IHH Q4 profit plunges 92% to RM40m (Fri, 28 Feb 2020)
KUALA LUMPUR: IHH Healthcare Bhd fourth-quarter net profit plunged 92% to RM40.6 million, from RM509.4 million due to foreign exchange losses and higher finance costs as additional loans
were taken for the Fortis acquisition, working capital and swapping of Acibadem’s non-Lira loans to Lira loans upon refinancing and the adoption of MFRS 16 Leases.
Revenue was 21% higher at RM3.8 billion, from RM3.2 billion previously on sustained organic growth at existing operations and contributions from Gleneagles Hong Kong Hospital and Acibadem
Altunizade Hospital, both opened in March 2017.
Amanjaya Specialist Centre and Fortis Healthcare, acquired in October 2018 and November 2018 respectively, also contributed to the higher revenue, the group stated in its Bursa filing.
IHH declared a first and final dividend of 4 sen per share for FY19 to be paid on April 30, 2020.
For FY19, IHH’s net profit fell 12.1% to RM551. 5 million, from RM627.7 million due to a RM200 million impairment loss from Global Hospitals which was acquired in 2015.
Revenue was 29.4% higher at 14.9 billion from RM11.5 billion previously.
The group’s balance sheet remained strong as at end-December 2019, with net cash generated from operating activities for the twelve months of RM2.4 billion and an overall cash balance of RM4.7
Net gearing edged up to 0.15 times, from 0.10 times in FY18 on strategic investments including Fortis in India.
Looking ahead, IHH managing director and CEO, Dr Kelvin Loh said the group will pursue a geographical cluster strategy for growth across its network to achieve greater economies of scale while
delivering better patient services.
That said, Loh acknowledged the Covid-19 outbreak to have an impact on the global economy including markets where IHH operates in as medical tourism slows and patients delay non-emergency
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TNB posts higher Q4 net earnings, pays record dividend of RM1 (Fri, 28 Feb 2020)
KUALA LUMPUR: Tenaga Nasional Bhd (TNB) recorded net earnings of RM653.3 million for the fourth quarter ended Dec 31, from a net loss of RM134.3 million a year ago, due to the impairment of
the cost of investment in an associate of RM304.7 million.
Revenue stood lower at RM12.2 billion, from RM12.5 billion, due to the decrease in total sales of electricity of RM498.8 million recorded during the quarter.
The group has approved a final single tier dividend of 20 sen per share, raising the single tier dividend total to 50 sen per share for FY19, which translates to a dividend payout ratio of
In addition, TNB’s board also approved a special dividend of 50 sen per share, bringing the total dividend per share to RM1, amounting to RM5.69 billion for this financial year. This marks TNB’s
highest dividend payout to date.
For the full year, TNB’s net profit rose 21.6% to RM4.5 billion from RM3.7 billion, on the recognition of the impairment as well as on a foreign currency translation gain of RM200.6 million.
Revenue for the period increased by 1.1% to RM50.9 billion from RM50.4 billion, consistent with the increase in total sales of electricity.
Sales in electricity for the group increased 3.5% in the reporting period to RM49.02 billion, from RM47.36 billion in 2018.
TNB president and CEO Datuk Seri Amir Hamzah Azizan (pix) described the group’s financial performance in FY2019 as “reasonable” amid operational challenges faced by TNB’s generation
business in the last quarter, resulting in a lower contribution to the group.
On TNB’s international business, Amir said the turnaround exercise of assets in Turkey and India has led to a return of profitable contribution from the associates.
Following impairments taken out on TNB’s asset in India (GMR Energy Ltd) in 2018, the company is undergoing a restructuring, primarily through asset monetisation, while TNB’s UK investments are
showing potential upsides due to technology enhancement initiatives currently being undertaken.
Looking ahead, Amir said that despite the economic challenges, the group’s performance for FY20 is expected to remain resilient.
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CIMB’s Q4 earnings drop 24%, declares 12 sen dividend (Fri, 28 Feb 2020)
KUALA LUMPUR: CIMB Group Holdings Bhd saw a 24% drop in its net profit for the fourth quarter ended Dec 31, 2019, to RM848.6 million, from RM1.1 billion in the previous corresponding
quarter due to a decline in non-interest income (NOII) and a lower gain on a non-performing loan sale during the quarter.
Revenue stood at 4.52 billion, 11% higher than RM4.1 billion previously.
The group declared a second interim net dividend of 12 sen per share to be paid via cash.
For FY19, the total dividend amounted to 26 sen per share or RM2.55 billion, translating to a higher dividend payout ratio of 56%.
For the full year, the group’s net profit declined 18.3% to RM4.6 billion, from RM5.9 billion, while revenue went up 2.4% to RM17.8 billion, from RM17.4 billion a year ago.
FY19 operating income grew 8.2% year-on-year (yoy) to RM17.8 billion, underpinned by growth in net interest income (NII) and NOII.
NII grew 6.3% yoy to RM12.66 billion from a 6.7% improvement in loan growth, while the 12.9% improvement in NOII to RM5.14 billion came largely on the back of improved capital market activity.
