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Friday, November 27, 2020

Bursa Malaysia continues upward momentum at opening

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KL shares today continued yesterday’s momentum to open higher today. — Bernama pic
KL shares today continued yesterday’s momentum to open higher today. — Bernama pic

KUALA LUMPUR, Nov 27 — KL shares today continued yesterday’s momentum to open higher today, driven by strong demand from both local and international investors.

At 9.03am, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) was 6.12 points higher at 1,618.23 compared with yesterday’s close of 1,612.11.

The index opened 3.09 points higher at 1,615.20.

Across the broader market, gainers thumped losers 306 to 140 while 312 counters were unchanged, 1,413 untraded and 88 others suspended.

Volume stood at 672.90 million shares worth RM174.70 million. — Bernama




Source: Malay Mail

Dollar poised for weekly losses on improving risk sentiment

The dollar held steady in thin trade today but was on track for weekly losses against a basket of major currencies. — Reuters pic
The dollar held steady in thin trade today but was on track for weekly losses against a basket of major currencies. — Reuters pic

TOKYO, Nov 27 — The dollar held steady in thin trade today but was on track for weekly losses against a basket of major currencies as it remained under pressure on improving risk appetite.

US markets were closed for the Thanksgiving holiday yesterday.

“Today will be another quiet day, with almost no catalyst to move the market. The dollar, however, is broadly pressured on month-end selling,” said Shinichiro Kadota, senior strategist at Barclays.

The US dollar index was steady at 92.03 against a basket of major currencies, treading water around a near three-month low of 91.84 it hit overnight.

The dollar has been under pressure this week, as riskier currencies benefited from increased optimism over a string of Covid-19 vaccines news reports and hopes for a more stable period in US politics.

While the greenback will remain under pressure in near term due to prolonged “risk-on” sentiment led by vaccine hopes, Barclay’s Kadota said the market expects the currency to firm in mid-term.

“When looking at how economies have rebounded in the July quarter, the United States grew and made a strong rebound. In a scenario where vaccines becomes gradually available next year and economies return to normal, the US will probably be one of the most resilient among developed countries. And I think that will create a dollar-favourable environment,” he said.

Dovish messaging from the European Central Bank’s chief economist and the minutes from last month’s meeting provided further confirmation of widely expected stimulus at its December gathering.

The central bank’s minutes from its October meeting showed policymakers agreed they could not afford to seem complacent during the second wave of the coronavirus, opting instead to lay the groundwork for more stimulus.

The ECB’s chief economist Philip Lane had also warned that tolerating “a longer phase of even lower inflation” would hurt consumption and investment as well as cementing expectations for low price growth in the future.

The euro was little changed against the greenback at US$1.1905 , away from a more than two months-high of US$1.1941 it marked yesterday.

Sterling fetched US$1.3349, trading near a three-month high of US$1.3399 it touched yesterday, as market participants look for progress on Brexit talks.

The European Union chief negotiator Michel Barnier will talk today with some of the bloc’s ministers responsible for fisheries to discuss the state of play in the trade discussions with Britain, EU official said.

The Australian dollar firmed at 0.73605, having climbed to a near three-month high of 0.7374 yesterday.

Meanwhile, the Kiwi changed hands at 0.7006 against the greenback.

Bitcoin, the most popular cryptocurrency, last fetched US$17,271.86 in a volatile trade. Overnight, the cryptocurrency plunged as much as 13 per cent to its lowest since November 16, having rallied close to its all-time high of US$19,666. — Reuters




Source: Malay Mail

Asian shares grind lower amid vaccine doubts, economic concern

Asian shares fell slightly today, pulling back from a record high hit earlier this week. — Reuters pic
Asian shares fell slightly today, pulling back from a record high hit earlier this week. — Reuters pic

TOKYO, Nov 27 — Asian shares fell slightly today, pulling back from a record high hit earlier this week, amid renewed doubts about a highly-anticipated coronavirus vaccine and concern about the economic impact from the pandemic.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.07 per cent. Australian shares were down 0.15 per cent. Japan’s Nikkei fell 0.09 per cent.

US S&P 500 e-mini stock futures fell 0.24 per cent in early Asian trade. US financial markets were closed yesterday for the Thanksgiving holiday and will trade on a partial schedule later today.

Oil prices looked set to extend their declines from a seven-month high due to signs of oversupply.

British drugmaker AstraZeneca’s coronavirus drug was touted as a “vaccine for the world” due to its inexpensive cost, but the efficacy of the vaccine is now facing more intense scrutiny, which experts say could delay its approval.

Several scientists have raised doubts about the robustness of results showing the shot was 90 per cent effective in a sub-group of trial participants who, by error initially, received a half dose followed by a full dose.

