Ringgit ends higher on renewed Brexit optimism (Thu, 17 Oct 2019)
KUALA LUMPUR: The ringgit ended higher today following renewed optimism in the foreign exchange market after the United Kingdom and the European Union have agreed on a new Brexit deal, said
At 6pm, the ringgit was quoted at 4.1780/1830 against the greenback, compared with 4.1935/1965 at yesterday’s close.
Oanda senior market analyst, Craig Erlam said the pound soared to a seven-month high against the dollar following confirmation of the agreement before profit-taking kicked in.
“That coincided with the confirmation from the Democratic Unionist Party that their position hasn’t changed, which suggests they won’t support the deal on Saturday, making the parliamentary
arithmetic on Saturday even tighter,” he said.
The ringgit was traded mostly lower against a basket of other major currencies.
It weakened against the Singapore dollar to 3.0610/0658 from 3.0560/0585 at Wednesday’s close and declined against the British pound to 5.4005/4086 from 5.3513/3568 yesterday.
The ringgit slightly strengthened vis-a-vis the yen to 3.8415/8471 from 3.8575/8613 but fell against the euro to 4.6443/6507 from 4.6288/6338 at Wednesday’s close. — Bernama
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Bursa Malaysia ends marginally lower in cautious trade (Thu, 17 Oct 2019)
KUALA LUMPUR: Bursa Malaysia ended marginally lower on cautious and range bound trade, in tandem with regional peers, following a lack of market catalysts, said a dealer.
At 5pm, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.40 of a point to 1,574.50 from Wednesday’s close of 1,574.90.
The index, which opened 1.86 points easier at 1,573.04, moved between 1,569.21 and 1,574.90 throughout the day.
On the broader market, losers led gainers 413 to 392, with 421 counters unchanged, 750 untraded and 15 others suspended.
Turnover fell to 2.33 billion shares worth RM1.88 billion from 3.06 billion shares worth RM2.23 billion on Wednesday.
Regionally, Japan’s Nikkei eased 0.09 per cent to 22,451.86, Hong Kong’s Hang Seng Index improved 0.69 per cent to 26,848.49.28, South Korea’s Kospi shed 0.23 per cent to 2,077.94, and Singapore’s
Straits Times Index slid 0.32 per cent to 3,124.90.
A dealer said Asian shares were mostly lower, trading cautiously as optimism over the US-China trade negotiations is losing steam, amid a lack of concrete details.
“Investors weighed on soft US retail sales data which stoked fears about the health of the world’s largest economy.
“They are also awaiting the release of Chinese economic growth data due on Friday, for clues on market direction. The data is largely expected to show the world’s second largest economy had slowed
further in the third quarter, affected by the trade dispute,” he said.
Bursa Malaysia stayed in the red for most of the trading session today as investors took profit following significant gains yesterday, and the lack of market catalysts to further lift market
Among heavyweights, Public Bank added two sen to RM19.28, Petronas Chemicals gained three sen to RM7.34 and IHH Healthcare rose four sen to RM5.74.
Maybank and Tenaga were flat at RM8.52 and RM13.76 respectively.
Of the most actives, Bumi Armada increased three sen to 44 sen, Green Packet warrant improved one sen to 32 sen, Mestron gained 2.5 sen to 14.5 sen, Sapura Energy eased half-a-sen to 27.5 sen,
while MYEG lost 15 sen to RM1.25.
The FBM Emas Index declined 7.08 points to 11,209.77, the FBMT 100 Index fell 7.26 points to 11,025.54 and the FBM 70 slipped 27.49 points to 14,137.17.
The FBM Emas Shariah Index was 4.25 points better at 11,840.63, while the FBM Ace rose 80.23 points to 4,794.66.
Sector-wise, the Financial Services Index advanced 13.60 points to 15,221.51, the Plantation Index bagged 46.33 points to 6,720.15, and the Industrial Products & Services Index was 0.26
of-a-point better at 152.38.
Main Market volume fell to 1.53 billion units worth RM1.69 billion from Wednesday’s 1.87 billion units worth RM1.99 billion.
Warrants turnover narrowed to 348.82 million units worth RM59.48 million from 411.22 million units worth RM75.22 million.
Volume on the ACE Market slipped to 455.61 million shares worth RM126.32 million from 784.66 million shares worth RM167.69 million.
Consumer products and services accounted for 228.81 million shares traded on the Main Market, industrial products and services (251.51 million), construction (117.09 million), technology (16.88
million), SPAC (nil), financial services (36.46 million), property (117.09 million), plantations (16.88 million), REITs (12.93 million), closed/fund (8,400), energy (451.98 million), healthcare
(16.75 million), telecommunications and media (120.67 million), transportation and logistics (44.19 million) and utilities (13.09 million).
The physical price of gold as at 5.00pm stood at RM193.64 per gramme, up 15 sen from RM193.49 at 5.00pm yesterday. — Bernama
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US-China trade war offers upside to Malaysian medical device makers: Fitch Solutions (Thu, 17 Oct 2019)
PETALING JAYA: The US-China trade war offers an opportunity for Malaysian medical device manufacturers to continue to position themselves as
alternative producers and suppliers to China, Fitch Solutions Macro Research said in a report.
