Ringgit ends at highest level since Aug 1, 2018 (Wed, 20 Feb 2019)
KUALA LUMPUR: Steady crude oil prices, positive market sentiment in Malaysia and optimism over US-China trade talks pushed the ringgit to finish at its highest level in more than six
At 5pm, the local note surged 140 basis points, or 18%, to 4.0640/0700 against the US dollar from 4.0780/0830 on Tuesday, the highest level since Aug 1, 2018 when it touched 4.0640/0680.
A dealer said the steadier crude oil prices which saw benchmark Brent crude hover above US$66 per barrel today, continued to fuel investor optimism as firmer oil prices was a boon to the country’s
oil and gas revenue.
“Meanwhile, news that Malaysia is in the last mile in its negotiations with China for a lower price tag for the US$20 billion East Coast Rail Link project also helped improve market sentiment in
the country,“ he said.
Externally, the dealer said rising hopes for progress on the US-China trade talks that resumed this week had whipped up investor appetite for riskier emerging market currencies.
“This has lent support to the ringgit’s performance,“ he added.
At the close, the ringgit was, however, traded mostly lower against other major currencies, except against the Japanese yen.
It slid against the Singapore dollar to 3.0066/0115 from 3.0052/0093 on Tuesday, declined against the British pound to 5.2986/3081 from 5.2680/2761 and retreated versus the euro to 4.6106/6195
Vis-a-vis the Japanese yen, the local unit appreciated to 3.6679/6743 from 3.6812/6867 previously. — Bernama
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Bursa Malaysia ends higher on stronger buying demand (Wed, 20 Feb 2019)
KUALA LUMPUR: Bursa Malaysia ended the day higher as stronger buying demand in heavyweights helped lift the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI).
At 5pm, the index finished 19.62 points higher at 1,726.18 from 1,706.56 at close yesterday.
After opening 6.27 points firmer at 1,712.83, the local index moved between 1,711.44 and 1,727.25 throughout the day.
A dealer said market sentiment was positive with investors optimistic that the latest round of trade talks between the world’s two giant economies would lead to a deal to resolve their tariff
“This positive sentiment is reflected in the stronger performance of Wall Street and spilled over into Asian stocks, with the MSCI’s broadest index of Asia-Pacific shares outside Japan, up nearly
one per cent to reach its highest level since Oct 2, 2018.
“On Wall Street, the S&P 500 index rose 4.16 points to 2,779.76, the Nasdaq Composite increased 14.36 points to 7,486.77 and the Dow Jones Industrial Average was 8.07 points better at
25,891.32,” he added.
Among local heavyweights, Maybank rose four sen to RM9.52, Public Bank and Tenaga gained six sen each to RM25.06 and RM13.38 respectively, while Petronas Chemicals surged 26 sen to RM9.15.
Of actives, Sapura Energy inched up 1.5 sen to 32.5 sen, Hibiscus Petroleum gained three sen to RM1.08 and Bumi Armada was one sen better at 22.5 sen.
Market breadth was positive with 724 gainers and 252 losers, while 346 counters remained unchanged, 532 untraded and 20 others suspended.
Total volume increased to 3.82 billion units valued at RM3.26 billion from 2.80 billion units valued at RM2.36 billion transacted yesterday.
The FBM Emas Index increased 170.21 points to 12,040.78, the FBMT 100 Index rose 166.37 points to 11,897.51 and the FBM Emas Shariah Index jumped 197.45 points to 12,041.45.
The FBM 70 rose 330.74 points to 14,486.38 and the FBM Ace Index increased 37.58 points to 4,699.69.
Sector-wise, the Financial Services Index added 117.28 points to 17,783.73, the Plantation Index rose 96.12 points to 7,498.56 and the Industrial Products and Services Index bagged 2.64 points to
Main Market volume was higher at 2.78 billion shares valued at RM3.03 billion from 1.87 billion shares valued at RM2.18 billion recorded on Tuesday.
Warrants’ turnover rose to 741.67 million units worth RM162.26 million from 609.05 million units worth RM120.56 million yesterday.
Volume on the ACE Market decreased to 295.17 million shares worth RM68.74 million from 317.97 million shares worth RM55.18 million.
Consumer products and services accounted for 316.42 million shares traded on the Main Market, industrial products and services (309.21 million), construction (236.86 million), technology (161.16
million), SPAC (nil), financial services (73.74 million), property (220.06 million), plantations (63.60 million), REITs (16.38 million), closed/fund (24,800), energy (1.19 billion), healthcare (41.44
million), telecommunications and media (67.56 million), transportation and logistics (35.28 million), and utilities (51.02 million). — Bernama
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Air France-KLM more than doubles profits in 2018 despite strikes (Wed, 20 Feb 2019)
PARIS: Air France-KLM, which was badly hit last year by strikes and management upheaval, reported on Wednesday that its annual net profits rose by 150% to 409 million euros (US$463
“The strong performance of our front-line teams and continued cost control helped partly offset the impact of strikes at Air France in the first half of the year, as well as significant fuel
headwinds,“ Benjamin Smith, the company’s new chief executive, said in a statement.
The Canadian businessman took over in September following Jean-Marc Janaillac’s sudden exit in a bitter dispute over salaries in the group’s French wing.
Fifteen days of strike cost the company 335 million euros, Air France said.
On Tuesday, Air France pilots voted by 85% in favour of a new pay deal, concluding a series of long employee-management negotiations.
Revenue growth last year was up in all business segments, with operating earnings coming in at of 1.3 billion euros, the Franco-Dutch airline group reported.
The group said it had carried more than 100 million passengers last year, making it the leading European airline for long-haul traffic.
Transavia, a low-coast subsidiary, carried 15.8 million passengers last year, an increase of 7.1% on 2017.
Full year 2018 capacity increased by 2.1%, mainly driven by the South American, North Atlantic and Asian networks, with respective growth of 8.6%, 3.0% and 2.1%, Air France-KLM said.
In 2019, the group will concentrate on “operational efficiency”, financial director Frederic Gagey told reporters.
“We can make a lot more money compared to last year,“ he said, adding that Air France-KLM would also be looking to renewing its fleet to replace some of its more fuel-guzzling planes. —
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Back to black: Cathay says it has ended two years of losses (Wed, 20 Feb 2019)
HONG KONG: Hong Kong flag carrier Cathay Pacific said on Wednesday it is expected to have swung back to profit in 2018, ending two successive losses as it embarks on a massive overhaul.
The recovery also came in a year that saw it suffer an embarrassing data breach that dented its reputation and could could prove costly.
The airline said it expects to record a consolidated profit of around US$293 million (RM 1.2 billion) for 2018, compared with US$160 million (RM651 million) losses the year before, according to a
preliminary profit alert.
The company’s share price jumped more than seven percent after the announcement as investors took comfort in the turnaround after two grim years for Asia’s largest carrier.
“In 2018, the passenger business benefited from capacity growth, a focus on customer service and improved revenue management,“ the company said in a statement, adding its cargo sector was also
Cathay has been overhauling its business after posting its first losses in eight years in 2016, firing more than 600 workers and paring overseas offices and crew stations as it faced stiff
competition from budget rivals on the mainland.
It also added international routes and better services on board its flights in a bid to compete with well-heeled Middle Eastern long-distance carriers.
The profit alert suggests those moves have paid off.
The airline narrowed its losses to US$33.5 million for the first half of 2018 – a tenth of what their losses were for the same period in 2017. But the second half of the year appears to have
brought Cathay squarely back into the black.
Dickie Wong, an analyst with Kingston Securities, said Cathay is expected to further benefit from the end this year of costly fuel-hedging contracts.
“I would say the unfavorable impact to Cathay would continue to reduce,“ he told AFP.
Wong said the introduction of premium economy had attracted new customers while ticket discounts helped it compete against budget carriers. But he said the company still had “much room to improve
in their luxury classes” if it wants to take on Middle Eastern rivals.
Cathay will announce its full-year result next month.
But the year was not without trouble.
In October it sparked outrage when it admitted to a massive breach five months after hackers made off with the data of 9.4 million customers, including some passport numbers and credit card
The airline faces potentially steep payouts in Europe, which boasts strong protection laws and financial penalties for companies that do not swiftly own up to data breaches.
British-based law firm SPG Law has already launched a group action against the carrier over the breach to help customers seek compensation.
This year Cathay’s website mistakenly offered first and business class flights for a fraction of their value in two high-profile and costly blunders. — AFP
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Matrix Concepts Q3 profit down 31% on less industrial segment contribution (Wed, 20 Feb 2019)
PETALING JAYA: Matrix Concepts Holdings Bhd’s net profit for the third quarter ended Dec 31, 2018 fell 31.11% to RM48.61 million from RM70.56 million a year ago mainly due to changes in
product mix and the absence of a significant contribution from industrial properties.
The Negeri Sembilan township developer recorded revenue of RM285.65 million, an increase of 7.32% from RM266.17 million in the previous year, on the back of higher revenue recognition from the
sales of residential and commercial development properties.
It has proposed to declare an interim dividend of 3 sen per share for the quarter under review, bringing its year-to-date dividend payout to 9.5 sen.
For the nine-month period, its net profit dipped 9.67% to RM151.70 million from RM167.94 million a year ago, while revenue increased 19.8% to RM769 million from RM641.92 million
The group’s unbilled sales stood at RM1.4 billion against RM1.1 billion a year ago and RM1.4 billion as at the preceding quarter’s end.
“We are on track to achieve another record year with our best-ever new sales and revenue performance expected in FY19, coupled with strong take up of above 80% for our residential and commercial
properties. Moving forward, we intend to leverage on our strengths and maintain our reputation as a provider of affordable homes to Malaysians,” said Matrix chairman Datuk Mohamad Haslah Mohamad Amin
in a statement.