“With global case numbers having now topped 60 million... there is certainly some rough terrain ahead for the global recovery, and that can create economic scarring,” analysts at ANZ Bank wrote in a memo.

MSCI’s broadest gauge of world stocks was up 0.02 per cent today in Asia, sitting just below a record high reached in the previous session.

Doubts about the distribution of a coronavirus vaccine have placed renewed focus on the current state of the pandemic, which looks grim for many places.

US hospitalizations for Covid-19 are at a record and experts warn that Thanksgiving could lead to further infections and deaths.

More than 20 million people across England will be forced to live under the toughest restrictions even after a national lockdown ends on December 2. Partial lockdowns in some European countries have also raised concern about economic growth.

The European Central Bank’s chief economist highlighted these concerns in dovish comments on Thursday, which pushed European bond yields lower.

The euro, which last bought US$1.1910, showed little reaction because currency traders have largely priced in expectations for additional ECB easing next month.

The dollar index was near its lowest in more than two months, but moves were subdued due to the US trading holiday.

US crude dipped 1.71 per cent to US$44.93 a barrel.

Fuel demand is falling due to renewed coronavirus lockdowns, but some oil producers are not complying with agreed production cuts, which raises concerns about oversupply.

Spot gold, which is often sought during times of uncertainty, was little changed at US$1,809.51 per ounce following a 0.3 per cent gain yesterday.

Bitcoin, the world’s biggest cryptocurrency, steadied at US$17,180 yesterday, but it tumbled by 8.4 per cent in the previous session after failing to take out its record high of US$19,666.

Bitcoin has rallied around 140 per cent this year, fuelled by demand for riskier assets. — Reuters




Source: Malay Mail

Britain to curb Google and Facebook with tougher competition rules

Britain will impose a new competition regime next year to prevent Google and Facebook using their dominance to push out smaller firms and disadvantage consumers. — AFP pic
Britain will impose a new competition regime next year to prevent Google and Facebook using their dominance to push out smaller firms and disadvantage consumers. — AFP pic

LONDON, Nov 27 — Britain will impose a new competition regime next year to prevent Google and Facebook using their dominance to push out smaller firms and disadvantage consumers.

The code will be enforced by a dedicated unit within the Competition and Markets Authority (CMA), which this year said it needed new laws to keep the tech giants in check.

Google and Facebook dominate digital advertising, accounting for around 80 per cent of £14 billion (RM76 billion) spent in 2019, Britain’s competition regulator the CMA said.

The two US companies have said they are committed to working with the British government and regulator on digital advertising, including giving users greater control over their data and the ads they are served.

While “unashamedly pro-tech”, Britain’s Digital Secretary Oliver Dowden said there was a growing consensus that the concentration of power in a small number of companies was curtailing growth, reducing innovation and having negative impacts on the people and businesses that rely on them.

“It’s time to address that and unleash a new age of tech growth,” Dowden said today.

The newly-created Digital Markets Unit, which will begin work in April, could be given powers to suspend, block and reverse decisions made by technology firms and to impose financial penalties for non-compliance.

Companies will have to be more transparent about how they use consumer data and restrictions that make it hard to use rival platforms will be banned, the government said, adding that the rules will also support the news industry, rebalancing the relationship between publishers and platforms.

The CMA said on Monday it was assessing whether a complaint about Google technology warranted a formal investigation.

Marketers for an Open Web (MOW), a coalition of technology and publishing companies, said Google was modifying its Chrome browser and Chromium developer tools to give it greater control over publishers and advertisers.

Google said advertising practices needed to adapt to changing expectations around how data was collected and used. — Reuters




Source: Malay Mail

Indian economy probably picked up in Sept quarter as vaccine hopes grow

India’s economy is likely to have shown signs of a pick-up in the quarter to September after a record contraction the previous quarter, and is expected to recover early next year. ― Reuters pic
India’s economy is likely to have shown signs of a pick-up in the quarter to September after a record contraction the previous quarter, and is expected to recover early next year. ― Reuters pic

NEW DELHI, Nov 27 — India’s economy is likely to have shown signs of a pick-up in the quarter to September after a record contraction the previous quarter, and is expected to recover early next year on hopes of better consumer demand fed by progress on coronavirus vaccines.

Economists in a Reuters poll forecast gross domestic product in Asia’s third largest economy to shrink 8.8 per cent in the September quarter, after a contraction of 23.9 per cent in the previous quarter, amounting to a technical recession.

They also predict a contraction of 3 per cent and growth of 0.5 per cent in the December and March quarters respectively, with the economy shrinking 8.7 per cent over the whole financial year for its worst performance in at least four decades.