According to the report, recent moves by the US government to further ramp up tariffs on Chinese-made products will increase pressure on Chinese companies to relocate manufacturing operations;
therefore, Malaysia’s access to the US and other major world markets would increase its attractiveness as an alternative manufacturing base.
In the short term, local rubber glove manufacturers stand to benefit from the recent US tariffs imposed on Chinese medical gloves.
“The US government has imposed a 15% tariff on medical gloves made in China effective from Sept 1, 2019, as a result of which US importers are seeking alternative sources of supply from other
manufacturers in Asia.
“As the world’s largest producer of rubber gloves, Malaysia stands to benefit from this shift in supply chain. The US imported medical gloves valued at US$2 billion in 2018, of which around
three-quarters came from Malaysia and 11% from China,” the report said.
The Fitch report also said higher US demand for Malaysian gloves will boost industry profit margins which have been hit by increases in raw material costs and surplus capacity due to
over-expansion by Hartalega Holdings Bhd, Kossan Rubber Industries Bhd, Supermax Corp Bhd and Top Glove Corporation Bhd.
“On the downside, the market environment for medical gloves in Europe is likely to become more competitive as Chinese producers shift their focus away from the US market.”
Over the longer term however, Fitch said, additional tariffs on a broad range of medical devices could help drive direct foreign investment into Malaysia’s medical device industry, boosting its
“We highlight that the Malaysian government is actively encouraging more investment from China, particularly in high-tech industries.
“Finance Minister Lim Guan Eng stated that Malaysia is keen to learn from Chinese expertise in artificial intelligence, advanced materials, robotics and cloud computing. This would allow Malaysia
to build on current initiatives to boost high-tech manufacturing,” Fitch said.
To date, US tariffs on Chinese-made medical devices have mainly targeted diagnostic imaging and electro-medical apparatus with most consumables remaining exempt.
Conversely, Chinese tariffs on US products have targeted a much broader range of devices and this could encourage more investment into Malaysia’s manufacturing sector from the US.
US medical devices companies with manufacturing operations in Malaysia include Abbott, Becton Dickinson, Boston Scientific, Cardinal Health, Medtronic and Teleflex.
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Local stock market expected to gain traction in Q4 (Thu, 17 Oct 2019)
PETALING JAYA: The local equity market is expected to pick up momentum moving forward with the return of slight optimism following a “mini trade deal”
between the US and China, coupled with the less austerity-sounding Budget 2020.
“We believe the less austerity-sounding Budget 2020 versus its 2019 predecessor, which had a slew of taxes, could provide some optimism to local businesses, resulting in a recovery trend in the
local markets moving forward,” HLIB Research said in a report today.
Year-to-date, the FBM KLCI has declined 116.08 points or 6.9%. Today, the key index closed 0.4 points or 0.03% lower at 1,574.50 points.
The research house views Budget 2020 as the main trading catalyst for the fourth quarter (Q4).
“On the back of improving optimism on trade war (amid the phase-one deal between the US and China), coupled with less austerity sounding Budget 2020 which market participants felt the change of
tone versus Budget 2019, we opine traders to look out for sectors such as technology, renewable energy, telecommunication, construction and tourism,” it added.
In Q4, it opined that the slightly positive-sounding Budget 2020 as well as window dressing in December (average 10-year December return: 1.98%) would be able to lift the broader market sentiment,
although some earnings disappointment may surface in November. In addition, the catalysts would bode well for stock selection in Q4.
“We believe the broad technology sector will be benefiting under the E&E and automation incentives, which could result in higher demand for automation equipment moving forward; under this
section we like I-Stone Group Bhd and KESM Industries Bhd.”
With rising demand for rural electrification in Malaysia, HLIB said, Pestech International Bhd would be the favoured pick amid its power transmission infrastructure expertise. For renewable energy
stimulus, it likes Pestech International Bhd.
“Given the increase in development expenditure and potentially improving construction sector, we see precast concrete manufacturers such as OKA Corp Bhd and Kimlun Corp Bhd to benefit from the
initial stage of construction jobs.”
For tourism, it likes Tune Protect Group Bhd for the travel insurance play, which is a proxy towards tourism industry.
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Microlink to raise RM8.45m from private placement (Thu, 17 Oct 2019)
PETALING JAYA: Microlink Solutions Bhd is expected raised RM8.45 million via a private placement exercise of up to 10% of its total issued share.
According to the group’s filing with Bursa Malaysia, the sum is derived from an indicative price of 50.5 sen per share on the issuance of 16.74 million new shares.
Microlink said of the proceeds raised, RM5.07 million will be utilised towards the repayment of bank borrowings and RM3.1 million for the repayment of trade payables.
The group’s existing bank borrowings stood at RM15.70 million as of September 30, 2019 and the proposed payment of RM5.07 million is expected to translate into an annual interest rate savings of
RM410,00 based on the average interest rate of 8.05% per annum.
Microlink said the proposed private placement is the most cost-effective source of capital and the most expeditious way of fund raising to meet the group’s funding needs in the short term.
The exercise is expected to be completed by the second quarter of 2020.
