Maybank ends FY19 with record profit of RM8.2b, pays 39 sen final dividend

PETALING JAYA: Malayan Banking Bhd posted a net profit of RM2.45 billion for the fourth quarter ended Dec 31, 2019, a 5.3% increase from RM2.33 billion recorded in the previous corresponding quarter, boosted by robust performances of its community financial services, Islamic banking and insurance & takaful segments.

This also came on the back of a net gain in investment income of RM185.5 million for the quarter, as compared to a net loss in investment income of RM352.6 million in Q4 18.

Revenue rose 6.1% to RM12.98 billion, from RM12.23 billion.

The group has proposed a final dividend of 39 sen per share, which together with the interim dividend of 25 sen per share, takes the full-year dividend to 64 sen per share.

This translates into a full-year dividend payout ratio of 87.8%, amounting to RM7.19 billion.

For the full year, Maybank’s net profit rose 1% to a new high of RM8.2 billion, from RM8.11 billion a year ago, while revenue was up 11.7% to RM52.84 billion, from RM47.32 billion previously.

The group achieved a record net operating income of RM24.74 billion for FY19 on the back of a 10.7% rise in net fee-based income and a 2.2% improvement in fund-based income, as a result of higher contributions from all business sectors led by the insurance & takaful business.

Group gross loans expanded 1.2% in FY19, contributed by a healthy growth in Malaysian operations, where it outpaced the industry with a 4.9% expansion

Group deposits, meanwhile, expanded 1.6%, in line with loans expansion, led by Singapore at 4.6% and Malaysia at 2.2%. The Singapore and Indonesia markets saw a decline by 3.9% and 8.2% respectively, mainly as a result of write-offs and repayments.

Consequently, net interest margin for FY19 was only marginally lower by 6 basis points to 2.27%, compared with 2.33% in FY18.

Gross impaired loan ratio was higher at 2.65% as at December 2019 against 2.41% in December 2018 amid challenging economic environment.

Maybank Group president and CEO Datuk Abdul Farid Alias said the group will aggressively seek selective growth opportunities, despite the overall cautious stance that is being seen across markets, especially with the prevailing concerns over the Covid-19 virus outbreak and other geopolitical issues.

“We will continue to focus on our digital agenda to help deliver greater efficiency and seek additional revenue streams for the future, while maintaining our emphasis on stringent risk and cost management to cushion the group from the uncertainties ahead.

“At the same time, we will closely monitor the current situation and ensure that our business continuity initiatives are able to mitigate the impact to our business,” he said in a statement.

At the noon break, Maybank’s share price gained 4 sen to RM8.37 on 1.6 million shares done.

source https://www.thesundaily.my/business/maybank-ends-fy19-with-record-profit-of-rm82b-pays-39-sen-final-dividend-YB2056032

Higher net income lifts AMMB Q3 earnings

PETALING JAYA: AMMB Holdings Bhd reported a 9.2% increase in net profit to RM382.15 million for the third quarter ended December 31, 2019 against RM349.88 million in the same quarter a year ago, underpinned by higher net interest income and other operating income.

Its revenue came in at RM2.37 billion, 3% higher than RM2.3 billion previously.

For the nine-month period, AMMB’s net profit also expanded 4.5% to RM1.09 billion from RM1.05 billion a year ago, with revenue rising 4.8% to RM7.11 billion from RM6.79 billion.

AMMB said in a filing with the stock exchange that its nine-month total income soared 9.1% to RM3.24 billion, driven by a 6.1% growth in net interest income and net interest margin of 1.93%.

Non-interest income also went up 14.9% on the back of strong fixed income trading gains and higher investment banking fee income. Customer deposits were broadly stable at RM105.7 billion.

However, the group recorded a net impairment charge of RM133.5 million, largely due to increased gross provisions charged for wholesale banking and business banking, coupled with lower recoveries from wholesale banking and retail banking.

Gross loans and financing increased 4.2% to RM104.5 billion, with higher impaired loan ratio of 1.71% versus 1.59% in FY19. Loan loss coverage ratio came in at 105.2%.

AMMB’s common equity tier 1 capital ratio was higher at 12.2% while total capital ratio stood at 15.6%.

Looking ahead, AmBank Group CEO Datuk Sulaiman Mohd Tahir said the overnight policy rate cut should provide positive impetus to the economy and the capital market.

“In tandem with a moderate economic outlook, the banking system loans growth is expected to grow around 4.3% for the calendar year 2020.”

“Barring any unforeseen circumstances, we expect the group to meet its FY2020 financial guidance to investors.”

At the midday break, AMMB’s share price was unchanged at RM3.78 on 598,000 shares done.

source https://www.thesundaily.my/business/higher-net-income-lifts-ammb-q3-earnings-LX2055940

PPI up 2.8% in January 2020

PETALING JAYA: The producer price index (PPI) for local production rose 2.8% to 107.3 in January 2020 as against 104.4 in the same month of the preceding year, driven by the index of agriculture, forestry & fishing (18.0%), mining (9.2%), electricity & gas supply (1.0%) and manufacturing (0.9%).