Economists have marginally raised forecasts this month after a pick-up in consumer demand for autos, non-durables and rail freight during the festival season, as prospects grow for Covid-19 vaccines to be launched early next year.

Effective widespread distribution of vaccine could help speed economic recovery next year, said Shilan Shah, an India economist at Capital Economics in Singapore.

“In particular, monthly data on capital goods production suggests that investment has bounced back more sharply than we had thought likely,” he said in a note this week.

Despite improvement in the growth outlook, however, a recent surge in infections presents downside risks for the economy, said Shaktikanta Das, the governor of the Reserve Bank of India.

“We need to be watchful about the sustainability of demand after the festivals and a possible reassessment of market expectations surrounding the vaccine,” he said yesterday.

India’s tally of infections has crossed 9.27 million to stand as the world’s second highest after the United States, with more than 135,000 deaths in the south Asian nation.

As some states re-imposed curbs this week to fight a second wave of infections, businesses feared the restrictions could slow the pace of recovery in the next two or three months, as well as heightening the risk of inflation.

Prime Minister Narendra Modi, whose party won elections this month in the eastern state of Bihar, expects the recent easing of farm and labour laws, along with tax incentives, to bolster manufacturing and lure more foreign investment.

But critics say the economy, which must grow at more than 8 per cent a year to create jobs for millions of young people entering the workforce, faces a prolonged slowdown, thanks to a delay in resolving a banking crisis and inadequate stimulus measures.

“Even widespread vaccination would not restore India to economic health, as tepid fiscal support and a beleaguered banking sector will weigh on economic growth long after the virus is brought under control,” said Shah. — Reuters




Source: Malay Mail

Thursday, November 26, 2020

German shoppers gloomy as virus mars holiday season

People walk past Berlin’s famous KaDeWe shopping centre on the Kurfuerstendamm boulevard during the spread of coronavirus disease in Berlin, Germany, March 26, 2020. The GfK survey of some 2,000 people found that respondents were more pessimistic about Germany’s economic prospects as well as their own income expectations. — Reuters pic
People walk past Berlin’s famous KaDeWe shopping centre on the Kurfuerstendamm boulevard during the spread of coronavirus disease in Berlin, Germany, March 26, 2020. The GfK survey of some 2,000 people found that respondents were more pessimistic about Germany’s economic prospects as well as their own income expectations. — Reuters pic
FRANKFURT, Nov 26 — German shoppers are heading into the annual holiday season feeling more downbeat about money and jobs, a key survey showed today, as the country battles a second coronavirus wave.

The GfK institute’s forward-looking assessment of consumer confidence fell to minus 6.7 points for December, down from a slightly revised minus 3.2 in November.

Chancellor Angela Merkel’s government introduced new measures in November to halt a rapid rise in coronavirus infections, closing restaurants, hotels, sports and cultural centres.

“Only a noticeable decrease in infection numbers and a loosening of the restrictions will bring more optimism again,” GfK’s Rolf Buerkl said in a statement.

Merkel and the leaders of Germany’s 16 states agreed late yesterday to extend the measures until December 20 at the least.

Although the shutdowns are milder than the lockdown imposed during the first coronavirus wave in the spring, the curbs have slammed the brakes on the economic recovery that started over the summer.

The GfK survey of some 2,000 people found that respondents were more pessimistic about Germany’s economic prospects as well as their own income expectations.

Fears are growing that businesses hardest hit by the latest shutdowns may not survive, fuelling concerns about job losses, the pollster said.

While respondents said they were less likely than last month to make large purchases, GfK noted that the overall tendency to spend as Christmas approaches remains at a “satisfactory” level.

Unlike in the spring, retailers have been allowed to stay open throughout the latest curbs.

Government officials have urged the public to do their gift shopping on weekdays to avoid stores getting too crowded. — AFP




Source: Malay Mail

South-east Asia IPO proceeds buck downtrend to hit US$6.4b as of mid-Nov

Total initial public offering (IPO) activity across South-east Asia as of mid-November this year bucked the overall downward trend to inch up to pre-Covid-19 levels. — Bernama pic
Total initial public offering (IPO) activity across South-east Asia as of mid-November this year bucked the overall downward trend to inch up to pre-Covid-19 levels. — Bernama pic

KUALA LUMPUR, Nov 26 — Total initial public offering (IPO) activity across South-east Asia as of mid-November this year bucked the overall downward trend to inch up to pre-Covid-19 levels, with US$6.44 billion (US$1=RM4.09) in funds raised from 100 IPOs.