The group’s focal point remains on further enhancing its township developments of Bandar Sri Sendayan in Seremban, Negeri Sembilan and Bandar Seri Impian in Kluang, Johor.
Its ongoing developments amount to RM2.8 billion in gross development value (GDV) as at Dec 31, 2018, growing from RM2.4 billion in GDV as at Dec 31, 2017.
To meet demand for affordable-yet-quality homes, the group aims to launch a total of RM1.7 billion worth of projects for the current FY19.
For the remaining three months of FY2019, the group targets to launch projects worth RM532.6 million in GDV, including Tiara Sendayan 3 and 4 and Ara Sendayan (Phase 5) in BSS, and Impiana Bayu 3A
in Bandar Seri Impian.
As at Dec 31, 2018, the group’s total undeveloped land bank is 1,320 acres.
The group maintains a positive outlook on demand for its properties going forward, backed by a strong track record in sales performance, in addition to positive purchaser sentiment received in its
recent property launches.
“Despite current cautious sentiment of the property sector, barring any unforeseen circumstances, the group is optimistic of maintaining its profitability in FY19 based on a healthy number of new
launches and sales progress of ongoing developments,” it added.
At 2.50pm, Matrix shares were trading 1 sen higher at RM1.98 on 398,100 shares done.
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Ahmad Zaki bags RM150.5m construction job (Wed, 20 Feb 2019)
PETALING JAYA: Ahmad Zaki Resources Bhd’s wholly-owned subsidiary Ahmad Zaki Sdn Bhd has bagged a RM150.5 million contract from Rantau Properties Sdn Bhd for a project in Kemaman,
The project includes the proposed refurbishment and upgrading works to the existing Petronas office complex (Block A) and Kompleks Operasi Petronas 1 (Block B), proposed construction and
completion of new annex building (Block C), infrastructure and landscaping works.
The contract works will be completed within 26 months from the date for possession of site on March 1, 2019.
“The contract works is expected to contribute positively to the group’s future earnings,“ the group said.
At the noon break, Ahmad Zaki’s share price was unchanged at 41.5 sen on 3,373,200 shares done.
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RedCargo, Air New Zealand sign agreement to expand market access (Wed, 20 Feb 2019)
SEPANG: RedCargo Logistics, the cargo and logistics platform of AirAsia, has signed an interline agreement with Air New Zealand to expand and provide market access to its respective cargo
The partnership, the first of its kind for RedCargo, provides shared value and cooperation alongside the complementary strengths of carriers AirAsia and Air New Zealand.
RedCargo customers will enjoy access to the belly-space of Air New Zealand flights between Australia and New Zealand and onwards to the US, while Air New Zealand cargo customers gain access to
cargo capacity on AirAsia services from Australia into Southeast Asia.
RedCargo Logistics CEO Pete Chareonwongsak said it is is proud to partner with a like-minded, digital savvy airline such as Air New Zealand, to provide cargo capacity to the more than 140
destinations in AirAsia’s short and long-haul network.
“This agreement provides global reach and market access for customers across Southeast Asia, New Zealand and the US, and helps to facilitate trade and e-commerce fulfillment in key production and
consumer markets,“ he said in a statement today.
RedCargo continues to seek and develop airline partnerships as it aims to create a compelling digital airfreight platform across Asia Pacific.
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CCM Duopharma still collecting GST refunds (Wed, 20 Feb 2019)
SHAH ALAM: CCM Duopharma Biotech Bhd (CCMD) is still in the process of collecting the Goods and Services Tax (GST) refunds from the government.
“Hopefully (the tax refunds) will actually occur within this financial year,” CCMD group managing director Leonard Ariff Abdul Shatar (pix) told reporters after its EGM here today.
“It (the tax refund) is in a million (ringgit), but single digit. There are still questions that need to be addressed with the Ministry of Finance,” he added.
It was reported last year that the government still owes the pharmaceutical firm about RM10 million in GST refunds.
Meanwhile, Leonard said the stronger ringgit against US dollar at the moment bodes well for the healthcare industry, especially the pharmaceutical companies.
“Apart from salaries and packaging, primarily all raw materials are imported for pharmaceuticals and it’s all denominated in US dollar. So any appreciation of the ringgit is actually positive for
the company,” he added.
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US debt hits record under Trump, Republicans mum (Wed, 20 Feb 2019)
WASHINGTON: More massive than the US economy, the national debt hit a new record of $22 trillion under President Donald Trump (pix) but Republicans who traditionally rail against
debt and deficits have remained mum.
The sum of borrowing to cover chronic deficits as well as growing interest payments, this mountain of debt already stood at $19.95 trillion when Trump entered the White House, reaching the
equivalent of US GDP for the first time since World War II.
By comparison, France's debt, which also is about the same as its GDP, amounted to a little more than 2.3 trillion euros (about $2.6 trillion) in late September.
The massive corporate tax cuts that Trump pushed for at the end of 2017, and the surge in spending, especially in defense, have increased the fiscal deficit for the world's largest economy.
"If we don't have a strong military, you don't have to worry about debt, you have bigger problems," Trump told reporters last week.
Administration officials continue to argue that the tax cuts, which are expected to widen the deficit by $1.5 trillion over 10 years, will pay for themselves by boosting economic growth and
thereby increasing tax revenues.
Republican deficit hawks quiet
But despite faster growth, the budget deficit climbed 17 percent to $779 billion last year, the worst since 2012. And according to the non-partisan Congressional Budget Office (CBO), the deficit
is expected to widen further this year to $900 billion.
The United States saw a budget surplus for four years under Democratic president Bill Clinton, amid a booming economy, but the war in Iraq under Republican George W. Bush once again plunged
federal finances into the red.
Democratic president Barack Obama had to deal with the aftermath of the 2008 global financial crisis that required a ramp up in government spending, causing the federal books to deteriorate
That helped fuel the birth of the Tea Party, a populist political movement that contributed to Trump's rise to power.
With the economic recovery and the standoff in the Republican-controlled Congress forcing cuts in public spending, the last few years of the Obama administration saw a decline in the deficit.
But when it started to surge again under Trump, the Republican deficit-hawks were strangely silent.
Beyond the politics, however, the aging US population with the accompanying increase in health and pension expenditures is the structural issue that is the primary cause of chronic US deficit.
Federal Reserve Chairman Jerome Powell frequently points out that while it is not his role to set fiscal policy, "it's not a secret, it's a long-known fact that the US federal government budget is
on an unsustainable path and that needs to be addressed."
Of course the Fed's interest rate increases -- nine in the past four years -- have caused an increase in the debt service costs, and Trump has frequently lashed out at the central bank, calling it
"crazy" and a greater economic threat than China.
Interest on the public debt cost the US government $13 billion more in December compared to a year earlier.
In addition to the US sovereign debt, which thanks to the strong dollar continues to be viewed worldwide as a safe investment, corporate and consumer borrowing are increasingly a source of
US corporate borrowing has almost doubled in just over a decade, fueled by the Fed's cheap money policy after the 2008 crisis, and now stands at $9 trillion. The Fed calls this "a macroeconomic
And household debt now stands at $13.5 trillion, well above the previous peak before the crisis.
While three quarters of the total is home mortgages, student loans, which put the brakes on consumption of young people, last year hit a record of nearly $1.5 trillion.
And auto loans, which also set a record of just under $1.3 trillion, are seeing rising delinquency rates that have sounded some alarm bells at the Fed.
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Asian markets, currencies boosted by trade optimism (Wed, 20 Feb 2019)
HONG KONG: Growing optimism that China and the United States will reach a trade deal lifted most Asian equities Wednesday while the positive sentiment also provided support to regional
currencies against the safe-bet dollar.
The yuan was among the big gainers following a report that the US has called on China to stabilise the unit as part of any agreement between the world’s top economic powers.
Wall Street returned from a long weekend to provide a healthy lead as US President Donald Trump said trade talks – which resumed in Washington Tuesday – were “going very well” but are “very
He also indicated he could put back the March 1 deadline for talks to be concluded – when US tariffs on Chinese goods are due to more than double – saying it is “not a magical date”.
Observers say that while there are no details about the negotiations the fact they are still talking and China appeared responsive to the call for yuan stability was good news.
Hong Kong led gains, rising 1.2% while Shanghai added 0.2% and Tokyo ended the morning session 0.7% higher.
Seoul climbed more than 1%, Singapore put on 0.6%, Taipei added 0.9% and Wellington 0.3%. Manila piled on 1% but Sydney slipped 0.3%.
The upbeat mood on trading floors gave investors confidence to buy higher-risk currencies, pushing the South African rand more than 1% higher and Australia’s dollar up 0.8%. The yuan climbed
Hopes that Prime Minister Theresa May could win changes to her Brexit deal with the European Union as she heads to Brussels Wednesday boosted the pound more than one percent.
While EU leaders have said they are not willing to bend on the agreement, analysts say there could be some movement that would help her push it through parliament and avoid a messy divorce that
could hammer the British economy.
“The EU is showing some possible concessions about the timing of the exit, as (European Commission chief) Jean-Claude Juncker has said a delay beyond the European parliamentary elections in May
would not be opposed, but the UK has to request it, which they have not done,“ said Alfonso Esparza, senior market analyst at OANDA. — AFP
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Oil near 2019 highs amid OPEC cuts, US sanctions (Wed, 20 Feb 2019)
SINGAPORE: Oil prices slipped away from 2019 highs on Wednesday, with surging U.S. supply and slowing economic growth tempering upward pressure from supply cuts led by producer club OPEC
and from Washington's sanctions on Iran and Venezuela.
