Stock Ticker

Saturday, October 31, 2020

The great divergence: US Covid-19 economy has delivered luxury houses for some, evictions for others

Kiki and Greg Kullman with their twin boys, Cam and Kyle pose in Columbus, Ohio in this undated handout picture. — Picture courtesy of the Kullman family/Handout via Reuters
Kiki and Greg Kullman with their twin boys, Cam and Kyle pose in Columbus, Ohio in this undated handout picture. — Picture courtesy of the Kullman family/Handout via Reuters

NEW YORK, Oct 31 — When the temperature dipped near freezing in Columbus, Ohio in mid-October, the children had no heat. The gas had been shut off in their apartment for nonpayment. DaMir Coleman, 8, and his brother, KyMir, 4, warmed themselves in front of the electric oven.

The power, too, was set to be disconnected. Soon there might be no oven, no lights and no internet for online schooling. The boys’ mother, Shanell McGee, already had her cell phone switched off and feared she could soon face eviction from their US$840-a-month (RM3,488-a-month) apartment. The rundown unit consumes nearly half her wages from her job as a medical assistant at a clinic, where she works full-time but gets no health benefits.

Just 14 miles northwest of McGee’s neighbourhood, Kiki Kullman is having one of the best years of her life.

The real-estate business she runs with her family just sold the highest-priced house in its history: a 13,000-square-foot estate, listed for US$4.5 million, that came with an elevator and a classic-car showroom. And in late October, Kullman closed on a home of her own — a US$645,000 three-story Colonial, painted a stately white with a front door flanked by columns, a pleasant place for her two-year-old twin boys to grow up.

Columbus exemplifies the economic split animating America’s coronavirus crisis.

Professionals like Kullman are thriving, thanks in part to pandemic-induced policies by the Federal Reserve that have buoyed the stock market and fuelled industries such as real estate with record-low interest rates.

For many lower-wage workers, meanwhile, the crisis has delivered a cruel shove, toppling families like the McGees who were already living on the financial edge. Nationwide, millions of people including hotel workers, retail clerks, waiters, bartenders, airline employees and other service workers have lost jobs as Covid-19 fears crushed consumer demand.

Economists call this phenomenon a “K-shaped” recovery, in which those on the top continue to climb upward while those on the bottom see their prospects worsen.

Ned Hill, professor of economic development at Ohio State University, called that downward slope of the K “fat and broad and long and ugly looking.” He said there’s little hope for a return to normal as long as coronavirus continues to spread unabated in the United States. In Ohio, Covid-19 cases are soaring and hit a record of 3,590 new cases on October 29. In Columbus alone, at least 643 people have died.

“People’s jobs and incomes have disappeared, and they aren’t coming back until people’s threat of dying from the virus dissipates,” Hill said. “That’s it.”

Located in the centre of Ohio, about halfway between Pittsburgh and Indianapolis, Columbus is a city of some 900,000 people. Home to Ohio State University and the state’s capital, its employment is rooted in sectors like hospitality, education and health, government, and professional and business services.

That mix has allowed it to fare better during the crisis than some other Rust Belt cities that are more heavily dependent on manufacturing. Columbus’s September unemployment rate of 7.5 per cent was lower than the national average of 7.9 per cent. But like the rest of the United States, its front-line and modestly skilled workers have been slammed the hardest.

The divergence of fortune can be seen in the city’s housing market.

For those with means, like the clients of real estate agent Kullman, low interest rates have translated into cheaper mortgages, allowing them to afford bigger houses. Columbus is just one of four US cities — along with Cincinnati, Kansas City and Indianapolis — where houses are selling in less than five days on average, according to real estate research firm Zillow.

“It is crazy to see in Columbus the million-plus price point getting multiple offers and all-cash bids,” said Kullman, 36.

For renters hammered by the downturn, meanwhile, housing is a precarious business.

During the early days of the pandemic as Ohio’s residents sheltered in place, evictions in Columbus fell, thanks to local and federal protections to keep renters in their homes. But since September, 1,774 eviction cases have been filed, far surpassing summer levels, according to Princeton University’s Eviction Lab, which tracks evictions. The Greater Columbus Convention Center now serves as a bustling eviction court.

Those filings came despite a September 4 decree by the US Centers for Disease Control and Prevention (CDC) banning all evictions nationwide until January 1 to prevent a surge of newly homeless people from contracting and spreading the coronavirus. Under the moratorium, landlords cannot evict tenants who can no longer pay rent because their earnings have been affected by Covid-19.

But landlords are not required to inform tenants of these protections and are free to file eviction lawsuits. Only renters who know about the CDC ban, qualify for it and take legal action to assert their rights can stop their evictions. Among the 24 cities the Eviction Lab tracks, Columbus is one of the few where evictions did not fall after the ban.

The fallout can be seen across Columbus. The local pot of money from federal relief to help cash-strapped tenants pay rent was tapped out in September. Food banks are running low on staples, and homeless shelters are at capacity, according to community advocates.

Utility shut-offs have surged to the point that lawyers for the Legal Aid Society of Columbus have resorted to filing personal bankruptcy petitions for tenants to keep their heat, lights and water on.

If present conditions persist, and without a new round of federal relief, as many as 40 million people could be at risk of eviction in coming months, according to the Aspen Institute, a think tank. In a typical year, 3.6 million eviction cases are filed.

‘Being poor costs you’

Even before the pandemic, McGee, 29, was struggling financially. In 2014, she bought a 2008 Chevy Malibu off a corner lot charging 22 per cent interest. She said the junker stopped running long ago, so she stopped paying in 2016. McGee said she offered to return the vehicle, which has 176,475 miles on it, but the lender wouldn’t take it back.

In March, McGee’s live-in boyfriend lost his job at a fast-food restaurant as Ohio went on lockdown, cutting their household’s income. In August, he was diagnosed with Covid-19 and the entire family had to quarantine. That same week, McGee got a call from her employer, telling her that her lender had gotten a court order to garnish 25 per cent of her wages to repay more than US$10,000, with penalties and late fees, that she still owed on the car.

That left her with take-home pay of US$728 every two weeks. She couldn’t afford school supplies for her sons and had to borrow gas money from her mom to get to work in her boyfriend’s car.

“It was heartbreaking, it was everything all at once,” said McGee, who wears rectangular glasses and has a broad, easy smile.

She sought help from Paul Bryson, an attorney with the Legal Aid Society who filed a bankruptcy petition in October to get McGee’s utilities turned back on and the garnishment frozen. The court approved the petition, but not before McGee’s lender took US$1,023 of her wages.

“Being poor costs you a lot of money,” Bryson said. “Even before the pandemic, somebody’s entire life falls apart when they get a garnishment. And now? If nothing is done, we are just going to have a lot of people on the street.”

McGee’s car lender, Columbus Mortgage, did not respond to requests for comment.

Living the dream

For years, Kullman, the real estate agent, fantasised about living on Bedford Road, a coveted address in the Columbus suburbs.

In the region’s poshest neighbourhoods, sumptuous houses that make perfect pandemic compounds, with amenities like his-and-hers home offices and roomy basements for online schooling, can sell in a day, often with multiple offers in all-cash deals well above the asking price. Kullman said some shoppers are submitting bids without ever touring a house. The most desperate are agreeing to “no-remedy” inspections, meaning they won’t ask for concessions if the inspection turns up a major defect. Others, she said, have authorised “crazy escalation clauses with no cap.” In real estate parlance, that means they will beat any other offer, no matter how high the price.

“You have to sign away your life to get the house you want,” Kullman said.

In August, Kullman, who runs the Kullman Group at Street Sotheby’s International with her husband, father and sister, found out that a couple who lived on Bedford Road were about to move. She made a bid before the house hit the market and the owners accepted. The Colonial is right next door to her sister’s home; their kids will share backyards.

Kullman is aware of her good fortune amidst the pandemic, and the mean hand that coronavirus has dealt to the city’s most vulnerable.

Her husband has been doing business with a landlord who’s selling a portfolio of homes in Columbus’s low-income neighbourhood of Linden. Non-paying tenants in those properties have been getting eviction notices.

“It is night and day, what we see here,” Kullman said. “Which is not what you would expect in Covid. It’s sad but it’s true.” — Reuters




Source: Malay Mail

FGV’s hope for RM3.5b-RM4b compensation from Felda optimistic, says CGS CIMB

CGS CIMB said the cost for Felda to take over the remaining stake it does not own in FGV is RM2.6 billion, based on FGV’s last market capitalisation. — Picture by Choo Choy May
CGS CIMB said the cost for Felda to take over the remaining stake it does not own in FGV is RM2.6 billion, based on FGV’s last market capitalisation. — Picture by Choo Choy May

KUALA LUMPUR, Oct 31 — CGS CIMB Research opines that FGV Holdings Bhd’s (FGV) expectation of a RM3.5 billion — RM4 billion compensation from Federal Land Development Authority (Felda) following the termination of the land lease agreement (LLA) between the parties is optimistic.

The research house said its opinion is based on the historical trends of LLA payments and its current understanding of the compensation formula.

