens started to gain more traction with institutional investors. A survey conducted by the World Economic Forum already predicted how 10% of world’s GDP will be stored on blockchain technology by 2027. This is an equivalent of US$24 trillion in financial assets.

Undoubtedly, Malaysia 5.0 is the golden opportunity to position the country as into the heart of digital Asean. The potential for early adopter countries, especially those that are taking the lead, is further facilitated as round-the-clock transactions become easier, cheaper and more secure while expanding its global reach.

This article was contributed by MDEC chairman Datuk Wira Dr Rais Hussin

source https://www.thesundaily.my/business/digital-asset-exchanges-essential-for-malaysia-50-FD3731465

Top Glove’s independent consultant completes verification, audit report

KUALA LUMPUR: An independent consultant, appointed to verify labour practices at Top Glove Corp Bhd’s manufacturing facilities and accommodation, has completed the intended verification work.

In a filing with Bursa Malaysia today, it said the audit report is expected to be available within 10 days, for the onwards submission to the US Customs and Border Protection (CBP).

“The independent audit entails virtual interviews of about 1,100 of the company’s migrant workers across various locations and also addresses the relevant areas of concern identified by the US CBP,” the rubber glove maker said.

Top Glove had, on Aug 10, 2020, commenced part remediation for recruitment fees amounting to RM4.4 million to 9,204 of its migrant workers who joined the company prior to the implementation of its Zero Cost Recruitment Policy in January 2019.

The total remediation fee to be paid is estimated at RM53 million, subject to finalisation with the US CBP.

The company said it continues to enhance its migrant workers’ working and living environment and facilities to ensure their well-being is always well-cared for. - BERNAMA

source https://www.thesundaily.my/business/top-glove-s-independent-consultant-completes-verification-audit-report-MY3724970

Beauty products from Taiwan unmasked

PETALING JAYA: While the global retail industry is experiencing difficulties caused by the Covid-19 pandemic, the beauty industry has great business potential, especially Taiwan’s beauty industry which has risen to the forefront.

Taiwan’s beauty market was developed early, and sales of beauty products are expected to increase to US$6.93 billion (RM29 billion) in 2025, with a compound annual growth rate (CAGR) of 4.5%, from US$5 billion in 2018.

Citing a Fortune Business Insights report, Taiwan External Trade Development Council (Taitra) president and CEO Walter Yeh said the global beauty market was worth more than US$297.61 billion in 2018 and is projected to reach US$438.38 billion by 2026, exhibiting a CAGR of 5.1% during the forecast period.

Geographically, Asia Pacific accounts for 41% of the global beauty market, followed by North America (24%), Western Europe (18%).

Dermatologist and Yuan Li Aesthetic Medical Group founder Dr Grace Liao Yuan Li said the beauty market is known as the fifth largest “consumption hotspot” after real estate, automobiles, electronic communications and tourism. The Southeast Asian market has one of the highest growth rates in the world.

“Skincare products account for 40% of the overall beauty market share and contribute nearly 60% to the growth of the global beauty market,“ she said at the “Beauty and masks: Taiwan Excellence online product launch” on Wednesday.

In Southeast Asia’s beauty market, skincare sales accounted for 28.01%, followed by hair condition (14.81%), makeup perfume (20.32%) and others (36.86%).

Indonesia accounts for the largest proportion (35.53%) of the beauty market in Southeast Asia, followed by Thailand (21.60%), Vietnam (12.86%), Taiwan (11.96%), Malaysia (2.48%) and others (15.77%).

Although most consumers prefer to shop through traditional channels, as traditional sales constitute 91.36% of the beauty sales market share in major regions of Southeast Asia, beauty brands are being forced into take the digital transformation to overcome the Covid-19 crisis.

Liao revealed that essence and lotion saw the highest increase among the attributes of skincare products in the first half of 2020.

“In the future, the main focus of skin improvement will be on face care and body care,“ she said.

Meanwhile, five Taiwan Excellence Award winners Perfect Corp, ShannHonq, O’right, Shinybrands and Annie’s Way from the beauty industry demonstrated their most innovative products during the online event.

The event also covered how brands passed global standards, including the halal or the Indonesian Food and Drug Authority (BPOM) certifications, which are essential for entering Southeast Asian markets.

The event, which was jointly held by Taitra and the Taiwan’s Bureau of Foreign Trade, attracted over 3,000 views online from countries including Malaysia, India, Indonesia, the Philippines, Singapore and Thailand.

More events will be held by Taiwan Excellence that focus on medical products, including eye care, assistance devices for the elderly and dentistry.

source https://www.thesundaily.my/business/beauty-products-from-taiwan-unmasked-LY3724386

CIMB Q2 net profit lower at RM277.08m, affected by modification loss

PETALING JAYA: CIMB Group Holdings Bhd’s net profit for the second quarter ended June 30, 2020 fell 81.6% to RM277.08 million from RM1.51 billion a year ago affected by the challenging economic environment caused by Covid-19, which led to modification loss arising from the moratorium given to borrowers, as well as elevated provisions due to macroeconomic factors and specific credit provisioning.

Revenue declined 13.5% to RM3.87 billion RM4.47 billion due to the impacted of the modification loss on NII and lower NIM during the period.

For the first half period ended June 30, 2020, its net profit was 70.9% lower at RM785.00 million against RM2.70 billion last year, while revenue declined by 7.3% to RM8.01 billion RM8.63 billion primarily due to a 27.6% drop in non-interest income (NOII) to RM1.86 billion versus RM2.57 billion in H1’19 due to lower fee and trading income in line with weaker economic activity.

However, net interest income (NII) grew by 1.4% YoY to RM6.15 billion, showing solid momentum despite the modification loss for the period and slight decrease in net-interest margin (NIM) to 2.29%. Excluding the modification loss, the group’s H1’20 NIM was only 7bps lower at 2.39%.

This translates to a lower annualised return on average equity of 2.8% and net earnings per share of 7.9 sen.

The group’s underlying business however, remains resilient with positive growth in gross loans and deposits and significant CASA growth. CIMB also outlined its intention to undertake rigorous cost optimisation measures and proactively strengthen its balance sheet in order to mitigate the impact of the challenging economic environment. The group’s capital position remains strong with its common equity tier 1 (CET1) ratio at 12.9%, backed by healthy liquidity support.

CIMB group CEO Datuk Abdul Rahman Ahmad said the subdued performance in Q2’20 came within expectations and was largely attributed to the impact of Covid-19.