U.S. West Texas Intermediate (WTI) crude oil futures hit 2019 highs of US$56.39 per barrel on Wednesday but had slipped back to US$56.15 per barrel by 0523 GMT, which was slightly above their last
International Brent crude futures were at US$66.33 per barrel, down 12 cents, or 0.2%, from their last close, though still not far off their 2019 high of US$66.83 per barrel from Monday.
Oil prices have been supported by supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC).
OPEC-member and top crude exporter Saudi Arabia is expected to reduce shipments of light crude oil to Asia in March as part of the effort to tighten markets.
OPEC as well as some non-affiliated producers such as Russia agreed late last year to cut output by 1.2 million barrels per day (bpd) to prevent a large supply overhang from swelling.
"We have lowered Saudi crude oil output in line with announcements... (and) are now assuming that Saudi Arabia will produce in the first three quarters of 2019 less than the 10.31 million bpd
target it agreed to at the Dec 7 OPEC, non-OPEC meeting," French bank BNP Paribas said in a note.
Because of the cuts, BNP said it expected oil prices "to rally through Q3 2019", with Brent to average US$73 per barrel by then and WTI to average US$66.
Another key oil price driver has been U.S. sanctions on oil exporters Iran and Venezuela.
Despite the sanctions, Iran's crude exports were higher than expected in January, averaging around 1.25 million bpd, according to Refinitiv ship tracking data. Many analysts had expected Iran oil
exports to drop below 1 million bpd after the imposition of U.S. sanctions last November.
SHALE BOOM, WEAKER ECONOMY
Standing against the supply cuts and sanctions is U.S. crude output , which soared by more than 2 million bpd in 2018 to a record 11.9 million bpd, thanks to booming shale oil production, which
the Energy Information Administration on Tuesday said was expected to keep rising.
BNP Paribas said surging U.S. output would feed into lower oil prices towards the end of the year, with Brent to dip to an average of US$67 a barrel by the fourth quarter and WTI to average
"U.S. oil production growth, driven by shale, will be increasingly exported in greater volumes to international markets while the global economy is expected to witness a synchronised slowdown in
growth," the bank said.
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Brexit: May heads back to Brussels but EU not budging (Wed, 20 Feb 2019)
BRUSSELS: British Prime Minister Theresa May (pix) heads back to Brussels on Wednesday to renew her quest to reopen the terms of Britain's Brexit divorce, but appears headed for
With less than six weeks until Brexit day, European Commission president Jean-Claude Juncker has agreed to meet May once again, but EU leaders insist they will not restart negotiations.
"I have great respect for Theresa May, for her courage and her assertiveness. We will have a friendly talk tomorrow but I don't expect a breakthrough," Juncker said Tuesday.
May and the other 27 EU leaders approved a Brexit withdrawal agreement at a summit on November 25 last year, but the British leader's own parliament rejected it on January 15.
Since then, May and her ministers have repeatedly met EU leaders and their negotiator Michel Barnier to urge them to reopen the text to find a way to appease eurosceptic MPs.
May will try again on Wednesday, but on this trip she will not even meet Donald Tusk who, as president of the European Council, represents the leaders of EU member states.
She will instead meet Juncker and Barnier, who have no mandate from Tusk's council or EU capitals to renegotiate the deal, or to modify the infamous "Irish backstop" clause.
This provides for Britain to remain in the EU customs union until a way is found -- such as a future free trade deal -- to ensure that Ireland's border with Northern Ireland remains open.
Brexiteers in May's own Conservative party see this as a "trap" to keep Britain in a form of union indefinitely, and have demanded a time limit or a unilateral exit clause.
This would be seen in Brussels as a betrayal of EU member Ireland, and it has consistently got short shrift from EU officials.
"We cannot accept a time limit to the backstop or a unilateral exit clause," Juncker's spokesman Margaritis Schinas told reporters on Tuesday, reiterating the longstanding EU position.
This represents a direct rejection of May's core demand.
May's spokesman said the prime minister was "working hard to secure legally binding changes" to the backstop.
"The prime minister believes that she can secure changes in relation to the backstop MPs want -- there is a majority in parliament for a deal".
Without a deal, Britain is due to leave the Union abruptly after four decades on March 29, with no follow-on agreement or transition period to manage trade and economic relations.
Economic chaos feared
Both sides have said they want to avoid this, and many experts foresee economic chaos, even warning of food and medicine shortages or a renewed threat of unrest in Northern Ireland.
Manufacturing supply chains could be disrupted, and Brexit uncertainty has already been cited as a contributing factor in the closure or departure of several British-based businesses.
Another option would be for Brussels to accord Britain an extension to the March 29 deadline, which is enshrined in British law.
But May's government insists it will not request a delay, all 27 remaining members would have to agree and it would be legally difficult for Britain to remain in the EU for long.
Member states are obliged to hold polls May 23-26 to elect a new European Parliament, which will start sitting from July 2, presumably without any British members.
"Any decision to ask for more time lies with the UK. If such a request were to be made, no one in Europe would oppose it," Juncker told the Stuttgarter Nachrichten this week.
"If you are asking for how long the withdrawal can be postponed, I have no timeframe in mind... But I find it hard to imagine that British voters would again vote in the European elections."
May is due at the EU's Berlaymont headquarters for her meeting with the Commission president at 6:30 pm (1730 GMT). The next day, British opposition Labour leader Jeremy Corbyn will meet
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Malaysia to end bauxite mining ban despite environment fears (Wed, 20 Feb 2019)
KUALA LUMPUR: Malaysia will next month lift a ban on bauxite mining that has been in place for three years, a minister said Tuesday, despite warnings the move may cause serious
The mining of bauxite, the main ore used to smelt aluminium, took off in Malaysia to feed strong Chinese demand after neighbouring Indonesia banned exports in 2014.
But authorities imposed a ban after complaints that pits across the bauxite-rich central state of Pahang were blighting the landscape, rivers were being stained red by mining run-off, and there
was a rise in respiratory problems and skin rashes.
In addition, critics said most of the mining was illegal, and done amateurishly with no government oversight.
Xavier Jayakumar, water, land and natural resources minister, said the new government which took power last year has decided not to extend a moratorium which ends on March 31.
“Industry players can resume mining by April, but they must adhere to strict mining conditions,“ he told AFP, adding the move was to allow Pahang to earn crucial extra revenue.
The announcement will also allow to be shipped overseas some 432,000 tons of high-grade bauxite currently stored at Kuantan port on the South China Sea.
Kuantan member of parliament Fuziah Salleh, representing a party in the ruling coalition, criticised the decision to lift the ban, warning that waste would once again be washed into waterways.
Mining will “pollute the rivers which are sources of water for the locals”, she told AFP.
Bauxite mining can release carcinogenic heavy metals such as strontium, caesium and other harmful substances, as well as low levels of radiation.
It is not clear whether the policy shift will lead to a new boom in bauxite mining in Malaysia, however, particularly as Indonesia started allowing exports again in 2017. — AFP
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KL shares open higher tracking Wall Street’s overnight gains (Wed, 20 Feb 2019)
KUALA LUMPUR: Shares on Bursa Malaysia opened higher today, lifted by stronger buying support in most heavyweights following Wall Street’s overnight gains.
At 9.05 am, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) stood at 1,712.34, up 5.78 points from Tuesday’s close of 1,706.56.
The index opened 6.27 points firmer at 1,712.83
In a note, Public Investment Bank Bhd said the FBM KLCI is anticipated to trend higher for the rest of the week given stronger recovery in an upward momentum, ranging between 1,720 and 1,700
“Immediate challenge would be having the index to stay above its watershed 1700-points level at the end of the week. Support levels for the index are at 1,664, 1,680 and 1,700, while the
resistance levels are at 1,720, 1,734 and 1,743,” it added.
On Wall Street, the S&P 500 index and Nasdaq Composite were both up 0.2% respectively, while the Dow Jones Industrial Average ended Tuesday flat.
Among heavyweights on Bursa Malaysia, Maybank gained three sen to RM9.51, Public Bank rose two sen to RM25.02 while Tenaga and Petronas Chemicals increased six sen each to RM13.38 and RM8.96,
Of actives, Bumi Armada was half-a-sen better at 22 sen, Hibiscus Petroleum was three sen higher at RM1.08 and Securemetric increased two sen at 52.5 sen.
The FBM Emas Index increased 46.39 points to 11,916.97, the FBM Emas Shariah Index went up 60.14 points to 11,904.14 and the FBMT 100 rose 45.89 points to 11,777.03.
The FBM Ace Index was 13.54 points higher at 4,675.65 and the FBM 70 rose 80.92 points to 14,236.56.
Sector-wise, the Financial Services Index was up 33.34 points at 17,699.79, the Plantation Index edged up 37.42 points to 7,439.86 and the Industrial Products and Services Index was 0.59
of-a-point higher at 166.44.
Market breadth was positive with gainers outpacing losers 182 to 69, while 160 counters were unchanged, 1,443 untraded and 20 others suspended.
Turnover stood at 111.19 million shares worth RM63.22 million.
Gold futures contract on Bursa Malaysia Derivatives was untraded this morning on weak interest for the precious metal amid a stronger ringgit.
At 9.20 am, February 2019, March 2019, April 2019 and May 2019 stood at RM174.50, RM174.50, RM174.80 and RM174.90 a gramme, respectively.
Volume was nil while open interest amounted to 23 contracts.
At 9.30 am, the price of physical gold was RM1.40 higher at RM169.98 a gramme. — Bernama
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Ringgit extend gains in early trade (Wed, 20 Feb 2019)
KUALA LUMPUR: The ringgit extended yesterday’s uptrend to opened higher against the US dollar this morning as demand for the greenback was fragile amid uncertainty about the US-China trade
talks, dealers said.