Deloitte South-east Asia and Singapore disruptive events advisory leader, Tay Hwee Ling, said compared to full-year 2019, the number of IPOs fell 38 per cent from 161 and total IPO proceeds slipped 12 per cent from US$7.34 billion, but the total IPO market capitalisation this year increased by three per cent to US$25.96 billion.

Malaysia, Thailand and the Philippines saw year-on-year increase in IPO funds raised.

“Capital markets stayed resilient despite a host of uncertainties from the evolving global health crisis to the worsening United States-China trade tensions and the impact of the US presidential elections,” she said during a virtual media conference on Deloitte’s perspectives on South-east Asia’s IPO market performance and outlook for 2021 today.

Thailand remains in number one position in the region with the highest funds raised across South-east Asia at US$3.94 billion as of November 15. Taking the top two spots on the region’s leaderboard are Central Retail Corporation Public Company Limited and SCG Packaging Public Company Limited with US$1.77 billion and US$1.27 billion funds raised, respectively.

Indonesia was responsible for 46 IPOs in the first 10.5 months of 2020, which accounted for the highest number of IPOs across South-east Asia.

For Malaysia, Deloitte Malaysia disruptive events advisory leader Wong Kar Choon said Bursa Malaysia scored the biggest boost from the listing of Mr DIY Group (M) Bhd which raised US$362 million, making it the largest listing in three years, while new listings fell to 18 this year compared with 30 listings last year.

“The average trading volume increased by about 86 per cent and 208 per cent for the second and third quarters of 2020 as compared with the same quarters in 2019.

“The high trading volume with buying momentum should remain strong where investors are generally looking at stock-specific (investments) rather than sectors, especially those related to technology and healthcare,” he said.

The movement control order and pandemic also created positive elements on the capital market, he said, noting that the funding from the government helped protect the livelihoods of many people and also became opportunities to access funds and do trading.

Elaborating on the Covid-19 challenges and outlook for 2021, he said the region would continue to see growth and he expected an upswing in listings as soon as a vaccine was proven safe and effective.

“Covid-19 has made companies reevaluate their business and growth forecast while looking into opportunities to raise funds from stock markets to support their growth and stay resilient in this challenging climate,” he said.

Wong added that the growth potential for real estate investment trusts (REITs) across the Southeast Asia region was also promising, given the region’s population and urbanisation-led growth trends.

“Certain industries and companies are doing well, such technology, gloves and pharmaceutical, and there will be a lot of companies coming in through digital platforms with planning for three-year strategies,” he said. — Bernama




Source: Malay Mail

Cargill to invest US$20m to expand production facility in Port Klang

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KUALA LUMPUR, Nov 26 — Global food corporation, Cargill is investing US$20 million (US$1=RM4.08) to expand and modernise its palm oil production facility in Port Klang, Selangor to meet the growing needs of the market and to better service its food and beverage customers in the region.

President for global edible oil business Gonzalo Petschen said improvements at the facility included deploying new production technologies, upgrading equipment and adding new research and development (R&D) capabilities.

With new production technologies and expanded R&D capabilities, he said the facility would be able to produce significantly more oils, especially value-added special palm products, while continuing to meet stringent product quality requirements.

“This investment enables us to provide high-quality, value-added specialty palm solutions and advanced R&D capabilities for customers in a variety of market segments.

“By strengthening our assets in the region, we are reinforcing our commitment to our employees and the Port Klang community,” he said in a statement here, today.

Meanwhile, Cargill Palm Products Sdn Bhd managing director Xiuling Guo said by upgrading plant operations to world-class production standards, customers from various industry segments, including food service, confectionery, bakery and specialised nutrition, would experience reduced turnaround times for high-quality products to meet the needs of the growing food market.

He said the first scope of the project involved moving the production of all lauric oils, mainly refined coconut oil, to Cargill’s Westport facility.

This move opened up capacity at the Port Klang facility to become the hub for palm processing and production of its derivatives, he said, citing this first phase was expected to be completed by April 2021.

The second phase would involve upgrading the physical refining plant and palm oil fractionation process at Port Klang to be a state-of-the-art production facility, which will likely be completed and running by February 2022, he added. — Bernama




Source: Malay Mail

Sime Darby posts higher net profit of RM281m in Q1

Sime Darby Bhd posted a higher net profit of RM281 million in the first quarter ended September 30, 2020. — Reuters pic
Sime Darby Bhd posted a higher net profit of RM281 million in the first quarter ended September 30, 2020. — Reuters pic

KUALA LUMPUR, Nov 26 — Sime Darby Bhd posted a higher net profit of RM281 million in the first quarter ended September 30, 2020 (Q1 FY2021) from RM246 million in the same period last year.

Revenue also firmed to RM10.88 billion from RM9.48 billion previously, it said in a filing with Bursa Malaysia.

