Ringgit closes marginally higher against US dollar

KUALA LUMPUR: The ringgit closed marginally higher against the US dollar today, despite the weakening oil prices, analysts said.

At 6pm, the local note stood at 4.3250/3400 compared with last Friday’s close of 4.3280/3350.

At time of writing, the benchmark Brent crude fell 5.55% to US$26.40 per barrel.

AxiCorp global chief market strategist Stephen Innes said the fall in oil prices triggered a wave of risk aversion in Asia today.

“While the realisation has set in that the coronavirus-linked economic disruption could last some time, this (the pandemic) is not only going to be bad for oil prices but also for global risk in general, hence we see there is not much of a change in the ringgit today and it could depreciate again,“ he told Bernama.

Innes also commented on the recent Prihatin Rakyat Economic Stimulus Package which was announced by the government last Friday.

He said the focus has started to shift from the size of the fiscal packages to the speed of implementation.

“The problem is that the political situation is a bit fragile, but fortunately it was not subjected to parliamentary gridlock.

“However, I think it will only be effective when the movement control order (MCO) is lifted. The longer the MCO period, the bigger the package needs to be and my worry is that the MCO gets extended again as the Covid-19 cases in Malaysia are still on an upward trend,“ he added.

As of noon today, the Ministry of Health announced that there were 156 new Covid-19 cases, bringing the total to 2,626.

Meanwhile, the ringgit was traded lower against a basket of major currencies.

It fell against the Singapore dollar at 3.0342/0450 from 3.0175/0234 at Friday’s close and weakened against the Japanese yen to 4.0098/0249 from 3.9754/9829.

The local note slipped vis-a-vis the euro to 4.7869/8052 from 4.7608/7702 and depreciated against the British pound to 5.3569/3764 from 5.2841/2943 on Friday. - Bernama

source https://www.thesundaily.my/business/ringgit-closes-marginally-higher-against-us-dollar-EM2196723

Bursa Malaysia fails to hold on last week’s gains on rising Covid-19 cases

KUALA LUMPUR: Bursa Malaysia failed to hold on to last week’s gains as investors remained jittery over the continued rise on the number of Covid-19 cases.

This was despite a massive RM250 billion Prihatin Rakyat Economic Stimulus Package (Prihatin) announced by the government last Friday.

At 5pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) lost 14.21 points, or 1.06% to close at 1,328.88 and moved between 1,317.39 and 1,336.23.

The key index opened 6.86 points weaker at 1,336.23 at 9am today.

Market breadth was negative with losers outpacing gainers 511 to 305, while 302 counters were unchanged, 892 untraded and 108 others suspended.

Turnover shrank to 2.83 billion shares worth RM1.86 billion from 4.22 billion shares worth RM2.73 billion last Friday.

In a note today, Malacca Securities Sdn Bhd said no doubt the economic stimulus packages announced across the globe including Malaysia’s, had managed to halt the recent global equities meltdown.

“However, attention has now shifted back to the impact of Covid-19 that saw a number of cases across the global rose at an exponential rate,” it said.

As of Sunday, Covid-19 had claimed 35 lives in Malaysia and infected 2,470 people nationwide. A total of 150 new cases were reported on Sunday alone.

While reckoning that the RM250 billion stimulus package is a necessary economic backstop, MIDF Amanah Investment Bank Bhd Research (MIDF Research) strategy head Syed Muhammed Kifni Syed Kamaruddin however, said it would not be able to provide a sufficiently strong impetus towards general market sentiment.

“In the immediate-term, market sentiment will continue to be dominated by the success and setbacks in containing the spread of Covid-19 infections, both locally and worldwide,” he told Bernama.

Among heavyweights, Axiata eased 16 sen to RM3.22, IHH fell 11 sen to RM5.15, RHB Bank fell 18 sen to RM4.79, Maybank slipped six sen to RM7.31 and Hartalega was 19 sen weaker at RM6.80.

Of the actives, Careplus bagged four sen to 26.5 sen, Vortex added two sen to five sen, Armada trimmed half-a-sen to 13 sen, while MLAB and Sapura Energy were unchanged at 1.5 sen and 7.5 sen, respectively.

Top losers were led by Dutch Lady which dropped 84 sen to RM42.04, followed by Hong Leong Bank which retreated 78 sen to RM13.42, Carlsberg dipped 72 sen to RM24.90, Yinson was 52 sen lower at RM4.78 and KLK slipped 48 sen to RM20.10.

On the index board, the FBM Emas Index dwindled 105.89 points to 9,080.40, the FBM Emas Shariah Index declined 99.42 points to 9,908.96 while the FBMT 100 Index gave up 104.50 points to 9,017.73.

The FBM 70 slid 154.21 points to 10,381.63 but the FBM Ace gained 16.52 points to 3,783.47.

Sector-wise, the Industrial Products and Services Index edged down 0.46 of-a-point to 103.83, the Financial Services Index dipped 168.20 points to 12,136.74 and the Plantation Index was 90.46 points easier at 6,043.17.

