Singapore keeps monetary policy on hold amid patchy recovery (Wed, 14 Apr 2021)
SINGAPORE: Singapore's central bank kept monetary policy settings unchanged on Wednesday and said the accommodative stance was appropriate due to a benign inflation outlook and global
economic uncertainties caused by the pandemic.
The Monetary Authority of Singapore (MAS) was, however, more upbeat about official 2021 growth projections while data showed the economy unexpectedly growing in the first quarter from a year
The central bank manages monetary policy through exchange rate settings, rather than interest rates, letting the local dollar rise or fall against the currencies of its main trading partners
within an undisclosed band.
Barring a setback to the global recovery, Singapore's economy is likely to exceed the upper end of the official 4–6% forecast range, the MAS said. But the sectors worst hit by the crisis will
continue to face significant demand shortfalls, it added.
“As core inflation is expected to stay low this year, MAS assesses that an accommodative policy stance remains appropriate,“ the central bank said in its statement.
Singapore's dollar strengthened 0.2% after the policy decision and better-than-expected gross domestic product (GDP) data.
The MAS expects core inflation, its preferred price gauge in setting monetary policy, to rise only gradually for the rest of the year and come in at 0%–1% in 2021. However, it raised its forecast
range for headline inflation to 0.5 to 1.5% from −0.5 to 0.5% previously.
The central bank adjusts its policy via three levers: the slope, mid-point and width of the policy band, known as the Nominal Effective Exchange Rate, or S$NEER.
On Wednesday, the MAS said it would maintain a zero percent per annum rate of appreciation of the policy band. The width of the policy band and the level at which it is centered will be
All 15 economists polled by Reuters had forecast the MAS would keep its policy unchanged.
“As such, persistent weakness in the aviation and retail and hospitality sector will hold back the recovery,“ said Alex Holmes, economist at Capital Economics. He expects policy settings to remain
unchanged for at least the next year.
GDP ticked up 0.2% in January-March on a year-on-year basis, official data showed on Wednesday, surprising economists who had expected a 0.2% decline.
Singapore, which has brought its local virus situation under control and is rolling out vaccinations, is on a gradual recovery path after its worst ever recession last year. But analysts say
external demand and the reopening of international borders are key to growth.
“The domestic demand recovery is firming much stronger than what we have been expecting,“ said Lee Ju Ye, an economist at Maybank Kim Eng. She said there was a small possibility the central bank
may tighten at its next policy review in October if the recovery gains momentum and inflation picks up. - Reuters
>> Continua a leggere
UWC to manufacture highest frequency 5G tester (Tue, 13 Apr 2021)
PETALING JAYA: UWC Bhd has been commissioned by its key client, customer B to develop and manufacture the world’s highest frequency 5G over-the-air
chamber, which serves as a 5G tester.
It stated that the tester will provide a measurement environment for characterising wireless and antenna system performance of devices at millimetre-wave frequencies and it will provide
performance, functional and protocol testing of networks.
The group said that the product is geared towards the automotive industry (vehicle-to-vehicle connectivity) and 5G smart devices such as smartphones and tablets.
UWC revealed that it has been a strategic partner to customer B in supporting the manufacturing of its test equipment which is en route for mass production roll-out and the capital expenditure
earmarked for the product will be financed internally.
Its executive director and group CEO Datuk Ng Chai Eng said the development marks its ability to keep up with trends in the development and manufacturing of new products for the technology
He projected that the development of 5G will continue to grow exponentially globally as technological advancement will need to rely on a strong network infrastructure. Therefore, it is optimistic
of the total addressable market for 5G.
“We take years to develop a product with our clients, starting from the product development stage where UWC provides value-added engineering solutions that will translate into a smooth
manufacturing process during mass production,” said Ng in a statement.
He pointed out that the product signals its clients’ confidence in the group.
>> Continua a leggere
SC reprimands Remitano, seeks to block website (Tue, 13 Apr 2021)
PETALING JAYA: The Securities Commission Malaysia (SC) has reprimanded Remitano for operating a digital asset exchange (DAX) in Malaysia without
authorisation and has included the entity to its ‘Investor Alert’ list.
The regulator has sought assistance of the Malaysian Communications and Multi-media Commission to block Remitano’s website as it views it as a serious transgression.
The SC has also written to Google and Apple to disable the operation of Remitano’s mobile applications in Malaysia.
It highlighted that operating a DAX without approval to be registered as a registered market operator (RMO) is an offence under Section 7 of the Capital Markets and Services Act 2007. If
convicted, a person may be liable to a fine not exceeding RM10 million or imprisonment for a term not exceeding ten years, or both.
It urged investors to immediately cease trading through the platform and withdraw all their investments before access to its website is blocked and becomes inaccessible.
Over the last two years, the regulator has intensified efforts in combating illegal investment schemes through various anti-scam awareness campaigns via its InvestSmart platform and maintained an
‘Investor Alert’ list accompanied by media announcement and social media posts.
It reminded investors to trade only with RMOs that are registered with the SC.
>> Continua a leggere
Pansar completes acquisition of Perbena Emas (Tue, 13 Apr 2021)
PETALING JAYA: Engineered solutions provider Pansar Bhd yesterday announced its successful acquisition of Perbena Emas Sdn Bhd (PESB), marking the
group’s strategic entry into the construction industry.
In line with the acquisition, the group will diversify its operations into construction and civil engineering, leveraging on PESB’s 43-year track record in construction and infrastructure
PESB’s orderbook to-date totalled RM2 billion, comprising key notable infrastructure projects such as the recently secured design and construction of Unimas Teaching Hospital in Kota Samarahan,
Sarawak totalling RM485.99 million, as well as the construction and completion of Batang Lupar 1 Bridge in Samarahan, Sarawak amounting to RM848.75 million, which are expected to support PESB’s
earnings visibility over the next two to four years.