Sime Darby said the net profit increased by 14.2 per cent on strong growth in the group’s motors division while profit before interest and tax (PBIT) was 17.6 per cent higher year-on-year (yoy) at RM447 million.

It said the motors division PBIT increased by 66.4 per cent yoy to RM223 million in the current quarter with most countries registering higher profits, supported by a 31.2 per cent increase in segment revenue and government grant income of RM33 million.

“Profit from the Greater China operations increased by 78.1 per cent, mainly attributable to strong vehicle sales in China while results from the Singapore operations improved due to higher BMW vehicle sales and lower inventory write-down and provisions,” it said.

It said the profit for the quarter includes net foreign exchange gains of RM7 million from the legacy oil and gas operations against a foreign exchange loss of RM3 million in the previous corresponding period. 

Meanwhile, the industrial division’s PBIT decreased by 24.6 per cent yoy to RM196 million in the current quarter, mainly due to lower equipment deliveries and parts sales in Australia following the fall in coal prices.

“For the logistics division, the port operations registered a decline in bulk cargo throughput by 36.5 per cent, mainly due to stiff competition,” it said.

On prospects, it said the impact of the coronavirus pandemic in the remaining months of the financial year cannot be accurately estimated at this juncture as there is still uncertainty in the timing of vaccine administration and the possible risk of resurgence in Covid-19 cases.

In a separate statement, group chief executive officer Datuk Jeffri Salim Davidson said the motors division staged a comeback, with most markets posting an increase in profits, thanks to the easing of restrictions which facilitated consumer spending.

“However, we also saw the impact of lower coal prices in our industrial division, with a cutback in mining operations translating to lower equipment deliveries and parts sales,” he said. — Bernama




Source: Malay Mail

Westports posts better Q3 net profit of RM203.8m

Westports Holdings Bhd’s net profit improved 28 per cent year-on-year to RM203.85 million for the third quarter (Q3) ended September 30, 2020. — Reuters pic
Westports Holdings Bhd’s net profit improved 28 per cent year-on-year to RM203.85 million for the third quarter (Q3) ended September 30, 2020. — Reuters pic

KUALA LUMPUR, Nov 26 — Westports Holdings Bhd’s net profit improved 28 per cent year-on-year to RM203.85 million for the third quarter (Q3) ended September 30, 2020, due to higher container revenue and lower operational cost.

Growth in container throughput pushed up revenue to RM528.36 million from RM460.43 million previously.

“Container throughput improved in Q3 2020 with a 6 per cent growth to 2.93 million twenty-foot equivalent units (TEUs) as global activities resumed after the earlier lockdown,” the port operator said in a filing with Bursa Malaysia today.

For the first nine months of the year, Westports handled lower container throughput of 7.73 million TEUs against the same period last year, as container volume and demand was affected by the various forms of lockdown,

Nonetheless, its net profit for the nine months rose to RM490.99 million from RM465.46 million previously while revenue climbed to RM1.43 billion from RM1.33 billion.

Group managing director Datuk Ruben Emir Gnanalingam said the rebound in container volume in Q3, after many countries emerged from the various forms of lockdown arrangements or movement restrictions, had cushioned the decline during the first six months of the year.

“As we enter into the fourth quarter, many regions and cities have reimposed various forms of lockdown. 

“However, we cautiously expect a less adverse impact from the latest lockdown compared to Q2 2020 as societies and economies adjust to these movement restrictions,” he added. — Bernama




Source: Malay Mail

Disney to lay off about 32,000 workers in first half of 2021

Walt Disney Co said yesterday it would lay off 32,000 workers, primarily at its theme parks. — Reuters pic
Walt Disney Co said yesterday it would lay off 32,000 workers, primarily at its theme parks. — Reuters pic

LOS ANGELES, Nov 26 — Walt Disney Co said yesterday it would lay off 32,000 workers, primarily at its theme parks, an increase from the 28,000 it announced in September, as the company struggles with limited customers due to the coronavirus pandemic.

The layoffs will be in the first half of 2021, the company said in a filing with the Securities and Exchange Commission.

Earlier this month, Disney said it was furloughing additional workers from its theme park in Southern California due to uncertainty over when the state would allow parks to reopen.

Disney’s theme parks in Florida and those outside the United States reopened earlier this year without seeing new major coronavirus outbreaks but with strict social distancing, testing and mask use.

Disneyland Paris was forced to close again late last month when France imposed a new lockdown to fight a second wave of the coronavirus cases.

The company’s theme parks in Shanghai, Hong Kong and Tokyo remain open.