“Moving ahead, we expect continued weaker performance for the remainder of 2020 in line with uncertain economic conditions, as we recognise elevated provisions arising from the impact of macroeconomic factors under MFRS9 and take impairments on specific accounts outside Malaysia to strengthen our financial position. Our underlying business remains resilient, loans and deposits grew 3.9% and 7.8% respectively, driving NII to grow by 6% YoY, excluding modification loss impact.

“To mitigate the impact of the challenging economic environment, we aim to aggressively rationalise cost. Cost on an absolute basis has already declined by 3.3% for H1’20, and we target an absolute cost reduction of around RM500 million or 5% for full year 2020. The group continues to be well-capitalised to withstand shocks through our prudent approach with a strong CET1 ratio and liquidity coverage ratio remaining comfortably above 100%,” Abdul Rahman added.

Abdul Rahman said the short term economic outlook will remain challenging. In recognition of the new challenges posed by a fluid and uncertain economic landscape, it is recalibrating its mid-term Forward23 plan to ensure the group is well positioned to take advantage of economic recovery.

“In the meantime, the group will continue to be prudent and maintain the utmost discipline in managing both risk and asset quality. Our priority remains on supporting customers affected by the pandemic, especially in Malaysia, as we approach the end of the blanket moratorium in September. We are committed to continue providing extended relief and support to affected customers with CIMB’s Targeted Assistance Programme. These customised relief options are aimed at providing temporary breathing space to help our customers get back on their feet again.”

As at end-June, CIMB group’s Covid-19 financial assistance initiatives have benefitted over 1.25 million retail customers and around 16,000 SMEs and corporate clients in terms of cash flow alleviation. The group’s support for affected customers in Malaysia will continue post-moratorium via its Targeted Assistance Programme, in line with the government’s extended Covid-19 relief initiatives.

source https://www.thesundaily.my/business/cimb-q2-net-profit-lower-at-rm27708m-affected-by-modification-loss-FF3722171

DRB-Hicom sees RM306m net loss in Q2 from MCO constraints

PETALING JAYA: DRB-Hicom Bhd posted a net loss of RM306.08 million for its second quarter ended June 30, 2020 due to weaker performance of its automotive and services segment due to the impact of the movement control order (MCO) and the Covid-19 pandemic, foreign exchange losses, recognition of modification loss from the financing moratorium as well as impairment losses.

Its revenue stood at RM2 billion.

The group stated that there were no comparable quarter for its Q2’20 result following the change of its financial year end from March 31 to December 31.

According to its Bursa filing, DRB-Hicom’s automotive segment was significantly affected by the temporary business operation suspension from mid-March to early May during the MCO.

Its services segment which comprises banking and postal & logistic businesses were also affected by the containment measure despite being classified essential services, while the property segment’s revenue was affected by the temporary closure of construction sites due to the imposition of the MCO.

Moving forward, the group noted that the recovery efforts by its individual businesses are ongoing and should be reflected in its performance in the second half of the year.

For its automotive business, Proton sales have continued to rebound with July 2020 monthly sales reaching 13,216 units, the highest monthly sales since June 2012.

Despite the challenging environment, DRB-Hicom stated that its logistics & postal services business, Pos Malaysia’s on-going transformation efforts will augment the improved tariff rates approved earlier in the year, and the growing demand for e-commerce.

Meanwhile, its other business will continue to adapt to the ‘new normal’ to ensure financial sustainability, against the backdrop of changes in customer and consumer behaviours.

The group outlined that due to the fears of the pandemic and its expected subsequent waves coupled with the potential of a further weakening economy globally, it remains cautious on the challenging financial year ending December 31, 2020.

Notwithstanding the above, it continues to take steps to proactively manage the businesses to ensure that the long-term prospects remain stable, which include on-going cost management and efficiency improvement efforts across the organisation.

In the first half of the year ended June 30, 2020 the group posted a net loss of RM479.36 million and a revenue of RM4.74 billion

source https://www.thesundaily.my/business/drb-hicom-sees-rm306m-net-loss-in-q2-from-mco-constraints-XF3722154

Public Bank Q2 earnings impacted by modification loss related to Covid-19 relief measures

PETALING JAYA: Public Bank Bhd net profit in the second quarter ended June 30, 2020 fell 24.8% to RM1.00 billion from RM1.33 billion a year ago mainly due to the one-off net modification loss related to Covid-19 relief measures amounting to RM498.4 million, coupled with the negative effect of Overnight Policy rate (OPR) reductions during the period.

Its revenue dropped 15.3% to RM4.74 billion versus RM5.60 billion in the same quarter last year.

For the first half year ended June 30, 2020, its net profit decreased 15.0% to RM2.33 billion from RM2.74 billion mainly attributed to a one-off net modification loss amounting to RM498 million in the second quarter of 2020, arising from the Covid-19 relief measures offered to individuals and businesses.

Excluding the modification loss, the group’s net profit declined by 1.2% in the first half of 2020, as

compared to the previous corresponding period in 2019.

Its revenue was 8.2% lower at RM10.25 million against RM11.17 million in the previous year’s corresponding period.

Public Bank founder and chairman emeritus Tan Sri Dr Teh Hong Piow (pix) said the group recorded a net return on equity of 10.7% in the first half of 2020. Excluding the one-off modification loss effect, the group’s net return on equity would have been 12.4%.

In addition to the modification loss incurred in respect of the Covid-19 related relief measures, the group’s profitability was also affected by the compression in net interest margin due to the reductions in OPR, and higher provisions set aside for the expected increase in impaired loans due to the pandemic. However, the adverse impact on profitability was mitigated by the continued expansion of the group’s loan and deposit portfolio, and higher non-interest income.

“In the first half of 2020, the group registered continued expansion in loans, albeit at a more moderate pace. The group’s total domestic loans grew at an annualised rate of 2.6%. On deposit-taking, the group’s total domestic customer deposits posted an annualised growth rate of 3.3%. The group’s funding position remained stable with a healthy liquidity coverage ratio of 145.7% as at the end of June 2020.”

Non-interest income continued to complement the group’s profitability. In the first half of 2020, the group’s non-interest income increased by 8.2%, mainly arising from unit trust business, as well as higher investment and brokerage income.

Despite the effect of the modification loss and reductions in OPR, the group’s cost-to-income ratio of 37.9% in the first half of 2020 remained significantly better than the domestic banking industry’s cost-to-income ratio of 44.7%.

“On asset quality, the group’s gross impaired loan ratio stood at 0.4% as at end-June 2020, which remained well below the banking industry’s gross impaired loan ratio of 1.5%. The group’s loan loss coverage ratio remained high at 158.7%. Including the RM1.9 billion regulatory reserves that the group had set aside, its total reserves for loan losses would be higher at 301.7%.”