“However, we believe Felda is unlikely to pursue a termination if the compensation is as high as RM3.5 billion to RM4 billion, given that it may be cheaper to take FGV private at current market capitalisation,” it said in a note today.

CGS CIMB said the cost for Felda to take over the remaining stake it does not own in FGV is RM2.6 billion, based on FGV’s last market capitalisation.

“Our read is that the compensation sum would be highly dependent on the financial year used for its calculation.

“If it is based on FGV’s 2019 financials, the compensation will likely be low or minimal, whereas if it is based on 2020 or 2021 financials, it will likely be higher, but the final amount will depend on the performances of FGV’s estates and crude palm oil prices,” it said.

The research house said it assumed the estates under the LLA to be worth RM2.55 billion.

“As such, we would view the deal as positive or negative for FGV if the compensation value is above or below our RM2.55 billion valuation for the estates.

“For the medium — to long-term, we see the LLA termination as a negative as it means FGV will not be able to enjoy the fruits of its replanting over the past years,” it said.

The LLA involves Felda-owned estates totalling 350,733 hectares that were leased to FGV for 99 years from November 1, 2011. — Bernama




Source: Malay Mail

Taiwan’s smart hardware for the global market

PETALING JAYA: Taiwan’s manufacturing industry has been actively strengthening its technology, investing in high-value hardware, building materials and fasteners.

In 2019, Taiwan’s hand tools export value achieved US$3.8 billion (RM16 billion) which ranked third in the world. Within the fastener industry, Taiwan is ranked among the top four globally with an export value of more than US$4 billion.

“Supported by Taiwan’s cutting edge ICT industry, building materials and fasterners could produce a whole bunch of data through sensors by which the functions of the components can be optimised,“ said Taiwan External Trade Development Council executive vice president Simon Wang at the Taiwan Excellence Building Material and Fastener Webinar yesterday.

Taiwan Excellence, representing the highest achievement awarded for Taiwanese products, held the online event which featured the latest hardware products from four award-winning Taiwanese companies King Slide Works Co Ltd, Sheh Kai Precision Co Ltd, Tronco Electric Machinery Inc and Sheh Fung Screws Co Ltd.

King Slide Works is the leading furniture hardware manufacturer in Taiwan engaged in the research, design, manufacture and sales of guide rails for servers and peripheral components. Its Simlead metal drawer system with push-open, silent soft closing and VSD comprises the metallic side walls and full extension runners, offering the world’s first drawer safety and friendly design.

Sheh Kai Precision is a manufacturer of high-end construction fastener: bi-metal screw, ultimate performance bi-metal and carbon steel screw anchor in Taiwan. Its concrete screw anchor is to create a fastener product with high ductility within the load bearing area of the fastener. The increase in ductility and hardness would in turn lower the sensitivity it will have to the damages caused by embrittlement by way of hydrogen as well as corrosion. Compared with traditional expansion anchor, concrete screw anchor can save 30% of time with no expansion forces as the installation is close to the edge.

Tronco Electric Machinery is one of the top suppliers of intelligent automatic door system, DC brushless motor, electronic access control system, wireless system and related accessories. Its automatic swing door system incorporates microprocessor servo controllers that bring the benefit of precision door position control and smooth noise-free operation. As a green electric system, it features high-efficiency power supply units with stand-by power consumption at just <0.5W, offering a superior energy, cost-effective automatic door solution.

Sheh Fung Screws is a specialist brand in manufacturing and distributing screws. It offers various screws, including self-drilling, timber construction, drywall, chipboard, self-tapping, decking, self-piercing screws, and other screws. Its timber construction screws come in four different types: wafer head, double flat head sharp point, cheese head, and double flat head drill point. It asymmetric thread design for better pullout, milling thread design reduce the risk of splitting the wood and easy no stress-free drill, reduce screw torque and fully threaded for maximising a joints load bearing capacity and pullout.



Source: The Sun Daily

China’s factory activity growth slows slightly in October

The official manufacturing Purchasing Manager’s Index (PMI) fell to 51.4 in October from 51.5 in September, data from the National Bureau of Statistics showed today. — Reuters pic
The official manufacturing Purchasing Manager’s Index (PMI) fell to 51.4 in October from 51.5 in September, data from the National Bureau of Statistics showed today. — Reuters pic

BEIJING, Oct 31 — China’s factory activity expanded at a slightly slower pace in October but was slightly above analysts’ expectations, suggesting a continuing economic recovery as the country rebounds from the coronavirus shock.

The official manufacturing Purchasing Manager’s Index (PMI) fell to 51.4 in October from 51.5 in September, data from the National Bureau of Statistics showed today, remaining above the 50-point mark that separates growth from contraction.

Analysts had expected it to slip slightly to 51.3 but said a broader recovery still appeared to be solidly on track.

The data, particularly new export orders, indicates October’s trade figures should stay strong, Zhou Maohua, an analyst at China Everbright Bank, said in a note. However, the epidemic’s spread overseas could increase uncertainties for China’s exports over the next few months, said Zhou.

China’s vast industrial sector is steadily returning to the levels seen before the pandemic paralysed huge swathes of the economy.

Pent-up demand, stimulus-driven infrastructure expansion and surprisingly resilient exports are propelling the rebound, though the global outlook is dimming as many Western countries battle renewed surges in the virus that causes Covid-19, with some going back into virus lockdowns.

The official PMI, which largely focuses on big and state-owned firms, showed overall new orders remained steady at 52.8, while new export orders rose to 51.0, improving from 50.8 a month earlier.

But smaller firms continued to struggle. A sub-index for those companies stood at 49.4 in October, slipping back into contraction from September’s 50.1.

Companies also shed jobs for a sixth month in a row, and at a faster pace. A sub-index for employment fell to 49.3 from September’s 49.6.

“The manufacturing industry overall continues to pick up,” said NBS official Zhao Qinghe, while noting that small companies face weak market demand.

Some companies reported that the resurgence of the epidemic overseas had lengthened procurement periods for imports of raw materials and increased transport costs, Zhao said in a statement released with the data.

China’s economy grew a weaker-than-expected 4.9 per cent in the third quarter year-on-year. It is expected to expand around 2 per cent for the full year — the weakest in over three decades but still much stronger than other major economies.

The pandemic has been largely controlled in China, with daily life in much of the country returning to normal, although an outbreak emerged recently in the western region of Xinjiang.

A sister survey on the services sector showed activity expanded for the eighth straight month, hitting the highest level since October 2013, as the removal of restrictions on public gatherings and movement bolstered consumer demand. — Reuters




Source: Malay Mail

US judge blocks Commerce Department TikTok order

US District Court Judge Wendy Beetlestone enjoined the Commerce Department from barring data hosting within the United States for TikTok, content delivery services and other technical transactions. — AFP pic
US District Court Judge Wendy Beetlestone enjoined the Commerce Department from barring data hosting within the United States for TikTok, content delivery services and other technical transactions. — AFP pic

WASHINGTON, Oct 31 — A US judge in Pennsylvania yesterday blocked a US Commerce Department order set to take effect on November 12 that would have effectively barred Chinese-owned short video-sharing app TikTok from operating in the United States.

US District Court Judge Wendy Beetlestone enjoined the Commerce Department from barring data hosting within the United States for TikTok, content delivery services and other technical transactions.

In her ruling, Beetlestone said the order would “have the effect of shutting down, within the United States, a platform for expressive activity used by approximately 700 million individuals globally. Over 100 million of these TikTok users are within the United States, and at least 50 million of these US users use the app on a daily basis.”

The Commerce Department, which did not immediately comment yesterday, has acknowledged the restrictions would “significantly reduce the functionality and usability of the app in the United States” and “may ultimately make the application less effective.”

On September 27, US District Judge Carl Nichols in Washington issued a preliminary injunction in a suit brought by TikTok owner ByteDance that stopped the US Commerce Department from ordering Apple Inc and Alphabet Inc’s Google app stores to remove TikTok for download by new users. That order had been set to take effect later that day.

Nichols is set to hold a November 4 hearing on the other aspects of the Commerce Department order that Beetlestone blocked yesterday.

The order by Beetlestone, in a suit brought by three TikTok content creators, also blocks the app store download ban.

TikTok said in a statement it was “deeply moved by the outpouring of support” form its users “who have worked to protect their rights to expression.”

Talks have been ongoing to finalise a preliminary deal for Walmart Inc and Oracle Corp to take stakes in a new company, TikTok Global, that would oversee US operations. US President Donald Trump said last month the deal had his “blessing.”

The Trump administration contends TikTok poses national security concerns as personal data collected on 100 million Americans who use the app could be obtained by China’s government. TikTok denies the allegations. — Reuters




Source: Malay Mail

Bank Negara’s OPR decision, Budget 2021, US elections to influence ringgit movement next week

During the week, Malaysia’s positive September exports helped the ringgit claim the title as Asia’s best-performing currency for the day. — Reuters pic
During the week, Malaysia’s positive September exports helped the ringgit claim the title as Asia’s best-performing currency for the day. — Reuters pic

KUALA LUMPUR, Oct 31 — Bank Negara Malaysia’s (BNM) policy rate decision on November 3 and Budget 2021 tabling on November 6 are set to be catalysts for the ringgit against the US dollar and other major currencies next week.