At 9 am, the ringgit was quoted at 4.0700/0740 compared to Tuesday’s close of 4.0780/0830.
He said the greenback was under pressure as the next round of trade talks between the United States and China took place Tuesday (last night local time) in Washington, with the White House urged
Beijing to keep the value of the yuan stable as part of trade negotiations between the world’s two largest economies.
The move was aimed at neutralising any effort by the Chinese to devalue its currency to counter American tariffs.
Meanwhile, the ringgit was traded mostly lower against other major currencies.
It fell against the Singapore dollar to 3.0081/0115 from 3.0052/0093 yesterday, weakened against the British pound to 5.3154/3223 from 5.2680/2761, and contracted versus the euro to 4.6182/6236
The local note, however, appreciated vis-a-vis to the Japanese yen to 3.6753/6796 from 3.6812/6867 previously. — Bernama
>> Continua a leggere
Office sector to remain flat this year: Rahim & Co (Tue, 19 Feb 2019)
KUALA LUMPUR: The office sector, which saw a 20% decline in asking rents last year, is expected to remain flat for more than a year due to pressure
from incoming supply, said Rahim & Co International Sdn Bhd.
Director of research Sulaiman Akhmady Mohd Saheh said asking rents fell 20% last year while effective rents fell 8-10%, resulting in yield compression whereby some office buildings are now getting
yields of less than 5%.
“There was a big gap in terms of landlords’ expectations compared with what tenants are willing to pay. It is that asking price that has seen the huge drop. But actual market transactions
especially for KLCC and established areas, did also see some drop because of vacancy rates – that’s one pressure – and the prolonged rent-free period,” he told reporters at a briefing on the
Malaysian property market yesterday.
However, he said the decline will plateau off as tenants weigh the costs of relocating although they will still negotiate for lower rents.
“In terms of market movement, the rental drop is seen more in Grade B1 and Grade A, newer office buildings. But the older, established, better-than-average buildings, rentals for those buildings
are actually holding up. It’s an economics of alternative,” he added.
Sulaiman said the office market will take more than a year to pick up due to incoming supply and the global economic situation. At present, there are 18 million sq ft of incoming office space of
which 12 million sq ft are being constructed.
Based on historical average take-up rate of office space of 3 million sq ft per year, it would take about three to four years for the market to absorb the 12 million sq ft of incoming supply.
Rahim & Co executive chairman Tan Sri Abdul Rahim Abdul Rahman said the overall property market is expected to remain flat this year as the government continues to implement changes to the
“2019 will also continue to be a buyer’s market as not only is there an abundance of readily available properties but also a wider range of financial aid and schemes that are geared for housing
ownership. Though it seems to be getting further out of reach, the dream to own a home is still attainable but a smarter strategy and planning is required in this day and age,” he said.
Sulaiman said the residential market will remain slow for another one to two years due to affordability issues, which means transactions would depend on effective income growth.
However, Abdul Rahim believes it will start to pick up in one year, as the downtrend has already slowed and trade tensions should be resolved by then. “The trade war between the US and China is
being negotiated. I’m sure both China and the US want it to be settled and I think it will be settled ... I think both China and the US are responsible countries,” he said.
“On the national side, the government has to be given time to settle down and I think by that time, they should settle down. In fact, government has introduced policies and so on, including
property policies that are logical. They have just formed the National Housing Policy and if everybody cooperates including developers, GLCs and so on, there’s no reason that these policies shouldn’t
work. I think 12 months is a logical period for us to expect the new government to function,” he added.
>> Continua a leggere
Warehousing, logistics will keep industrial property sector busy: Expert (Tue, 19 Feb 2019)
KUALA LUMPUR: The industrial sector will continue to perform well this year, driven by increased warehousing activities supported by the e-commerce
wave, said Rahim & Co International Sdn Bhd director of estate agency Robert Ang.
“Generally the industrial sector has always been the best performer in terms of yields. If you look at the various sectors, for residential in prime areas, yields have gone down to 3-4%. That’s
what we call yield compression over the years.
“If you look at commercial, which is office and retail, you’re looking at 5-6%. Industrial has always been giving the highest yield, you could get as high as 6-7%,” he told reporters at a briefing
on the Malaysian property market today.
He said as a manufacturing nation, Malaysia’s gross domestic product has been driven by the manufacturing sector but, lately, this has been on a decline and the slack has been picked up by
logistics and warehousing.
“Malaysia has become a regional centre for a lot of MNCs so there’s a lot more activities in the industrial sector at the moment. But we are a country blessed with a lot of good infrastructure.
Because of that, a lot of land are available now for such activity. There are several major players coming into the market,” he added.
Ang said with such players coming into logistics, including foreign players like Mapletree and Mitsui, Malaysia could face oversupply of space and facilities in the segment in the coming
In terms of hotspots for industrial properties, Ang said the traditional areas would be Shah Alam, which is serviced by a good highway network, and those that are closer to ports while current
hotspots include KLIA and Banting, which is serviced by the West Coast Expressway.
Rahim & Co director of research Sulaiman Akhmady Mohd Saheh said the Digital Free Trade Zone, although it has not kicked off in a big way yet, has a lot of potential especially due to its
proximity to KLIA. “KLIA’s masterplan for its repositioning exercise is going to give positive impact to the logistics market.”
Executive chairman Tan Sri Abdul Rahim Abdul Rahman (pix) said the property market will remain flat across the board this year, except for warehousing, which has been giving steady returns
>> Continua a leggere
Hibiscus Q2 net profit up fourfold (Tue, 19 Feb 2019)
PETALING JAYA: Hibiscus Petroleum Bhd’s net profit for the second quarter ended Dec 31, 2018 surged over four fold to RM50.11 million from RM11.04
million a year ago mainly thanks to its Anasuria segment.
The group’s revenue doubled to RM165.16 million compared with RM76.06 million in the previous year’s corresponding quarter.
For the six-month period, Hibiscus’ net profit jumped over six times to RM150.11 million from RM21.83 million a year ago, while revenue more than tripled to RM525.11 million from RM134.3
On its prospects, Hibiscus said its immediate focus as a group is the achievement of its 2021 mission.
The delivery of its 2021 mission entails the achievement of an average daily net production of 20,000 bbls of oil per day (bopd); as well as the securing of net proven and probable
reserves/entitlement of 100 million bbls of oil.
As joint operator of the Anasuria Cluster and the North Sabah oilfields, Hibiscus said the group continuously focuses on optimising asset performance, but noted that its performance is impacted by
external macroeconomic factors.
While all of its activities and acquisitions to-date have been funded with equity and internally generated funds, Hibiscus anticipates that the group will undertake certain fundraising activities
in the next six months to ensure that its projects are executed smoothly.
“The group currently has no debt. Therefore, we are in a position to gear up to a conservative level if we need to, based on our forward looking plans. We are currently considering various debt
options that are on offer, bearing in mind factors such as long-term capital requirements, benefits to the group to maintain a certain level of agility and financial flexibility, overall weighted
average cost of capital, etc. We shall make the relevant disclosures as our plans mature.”
>> Continua a leggere
Asia Brands scraps private placement (Tue, 19 Feb 2019)
PETALING JAYA: Asia Brands Bhd (ABB) has aborted its private placement exercise to issue up to 46.53 million new shares, representing up to 20% of its
enlarged issued shares.
This is because it had achieved its objective to raise funds from its rights issue exercise for the repayment of the Islamic medium term notes (Tranche 1, Series 3) of RM40 million due on March
18, it told the stock exchange today.
The rights issue exercise, which involves an issuance of up to 116.32 million new shares at an issue price of 35 sen per rights share on the basis of one right share for every one share held, was
aimed to raise gross proceeds of between RM30.15 million and RM40.71 million.
ABB said the private placement was proposed to be implemented to facilitate the group to comply with the public shareholding spread requirement under Paragraph 8.02(1) of the Listing Requirements
of Bursa Securities in the event ABB’s public shareholding spread falls below 25% following the implementation of the rights issue.
“As the public shareholding spread of ABB after the implementation of the rights issue remains above 25%, ABB has decided not to proceed with the implementation of the private placement,” it
Based on an indicative issue price of 50 sen per placement share, the private placement was previously expected to raise gross proceeds of up to RM23.26 million.
>> Continua a leggere
Hup Seng fourth quarter earnings down 11.5% on lower margin (Tue, 19 Feb 2019)
PETALING JAYA: Biscuits manufacturer Hup Seng Industries Bhd’s net profit for the fourth quarter ended Dec 31, 2018 fell 11.5% to RM12.74 million from
RM14.38 million a year ago mainly due to poorer margin in certain segment coupled with higher incentive and promotional sponsorship activities given to the distributors during the current
The group’s revenue for the current quarter decreased slightly by 0.4% to RM85.85 million from RM86.22 million in the quarter ended Dec 31, 2017 as domestic sales registered a drop of 2%.
For the full-year period, Hup Seng’s net profit fell 3.3% to RM42.96 million from RM44.45 million a year ago, with revenue increasing 2.6% to RM307.37 million from RM299.67 million.
It recommended the payment of a third interim dividend of 2 sen per share for the financial quarter under review.
Hup Seng said the operating environment over the next six months is expecting weak domestic growth, uncertainty in global demand and prudent investment in business expansion. Faced with uncertain
global and domestic economic prospects, consumers will once again be expected to be more prudent with their spending, leading to weaker sentiment on retail consumption for 2019.