As at the end of June 2020, the Public Bank’s common equity tier 1 capital ratio, tier 1 capital ratio and total capital ratio further strengthened to 14.0%, 14.0% and 17.2% respectively. The group’s liquidity coverage ratio also stood at a healthy level of 145.7%.

Teh said as part of its prudent capital management to conserve capital and further strengthen its capital position, the board of directors has decided to reassess its dividend plans at year end upon finalisation of the group’s full year results.

On the group’s strategy going forward, Teh said the group will continue to focus on its organic growth strategy in retail and commercial banking. With the various measures taken to provide financial assistance to SMEs and support home ownership, the group is of the view that there is still demand for financing.

“However, as the outlook remains uncertain, the group will remain cautious and place greater focus on risk management in its pursuit of business growth. In addition, prudent cost management will remain important and the group will continue to explore ways to further enhance its operational efficiency and productivity.”

source https://www.thesundaily.my/business/public-bank-q2-earnings-impacted-by-modification-loss-related-to-covid-19-relief-measures-XY3717990

RHB sees 35% hit to net profit from one-off net modification loss

PETALING JAYA: RHB Bank Bhd saw its net profit decline 34.9% to RM400.77 million in its second quarter ended June 30, 2020 from RM615.41 million reported in the corresponding period of the previous year attributed to a one-off net modification loss relating to the loan moratorium and high allowances for credit losses.

Revenue for the period stood at RM3.27 million, a 4.2% fall from RM3.42 billion reported previously.

According to the group’s Bursa disclosure, its group retail banking operations saw a pre-tax profit of RM477.5 million in the first six month of the year ended June 30, 2020, 10% lower than the previous year’s corresponding period due to higher allowances for credit losses on loans and lower non-fund based income, partially offset by higher net fund based income and lower operating expenses.

Its group business banking segment pre-tax profit saw a 33.6% decline year-on-year (yoy) to RM170.7 million for the period mainly due to higher allowances for credit losses on loans and lower non-fund based income, partly offset by higher net fund based income and lower operating expenses.

Meanwhile, RHB’s group corporate & investment banking operations reported a 17.4% yoy improvement in pre-tax profit to RM336.3 million, a 17.4% on the back of higher net income, lower operating expenses and lower expected credit losses on loans, partially offset by higher impairment losses on other financial assets.

Its overseas operations, RHB Bank Singapore posted a 39% yoy higher pre-tax profit of SG$8.8 million attributed to higher non-fund based income and lower operating expenses, partially offset by higher expected credit losses on loans and other financial assets and lower net fund based income.

On the whole the group’s gross loans and financing grew by 4.9% yoy in 1H’20 to RM180.8 billion, mainly supported by growth in mortgages, SME and Singapore operations, while its domestic loans and financing grew 3.4% year-on-year.

Its customer deposits increased by 7.8% yoy to RM199.4 billion, largely attributed to growth in CASA and fixed deposits with its liquidity coverage ratio (LCR) remained healthy at 141.5%.

RHB group managing director Datuk Khairussaleh Ramli (pix) noted that the bank is not spared from the effects of the pandemic but remains committed to assist its customers, absorbing the net modification loss arising from the implementation of the loan repayment moratorium in the first half of 2020.

“The outlook remains challenging but in the medium term, we remain steadfast in driving our FIT22 five-year strategy, making the necessary adjustments to our key initiatives to meet the changing customer behaviour and respond to the demands brought about by Covid-19,” he said in a press release.

“We are confident that we will be able to navigate the group through these unprecedented economic challenges,”

Khairussaleh also stated that the group has taken a prudent stance of not declaring any interim dividend but will revisit this at year end when there is better visibility on the impact and outlook.

In the first half of the year ended June 30, 2020, the group posted a net profit of RM971.65 million, a 22% decline from RM1.25 billion reported previously in the first half of the previous year.

Meanwhile, its revenue saw a 3.9% reduction to RM6.50 billion from RM6.77 billion reported previously.

source https://www.thesundaily.my/business/rhb-sees-35-hit-to-net-profit-from-one-off-net-modification-loss-HY3717922

TNB’s net profit shrinks 41.5% from higher taxes in Q2

PETALING JAYA: Tenaga Nasional Bhd’s (TNB) net profit for its second quarter ended June 30, 2020 shrank by 41.5% to RM653.3 million against RM1.12 billion reported in the same quarter of the previous year mainly due to a higher tax expense.

Revenue for the quarter stood at RM10.89 billion, a 15.4% decline from RM12.88 billion reported previously.

According to the group, electricity sales for the first half ended June 30, 2020 was affected by the closure of business premises during the movement control order (MCO), moderating to 53,535.7 GWh compared to 58,521.1 GWh registered in the same period last year.

However, electricity demand is showing an uptrend with peak demand recorded at 17,484 MW in June, 17,724 MW in July, and 18,307 MW in August.

TNB’s president and CEO Datuk Seri Amir Hamzah Azizan commented that the country is showing positive signs of economic recovery following the reopening of industrial and commercial sectors during the recovery movement control order (RMCO), which is also reflected by the upturn in electricity demand.

“We expect the positive trend to continue and stabilise in the second half of the year,” he said in a statement.

In regards to its outlook, the group noted that the Malaysian economy contracted by 17.1% in Q2’20 due to the containment measures to curb the Covid-19 pandemic which restricted production and consumption activities.

Subsequently, the Malaysian economy is expected to recover in the second half of the year as the economy reopens and external demand improves, underpinned by the rebound in key indicators wholesale and retail trade, industrial production, gross exports and electricity generation.

Against the challenging backdrop, TNB’s board foresees a prospect of a gradual recovery on its performance for the remaining quarters of the financial yea, underpinned by the improving business activities momentum aided by the timely rollout of the government’s stimulus package under its Penjana economic recovery plan.

The group has also taken prudent measures in terms of its operational and financial requirements to ensure it remains resilient.

For the cumulative six months period ended June 30, 2020 its net profit stood at RM1.37 billion, 48.7% lower than RM2.67 billion reported in the same period of the previous year.

Meanwhile, its revenue slipped by 13.7% to RM22.55 billion from RM26.12 billion registered previously.

Despite the challenging environment, TNB continues to honour its dividend policy, rewarding shareholders with a RM1.26 billion interim dividend payout which translates to dividend per share of 22 sen.

source https://www.thesundaily.my/business/tnb-s-net-profit-shrinks-415-from-higher-taxes-in-q2-EX3716600

Knowledge-based economy key for Malaysia to reach developed nation status

PETALING JAYA: As Malaysia approaches its 63 year of independence, it needs to continue its transformation towards becoming a knowledge-based economy to achieve its status as a developed nation, according to Asia Pacific Investment Bank (APIB) CEO Chris Wang.