The Overnight Policy Rate (OPR) is currently at 1.75 per cent after the central bank slashed the key interest rate by a cumulative 100 basis points (bps) during its Monetary Policy Committee meetings this year.

FTXM market analyst Han Tan said additionally, the domestic political uncertainties also added another layer of risk which could affect the local currency’s performance.

However, he noted that the US dollar/ringgit movement would still primarily be driven by external factors.

“For the week ahead, an increase in risk aversion could see US dollar/ringgit testing the 4.1707 resistance level, with stronger resistance set around the 4.20 psychological level.

“However, a steep decline in the US dollar could bring the 4.14 level back into focus for the currency pair, while a path towards the 4.10 psychological level cannot be ruled out if the greenback capitulates on the back of a decisive Joe Biden win or some surprisingly dovish US Federal Reserve commentary,” he said.

The 2020 United States (US) presidential election is scheduled for November 3. It will be the 59th quadrennial presidential election.

On the same note, Axi chief global market strategist Stephen Innes said Biden’s victory in the US presidential election would be viewed more favourably than a Donald Trump win from Asia’s perspective.

“My view is that the US dollar will eventually sell off on either outcome, but traders need to respect the market’s initial knee jerk reaction, so I think this is holding traders back from taking on more Asian foreign exchange (FX) risk.

“The Chinese yuan could bounce around on election day, and it could be messy getting stuck on the wrong side of the trade,” said Innes.

He noted that many traders would prefer for the US election’s dust to settle before rebuying the ringgit as the issue of a contested election remained a main concern.

“Positioning is much lighter, so the ringgit could stand to make a bullish break next week, provided the Covid-19 counts start to fall locally. Cautious range next week for the ringgit against the US dollar is between 4.14 — 4.17,” he added.

During the week, Malaysia’s positive September exports helped the ringgit claim the title as Asia’s best-performing currency for the day.

Nonetheless, the US dollar index rose over one per cent as global risk appetites deteriorated amidst the resurgence in Covid-19 cases in major economies, while hopes of a pre-election US fiscal stimulus deal began to wane.

On a Friday-to-Friday basis, the ringgit declined against the US dollar to 4.1530/1570 from 4.1500/1600 in the previous week.

The local currency traded mostly higher against other major currencies.

It appreciated against the Singapore dollar to 3.0427/0468 from 3.0593/0678 Friday last week but eased versus the yen to 3.9757/9814 from 3.9664/9771.

The ringgit strengthened vis-a-vis the British pound to 5.3806/3866 from 5.4286/4434 a week earlier and traded firmer against the euro at 4.8470/8529 from 4.9153/9288 previously.

The market was closed on Thursday for the Maulidur Rasul public holiday. — Bernama




Source: Malay Mail

Budget 2021, MPC meeting, US election to be key movers for Bursa Malaysia next week

On a Friday-to-Friday basis, the local bourse witnessed heavy selling on the ACE Market, leading the index to decline almost 11 per cent to 9,443.20 due to local market uncertainty. — Picture by Azneal Ishak
On a Friday-to-Friday basis, the local bourse witnessed heavy selling on the ACE Market, leading the index to decline almost 11 per cent to 9,443.20 due to local market uncertainty. — Picture by Azneal Ishak

KUALA LUMPUR, Oct 31 — Bursa Malaysia will be in a bearish mode next week pending the Budget 2021 announcement yesterday.

An analyst said that technical analysis on the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) has shown a three black crows pattern, which indicates a further bearish momentum.

“The relative strength index (RSI) for the FBM KLCI is currently at 14, below the RSI of 30, which signals an oversold position.

“However, pending local development, the momentum could either turn upward or further downward after the budget tabling on Friday,” she said.

Investors would also await the interest rate decision by the Monetary Policy Committee (MPC) on Tuesday (November 3) as well as Malaysia’s unemployment data and industrial production to be released on November 9.

She added that besides the budget tabling and MPC meeting, the US presidential election which will take place on November 3 will also influence market movement especially emerging markets.

On the technical benchmark, the FBM KLCI is expected to move in a volatile manner between 1,430 and 1,470 pending the announcement of the budget.

On a Friday-to-Friday basis, the local bourse witnessed heavy selling on the ACE Market, leading the index to decline almost 11 per cent to 9,443.20 due to local market uncertainty.

On Friday, the market took the biggest slide across board with the FBM KLCI tumbling 28.31 points or 1.89 per cent after a steady decline over the week.

During the week, the market was directly influenced by the local political scenario, concerns over Budget 2021, calls for fresh elections to be held once Covid-19 is under control, oil market dip as well as global market movements.

The market was closed on Thursday in conjunction with Maulidur Rasul.

The FBM KLCI ended 27.75 points lower this week at 1,466.89 compared with 1,494.64 on Friday last week.

On the scoreboard, the FBM Emas Index shrank 213.65 points to 10,613.58, the FBMT 100 Index contracted 208.0 points to 10,423.63 and the FBM Emas Shariah Index weakened 212.43 points to 12,741.68.

The FBM 70 shed 273.25 points to 13,985.09.

Sector-wise, the Financial Services Index declined 349.77 points to 12,009.39 and the Plantation Index eased 53.10 points to 6,801.90 while Industrial Products and Services Index inched down 3.22 points to 141.14.

The Technology Index slid 1.09 points to 59.69 while the Healthcare Index slashed 38.49 points to 3,083.37.

During the holiday-shortened week, weekly turnover declined to 21.09 billion units worth RM16.16 billion from 42.67 billion units worth RM25.89 billion last week.

Main Market volume dwindled to 11.43 billion shares worth RM12.94 billion from 23.18 billion shares valued at RM20.43 billion.

Warrants turnover was lower at 2.84 billion units worth RM735.43 million compared to 4.06 billion units worth RM988.80 million in the preceding week.

The ACE Market volume also skidded to 6.80 billion worth RM2.48 billion from 14.66 billion shares valued at RM4.22 billion previously. — Bernama




Source: Malay Mail

Days before election, US economic data reveals gradual improvement, gloomy outlook

Democratic US presidential nominee and former Vice President Joe Biden interacts with US Representative Gwen Moore at a campaign stop in Milwaukee October 30, 2020. — Reuters pic
Democratic US presidential nominee and former Vice President Joe Biden interacts with US Representative Gwen Moore at a campaign stop in Milwaukee October 30, 2020. — Reuters pic

NEW YORK, Oct 31 — With the presidential election drawing near, a litany of data released this week shows the US economy continues to climb out of the recession caused by the coronavirus pandemic, but progress is slowing.

Now, with infections on the rise, economists say many voters may be weighed by a gloomy outlook when deciding whether to back the incumbent president, Republican Donald Trump, or his challenger, Democrat Joe Biden.

“I would think the overall mood of the voter going in is not joyous right now,” said Kathy Bostjancic, chief US financial economist for Oxford Economics.

The economic data released this week largely beat expectations and showed incomes are rising, consumers are spending more and output is increasing. It also revealed an economy still far from where it was before the pandemic, with some consumers likely needing more help to stay aloft.

That divide was present in the pitches Trump and Biden made to voters this week, with Trump vowing to deliver more growth in a second term and Biden emphasizing the economy was still in a deep “hole.”

Yesterday's report showed consumers’ incomes are recovering slowly. It also showed their spending is more concentrated on goods, such as cars, clothing and shoes, while spending on services, including travel, remained low. The pattern shows many consumers remain cautious about how they spend because of budget constraints, fear of getting sick and activity restrictions, said Bostjancic. Some who lost jobs are spending down savings and dim prospects for more fiscal aid in the near future could be impacting consumers’ attitudes, she said.

The reports also show that after an historic third-quarter surge, the economy is recovering more gradually now, said Jason Pride, chief investment officer for private wealth at Glenmede. It could take time for industries dependent on close human interaction to fully recover, Pride said.

“We’ve been through the easy portion of the reopening,” he said. “Now we’re in the slow grind upward.”

Cooling temperatures heading into the winter could provide another hurdle for restaurants and other businesses that have adapted by moving outdoors, Diane Swonk, chief economist for Grant Thornton, wrote in a note yesterday. That slow comeback for services could mean prolonged unemployment for the millions laid off because of the crisis.

Getting the virus under control and helping people get back to work will be among the largest challenges faced by the winner, analysts say..

While voters will weigh a range of issues in their decisions, some who are unemployed may back who they hope will deliver more stimulus, said Pride. Those doing well financially may not see such a need and could vote in the opposite direction, he said.

If elected, Biden has pledged to lift the federal minimum wage, roll out more stimulus and invest trillions of dollars in infrastructure and green energy programmes. But he will not get far without support in Congress.

Trump has signalled he is in favour of more federal stimulus, but has offered fewer specifics on jobs. — Reuters




Source: Malay Mail

Tech slide, pandemic surge slam Wall Street, biggest weekly loss since March

Apple Inc tumbled 5.6 per cent after it posted the steepest drop in quarterly iPhone sales in two years due to the late launch of new 5G phones. — Reuters pic
Apple Inc tumbled 5.6 per cent after it posted the steepest drop in quarterly iPhone sales in two years due to the late launch of new 5G phones. — Reuters pic

NEW YORK, Oct 31 — US stock indexes closed lower yesterday to cap Wall Street’s biggest weekly sell-off since March, as losses in richly priced tech heavyweights, a record rise in coronavirus cases and jitters over the presidential election snuffed investor sentiment.