The gross loan growth of 6.7% was attributed to strong growth posted by Thailand and Malaysia. Total deposits were 5.8% higher yoy, while the loan to deposit ratio stood at 92% from 91.2% at Dec
Net interest margin (NIM) was relatively flat at 2.46%, with some spread compression in Malaysia and Thailand, partially offset by an improvement in Indonesia.
As at Dec 31 2019, CIMB Group’s total capital ratio stood at 16.8% while the Common Equity Tier 1 capital ratio stood at 12.9%.
CIMB group CEO Tengku Datuk Seri Zafrul Aziz said the group’s FY19 performance was within expectations amid numerous macro challenges.
“2019 would be a year of investments under Forward23 and we are happy to see these investments beginning to bear fruit. We are also pleased that our underlying operating income showed robust
“I am also happy to note that for Malaysia, we are on track in disbursing our RM15-billion allocation to SMEs, and in assisting the B40 through our RM12-billion allocation for financing and
related products,” he said in a statement.
Moving forward, Zafrul added that the group continues to maintain a cautious stance for 2020 in view of sustained global economic headwinds, trade tensions, the threat from the Covid-19 outbreak
as well as potential further interest rate cuts across the region.
“Tangible progress has been made in our Forward23-related investments to future-proof the group. The year 2020 will be a year of continued investment in our people and technology, to ensure the
group’s resilience in an increasingly challenging operating landscape.
“However, we remain cautiously optimistic that in 2H20, the Malaysian economy, in particular, will improve from the recently announced stimulus package and other private sector initiatives,” he
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Shopping malls association to work on reducing tenants’ overheads (Fri, 28 Feb 2020)
KUALA LUMPUR: The Malaysia Shopping Malls Association has urged members to work with their tenants and retailers for realistic and win-win solutions to reduce monthly overheads and/or
enhance turnover as suggested in the 2020 Economic Stimulus Package to reduce the impact of COVID-19.
Interim Prime Minister Tun Dr Mahathir Mohamad, when announcing the stimulus package yesterday, called on industry players such as hotels and shopping malls to offer discounts and reduce rentals
to their tenants respectively, in the spirit of shared responsibility to overcome the current challenges.
COVID-19 is the official name for the 2019 novel coronavirus given by the World Health Organisation.
The association said the issue can also be tackled in ways other than rental reduction, such as direct marketing assistance and closer joint collaboration on sales and promotions, which will
increase footfall and sales turnover, thereby directly spurring the economic cycle.
“We further reiterate that shopping mall members will need to analyse and monitor data and trends and to curate appropriate and targeted action plans,” it said in a statement here today.
Also, as the impact differs for different categories of business operations, mall members need to tailor a different assistance programme that is most suitable and for the best results, it
“We recognise that each mall has its individual and unique business environment and such measures have to be tailored and implemented on a case-by-case basis.
“We are confident that shopping malls will evolve and enhance ourselves to cater to the constantly changing trends and business environment, and coupled with close collaboration with our
retailers, we will remain resilient and overcome the hurdles together,” said the association.
Among the measures in the RM20 billion stimulus package that have a direct impact on shopping malls are: 15 per cent discount in monthly electricity bills from April to September 2020, option for
all employees to reduce Employee Provident Fund (EPF) contribution by 4 per cent to 7 per cent from April to December 2020, and tax deduction of up to RM300,000 on renovation and refurbishment cost.
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AirAsia X defers A330neo deliveries as virus pressures frail finances (Fri, 28 Feb 2020)
KUALA LUMPUR/SYDNEY: Malaysian long-haul budget airline AirAsia X said it will defer delivery of 78 Airbus SE A330neo planes and consider other changes to reduce its fleet, as the
coronavirus outbreak adds pressure on the loss-making carrier.
AirAsia X said late on Thursday it might sell two A330s that could fetch up to $100 million and return five others to lessors early, adding it was already in negotiations with lessors about a
targeted 30% cut in lease rates.
The airline cancelled 600 flights for March, according to an investor presentation published after it reported a higher quarterly net loss. AirAsia X flagged lower forward bookings and pressure on
fares in the presentation.
The virus has deepened the challenges facing the airline and sister carrier AirAsia Group Bhd, whose Chief Executive Tony Fernandes and Chairman Kamarudin Meranun have both stepped aside for at
least two months amid investigations into a corruption scandal. Airbus was alleged to have paid a $50 million bribe for plane orders.
Brendan Sobie, a Singapore-based independent aviation analyst, said AirAsia X was highly exposed to China and other markets in North Asia significantly impacted by the coronavirus but the carrier
was also in a weak financial position prior to the crisis.
AirAsia X shares fell by 5% on Friday to a record low after it posted a net loss of 95.8 million ringgit ($22.62 million) in the quarter ended Dec. 31, increasing from an 88.1 million ringgit loss
a year ago.
Flights to and from mainland China accounted for about 30% of AirAsia X’s capacity before the outbreak of the virus. It has a fleet of 24 A330 planes.
The carrier last August reached a revised deal with Airbus to take 78 A330neos and 30 long-range A321XLR narrowbodies, down from earlier plans for 100 A330neos. AirAsia X is Airbus’ biggest
customer for the A330neo, a more fuel efficient version of the older A330 model.