He stated that the country’s economic development has been stable compared to its Southeast Asian peers but several constraints remain for it to break through the middle-trap and become an advanced country.

For instance, Malaysia does not have a large consumer base such as the US, China and Japan to help propel the country to become an advanced nation.

“There has always been only one option for a small country like Malaysia to achieve such a goal, which is to develop a knowledge-based economy that possesses advanced knowledge, instead of relying only on natural resources, that is unique and valuable,” Wang said in a statement today.

For a knowledge-based economy, he pointed out that education, research and development are its main sectors, while talent and human resources are the most important assets.

In addition, a key driver behind a knowledge-based economy is an open financial market that could help the country attract talents, encourage development and innovation.

The CEO highlighted an open financial market could be achieved through continuous development and further opening of Malaysia’s Islamic finance.

“It is vital for Malaysia to open up its Islamic financial market further to attract talents and encourage technological advancement. It will benefit the service and manufacturing industries of the country,” he explained.

In regards to strategic planning of the economy, Wang lauded the efforts made by the government and expressed that the APIB wants to assist the country to open up its Islamic finance industry further.

He noted that the objectives of Malaysia’s economic planning are clear but there is room for adjustment particularly in terms of Islamic finance and capital market openness.

“For instance, the country should give full support to foreign Islamic entities including financial companies to enter its capital market. We believe this will allow more high technology businesses and innovative companies to set up their bases here.”

APIB noted that there are many foreign enterprises from China and elsewhere looking for cross-border investment and opportunities to enter the Islamic market to which Malaysia is in a good position to attract these companies and bring their advanced science and technological knowledge and capital into the country.

Furthermore, with the adoption of Industry 4.0 by countries and businesses worldwide, the existence of high-tech enterprises will support such a transformation process.

Wang stated that the Islamic finance industry is at a turning point and the industry players need to speak its mind and voice its demand for the industry to open up further.

“When this happens, it will attract worldwide attention,” he said.

source https://www.thesundaily.my/business/knowledge-based-economy-key-for-malaysia-to-reach-developed-nation-status-GX3716080

Malaysia’s exports up 3.1% in July, trade surplus at record high

PETALING JAYA: Malaysia’s exports increased 3.1% year-on-year (y-o-y) to RM92.5 billion in July 2020, marking the second highest export value ever registered, after RM97.1 billion posted in October 2018.

Chief statistician Malaysia Datuk Seri Dr Mohd Uzir Mahidin said July’s export growth represents two consecutive months of growth.

Re-exports was valued at RM20.8 billion registering an increase of 15.6% y-o-y and accounted for 22.5% of total exports. Domestic exports decreased marginally by 0.1% to RM71.7 billion.

“In contrast, imports valued at RM67.4 billion, declined by 8.7% y-o-y, resulting a trade surplus of RM25.1 billion, widened by 57.5% compared to July 2019. This was the largest trade surplus ever recorded thus far. Meanwhile, Malaysia’s total trade stood at RM159.9 billion, declined by 2.2% compared to the same month last year,“ Uzir said in a statement today.

The expansion in exports was attributed to higher exports to the US (+RM2.5 billion) and China (+RM1.9 billion). However, exports to the United Arab Emirates decreased by RM467.2 million.

Lower imports were mainly from Korea (-RM1.4 billion), China (-RM1.4 billion), the European Union (-RM1.2 billion) and Australia (-RM1.0 billion). However, imports from India registered an increase of RM889.7 million.

The main products which contributed to the expansion in exports were electrical and electronic products (+RM3.3 billion), rubber products (+RM1.9 billion) and palm oil and palm oil-based agriculture products (+RM1.6 billion). While decreases in imports were noted for transport equipment (-RM1.5 billion), chemical and chemical products (-RM1.4 billion), machinery, equipment and parts (-RM1.1 billion) and crude petroleum (-RM1.1 billion).

Meanwhile, the decrease in imports by end use was attributed to intermediate goods and capital goods. Imports of intermediate goods dropped by 17.3% or RM6.7 billion to RM32.2 billion. Capital goods declined by 19.7% or RM1.7 billion to RM6.7 billion. Imports of consumption goods registered an increase of 0.1% to RM6.4 billion.

source https://www.thesundaily.my/business/malaysia-s-exports-up-31-in-july-trade-surplus-at-record-high-YB3715809

Dollar buoyed by yields surge jump after Fed’s inflation shift

TOKYO: The dollar held gains against major currencies on Friday, after the Federal Reserve's aggressive new strategy to lift employment and increased tolerance for higher inflation pushed U.S. bond yields up.

The dollar's index rose against six major currencies and was last trading at 93.061, turning around a sharp decline seen on Thursday.

Speaking at the Fed's Jackson Hole symposium, which was held virtually this year, Chair Jerome Powell said the central bank will seek to achieve 2% inflation on average, so that periods of super-low inflation would likely be followed by an effort to lift inflation "moderately above 2% for some time," and to ensure economic recovery and job creation.

Following Powell's comments, the dollar initially fell sharply against the yen and the euro, but reversed as longer-term U.S. Treasury yields bounced back to their highest levels in months.

"Since FOMC meeting in June, the treasury yields have declined and the dollar fell, but I think that will not be the case for the time being, especially after the Fed's speech. The market is more likely to see higher treasury yields," said Masafumi Yamamoto, chief currency strategist at Mizuho Securities in Tokyo.

The benchmark 10-year yield, which rises when bond prices fall, rose to 0.7700% in Asian trade, a level unseen since June 16.

"It's clear we saw a 'buy the rumour, sell the fact' play out, notably in U.S. Treasuries, which have led broad market moves," said Chris Weston, Head of Research at brokerage Pepperstone in Melbourne.

"The move higher in Treasury yields post-Powell did promote a USD rally, although we find it flat on the day, with a mixed picture across the well-traded FX pairs."

The euro changed hands at $1.18155, after almost hitting last week's low of $1.17545 overnight.

The greenback rose to 106.695 against the safe-haven yen, edging near this month's high of 107.05.

Traders in the yen now shift their focus to Japanese Prime Minister Shinzo Abe's news conference later in the day, amid growing concerns over his health.

Ruling party officials have said Abe's health is fine, but his recent hospital visits, one of which ran nearly eight hours, have fanned speculation whether he will be able to continue in the job until the end of his term in September 2021.

The offshore yuan stood at 6.8819 per dollar.