The pandemic pushed US hospitals to the brink of capacity as coronavirus cases surpassed 9 million, while the prospect of wider Covid-19 restrictions in Europe raised concerns about the economic recovery.

The CBOE volatility index closed just below a 20-week high, a sign of investor jitters ahead of the final weekend before Election Day on Tuesday. The main indexes pared steeper losses toward the closing bell, with the Dow down less than 1 per cent.

“We’re two market days away from Election Day and people want to make sure that they’re not completely caught off guard,” said Pete Santoro, a Boston-based equity portfolio manager at Columbia Threadneedle.

The S&P 500 has fallen about 8.9 per cent since hitting an all-time high in early September in a rally driven by the tech mega caps whose quarterly results this week failed to meet highly optimistic expectations.

Apple Inc tumbled 5.6 per cent after it posted the steepest drop in quarterly iPhone sales in two years due to the late launch of new 5G phones.

Amazon.com Inc slid 5.45 per cent after it forecast a jump in costs related to Covid-19, while Facebook Inc fell 6.3 per cent as it warned of a tougher 2021.

“All these names are eventually going to be repriced, they’re all ridiculously valued. It’s just that I don’t know when and I don’t know from what stratospheric valuation they inevitably reprice,” said David Bahnsen, chief investment officer at The Bahnsen Group in Newport Beach, California.

Communication services got a boost from a jump in shares of Alphabet Inc after the Google parent beat estimates for quarterly sales as businesses resumed advertising.

Google may have benefited as it has been trading at about 36 times earnings, far less than the 119 times earnings valuation of Amazon, Bahnsens said.

“There is a big selloff in those big tech names because they didn’t live up to the hype and people are really worried about next week’s election,” said Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh.

Republican President Donald Trump has consistently trailed Democratic challenger Joe Biden in national polls for months, but polls have shown a closer race in the most competitive states that could decide the election.

The Dow Jones Industrial Average fell 157.51 points, or 0.59 per cent, to 26,501.6. The S&P 500 lost 40.15 points, or 1.21 per cent, to 3,269.96 and the Nasdaq Composite dropped 274.00 points, or 2.45 per cent, to 10,911.59.

For the week, the Dow fell 6.5&, the S&P 500 5.6 per cent and the Nasdaq 5.5 per cent. For the month, the Dow slid 4.6 per cent, the S&P 500 2.8 per cent and the Nasdaq 2.3 per cent.

Volume on US exchanges was 10.31 billion shares.

The third-quarter earnings season is almost past its halfway mark, with about 86.2 per cent of S&P 500 companies topping earnings estimates, according to Refinitiv data. Overall, profit is expected to fall 10.3 per cent from a year earlier.

Twitter Inc, the largest S&P 500 decliner by percentage, slumped 21.1 per cent after the micro-blogging site added fewer users than expected and warned the US election could affect ad revenue.

Declining issues outnumbered advancing ones on the NYSE by a 1.83-to-1 ratio; on Nasdaq, a 2.63-to-1 ratio favoured decliners.

The S&P 500 posted three new 52-week highs and two new lows; the Nasdaq Composite recorded 22 new highs and 83 new lows. — Reuters




Source: Malay Mail

US cuts tariff benefits for Thailand in pork dispute

US Trade Representative Robert Lighthizer said the decision 'demonstrates the Trump Administration’s commitment to robust monitoring and enforcement of our trade preference programmes'. — Reuters pic
US Trade Representative Robert Lighthizer said the decision 'demonstrates the Trump Administration’s commitment to robust monitoring and enforcement of our trade preference programmes'. — Reuters pic

WASHINGTON, Oct 31 — Washington will eliminate some tariff benefits for Thailand, saying the country has failed to allow imports of pork from US producers, the US Trade Representative (USTR) announced yesterday.

The move suspends duty-free access for US$817 million (RM3.4 billion) in goods starting December 30 due to the “lack of sufficient progress providing the United States with equitable and reasonable market access for pork products,” despite 12 years of discussions, USTR said in a statement.

US Trade Representative Robert Lighthizer said the decision “demonstrates the Trump Administration’s commitment to robust monitoring and enforcement of our trade preference programmes.”

That amount represents about one-sixth of Thailand’s benefits under a programme called the Generalised System of Preferences (GSP), the statement said.

Products affected including mango, pineapple, manicure kits, steel pipes and precious stones.

The National Pork Producers Council (NPPC) filed a petition in 2018 asking US officials to take action against Thailand.

The GSP allow duty-free entry into the US market for 3,500 products from 119 countries, which in exchange must take steps to protect worker rights, protect intellectual property rights, and assuring “equitable and reasonable access to its markets.” — AFP




Source: Malay Mail

Friday, October 30, 2020

Remittance flows to fall 14pc by 2021 as migration falls, says World Bank

The World Bank Group logo is seen on the building of the Washington-based global development lender in Washington on January 17, 2019. — AFP pic
The World Bank Group logo is seen on the building of the Washington-based global development lender in Washington on January 17, 2019. — AFP pic

LONDON, Oct 30 — The amount of money migrant workers send home is expected to fall 14 per cent by 2021 compared with levels before the coronavirus pandemic in 2019, the World Bank has estimated.

Flows of remittances to low and middle-income countries are set to fall by 7 per cent to US$508 billion (RM2.11 trillion) in 2020, before a further decline of 7.5 per cent to US$470 billion in 2021, according to the World Bank's Migration and Development Brief.

Tepid economic growth and employment levels in countries hosting migrants, weak oil prices and depreciation of the currencies of remittance-source countries against the US dollar were all factors behind the decline, the World Bank said.

“The impact of Covid-19 is pervasive when viewed through a migration lens as it affects migrants and their families who rely on remittances,” said Mamta Murthi, vice president for human development at the World Bank, adding that the World Bank will continue working with partners and countries to keep the remittances flowing.

Europe and East Asia will suffer the steepest drop in remittances in 2020 and 2021, of 16 per cent and 11 per cent, respectively, with central Asia also suffering a 8 per cent drop.

Remittance flows are a vital source of external financing for low and middle-income countries, with the level surging to a record high of US$548 billion last year, greater than foreign direct investment flows of US$534 billion and overseas development assistance of about US$166 billion.

The World Bank warned the gap between remittance flows and foreign direct investment is expected to widen further as the latter declines more sharply.

The stock of international migrants is likely to decline this year for the first time in recent history as new migration has slowed and more people return to their native countries after the lifting of national lockdowns left many migrant workers stranded in host countries, the World Bank noted. — Reuters




Source: Malay Mail

Taiwan’s smart manufacturing shaping the future of the automotive industry

PETALING JAYA: As the world’s fourth largest exporter of machine tools, Taiwan machine tools makers have the advantages of customisation and integration of its renowned ICT industry to fit the demands for modern automobiles manufacturing.

Coupled with competitive prices and outstanding products, Taiwan’s smart manufacturing is reputable worldwide.

To stay competitive, Taiwan Excellence held the Smart Machine Tools for Automotive and Parts Manufacturing online products and solutions launch on Wednesday. Four Taiwanese smart machinery companies Seyi, Jainnher, YDPM and Tongtai showcased their advanced smart manufacturing solutions in a bid to assist global manufacturers in managing industry upgrade and automation.

Seyi is a servo press manufacturer in the servo press industry in hot forming application and has received orders from large manufacturers of automobile parts from Japan, the US, and Europe. Its straight side eccentric gear servo press (SDE series) complies with the trend and application of steel parts with light weight but high tensile strength in modern automotive industry. Its patented power management system saves more than 30% of power consumption.

Jainnher is a grinding machine manufacturer, specialising in different grinding machines including centerless grinders, cylindrical grinders and center hole grinders. Its thread grinding machine uses a high precision machinery process, offering a 380mm maximum grinding diameter x 1,000mm between centres. The grinding wheel at 510mm diameter has a 3,500rpm spindle to move manufacturing to a new level.

YDPM is an expert in precision machinery and has product distribution across five continents. Its horizontal machining centers can be applied to versatile machining components like watchmaking, automotive, motorcycle, electronics and aircraft industries. The design is based on the experience of HMC customer feedback; with CAE finite element, it is lightweight and has high rigidity. All components are QC certified with calibration and machining tests.

Tongtai is a leading machine manufacturer and a listed company with the highest revenue among Taiwan’s machinery manufacturing groups. Tongtai is focusing on its newest machine models, equipment for additive and hybrid additive-subtractive manufacturing, the Tongtai Intelligence Manufacturing System and Tongtai Line Management solutions enabling operators to easily control production status and improve machining efficiency.

The Taiwan Excellence Smart Machinery Virtual Pavilion is also being introduced at the conference, which displayed a total of 60 innovative smart machinery products from 50 Taiwan Excellence brands.