“The group witnessed some margin compression arising from costs pressures amid continued growth in revenue. Nevertheless, the group will continue its efforts to enhance operating efficiency to
mitigate as much as possible the impact of higher input costs. The group will continue to focus in improving the group’s performance by innovating products portfolio, broadening the distributor
network to safeguard the group’s revenue and profitability,” it said.
>> Continua a leggere
Pesona Metro secures RM409m MRCB contract (Tue, 19 Feb 2019)
PETALING JAYA: Pesona Metro Holdings Bhd’s unit Pesona Metro Sdn Bhd has clinched a contract worth RM408.8 million from MRCB Builders Sdn Bhd for the
execution and completion of the superstructure works for the proposed mixed development in Kuala Lumpur.
MRCB Builders, which is wholly owned by Malaysian Resources Corp Bhd, is the main contractor for the project.
The project is for a duration of 30.5 months commencing on Feb 18 and is expected to contribute positively to the group’s earnings and enhance its net assets during the duration of the project,
Pesona Metro told the stock exchange today.
The project will be funded via internal generated funds and accordingly, has no effect on the gearing of the group, it said.
Meanwhile, in a separate announcement, Pesona Metro said its unincorporated joint venture (JV) with Pembinaan Kaleigh Sdn Bhd have mutually terminated the RM371.42 million contract agreement to
build a stretch of the West Coast Expressway in Selangor.
“The parties have agreed the terms of settlement for a sum of RM7.17 million payable by the main contractor of the JV in respect of all claims and counterclaims. The main contractor shall gain
access to and take full site possession on Feb 15 from the JV,” it added.
However, no reason was given for the project cancellation.
The parties had in September 2016 accepted the letter of award to construct and complete the civil works for the Section 6 Kapar Interchange to Asam Jawa Interchange.
>> Continua a leggere
Boustead to dispose of Royale Chulan Bukit Bintang (Tue, 19 Feb 2019)
PETALING JAYA: Boustead Holdings Bhd is disposing of the Royale Chulan Bukit Bintang Hotel (pix) and its business in Kuala Lumpur to
Singapore’s Hotel Royal Ltd for RM197 million.
The conglomerate told Bursa Malaysia that its wholly owned subsidiary Boustead Hotel & Resorts Sdn Bhd (BHR) had on Feb 19 accepted an offer from Hotel Royal via its letter dated Feb 15 for
Hotel Royal is listed on the Main Board of Singapore Exchange Securities Trading Ltd (SGX).
Royale Chulan Bukit Bintang is a four-star hotel with 400 rooms. It is one of the eight hotels under the group’s hotel portfolio.
“There are currently two Royale Chulan hotels in Kuala Lumpur – Royale Chulan Bukit Bintang and Royale Chulan Kuala Lumpur, which are both within close proximity and competing with each other. As
such, the Group has decided to consolidate and focus on one hotel, namely Royale Chulan Kuala Lumpur, to better capture the Kuala Lumpur market,” said Boustead.
“Royale Chulan Bukit Bintang offers good prospects, given its strategic location in one of the prime tourist areas and hotel belts of Kuala Lumpur’s city centre. With this attractive offer price,
we are of the view that this is the right time to dispose of this hotel,” it added.
The letter of offer is subject to, amongst others, Hotel Royal being granted an exclusivity period of one month commencing from Feb 19 to conduct a due diligence exercise on the hotel; BHR shall
refrain from responding to (other than to reject) any enquiry, discussion, proposal or offer for or to continue, propose to, negotiate or hold discussions, and/or enter into any agreements,
arrangements or understanding with any other parties during the exclusivity period.
It is also subject to the execution of a conditional sale and purchase agreement (SPA) by the parties within the exclusivity period; and the conditions precedent for the proposed disposal will
include, inter alia, the statutory and regulatory approvals required under the Malaysian law and the SGX.
Boustead said Hotel Royal had paid a sum of RM3.94 million, being the 2% earnest deposit of the disposal consideration, as part of the terms of the letter of offer.
“In the event that the SPA is not executed for any reason whatsoever, the earnest deposit shall be refunded in full to the purchaser within 14 days from the date of the purchaser‘s written demand
Boustead said it will make the necessary announcements upon further development of the proposed disposal.
>> Continua a leggere
‘Buy and hold’ may not fit flattish market: MIDF (Tue, 19 Feb 2019)
PETALING JAYA: As a flattish market in the near term does not bode well for a “buy and hold” strategy, MIDF Research advised the investors to focus on
velocity and volatility of sectors and stocks to whither uncertainty.
In a strategy report today, the research house said it recommended a trading strategy focusing on velocity and volatility which is divided into four quadrants, namely “opportunist”, “trading”,
“buy and hold” and “bullets”.
Overall, MIDF Research said it observed that construction players are the most suitable for a “trading” strategy due to their high velocity and high volatility.
It noted that construction stocks make a huge part of this quadrant, which include Malaysian Resources Corp Bhd, WCT Holdings and Gamuda Bhd.
For aviation, MIDF believes that AirAsia Group will suit well for a trading strategy too.
“With ample liquidity and a healthy newsflow driven price volatility, a trading portfolio would be ideal to generate returns amidst a ‘flattish’ movement of the benchmark indices.
“Liquidity would support ease of trading movement and the newsflow would provide the incentive to take trading position towards ‘sell high’ and ‘buy ‘low’ investment decision process,” it
The research house said other sectors, such as rubber gloves fit to be used as “bullets” for the execution of the “opportunist” trading strategy.
MIDF said, this “opportunist” quadrant describes stocks that are relatively have low traded volume and highly volatile price movements, and stocks sitting in this quadrant includes YTL, UEM
Sunrise, Sunway Construction and Cahya Mata Sarawak.
“All of these are great stocks to be included in the portfolio, but due to low liquidity, investors have to scan the market sentiment and wait for an opportunistic time to buy these stocks,
wishing for Lady Luck to show herself.”
MIDF noted that the “bullets” quadrant describes stocks that relatively have high liquidity and low price volatility, while “buy and hold” describes stocks that are relatively have low traded
volume and less price movements.
Stocks sitting in “buy and hold” quadrant includes UOA Development, Nestle and KKB Engineering.
The research firm said the FBM KLCI has been on a flattish trend so far this year with a year-to-date growth of less than 1% but expects earnings to grow by mid single-digit amid supportive
Overall, it reiterated its FBM KLCI year-end 2019 target at 1,800 points.
>> Continua a leggere
Petronas Dagangan Islamic notes’ rating affirmed (Tue, 19 Feb 2019)
PETALING JAYA: Malaysian Rating Corp Bhd (MARC) has affirmed its “AAA” rating on Petronas Dagangan Bhd’s (PDB) Islamic commercial papers (ICP) and
Islamic medium-term notes (IMTN) programme of up to RM2 billion, with a stable outlook.
The rating agency said in a statement today that the ratings affirmation reflects PDB’s strong financial metrics, characterised by its sound liquidity and strong leverage position.
PDB’s ratings also incorporate high parental support from Petroliam Nasional Bhd (Petronas) on which MARC maintains a public information rating of “AAA” with a stable outlook.
The stable outlook on the ratings reflects MARC’s expectation that PDB will continue to maintain its current credit profile, it added.
PDB is a leading domestic player of downstream petroleum products, benefitting from an extensive network of more than 1,000 petrol stations across the country, with a strong market position,
underpinned by well-established Petronas brand.
Its businesses are divided into four core segments, namely retail (mainly motor gasoline and diesel), commercial (mainly airline fuel), liquefied petroleum gas (LPG) and lubricants.
It retains a healthy market share in the retail and commercial segments, contributing about 50.7% and 49.3% to group revenue of RM22.2 billion for the nine month period of 2018 (9M2018).
The total group revenue rose by 9.4% year-on-year, largely due to higher average selling prices on higher Mean of Platts Singapore (MOPS) prices, the benchmark prices for refined products.
MARC noted that changes in pump prices have had no impact on PDB’s pricing mechanism as it adheres to the automated pricing mechanism under which it is assured of a fixed profit rate that affords
earnings stability in the retail segment.
However, MARC said the operating performance of its commercial segment will continue to be susceptible to fluctuations in oil prices and economic cycles.
During 9M2018, PDB incurred higher capex of RM187.3 million, largely due to expenditure for the renovation and upgrading of petrol stations.
The lower cash flow from operations, higher capex and higher dividend payment of RM774.9 million resulted in negative free cash flow of RM484.1 million (9M2017: RM485.5 million).
Nevertheless, MARC noted that PDB has strong liquidity as reflected by cash balances of RM2.9 billion as at end-September 2018.
“The leverage level remained low with a debt-to-equity ratio of 0.01 times. There is currently no outstanding amount under the rated programme,” MARC added.
>> Continua a leggere
Global sovereign sukuk issuance to rise to US$100b in 2020 (Tue, 19 Feb 2019)
KUALA LUMPUR: Moody’s Investors Service Ltd expects total gross sovereign sukuk issuance, including short-term securities, will recover in 2019 and
surpass its record-high volumes of US$93 billion (RM379 billion) reached in 2012, by 2020.
Moody’s vice-president and senior analyst Alexander Perjessy said the international rating agency projects global sovereign sukuk issuance to increase to US$87 billion in 2019 and rise towards
US$100 billion in 2020, from US$78 billion in 2018.
“This recovery will be driven by a combination of various sovereigns’ commitments to further sukuk market development, higher sukuk refinancing needs and our expectations of higher budget deficits
for the major sovereign sukuk issuers in 2019-2020,“ he said in a report themed “Sovereigns-Global: Sovereign Sukuk Issuance to Recover Amid Moderate Oil Prices and Higher Refinancing Needs” released
Perjessy said he expects gross sovereign issuance to also rise further in the medium term as the sukuk issued by Gulf Cooperation Council (GCC) governments begin to mature.