Combined with Pansar group’s existing orderbook of RM223 million, comprising design, construction, supply, and engineering contracts from the group’s engineering division, the addition of PESB
brings the enlarged Pansar group’s total secured orderbook value to RM2.2 billion.
A Pansar spokesman said: “The acquisition of PESB marks a significant milestone for the future development and growth of our group. With the combined earnings potential and the benefits of
vertical integration, we envisage the enlarged Pansar group becoming a leading player in East Malaysia’s civil and infrastructure development.”
The management of Pansar is in the view that the construction sector in Sarawak is expected to prosper over the next few years, driven by the RM22 billion in spending for infrastructure projects
by the Sarawak government including the Second Trunk Road, coastal road upgrades, water grid programs, rural electrification projects and telco towers.
Going forward, Pansar anticipates that the revenue and earnings stream from PESB’s core business of construction and construction-related activities to contribute substantially to the net profit
of the group.
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Pine Labs acquires local fintech Fave for RM185m (Tue, 13 Apr 2021)
PETALING JAYA: Singapore-incorporated Pine Labs has acquired Fave for US$45 million (RM185 million) which will translate into the adoption of the
latter’s consumer fintech platform by 500,000 merchant network points across India.
The acquisition is projected to accelerate the growth of both companies in Asia through consumer opportunities across retail, food & beverage, fashion and fast-moving consumer goods.
With the deal, Fave’s founders will expand their role to lead the overall consumer platform for the group across Asia and it will also hire over 100 new employees for the effort.
Pine Labs CEO B Amrish Rau remarked that consumers have tremendous choices in payments and to save on every transaction.
He said Fave helps consumers apply their best rewards, coupons, gift cards and cashbacks on all transactions in a seamless manner.
“Joel and the Fave team have built a loyal consumer base with their smooth checkout experience. We are excited to partner them in this journey in Southeast Asia and India,” B Amrish said in a
Similarly, the consumer fintech startup’s co-founder and CEO Joel Neoh, is upbeat to be working with Pine Labs and expanding the platform across Asia.
“Really excited to work with Amrish and the Pine Labs team to continue expanding the Fave platform across the Asian region,” he said.
“Pine Labs has been a great partner and investor for us, and it only makes sense for us to join our synergies together and work towards our shared vision of building a truly global consumer and
Neoh commented that India has the digital advantage with young demography, growing aspirational middle class with rising disposable income and increasing digital savviness.
Moving forward, he is confident that the Asia-Pacific e-payments landscape will continue to achieve exponential growth in the coming decade.
>> Continua a leggere
Coinbase brings cryptocurrencies to Wall Street (Tue, 13 Apr 2021)
NEW YORK: The arrival of cryptocurrency exchange Coinbase on Nasdaq today is one of the most anticipated events of the year on Wall Street, where
enthusiasm for record-breaking bitcoin is in full swing, despite questions about the sustainability of the market.
The first company devoted entirely to cryptocurrency to enter the US stock exchange, Coinbase – which will be listed under the symbol COIN – is already a heavyweight.
Estimates vary depending on the method of calculation, but its capitalization is expected to range from US$70 (RM289 billion) to US$100 billion, the largest IPO for a US company since Facebook in
Coinbase chose a direct listing, which does not allow it to raise new funds but does offer current shareholders – founders, employees and historical investors – the opportunity to sell their
stocks on the market.
Spotify, Slack, Palantir and Roblox had also used this method for their Wall Street debuts.
Nearly 115 million Coinbase shares will be put on the market.
Founded in 2012 in San Francisco by Brian Armstrong and Fred Ehrsam, the platform allows users to buy and sell about 50 cryptocurrencies, including bitcoin and ether.
Coinbase claims 56 million total users and a little more than six million people making transactions each month, according to estimates from its first-quarter results, released in early April.
The company has benefited from bitcoin’s meteoric rise over the past year, with the crypto asset’s price rising from US$6,500 last April to a record-high above US$62,000 yesterday.
“With bitcoin already having more than doubled in the last six months and cryptocurrencies becoming more popular with more mainstream investors, it can certainly be argued that crypto has become
more mainstream in the last 12 months,“ said Michael Hewson, the chief market analyst at CMC Markets UK.
The success of Coinbase and cryptocurrencies in general has given some rivals ideas: the head of the California-based cryptocurrency exchange platform Kraken told CNBC last week he hopes to take
his company public next year, also via a direct listing.
If the situation seems favorable to Coinbase, caution remains the order of the day among observers, who recall the company’s dependence on the price of virtual currencies, which tend to be
Before its spectacular rise in recent months, bitcoin had experienced setbacks, particularly in 2018 when the currency kept falling.
Some are also drawing attention to the distrust of lawmakers in several countries who are concerned about cryptocurrencies being used for illicit purposes.
“Will Coinbase prove popular with retail investors? There is little doubt about that prospect with demand and interest set to be high,“ said Hewson.
“The bigger question is whether any valuation is sustainable, particularly given how many governments aren’t particularly enamoured of cryptocurrencies,“ he said.
“Future regulation is likely to be a clear and present danger and a probable headwind” in the long term. – AFP
>> Continua a leggere
China’s strong exports and imports boosting recovery (Tue, 13 Apr 2021)
BEIJING: China’s exports rose sharply in March while imports growth surged to the highest in four years in yet another boost to the nation’s economic
recovery, signalling improving global demand amid progress in worldwide Covid-19 vaccination.
