Ringgit to test 4.17 resistance next week

KUALA LUMPUR: The ringgit is expected to trend lower and test the 4.17- resistance level next week, no thanks to worsening trade disputes between the US and China which is fuelling more risk aversion among investors.

FXTM market analyst Han Tan, however, said the 4.13-mark may come into play if risk appetite enjoys a rebound in the week ahead.

According to him, US President Donald Trump’s latest threat to slap more tariffs on Chinese goods could maintain the risk-off mood at the start of the new week.

“Signs of potential retaliatory measures out of China in the near-term will hurt market sentiment further and dampen demand for risk assets, including the ringgit, amid heightened concerns over intensifying US-China tensions,“ he told Bernama in an email recently.

Tan said the ringgit could also react to economic data releases out of the US and China, including the July US non-farm payrolls data released on Aug 2, as well as China’s July Manufacturing Purchasing Managers Index (PMI) and external trade figures due in the week ahead.

“Should global investors be fed with more signals that global growth is deteriorating further, that could spur more risk aversion,“ he said.

On the domestic front, Malaysia’s June industrial production print which declined by 1.8 per cent year-on-year he said, was unlikely to have a major effect on the local unit’s performance in the week ahead.

“This is because extraneous factors continue to hold sway over Asian currencies,“ he added.

For the holiday-shortened week, the ringgit traded lower against the US dollar as all eyes were on Federal Reserve’s interest rate cut decision, the US-China trade talks in Shanghai, as well as the crude oil price movements.

Early on Thursday, the Fed lowered its benchmark interest rate by a quarter-point to between two per cent and 2.25%, the first reduction since the 2008 financial crisis.

Trump has also threatened to impose an additional 10 per cent tariffs on the remaining US$300 billion (RM1.2 billion) worth of Chinese imports, effective Sept 1, 2019, after the two economic giants concluded their trade negotiations in Shanghai without any definitive deal.

The market was closed on Tuesday in conjunction with the installation of Al-Sultan Abdullah Ri’ayatuddin Al-Mustafa Billah Shah as the country’s 16th Yang di-Pertuan Agong.

On a Friday-to-Friday basis, the ringgit was lower at 4.1550/1600 against the greenback compared with last Friday’s 4.1180/1210.

The local currency also traded lower against most other major currencies, except against the pound.

It depreciated against the Singapore dollar to 3.0168/0215 from 3.0091/0118 in the preceding Friday, weakened versus the yen to 3.8864/8922 from 3.7905/7936 and fell against the euro to 4.6104/6176 from 4.5879/5920.

Vis-a-vis the pound, the local note climbed to 5.0379/0457 from 5.1211/1265 previously. — Bernama

source https://www.thesundaily.my/business/ringgit-to-test-4-17-resistance-next-week-BJ1209201

Bursa Malaysia expected to trade cautiously next week amid gloomy sentiment

KUALA LUMPUR: Gloomy global economic sentiment which has led to weaker growth, coupled with a protracted trade dispute between the US and China has taken the shine off on Bursa Malaysia.

As the local bourse continues its losing streak for the third consecutive week, analysts are expecting the benchmark FBM KLCI to trade cautiously next week, ranging between 1,620 to 1,640.

Inter-Pacific Securities Sdn Bhd head of research Pong Teng Siew said there is a high possibility the local bourse could be extending its losses next week due to lack of local catalysts.

“However, as the market is currently at a low level due to overselling, there may be a technical rebound and bargain hunting in between the week, buying on weaknesses especially in the banking stocks,” he told Bernama.

Pong said that as the current market situation remained cloudy due to global economic volatility, investors are shifting to a more stable investment such as real estate investment trusts (REITs).

The 25 basis point cut by the US Federal Reserve’s Federal Open Market Committee (FOMC) has taken a toll on the local financial index, slumping 353.08 points over the week to 15,964.87 on a Friday to Friday basis.

VM Markets Pte Ltd managing partner Stephen Innes said the US interest rate cut has caused investors to second guess Asia’s emerging markets equity strategy.

“Tagged together with the escalation in tariffs which has sent the market reeling as this hits at the heart of the regional growth markets, investors would be more cautious before putting their money in,” he said.

Meanwhile, the trade dispute between Washington and Beijing rages on when US President Donald Trump on Thursday slapped additional tariffs on Chinese goods including smart-phones, laptop computers and children’s clothing starting September 1, 2019.

Beijing has pledged retaliatory measures if the US continues to pile more tariffs to the remainder on its exports.

On a Friday to Friday basis, the FBM KLCI index erased 21.20 points to 1,626.76 from 1,647.96 last week.