Source: The Sun Daily

KL shares stay in the red as counters widen loss

Losers overtake gainers 688 to 215, 367 counters are unchanged, 879 untraded and 80 others suspended. — AFP pic
Losers overtake gainers 688 to 215, 367 counters are unchanged, 879 untraded and 80 others suspended. — AFP pic

KUALA LUMPUR, Oct 30 — The local market extended its losses in the early session today as declining counters widened due to rising market uncertainty and lack of fresh catalysts.

At 11.04 am, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) slipped 9.62 points to 1,485.58 after opening 0.89 of-a-point lower at 1,494.31.

Losers overtook gainers 688 to 215, while 367 counters were unchanged, 879 untraded and 80 others suspended.

Total volume stood at 2.12 billion units worth RM1.11 billion.

Energy index took the biggest hit so ar as it declined 2.51 per cent as oil price slipped to below US$40 (RM167) per barrel on lackluster demand and outlook.

On heavyweight performance, Petronas Chemicals down 20 sen to RM5.75, Axiata slipped 10 sen to RM2.94, Top Glove shed 11 sen to RM8.67, and Public Bank dropped 16 sen to RM15.52.

Petronas Chemicals and Public Bank were also among the losing counters in the morning session.

On actives, tech counters led with Greenpacked shedding half-a-sen to 47.5 sen, while Vivocom adding half-a-sen to 5.0 sen.

On the index board, the FBM Emas Index erased 75.88 points to 10,744.75, the FBMT 100 Index was 70.10 points lower at 10,561.16 and the FBM Emas Shariah Index declined 91.10 points to 12,887.24.

The FBM 70, meanwhile, slipped 103.69 points to 14,140.44 and the FBM ACE was 53.89 points stronger at 9,874.43.

The Financial Services Index inched down 71.01 points to 12,189.80, the Industrial Products and Services Index was 2.39 point lower at 141.45, and the Plantation Index bucked the trend to raise 4.70 points to 6,927.25. — Bernama




Source: Malay Mail

Further interest rate cut remains open, says Ambank Research

At the next Bank Negara Monetary Policy Committe meeting in November, it seems a question of holding on or further reducing the current interest rate. — Reuters pic
At the next Bank Negara Monetary Policy Committe meeting in November, it seems a question of holding on or further reducing the current interest rate. — Reuters pic

KUALA LUMPUR, Oct 30 — The door for further monetary easing remains open at the next Monetary Policy Committee’s (MPC) meeting on November 3, said Ambank Research.

Chief economist/head Dr Anthony Dass said a 25 basis points (bps) cut during the meeting with a high of 50bps from the current overnight policy rate (OPR) of 1.75 per cent would augur well for economic recovery.

He said following the 25 basis points (bps) cut to 1.75 per cent in July, BNM left the policy rate unchanged during the September MPC meeting, as the economic activity continued to recover from the trough in April, supported by the fiscal packages, monetary and financial measures.

“The question now is whether Bank Negara Malaysia (BNM) will hold or reduce the OPR in November.

“While there are some early signs of stabilisation from manufacturing, the virus spread containment measures will impact services,” he said in a note today.

Dass said there were also serious issues in areas like the job market, income reduction, post-moratorium impact, bankruptcies, non-performing loans, external headwinds and domestic non-economy.

“Johor, which accounts for 9.4 per cent of national gross domestic product (GDP) and 10.8 per cent of the country’s establishment of small and medium enterprises (SMEs), remains badly affected from the Singapore border closure,” he said.

The upcoming Budget 2021 that will be unveiled on November 6 plays a crucial role, Dass said.

“With the recovery being uneven across the sectors, the budget is expected to be big,

“The deficit is likely to be around between 5.5 per cent and 6.0 per cent of the GDP, which aims to continue supporting the economic recovery from the adverse impact of the pandemic,” he said.

Hence, the monetary policy will also need to play a crucial role, he added. — Bernama




Source: Malay Mail

Yinson’S FPSO Abigail-Joseph achieves first oil

PETALING JAYA: Yinson Holdings Bhd’s latest floating production, storage and offloading (FPSO) vessel FPSO Abigail-Joseph has received its first oil certificate on Wednesday following a successful 72-hour stabilisation testing.

This marks the commencement of the firm charter of the FPSO for a period of seven years, with options to extend for a further eight years.

The Yinson team achieved the delivery of first oil for production within 20 months after signing the contract with its client, First Exploration & Petroleum Development Company Limited (First E&P), as the operator of the Nigerian National Petroleum Corporation (NNPC)/ First E&P OMLs 83 & 85 Joint Venture (the NNPC/First E&P JV). The asset is operating in the Anyala and Madu fields within OMLs 83 & 85.

FPSO Abigail-Joseph is Nigeria’s first integrated oil and gas greenfield project that has been wholly executed by an indigenous oil company, and is the group’s fourth offshore production asset to operate in Nigerian waters.

Yinson CEO of offshore production Flemming Gr√łnnegaard said the achievement was made possible through the teamwork between the Yinson team, client and subcontractors.

“This is a special project for us as it marks our continuous business presence in Nigeria, allowing us to continue impacting Nigeria’s development positively through our contribution to its energy landscape and local economy,” he said in a statement today, further highlighting that Yinson has been operating in Nigeria for the past 25 years.

He added that the team achieved zero lost time injuries throughout the 2.1 million man hours clocked during the conversion and commissioning of the FPSO.



Source: The Sun Daily

FBM KLCI weighed down by political climate, Covid-19 surge

PETALING JAYA: The past week has not been short of political drama on the local front but the equity market was rather reserved as the FBM KLCI moved sideways during the height of the uncertainty, closing at 1,494.64 points on Oct 23 and at 1,494.61 points on Monday.

Tuesday saw Bursa Malaysia buck the regional trend as the index closed 5.74 points or 0.38% higher at 1,500.35 points compared with Singapore’s Strait Times Index which ended 5.86 points or 0.23% lower at 2,518.59 points, while Tokyo’s Nikkei 225 fell 10.24 points to 23,478.34 points.

MR DIY made its debut on Bursa Malaysia’s Main Market on Monday, chalking up a 15 sen premium at the close, and Econframe entered Bursa’s ACE Market on Tuesday, closing 9 sen above its initial public offering price and topping the most active counters list for the day.

However, the toll from domestic developments finally caught up with the local bourse as the FBM KLCI ended down 0.34% or 5.15 points to 1,495.20 points on Wednesday, ending the calm composure adopted by investors amid political turbulence and rising Covid-19 transmissions.

MIDF Research’s senior analyst Imran Yassin believes that the benchmark index’s performance from Oct 22 to 27 was largely driven by bargain-hunting activities.

“In fact, our performance is against regional peers today (Oct 27) as almost all are experiencing a selloff following the decline in US markets overnight,” he told SunBiz on Tuesday.

Meanwhile, Inter-Pacific Securities head of research Victor Wan remarked that the FBM KLCI’s decline on Wednesday reflects the dearth of catalysts on the local equity market, evident by the thin trading volumes which denote very little interest.

He said the market is currently weighed down by political uncertainty and the surge in Covid-19 transmissions. “Until this situation is resolved, I anticipate little to no change to the equity market.”

Wan said the US presidential election on Nov 3 could be a catalyst for the Malaysian bourse, particularly from foreign investors. However, the head of research expects interest from retail investors to remain subdued.

He opined that the tabling and passing of Budget 2021 in the Dewan Rakyat would be a more significant catalyst for retailers.

On Sunday, Yang di-Pertuan Agong Al-Sultan Abdullah Ri’ayatuddin Al-Mustafa Billah Shah rejected a request by Prime Minister Tan Sri Muhyiddin Yassin last Friday to declare a state of emergency due to a steady increase in Covid-19 infections in the country.

However, political analysts and observers saw the prime minister’s request as a response to the claim of parliamentary majority by the opposition leader, Datuk Seri Anwar Ibrahim, who was granted an audience with the King to present his case.

With regard to the tabling of Budget 2021 on Nov 6, the palace has issued a statement by the King advising MPs to support the measure, which is aimed at combating the threat of the pandemic and supporting the frontliners.

As for the national budget, Wan expects to see a continuation of the government’s earlier Penjana and Prihatin stimulus measures instead of bold pump-priming measures.

“I am not expecting much for the upcoming budget as the government has very little leeway, due to the bigger-than-expected deficit.”

MIDF Research’s Imran highlighted that increased support for Budget 2021 in Parliament will translate into support for Bursa Malaysia’s benchmark index as downside risks will be reduced.

He said the budget is expected to be expansionary, so as to maintain the economic recovery.

“We expect resumption of some construction projects, incentives for companies and possibility of further cash assistance to the B40 and lower M40 which might spur employment and demand,” said the senior analyst.

In regard to the ringgit, FXTM market analyst Han Tan opined that the local currency is in a relatively stable shift against the US dollar, despite the shifts in global risk sentiment amid a resurgence in Covid-19 cases in major economies and waning hopes over a pre-election US fiscal stimulus deal.

However, he cautioned that there could be a big move on the currency front should the US presidential election produce a shock outcome that triggers a knee-jerk reaction in the dollar.