Disney did not respond to a Reuters request for comment on whether the 28,000 layoffs announced earlier were included in the latest figure, but a spokesperson for the company confirmed to Variety that the figure includes the previously announced number. — Reuters




Source: Malay Mail

TNB's Q3 net profit down to RM1b

The Tenaga Nasional Berhad logo is seen at its headquarters in Bangsar May 31, 2019. — Picture by Shafwan Zaidon
The Tenaga Nasional Berhad logo is seen at its headquarters in Bangsar May 31, 2019. — Picture by Shafwan Zaidon

KUALA LUMPUR, Nov 26 — Tenaga Nasional Bhd’s (TNB) net profit for the third quarter (Q3) ended Sept 30, 2020 fell to RM1 billion from RM1.20 billion in the same quarter last year.

Revenue declined 12.1 per cent to RM11.10 billion from RM12.64 billion previously, it said in a filing with Bursa Malaysia today.

For the nine months ended Sept 30, 2020, TNB recorded a net profit of RM2.38 billion on the back of a turnover of RM33.65 billion, compared with a net profit of RM3.88 billion on a turnover of RM38.76 billion previously.

It said revenue for the period decreased by 13.2 per cent, mainly due to the over-recovery position of the Imbalance Cost Pass-Through of RM1.47 billion compared with an under-recovery position of RM1.99 billion posted during the last corresponding period, and a 6.5 per cent decline in sales of electricity.

“This was largely due to a decline in commercial and industrial customer segments affected by the Covid-19 outbreak.

“Consequently, operating profit fell 13.9 per cent to RM5.90 billion from RM6.85 billion,” it said.

On prospects, TNB said it foresees a gradual recovery in the group’s performance for the remaining quarter of the financial year ending Dec 31, 2020 amid the challenging environment.

“This was underpinned by the timely rollout of the government’s stimulus packages, specifically the Bantuan Prihatin Rakyat and sustained momentum of business activities.

“The group has taken prudent measures in terms of operational and financial requirements to ensure it remains resilient,” said TNB. — Bernama




Source: Malay Mail

With new bank aid, BOJ makes stealthy retreat from negative rates

TOKYO: The Bank of Japan is quietly walking back its unpopular negative interest rates policy with a controversial scheme designed to drive mergers among weaker, smaller lenders, a move some insiders see as a risky deviation into industrial reform.

As COVID-19 adds pain for regional banks suffering from years of ultra-low interest rates, the BOJ this month unveiled a plan to pay 0.1% interest on deposits held by lenders that cut costs, boost profits or consolidate.

The programme means the BOJ will for the first time offer payouts to a specific industry with the aim of driving reform in that sector. Critics warn such policy should be directed by elected officials, not central bankers.

"The BOJ is incentivising unviable banks to merge before they end up going under," said Tomoyuki Shimoda, a former BOJ official who is now professor at Hitotsubashi University. "It's a pretty bold decision. There's no turning back."

Some BOJ executives were against the scheme, which defied the central bank's tradition of being "a lender not a spender," according to three sources with direct knowledge of the matter.

But after more than a year of groundwork by BOJ bureaucrats and bank regulators, the plan went through, the sources said, a sign that regional banks were in worse shape than BOJ Governor Haruhiko Kuroda was willing to admit.

"It's a message to regional banks that time is running short," one of the sources said. "Were it not for the seriousness of the problem, the BOJ wouldn't have gone this far," another source said, a view echoed by a third source.

The BOJ declined to comment for the story.

UNCHARTED TERRITORY

The decision highlights how Kuroda's defense of his stimulus policies - and his view the cost of prolonged easing is manageable – is crumbling, forcing him to pay the price for his radical measures with an even more controversial programme.

It also marked another retreat from negative rates, a policy long criticised by banks as crushing yields across the curve and narrowing already thin margins, two other sources said.

The policy was unpopular from the outset. Just eight months after its launch in 2016, the BOJ was forced to set a target for 10-year bond yields to avoid excessive falls in long-term rates.

It also shrank the pool of funds to which negative rates were applied to around 5 trillion yen ($48 billion) - or 1% of total reserves financial institutions park with the BOJ.

"The aid scheme is part of the BOJ's attempt to phase out the impact of negative rates, which has been going on over the past few years," said former BOJ executive Hideo Hayakawa, who retains close contact with incumbent policymakers.

"The BOJ can't openly concede the policy was a failure or ditch it altogether, so it's quietly dialing it back," he said.

Of nearly 70 trillion yen in reserves, around 50 trillion yen could be targeted for the 0.1% interest for up to three years, according to Dai-ichi Life Research Institute.