AirAsia X said delivery of the A330neos would be deferred and it would move toward a dual-fleet strategy with A321s set to replace its A330s on routes of four to six hours when demand
“We believe advanced aircraft technology has changed business dynamics as we can now fly narrow body aircraft longer,“ AirAsia X Malaysia CEO Benyamin Ismail said in a statement.
An AirAsia X spokeswoman said the airline was evaluating market conditions and had yet to confirm the duration of the A330neo delivery deferrals. An Airbus spokesman said the manufacturer does not
comment on delivery schedules for individual airlines. -Reuters
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Global corporate earnings to stagnate at best in 2020 -Citigroup analysts (Fri, 28 Feb 2020)
BANGALORE: Major global companies will see no growth in earnings in 2020, analysts from U.S. bank Citigroup have predicted, the latest sign of a reining in of expectations for commercial
performance this year as the coronavirus continues to spread.
The note from the bank, predicting that global corporate earnings per share would be flat and might even fall this year, followed a similar downgrading of expectations by Goldman Sachs for U.S.
companies on Thursday.
The fast-spreading virus has sparked fears of a global recession and an end to a decade-long bull run for stock markets. Most major markets on Friday were heading for their worst week since the
2008 financial crisis.
“Maybe even flat EPS is too optimistic,“ Citigroup analyst Robert Buckland said in a note published late on Thursday.
“If the virus slows global economic growth to 2% in 2020, our models suggest global EPS could contract around 10%,“ he added.
Another U.S. peer, Bank of America, on Thursday cut its world growth forecast to 2.8%, the lowest since 2009.
Citigroup cut its end of year target for the MSCI all country world stocks index to 660 points, down from a previous 690. The index has lost 9.4% so far this week to trade at 516 points on Friday.
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FGV back in the black for 4Q, net earnings at 76m (Fri, 28 Feb 2020)
KUALA LUMPUR: FGV Holdings Bhd returned to positive territory for the fourth quarter ended Dec 31, posting a net profit of RM75.8 million, from a net loss of RM209.2 million in the previous
corresponding quarter due to improved crude palm oil (CPO) margins, and significantly reduced operating costs as a result of tighter controls and improved efficiencies across the group.
Revenue, however, declined 2.4% to RM3.15 billion, from RM3.23 billion previously, due largely to lower yields, which is in line with the national average, as a result of the lag effect from
prolonged dry weather and lower rainfall in late 2018 and early 2019.
For the quarter, the group recorded lower impairment losses amounting to RM17 million, as compared to RM151 million in 4Q2018.
CPO prices were recognised at RM2,159 per metric tonne (MT), compared to RM2,055 per MT before.
FGV declared a final dividend payment of 2 sen per share for FY19 ended Dec 31, which is expected to be paid by mid-July 2020.
FGV group CEO Datuk Haris Fadzilah Hassan said he was pleased to report an improvement in the group’s earnings on the back of its aggressive transformation programme.
“We reached far into the core of the group to effect change at every level. Our intention is to institutionalise this change, to protect and enhance the interests of the owners of this company,
now and in the future,” he said.
For the full year, the group posted a narrowed net loss of RM242.2 million, from RM1.08 billion recorded a year before, while revenue stood 1.5% lower at RM13.3 billion, from RM13.5 billion
CPO prices for FY19 were realised at RM2,021 per MT, down 11% compared to RM2,282 per MT in FY2018 due to improved full-year CPO ex-mill costs which averaged at RM1,503 per MT compared to RM1,800
per MT in FY2018.
Group-wide cost rationalisation and improved procurement processes resulted in savings of approximately RM170 million for the full year, FGV noted.
Moving forward, Haris said FGV’s plans to diversify its revenue streams is well underway., with the group expecting to see additional revenues of RM45 million from its integrated farming,
renewable energy and animal feed businesses in FY20.
“While palm oil will remain our mainstay, this is an exciting diversification that will bring us and our smallholder partners added revenue and opportunities for growth,” Haris said.
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BCorp to dispose of Four Seasons Hotel in Kyoto for RM1.87b (Fri, 28 Feb 2020)
PETALING JAYA: Berjaya Corp Bhd (BCorp) has proposed to dispose of its interest in the Four Seasons Hotel & Hotel Residences Kyoto, Japan to Godo Kaisha Tigre for a cash consideration
of 49 billion yen (RM1.87 billion) via its subsidiary, Kyoto Higashiyama Hospitality Assets Tokutei Mokuteki Kaisha (KHHA).
According to the group’s Bursa disclosure, it entered into a real property trust beneficial interest purchase and sale agreement with Tigre for the proposed disposal by KHHA on the hotel component
of the Four Seasons Kyoto.
Subsequently, BCorp’s other subsidiary, Berjaya Kyoto Development Kabushiki Kaisha (BKD), will leaseback the hotel from Tigre for 17 years to maintain the present arrangements and operations of
Both KHHA and BKD are 100%-owned subsidiaries of Berjaya Kyoto Development (S) Pte Ltd, which in turn is held by BCorp and its listed subsidiary Berjaya Land Bhd, each holding 50% equity
BCorp estimated that the monetisation of its investments in the hotel will result in a gain exceeding RM600 million.