On the domestic front, Tan said next week’s Bank Negara Malaysia’s monetary policy decision and the tabling of Budget 2021 may serve as catalysts for the ringgit, while the domestic political uncertainties have added a layer of risk to the currency’s performance.”

Tan pointed out that the ringgit has broken above its 50-day simple moving average against the greenback for the first time since May, and it is testing the technical indicator support level as of Wednesday.

He expects the ringgit to stay close to the 4.15 level against the dollar over the coming days, barring a major surprise either on the domestic or external front.

“The 4.1707 mark serves as the immediate resistance level, while it remains to be seen whether the 4.14 support level could be tested again over the coming days,” said the analyst.



Source: The Sun Daily

CGS-CIMB reiterates 'add' call on Hartalega, target price unchanged at RM24.80

Hartalega expects the current shortage in global glove supply to persist for the next two to three years. — AFP pic
Hartalega expects the current shortage in global glove supply to persist for the next two to three years. — AFP pic

KUALA LUMPUR, Oct 30 — CGS-CIMB has reiterated its “add” call on Hartalega Holdings Bhd, with an unchanged target price (TP) of RM24.80 amid prospects of higher average selling prices (ASPs) and strong glove demand sustaining for the next 12 months.

Based on its recent meeting with Hartalega, CGS-CIMB learnt that Hartalega expects the current shortage in global glove supply to persist for the next two to three years, as the group does not expect the additional glove supply that would come on-stream in the next two to three years to be sufficient to meet market demand.

“According to its internal study, Hartalega estimates that there is currently a shortage of 120 billion pieces of gloves annually.

“It only expects this shortage to be rectified by 2024, at which time, new capacity would be sufficient to offset the increase in glove demand,” CGS-CIMB said in a note today.

On the ASPs, the research house said as Hartalega’s ASPs are currently trailing those of its glove sector peers, the group believes a further ASP hike would not be difficult.

“We gather Hartalega aims to raise its ASPs by 50 per cent quarter-on-quarter in the third quarter for the financial year ending December 31, 2021 (Q3 FY21). It is also not discounting further hikes from Q4 FY20 onwards,” it said.

Nevertheless, CGS-CIMB foresees the company's ASPs would still be at a discount to peers despite the expected hike in Q3 FY21.

“In our view, Hartalega’s ASPs tends to lag those of its peers, given its long-term contracts with larger volume customers, and its intention to maintain long-term relationships with key customers by keeping prices reasonable,” it said.

Overall, the research house said it continued to like Hartalega for its industry-leading technology in the nitrile glove space, being a beneficiary of strong global glove demand owing to Covid-19, as well as its higher-than-average margins in the sector over the past five years.

At 11.03am, Hartalega advanced 14 sen to RM18.16, with 905,900 shares traded. — Bernama




Source: Malay Mail

Better Q3 GDP on the cards, says Maybank IB

Malaysia's exports are reported to have rebounded by 4.4 per cent YoY in the third quarter of 2020. — Reuters pic
Malaysia's exports are reported to have rebounded by 4.4 per cent YoY in the third quarter of 2020. — Reuters pic

KUALA LUMPUR, Oct 30 — A better third quarter real gross domestic product (GDP) is likely on the cards for Malaysia after the country recorded a 17.7 per cent year-on-year (YoY) slump in the second quarter 2020, supported by trade surplus growth in 3Q20, said Maybank Investment Bank Bhd (Maybank IB).

It said exports rebounded by 4.4 per cent YoY in 3Q20, imports eased to -6.3 per cent YoY and trade surplus jumped 68.4 per cent YoY to RM60.4 billion, signalling net external demand growth last quarter (2Q20) after the decline in the fourth quarter of 2019.

However, domestic demand was uneven last quarter as capital goods imports fell -12.6 per cent YoY in 3Q20, pointing to continued weakness in real gross fixed capital formation or investment, while imports of consumption goods rebounded +4.6 per cent YoY, which was encouraging for real private consumption.

“Pending releases of more key economic indicators for September 2020 to complete the 3Q20 picture on the economy, we expect 3Q20 real GDP to have shrunk by a shallower -3.5 per cent YoY versus -17.1 per cent YoY slump in 2Q20,” it said in a note today.

Maybank IB said manufacturing exports recovered by 6.8 per cent YoY in 3Q20 compared with -12.6 per cent YoY in 2Q20.

In September alone, manufacturing exports surged by 16.3 per cent YoY against -0.1 per cent YoY in August, driven by the jumps in electrical and electronics export which rose 33 per cent YoY during the month, and increased in rubber products (115.8 per cent) accompanied by gains in iron and steel products (30.3 per cent); optical and scientific equipment (6.2 per cent), wood products (15.2 per cent), and machinery, equipment and parts (5.0 per cent).

These more than offset the lower shipments of manufactured petroleum products which declined by 29.5 per cent YoY in September 2020, transport equipment (- 35.8 per cent), manufactures of metal (-5.9 per cebt) and manufacture of plastics (-12.8 per cent).

Maybank IB said the industry’s outlook, which continued to remain favourable in view of increasing production capacity for the sector, would create a healthy tech demand. — Bernama




Source: Malay Mail

FGV stock under close watch following spat with Felda

The Felda Global Ventures logo is pictured at its headquarters in Kuala Lumpur October 9, 2019. — Picture by Choo Choy May
The Felda Global Ventures logo is pictured at its headquarters in Kuala Lumpur October 9, 2019. — Picture by Choo Choy May

KUALA LUMPUR, Oct 30 — FGV Holdings Bhd, one of the world’s biggest palm oil producer, is now in hot water following the Federal Land Development Authority’s (Felda) move to terminate its land lease agreement (LLA) with the group.

The spat that started about two weeks ago has came to a boiling point yesterday after FGV issued a statement saying that it has yet to receive a written notice from Felda on the LLA termination.

FGV said once it receives an official notice from Felda as required under the LLA, it will follow the procedures outlined in the LLA to start the process of termination and determine the compensation due, which will take 18 months to complete.

“As LLA termination had always been a much-talked about scenario, FGV has already prepared its businesses and operations for this eventuality,” the country’s largest crude palm oil producer said.

According to FGV, the expected compensation amount due to the company as a result of the LLA termination may range between RM3.5 billion and RM4.3 billion based on internal assessment which will vary depending on FGV’s financial performance for 2020 and 2021 and various other factors.

The LLA refers to Felda-owned estates totalling 350,733 hectares that were leased to FGV for 99 years since November 1, 2011.

Minister in the Prime Minister's Department (Economy) Datuk Seri Mustapa Mohamed, in a statement, said the termination of the LLA and issuance of a RM9.9 billion worth sukuk by Felda were some of the proposals approved by the Cabinet to ensure the agency’s recovery.

On stock performance, FGV has remained relatively stable despite the US ban on its products for the time being.

Year to date, the highest price point was at RM1.56 per unit at the beginning of the year before dipping to 72 sen in March due to global economic shutdown to tackle Covid-19.

Over the past month, it has stabilised to above RM1.00 despite ongoing discussions with the US on the product ban.

As at 10.02am today, FGV stock added one sen to RM1.09, with 796,100 shares traded. — Bernama




Source: Malay Mail

Asian shares falter again, poised for first weekly loss since late September

Today's trading mood is far from positive as Japan's Nikkei slips 0.8 per cent. — Reuters pic
Today's trading mood is far from positive as Japan's Nikkei slips 0.8 per cent. — Reuters pic

SYDNEY, Oct 30 — A gauge of Asian shares fell for a third straight session today as jitters over upcoming US presidential elections and fears that the global economic downturn will persist enveloped markets, though the index was still set to end the month higher.

MSCI's broadest index of Asia-Pacific shares outside of Japan was last down 0.3 per cent, on track to the end the week 1.3 per cent lower after four straight weeks of gains.

The index is up 3.7 per cent in October so far. Analysts expect this broader outperformance to extend further.

“For a crisis of this scale, Asian equities have performed remarkably well,” Citi analysts wrote in a note.

“Within the region, markets with a higher weighting of technology stocks or where the recovery has become more entrenched have outperformed,” they added. “This solid performance can continue, in our view. Valuations are reasonable for an early stage of a recovery while liquidity is generous. There has also been a perceptible drop in volatility in recent months.”

The mood today was less positive, though. Australia's ASX 200 fell 0.2 per cent and New Zealand's benchmark index faltered 0.6 per cent. Japan's Nikkei slipped 0.8 per cent as did South Korea's Kospi index.

Chinese shares were marginally higher, with the blue-chip index up 0.07 per cent.

E-Mini futures for S&P500 stumbled 0.9 per cent in early Asian trading, a signal Wall Street would open in the red later in the day.

Record numbers of coronavirus cases worldwide and the November 3 US presidential election remained the major factors looming ahead for investors. On Wednesday, global coronavirus cases rose by over 500,000 for the first time as France and Germany prepped fresh lockdowns.

The falls in Asia occurred despite a solid session on Wall Street overnight, which was helped by a diet of strong quarterly reports from tech giants and data showing the US economy grew at a historic annualised pace of 33.1 per cent in the third quarter.