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Selangor Dredging aborts Damansara Heights land disposal (Thu, 17 Oct 2019)
PETALING JAYA: Selangor Dredging Bhd’s (SDB) wholly owned subsidiary SDB Damansara Sdn Bhd has terminated its RM71 million land disposal to Bukit Selesa Development Sdn Bhd (BSDSB).
This comes after BSDSB failed to obtain the approval from the relevant authorities for an amended development order (DO) that was stipulated in the agreement, according to SDB’s filing with Bursa
“The extended CP period to obtain the amended DO has expired on Oct 17, 2019, 5pm and pursuant to clause 4.3 of the agreement, BSDSB has exercised its rights to terminate the agreement.”
The sales and purchase agreement for the 16 parcels of land was signed in October 2016.
Prior to the proposed disposal to BSDSB, SDB had planned to develop 21 luxury bungalows with a gross development value of RM210 million.
However, in 2008, the development was fined and a stop work-order was issued by Kuala Lumpur City Hall for flouting certain building rules.
Subsequently, the government imposed a freeze on hillslope developments.
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Perak Corp unit defaults on RM25.7m loan (Thu, 17 Oct 2019)
PETALING JAYA: Perak Corp Bhd’s indirect 51%-owned subsidiary Animation Theme Park Sdn Bhd (ATP) has defaulted on payment to Affin Hwang Investment Bank Bhd amounting to RM25.7 million.
This is part of the repayment of principal in respect of its syndicated term loan facility of up to RM280 million granted by Affin Hwang, Affin Bank Bhd, Bank Pembangunan Malaysia Bhd and Malaysia
Debt Ventures Bhd.
ATP is the developer, owner and operator of Movie Animation Park Studios (MAPS) located in Ipoh, Perak.
According to Perak Corp’s Bursa disclosure, its wholly owned subsidiary PCB Development Sdn Bhd is actively seeking to dispose of its 51% stake in ATP and its immediate holding corporation
Perbadanan Kemajuan Negeri Perak (PKNP) has shown interest to takeover.
Perak Corp revealed that PKNP had written a letter to the group on February 21, 2019 to confirm its intent to take of MAPS.
Perak Corp said ATP had on Sept 24, 2019 requested indulgence of time of up to three months for PKNP to arrange funding for the instalment repayment of principal as part of its purchase price to
takeover the theme park.
Subsequently, Affin Hwang had on Oct 3 rejected the request and declared a default on Oct 16 with a 14-day notice from the date of letter to effect the payment of RM25.7 million, failing which all
the secured obligation due from ATP will become immediately due and payable.
Perak Corp said it is continuously in discussions with Affin Hwang to regularise the outstanding payment of the syndicated term loan.
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Malaysia, Chengdu ink RM177.2 million deals (Thu, 17 Oct 2019)
Malaysia, Chengdu ink RM177.2 million deals
KUALA LUMPUR: Three economic and trade investment cooperation agreements amounting to 300 million yuan (RM177.2 million) were inked at the 2019 Chengdu-Kuala Lumpur Urban Economic &
Trade Cooperation Exchange here yesterday.
The agreements include the partnerships between PUC Bhd and Sichuan Goodchains Supply Chain Management Co Ltd; Whitewave Global Consulting, Yisha Chengdu International Trade City Co Ltd and One
Belt One Road South East Asian NGOs Alliance (Oborseana); as well as PIHH Development Sdn Bhd and Chengdu Restaurant Industry Association.
Chengdu Municipal People’s Government deputy mayor Liu Xiaoliu said Malaysia has always been an important economic and trade partner of Chengdu in Southeast Asia.
“From January to August 2019, the total import and export volume between Chengdu and Malaysia was 19.7 billion yuan, ranking second among Asean countries, second only to Vietnam,” Liu said at the
Malaysia has 96 enterprises in Chengdu and the cumulative use of foreign capital is about US$900 million (RM3.76 billion) mainly in machinery manufacturing electronic information, real estate
development, as well as enterprises including Hong Leong Bank, Unisem Bhd, Parkway Health, Parkson Department Store, Shangri-La Hotel and Kerry Logistics.
About 18 Chengdu enterprises have invested US$28.44 million in Malaysia and the contracted project completed has a turnover of US$48.68 million, mainly in real estate, retail, food manufacturing,
construction and other fields.
Chengdu Investment Promotion Bureau deputy director He Li said Chengdu has formed a modern industrial system and has significant advantages in the fields of financial services, modern logistics,
exhibitions, cultural tourism, life services and new economy which promise great collaborative opportunities.
Chengdu Port and Logistics Office deputy director Liu Shuguo believes that Kuala Lumpur and Chengdu have broad prospects for cooperation in route networks, international channels, port services
and logistics industries. He added that Chengdu will provide comprehensive policy support for bilateral cooperation.
Malaysia External Trade Development Corporation (Matrade) director of China & Northeast Asia division Khairul Annuar Abdul Halim said bilateral trade volume between China and Malaysia reached
US$108.6 million in 2018, while total trade between Chengdu and Malaysia was US$4.63 billion in 2018.
More than 200 representatives from Matrade, InvestKL, Malaysia China Industrial & Commerce Association, Oborseana, PUC, Lion Corp Bhd, LBS Logistics Sdn Bhd and logistics, catering, new
retail, chain supermarket enterprises attended the exchange session.