On the transaction, BCorp’s executive chairman, Tan Sri Vincent Tan commented that he is happy to dispose of the three and a half year old hotel for a huge gain.
“Together with the 23 units of the Four Seasons Kyoto residences which were already sold and the estimated profit from the potential sale of the remaining 34 units of the residences, the BCorp
group is expecting to realise a total net gain of about RM1.55 billion with gross cash inflows surpassing RM3.22 billion for our entire Four Seasons Hotel and Residences project in Kyoto,” he said in
a press statement.
Besides the hotel, the group developed 57 units of residences, also operated under the Four Seasons Hotel & Hotel Residences, Kyoto brand name. These residences are not part of the
The proposed disposal is expected to close in mid-March 2020.
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Sime Darby Plantation in the red in Q4, FY19 (Fri, 28 Feb 2020)
PETALING JAYA: Sime Darby Plantation Bhd posted a net loss of RM45 million in the fourth quarter ended Dec 31, 2019 (Q4), largely due to lower fresh fruit bunch (FFB) production and lower
contribution from Sime Darby Oils (downstream) operations.
There is no comparative for Q4 and the financial year ended Dec 31, 2019 (FY19) due to the change in the financial year end from June 30 to Dec 31.
However, for comparison, the net loss was against a net profit of RM172 million in the same quarter last year.
With the group’s discontinuing operations recording a net loss of RM13 million, the group’s net loss totalled RM58 million in Q4 against a net profit of RM129 million in the corresponding quarter
of the previous year.
It posted a revenue of RM3.38 billion in Q4.
For FY19, Sime Darby Plantation posted a net profit of RM122 million from its continuing operations. For comparison, this was lower compared to its net profit of RM729 million in the corresponding
period of the previous year, attributable to lower crude palm oil (CPO) and palm kernel (PK) prices realised, as well as lower FFB production in the year under review.
The group’s discontinuing operations, which comprise its Liberian operations and joint ventures in the oleochemical and biomass businesses, recorded a net loss of RM322 million mainly arising from
the impairment of assets in Liberia. Accordingly, the group posted a net loss of RM200 million for the full year compared to a net profit of RM523 million in the previous year.
Its FY19 revenue stood at RM12.06 billion.
It declared a final single tier dividend of 1.0 sen per share in respect of FY19.
Chairman Tan Sri A Ghani Othman said FY19 proved to be challenging for its plantation industry and Sime Darby Plantation as it continued to face unfavourable weather conditions and the low CPO and
PK prices for the most part of the year.
“However, we are progressing into the new year 2020 with renewed enthusiasm. CPO prices have rebounded towards the end of 2019 and this may offer some respite to the industry players if the price
recovery is sustained,” he said in a statement.
It is cognisant that factors beyond its control, such as the recent outbreak of the Covid-19 in China, may have negative implications on global economic growth and demand for palm oil.
“The impact from restrictions placed by India on imports of refined palm oil will also be negative to the industry. Nevertheless, this will not affect our focus and determination to improve our
financial performance as we continue to rely on the group’s resilience,” he added.
Group managing director Mohamad Helmy Othman Basha is confident that the group remains on track in its strategies of increasing profit contribution from its downstream segment, improving
operational efficiencies in its upstream operations as well as in maintaining disciplined management of cost and liquidity.
On outlook, Sime Darby Plantation said the expectation of a slowdown in crop production in Malaysia and Indonesia in 2020 has resulted in the price recovery of palm products. However, the rise in
prices is expected to be moderated over concerns on the global economic growth with the outbreak of the Covid-19.
Moreover, restrictions placed by India on imports of refined palm oil may have an impact on these prices. Despite these uncertainties, other factors such as biodiesel mandates in Malaysia and
Indonesia are expected to keep palm product prices resilient in the near term.
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Huawei to open European 5G factory in France (Fri, 28 Feb 2020)
PARIS: Chinese telecom giant Huawei said Thursday that it would begin manufacturing radio equipment for next-generation 5G networks in France, its first such facility outside of China.
Huawei, which has become caught up in a bruising trade war between Beijing and Washington, has been attentively courting Europe as it tries to offset lost business in the US.
Its planned 200-million-euro ($218-million) French facility will employ 500 people and produce equipment for the European market, Huawei chairman Liang Hua told a press conference in Paris.
“The site will begin manufacturing radio equipment and then branch out to other products in future, depending on the needs of the European market,“ Liang said.
He did not say where the factory, which will produce around one billion euros worth of equipment a year, would be located nor when it would begin production.
Liang said the company was in discussions with the French government and local authorities about the project.
5G, or fifth generation, networks offer vastly higher cellular communication speeds compared with the 4G networks currently used widely, which could unlock a variety of new applications.
The US has been pressuring European allies to exclude Huawei from their 5G networks, but France and Britain have so far refused to be swayed.
French authorities said earlier this month they would not discriminate against the company but would nonetheless prioritise European operators, such as Nokia or Ericsson.