The British pound was little changed at $1.3193, after hitting its highest since Dec. 31 of $1.3284 on Powell's comments.

The Australian dollar was changing hands at $0.7264 , while the kiwi stood at $0.6643 per dollar. - Reuters

source https://www.thesundaily.my/business/dollar-buoyed-by-yields-surge-jump-after-fed-s-inflation-shift-IB3715208

Oil drifts down as U.S. producers, refiners avoid worst of storm

MELBOURNE: Oil prices fell on Friday as a massive storm raced inland past the heart of the U.S. oil industry in Louisiana and Texas without causing any widespread damage to refineries.

U.S. West Texas Intermediate (WTI) crude futures fell 6 cents, or 0.1%, to $42.98 a barrel as of 0202 GMT, adding to overnight losses.

However WTI is on track to rise 1.5% rise this week, for a fourth straight week of gains.

Brent crude futures for October, set to expire on Friday, fell 2 cents to $45.07 a barrel, heading for a weekly gain of 1.6%. The more active November contract rose 1 cent to $45.61.

Hurricane Laura hit Louisiana early Thursday with 150 mph (240 kph) winds, damaging buildings, knocking down trees and cutting power to more than 650,000 people in Louisiana and Texas, but refineries were spared from feared massive flooding.

"Unless there is any lasting damage to oil production infrastructure, it would not be a surprise to see oil trade down a bit after the storm as damage assessment continues," AxiCorp market strategist Stephen Innes said in a note.

U.S. producers had shut 1.56 million barrels per day of crude output, or 83% of the Gulf of Mexico's production, while nine refineries had shut around 2.9 million bpd of capacity, or 15% of U.S. processing capacity, ahead of the storm.

Late on Thursday, the Port of Houston, the top U.S. crude oil export hub accounting for about 600,000 barrels per day of shipments, was in the process of reopening to commercial shipping late Thursday.

The earlier closures of Houston Port, Beaumont and Port Arthur were expected to reduce seaborne crude export capacity by nearly 1 million bpd, data intelligence firm Kpler estimated, based on average figures over the past four months.

In refining, Exxon Mobil Corp was preparing to restart units at 369,024 bpd Beaumont, Texas refinery, sources familiar with plant operations said.

"Limited refinery damage and the quick resumption of capacity is good news for crude oil demand, although for now that is not reflected in the market," ING Economics said in a note. - Reuters

source https://www.thesundaily.my/business/oil-drifts-down-as-u-s-producers-refiners-avoid-worst-of-storm-IB3715129

PetroChina posts 29.98b yuan first-half loss, pledges near-zero emissions by 2050

SINGAPORE/BEIJING: PetroChina Co pledged yesterday to cut emissions to near zero by 2050, as it reported a plunge to a first-half net loss of 29.98 billion yuan (RM17.99 billion) on lower oil prices and a hit to demand from the CovidD-19 crisis.

Asia's largest oil and gas producer vowed to boost clean energy investments over the next five years, like global peers like BP and Total, in an effort to tackle climate change.

In the company's first mention of a greenhouse gas emission target, company president Duan Liangwei said PetroChina aimed for near-zero emissions by 2050, and planned to invest in geothermal, wind and solar power, as well as pilot hydrogen projects.

The firm plans to spend 3-5 billion yuan annually on sectors including solar, hydrogen and natural gas power generation in the first few years of the 2021-2025 period, rising to 10 billion yuan a year, said another planning executive.

The first-half loss compares with a profit of 28.42 billion yuan a year earlier, according to the firm's filing to the Hong Kong stock exchange.

"The company faced unprecedented challenges in production and operations because of the steep fall in global oil prices and shrinking domestic oil and gas demand," chairman Dai Houliang said in the filing.

First-half revenue fell 22% to 929 billion yuan.

Crude oil output rose 5.2% to 475.4 million barrels, while natural gas production was up 9.4% to 2.15 trillion cubic feet, as the state giant sustained domestic drilling to safeguard national supply security.

The robust growth in gas production was in line with a pledge earlier this year to priorities production of the lower-carbon fuel, the price of which is more insulated versus oil.

Reflecting the impact of lockdowns earlier in the year, China's second-largest refiner reported a 4.9% fall in refinery throughput to 568 million barrels.

Losses at its natural gas import business also deepened by 5.6% during the period to 11.83 billion yuan, as import costs exceeded state-capped domestic wholesale prices.

Gas imports for the second half of 2020 are expected to be stable or higher versus the 30.5 billion cubic metres imported in the first six months.

With the gradual recovery in oil prices, PetroChina had by the end of June largely recouped losses in crude oil inventories that totalled 5.3 million tonnes then, said a company finance officer.

Its first-half capital spending fell 11% year-on-year to 74.8 billion yuan. – Reuters

source https://www.thesundaily.my/business/petrochina-posts-2998b-yuan-first-half-loss-pledges-near-zero-emissions-by-2050-DX3707674

Honda goes small with first mass-produced all-electric car

UTSUNOMIYA (JAPAN): As many automakers bet on sedans and SUVs in the switch to electric vehicles (EV), Japan's Honda Motor Co Ltd has decided smaller is better for its first-ever mass-produced all-battery car.

The Honda e, released in Europe earlier this month, is a compact model meant solely for city driving. That contrasts with Tesla Inc, whose Model 3 sedan dominates the battery EV market, and others such as Audi AG and Hyundai Motor Co that have focused on SUVs with long driving ranges.

High battery costs have kept EVs at the premium end of the car market, and many automakers are developing bigger, all-purpose models, some of which can drive as far as 570 kilometres on a single charge.

The Honda e, however, has a battery capacity roughly half that of the Model 3, driving just 280 kilometres per charge.

"Most EVs use large capacity batteries, but often, much of that capacity goes unused during city driving," said Tomofumi Ichinose, chief engineer of the Honda e, told reporters earlier this week.

"We question whether larger vehicles are appropriate for urban areas, and believe that smaller is a better option for cities."

With a retro, ultra-compact design evoking Honda's classic N360 and N600 models from the 1960s, the two-door Honda e is intended as an upmarket city car, whose price tag of around €33,000 (RM163,000) is higher than Renault's Zoe ZE50, which is roomier and has a longer driving range.

Ichinose said Honda engineers had prioritised accurate and sharp handling to enable easy u-turns in narrow streets. Side mirrors have been replaced with interior displays to avoid bumps and scrapes during parking.

The model will only be sold in Europe and Japan, where it goes on sale in late October. Honda expects annual sales of only around 10,000 in Europe, and 1,000 at home, where it will also introduce the model into its car-sharing fleet.