Google parent Alphabet, Amazon.com Inc, Apple Inc and Facebook Inc all beat analyst estimates for quarterly revenue, with Amazon reporting a second straight quarter of record profits.

The Dow Jones Industrial Average closed up 0.52 per cent. The S&P 500 gained 1.19 per cent and the Nasdaq Composite added 1.64 per cent.

“Even with the rebound, US output remains 3.5 per cent below its pre-Covid levels. The path towards recovery is much less clear from here, especially as the number of virus cases grows and there are near-term impediments to a fiscal deal,” wrote ANZ analysts in a note.

The European Central Bank committed to further action in December to further lend economic support as European nations grappled with a renewed coronavirus outbreak.

Analysts expect an expansion and extension of the ECB's Pandemic Emergency Purchase Programme, a lower deposit facility rate, and even more generous lending terms for banks in December.

The announcement sent the euro sliding to a four-week low of $0.1648 to be last at $1.1678.

The US dollar was weaker against the Japanese yen at 104.46 while the risk-sensitive Australian dollar rose 0.3 per cent to US$0.7050.

In commodities, oil picked up after hitting a five-month low yesterday, with Brent crude futures up 9 cents at US$37.74 (RM156.84) a barrel and US crude adding 11 cents at US$36.28.

Gold rose, with spot prices climbing 0.2 per cent to US$1,870.9 an ounce. — Reuters




Source: Malay Mail

American Express to invest US$1b in diversity push

American Express and American Express corporate cards are pictured in Encinitas, California, October 17, 2011. — Reuters pic
American Express and American Express corporate cards are pictured in Encinitas, California, October 17, 2011. — Reuters pic

NEW YORK, Oct 30 — American Express Co said yesterday it was investing US$1 billion (RM4.15 billion) to advance racial and gender equality, the latest in a line of US companies pledging to promote social justice after a series of race-related protests earlier in the year.

The New York-based credit card issuer said it has achieved 100 per cent pay equity for its employees and would continue to do so, as well as promote practices to hire and retain underrepresented colleagues, including Black, Latinx and female colleagues.

The company also said it intends to double its spending on diverse and minority-owned suppliers in the United States to US$750 million annually, as well as provide grants to non-profit organisations by the end of 2024.

Several US companies, including large banks and financial firms, had pledged billions of dollars to promote racial equality after the killing of George Floyd, a Black man, by Minneapolis police sparked protests across the country earlier in the year.

Earlier in October, JPMorgan Chase & Co said it would commit $30 billion to address racial inequality over the next five years, marking one of the largest corporate pledges related to race since the death of Floyd.

Other companies that have rushed to take a stand include Home Depot Inc, Procter & Gamble Co and Coca-Cola Co. JPMorgan Chase & Co recently made a US$30 billion commitment over the next five years. — Reuters




Source: Malay Mail

Robinsons begins liquidation of Malaysian stores

PETALING JAYA: Robinson Co (Malaya) Sdn Bhd has begun the liquidation process of its two stores in Malaysia, located at The Gardens Mall and Shoppes at Four Seasons Place.

Datuk Robert Teo Keng Tuan of RSM Malaysia has been appointed as interim liquidator. The provisional liquidator will now take control of the company’s assets and assess options to realise value in order to maximise returns to creditors.

Subject to confirmation, the liquidators are hoping the stores will remain open for the coming weeks to facilitate final sales for customers before they are shuttered.

Globally, retail buying patterns are seeing significant shifts from offline to online spending with the Global Ecommerce 2020 report showing that Asia Pacific will produce nearly 63% of all digital sales this year. Furthermore, demand for department store concepts has weakened significantly with reports showing drop in retail sales, recording a negative growth rate of 8.5% in Malaysia for Q12020, as compared to the same period a year ago. In addition, large name players globally have exited the industry with a US study expecting over half of mall-based department stores to close in the next five years.

Similarly, in Malaysia, the retail industry recorded the worst growth rate in 33 years with the outlook remaining negative for the remaining months of the year as consumers are expected to tighten their spending. More department store closures have been announced in the past months with more expected as department stores in particular continue to struggle. The negative effects of Covid-19 have made its impact more acute.

Robinsons senior general manager Danny Lim commented: “We regret this outcome today. Despite recent challenges in the industry, the Robinsons team continued to pursue the success of the brand. However, the changing consumer landscape makes it difficult for us to succeed over the long-term and the Covid-19 pandemic has further exacerbated our challenges. We have enjoyed success over the years, and it has been an honour for Robinsons to serve the Malaysian market.”

Robinsons employees have today been informed by management and the provisional liquidators of this announcement. They have been assured that the provisional liquidators will now work to maximise returns to creditors, including employees. Robinsons management has ensured that employees are supported with a payment in keeping with liquidation regulations. Further, these payments will be made to them in line with the next payment cycle; well in advance of the usual liquidation process timing which would usually take months.

The liquidators will reach out to the relevant government authorities to support employees during this liquidation period.

Concurrently, Robinsons stores in Singapore, located at The Heeren and Raffles City Shopping Centre will also undergo a similar liquidation process with the appointment of Cameron Duncan and David Kim from KordaMentha as provisional liquidators.



Source: The Sun Daily

Ringgit opens lower against US dollar

There's an obvious lack of buying interest as the ringgit is traded lower against the US dollar. — Reuters pic
There's an obvious lack of buying interest as the ringgit is traded lower against the US dollar. — Reuters pic

KUALA LUMPUR, Oct 30 — The ringgit opened lower against the US dollar today on lack of demand, as the stronger greenback mitigated interest for the local currency, said a dealer.

At 9.05am, the local currency was traded at 4.1570/1630 versus the US dollar compared with Wednesday's close of 4.1520/1570.

The market was closed yesterday for the Maulidur Rasul (the birthday of Prophet Muhammad) celebration.

The dealer said Malaysia returned from holiday today to a market gripped by reopening fears, uncertain oil market, and the escalating Covid-19 cases globally, still lingering on the horizon.

On the other hand, the upcoming Malaysia's Budget 2021 announcement on Nov 6 also weighs on the local currency trends.

Meanwhile, the ringgit was traded mostly higher against other major currencies.

It improved against the Singapore dollar to 3.0419/0474 from Wednesday's close of 3.0469/0517 and rose against the British pound to 5.3746/3828 from 5.3860/3929.

The ringgit ticked up against the euro to 4.8525/8611 from 4.8778/8841 and increased versus the yen to 3.9765/9834 from 3.9835/9894 previously. — Bernama




Source: Malay Mail

Tough for Bursa Malaysia at opening of trade

Political concerns send Bursa Malaysia tumbling from the very start. — Picture by Firdaus Latif
Political concerns send Bursa Malaysia tumbling from the very start. — Picture by Firdaus Latif

KUALA LUMPUR, Oct 30 — Bursa Malaysia had a tough start today as early general election calls are growing stronger, leading to further selldown in the local market.

As at 9.05am, the benchmark index TSE Bursa Malaysia KLCI (FBM KLCI) dropped 7.31 points to 1,487.89 after opening 0.89 of-a-point lower at 1,493.31.

Losers overtook gainers 320 to 102, while 273 counters were unchanged, 1454 untraded and 80 others suspended.

Total volume stood at 388.31 million worth RM150.01 million.

Energy emerged as the biggest laggard as it declined 1.34 per cent to 655.74 points as the benchmark Brent crude slipped to below US$40 per barrel.

The market was closed yesterday for the Maulidul Rasul celebration.

An analyst said the calls, which gained intensity yesterday, raised caution among investors that the 15th general election could be held early next year once the Covid-19 dust has settled.

“There is actually two sides of the coin in this matter. The bright side is the political uncertainty will be brought to a stop, while on another side, it would pause investors confidence longer, leading to a slower economic recovery,” she said.

The United Malays National Organisation (Umno) last night said the next general election should be held once Covid-19 is brought under control, with the minimum number of cases, in order to get a fresh mandate from the people to establish a stable government.

On the technical forefront, the analyst said a bearing momentum is persistent in the local market with the benchmark KLCI expected to dip further down to test the level of 1,450 with the immediate resistance of 1,500.

“The oversold position will continue until a fresh catalyst is provided,” she said.

On the global front, the US presidential election on November 3 will also impact the market’s direction.

On heavyweight performance, Petronas Chemicals down 10 sen to RM5.85, Axiata and Top Glove both shed eight sen to RM2.96 and RM8.70, respectively, while Public Bank dropped 12 sen to RM15.56.

Petronas Chemicals and Public Bank also led the losers counters at the morning session.

On actives, tech counters dominated with Vivocom adding half-a-sen to 50 sen, Dataprep added 1.5 sen to 21 sen.

As for gainers, British American Tobacco rose 21 sen to RM10.16 on better quarterly earnings performance.

On the index board, the FBM Emas Index erased 53.60 points to 10,767.03, the FBMT 100 Index was 53.06 points lower at 10,578.79 and the FBM Emas Shariah Index declined 68.52 points to 12,909.83.

The FBM 70, meanwhile, slipped 75.56 points to 14,168.58 and the FBM ACE was 49.61 points weaker at 9,770.93.