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Six Seacera shareholders seek to remove nine directors (Thu, 17 Oct 2019)
PETALING JAYA: Six shareholders of Seacera Group Bhd, a Practice Note 17 (PN 17) company, has called for an extraordinary general meeting of the company to remove nine directors and appoint
six new ones.
In a filing with Bursa Malaysia, Seacera said the meeting was being called by JS Portfolio Sdn Bhd, Mak Hon Leong, Ong Eng Taik, Ng Wai Yuan, Datin Sek Chian Nee and Low Swee Foong but did not
disclose the reason the EGM was being called.
According to the meeting resolutions, the six shareholders named above are seeking to remove Wan Mohd Zahari Wan Embong, Zulqarnain Lukman, Koo Kien Yoon, Datuk Nik Ismail Nik Yusoff, Datuk Ismail
Ahmad, Mazlan Mohamad, Zamri Mohd Ramli, Ishak Ismail and Saharom Mohd Adas as directors with immediate effect.
The resolutions also sought to appoint Rizvi Abdul Halim, Datin Ida Suzaini Abdullah, Marzuki Hussain, Tan Lee Chin, Ong and Ramnath Sundaram to be appointed as directors of the company with
“The company is seeking legal advice on the above and further announcement will be made on the development thereof accordingly, if any,” Seacera said in the filing. The EGM will be held on Dec
It should be noted that this is not the first time Seacera shareholders have called for a meeting to remove some of its directors and appoint new ones.
In March this year, the group released an EGM notice for a meeting to be held on April 29, however, the elected chairman had adjourned the EGM to a later date.
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‘Merger of DFIs will not affect their ratings’ (Thu, 17 Oct 2019)
PETALING JAYA: RAM Ratings opined the proposed merger of four development financial institutions (DFIs) will not affect their ratings.
Budget 2020 discloses plans for a two-stage restructuring of DFIs involving Bank Pembangunan Malaysia Bhd (Bank Pembangunan), Danajamin Nasional Bhd (Danajamin), Export-Import Bank of Malaysia Bhd
(MEXIM) and the Small & Medium Enterprise Development Bank Malaysia Bhd (SME Bank).
“The proposed exercise is not anticipated to affect the respective AAA/Stable/P1 financial institution ratings of Bank Pembangunan and MEXIM, nor have any impact on Danajamin’s AAA/Stable/P1
insurer financial strength ratings or the ratings of Danajamin-guaranteed issues.”
“The rating assessments for Bank Pembangunan, MEXIM and Danajamin already consider the solid backing of the Government of Malaysia, anchored by each entity’s strategic role in fulfilling the
nation’s developmental goals,” the rating agency said in a statement.
The four entities have a combined asset base in excess of RM45 billion and an aggregate guarantee portfolio of about RM6 billion.
RAM said with a larger market impact, the merged DFI’s strategic importance is expected to remain well preserved.
“The DFI’s credit profile and the ratings of debts that may be transferred to it will continue to benefit from a strong likelihood of government support if required.”
It also highlighted that the integration of resources, cultures and systems is critical to a merger of this scale.
“If well implemented, the proposed realignment of the strategic mandates of DFIs will support the nation’s aspirations in a new global digital economic landscape.”
“Bank Pembangunan provides medium to long-term financing to sectors vital to the nation’s socio-economic development, while MEXIM supports and promotes Malaysia’s external trade.”
As the national financial guarantee insurer, Danajamin is tasked with developing the debt capital markets through credit enhancements for bond and sukuk issuances.
Meanwhile, SME Bank nurtures and serves the financing needs of SMEs – a segment which accounts for more than a third of the country’s gross domestic product.
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Potential re-rating for FGV, upgraded to buy (Thu, 17 Oct 2019)
PETALING JAYA: FGV Holdings Bhd’s possible disposal of its 51% stake in MSM Malaysia Holdings Bhd might warrant a re-rating of its share price should the stake sale materialise, according
to Hong Leong Investment Bank Research (HLIB Research).
Although the disposal will likely result in FGV incurring a disposal loss or impairing the remaining stake in MSM if it is a partial disposal, the research house still views the move positively as
it will reduce MSM’s share of losses to FGV and FGV’s net gearing.
Despite the fact that FGV’s performance in Q3 19 will likely to remain weak as the crude palm oil (CPO) price only started recovering since August and raw sugar cost will remain high for the rest
of 2019, HLIB Research opined that FGV deserves a relook into.
Earlier, FGV had confirmed that it was in talks with several parties to dispose of its 51% stake in MSM.
FGV reported a loss before tax of RM56.8 million in Q2 19 compared to a profit before tax of RM23.4 million in Q1 19, dragged down mainly by losses registered at sugar and plantation segments.
“We believe weak Q2 19 performance was the main culprit to FGV’s share price downtrend since August 2019.” said HLIB Research.
The research house raised its net loss forecast for FGV by 47% to RM130.7 million, to account for larger loss assumptions at sugar division and JV losses.
However, it will maintain its FY20-21 core net profit forecasts at RM7.1 million-RM18 million based on average CPO price assumption of RM2,200/tonne and fresh fruit bunches output of 4.9 million
tonnes and 5.4 million tonnes, respectively.