The US contends that Huawei is too close to the Chinese government and that its equipment could be used as a tool for spying -- a contention the company has denied.
A US court last week dismissed a challenge by Huawei to a ban on the purchase of its products by US federal agencies. -AFP
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Virus to cost world tourism at least $22 bn: global tourism body (Fri, 28 Feb 2020)
MADRID: The deadly coronavirus epidemic will cost world tourism at least $22 billion owing to a drop in spending by Chinese tourists, the head of the World Travel and Tourism Council said
The COVID-19 epidemic has killed more than 2,760 people, mostly in China -- where it first emerged in December -- and infected more than 81,000 in over 45 countries.
“It is too soon to know but the WTTC has made a preliminary calculation in collaboration with (research firm) Oxford Economics which estimates that the crisis will cost the sector at least $22
billion,“ Gloria Guevara told El Mundo daily.
“This calculation is based on the experience of previous crises, such as SARS or H1N1, and is based on losses deriving from Chinese tourists who have not been travelling in recent weeks,“ she
“The Chinese are the tourists who spend most when they travel.”
The loss figure, which equates to about 20.2 billion euros, is the most optimistic scenario envisaged by the study which was published on February 11 by Oxford Economics, taking the hypothesis of
a 7.0 percent drop in overseas trips by Chinese nationals.
But the losses could more than double, reaching as much as $49 billion if the crisis lasts as long as the SARS outbreak, which erupted in November 2002 and was brought under control in July
And it could spiral to $73 billion if it lasted longer than that, Oxford Economics said.
The economies most likely to suffer would be those most dependent on Chinese tourism, such as Hong Kong and Macau, Thailand, Cambodia and the Philippines, researchers found.
On Wednesday, the WTO urged countries to avoid taking health measures that would cause “unnecessary interference with international traffic and trade” saying travel restrictions needed to be
proportionate to ensure they did not have “negative repercussions on the tourism sector”. -AFP
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IMF, World Bank funds ready to fight virus outbreak: spokesman (Fri, 28 Feb 2020)
WASHINGTON: The International Monetary Fund and World Bank are ready to provide countries in need with immediate emergency funding to fight the coronavirus outbreak, a spokesman said on
While they have yet to receive a request for aid, the institutions “have now developed contingency plans. We have various financial instruments that could be used,“ IMF spokesman Gerry Rice said
at a press conference.
As the epidemic has spread beyond China, shuttering production and closing schools in Japan, economists are increasingly worried about a slowdown in the global economy.
“We have various financial instruments that could be used to support countries with balance of payment problems that arise from epidemics or natural disasters,“ Rice said, noting that the lenders
rapidly deployed funds during the Ebola epidemic.
He singled out China, saying the IMF remains “very supportive” of the country where the coronavirus outbreak started with efforts to tackle its spread.
The fund and the World Bank expect to make a decision soon on whether to hold their spring meetings in Washington.
Thousands of people attend the twice-yearly gatherings, which attract activists, economists and investors as well as officials and reporters.
The planning for the April meeting is “under active review,“ Rice said, but he added, “We are confident that, whatever the format of the spring meetings will be, that we will have effective
meetings... and dialogue with our membership.”
The US Centers for Disease Control warned this week that the epidemic will reach American shores, and urged organizations to cancel mass gatherings.
Health officials on Wednesday announced they’d found the first case of the virus of unknown origin in the United States. -AFP
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Baidu warns of big hit from coronavirus outbreak (Fri, 28 Feb 2020)
BEIJING: Internet search giant Baidu has warned the deadly coronavirus outbreak could drive revenues down in the first quarter, as it reported steady annual revenue growth.
The Beijing-based group has forecast a plunge of between five percent and 13 percent due to the economic uncertainty surrounding the new virus, which is rapidly spreading around the world.
It is forecasting revenues between 21.0 billion yuan ($3.0 billion) and 22.9 billion yuan in the first three months of the year.
“The coronavirus situation in China is evolving, and business visibility is very limited,“ the firm said in its statement, adding that the outlook was “subject to substantial uncertainty”.
The group’s total revenues for the year ended December 31 rose five percent to 107.4 billion yuan ($15.43 billion), with income during October-December rising six percent on-year.
Considered China’s answer to Google, Baidu has traditionally relied on advertising for much of its revenue.
But the ad sector is particularly vulnerable to economic slowdowns, and Baidu has had to battle with popular start-ups such as Bytedance.
Baidu’s online marketing revenues were 78.1 billion yuan for the year -- a drop of five percent.
Chairman Robin Li said the company had made “tremendous progress in strengthening Baidu’s mobile ecosystem”.
The firm has also been spending huge sums trying to reposition itself as a leader in advanced technologies such as artificial intelligence (AI) and driverless cars.
Revenue growth was driven largely by strong growth in cloud services, smart devices and its Netflix-style platform iQIYI.
Nasdaq-listed iQIYI added 19.5 million new subscribers over the year, and projected revenue gain of 2-8 percent this quarter.
The coronavirus outbreak has hit businesses across the country and beyond.
But China’s streaming giants have seen an unexpected boost from millions of people stuck at home, and shares surged in January for the likes of iQiyi.