The data suggests the world’s second largest economy will continue to gather momentum as it emerges from the Covid-19-led slump in early 2020, though a lagging consumer rebound, a resurgence in
Covid-19 cases in many countries and Sino-US tensions have raised risks for the outlook.
Exports in dollar terms soared 30.6% in March from a year earlier, but at a slower pace from a record 154.9% growth in February. The analysts polled by Reuters have forecast a 35.5% jump in
“Strong foreign demand is likely to be sustained throughout the second quarter as the global economy further recovers,“ said Nie Wen, an economist at Hwabao Trust.
“But with the acceleration in global vaccination efforts, industrial sectors in other countries are gradually restarting. It remains to be seen that if China’s stellar export growth will begin to
Despite sporadic Covid-19 cases in China’s border cities, authorities have been able to largely contain the virus in a boost to the lagging consumer recovery.
The data showed total Chinese imports jumped 38.1% year-on-year last month, the fastest pace since February 2017 on high commodity prices, beating a 23.3% forecast and compared with 17.3% growth
China posted a trade surplus of US$13.8 billion (RM57 billion) last month, versus analysts expectations for the surplus to rise to US$52.05 billion from US$37.88 billion in February.
Official and private manufacturing surveys in China pointed to robust growth, with export orders returning to growth amid improving foreign demand.
But the resurgent Covid-19 infections abroad and constraints in global trade have left some companies grappling with prolonged delivery timeframes and surging prices of raw materials.
Makers of cars and electronic devices from televisions to smartphones are sounding alarm bells about a global shortage of chips, which is causing manufacturing delays as consumer demand bounces
back from the coronavirus crisis.
China’s gross domestic product expanded 2.3% last year, the only major economy to post growth in 2020, underpinned by solid demand for goods such as medical and work-from-home equipment.
This year, China has set a modest growth target of at least 6%, as authorities plotted a careful course out of a year disrupted by Covid-19 and amid heightened tensions with the United States.
China’s trade surplus with the United States slipped to US$21.37 billion in March from a US$23.01 billion in February. – Reuters
>> Continua a leggere
UK economy grew in February as firms readied for lockdown easing (Tue, 13 Apr 2021)
LONDON: Britain's economy grew by 0.4% in February from January as companies prepared for the lifting of a third coronavirus lockdown, according to official data which also showed a partial
recovery in post-Brexit trade with the European Union.
Economists polled by Reuters had expected growth of 0.6%. However, the data also showed that the fall in gross domestic product in January was not as severe as previously estimated, down by 2.2%
compared with the initial reading of a 2.9% drop.
Britain's economy shrank by almost 10% last year, its biggest slump in more than three centuries and a more severe fall than in most European economies, as the country was battered by the
Tuesday's data showed GDP remained 7.8% below its level a year earlier, shortly before the pandemic swept Europe, and was 3.1% lower than its level in October, before the two latest lockdowns
hammered Britain's huge services sector.
Still, a fast rollout of COVID-19 vaccines has raised the prospect of a bounce-back this year and in 2022.
Non-essential shops and outdoor hospitality venues reopened on Monday and Prime Minister Boris Johnson hopes to relax most coronavirus restrictions before the end of June.
“While the UK is still on course for a modest contraction in GDP in the first quarter, investors are increasingly looking towards the forthcoming rebound in economic growth rather than dwelling on
the negative quarterly figure,“ Dean Turner, an economist at UBS Global Wealth Management, said.
Growth in February was helped by a first rise in factory output since November, led by car manufacturing after two months of contraction when the industry struggled with a global shortage of
Wholesalers and retailers saw a pick-up in sales which helped the services sector to grow by 0.2%.
There were signs that trade between Britain and the European Union partially recovered in February after a hit in January, the first month of a new post-Brexit trade relationship.
British goods exports to the EU, excluding non-monetary gold and precious metals, were 41.4% below year-ago levels in January but partially recovered to be 12.5% below year-ago levels in February.
Imports, which dropped 19.2% on year-ago levels in January, were 11.5% below year-ago levels in February.
Trade volumes between Britain and the European Union rose in late 2020 as businesses stockpiled goods in anticipation of border delays in 2021.
“Despite the evidence of partial recovery from the substantial January falls in some commodities, it is still too soon to determine to what extent the monthly changes in trade for January and
February can be directly attributed to the end of the transition period,“ the ONS said. - Reuters
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Luster to build glove production lines in US (Mon, 12 Apr 2021)
PETALING JAYA: Luster Industries Bhd-linked Glovconcept Sdn Bhd (GSB), a 60%-owned subsidiary of Glovmaster Sdn Bhd, which in turn is a 56%-owned
subsidiary of the company, has entered into an agreement with American Nitrile LLC (AN) to provide engineering, procurement, construction and commissioning (EPCC) services as well as glove technology
solutions for up to 12 glove production lines and a further estimated 72 glove production lines in the US.
The contract, valued at more than RM1 billion (based on the total estimated 84 lines), marks Luster’s maiden foray into North America. Luster is also among the first Malaysian companies to offer
EPCC works for a glove manufacturing plant in the US, reaffirming the market’s confidence in the group to undertake a high-tech production facility.
A filing with Bursa Malaysia yesterday showed that GSB will undertake the designing, building and delivery of a glove manufacturing factory on a turnkey basis, with glove output of not less than
38,000 to 40,000 pieces per line, per hour. Meanwhile, AN will be responsible for the sourcing and procurement of the plant, machineries and infrastructure such as electricity and water, raw
materials, workers and utility. The plant will be located in Ohio, the US.
The remaining stake in Glovmaster is held by Fortune Tac Sdn Bhd, which specialises in the glove business, from setting up to operating glove production lines.