Main Market narrowed to 1.82 billion shares worth RM1.64 billion from 3.09 billion shares worth RM2.49 billion last Friday.

Warrants turnover was lower at 290.31 million units valued at RM92.63 million versus 379.09 million units valued at RM95.39 million previously.

Volume on the ACE Market also contracted to 718.09 million shares worth RM120.46 million as compared with 750.15 million shares worth RM148.15 million.

Consumer products and services accounted for 329.47 million shares traded on the Main Market, industrial products and services (265.50 million), construction (182.79 million), technology (193.13 million), SPAC (nil), financial services (52.78 million), property (151.60 million), plantations (39.59 million), REITs (9.31 million), closed/fund (20,000), energy (444.29 million), healthcare (46.65 million), telecommunications and media (44.68 million), transportation and logistics (42.10 million), and utilities (20.38 million). - Bernama

source https://www.thesundaily.my/business/bursa-malaysia-fails-to-hold-on-last-week-s-gains-on-rising-covid-19-cases-CM2196501

Apple supplier Foxconn’s profit down 24% in last quarter of 2019

TAIPEI: Taiwanese electronics manufacturer Foxconn reported a 23.7% fall in profit in the last three months of 2019 on Monday as it braces for the impact from the coronavirus pandemic that has hit demand from key customers such as Apple.

Foxconn, which assembles iPhones at factories in China, reported net profit of T$47.76 billion ($1.6 billion), according to Reuters calculations, slightly above an average forecast of T$46.94 billion from 14 analysts compiled by Refinitiv.

The world’s largest contract electronics manufacturer did not given any explanation for the decline from T$62.61 billion in the same period a year earlier.

Foxconn is among manufacturers worldwide grappling with the fallout from coronavirus restrictions that have disrupted supply chains and hurt demand.

Apple, its biggest client, rescinded its outlook for the first quarter of 2020 saying manufacturing in China had taken longer than expected to resume amid travel restrictions and an extended Lunar New Year break.

Foxconn warned this month that revenue would fall more than 15% in businesses including consumer electronics in the first quarter. But it said revenue would recover thereafter as production returns to normal in virus-hit China.

Foxconn reported its biggest monthly drop in revenue in about seven years in February as the outbreak continued to play havoc with its business.

Shares in the company, formally known as Hon Hai Precision Industry Co Ltd, have fallen more than 12% this year. -Reuters

source https://www.thesundaily.my/business/apple-supplier-foxconn-s-profit-down-24-in-last-quarter-of-2019-FM2196214

Thai Airways may cut some plane types for good after grounding jets

BANGKOK: Thai Airways International Pcl may permanently reduce the number of aircraft types it deploys once the coronavirus outbreak that has caused the company to ground most of its fleet ends, said a senior government official on Monday.

Thai Airways is grounding 69 of its 82 jets following a drop in passenger volume and route cancellations from the increased border restrictions imposed by the pandemic, the state-owned airline said in a statement earlier on Monday.

The airline’s board and management will come up with two plans by next month, the first to get the carrier through the coronavirus outbreak and another for business rehabilitation, Deputy Transport Minister Thaworn Senniam, the government official responsible for Thai Airways, said on Monday.

“The rehabilitation plan must be done fast because by October, if COVID subsides, we will need to deliver services to travelers and tourists,“ Thaworn said, referring to the respiratory disease caused by the coronavirus.

He added that sales and leasebacks of airplanes and other types of capital injections were being considered.

“We have to reduce aircraft types to as much as possible to reduce cost ... we can take out old aircraft, replace them with new ones through leasing or other procurement methods,“ he said adding the plans should be done by next month.

Thai Airways was already facing financial trouble, reporting losses since 2017. Losses in 2019 widened to 12.2 billion baht ($385 million) from losses of 11.6 billion baht a year earlier.

The coronavirus outbreak and the resulting travel restrictions limiting tourism in Thailand has exacerbated the airline’s decline.

The government last week banned entry to foreigners and declared a state of emergency to combat the disease.

Thailand on Monday reported 136 new coronavirus cases, raising the total number of infections in the country to 1,524. Nine people have died.

The flag carrier had canceled nearly all of its international routes after its president resigned amid the outbreak.

The airline said last year it was reviewing long-delayed plans to purchase 38 jets for its expansion plan.

Other Thai airlines are also suffering amid the pandemic.

Regional carrier Bangkok Airways Pcl said it was suspending 20 international routes and 10 domestic routes until October, with staff taking salary cuts of 10% to 50%.

Budget carrier Thai AirAsia is hibernating its fleet after suspending its international and domestic flights, its largest shareholder, Asia Aviation Pcl (AAV) said. -Reuters

source https://www.thesundaily.my/business/thai-airways-may-cut-some-plane-types-for-good-after-grounding-jets-KM2196185

Japan to boost govt bond issuance by US$149b to fund stimulus

TOKYO: Japan will boost government bond issuance by US$149 billion (RM644 billion) from July to fund a massive stimulus package aimed at combating the hit to the economy from the coronavirus pandemic, two government sources told Reuters yesterday.