“We took this opportunity to switch our valuation methodology, to better reflect the value of FGV’s businesses. Post revision of valuation methodology, we upgrade our rating on FGV to buy from
hold previously with a target price of RM1.22 from 97 sen previously.”
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Matrade hopes India will not proceed with restricting imports from Malaysia (Thu, 17 Oct 2019)
KUALA LUMPUR: Malaysia External Trade Development Corporation (MATRADE) hopes the Indian government will not proceed with restricting the imports of Malaysian products including palm oil,
said its chief executive officer, Datuk Wan Latiff Wan Musa.
“This is something that we don’t want to happen, not only between Malaysia and India, but between Malaysia and any other countries on that matter.
“Once protectionism and trade war takes place, which is what happening today, it’s not healthy to the trade growth globally because when there is trade war between two countries, we are equally
affected,” he told reporters after a briefing on MATRADE’s National Export Day 2019 today.
Previously, it was reported that India was considering restricting imports of some products from Malaysia, including palm oil, after Putrajaya criticised New Delhi for the latter’s actions in
Wan Latiff said at present, no decision has been officially made by the Indian government and Malaysia, especially the Ministry of Primary Industries, is currently monitoring the situation.
Meanwhile, NED 2019 which will take place at Menara MATRADE here on Oct 24 from 8 am-5 pm, is an effort by the agency to mobilise Malaysian exporter community to further grow their global
footprint amidst an increasingly challenging economic landscape.
Themed ‘Sustainability and Inclusiveness’, NED 2019 is expected to draw over 1,000 participants including Small and Medium Enterprises (SMEs), Mid-Tier companies and government-linked companies
from all industries such as food and beverages, oil and gas, chemicals, construction, logistics and electrical and electronics.
He said the programme was developed to encompass various key issues that would be relevant to the Malaysian export community including those related to global trade friction, transforming local
champions to global leaders, governance and sustainability.
“Our aim is clear and simple, we want as many Malaysian companies to get access to this event to not only secure insights but also be energised and motivated to kick-start their venture in
exporting, as well as to provide guidance to existing exporters so they can grow further.
“This is crucial to ensure Malaysia will have a sufficient and strong pool of exporters to help our nation maintains its positive trade performance,” he added.
In addition, Wan Latiff said NED 2019 was part of MATRADE’s Corporate Shared Values initiative called Sustainability Action Values for Exporters and the corporation will be taking a leadership
role in championing the adoption of sustainable practices among Malaysian companies based on United Nation’s Sustainable Development Goals.
“Through this (NED), Malaysian companies will have the opportunity to engage with their respective industry players as well as with MATRADE officers to seek clarification on the agency’s
facilitation, consulted by officers who have served as trade commissioners (TCs) overseas and how they can leverage on the export incentives announced during the recent 2020 Budget.
“The speakers who will feature in the programme include Minister of International Trade and Industry Datuk Ignatius Darell Leiking, Chinese University of Hong Kong professor Lim Chin Leng, and
co-founder of Ficus Venture Capital Sdn Bhd Rina Neoh, while the MATRADE’s former TCs are those who were based in Almaty, Ho Chi Minh City, Yangon, Chengdu, Rotterdam, Seoul and Tokyo,” he added. --
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Nestle revamps water business as organic growth slows (Thu, 17 Oct 2019)
ZURICH: Food group Nestle plans to return up to 20 billion Swiss francs ($20.13 billion) to shareholders over the next two years and is making changes to its struggling waters business
after organic sales growth dipped to 3.7% in the third quarter from 3.9% in the previous quarter.
Packaged food makers are branching out into new areas like plant-based meat alternatives or products made from all natural ingredients to boost growth in an otherwise sluggish market.
Nestle's organic growth, which strips out currency swings and acquisitions, slowed in the third quarter as prices for its products fell slightly, the maker of KitKat chocolate bars, Maggi noodles
and vegan burgers said in a statement on Thursday.
It did, however, confirm its outlook for organic sales growth of around 3.5% and an operating margin of 17.5% or above for the full year, pointing to strong momentum in the United States and its
It said it had decided to distribute up to 20 billion francs to shareholders over the period 2020 to 2022, primarily in the form of share buybacks, but special dividends were also possible.
"Should any sizable acquisitions take place during this period, the amount of cash to be distributed to shareholders will be adjusted accordingly," Nestle said.
In a separate statement, Nestle announced it would no longer manage its waters business, which posted weak organic growth of 0.5% for the nine-month period, as a global business. It will instead
integrate it into its three geographical zones.
Maurizio Patarnello, head of the waters business, will leave the executive board at the end of this year.
Nestle appointed Sanjay Bahadur, head of acquisitions and business development, to lead a new group strategy and business development function that should help identify internal and external
strategic growth opportunities. - Reuters
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Widad buys integrated facilities management firm for RM95.89m (Thu, 17 Oct 2019)
PETALING JAYA: Widad Group Bhd is acquiring a 90% stake in Serendah Heights Sdn Bhd (SHSB) for RM95.89 million.
The acquisition will be satisfied via RM86.3 million cash and the issuance of new Widad shares.
Widad told Bursa Malaysia that it had entered into a heads of agreement (HOA) with SHSB’s shareholders namely Prihatin Ehsan Holdings Sdn Bhd and Training Camp Aabata Sdn Bhd for the
Widad said the purchase sum will be raised from a combination of internally generated fund and bank borrowings.