Global gross sovereign sukuk issuance declined 5% to US$78 billion in 2018, from US$82 billion in 2017.
Perjessy said Malaysia has by far the largest stock of outstanding long-term sovereign sukuk worth US$84 billion, followed by Indonesia (Baa2 stable) and Saudi Arabia (A1 stable), with around
US$40 billion each.
“The three sovereigns and Qatar (Aa3 stable) have been the most active in promoting the market’s development,“ he said.
He said during 2015-2018, sukuk issues filled nearly 80% of Malaysia’s fiscal deficit financing needs, whereas they covered about a third of Qatar’s and Indonesia’s fiscal deficit and around 14%
of Saudi Arabia’s.
Moving forward, Perjessy said Moody’s expects the three largest issuers – Malaysia, Saudi Arabia and Indonesia – to gradually increase their share of sukuk in fiscal deficit financing, further
supporting the market’s growth prospects.
“In the medium term, gross issuance will rise further, particularly when GCC sukuk instruments issued after 2016 begin to mature in 2022 and beyond and are refinanced by issuing new sukuk
instruments,“ he said.
He added that the Islamic Development Bank (IsDB, Aaa stable) remains by far the largest issuer among the supranationals, with more than US$16 billion of outstanding sukuk at the end of 2018.
>> Continua a leggere
Ringgit ends firmer against US dollar (Tue, 19 Feb 2019)
KUALA LUMPUR: The ringgit reversed earlier losses to end firmer against the US dollar today, as market sentiment remained positive amid the ongoing trade talks between the US and China.
At the closing bell, the ringgit rose 50 basis points to 4.0780/0830 against the US dollar from 4.0830/0880 on Monday.
A dealer said growing expectations for a trade detente had boosted investors’ risk appetite, resulting in a higher demand for riskier emerging market currencies like the ringgit compared with
safe-haven currencies like the greenback.
“The positive mood had offset the impact of the easing crude oil prices, “ he said.
Trade negotiations between the US and China reportedly went smoothly last week in Beijing, and the talks will resume in Washington later today.
Benchmark Brent crude was traded at US$66.32 per barrel at 6.12pm, down 27% from its last settlement.
At the close, the ringgit also traded higher against other major currencies.
It increased against the Singapore dollar to 3.0052/0093 from 3.0100/0145 on Monday and advanced against the British pound to 5.2680/2761 from 5.2724/2797.
Vis-a-vis the Japanese yen, the local unit rose to 3.6812/6867 from 3.6934/6982 previously while against the euro, it strengthened to 4.6085/6158 from 4.6195/6264. — Bernama
>> Continua a leggere
Bursa Malaysia ends higher (Tue, 19 Feb 2019)
KUALA LUMPUR: Bursa Malaysia ended the day higher on better market sentiment prompted by growing optimism over US-China trade talks.
At 5pm, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI), which remained in the positive territory throughout the day, finished 13.82 points higher at 1,706.56 from Monday’s close of
After opening 1.29 points firmer at 1,694.03, the local index moved between 1,693.37 and 1,710.14 throughout the day.
A dealer said investors were upbeat over the progress being made in the negotiations between the world’s two giant economies, with a new round of talks scheduled in Washington on Tuesday.
“Optimism in the local market was also fuelled by higher oil prices which was positive for the country’s oil and gas revenue,“ he added.
International benchmark, Brent crude oil futures rose 5 cents to US$66.52 per barrel while US West Texas Intermediate crude futures increased 44 cents to US$56.03 per barrel.
Among heavyweights, Maybank and Public Bank were unchanged at RM9.48 and RM25, respectively, while Tenaga surged 32 sen to RM13.32 and Petronas Chemicals gained 33 sen to RM8.90.
Of actives, Sapura Energy rose half-a-sen to 31 sen, Bumi Armada lost one sen to 21.5 sen and Ahmad Zaki Resources added 1.5 sen to 23 sen.
Market breadth was positive with 517 gainers and 385 losers while 366 counters remained unchanged, 586 untraded and 20 others were suspended.
Total volume increased to 2.80 billion units, valued at RM2.36 billion, from 2.75 billion units, worth RM1.65 billion, transacted yesterday.
The FBM Emas Index increased 89.86 points to 11,870.57, the FBMT 100 Index rose 89.18 points to 11,731.14 and the FBM Emas Syariah Index jumped 140.28 points to 11,844.00.
The FBM 70 rose 83.68 points to 14,155.64 and the FBM Ace Index increased 7.93 points to 4,662.11.
Sector-wise, the Financial Services Index added 13.60 points to 17,666.45, the Plantation Index rose 76.53 points to 7,402.44 and the Industrial Products and Services Index added 2.28 points to
Main Market volume was higher at 1.87 billion shares, valued at RM2.18 billion, from 1.80 billion shares worth RM1.46 billion recorded on Monday.
Warrants’ turnover rose to 609.05 million units worth RM120.56 million versus yesterday’s 481.76 million units valued at RM105.79 million.
Volume on the ACE Market decreased to 317.97 million shares, worth RM55.18 million, from 463.11 million shares valued at RM77.23 million.
Consumer products and services accounted for 281.50 million shares traded on the Main Market, industrial products and services (278.75 million), construction (228.49 million), technology
(176.09million), SPAC (nil), financial services (67.83 million), property (132.98 million), plantations (51.10 million), REITs (8.67 million), closed/fund (25,800), energy (494.80 million),
healthcare (46.65 million), telecommunications and media (46.08 million), transportation and logistics (37.86 million), and utilities (27.76 million).
The physical price of gold as at 5pm stood at RM168.58 per gramme, up 57 sen from RM168.01 at 5pm yesterday. — Bernama
>> Continua a leggere
Pheim Asset Management bullish on tech, semiconductor sectors (Tue, 19 Feb 2019)
KUALA LUMPUR: Pheim Asset Management Sdn Bhd is bullish on the technology and semiconductor sectors, citing them as “the future” of the market.
Founder and chief strategist Dr Tan Chong Koay (pix) said the future is about the internet, cloud, mobile phones, 5G, among others and that there is demand for these technologies and
Guided by Pheim’s own investment philosophy of “never fully invest at all times”, Pheim seeks to trim its equity exposure when it is believed that the market is near its peak in order to preserve
capital. Conversely, Pheim seeks to increase its equity exposure when it is believed that the market is near its bottom.
“We follow value investing, especially never fully invest at all times. You sell the shares before it crashes. If you don’t do that, your shares go down and it will take one or two years to go
back. The key is to sell when the market is high,” Tan told a press conference in conjunction with Pheim Asset Management’s 25th anniversary celebration today, which was graced by Finance Minister
Lim Guan Eng.
Tan also believed in investing in companies with low gearing, rising profit and good management.
He is a strong believer that crisis is an opportunity. Crisis can be created from external forces as shown during last year where external events such as US-China trade war had caused market to
correct towards the end of the year.
Looking ahead, he said Pheim favours the Asia ex-Japan region, particularly the Asean region as it is one of the fastest growing regions in the world.
Meanwhile, Pheim is aiming to deliver 8-12% returns for its funds over the next five years. It is also targeting to grow its asset under management by 10-15% this year from RM1 billion
Among the past and present prominent clients of Pheim are the Employees Provident Fund (EPF), the Government of Singapore Investment Corp, the Norwegian Government Pension Fund, Sumitomo Life of
Japan, Aizawa Securities of Japan, New Private Bank of Switzerland and many high net-worth individuals and institutions.
Pheim was among the earliest to be appointed to serve as one of EPF’s external fund managers in 1997 and has continued to serve in this capacity for over 21 consecutive years.
>> Continua a leggere
Property market to remain flat in 2019: Rahim & Co (Tue, 19 Feb 2019)
KUALA LUMPUR: The property market is expected to remain flat this year before picking up again next year, said Rahim & Co International Sdn Bhd.
Executive chairman Tan Sri Abdul Rahim Abdul Rahman said the property market will remain flat across all sectors this year, except for the warehousing sub-sector, which will be driven by growth of
He said the overall market will take about 12 months to begin picking up, in line with the anticipated resolution of the trade war between the US and China.
Rahim & Co director of research Sulaiman Akhmady Mohd Saheh said the residential market will take one to two years to improve due to affordability issues while the office market will remain
slow for more than a year due to incoming supply.
He said asking rents for offices have dropped 20% while effective rents have dropped 8-10%.
>> Continua a leggere
HSBC pre-tax profit up 16% at US$19.9 bn in 2018 (Tue, 19 Feb 2019)
HONG KONG: Banking giant HSBC said on Tuesday that pre-tax profit rose 16% to US$19.9 billion last year with growth across its global businesses despite a “challenging external environment
in the fourth quarter”.
The results capped the first full year at the helm of the Asia-focused bank for chief executive officer John Flint, who has vowed growth while keeping a lid on costs as trade tensions between the
United States and China rumble.
However, earnings in the last three months of 2018 came in below expectations as Washington’s trade war began to bite globally and hammered the stock markets, especially in Hong Kong and
Adjusted pretax profit fell one percent to US$3.39 billion in October-December, missing the US$4.4 billion consensus average by Bloomberg News derived from estimates compiled by the
Global markets adjusted revenue was down US$202 million to US$1.1 billion over the same period, while wealth management dropped 18%, also to US$1.1 billion.
Overall the year saw strong growth for HSBC with net profit ballooning 30%to US$12.6 billion while adjusted pre-tax profit rose three percent to US$21.7 billion.
The bank had to lay off tens of thousands of staff as part of a wide-ranging overhaul that also saw it sell its Brazil operations in 2015.
But it showed a healthy doubling of profits by 2017, a year that also saw it nominate Mark Tucker as chairman, breaking a longstanding tradition of appointing insiders to the post.