The automaker said it had no plans to market the car in North America or China, its biggest markets where SUVs dominate. – Reuters

source https://www.thesundaily.my/business/honda-goes-small-with-first-mass-produced-all-electric-car-EX3707457

China’s Xpeng IPO raises US$1.5 billion for smart EV technologies, expansion

BEIJING/HONG KONG: Chinese electric vehicle (EV) maker Xpeng said yesterday it has increased the size of its US initial public offering (IPO) by more than a third to about US$1.5 billion (RM6.26 billion), as global investors race to companies promoting cleaner technology.

The IPO, which is the third major listing in New York by Chinese EV companies in the past two years, comes as share prices of EV makers including Tesla Inc and Nio Inc have surged in recent months.

Xpeng's chief executive He Xiaopeng, 42, who is also known for founding internet browser company UCWeb, said the company will focus on cars priced between 150,000 and 300,000 yuan (RM90,000 and RM180,000), a big mass-market segment in China, the world's biggest auto market.

Xpeng will use the funds for research and development, and to expand sales, He told Reuters in an interview.

The firm invested over 2 billion yuan in technology development last year, with around one-third on intelligent functions such as autonomous driving, He said.

Xpeng has sold over 20,000 electric vehicles, including new P7 sedans and G3 sport-utility vehicles. It builds cars in two factories in China. He said a third model would also be a sedan, but declined to comment on the company's future sales.

Xpeng said in a filing that it would price its shares at US$15 each, after initially indicating they would be sold for US$11 to US$13 when the deal was launched on Friday.

Xpeng, which counts Chinese e-commerce titan Alibaba and Xiaomi Corp among its backers, had initially targeted raising US$1.11 billion.

The Guangzhou-based automaker had planned to sell 85 million American Depository Shares (ADS) but increased that to about 99.7 million shares following higher-than-expected demand from investors, according to the filing. Investors now value Xpeng at over US$11 billion. Its shares were to start trading in New York yesterday.

There is also a so-called greenshoe option in which another 14.96 million shares can be issued within the next 30 days that would allow Xpeng to raise a further US$224.4 million.

BofA Securities, Credit Suisse, and JPMorgan are joint bookrunners for the offering. – Reuters

source https://www.thesundaily.my/business/china-s-xpeng-ipo-raises-us-15-billion-for-smart-ev-technologies-expansion-KX3707059

Walmart partners with Microsoft for TikTok bid

NEW YORK: Walmart Inc is partnering with Microsoft Corp in the software maker's bid for Bytedance-owned TikTok, the world's largest retailer said on Thursday.

ByteDance has been in talks to sell TikTok's North American, Australian and New Zealand operations which could be worth US$25 billion to US$30 billion (RM104.3 billion to RM125.2 billion) to companies including Microsoft and Oracle, people with knowledge of the matter have told Reuters.

US President Donald Trump has demanded that China's ByteDance, which owns TikTok globally, sell its US operations, citing potential national security risk due to the vast amount of private data the app is compiling on US consumers.

"We are confident that a Walmart and Microsoft partnership would meet both the expectations of U.S. TikTok users while satisfying the concerns of US government regulators," the retailer said in a statement.

The two companies are two years into a five-year partnership as part of the retailer's push for wider use of cloud and artificial intelligence.

Walmart said TikTok's integrated e-commerce and advertising capabilities in other markets "is a clear benefit to creators and users in those markets."

The retailer's shares were up about 4.4% on the news. – Reuters

source https://www.thesundaily.my/business/walmart-partners-with-microsoft-for-tiktok-bid-HY3706898

Prices slip as hurricane makes landfall in US oil industry heartland

NEW YORK: Oil prices fell on Thursday as a massive hurricane in the Gulf of Mexico made landfall in the heart of the US oil industry, forcing oil rigs and refineries to shut down.

Brent crude futures for October, which expire on Friday, fell 64 cents, or 1.4%, to US$45.00 (RM187.78) a barrel by 1532. US West Texas Intermediate crude futures fell 61 cents or 1.4% to US$42.78 (RM178.52) a barrel.

The storm hit Louisiana early Thursday with 150 mile-per-hour winds, damaging buildings, knocking down trees and cutting power to more than 400,000 people in Louisiana and Texas. Its storm surge was less than predicted, sparing inland plants from feared flooding.

Oil producers on Tuesday had shut 1.56 million barrels per day (bpd) of crude output, or 84% of the Gulf of Mexico's production, evacuating 310 offshore facilities.

At the same time, refiners that convert nearly 2.33 million bpd of crude oil into fuel, and account for about 12% of US processing, halted operations.

"On the one hand refinery shutdowns reduced the demand for crude oil, but at the same time Gulf of Mexico production was shut in, nearly offsetting each other," said Andrew Lipow, president of Lipow Oil Associates in Houston.

On Wednesday, the US government reported that crude oil stockpiles fell last week as exports soared the most in 18 months and refineries boosted production to the highest rate since March. Gasoline stocks also fell.

"It appears that the gasoline inventory reduction was due first and foremost to increased demand – gasoline (petrol) demand rose to a six-month high of around 9.2 million bpd," Commerzbank said. – Reuters

source https://www.thesundaily.my/business/prices-slip-as-hurricane-makes-landfall-in-us-oil-industry-heartland-BY3706751

Fed unveils major policy shift, to allow inflation to rise to maximise job growth

WASHINGTON: The US central bank rolled out a major policy change today that gives greater weight to its mission of maximising employment to benefit lower income families, while ratcheting back its emphasis on fighting inflation.

Federal Reserve chair Jerome Powell said the aim is to correct the "shortfalls" in achieving the Fed's goal of maximum employment and to recognise that, with changes in the global economy, a tight job market does not necessarily drive prices higher.

In practice, the change will keep borrowing rates low for much longer than in prior economic expansions – something President Donald Trump has loudly demanded, though for more political reasons.

"This change reflects our appreciation for the benefits of a strong labor market, particularly for many in low- and moderate-income communities," Powell said in a speech unveiling the policy.

The new policy makes it clear the central bank will allow inflation to stay above its 2.0% target "for some time" before officials will need to take action by raising interest rates.

The policy shift, though telegraphed in recent statements, is a significant change for the Fed and central banking in general, as inflation for decades has been the economic villain to be stamped out at every turn. It also represented a defeat for inflation hawks, though the change was approved unanimously.

Powell, in his speech to the annual Jackson Hole monetary policy conference, said the past 10 years since the 2008 global financial crisis has shown that warnings about low unemployment causing price increases were exaggerated.

"This change may appear subtle, but it reflects our view that a robust job market can be sustained without causing an outbreak of inflation," he told the virtual conference.