In contrast, the index of water supply recorded a decline of 1.2%.

Chief statistician Malaysia Datuk Seri Dr Mohd Uzir Mahidin said out of 1,063 items covered in PPI, 41.9% items showed an increase in January 2020 as compared to January 2019. On the contrary, 50.0% items showed a decline while 8.2% items were unchanged.

On a monthly basis, the PPI for local production registered a marginal decline of 0.1% in January 2020, attributed by the decline in the index of mining with 6.8%.

Conversely, the sectors which increased during this month were agriculture, forestry & fishing (3.8%), manufacturing (0.4%) and electricity & gas supply (0.1%). Meanwhile, the index for water supply was unchanged.

source https://www.thesundaily.my/business/ppi-up-28-in-january-2020-FX2055456

Malaysian exporters generates RM566m sales at Gulfood, Dubai

KUALA LUMPUR: The 103 Malaysian exporters that participated in the food and beverage (F&B) trade fair, Gulfood in Dubai recently, generated RM566 million in sales throughout the event held from Feb 16-20.

The Malaysia External Trade Development Corporation (MATRADE) in a statement today said throughout the five-day exhibition, Malaysian companies show cased a variety of F&B including coffee, tea & cocoa, ‘ready-to-eat’ meals, beverages, cooking oil, frozen food, sauce & paste, ingredients, and functional foods.

Malaysian brands, it said were exposed to over 80,000 trade visitors from around 150 countries.

Other government agencies that also coordinated the Malaysia Pavilion were Malaysian Palm Oil Council (MPOC), Federal Agricultural Marketing Authority (FAMA) and Majlis Amanah Rakyat (MARA) as well as the Department of Industrial Development and Research (DIDR), Sabah.

MATRADE’s trade commissioner in Dubai, Omar Mohd Salleh said Malaysian products were well accepted in the region due to its high-quality and globally accepted halal standards.

"We have been busy providing our facilitation to connect Malaysian exporters with serious foreign buyers. We hope that through active engagements at the Gulfood, the exports of Malaysian food and beverage products to this region will increase," he said.

In 2019, Malaysia’s exports of processed food and beverages to the Middle East & North Africa (MENA) region increased by 20 per cent to reach RM1.9 billion.

The United Arab Emirates (UAE) is Malaysia’s largest export destination in the region with a 27.5 per cent market share. - BERNAMA

source https://www.thesundaily.my/business/malaysian-exporters-generates-rm566m-sales-at-gulfood-dubai-XX2055415

Gross premiums for general insurance industry declines 0.8% in 2019

PETALING JAYA: The general insurance industry registered a decline of 0.8% in 2019 with total gross direct premiums of RM17.41 billion, according to the General Insurance Association of Malaysia (PIAM), as it anticipates the general insurance industry will continue to stagnate for 2020.

Motor remained the largest class with a market share of 48.3% in 2019, followed by fire at 19.3%.

Motor insurance recorded gross direct premiums of RM8.42 billion with a drop of 0.4%. This is despite an increase in total new vehicle sales in 2019. The local automotive industry recorded 604,287 units of total vehicle sales in 2019 compared to 598,598 units in 2018.

Motor insurance have been registering underwriting losses for more than 10 years. Average premium per policy has been on a downward trend since 2016 while overall costs of vehicle repairs have risen owing to increases in motor spare part prices amongst other factors.

In 2019, an underwriting loss of RM335 million was recorded with RM5.48 billion being paid out in motor claims. On a daily basis, this amounts to RM15 million per day paid out by motor insurers for property damage, bodily injury and vehicle theft.

A major factor is the high accident and fatalities nationwide. Statistics shows that Malaysia has one of the highest road accident and fatality rates in the region.

PIAM chairman Antony Lee said in the pricing of motor insurance premiums, it is important to reward the good risks and charge the bad drivers more. This means that a driver who is in a class that is more likely to experience road accidents should pay a higher insurance premium compared to a good driver with a clean record.

“PIAM is currently in discussion with the regulator Bank Negara Malaysia on the next phase of the motor tariff liberalisation to adopt a more equitable approach through the use of risk-based pricing models. There will be incentives for safe drivers with accident-free records,” Lee said in a statement.

In this way, PIAM hopes that the high risk drivers will be motivated to effect a change in their driving behaviour to enjoy the benefit of a lower insurance premium. The industry eagerly anticipates further liberalisation and look forward to the eventual opening up of the market.

Meanwhile, the number of stolen vehicles continued its downward trend in 2019 declining 21% from 13,581 to 10,729 vehicles for all classes. Since 2014, lesser vehicles have been stolen year on year.

Fire insurance grew 1.1% and maintained its position as the second largest class with gross direct premiums of RM3.37 billion. Marine aviation and transit insurance surged 5.3% with gross direct premiums of RM1.35 billion owing to a recovery in the offshore oil related sector. The miscellaneous class recorded a drop of 2.9% with gross direct premiums at RM2.08 billion.