In a statement attached to Tuesday’s earnings, Tucker and Flint said the bank was prepared to weather fallout from both a possible deterioration in the trade talks between Washington and Beijing
and Britain’s impending departure from the EU.
“The fundamentals for growth in Asia remain strong in spite of a softer regional economic outlook,“ Tucker said in a statement attached to the annual report.
“The system of global trade remains subject to political pressure, and differences between China and the US will likely continue to inform sentiment in 2019,“ he added.
With Brexit looming, HSBC followed the other major British financial giants in ring-fencing its UK bank.
“We continue to prepare for the UK’s departure from the EU” Flint said, adding its operations in France “gives us a major advantage in this regard”. — AFP
>> Continua a leggere
Palm hits over 1-week top on US soyoil strength, weak ringgit (Tue, 19 Feb 2019)
KUALA LUMPUR: Malaysian palm oil futures rose by more than 1 percent on Tuesday to their highest level in over one week, tracking strength in U.S. soyoil prices and on a weaker ringgit.
The ringgit, palm’s currency of trade, weakened as much as 0.2 percent, making the vegetable oil cheaper for holders of foreign currencies.
The currency was last down 0.1 percent at 4.0850 per dollar.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange was up 0.6 percent at 2,299 ringgit ($562.79) a tonne at the midday break.
Earlier in the session, it climbed as much as 1.1 percent to 2,311 ringgit, its highest since Feb. 8. Trading volumes stood at 12,586 lots of 25 tonnes each at noon.
“The palm market is up on supportive external markets, along with the weaker ringgit,“ said a Kuala Lumpur-based trader, referring to soyoil prices on the U.S. Chicago Board of Trade.
The market was also up on expectation of supportive cargo surveyor export data for Feb. 1-20, said the trader.
Exports from Malaysia during Feb. 1-15 rose between 4.2-12.9 percent from a month earlier, according to cargo surveyors.
Cargo surveyors are scheduled to release export data for the Feb. 1-20 period on Wednesday.
In other related oils, the Chicago March soybean oil contract was up 0.8 percent on Tuesday, in line with gains in soybeans on optimism about a trade deal between the United States and China.
The May soyoil contract on the Dalian Commodity Exchange rose 0.8 percent, while the Dalian May palm oil contract added 1.1 percent.
Palm oil prices are affected by movements in soyoil, as they compete for a share in the global vegetable oil market.
Palm oil may rise to 2,316 ringgit per tonne, as it has broken a resistance at 2,285 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
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SunCon bags RM781.3m contract from TNB (Tue, 19 Feb 2019)
PETALING JAYA: Sunway Construction Group Bhd’s (SunCon) unit Sunway Construction Sdn Bhd (SCSB) has bagged a contract worth RM781.3 million from Tenaga Nasional Bhd (TNB) for the
construction and completion of TNB campus at Jalan Bangsar, KL.
SunCon said in Bursa Malaysia filing today that SCSB had accepted the letter of award issued by TNB in respect of the TNB HQ campus development (Phase II) – project platinum main building
It said the project shall be completed within 26 months from the date of commencement which will be determined by the parties.
The project is expected to contribute positively to the group’s earnings from the financial year ending Dec 31, 2019 onwards.
Upon the award of the project, SunCon said its outstanding order book as at to-date amounts to RM6 billion.
At 12.30pm, SunCon’s share price was up 2.52% or 4 sen to RM1.63 with 1.04 million shares changing hands.
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Kossan up 2.75% on higher Q4 earnings (Tue, 19 Feb 2019)
PETALING JAYA: Kossan Rubber Industries Bhd’s shares jumped 2.75% or 11 sen this morning, after its net profit for the fourth quarter ended Dec 31, 2018 rose 29.6% to RM59.51 milllion.
At 11.40am, the stock stood at RM4.11 with 1.65 million shares changing hands, bringing its market capitalisation to RM5.27 billion.
The group told the stock exchange yesterday that the higher profit was due to improved performance in all three of the group’s divisions.
During the period, the group saw revenue rise 23.36% to RM589.37 million from a year ago, also due to improved performance in the glove, technical rubber products and cleanroom divisions.
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Asian markets extend gains on cautious trade optimism (Tue, 19 Feb 2019)
HONG KONG: Asian markets mostly rose Tuesday with investors cautiously optimistic that China and the US can reach a deal ending their trade war as the two sides prepare to resume talks this
With New York closed for a public holiday there were few catalysts to drive buying, though the release of Federal Reserve minutes on Wednesday will be pored over for an idea of the bank’s interest
Top-level officials from the world’s two biggest economies will reconvene in Washington after a series of negotiations in Beijing last week, with the US side telling Donald Trump they had been
The positive tone from the diplomats, and the president’s indication he could extend a deadline for agreement, boosted regional markets Monday, extending a 2019 rally fuelled by optimism of an end
to the nearly year-long tariffs spat.
Shanghai added 0.3%, having piled on more than two percent Monday, while Hong Kong rose 0.2% and Tokyo finished the morning 0.1% higher.
Sydney gained 0.5%, Singapore put on 0.3% and Taipei 0.2%, with Seoul flat and Wellington marginally lower.
Britain’s Labour strife
However, OANDA senior market analyst Jeffrey Halley warned of trouble ahead if Chinese and US officials do not agree a deal.
“The rallies (Monday) were impressive given the talks ended last week without any concrete results and have yet to even recommence in Washington this week due to the US public holiday,“ he
“Without sounding like a damp squib, there is now a vast amount of ‘optimism’ baked into currency, stock and energy market prices globally and precisely zero concrete detail. The unwind, should no
deal be struck, could be very ugly.”
Oil prices were mixed after rallying Monday on trade talks hope and signs that OPEC and other key producers are narrowing output.
“Saudi Arabia seems willing to do whatever is necessary to reach levels of US$80 (RM327) a barrel, and judging by the price reaction, they’re on track,“ said Eugen Weinberg, head of commodities
research at Commerzbank AG.
“Even rather bearish factors, like a stronger-than-expected rise in US oil production, does not seem to derail the price recovery.”
On currency markets the pound was down, with uncertainty fanned by news that seven pro-remain MPs had split from Britain’s opposition Labour Party over its handling of Brexit and a row over
The move “looks awfully like a bungled mess of the creation of a new party, which we think is more likely to be pound-negative... by giving Brexit a less effective opposition”, said Peter
Chatwell, head of European rates strategy at Mizuho International, told Bloomberg News.
He added that it left both main parties “with clear pro-Brexit mandates”. — AFP
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Russian arrests of foreign businessmen shocks Western investors (Tue, 19 Feb 2019)
MOSCOW: The arrest in Russia of prominent US and French investors on suspicion of fraud has sent shockwaves through Western business circles and sparked fears of cutbacks in foreign
investment sorely needed for economic growth.
The founder and employees of the Baring Vostok private equity firm were arrested on Friday in a case brought with the help of the FSB security service.
The arrest took place on the same day Russia hosted leading business people in the Black Sea resort of Sochi for a major economic forum which trumpeted the country’s openness to investment.
Michael Calvey, a US citizen and the founder and director of Baring Vostok, has been placed in pre-trial detention in a Moscow jail for the next two months for alleged fraud, along with five
others – including Philippe Delpal, a French citizen.
They are accused of defrauding Vostochny Bank of at least 2.5 billion rubles (US$37.7 million). All of them deny any wrongdoing and blame the case on a shareholder dispute.
In an opinion piece on Monday in the Vedomosti business daily, Maxim Bouev – vice-rector of Moscow’s New Economic School – wrote the case proves what investors have long known: “If you want to
invest in Russia, you have to accept your risk of eventually being arrested and finding yourself in the dock.”
This is the latest in a long line of cases in which top business people have been accused of crimes motivated by commercial or political interests, but these have rarely involved foreigners.
Business figures and economists reacted strongly to investigators swooping on Baring Vostok, founded 25 years ago, which has brought in investments of more than US$3 billion (RM12.2 million) to
Russia despite the geopolitical tensions and Western sanctions of recent years.
Arkady Volozh, the CEO of Russian internet giant Yandex, defended Calvey in a statement, saying he “has always been a standard for the market of decency and law-abidingness”.
‘Hateful image abroad’
Other business leaders said they fear the case will deal a severe blow to an investment climate already marred by corruption and the lack of independent courts – especially given the strong-arm
“This gives Russia a hateful image abroad,“ the president of the French-Russian chamber of commerce, Emmanuel Quidet, told AFP.
The chamber on Monday said it was “very concerned” about the arrests in a joint statement with the Association of European Businesses, a federation of multinational companies working in
The case could “severely damage the climate and attractiveness of Russia for direct investments from abroad”, it said.
The Kremlin sought to dispel those fears, with spokesman Dmitry Peskov saying Calvey’s arrest should “not affect the investment climate” in Russia.
He added he was aware of the contribution to the Russian economy made by Calvey, who has met President Vladimir Putin numerous times.
The government in early February unveiled a 340 billion euros (US$385 billion) plan to achieve its economic goals and support growth that is forecast to slow this year. This will require major
“It’s an electric shock,“ a source in the Association of European Businesses told AFP.
“You get the impression that business rivals are using the justice system and Russian (security) services to settle their scores. But the fact that the authorities are letting this happen sends
out a very negative signal. You wonder who will be next.”
In the Novaya Gazeta independent newspaper, outspoken commentator Yulia Latynina claimed that in the context of current East-West tensions, “for security officials, business people are criminals
and foreigners are spies”. — AFP
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Brent oil eases from 2019 highs as markets await trade talks outcome (Tue, 19 Feb 2019)
SINGAPORE: Brent crude oil prices eased away from 2019 highs on Tuesday on caution that economic growth may dent fuel demand this year, although supply cuts led by producer cartel OPEC
still meant markets were relatively tight.