Luster Industries deputy managing director Liang Wooi Gee said the group has taken the opportunity to tap into the US market, following the rising interest for it to reduce its reliance on Asia’s
personal protective equipment (PPE), including masks, gloves and ventilators. Malaysia supplies about 68% of the world’s gloves.
This is in line with the direction of US President Joe Biden’s administration to reduce dependency and reliance on imports of PPE.
The estimated cost of around US$3.6 million or RM14.9 million per line in building the glove production plant will be borne by AN. At least 12 production lines will be placed into two separate
orders, which works out to RM178.8 million in value. AN aspires to purchase from GSB up to 72 additional production lines within the first 24 months of the agreement.
GSB is entitled to a percentage of the sale proceeds from all the production lines, with a minimum entitlement of US$2 million per annum and capped at US$50 million for every 12 lines. Once all 84
production lines are running at full capacity, Luster could see earnings of up to US$350 million coming from the sales proceeds of gloves by AN.
>> Continua a leggere
Taking a look into the retail investment surge (Mon, 12 Apr 2021)
PETALING JAYA: With the surge in retail investment driven by the Covid-19 pandemic, there is a typical narrative of changes of opportunity cost,
increase in investable income - from mortgage moratorium and other stimulus actions, coupled with the lack of other opportunities which has been driving this trend, said University of Southern
California senior economist and Institute for Capital Market Research (ICMR) Malaysia research fellow Dr Joanne Yoong.
Zooming in on those who are investing for the very first time, she noted that there is a story of social media, peer effects and unprecedented access.
“Some of this is a perfect storm of things that have been worked on for a long time to promote the healthy retail participation, but on the other hand some of it are behaviours that we have to
worry about,” she said at ICMR’s panel discussion Retail Investor Behaviour: 2020 and Beyond yesterday.
“We don’t see increases in indices of financial literacy. Sometimes we are not measuring those indices correctly or in the most modern way but we are not seeing that increase which should give us
With regards to the surge in retail investors, Bursa Malaysia Securities market director Azhar Zabidi feels there is no fixed rule on how certain age groups should invest, as the young could be
risk-averse which could be a function of starting out with a smaller amount of capital and vice versa.
He opined that a portfolio of investments should comprise longer-term yielding stocks that pays dividends, from stable companies such as banks, while in the short-term one might go for growth
companies that may not provide the necessary dividend stream but more likely to appreciate in terms of capital value. In addition, a smaller proportion should be on short-term gains.
“To me it’s about striking a balance, like any fund manager looking at a portfolio. An individual should also look at things from a similar perspective,” said Azhar.
As for the behaviour of retail investors, Maybank Kim Eng retail brokerage regional head Lok Eng Hong highlighted that the Securities Commission’s latest statistics showed that 83% of active
retail accounts traded in stocks that are priced below 50 sen.
“This is interesting data. Why are these stocks so attractive? Are the investors looking at the companies’ business plan and other data?” he posed.
Lok surmised the popularity of such counters is related to retailers’ ability to go in and out quickly and make a lot of decisions, since there a lot of time available during the lockdown which
allow people to sharpen their skills and spend more time.
“At the same time, we are seeing intraday trading proportion of retail trading has gone up. Three years ago it was only 23% and last year the numbers pushed up to about 33%, a significant jump,”
Comparatively, the regional head noted that the institutional space’s intraday trading has not changed much as it remained at 17-18% over the same period.
“Retailers do have the ability to participate in impulsive trading and perhaps small swings, regardless of names.”
However, he also acknowledged that retail investment does bring a different element despite being from different accounts and names. It tends to be concentrated in certain small caps and
speculative stocks, gravitating more towards most-traded stocks.
>> Continua a leggere
Bintai Kinden acquires Johnson Medical to expand healthcare business (Mon, 12 Apr 2021)
PETALING JAYA: Bintai Kinden Corp Bhd, which aims to include healthcare as one of its core businesses, is acquiring Johnson Medical International Sdn
Bhd for RM50 million to expand its healthcare business segment.
The company yesterday entered into a memorandum of understanding (MoU) with the vendor Yeo Eng Lam to acquire the entire stake in Johnson Medical. The proposed acquisition would be satisfied via a
combination of cash amounting to RM26 million and the issuance of 58.54 million new shares in Bintai Kinden at 41 sen each.
Pursuant to the MoU, Bintai and the vendor have mutually agreed to negotiate exclusively in good faith on the structures and terms of the proposed acquisition with the intention to finalise and
enter into the relevant definitive agreements within 30 days from the date of the MoU or such other longer period as both parties may mutually agree upon.
Established in 1994, Johnson Medical is a medical engineering solutions provider focused on the manufacturing, supply and installation of operating theatres, critical care units and medical gas
delivery systems, and trading of medical equipment and supplies.
Johnson Medical specialises in undertaking medical facility development and construction projects, which covers the design, construction planning, engineering, manufacture, equipping,
installation, testing, commissioning, training and maintenance aspects.
Johnson Medical is a holder of Grade “G7” certificate by the Construction Industry Development Board of Malaysia to undertake building general works, general civil engineering works, mechanical
works and medical equipment system.
Bintai Kinden executive vice-chairman Ibrahim Othman said the proposed acquisition presents an opportunity for the company to expand inorganically via acquisition of businesses that is similar
industries to its existing core business in the construction sector.
“The exercise will also enable the company to expand its products and services offering in addition to its current distribution of Greenie Medi Cold Chain Box designed for storage and distribution
of Covid-19 vaccine under its healthcare business segment.