Short-term rates may creep up if the banks tap markets for funds that they then shift to BOJ deposits to earn 0.1% interest. That would complicate the BOJ's efforts to meet its -0.1% short-term rate target and cast doubt on Kuroda's argument the scheme won't affect monetary policy, some analysts say.

The fact the BOJ crossed the line to forestall a banking crisis highlights a deepening concern among policymakers over the rising cost of prolonged easing.

Combined net profits at Japan's 102 regional banks have tumbled 40% over the past four years as lending margins sank to 0.2%.

A recent stress test by the BOJ showed in the most severe economic downturn scenario, their average capital-to-asset ratio would slide to 7% in fiscal 2022 from the current 10% and a few points above the required 4%.

Several BOJ board members have publicly warned an increase in pandemic-driven bankruptcies could saddle banks with bad loans and threaten Japan's financial system.

"It has become extremely important to pay more attention to the side-effects of prolonged easing," board member Takako Masai said, signalling that the BOJ should focus on making its policy framework sustainable rather than deploy further stimulus.

The growing alarm within the board over the demerits of his stimulus programme may make it harder for Kuroda to ease further, especially by deepening negative rates.

"If banking-sector problems are as serious as the BOJ suggests, deepening negative rates would make matters worse," said a fourth source familiar with the BOJ's thinking. "It's quite clear the BOJ wants to avoid deepening negative rates." - Reuters



Source: The Sun Daily

UEM Edgenta posts net loss of RM19.01m in Q3

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KUALA LUMPUR, Nov 26 — UEM Edgenta Bhd fell into the red with a net loss of RM19.01 million in the third quarter ended Sept 2020 (Q3 2020) compared with a net profit of RM17.27 million in the same quarter last year.

Revenue also fell to RM482.91 million from RM587.64 million previously, the asset management and infrastructure solutions company said in a filing with Bursa Malaysia yesterday.

Revenue from infrastructure solutions decreased by RM266.1 million mainly from less pavement work done for expressways during the movement restriction period due to the Covid-19 pandemic.

“The asset consultation division also recorded lower revenue from lower consultancy work done during the period,” it said.

Meanwhile, revenue from asset management increased by RM27.4 million due to more healthcare support work from contracts secured in Singapore and Taiwan by the healthcare support division.

The group also recorded a loss before tax RM15.15 million in Q3 2020 compared with a profit before tax of RM25.9 million previously, as asset management results declined by RM44.7 million primarily from the healthcare support division due to margin contractions experienced by its commercial business in Singapore and Taiwan, coupled with higher operating costs in its Malaysian concession operations.

“Infrastructure solutions posted lower results by RM39.7 million from lower revenue and impairments made on receivables.

“Impairment of completed property inventories totalling RM50 million was recognised during the period by the property development division,” it said.

In a separate statement, managing director and chief executive officer Syahrunizam Samsudin said the company’s recovery efforts had been hampered by higher operating costs to deliver essential services at the front lines.

“We provide healthcare support services to clients in Malaysia, Singapore, Taiwan and India, and we are committed to delivering our services and ensure the healthcare systems in all these countries are able to operate uninterrupted and at the highest standards at all times in the fight against Covid-19,” he said.

Despite the difficult operating conditions in Q3 2020, the company’s healthcare support division has added Pantai Hospital Cheras, Melaka’s Mahkota Medical Centre and Regency Specialist Hospital in Johor, amid a growing list of reputable new clients which also includes Alexandra Hospital in Singapore, Chang Gung Memorial Hospital and Micron Technology, Inc in Taiwan.

According to Syahrunizam, UEM Edgenta was also focused on empowering its technology-abled solutions for better service offerings and setting firm footing, future-ready business fundamentals in place once the newly announced vaccine is available and the economy is upbeat again post-Covid-19. — Bernama




Source: Malay Mail

Research houses mixed on Malaysia’s 2021 OPR outlook

Kenanga Research assigned a 50 per cent probability that Bank Negara Malaysia (BNM) would cut the OPR by 25 basis points at the next Monetary Policy Committee meeting in January 2021. — Picture by Ahmad Zamzahuri
Kenanga Research assigned a 50 per cent probability that Bank Negara Malaysia (BNM) would cut the OPR by 25 basis points at the next Monetary Policy Committee meeting in January 2021. — Picture by Ahmad Zamzahuri

KUALA LUMPUR, Nov 26 — Maybank Investment Bank Bhd (Maybank IB) expects the Overnight Policy Rate (OPR) to stay at 1.75 per cent until end-2021 after Malaysia’s Consumer Price Index (CPI) shrank 1.5 per cent year-on-year (y-o-y) in October 2020.

“But this is a ‘dovish pause’ amid downside and tail risks to economic outlook,” the investment bank said in a note today.