International Brent crude oil futures were at US$66.08 (RM270.20) per barrel at 0220 GMT, down 42 cents, or 0.6% from their last close, but still not far off the 2019 high of US$66.83 (RM273.23) a
barrel hit in the previous session.
U.S. West Texas Intermediate (WTI) crude futures were at US$55.71 (RM227.80) per barrel. While that was up 12 cents from their last settlement, it was below the US$56.33 (RM230.33) 2019 high from
the previous day.
Traders said the slight downward correction was driven by concerns about the health of the global economy this year.
Bank of America Merrill Lynch said in a note that the Sino-American trade dispute was hurting economic growth globally.
“Addressing global trade tensions is key for improving the economic outlook,“ it said in a note.
China’s vice premier and chief trade negotiator, Liu He, and U.S. Trade Representative Robert Lighthizer lead a round of trade talks this week in Washington.
Considering the economic outlook and supply and demand balances, the bank said it expects Brent prices to average between US$50 (RM204.5) and US$70 (RM286) per barrel, “anchored around US$60.”
Despite some caution around trade, global oil markets remain relatively tight because of supply cuts led by the Middle East dominated Organization of the Petroleum Exporting Countries (OPEC), with
top crude exporter Saudi Arabia cutting the most.
Saudi seaborne crude exports fell in the first half of February, with departures standing at 6.204 million barrels per day (bpd), a 1.341 million bpd decline on the previous month and 0.91 million
bpd decline on the year, data intelligence firm Kpler said.
Further providing oil markets with support are US sanctions against petroleum exporters Iran and Venezuela.
Venezuela is a major crude supplier to US refineries while Iran is a key exporter to major demand centres in Asia, especially China and India. — Reuters
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Ringgit opens lower in early trade (Tue, 19 Feb 2019)
KUALA LUMPUR: The ringgit was slightly lower against the US dollar in early trade dragged by lower oil prices, said a dealer.
At 9am, the ringgit was quoted at 4.0880/0950 compared to Monday’s close of 4.0830/0880.
He said oil prices fell today, amid signs of concerns on another round of trade talks between the United States and China.
“Investors are now adopting a wait-and-see attitude ahead of the upcoming trade talks between the US and China in Washington this week,” he said.
It was reported that trade talks between the US and China last week in Beijing went smoothly and the investors hoped that both sides could reach an agreement before March 1 deadline.
At press time, benchmark Brent crude stood at US$66.40 per barrel.
Overall, the ringgit traded lower against other major currencies.
It fell against the Singapore dollar to 3.0121/0177 from 3.0100/0145 yesterday, weakened against the British pound to 5.2784/2895 from 5.2724/2797.
The local note also declined against the euro to 4.6211/6294 from 4.6195/6264 and depreciated against Japanese yen rose to 3.6969/7045 from 3.6934/6982 previously. — Bernama
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KL shares open higher, tracking regional equities (Tue, 19 Feb 2019)
KUALA LUMPUR: Shares on Bursa Malaysia extended yesterday’s gains to open higher today as market sentiment was lifted by higher regional equities.
At 9.16am, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) stood at 1,694.87, up 2.13 points from Monday’s close of 1,692.74.
The index opened 1.29 points firmer at 1,694.03.
Regionally, Singapore’s Straits Times Index rose 0.09% to 3,268.82, Jakarta Composite Index was up 1.70% to 6,497.81 and Hong Kong’s Hang Seng Index rose 1.60% to 28,347.01.
In a note, Public Investment Bank Bhd said the FBM KLCI would continue to trend higher today as the regional equities kicked off the week with strong gains, propelled by a solid close on Wall
Street on Friday.
“Stocks across Asia Pacific got off to a robust start after broad declines on Friday, as trade war optimism on Wall Street in the interim fed through to markets in the region,” it added.
Meanwhile, Wall Street was closed yesterday for a public holiday in honour of George Washington, the first President of the United States.
Among heavyweights on Bursa Malaysia, Maybank added one sen to RM9.49, Public Bank was flat at RM25, Tenaga eased two sen to RM12.98 and Petronas Chemicals gained 16 sen to RM8.73.
Of actives, EA Holdings and TRC Synergy were each one sen higher at 2.5 sen and 58.5 sen, respectively, while Bumi Armada lost half-a-sen to 22 sen.
The FBM Emas Index increased 15.56 points to 11,796.27, the FBM Emas Syariah Index went up 22.19 points to 11,725.91 and the FBMT 100 rose 15.34 points to 11,657.29.
The FBM Ace Index was 18.28 points higher at 4,672.46 and the FBM 70 rose 21.47 points to 14,093.43.
Sector-wise, the Financial Services Index was up 17.50 points at 17,670.35, the Plantation Index edged down 8.03 points to 7,317.88 and the Industrial Products and Services Index was 1.06
of-a-point higher at 164.63.
Market breadth was positive with gainers outpacing losers 155 to 123, while 240 counters were unchanged, 1,336 untraded and 20 others suspended.
Turnover stood at 220.83 million shares worth RM87.96 million.
The physical price of gold as at 9.30am stood at RM168.59 per gramme, up 58 sen from RM168.01 at 5pm yesterday. — Bernama
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GLOBAL LNG-Asian prices drop to 17-mth low on tepid demand (Tue, 19 Feb 2019)
SINGAPORE: Asian spot prices for liquefied natural gas (LNG) continued their downward spiral this week, hitting a 17-month low as the market moved further away from the peak winter-demand
period and inventories remained high in the region.
Spot prices for March delivery to Asia fell to US$6.50 (RM26.59) per million British thermal units (mmBtu) this week, down 20 cents from the previous week to their lowest since Sep 8, 2017, trade
April prices are estimated at about US$6.30 (RM25.77) per mmBtu, the sources said.
Demand in China remained tepid as many factories there were still shut for Lunar New Year celebrations, trade sources said. The Lunar New Year fell on Feb. 5 and 6 this year, but the festival
typically lasts for about two weeks.
While temperatures in Beijing and Shanghai briefly dipped below normal levels, they are expected to rise next week, weather data on Refinitiv Eikon showed.
“It snowed in Beijing but it’s not that cold still, plus the factories are still shut, so the inventory levels are still quite high,“ a China-based trade source said.
Several unplanned outages failed to lift prices, indicating just how weak demand is currently, trade sources said.
Loadings of LNG cargoes at Malaysia’s Bintulu export plant, operated by Petronas, were delayed this week due to lower production, sources have said.
But the delay was due to minor glitches at the plant which have since been resolved, one of the sources said.
In Australia, at least one train was down briefly at Chevron Corp’s Wheatstone LNG plant but operations have resumed since, sources said. Chevron declined to comment.
Train 3 of Chevron’s Gorgon LNG project in Western Australia is still down after it was shut in mid-January following a mechanical issue, sources said.
All sources declined to be identified as they were not authorised to speak with media.
Woodside Petroleum’s Pluto LNG facility has also resumed full output after a brief outage.
With prices falling, there is also less incentive for producers to keep output at high levels, an industry source said.
LNG exports from US LNG terminals are returning to normal after loadings were delayed earlier this month when natural gas flows to terminals fell to their lowest level in almost a year due to
maintenance work and a fog along the US Gulf Coast.
Supply remained ample in Asia with Indonesia’s Donggi-Senoro LNG export plant offering a cargo for April, while Kuwait Petroleum Corp was seeking a cargo for March.
Indonesia’s Pertamina sold four cargoes it had offered for March 2019 to early 2020 from its Bontang plant, although price and buyer details could not immediately be confirmed. —
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Australia’s Blackmores flags weaker H2 as China sales slow, shares crash (Tue, 19 Feb 2019)
SYDNEY: Australian vitamin maker Blackmores Ltd cautioned that weak sales in China, its biggest export market, will drag on its net profit in second half of the year, driving down its
shares the most since the company listed three decades ago.
The vitamin maker, which has benefited from exploding Chinese demand for Australian health products, said sales to the mainland fell more than a tenth in the six months to December, and the
pattern was continuing partly due to “a general softening of consumer sentiment”.
Full-year revenue is expected to be “modest”, it warned, even as the beachside Sydney-based company turned in a record first-half net profit. Blackmores said it was reviewing its operations in
China, without elaborating.
The warning sent Blackmores shares down as much as a third, their biggest percentage drop since 1985. The stock hit its lowest intraday level since 2015 as investors rethought the underlying value
of the company’s main growth prospect.
By midsession the shares were down 23%, while the broader market was up 0.4%.
Blackmores’ dour outlook underlines the precarious position of companies around the world that have staked their future on insatiable Chinese consumer appetite.
In January, computer maker Apple Inc rattled global markets as it issued a surprise revenue warning based citing weaker demand for its iPhones in China.
That is all against a backdrop of bitter trade tensions between the United States and China which have led to tougher conditions for exporters.
“You’ve got a property market over there that’s very weak, you’ve got all these trade tensions, you’ve got the lowest economic growth in 20 years in China (but) for Blackmores that space was
supposed to be growing no matter what,“ said Steve Johnson, chief investment officer at Forager Funds Management.
“They’re almost certainly buying more of that type of product, it’s just that when the demand increases so does the competitive response.”
Blackmores reported a net profit of AUS$34.3 million (US$24.46 million/RM100 million) for the six months to Dec 31, up 0.4% from the previous corresponding period. Half-year revenue from ordinary
activities rose about 11% to AUS$319.4 million, which the company said was its best-ever revenue figure for the period. — Reuters
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