“It will allow Bintai Kinden to tap into the healthcare segment to supply and install various medical devices such as medical pendants, mobile and modular healthcare units, bedhead panels, mobile
surgical units and trauma workstation to capture the demand for healthcare business as a result of the Covid-19 pandemic, he added.
Under the MoU, the vendor will provide Bintai Kinden with a profit guarantee of RM3.5 million and RM5.6 million for the financial year ending Dec 31, 2021 and FY22 respectively.
>> Continua a leggere
ARB, Involve Asia in Deloitte Touche’s list (Mon, 12 Apr 2021)
PETALING JAYA: Two Malaysian companies ARB Bhd and Involve Asia Technologies Sdn Bhd have earned their spot on the Deloitte Touche Tohmatsu Ltd’s 2020
Asia Pacific Technology Fast 500 index, ranking 72nd and 414th respectively.
The index is an annual ranking of the fastest growing Asia Pacific companies in the hardware, software, communications, media, life sciences and clean technology industries, with the firms
selected based on their percentage of fiscal year revenue growth over three years.
ARB, an IT and IoT solutions and services company, is the top company in the region at 72nd place.
The two local firms join six other companies from Southeast Asia on the index. ARB and Involve Asia reported a growth of 799% and 109% respectively.
Deloitte Southeast Asia’s technology, media & telecommunications industry leader Yang Chi Chih remarked that even though the Covid-19 pandemic brought about unprecedented disruptions to
businesses in the last year, it has also catalysed digital transformation across Southeast Asia as companies pivoted to respond, recover and thrive.
“Looking ahead, we expect technology companies in the region to continue this growth trajectory, focusing and leveraging on 5G technology, cloud and data analytics,” he said in a statement.
Similarly, Deloitte Private Asia Pacific leader Mike Horne acknowledged that this year’s winners have all weathered multiple challenges to make it on the list, as it managed to maintain strong
growth momentum amidst the pandemic, injecting vitality into the communities, industries, and markets they serve.
Overall, this year’s top 500 companies had an average revenue growth of 551%, while the top 10 companies delivered an average revenue of about US$137.05 million (RM567.15 million) with an average
revenue growth of 7,621%.
Due to the global spread of Covid-19, the average revenue growth in 2020 dropped significantly compared to the 2019 average growth of 717%, and historical high in 2018 (987%), and is the fifth
highest recorded by the Asia Pacific Technology Fast 500.
>> Continua a leggere
Chinese tech start-ups pull IPO plans as Beijing tightens scrutiny (Mon, 12 Apr 2021)
SHANGHAI: A growing number of Chinese tech start-ups are cancelling plans to list on Nasdaq-style markets at home with some eyeing Hong Kong share
sales instead, as regulators tighten scrutiny of IPO applicants after the halting of Ant Group’s US$37 billion (RM153 billion) float.
Over 100 companies have voluntarily withdrawn applications to list on Shanghai’s STAR Market and Shenzhen’s ChiNext since Ant’s termination of its initial public offering (IPO) in November,
according to Reuters review of exchange filings.
The unprecedented withdrawals come against the backdrop of sharply intensified grilling of listing prospects by regulators, leading to IPO delays, outright rejection or even penalties, say bankers
and company executives.
The scramble to withdraw IPO applications raises questions over the quality of China’s IPOs and robustness of due diligence done by their underwriters.
The trend, if it continues, would threaten China’s ambition to compete with global listing venues such as Hong Kong and New York at a time when Beijing is also considering establishing a new
bourse to attract overseas-listed firms.
China launched STAR nearly two years ago with a US-style registration and disclosure-based IPO regime in a bid to dissuade its tech start-ups from tapping offshore bourses, and to fast-track
listings. The reform extended to ChiNext last year.
But Ant’s IPO, which was suspended after regulators expressed concerns about some parts of its businesses, shifted the watchdog’s attention towards risk control, said a banker with direct
knowledge of regulators’ thinking.
The STAR Market became the world’s fourth most popular listing venue in 2020, with IPOs raising US$20 billion. Its ranking fell to the 7th in the first quarter, according to Refinitiv data.
DaoCloud, a Shanghai-based cloud computing start-up, had planned a STAR IPO this year, but is now considering a Hong Kong listing instead, deterred by the likelihood of approval delays.
IPO applicants “now face a lot of regulatory uncertainty,“ said Roby Chen, DaoClould’s founder. “So we need a plan B.”
For others with no immediate plans for an overseas listing, the priority is to seek fresh private funding.
Several artificial intelligence unicorns, start-ups valued at US$1 billion or above, “have come to me with their business plans, and seek financing,“ said Abraham Zhang, chairman of Shenzhen-based
venture capital firm China Europe Capital.
Loss-making tech unicorns that have shelved their listing plans include Yitu Ltd, Unisound AI Technology Co and Shenzhen Royole Technologies Co, according to exchange data.
Ming Liao, founding partner of Beijing-based Prospect Avenue Capital, said many Chinese start-ups now face a bumpy road towards IPOs, with some of them struggling to “demonstrate their potential
for sustainable growth.”
CSRC Chairman Yi Huiman last month urged underwriters to tighten scrutiny of IPO candidates, vowing to punish those trying to bring “sick” firms to the market.
Bankers say bourses are now launching on-site inspections, poring over IPO filings and bombarding sponsors with loads of questions – practices that were not common earlier.
In addition, senior executives of a start-up must disclose their personal bank accounts and explain large transactions.