SHSB holds YBK Usahasama Sdn Bhd, which had in May 2010 entered into a concession agreement with the Malaysian government and Universiti Teknoloji MARA to develop the facilities and infrastructure
and to carry out maintenance works for the UiTM Campus in Jasin, Malacca.
Currently YBKU has remaining concession period of another 14 years ending 2034 totalling RM861.6 million.
Pursuant to the HOA, Widad and the vendors have agreed to exercise their best endeavour to negotiate and finalise all terms of the definitive agreement pertaining to the proposed acquisition
within two months.
Widad said the proposed acquisition is in line with the group’s principal activities of construction and integrated facilities management.
“It represents a strategic opportunity for the company to strengthen its remaining order book from approximately RM910 million currently to RM1.8 billion post proposed acquisition and diversifying
its service offerings into the education industry.”
The proposed acquisition is expected to be completed in the first quarter of 2020.
At the noon break, Widad’s share price gained 1.4% to 35 sen on 3.68 million shares done.
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China to scrap business curbs on foreign banks, brokerages (Thu, 17 Oct 2019)
BEIJING: China will remove business restrictions on foreign banks, brokerages and fund management firms, a cabinet meeting chaired by Premier Li Keqiang (pix) said on Wednesday,
state television reported.
But the move, which comes nearly 18 years after China joined the World Trade Organization (WTO), could have limited impact on the competitive landscape of an industry dominated by China's state
China has stepped up efforts to open its financial sector amid a festering trade war with the United States, with increased access to its financial sector among a host of demands from
Last week, China announced a firm timetable for opening its futures, brokerage and mutual fund sectors fully to foreign investors next year, as Beijing and Washington reached a tentative deal to
resolve their trade dispute.
The cabinet did not elaborate on what effect the removal of the curbs would have. On Tuesday, the cabinet relaxed management rules for foreign insurers and banks, giving them easier access to
China, and wider business scope.
China will also support local governments' efforts to attract more foreign investment and allow foreign companies to be more flexible in choosing how they borrow funds from abroad, the cabinet
China will not allow forced technology transfers by foreign firms, it said.
Stabilising foreign investment is part of Beijing's policies to support the slowing economy that has been hit by the country's trade war with the United States.
In 2007, HSBC Holdings, Standard Chartered Bank , Bank of East Asia and Citigroup became the first foreign banks allowed to set up locally-incorporated subsidiaries in China as Beijing gradually
opened up the sector.
But hampered by numerous restrictions on business scopes and operations such as outlet openings, the roughly 40 foreign banks with local units operating in China account for a tiny fraction of a
market dominated by state-owned rivals such as Industrial and Commercial Bank of China and Bank of China .
"Many people say 'the wolves are coming', but my observation is that...through opening, Chinese regulators intend to introduce technology and talents, but it doesn't mean foreign players can grab
a big market share in China," Xin He, Societe Generale's China head of global markets told a financial conference over the weekend.
He added that the French bank has retreated from its retail business in China after realising that "foreign banks cannot compete with Chinese players in this business segment."
In the securities sector, China last year relaxed rules to allow foreign brokerages to own a majority stake in Chinese ventures. China said last week foreign ownership limits in the sector will be
scrapped completely on Dec. 1, 2020. UBS Group , JPMorgan Chase and Japan's Nomura Holdings have obtained regulatory approval to set up majority-owned China ventures.
But China has yet to open more sensitive areas of its financial industry. U.S. payments card giants Mastercard Inc and Visa Inc are still awaiting regulatory approval to conduct yuan clearing
business in the country.
China's economic growth is expected to slow to a near 30-year low of 6.2% this year and cool further to 5.9% in 2020, a Reuters poll showed, even as Beijing steps up policy stimulus.
The government has been leaning heavily on fiscal stimulus to support the economy, including rolling out big tax cuts and increased spending on infrastructure investment.
Tax and fee cuts amounted to 1.5 trillion yuan ($211.32 billion) in the first eight months, which has helped ease the burden on firms, boost incomes and employment, with full-year reductions set
to exceed 2 trillion yuan, the cabinet said.
The government will also support local governments facing fiscal difficulties to ensure wage payments, the cabinet said. - Reuters
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Lotte Group chairman stays out of jail as S.Korea court ruling upheld (Thu, 17 Oct 2019)
SEOUL: South Korea's Supreme Court on Thursday upheld a ruling by a lower court that freed Lotte Group Chairman Shin Dong-bin from jail after he had served several months for bribery
charges involving the country's former president.
The Supreme Court ruling means that Shin will remain out of jail, as it upholds a decision last year to suspend the remainder of his jail sentence, pending good behaviour over four years.
The decision boosted shares of Lotte Corp, the holding company of retail-to-chemicals giant Lotte Group. Lotte Corp rose as much as 4.2%, while flagship retailer Lotte Shopping Co Ltd gained
nearly 2%. The broader KOSPI market was 0.1% lower at 0305GMT.
"We will try to become a trustworthy company as we contribute to the nation and society," Lotte Group said in a statement following the Supreme Court's decision.