The Financial Services Index inched down 42.32 points to 12,218.49, the Industrial Products and Services Index was 1.05 point lower at 142.79, and the Plantation Index bucked the trend to raise 2.33 points to 6,924.89. — Bernama




Source: Malay Mail

Alphabet sales growth revived as advertisers flock back to Google

The brand logo of Alphabet Inc's Google is seen outside its office in Beijing, China August 8, 2018. — Reuters pic
The brand logo of Alphabet Inc's Google is seen outside its office in Beijing, China August 8, 2018. — Reuters pic

OAKLAND, Oct 30 — Google parent Alphabet Inc yesterday powered back to sales growth, beating analysts' estimates for the third quarter as businesses initially hobbled by the coronavirus pandemic resumed advertising with the internet's biggest supplier of ads.

Alphabet shares, up 13 per cent on the year, rose 8.5 per cent after hours to US$1,689.89 (RM7,023.14).

Google's billions of users are spending more time online transacting and entertaining themselves this year as they try to avoid the virus.

But many advertisers ceased spending in the second quarter as travel and leisure activity disappeared. As the global economy in the third quarter began to chug along again, advertisers flocked to Google to let shoppers know about deals and adjusted service offerings.

Google also gained from political ad spending ahead of the US presidential election on November 3, advertising analysts said.

Ad sales surged across all regions and industries, Alphabet Chief Financial Officer Ruth Porat said. For instance, US revenue grew 15 per cent in the third quarter compared with 1 per cent in the second quarter.

Porat declined to say whether the trend was sustainable in the fourth quarter, with Europe and other areas once again locking down because of significant increases in infections.

“While we’re pleased with our performance in the third quarter, there is obviously uncertainty in the external environment,” Porat said.

Google rival Facebook Inc warned yesterday that the recent bump in online shopping, which has been good for online ad sellers, may not carry through next year.

Google's cloud business was about flat with the second quarter, as were the company’s sales of apps, hardware and content subscriptions.

Alphabet said it would elevate cloud into a separate reporting unit starting in the fourth quarter, effectively dropping cloud financial results from its Google unit and giving investors their first view into the business' profitability.

Porat told financial analysts the company would not slow down spending on the cloud unit, even though another round of Covid-19 lockdowns may hit ad demand.

“We are investing aggressively in cloud, given the opportunity that we see and frankly the fact that we were later relative to peers,” she said.

Ad rebound

Alphabet's bounce-back followed its first sales decline compared with a year-earlier period in the second quarter, since going public in 2004.

Third quarter sales were US$46.2 billion, up 15 per cent from a year ago, compared with the average estimate of US$42.9 billion, or 5.9 per cent growth, among analysts tracked by Refinitiv.

Alphabet's profit was US$11.2 billion, or US$16.40 per share, compared with the average estimate of US$7.698 billion, or US$11.18 per share. Earnings benefited from cutbacks in marketing and travel and in particular a 20 per cent drop in spending on equipment and workspace construction.

Google ad sales accounted for 80 per cent of Alphabet's revenue, with bumps across each of the ads businesses where Google technology dominates the online landscape, including search, YouTube and the broader web.

The ubiquity and popularity of Google services has become a liability for the company. The U.S. government last week sued the company for operating a search monopoly and stifling competition. Other regulators in the United States and elsewhere have raised concerns about user privacy and censorship.

The various cases could lead to Google having to make costly changes to its bureaucracy and technology. But Alphabet Chief Executive Sundar Pichai said yesterday that resolving the complaints would create “certainty, clarity and opportunities.”

USPresident Donald Trump referenced his administration's lawsuit in a campaign video released on Wednesday, saying “Big Tech has to be spoken to and probably in some form has to be stopped because they're taking away your rights.”

Facebook, Amazon.com Inc and Twitter Inc also released financial results on Thursday that were above expectations, showing how internet companies have fared well through the pandemic. Facebook shares yesterday were up 30 per cent this year, Amazon 71 per cent and Twitter 51 per cent. — Reuters




Source: Malay Mail

Netflix raises monthly charges for US customers, shares jump

A smartphone with the Netflix logo is seen on a keyboard in front of displayed ‘Streaming service’ words in this illustration taken March 24, 2020. — Reuters pic
A smartphone with the Netflix logo is seen on a keyboard in front of displayed ‘Streaming service’ words in this illustration taken March 24, 2020. — Reuters pic

NEW YORK, Oct 30 — Streaming video service Netflix Inc yesterday raised monthly charges in the United States for its standard and premium subscription plans, a move that sent the company's shares climbing nearly 5 per cent.

Netflix increased the cost of its standard subscription by US$1 (RM4.15) a month to US$14, and the price for the premium tier rose by US$2 per month to US$18. The standard plan, the company's most popular, enables two streams at the same time, while the premium plan allows for four simultaneous streams.

The price increase was the first for US customers since January 2019.

Shares of Netflix jumped 4.8 per cent to US$509.53 in afternoon trading on Nasdaq.

Netflix, the world's dominant streaming service, enjoyed a boom in subscriptions at the beginning of the year as viewers around the world were told to stay at home to help fight the coronavirus pandemic. The company expects to end 2020 with more than 200 million streaming subscribers around the world, with 73 million of those from the United States and Canada.

It also is facing a growing list of competitors including Walt Disney Co's Disney+, HBO Max from AT&T Inc and Apple Inc's Apple TV+.

After the company's earnings report last week, Chief Operating Officer Greg Peters said the company saw an opportunity to increase prices in countries “where we've delivered that extra value.”

Yesterday, a Netflix spokesperson said the company was raising prices “so that we can continue to offer more variety of TV shows and films — in addition to our great fall line up.”

Netflix's basic plan, which allows only one stream at a time, will remain at US$8 a month in the United States. — Reuters




Source: Malay Mail

French cenbank head expects GDP drop in Q4 due to new Covid-19 wave

Governor of the Bank of France Francois Villeroy de Galhau speaks at the 'Bretton Woods: 75 years later' conference in Paris, France July 16, 2019. — Reuters pic
Governor of the Bank of France Francois Villeroy de Galhau speaks at the 'Bretton Woods: 75 years later' conference in Paris, France July 16, 2019. — Reuters pic

PARIS, Oct 30 — The French economy will shrink in fourth quarter due to the second wave of new coronavirus infections in the country, Bank of France Governor Francois Villeroy de Galhau said yesterday.

Speaking at a conference on climate change, Villeroy also said that the drop in gross domestic product (GDP) should be less severe than in first and second quarters.

French President Emmanuel Macron and German Chancellor Angela Merkel ordered on Wednesday their countries back into lockdown, as a massive second wave of infections threatens to overwhelm Europe before the winter.

Statistics agency Insee warned in early October that economic rebound in France was likely to peter out in the fourth quarter as a resurgence of the epidemic weighs on business activity and lowered its outlook.

Growth in the euro zone's second-biggest economy was expected initially to be flat in the final three months of the year from the previous quarter.

France recorded a 13.8 per cent drop in gross domestic product in the second quarter after the government ordered one of Europe's strictest lockdowns to curb the outbreak spread. — Reuters




Source: Malay Mail

Businesses need to step up anti-virus efforts or face new lockdowns, warns US Chamber

A new business advertises for workers as it prepares to open up during the outbreak of Covid-19 in Encinitas, California July 30, 2020. — Reuters pic
A new business advertises for workers as it prepares to open up during the outbreak of Covid-19 in Encinitas, California July 30, 2020. — Reuters pic

WASHINGTON, Oct 30 — The US Chamber of Commerce yesterday called on member companies and local community leaders to step up efforts to slow the spread of the coronavirus with mask mandates and other measures to avoid another lockdown of business activity.

Chamber officials told a webcast event that businesses needed to take a leadership role in mitigation measures as new social distancing lockdowns were announced in Europe and White House officials warned of an “unrelenting” rise in Covid-19 cases that would require aggressive action.

The leaders of France and Germany ordered their countries back into lockdown mode on Wednesday as a massive second wave of coronavirus infections threatened to overwhelm Europe as winter approaches.

Neil Bradley, the US Chamber's chief policy officer, told representatives of about 800 member companies that Europe appeared to be about a month ahead of the United States in Covid-19 infections.

“If we want to avoid the experience of Europe, if we want to avoid a return to the lockdowns that they're experiencing and that we experienced this spring, then it's up to us,” Bradley said.

Unlike the spring, when little was known about the virus and medical guidance was mixed, mitigation measures are now clear, he said, including requiring employees to wear face masks, ensuring that they get seasonal influenza vaccine shots and maintaining social distancing.

He said the goal was to avoid the “lightswitch” approach that previously shut down major parts of the US economy and had a “catastrophic” effect on small businesses.

Instead, he advocated a “dial” approach that could reduce some activity, but not shut it off entirely, and urged businesses to discuss such an approach with local officials.

“Masks, masks, masks are key,” said Marjorie Chorlins, the Chamber's senior vice president of European affairs. “Along with social distancing and hand washing, mandating masks and public spaces is a unifying theme, and meaningful enforcement is absolutely essential.”

The officials also urged companies to support mayors, governors and other local officials in declaring mask mandates and enforcing safety protocols. — Reuters




Source: Malay Mail