The additional ¥16 trillion (US$149 billion) in bonds comes on top of the government's existing plan to sell nearly ¥129 trillion of Japanese government bonds (JGBs) in the fiscal year beginning in April.

The increase would roughly match the nearly ¥17 trillion in additional bonds Japan sold in 2009 to fund stimulus measures during the global financial crisis.

The total amount to be sold in markets in the upcoming fiscal year, at around ¥145 trillion, would be the first increase in annual bond issuance in four years.

Prime Minister Shinzo Abe has pledged to lay out a huge stimulus plan to combat the virus fallout that will exceed the ¥57 trillion package compiled after the collapse of Lehman Brothers in 2008.

The government will unveil a supplementary budget for the next fiscal year to fund part of the package, which will include plans to issue more bonds, the sources said on condition of anonymity as they are not authorised to speak publicly.

The government will increase issuance for JGBs of all maturities excluding 40-year bonds, inflation-linked bonds and liquidity-supplying bonds, the sources said. It may also issue six-month treasury discount bills, they said.

The finance ministry, which oversees bond issuance, will hold a meeting with 21 commercial banks and securities firms in coming days to iron out details, and announce the plan on April 7, the sources said.

The rapid spread of the coronavirus pandemic has added to woes for Japan's economy, which is on the brink of recession as the outbreak disrupts supply chains, cools consumption and has postponed the Tokyo Olympic Games. – Reuters

source https://www.thesundaily.my/business/japan-to-boost-govt-bond-issuance-by-us-149b-to-fund-stimulus-DM2196137

FMM calls for further relaxation of stimulus package measures

PETALING JAYA: The Federation of Malaysian Manufacturers (FMM) has called for the relaxation of some measures introduced in the Prihatin Rakyat Economic Stimulus Package to help ease the immediate cash flow and financial constraints of businesses due to the Covid-19 and movement control order.

FMM president Tan Sri Soh Thian Lai requested for the relaxation of conditions for the six-month moratorim on loan repayment, urging the central bank’s further intervention to ensure consistency across all financial institutions in the treatment of interest during the moratorium period.

“Banks should not compound interest but rather waive or reduce the interest during the moratorium period to further assist companies affected,“ he said in a statement.

On the RM50 billion Danajamin guarantee scheme, Soh hopes that banks will fully assist affected companies with reasonable interest charges and focus on saving the financially distressed companies from folding with easier complied conditions, since the government provides guarantee and with low interest.

On the RM5 billion special relief facility for SMEs, Soh opined that the interest could be further reduced to 2% and lending conditions be lessened, including the strict collateral requirement.

Soh said the RM5.9 billion wage subsidy programme should be doubled to RM12 billion as the allocated amount is not sufficient since it is estimated to only cover 3.3 million workers.

“The RM600 wage subsidy introduced should have been extended to all employees regardless of wage level; and the subsidy should be automatic without the need for companies to prove reduction in earnings by 50% as all companies would be experiencing a significant reduction on revenue and sales. In fact, FMM had proposed for a 30% wage subsidy by the government on a tripartite shared basis with employers and employees.”

FMM has proposed a complete exemption or a reduction in the employer contribution to the Employees Provident Fund until end of December 2020 instead of the current announced deferment/restructuring/rescheduling option of payment.

“The current initiative of deferment would still tie employers down financially as they focus on their respective business revival plans to ensure business viability and continuity and keeping jobs in the next six months to a year.”

Soh also pointed out that the increase in electricity discounts appear to only benefit domestic and low voltage users while the major industrial and large users including the medium and high voltage customers would not benefit much from the discount.

“With the disruptions to operations and the anticipated further slowdown in business in the coming months, FMM appeals to the government for all industrial power users irrespective of the kilowatt usage a month get at least a 15% discount in electricity for the next six months.”

Meanwhile, FMM proposed that the government introduce a special soft loan scheme of RM5 billion with a low 2% interest rate for companies to cover the fixed capital payments such as rents and utilities as well as administrative payments including salaries during this period.

source https://www.thesundaily.my/business/fmm-calls-for-further-relaxation-of-stimulus-package-measures-BM2196021

S.Korea to pay 9.1 trillion won cash to families, draw up $5.8b extra budget

SEOUL: South Korea will draw up a 7.1 trillion won ($5.80 billion) second supplementary budget to fund emergency cash payments to many families to ease the fallout from the coronavirus outbreak, Finance Minister Hong Nam-ki told a briefing on Monday.

The country plans to spend some 9.1 trillion won for "emergency disaster relief payment," a one-time support measure, which will help shore up domestic demand and economic growth.

Hong said the government would have to issue deficit-covering bonds to at least partially fund the second budget. - Reuters

source https://www.thesundaily.my/business/s-korea-to-pay-91-trillion-won-cash-to-families-draw-up-58b-extra-budget-FL2195513