Trading in the week was heavily influenced by the Wall Street performance, on negotiation between the US and China on their trade disputes, as well as the US FOMC meeting on interest rate decision.

The FBM Emas Index declined 181.63 points to 11,516.79, the FBMT 100 Index depreciated 174.66 points to 11,345.00 and the FBM Emas Syariah Index trimmed 133.97 points to 11,926.52.

The FBM 70 weakened 331.66 points to 14,356.22 and the FBM Ace Index shed 75.43 points to 4,689.34.

Sector-wise, the Financial Services Index slid 353.08 points to 15,964.87, the Plantation Index dipped 89.46 points to 6,689.17 and the Industrial Products and Services Index inched down 1.57 points to 154.22.

Weekly turnover fell to 10.06 billion units valued at RM8.25 billion versus 13.96 billion units worth RM9.90 billion last week.

Main Market volume decreased to 6.40 billion shares worth RM7.55 billion against 9.25 billion shares valued at RM9 billion.

Warrants turnover slid to 1.92 billion units valued at RM416.16 million versus 2.36 billion units worth RM486 million.

The ACE Market volume fell to 1.72 billion shares valued at RM264.95 billion from 2.34 billion shares valued at RM411.64 billion.

The local bourse and its subsidiaries were closed on July 30 in conjunction with the installation of Al-Sultan Abdullah Ri’ayatuddin Al-Mustafa Billah Shah as the country’s 16th Yang di-Pertuan Agong. — Bernama

source https://www.thesundaily.my/business/bursa-malaysia-expected-to-trade-cautiously-next-week-amid-gloomy-sentiment-CJ1209163

Ringgit breaches 4.15 mark against US dollar

KUALA LUMPUR: The ringgit began the month of August on the back foot, breaching the 4.15 mark against the US dollar for the first time since June this year.

At 6pm, the local unit lost 110 basis points to end at 4.1550/1600 against the greenback from Thursday’s close of 4.1440/1470.

FXTM market analyst Han Tan said the weaker ringgit was dampened by the firmer US dollar, fuelled by US Federal Reserve chairman Jerome Powell’s convoluted policy guidance, following the first US interest rate cut of 25 basis-point since 2008.

“Risk sentiment soured after US President Donald Trump threatened more tariffs on Chinese goods that could choke global trade further,“ he told Bernama in an email today.

In the face of such strong external headwinds, Tan opined that the downcast readings on Malaysia’s June external trade figures offered scant support for the ringgit.

The Ministry of International Trade and Industry, in a statement today, said Malaysia’s exports down 3.1% to RM76.17 billion in June 2019, with imports 9.2% lower at RM65.91 billion, bringing the total trade to RM142.1 billion, a 6% decrease compared with that of June 2018.

At the closing bell, the ringgit also traded lower against a basket of major currencies.

It slid against the Singapore dollar to 3.0168/0215 from 3.0134/0167 on Thursday and weakened against the yen to 3.8864/8922 from 3.7984/8021.

Vis-a-vis the pound, the local unit fell to 5.0379/0457 from 5.0126/0179 and it depreciated against the euro to 4.6104/6176 from 4.5741/5779 yesterday. - Bernama

source https://www.thesundaily.my/business/ringgit-breaches-4-15-mark-against-us-dollar-LI1208058

ECRL: Calls for tenders to local contractors to commence in Q4

PETALING JAYA: Calls for tenders to local contractors for the civil works packages of the East Coast Rail Link (ERCL) will begin in the fourth quarter of 2019, with a total of 331 local contractors shortlisted as potential tenderers, said Malaysia Rail Link Sdn Bhd (MRL).

This follows the call for submission of pre-qualification documents on May 29 and 30 by China Communications Construction Company Ltd (CCCC) to identify potential local subcontractors for the 40% civil works (excluding tunnel works) portion of the project.

“All shortlisted companies are expected to be notified in writing before end-August 2019 by CCCC who is the engineering, procurement, construction and commissioning contractor for the 640km ECRL project,” MRL said in a statement today.

MRL CEO Datuk Seri Darwis Abdul Razak (pix) said the tender packages to be issued for the 40% civil works would involve the 223km stretch from Dungun to Mentakab where the rail alignment has been finalised.

He said tenders for local contractors would continuously be called throughout the construction period of the ECRL and further tenders will be called once both the realignment from Kota Bharu to Dungun and new Southern alignment between Mentakab and Port Klang have been firmed up.

“Completion of the ECRL by end of 2026 also hinges on the effective participation of local contractors in ECRL’s civil works which includes earthworks, foundation works, structural works, soil improvement works and road works,” he added.