As a result, the average waiting time has blown out from six months to 12, creating a backlog of over 100 companies waiting to list on STAR, said a banker. – Reuters
>> Continua a leggere
IMF warns on rising debt risks in virus-hit Middle East, Central Asia (Sun, 11 Apr 2021)
DUBAI: The International Monetary Fund (IMF) said yesterday countries in the Middle East and Central Asia need to curb their financing requirements,
as a surge in government debt, exacerbated by the pandemic, threatens recovery prospects.
The region, which includes around 30 countries from Mauritania to Kazakhstan, saw an economic rebound in the third quarter as countries relaxed measures to contain the new coronavirus.
But the outlook remains highly uncertain and recovery paths will diverge depending on the speed of vaccinations, reliance on heavily impacted sectors, such as tourism, and countries’ fiscal
The Fund said “early inoculators”, which include the oil-rich Gulf countries, Kazakhstan, and Morocco, will reach 2019 gross domestic product (GDP) levels next year, while recovery to those levels
is expected to take one year more for other countries.
“High financing needs could constrain the policy space required to support the recovery,“ the Washington-based global lender said in its Regional and Economic Outlook Update.
Lower demand and a slump in commodity prices eroded state finances last year. In the Middle East and North Africa, fiscal deficits widened to 10.1% of GDP in 2020 from 3.8% of GDP in 2019.
The crisis led many countries to raise debt, partly taking advantage of abundant liquidity in the global markets, to afford extra spending needed to mitigate the impact of the pandemic.
The IMF warned that financing needs are projected to increase over the coming two years, with emerging markets in the region likely to need around US$1.1 trillion (RM4.5 trillion) during 2021-2022
from US$784 billion in 2018-2019.
This presents financial stability risks and could slow economic recovery. Many countries rely on domestic banks to fund sovereign needs, which could make credit less easily available for
corporates and small enterprises. – Reuters
>> Continua a leggere
Amended Act 118 to help buyers of abandoned projects (Sun, 11 Apr 2021)
KUCHING: The Housing Development (Control and Licensing) Act 1996 (Act 118) will be amended to help house buyers buyers of abandoned housing projects,
said Housing and Local Government Minister Datuk Zuraida Kamaruddin.
She said the amendment to the act was being drawn up to address issues concerning abandoned housing projects, as well as to enable stricter action to be taken against developers.
“Under the current law, the developers will only be blacklisted,” she told a press conference after opening the Sarawak branch Syarikat Perumahan Negara Bhd (SPNB) office yesterday.
The ministry, she said, would also set up a fund where housing developers are required to allocate a certain amount into the fund before they can develop a housing project.
“The fund will be used if the developer were to abandon the project,” she added.
Meanwhile, on the opening of the SPNB office, Zuraida said it was one of the agency’s rebranding initiatives in Sarawak.
“Members of the public, especially the B40 group in Sarawak, can contact SPNB directly to obtain information on the People Friendly Housing Program (RMR) and to purchase the affordable homes under
SPNB,” she added.
SPNB has so far built 2,904 housing units in Sarawak, with several other projects will be launched, including in Kuching and Miri involving 2,187 units. – Bernama
>> Continua a leggere
Celcom-Digi merger won’t stray from MyDigital blueprint (Sun, 11 Apr 2021)
PETALING JAYA: The Celcom-Digi merger is not likely to lead to an investment in their own 5G network ahead of the change to a state-owned entity
network rollout model from a consortium led model that was announced with the MyDigital blueprint in February, according to an analyst.
Speaking to SunBiz on condition of anonymity, the analyst noted that such development is not possible as the special purpose vehicle (SPV) rollout entails a dedicated spectrum allocated to the
operators managed by the ministry-linked SPV.
Previously, Fitch Solutions raised the possibility that a centrally-coordinated rollout of 5G could be inefficient and likely to incur higher levels of capital expenditure (capex) compared to a
scenario where operators pursue their own buildouts and network sharing arrangements.
In a report, the rating agency cautioned a similar government-led approach in Australia has resulted in the telco investing heavily to develop their own 5G fixed-wireless networks to mitigate
their reliance on state-owned network’s wholesale capacity to serve the fixed broadband segment.
It said there is a potential for a similar scenario playing out in Malaysia, where operators could look at deepening their focus in areas where the government-owned SPV might not focus, such as in
unlicensed private 5G networks, in order to grow their revenues.
However, the analyst opined that the impetus for the move is due to the cutthroat competition in the sector, as the merger would enable the two to capitalise on synergies and value accretion.
On the whole, research houses are positive on the move which would result in the merged entity, Celcom-Digi to be the leading telco service provider in Malaysia in terms of market capitalisation,
revenue and profit, with proforma FY20 revenue of RM12.4 billion, pre-synergy ebitda of RM5.7 billion and 19 million customers, 71% above current market leader Maxis.
Public Investment Bank Research said the merger should help ensure long term sustainability given the trend where the industry is experiencing margin compression and lower profitability with the
need to continuously invest in new technologies to cater for a growing demand for data and speed.
AmResearch highlighted that the two have not provided any guidance on the synergistic value creation versus the net present value of RM7-9 billion over five years for the Malaysian operations
during the previous abortive merger attempt back in 2019.
“This was the larger part of the five-year synergies up to RM15–20 billion in present value from network efficiencies, cost avoidance, procurement optimisation and economies of scale arising from
merging the regional operations of Axiata and Telenor,” it said.
Prior to the synergy, CGS-CIMB estimates the deal values Celcom at FY21 enterprise value/ebitda of 8.8 times, which translates to 23-24% below Digi’s and Maxis’s valuations. It sees Digi’s FY22
core earnings per share lifted by 7.4% pre-synergy, including new debt and enlarged share base. Similarly, the research house noted that there has been no guidance on potential synergy other that the
2019 merger guidance.