Baidu said it had “devoted significant efforts” to fighting the coronavirus, including facial recognition and AI technology to power screening systems that can remotely measure up to 200 people a
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Hong Kong home prices fall for second straight month in January (Fri, 28 Feb 2020)
HONG KONG: Hong Kong private home prices fell for the second straight month in January on low transaction volumes, easing 0.2% amid the emergence of the novel coronavirus in a property
market already hit hard by anti-government protests in the last year.
Prices fell a revised 1.6% in December. January prices were 4.7% lower than the peak in May 2019.
Fears over the virus outbreak have clouded one of the world’s most expensive property markets, but property agents said business recovered slightly this month after the lunar new year holiday, as
sellers cut prices and buyers sought bargains.
While the volume is expected to remain low in the short term, agents do not expect a collapse in prices, given the strong pent-up demand and low interest rates.
Realtor Ricacorp lowered its forecast for the full year, saying prices would climb 3-5%, compared with its original forecast of a 10% rise.
The property sector has been relatively resilient compared with tourism and retail, which have been hit badly by the protests and the epidemic.
But some agents project no growth or a small decline, saying that could worsen when the recession-hit city’s unemployment rate rises.
At least two Hong Kong banks have introduced relief measures for home mortgage borrowers hurt by the coronavirus outbreak, in a move analysts say could help lower foreclosures in an economy
already in recession. -Reuters
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FMM disappointed export sector not featured in stimulus measures (Fri, 28 Feb 2020)
KUALA LUMPUR: The Federation of Malaysian Manufacturers (FMM) has lauded the timely announcement of the federal fiscal stimulus package, but expressed disappointment that the export sector
has not been given prominence.
FMM president Tan Sri Soh Thian Lai thanked the government for including some of its recommendations on boosting domestic consumption and said the federation was looking forward to further details
of the measures to be introduced as soon as possible.
“FMM thanks the government for taking heed of our recommendations in our stimulus package wishlist to boost domestic consumption by announcing the 4% reduction in the employees’ contribution to
the Employees Provident Fund (EPF), introducing the digital domestic travel vouchers and the 15% discount in electricity bills to hotels, shopping malls, etc. to stimulate the tourism industry,” he
said in a statement.
However, he added that based on feedback received from FMM members, the main concern of manufacturers is the impact of Covid-19 on production, which has slowed down due to low supply of raw
materials sourced from China.
“Imports of these raw materials from China are affected as certain cities are currently under lockdown and production has been stopped.
“Similarly, exports to China are affected as most of the customers and importers are still close due to the Chinese government’s directive,” he said.
Soh then outlined eight initiatives which he said would have both direct and indirect impact on the manufacturing sector, including a RM200 million microcredit facility at 4% interest rate to
affected businesses, a RM2 billion special relief facility for SMEs for working capital, and a RM300 million SME automation & digitalisation facility.
In relation to government procurement and implementation of development projects, Soh said FMM urges the government to place greater emphasis on ‘Love Malaysia, Buy Made-in-Malaysia Products’ in
order to ensure robust and sustained domestic market demand for Malaysian manufactured products and to promote import substitution which will strengthen the capacity and capability of the domestic
Meanwhile, he said FMM was urging its members to be persistent in their efforts to sustain business and also find alternative sources from within Asean or via other trade partners if supplies from
China are not coming in on time.
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Bank of Canada to stay put for now, but 2020 rate cut in play (Fri, 28 Feb 2020)
BENGALURU: The Bank of Canada will hold interest rates at 1.75% on Wednesday, according to most economists polled by Reuters, although a significant minority expects at least one rate cut
About 60% of respondents, 20 of 34, said the central bank would leave its benchmark overnight rate unchanged until the end of 2020, down slightly from about 70% when forecasters were last polled
by Reuters a month ago.
Those prospects have flipped back and forth in monthly polls since October as optimism around the Canadian economy has see-sawed. While more economists expect a 2020 rate cut than in January,
there were even more in December.
However, optimism about the economy has started to sour again.
"The labour market is starting to slow down, consumer spending is definitely not there, business investment is clearly disappointing and exports outside energy are not rising in any significant
way," said Benjamin Tal, deputy chief economist at CIBC Capital Markets.
"So there are many factors suggesting GDP growth will be suboptimal and although the BoC would like to avoid cutting, the overall weakness in the economy will convince them that a cut is needed,"
said Tal, who expects a cut in Q2.
Still, only six of 34 economists surveyed from Feb. 24-27 expect a rate cut at the March 4 policy meeting. Analysts provided a median 30% probability of a rate reduction then, roughly in line with
Canada's economic growth likely ground to a near-halt in the final three months of 2019 - 0.3% - according to a separate Reuters poll. It is forecast to recover only modestly to an annualized 1.6%
rate in the current quarter.
But with financial markets hammered by fears over the spread of the coronavirus and swathes of Asia now expected to take a direct economic hit from factory shutdowns, travel restrictions and less
consumer spending, that may look optimistic.
Canada has had economic disruptions of its own this month.