Prior to the coronavirus pandemic, the US unemployment rate had hovered near 50-year lows at 3.5%, which brought many people back into the workforce as firms struggled to fill open positions.

Inflation for years has stayed below the 2.0% target, and Powell said the goal now is "to achieve inflation that averages two percent over time," although he stressed that would not be tied "to a particular mathematical formula."

Advocates of the new regime have argued the central bank needed to let the inflation rate drift higher to average 2.0% over the long run.

The Fed chief grew passionate as he described the impact of hearing from low-income workers about the dramatic change the higher employment rate had on their communities in recent years.

Going forward, "In conducting monetary policy, we will remain highly focused on fostering as strong a labor market as possible for the benefit of all Americans," he said.

In addition, he pledged the Fed will use "our full range of tools to support the economy."

Responding to questions after the video speech, Powell sounded a note of optimism about the recovery from the pandemic, as well as a note of caution.

The pandemic hit a solid economy like a natural disaster, he said, noting that "there's is still a healthy economy under here, except for this area that's been directly affected by Covid."

But millions of workers in travel, hotels and restaurants have been directly impacted, which means "a couple of years of... relatively high unemployment."

People in those industries are "really going to struggle to find work... We need to support them."

As he has repeatedly stated, this will "take support from Congress" with programmes focused on education, training and healthcare – though lawmakers are currently deadlocked on the passage of another round of legislation to aid the economy.

"It's about all the things that enable people to get into the labor force and stay there and progress in their careers," Powell said. – AFP

source https://www.thesundaily.my/business/fed-unveils-major-policy-shift-to-allow-inflation-to-rise-to-maximise-job-growth-BA3705146

New US jobless benefits claims drop to 1 million in week to Aug 22

WASHINGTON: One million people in the United States made new claims for jobless benefits in the week ended Aug 22, the Labor Department said today, a slight improvement from the week prior.

The result was in line with expectations and a decrease of about 100,000 claims from the prior week, but the number of people filing under a special programme providing benefits to workers normally ineligible increased by about 82,000 to 607,806 in the latest week.

The US has seen tens of millions of layoffs since mid-March when businesses shut down to stop the coronavirus, though the initial wave has decreased since its peak later that month.

While there have been signs of rehiring, the weekly claims data has yet to fall below the level seen in the worst week of the global financial crisis.

The Labor Department data showed the rate of continuing claims, which measures people actually receiving benefits, declining by 0.2 points to 9.9% in the week ended Aug 15, the latest period for which data was available. The four-week moving average of new claims also ticked downwards to around 1.1 million, dropping about 107,000 in the week ended Aug 22.

All told, the data show 27 million people are still receiving some form of government assistance, a massive number.

And while Congress passed legislation early in the pandemic offering US$600 (RM2,503) in extra payments to the unemployed each week, that money ran out at the end of July and lawmakers have yet to agree on whether or not to extend it in a future bill.

"The decline in continuing claims for a fourth straight week is even more encouraging and is indicative of ongoing hiring, though it could also be reflective of individuals exhausting their benefits," said Rubeela Farooqi of High Frequency Economics.

However she pointed to the continuing high rate of new filings as evidence that layoffs may be ongoing, reflecting an underlying weak economy that may persist far longer than anticipated.

"The return to pre-pandemic levels of prosperity is set to be an uncertain and prolonged process," she said.

Separately, the Commerce Department released its second estimate of second quarter gross domestic product (GDP), which encompassed the months when businesses were shutdown to stop Covid-19 before tentatively reopening.

The new estimate shows GDP collapsing at an annualized rate of 31.7%, a slight improvement from the 32.9% initially forecast. But the figure was still the worst quarterly decrease since at least 1947. – AFP

source https://www.thesundaily.my/business/new-us-jobless-benefits-claims-drop-to-1-million-in-week-to-aug-22-NA3705078

Covid-19 pandemic shatters flourishing Paris tourism

PARIS: Tourism in Paris, one of the world's most visited cities, has plunged due to the coronavirus, sparking fears of mass closures for thousands of businesses that rely on eager visitors from home and abroad, its senior regional official said today.

Fourteen million fewer tourists explored the French capital in the first six months of 2020 compared to last year, Ile-de-France (Paris region) president Valerie Pecresse said.

"Tourism is an extremely precious economic activity for Ile-de-France which represents 500,000 jobs and 7% to 8% of regional growth," Pecresse said at a press conference.

"For the past four years, we had been announcing record number of visitors. So it is with great sadness that we have seen the pandemic shatter an extremely dynamic and flourishing sector," Pecresse added.

The income generated by tourism slumped to €3.8 billion (RM18.76 billion) over the first six months of 2020 from €10.2 billion in the same period last year.

As many planes remain grounded and long-haul flights limited, 68% fewer international tourists visited the city of lights, whereas the drop was of 54% for national tourists. Tourists from abroad tend to spend between twice and three times as much as those who live in France, meaning that the fall in income was that much sharper.

One of Paris' main attractions, the Louvre Museum, said today it had received 75% fewer visitors in July and 60% fewer in August compared to the same months in 2019. Nearly 80% of those who did come were from France, up from about 20% to 25% in other years.

Half of the Paris region's businesses expect an improvement of affairs by the end of October, thanks to French clients and tourists from neighbouring European countries.

But the 80% drop in reservations for long-haul flights means many entrepreneurs remain wary.

Pecresse insisted that Paris was a safe destination, and said she was dismayed to learn that Germany and Belgium had designated the region as risky.

The Ile-de-France region is working on a health security label, comprising very strict measures, to reassure foreign tourists, Pecresse added.

French Prime Minister Jean Castex announced today that face masks will become compulsory throughout Paris after a surge in cases. Masks are already obligatory on public transport nationwide and in most enclosed public spaces. – AFP

source https://www.thesundaily.my/business/covid-19-pandemic-shatters-flourishing-paris-tourism-HA3705180

Maybank believes OPR already near bottom, further cut unlikely

KUALA LUMPUR: Malayan Banking Bhd (Maybank) does not foresee the Overnight Policy Rate (OPR) being lowered further than the current 1.75%, but its group president and chief executive officer Datuk Abdul Farid Alias (pix) is not discounting the idea completely either.

“If such a rate cut were to happen, it is expected to have a negative impact of 1 to 2 bps on our net interest margin (NIM),” he told reporters at Maybank’s second-quarter (Q2) financial results briefing today.

For the financial year ending Dec 31, 2020, the group stated that its NIM guidance widened to 20 basis points (bps) which incorporated the latest rate cuts in first-half 2020 and a “day-one” modification loss impact from the blanket moratorium amounting to RM314 million.