Shin was initially sentenced to a two-and-a-half-year prison sentence in February 2018 for bribing a close friend of former President Park Geun-hye as he sought to earn a government license for
Lotte's duty free business. Park had been ousted amid an influence-peddling scandal in 2017.
Shin was convicted of providing 7 billion won ($5.90 million) to one foundation controlled by Park's close friend in return for favours to win a duty free license.
Shin appealed the sentence to the Seoul High Court, which suspended the jail sentence for four years, freeing him from jail in October 2018 after he had served seven months. Thursday's Supreme
Court ruling upheld that decision.
The decision on Shin's case came as appeals continue in a separate bribery case against Samsung Group's de facto chief Jay Y. Lee, who was given a five-year jail term in 2017 for seeking favours
from Park's administration.
The Seoul High Court similarly gave Lee a four-year suspended sentence on appeal after he had spent a year in detention. The case was sent back to that court for review last month, potentially
raising the chances of Lee returning to jail. A new trial is scheduled to commence next Friday. - Reuters
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RAM expects Malaysia’s 2020 GDP growth to be lower at 4.5% (Thu, 17 Oct 2019)
PETALING JAYA: Malaysia’s gross domestic product (GDP) is projected to expand at a marginally lower rate of 4.5% in 2020 compared to 4.6% in 2019, according to RAM Ratings.
The ratings agency pointed out that further easing of monetary policy is on the cards while
fiscal policy remains mildly growth-supportive.
“Against this backdrop, Malaysia will need to harness its inner strength from resilient domestic demand and accommodating policy measures to build a buffer against external challenges, which are
likely to impinge on its growth next year,” it said in a press statement for its annual credit summit.
During the summit, the panellists concurred that global uncertainties will persist in the foreseeable future, although there is a silver lining - Malaysia has been performing relatively
commendably to date.
Out of the 11 broad sectors under its coverage, RAM has identified the automotive and commercial property to remain on a negative outlook while the others which include power, telecommunications,
toll roads and banking, are stable.
It elaborated that the automotive segment is weighed down by keen competition in an increasingly more saturated market while the commercial property industry has been plagued by a glut of retail
malls and office space.
Meanwhile, the rating agency said that the credit trends of its rated issuers are generally stable, supported by their strong business profiles and credit metrics.
“The banking sector, a bellwether for the Malaysian economy, is envisaged to shift to a lower gear on account of slower growth.”
“Even so, the incumbents are still well-capitalised while their asset quality remains intact despite some potential slippage.”
On the whole, RAM said that about 93% of its rated entities are on stable outlook and the rating drift is anticipated to improve further next year.
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US firms say near-term outlook dimming amid slow growth: Fed (Thu, 17 Oct 2019)
WASHINGTON: Less than stellar US growth in recent weeks has caused many businesses to lower their outlooks and they now expect the economy to weaken, the Federal Reserve said Wednesday.
The Fed later this month is widely expected to cut interest rates for the third time this year as policymakers work to provide support for an economy that has begun to sag -- even though for the
moment it continues to outshine the rest of the industrialized world.
“The US economy expanded at a slight to modest pace... as business activity varied across the country,“ the central bank said in its beige book report on the economy.
“Business contacts mostly expect the economic expansion to continue; however many lowered their outlooks for growth in the coming six to 12 months.”
Most economists do not expect a recession in the next year but forecasting models still show the risk is increasing.
The hardships that manufacturing and agriculture face, according to the report, have not eased.
And elsewhere the picture has been uneven, though household spending has remained “solid,“ according to the Fed’s report, which gathers anecdotal accounts from around the country.
The mood was generally better in the southern and western regions of the country, while the Midwest and Great Plains -- regions key to President Donald Trump’s election upset in 2016 -- were
gloomier, according to the Fed.
Hard to find workers
Oxford Economics said in a client note that the report was “lackluster” and pointed to more rate cuts from the central bank.
“We still expect two more rate cuts this year, in October and December,“ the firm said.
While US economic expansion is in a record 11th year and unemployment remains at 50-year lows, Fed members at their most recent meeting said they had become “more concerned” by mounting risks.
As the world economy begins to sputter, policymakers in recent weeks have said a clearer picture has emerged of the threat from President Donald Trump’s trade wars: Skittish companies, unsure of
markets and prices, have held back on investment and could soon reduce hiring, which could then eat into consumer spending and growth.
But according to the beige book, for many employers the main barrier to more steady hiring remains the lack of available and qualified workers.
A major New York employment firm said “almost all job candidates are merely jumping from other jobs,“ the report said, while pressure to fill open positions in the Philadelphia region remained
But among manufacturers, the labor shortage had a different effect. Rather than lay off employees who could be hard to replace, some firms reduced worker hours instead.
In the Boston region, “signs of slowing have become more widespread,“ while growth in the New York area “slowed to a subdued pace.”
Conditions improved in the Chicago and St Louis regions.
The early fallout from a month-long nationwide strike by UAW workers at General Motors plants “was limited,“ the Fed said.
Wall Street was largely unmoved by the report, finishing slightly lower after Commerce Department data showed weakening consumer demand in September. -AFP
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US-China trade mini-deal being ‘papered’: Trump (Thu, 17 Oct 2019)
WASHINGTON: The partial trade bargain struck last week with China is now being formally put down in writing, US President Donald Trump (pix) said Wednesday.