"The shutdown of large sections of the Canadian rail system following First Nations protests and blockades will be a larger drag on economic activity than the coronavirus," said Sebastien Lavoie,
chief economist at Laurentian Bank.
Asked if those blockades had significantly dulled the expected strength of the economy's rebound this quarter, 13 of 19 economists said it had.
Four of the five biggest Canadian banks are expecting the BoC to cut rates at least once by end-2020.
But BMO Capital Markets, the top economic forecaster in Reuters polls for Canada in 2019, said rates will stay on hold until at least the end of next year. Inflation, which the BoC targets at 2%,
has remained steady and is not set to pick up.
There remains a high degree of uncertainty over the longer-term interest rate outlook, even before the latest shocks. The range of probabilities given by economists for a March rate cut ran from
10% to 90%. For end-year it was 20% to 100%.
Looking further out, views on where rates will be at the end of next year ranged from 0.5% to 2.5%, roughly as wide as those on U.S. benchmark rates. - Reuters
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Lynas sees opportunity in coronavirus outbreak; profit slides (Fri, 28 Feb 2020)
MELBOURNE: Australian miner Lynas Corp is talking to customers about the risks of relying too heavily on China for rare earth supplies in the wake of disruptions from the new coronavirus
outbreak, the company's CEO said on Friday.
There has so far been little direct impact on the market for the metals used in everything from electric vehicles to military equipment, given current levels of oversupply, Lynas Chief Executive
Amanda Lacaze told an analyst briefing.
However, she said logistics issues in China, which dominates the rare earths market, presented an opportunity.
"The conversation which [Lynas is] having with end-user customers is a conversation about the risk that they introduce into their supply chain by not having a diversified supply," she said,
pointing to both political and geographical risk.
Lynas, the world's largest rare earths producer outside China, earlier posted a nearly 80% plunge in half-year profits, hurt by a weak market, a security bond payment at its Malaysian processing
facility and higher operational expenses.
Net profit slumped to just A$3.9 million ($2.57 million) for the six months ended Dec. 31, while revenue rose slightly to A$180.1 million.
Its shares fell 5.8 percent, outpacing a virus-related risk selloff in Australian sharemarkets. The ASX 200 fell 3.3 percent.
Lynas has been a target of investor focus amid concerns that China's dominant position in rare earths could have played a part in the Sino-U.S. trade war, while the company has faced an
environmental row over its operations in Malaysia.
On Thursday, Malaysia approved a new three-year licence, that allows Lynas to continue processing rare earths at its Kuantan plant, subject to meeting several conditions that the miner expects to
As part of the process, the company said it deposited A$11.6 million with Malaysia's Atomic Energy Licensing Board for operating its $800 million plant in Kuantan.
Lynas said the production of Neodymium and Praseodymium, used in magnets, fell more than 10% for the half-year to 2,512 tonnes, while Rare Earth Oxide production dropped over 22% to 7,518
While it has received a permit to import more concentrate to Malaysia, Lynas will now turn its focus to getting a permit to process the extra material, an issue that has constrained production for
the past few years, Lacaze said. - Reuters
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S.Korea’s extra budget to fight coronavirus set to beat $9.5 bln MERS spending (Fri, 28 Feb 2020)
SEOUL: South Korea said on Friday a supplementary budget due next week to cushion the economic hit of the coronavirus will be larger than the 11.6 trillion won ($9.5 billion) package spent
during the 2015 MERS outbreak.
The extra budget is part of a series of urgent measures President Moon Jae-in's government announced on Friday as the virus disrupts exports and weakens consumer spending.
The finance ministry did not disclose the size of the extra budget but said it would be equal to or bigger than the 11.6 trillion won package deployed when the Middle East Respiratory Syndrome hit
the economy in 2015.
The supplementary budget will be submitted for parliamentary approval next week. The ministry did not elaborate on how the budget will be funded.
Once approved by the parliament, the government plans to spend more than 75% of the budget within the first two months.
Much of the new outlays will be allocated to small businesses, the medical and tourism sectors, as consumers pull back on discretionary spending.
A separate 16 trillion won package of tax breaks and cheap loans will go to small businesses that are struggling to pay wages to their workers and people who have lost their jobs for training, the
ministry said in a statement. - Reuters
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World stocks set for worst week since 2008 as virus fears grip markets (Fri, 28 Feb 2020)
TOKYO: Global share markets were headed for the worst week since the depths of the 2008 financial crisis as investors ditched risky assets on fears the coronavirus would become a pandemic
and derail economic growth.
Asian stocks tracked another overnight plunge in Wall Street's benchmarks on Friday with the markets in China, Japan and South Korea all posting heavy losses.
Hopes that the epidemic that started in China would be over in a few months and economic activity would return to normal have been shattered, as new infections reported around the world now
surpass those in China.
The worsening global threat from the virus prompted investors to rapidly step up bets the U.S. Federal Reserve would need to cut interest rates as soon as next month to support economic
"We don't even need to wait for economic data to see how badly the economy is being hit. You can tell that the sales of airlines and hotels are already falling by a half or something like that,"
said Tomoaki Shishido, senior economist at Nomura Securities.