On the whole, Abdul Farid opined that the worst is over for the bank as it posted a net profit of RM941.73 million for the second quarter ended June 30, a 51.5% decline from RM1.94 billion reported in the same quarter of the previous year attributed to outsized impairment losses reported for the period.

“Our results are a reflection of what we have gone through, namely the movement control order, which was necessary to contain the spread of the outbreak; the subsequent policies on interest rates as well as the proactive measure on the moratorium which was meant to help all of us to have the opportunity to regroup and redraw our plans,” he said.

In Q2’20, Maybank’s revenue slipped 9.7% to RM11.79 billion from RM13.05 billion posted for Q2’19.

Its net operating income increased 5.3% to RM12.37 billion on the back of a 27.8% rise in net fee based income, mitigating a 3.4% decline in net fund based income.

For the cumulative period, the group’s net profit fell 20.2% to RM2.99 billion from RM3.75 billion posted for the corresponding period of the previous year.

Meanwhile, the group’s revenue stood at RM25.01 billion from RM26.03 billion reported previously.

Abdul Farid said given the fluidity of the current environment owing to the pandemic, Maybank is not proposing an interim dividend for the six-month period, as it continues to prioritise capital and liquidity preservation.

Noting that the performance of the banking sector reflects the overall economy, he said the purchasing managers index – a measure of economic activity – for Malaysia and globally for June and July has been above the 50-point threshold, which indicated economic expansion.

At the same time, the mobility index for many countries has improved substantially which implies an improvement in economic activity.

“Based on the data we have seen, the economy has indicated signs of improvement, but these gains will be contingent on our ability to control the spread of the pandemic,” he said.

Abdul Farid noted should the approval for a clinical trial for a Covid-19 vaccine by AstraZeneca come to pass in October, this could arrest the impact of the pandemic on the global economy.

With regard to its operations in Singapore, the bank expects recovery in the second half of the year to be sluggish and choppy, dampened by slow business reopening, border controls and foreign worker shortages.

However, it noted that policy measures to ensure cash flows to affected corporations and households might assist non-performing loan risks better than in the previous cycles.

In Indonesia, Maybank said the leniency provided by the regulatory bodies for loan restructuring might help prevent non-performing loan spikes. However, such a measure is likely to have a negative impact on its NIM.

source https://www.thesundaily.my/business/maybank-believes-opr-already-near-bottom-further-cut-unlikely-JB3704748

KPJ Healthcare earnings for second quarter down 70%

PETALING JAYA: KPJ Healthcare Bhd’s net profit for the second quarter ended June 30, fell 70% to RM12.66 million from RM41.83 million a year ago, impacted by the lower activities in hospital operations during the movement control order (MCO) period coupled with several expenses, such as staff costs, interest on lease liabilities, borrowing costs and depreciation which remain fixed despite the decline in business activities.

Its revenue was 27% lower at RM626.62 million compared with RM860.27 million in the previous year’s same quarter.

For the six-month period, KPJ’s net profit dropped 37% to RM51.19 million from RM80.96 million, and revenue dropped 13% to RM1.51 billion versus RM1.74 billion last year.

For the financial year ending Dec 31, 2020, the group said it recognises that its performance will be adversely affected by the Covid-19 pandemic. The MCO, followed by conditional MCO and recovery MCO have made a significant impact to the operations of the group.

“The group had taken advantage from Prihatin Economic Stimulus Package and Penjana Economic Recovery Plan unveiled by the Malaysian government, which had provided the group immediate assistance such as wages subsidies programme, loan moratorium, tax incentives programme and rental rebates from Al-‘Aqar Healthcare REIT for the lease of land and buildings,” it said in its exchange filing.

It added that it remains cautiously optimistic and will continue to focus on disciplined management of costs and efficient operational cash flows strategy.

“For the second half of the year, the group will remain active in providing its core services and adding new areas of services such as tele-medicine and home visits while continuously educating the public on the implemented standard operating procedures at all our healthcare facilities to ensure Covid-19 risk are appropriately managed,” said KPJ.

source https://www.thesundaily.my/business/kpj-healthcare-earnings-for-second-quarter-down-70-BB3704388

Genting Malaysia in the red for second quarter

PETALING JAYA: Genting Malaysia Bhd (GenM) recorded a net loss of RM900.42 million for the second quarter ended June 30, from a net profit of RM416.48 million a year before, as its operating performance was severely impacted by the temporary closure of its resort operations worldwide amid the Covid-19 outbreak.

The group’s total revenue decreased by 96% to RM114.9 million in Q2’20, from RM2.6 billion previously.

For the first half, GenM saw a net loss of RM1.32 billion on a revenue of RM2.07 billion, from a net profit of RM684.77 million and turnover of RM5.34 billion during the same period last year.

In its Bursa filing, the group said the Malaysia leisure and hospitality business reported lower revenue by 64% to RM1.3 billion, primarily attributable to the unprecedented disruptions to its operations, as well as the exceptionally high hold percentage in the mid to premium players segment recorded in H1’19.

In the UK and Egypt, the group recorded a 52% decline in revenue to RM404.4 million, largely due to the suspension of its land-based gaming operations since mid-March. Similarly, operations in the US and Bahamas registered lower revenue by 61% to RM289.1 million mainly attributable to the decline in volume of business following the temporary closure of its resorts since mid-March 2020.

An interim single-tier dividend of 6 sen per ordinary share was declared.

Looking ahead, the group said overall pandemic-related fears and uncertainty may result in the slow recovery of the tourism, leisure and hospitality and gaming industries, but it has been heartened by the positive reception to the phased reopening of Resorts World Genting in Malaysia.

“The group will continue leveraging domestic demand to drive traffic growth and revenue whilst actively managing its cost base. Meanwhile, the group is focused on the completion of the outdoor theme park which is targeted to open in mid-2021,” it said.

In the UK, a majority of the group’s land-based gaming operations have recommenced since Aug 15, while in the US, Resorts World New York City (RWNYC) and Resorts World Catskills remain temporarily shuttered until further notice. Operations as Resorts World Bimini in the Bahamas have been re-suspended on renewed concerns from local authorities surrounding the pandemic.

“The group will continue to proactively manage its operating cost structure as it navigates through the dynamic situation in the US and Bahamas. In the meantime, development work for the expansion project at RWNYC is currently under way and the group is working towards the completion of the first phase of the new 400-room hotel, which is expected to open by the first quarter of 2021,” it said.

source https://www.thesundaily.my/business/genting-malaysia-in-the-red-for-second-quarter-YC3703760