“However, as Celcom/Digi’s future capex would fall anyway due to 5G network investments by the government, we think the synergies may be less this time. We have assumed RM5 billion, or 28-44%
lower,” it said.
With the merger, Rakuten Trade head of research Kenny Yee hopes it will prompt similar merger & acquisition moves.
“By doing so, mega companies will emerge thus attracting higher inflow of foreign participants,” he said.
>> Continua a leggere
Alibaba fined US$2.75b for anti-monopoly violations (Sun, 11 Apr 2021)
SHANGHAI: China slapped a record 18 billion yuan (US$2.75 billion) fine on Alibaba Group Holding Ltd on Saturday, after an anti-monopoly probe found
the e-commerce giant had abused its dominant market position for several years.
The fine, about 4% of Alibaba’s 2019 domestic revenues, comes amid a crackdown on technology conglomerates and indicates China’s antitrust enforcement on internet platforms has entered a new era
after years of laissez-faire approach.
The Alibaba business empire has come under intense scrutiny in China since billionaire founder Jack Ma’s stinging public criticism of the country’s regulatory system in October.
A month later, authorities scuttled a planned US$37 billion (RM153 billion) IPO by Ant Group, Alibaba’s internet finance arm, which was set to be the world’s biggest ever. The State Administration
for Market Regulation (SAMR) announced its antitrust probe into the firm in December.
While the fine brings Alibaba a step closer to resolving its antitrust woes, Ant still needs to agree to a regulatory-driven revamp that is expected to sharply cut its valuations and rein in some
of its freewheeling businesses.
“This penalty will be viewed as a closure to the anti-monopoly case for now by the market. It’s indeed the highest profile anti-monopoly case in China,“ said Hong Hao, head of research BOCOM
International in Hong Kong.
“The market has been anticipating some sort of penalty for some time ... but people need to pay attention to the measures beyond the anti-monopoly investigation.”
The SAMR said it had determined that Alibaba, which is listed in New York and Hong Kong, had been “abusing market dominance” since 2015 by preventing its merchants from using other online
The practice, which the SAMR has previously spelt out as illegal, violates China’s antimonopoly law by hindering the free circulation of goods and infringing on the business interests of
merchants, the regulator added.
Besides imposing the fine, which ranks among the highest ever antitrust penalties globally, the regulator ordered Alibaba to make “thorough rectifications” to strengthen internal compliance and
protect consumer rights.
Alibaba said in a statement that it accepts the penalty and “will ensure its compliance with determination”. The company will hold a conference call today to discuss the penalty.
The fine is more than double the US$975 million paid in China by Qualcomm, the world’s biggest supplier of mobile phone chips, in 2015 for anticompetitive practices.
The hefty penalty on Alibaba also comes against the backdrop of regulators globally, including in the US and Europe, carrying out tougher antitrust reviews of tech giants such as Alphabet Inc’s
Google and Facebook Inc.
With the fine on one of its most successful private enterprises, Beijing is making good on threats to clamp down on the “platform economy” and rein in the behemoths that play a dominant role in
the country’s consumer sector.
Chinese official media hailed the penalty imposed on Alibaba, saying it would set an example and bolster awareness about antimonopolistic practices and the need to adhere to related laws. –
>> Continua a leggere
SIBS 2021 to return with hybrid edition, bringing Selangor as premier investment destination (Thu, 08 Apr 2021)
KUALA LUMPUR: One of the most anticipated annual business events, the 5th Selangor International Business Summit (SIBS) 2021 will return with a hybrid
edition at the Kuala Lumpur Convention Centre from Oct 7 to 10 this year, showcasing Selangor as a premier investment destination.
Selangor State Executive Councillor Datuk Teng Chang Khim said the return of SIBS 2021 will be an opportunity to strengthen Selangor’s position as a competitive and preferred investment
destination in Asia.
“It will also offer the avenue to demonstrate our resilient, agility and determination to succeed and move forward despite the challenges presented by the pandemic,” he said in his speech at the
soft launch of SIBS 2021 at the Kuala Lumpur Convention Centre yesterday.
Themed “Tomorrow, Today, SIBS 2021” will further strengthen Selangor’s position as the most progressive and developed state in Malaysia.
Teng, who is also chairman of State Standing Committees for Investment, Industry & Commerce and Small & Medium Enterprise, said established value chains across numerous industries,
advanced physical and online connectivity, and excellent state government support makes Selangor one of the most attractive trading hubs in the region and an ideal gateway to Asean and the world for
“Selangor continues to position itself as a regional leader in five promising core clusters, namely electrical and electronics, life sciences, F&B (food and beverage), transport equipment, and
machinery and equipment.
“These clusters include a range of industries from aerospace to pharmaceuticals, all of which will serve as the strategic platform to continue accelerating Selangor’s economic growth and
sustainability,” he added.
Teng said SIBS 2021 will be a crucial part of the golden state’s economic rebuilding process to reverse the effects of the global pandemic.
“Historically, Selangor was one of the largest recipient of inward direct investment in Malaysia and in 2020, topped the list of the best investment destination in Malaysia, with total approved
investments amounting to RM38.7 billion.
“Despite experiencing the worst of the pandemic, the state manufacturing sector also recorded 324 approved manufacturing projects valued at RM18.4 billion.
“For this sector, Selangor managed to retain its top position in 2020 and even exceeded its achievement of securing approved investment of RM17 billion in manufacturing projects,” he said.
Initiated by the Selangor state government and organised by Invest Selangor Bhd, the virtual SIBS 2021 can be view at www.selangorbusinesshub.my.