The pre-qualification exercise was opened to CIDB registered companies from grades G3 to G7 with a minimum two-star SCORE rating. A total of 1,321 Malaysian construction companies participated, of which 331 were shortlisted.

Of the 331 companies shortlisted, 164 are CIDB G7 companies and 69 are CIDB G4 companies, while 45 are CIDB G3 companies. The remaining companies that made the cut are 33 CIDB G5 and 20 CIDB G6 companies.

Of the 331 companies, 234 are Bumiputera companies. The shortlisted companies were evaluated based on track record, financial capabilities, technical personnel, and plant and equipment.

MRL and CCCC had signed a supplementary agreement on April 12, 2019, paving the way for the revival of the ECRL project. The new deal involves a reduction in construction cost to RM44 billion from RM65.5 billion while local participation of civil works rose to 40% from 30% previously.

Prior to the suspension of the project, local companies comprising suppliers, contractors and consultants were appointed by CCCC for preliminary works. These contracts were suspended following the suspension of the project on July 3, 2018.

“Nevertheless, with the resumption of the ECRL project, CCCC will honour the respective contracts and enable the local companies concerned to resume work,” said MRL.

MRL, a wholly owned subsidiary of the Minister of Finance Incorporated, is the project and asset owner of ECRL. Upon completion in December 2026, the rail network will link Kota Bharu to Putrajaya in about four hours.

source https://www.thesundaily.my/business/ecrl-calls-for-tenders-to-local-contractors-to-commence-in-q4-JD1207946

Bursa Malaysia ends lower, CI down 0.75%

KUALA LUMPUR: Bursa Malaysia ended trading on a weak note today in all index-linked counters, except the real estate investment trusts (REIT) index, and in line with regional peers who were dragged down by the lacklustre overnight performance of US markets, said a dealer.

The benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) further lost 0.75% or 12.31 points to finish at 1,626.76 from Thursday’s close of 1,639.07.

The FBM KLCI, which opened 7.68 points weaker at 1,631.39, moved between 1,623.66 and 1,631.42 throughout the day.

On the broader market, there were 697 losers to 209 gainers, while 341 counters remained unchanged, 650 untraded and 28 others suspended.

Turnover fell to 2.22 billion units worth RM1.76 billion from Thursday’s close of 2.45 billion units worth RM2.02 billion.

Inter-Pacific Securities Sdn Bhd head of research Pong Teng Siew told Bernama the sharp overnight drop on Wall Street was a surprise as the US-China trade dispute was thrust back into the spotlight.

“Investors were quick to develop an adverse reaction to US President Donald Trump’s tweet that he would impose an additional 10% tariff on US$300 billion in Chinese imports,” he said.

On Bursa, Pong said Malaysia’s trade data for June, which recorded a decline in exports and imports, also led some investors to move to the sidelines amid an increased weak global sentiment.

The Ministry of International Trade and Industry (MITI) in a statement today said Malaysia’s June trade contracted by 6% from the same month of 2018 to RM142.08 billion.

It said exports were down by 3.1% to RM76.17 billion, with imports 9.2% lower at RM65.91 billion.

Meanwhile, among heavyweights, Maybank, Public Bank and PChem fell four sen each to RM8.65, RM21.78 and RM7.43 respectively, Tenaga eased 18 sen to RM13.86 and IHH dipped three to RM5.73.

As for the actives, Netx was flat at 1.5 sen, KNM slid one sen to 39.5 sen and Ekovest dropped half-a-sen to 83.5 sen.

The FBM Emas Index shrank 95.28 points to 11,516.79, the FBMT 100 Index narrowed 91.28 points to 11,345.00 and the FBM Emas Shariah Index slumped 122.14 points to 11,926.52.

The FBM 70 was down 138.16 points to 14,356.22 and the FBM Ace lost 84.10 points at 4,689.34.

Sector-wise, the Financial Services Index gave up 82.50 points to 15,964.87, the Plantation Index trimmed 33.77 points to 6,689.17 and the Industrial Products and Services Index slid 1.03 points to 154.22.

Main Market volume narrowed to 1.32 billion shares valued at RM1.58 billion versus 1.52 billion shares worth RM1.83 billion on Thursday.

Warrants turnover increased to 506.77 million units worth RM122.91 million from 462.54 million units valued at M104.86 million.

Volume on the ACE Market fell to 385.79 million shares valued at RM55.37 million against 471.70 million shares worth RM84.90 million previously.