“It hasn’t been papered yet but it is being papered,“ Trump told reporters at the White House.
He insisted that China had already bought $40 to $50 million worth of American agriculture products last week.
He reiterated that China committed to greater purchases of US farm exports, and made concessions because of economic pressure by Washington.
“They want to make a deal. They have to make a deal. Their economy has been hurt very badly by what we’ve done and the tariffs,“ Trump said.
Markets rallied Friday as the deal was struck, in relief after the steady escalation in the trade conflict with China.
Last week, Trump hailed a breakthrough on a “phase one” deal that he said was substantial and included a surge in purchases of American farm products and also covers intellectual property,
financial services and currencies.
However, comments from officials in Beijing raised skepticism about the significance of the agreement.
While the deal meant tariffs increases planned for this week would not go forward, it did not roll back any of the stinging import duties imposed up to now on hundreds of billions of dollars in
trade between the economic powers, nor did it address another round of import taxes planned for December.
Scant specifics are available but Trump says he hopes to sign the agreement with Chinese President Xi Jinping at the APEC summit in Chile next month.
Treasury Secretary Steven Mnuchin said Wednesday that he plans to meet with Chinese Vice President Liu He in Chile ahead of any meeting between Trump and Xi.
He did not rule out traveling to China with US trade ambassador Robert Lighthizer.
Mnuchin added that discussions about technology transfers would largely be part of a “phase two” of the agreement. -AFP
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Asian shares pause after 5-day rally, Brexit in focus (Thu, 17 Oct 2019)
TOKYO/SYDNEY: Asian stocks barely moved on Thursday as soft U.S. retail sales data raised fears about the health of the world’s largest economy, sucking the steam out of a five-session
rally, while hopes of a Brexit deal kept sterling volatile.
South Korean, Australian and New Zealand indexes were all in negative territory. Chinese shares were mostly flat while Japan’s Nikkei ticked up and U.S. stock futures were barely changed.
That left MSCI’s broadest index of Asia-Pacific shares outside Japan slightly higher with gains largely led by Hong Kong’s Hang Seng index.
The S&P 500 shed 0.20% on Wednesday after data showed U.S. retail sales contracted in September for the first time in seven months, in a potential sign that manufacturing-led weakness could be
spreading to the broader economy.
“It looks like the trade war has claimed yet another victim, in addition to diminished business confidence and reduced investment spending, as consumers are starting to chicken out,“ said Chris
Rupkey, chief financial economist at MUFG Union Bank.
Given U.S. consumption has been one of few remaining bright spots in the global economy, the data fanned worries the Sino-U.S. trade war would tip the world into recession.
U.S. Treasury Secretary Steven Mnuchin said on Wednesday that U.S. and Chinese trade negotiators were working on nailing down a Phase 1 trade deal text for their presidents to sign next month.
But he also said there were no plans for another high-level meeting on the trade deal outlined last week.
“While the U.S. suspended a hike in tariffs, it hasn’t gone as far as scrapping the tariffs altogether, so it is hard to expect a quick pick-up in the economy,“ said Yoshinori Shigemi, global
market strategist at JPMorgan Asset Management.
Not for the faint-hearted
Losses in equities were somewhat offset by a solid start to the earnings season, though that is partly because investors have already marked down their expectations substantially. Earnings for
S&P 500 companies are forecast to show a decline of 3% for the quarter, according to Refinitiv data.
Bank of America shares rose 2.0% following its quarterly results. Netflix rose 9.9% in after-hours trade after its earnings beat Wall Street estimates.
In the currency market, soft U.S. retail sales took the shine out of the dollar.
The dollar index was last at 98.005, having touched its lowest since Aug. 27 on Wednesday.
Against the yen, it was a flat at 108.73 after peaking at 108.90 on Tuesday.
The euro stood at $1.1074, near a one-month high of $1.1085 hit in U.S. trade on Wednesday.
Sterling traded at $1.2821, having risen to as high as $1.2877 on Wednesday, its loftiest since mid-May.
The pound has risen more than 5% in the past five sessions on hopes the United Kingdom and the European Union can strike a fresh deal in an EU leaders’ summit on Thursday and Friday.
Investors have welcomed optimistic comments from key officials in the last few days. British culture minister Nicky Morgan said late on Wednesday there is a good chance of a deal.
Still, many doubts remained, not the least of which is if British Prime Minister Boris Johnson can ensure his government and factious parliament approve the plan.
“Trading the British pound intra-day at the moment is not for the faint-hearted with deep pockets required,“ said Jeffrey Halley, senior market analyst at OANDA.
“The street clearly wants to take GBP higher on any Brexit hope, but traders should be aware that the pullback will be equally as ugly if progress stalls or collapses yet again.”
In commodities, oil prices slipped after industry data showed a larger-than-expected build-up in U.S. crude stocks, adding to concerns that demand for oil around the world may weaken amid further
signs of a global economic slowdown.
Brent crude futures fell 0.47% to $59.14 a barrel while U.S. West Texas Intermediate (WTI) crude lost 0.7% to $52.98.
Spot gold was slightly weaker at $1,488.31 an ounce. -Reuters
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