Meanwhile, Invest Selangor Bhd CEO Datuk Hasan Azhari Idris said SIBS 2021 will be successful and anticipates full take-up of all 840 booths available and 15,000 trade visitors arriving from over
The four-day event will be featuring six unique sessions, namely the 7th Selangor International Expo (F&B), the 5th Selangor Asean Business Conference, the 4th Selangor Smart City &
Digital Economy Convention, and the 2nd Selangor R&D and Innovation Expo.
It will also have two new events components, namely the 7th Selangor International Expo (Medic) 1st edition, and the 1st Selangor Industrial Park Expo, which are set to encourage broad range of
business and investment opportunities.
The SIBS has been a platform for Asean and International businesses to explore the massive potential of the Malaysian and serve as a springboard to tap into the broader Asean market, home for over
600 million consumers and more than 200 of the world’s largest companies. – Bernama
>> Continua a leggere
ACCCIM to help MTDC train members under Tentra programme (Thu, 08 Apr 2021)
KUALA LUMPUR: The Malaysian Technology Development Corporation (MTDC) is confident that its partnership with the Associated Chinese Chambers of
Commerce and Industry of Malaysia (ACCCIM) would further help MTDC train 12,000 participants under its Technoprenuer Training Academy (Tentra) this year.
CEO Datuk Norhalim Yunus said MTDC last year trained about 10,000 participants consisting of graduates, students, entrepreneurs, policymakers, practitioners, and researchers.
“MTDC is committed to assist ACCCIM members in the adoption of Industry 4.0 (i4.0) technologies developed by our local companies.
“Together we will now able to tell companies in Malaysia that we are ready to embark on this new industrial transformation using our own talents and resources,“ he told reporters after the signing
of a memorandum of understanding (MoU) between MTDC and ACCCIM yesterday.
The signing ceremony was witnessed by Deputy International Trade and Industry Minister Datuk Lim Ban Hong.
In his speech, Lim said that ACCCIM, as an organisation, will be part of the growing list of agencies and ministries such as the Ministry of Higher Education, Ministry of Entrepreneur Development
and Cooperatives, and Ministry of International Trade and Industry trained by Tentra.
ACCCIM members could also benefit from MTDC’s Centre of 9 Pillars (Co9P) programme, which aims to help accelerate technology scale-up for small and medium enterprises by promoting them to deliver
i4.0 solutions that are customised to their needs.
“MTDC’s CoP9 does not only provide local and customised i4.0 solutions, but also offers various types of training related to the nine pillars of i4.0,“ he said.
The event also witnessed another MoU signing between ACCCIM and MIDF, which aims to promote and improve economic cooperation through commerce, trade and Investment by providing a platform for the
parties to exchange information and views.
The MoU between ACCIM and MIDF is also expected to increase awareness among ACCIM members on the financing facilities that are available from MIDF and the advice provided to help them grow their
business through automation, digitalisation and modernisation. – Bernama
>> Continua a leggere
Axiata, Telenor to merge Celcom, Digi (Thu, 08 Apr 2021)
PETALING JAYA: Axiata Group Bhd and Telenor Asia are in advanced discussions on the merger of the telco operations of Celcom Axiata Bhd and Digi.com
Bhd (MergeCo), in which the parties will have equal ownership estimated at 33.1% each.
Axiata together with Malaysian institutional funds will own over 51% of the MergeCo.
As part of the merger transaction, Axiata will receive newly issued shares in Digi representing 33.1% post-transaction shareholding and cash equalisation amount of around RM2 billion, of which
RM1.7 billion to come from Digi as new debt, balance of RM300 million from Telenor.
With the intent to create the leading Malaysian telco, MergeCo will bring together Axiata and Telenor’s Malaysian operations’ combined scale, competencies, finances and vast experiences to
generate significant synergistic value for a commercially stronger and more resilient MergeCo, which will be better positioned to drive the country’s transition into a high income digital
MergeCo will be considered a leading telecommunications service provider in Malaysia in terms of value, revenue and profit, with proforma revenue of about RM12.4 billion, pre-synergy ebitda of the
combined entity at RM5.7 billion, and an estimated 19 million customers.
Axiata has the right to nominate the initial chairman and CEO of MergeCo, and together with Telenor, have agreed to nominate Datuk Izzaddin Idris as chairman, Jørgen C. Arentz Rostrup as
vice-chairman, Idham Nawawi as CEO and Albern Murty as deputy CEO.
MergeCo will be named as Celcom Digi Bhd and will continue to be listed on Bursa Malaysia. MergeCo is expected to improve the liquidity and profile of Bursa Malaysia as one of the largest
technology company in Malaysia and amongst the largest market capitalisation companies of the exchange.
The parties reiterate their commitment to protect employee welfare with no forced retrenchments. MergeCo will create opportunities for staff to continue to develop across functions, build new
competence and be part of future growth of the company as it explores new technologies and innovation.
Customers on the other hand, will benefit significantly from the merger, as the merged company will have the capacity to invest even more to provide better quality of service and at competitive
rates. Customers also will be able to maintain their choice of mobile operator brand, as both Celcom and Digi brands will continue as is post-merger.
Axiata and Telenor have also agreed to the creation of a world-class Innovation Centre to catalyse 4IR digital transformation, development of 5G use cases and other technological advancement. The
Innovation Centre will not only drive technological advancement in Malaysia, but also play a direct role in upskilling employees for the future economy.
Both parties will work towards finalising agreements in relation to the proposed transaction within the second quarter of 2021 following due diligence.
The transaction will be subject to approval by Celcom and Digi shareholders, receipt of regulatory approvals and other customary terms and conditions. The parties acknowledge that there is no
certainty that these discussions will result in any agreement.
>> Continua a leggere