Medical and health insurance declined 11.4% to RM 1.02 billion while personal accident insurance dipped 1.3% to RM 1.19 billion.

Medical claims have been on the rise owing to inflation and a host of other reasons. Malaysia has one of the highest medical inflation rates in Asean in the recent years. The expected increase in medical claims for 2019 was 13%.

A joint industry task force has been set up to better understand and address medical inflation. The critical issue for insurers and consumers is price transparency so that consumers can make informed choices on the cost of treatment.

Looking ahead, PIAM foresees that the Malaysian economy will experience weaker growth having recorded the lowest level of growth in the Q4 2019 at 3.6% since Q3 2009. Challenges in the operating and business climate remain. The current Covid-19 crisis will compound the situation further with a significant dampening impact.

source https://www.thesundaily.my/business/gross-premiums-for-general-insurance-industry-declines-08-in-2019-KX2055297

Datasonic surges after UMA reply

PETALING JAYA: Datasonic Group Bhd’s share price jumped as high as 17 sen or 16.35% to RM1.21 this morning on bargain hunting after it responded to an unusual market activity (UMA) query by Bursa Malaysia Securities Bhd yesterday.

Datasonic, whose trading was halted for an hour this morning, surged 10.58% to RM1.15 at 10.54am on 57.18 million shares done.

The company said it is not aware of any corporate development or any change that may account for the sudden sharp fall in the company’s share price.

“We are not aware of any rumour or report concerning the business and affairs of the group that may account for the trading activity. The company’s business is doing well as usual and there is no negative development affecting the company’s business and the fundamentals of the company remain strong and solid,“ Datasonic replied to the UMA query today.

It is seeking Bursa Securities to remove the company’s shares counter from the regulated short selling approved securities list and to request Bursa Securities to investigate any short-selling activity or manipulation of the company’s share price to protect the interest of the company and its shareholders.

Datasonic’s share price had slumped 36 sen or 25.7% yesterday. The stock tumbled as much as 36 sen or 30%, hitting limit down of 98 sen before settling at RM1.04 yesterday on 52.85 million shares done.

Datasonic has yet to release its latest quarterly results ended Dec 31, 2019. For the second quarter ended Sept 30, 2019, its net profit jumped 62.8% to RM13.86 million from RM8.52 million in the same quarter a year ago.

source https://www.thesundaily.my/business/datasonic-surges-after-uma-reply-HX2055081

Oil falls for fifth day as coronavirus spreads outside of China

TOKYO: Oil prices fell for a fifth day on Thursday to their lowest since January 2019 as a growing number of new coronavirus cases outside of China deepened fears that the global economy will slow and lower crude demand.

Brent crude was down 77 cents, or 1.4% at $52.66 a barrel at 0204 GMT. The contract earlier fell to its lowest since Jan. 4, 2019. West Texas Intermediate (WTI) futures fell by 80 cents, or 1.6%, to $47.93 a barrel. The contract earlier fell to its lowest since Jan. 2, 2019.

Brent prices have dropped 11% in the past five trading sessions through Thursday, the biggest five-day percentage loss since August 2019. WTI has declined 10.8% over the same period, also the biggest five-day percentage drop since August 2019.

On Wednesday, the number of new coronavirus infections outside China exceeded the number reported in China, the source of the outbreak, for the first time ever. Italy and Iran are emerging as new epicentres of the rapidly spreading illness.

President Donald Trump assured Americans on Wednesday evening that the risk from coronavirus remained "very low". However, Asian share markets fell on Thursday morning, as investors fear the coronavirus spread will disrupt the global economy as quarantines and other measures to halt its advance slow trade and industry.

"Speculations that coronavirus may spread in the United States prompted a series of fresh selling," said Kazuhiko Saito, chief analyst at Fujitomi Co.

If an outbreak "continues to worsen in the United States, oil prices will likely decline further, especially with U.S. gasoline prices already plunging," Saito said.

The U.S. government reported a drop in gasoline inventories last week, but U.S. gasoline prices have taken a dive since late last week due to concerns over slowing demand, Saito said.

Gasoline stockpiles dropped by 2.7 million barrels in the week to Feb. 21 to 256.4 million, the Energy Information Administration (EIA) said on Wednesday, amid a decline in refinery throughput. Distillate inventories fell by 2.1 million barrels to 138.5 million.

U.S. crude oil stockpiles increased by 452,000 barrels to 443.3 million barrels, the EIA said, whic was less than the 2-million-barrel rise analysts had expected.

The crude market was also watching for possible deeper output cuts by the Organization of the Petroleum Exporting Countries (OPEC) (pix) and its allies including Russia, a group known as OPEC+.

OPEC+ plans to meet in Vienna over March 5-6.- REUTERS

source https://www.thesundaily.my/business/oil-falls-for-fifth-day-as-coronavirus-spreads-outside-of-china-AX2055002