"It is fair to say the impact of the coronavirus will be clearly much bigger than the U.S.-China trade war. So the Fed does not have a reason to take a wait-and-see stance next month," he
MSCI all country world index fell 0.3% after 3.3% drop on Thursday. So far this week it has lost 9.2%, on course for its biggest weekly decline since a 9.8% plunge in November 2008.
Wall Street shares led the rout as the S&P 500 fell 4.42%, its largest percentage drop since August 2011.
It has lost 12% since hitting a record close on Feb. 19, marking its fastest correction ever in just six trading days while the Dow Jones Industrial Average fell 1,190.95 points, its biggest
points drop ever.
The CBOE volatility index, often called the "fear index", jumped to 39.16 on Thursday, the highest level in about two years, well out of the 11-20 range of recent months.
The index, which measures expected swings in U.S. shares in the next 30 days, often shoots up to around 50 as bear market selling hits its heaviest although it approached 90 during the 2008-09
In Asia, MSCI's regional index excluding Japan shed 1.4%. Japan's Nikkei gave up 3.3% on rising fears the Olympics planned in July-August may be called off due to the coronavirus.
Australian shares dropped 2.8% to a six-month low while South Korean shares shed 2.1%.
"The coronavirus now looks like a pandemic. Markets can cope even if there is big risk as long as we can see the end of the tunnel," said Norihiro Fujito, chief investment strategist at Mitsubishi
UFJ Morgan Stanley Securities. "But at the moment, no one can tell how long this will last and how severe it will get."
WHO Director General Tedros Adhanom Ghebreyesus said the virus could become a pandemic as the outbreak spreads to major developed economies such as Germany and France.
The global rout knocked mainland Chinese shares lower, which have been relatively well supported this month, as new coronavirus cases in the country fell and Beijing doled out measures to shore up
CSI300 index of Shanghai and Shenzhen shares dropped 2.4%, on track to post its first weekly loss in three.
Fears of a major economic slump sent oil prices to their lowest level in more than a year.
U.S. crude futures fell 1.6% to $46.35 per barrel, having lost 13.2% so far on the week, which would be the deepest fall in more than five years.
As investors flocked to the safety of high-grade bonds, U.S. yields plunged with the benchmark 10-year notes yield hitting a record low of 1.241%. It last stood at 1.274%.
That is well below the three-month bill yield of 1.439% , deepening the so-called inversion of the yield curve. Historically an inverted yield curve is one of the most reliable leading indicators
of a U.S. recession.
Expectations the Fed will cut interest rates to cushion the blow are rising in money markets. Analysts say Fed funds futures are now pricing in more than a 50% chance of a 25 basis point cut at
the central bank's March 17-18 meeting.
As investors rushed to safe assets, gold stood at $1,646.4 near seven-year high of $1,688.9 hit earlier this month.
In currency markets, the yen rose to a three-week high of 109.33 to the dollar and last stood at 109.40.
The euro stood at $1.0993, having jumped over 1% in the previous session, the biggest gain in more than two years as investors wound back bets against the currency versus the dollar. -
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Oil prices fall again, on track for biggest weekly drop in over 4 years (Fri, 28 Feb 2020)
SINGAPORE: Oil prices fell for a sixth straight session on Friday and were on track for about a 12% weekly fall, the biggest in more than four years, as the spread of the coronavirus
outside China raised fears of slowing global demand.
The virus, which has killed more than 2,700 people in China, has been found in another 46 countries and caused 57 deaths. Investors worry the epidemic could turn into a pandemic and deliver a
damaging blow to the global economy.
The most active Brent crude contract for May was down 90 cents, or 1.7%, at $50.83 a barrel by 0141 GMT, a 14-month low. The front-month April contract expires today.
The international benchmark, which fell about 2% on Thursday, has shed around 12% this week and is on track for its steepest weekly decline since mid-January 2016.
West Texas Intermediate (WTI) crude futures fell 73 cents, or 1.6%, to $56.36 per barrel. U.S. crude has fallen about 13% for the week, the biggest weekly decline since November 2014.
With new infections reported around the world now surpassing those in mainland China, the World Health Organization said on Thursday that all countries need to prepare to combat the
“Oil prices are moving tangentially to news flows around the deluge of secondary cluster outbreaks,“ said Stephen Innes, chief market strategist at AxiCorp.
“And for the oil market, none more so worrying than those reports emanating from the U.S. market, which is the biggest consumer of oil on the planet by a long shot.”
U.S. health officials urged Americans to begin preparing for the spread of coronavirus in the United States earlier this week.
The oil market is hoping for steeper supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) and its allies including Russia, who have said they will take a responsible
approach in the wake of the virus outbreak.
The producer group known as OPEC+, which is currently reducing output by roughly 1.2 million barrels per day to support prices, is set to meet in Vienna on March 5-6.
“We now believe the group needs to make much steeper cuts than the 600,000 barrels per day (bpd) recommendation from their technical committee to support prices,“ Jefferies analyst Jason Gammel
“At least a 1 million bpd cut for the second quarter strikes us as necessary to merely moderate inventory builds, and we confess to underestimating demand destruction over the last several weeks.”
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