Consumer products and services accounted for 218.25 million shares traded on the Main Market, industrial products and services (253.84 million), construction (111.97 million), technology (105.01 million), SPAC (nil), financial services (45.27 million), property (77.94 million), plantations (15.74 million), REITs (24.91million), closed/fund (10,400), energy (296.09 million), healthcare (34.49 million), telecommunications and media (101.27 million), transportation and logistics (29.64 million) and utilities (15.02 million). - Bernama

source https://www.thesundaily.my/business/bursa-malaysia-ends-lower-ci-down-0-75-YD1207908

Maxis earnings hit by lower service revenue

PETALING JAYA: Maxis Bhd reported a net profit of RM397 million for the second quarter ended June 30, 2019, a 17% decline from RM478 million a year ago due to a 4.7% drop in service revenue to RM1.91 million from RM2.01 million a year ago.

Maxis said the lower service revenue was largely due to the termination of a network sharing agreement, decline in prepaid revenue generating subscriber (RGS) and an overall reduction in prepaid and postpaid average revenue per user (arpu), offset by growth in postpaid and home fibre subscribers.

“Postpaid service revenue for 2Q19 decreased by 3.7% in the second quarter to RM972 million compared to RM1.00 billion in 2Q18,” it said in a filing with Bursa Malaysia.

Meanwhile, its prepaid service revenue declined by 7.4% year-on-year to RM791 million from RM854 million on the back of a lower subscription base which was due to continued SIM consolidation, migration from prepaid to postpaid, and reduced Mobile Termination Rates (MTR).

Maxis also saw an additional 30,000 new fibre subscribers in 2Q19, bringing the total fibre subscriber base to 310,000.

During the quarter, it posted a revenue of RM2.20 billion against RM2.24 billion recorded a year ago, reflecting a 1.8% decrease.

For the first half of the year, the group recorded a net profit of RM806 million, a 19.5% decline from RM1 billion recorded in the corresponding period of the previous year while revenue for the period fell 1% to RM4.43 billion from RM4.48 billion a year ago.

Maxis declared a first interim dividend of 5 sen per share, to be paid on Sept 26, 2019. The entitlement date has been set on Aug 30, 2019.

Maxis CEO Gökhan Ogut (pix) said that the group is making headway in its converged ambitions with the launch of new fibre speeds, delivering smart solutions for enterprises and championing Industry 4.0 initiatives in line with the government’s digital economy agenda.

“The potential of 5G in a future of smart solutions is tremendous. To this end, our 5G live trials are progressing well,” he said.

source https://www.thesundaily.my/business/maxis-earnings-hit-by-lower-service-revenue-ND1207807

Larger trade surplus of RM10.3b in June as import contracts

PETALING JAYA: Malaysia’s imports contracted at a faster rate against export, resulting in a larger trade surplus of RM10.3 billion in June 2019.

According to Malaysia’s chief statistician Datuk Seri Dr Mohd Uzir Mahidin, Malaysia’s exports in June 2019 saw a decline of 3.1% to RM76.2 billion year-on-year (yoy), while re-exports stood at RM12.2 billion, reflecting a decrease of 22.3% yoy which accounts for 16.1% of total exports.

“However, domestic exports increased 1.7% or RM1.1 billion to RM63.9 billion. Imports also

registered a decrease of 9.2% yoy to RM65.9 billion,“ he said in a statement today.

Total trade for June stood at RM142.1 billion, reflecting a RM9.1 billion or 6.0% decrease from June 2018.

For the month, the main products which contributed to the decline in exports were electrical and electronic products (-RM1.8 billion) and timber and timber-based products (-RM305.9 million).

On the other hand, increases were recorded for crude petroleum (+RM752.2 million), refined petroleum products (+RM433.8 million), liquefied natural gas (+RM151.0 million), palm oil and palm oil-based products (+RM110.5 million) and natural rubber (+RM33.2 million).

“Meanwhile, the decrease in imports by end use was mainly attributed to capital goods

(-RM2.2 billion) followed by intermediate goods (-RM995.5 million) and consumption

goods (-RM318.4 million),” said Mohd Uzir.

The Department of Statistics also reported a marginal increase in exports in the second quarter this year, of 0.2% yoy to RM245.5 billion, while re-exports fell 26.7% yoy to RM38.2 billion, accounting for 15.6% of total exports.

For the quarter, domestic exports grew 7.5% to RM207.3 billion from the previous year.

However, imports registered a decrease of 1.2% yoy to RM215.3 billion.

source https://www.thesundaily.my/business/larger-trade-surplus-of-rm10-3b-in-june-as-import-contracts-FC1206575