Meanwhile, Kenanga Research assigned a 50 per cent probability that Bank Negara Malaysia (BNM) would cut the OPR by 25 basis points at the next Monetary Policy Committee meeting in January 2021.

“This is due to the continuing surge in local Covid-19 infections and the extension of conditional movement control order (CMCO) measures,” it said in a note today.

The Department of Statistics Malaysia released the CPI data yesterday, showing that the decrease in the overall CPI in October 2020 was attributed to the decline in transport (-10.2 per cent), housing, water, electricity, gas & other fuels (-3.0 per cent), and clothing & footwear (-0.4 per cent) which contributed 41.6 per cent to overall weight.

With that, Maybank IB said it continues to expect negative monthly inflation rate for the rest of the year amid the contraction in real gross domestic product (GDP) and lower average global crude oil (Brent) price, the y-o-y effect of the 18 per cent reduction in PLUS tolled highways since February 1, 2020, and electricity bill discounts from Apr 2020 to Dec 2020 as part of government measures to assist households and businesses amid the recession triggered by the Covid-19 pandemic.

It has forecast Malaysia’s GDP to contract 5.4 per cent in 2020 compared with a growth of 4.3 per cent in 2019, while Brent crude is expected to average at US$40-45 per barrel in this year versus US$64 per barrel last year.

Maybank IB also maintained its “conservative” annual real GDP projection of -5.4 per cent for 2020 and +5.1per cent for 2021 as outlook would depend on the Covid-19 pandemic, politics and policies. 

“This year’s full-year GDP forecast and (first) nine months of 2020 (9M2020: -6.4 y-o-y) actual imply the fourth quarter of 2020 GDP forecast of -2.8 per cent y-o-y.

“That reflects ‘speed bumps’ in the recovery process amid Covid-19’s third wave and the second round of CMCO since mid-October 2020,” it said.

Meanwhile, Kenanga Research has revised downwards its 2020 CPI forecast to -1.0 per cent from -0.7 per cent compared with 0.7 per cent in 2019, on the back of renewed deflationary threat amid worsening Covid-19 situation.

“The government’s decision to reimpose the CMCO in most of the states in Malaysia to prevent the Covid-19 situation from becoming worse may likely hurt consumer spending in the near term. 

“However, rising commodity prices especially crude oil due to vaccine hopes may help to partially reduce deflationary pressures in the coming months,” it said. — Bernama




Source: Malay Mail

Bitcoin price drops more than US$1,000 in Asian trade

Bitcoin, the world’s biggest and best-known crypto-currency, was last trading around US$17,700. — Reuters pic
Bitcoin, the world’s biggest and best-known crypto-currency, was last trading around US$17,700. — Reuters pic

HONG KONG, Nov 26 — Bitcoin hiccoughed in Asian trading today to at one point stand more than 6 per cent down on the day after failing to make record highs.

Bitcoin, the world’s biggest and best-known crypto-currency, was last trading around US$17,700 (RM72,300), having lost more than US$1,000 since its previous close.

“With very high volumes on spot but also on leveraged markets, it’s not surprising that after failing to hit the all-time highs, there would be this sort of rapid correction,” said Justin d’Anethan sales manager at digital asset company Diginex.

“While a quick visit in the upper or mid-16,000s is possible, we’re still trending up and with plenty of upside potential,” he added This year, bitcoin has risen 358.6 per cent from the year’s low of US$3,850 on March 13, but has not yet breached the US$19,666 hit in December 2017.

Analysts say that this latest rally differs from 2017’s as there are proportionally fewer retail investors and more institutions such as hedge funds and family offices trading cryptocurrencies. — Reuters




Source: Malay Mail

Oil extends gains on surprise U.S. inventory draw amid vaccine rally

TOKYO: U.S. oil rose for a fifth day on Thursday as a surprise drop in crude inventories extended a rally driven by hopes that vaccines would end the coronavirus pandemic and revive fuel demand.

Brent was up by 20 cents, or 0.4%, at $48.81 a barrel, after rising around 1.6% in the previous session. West Texas Intermediate crude was up by 14 cents, or 0.3%, at $45.85, having gained 1.8% on Wednesday.

Both benchmarks have risen about 9% this week, getting a boost after AstraZeneca said on Monday its COVID-19 vaccine could be up to 90% effective, adding to the potential armoury to end the worst pandemic in a century.

U.S. oil stockpiles fell 754,000 barrels last week, data showed, while analysts in a Reuters poll had predicted a 127,000-barrel rise. Stockpiles at the Cushing, Oklahoma, delivery point for WTI, fell 1.7 million barrels.

But gasoline demand for the week fell by 128,000 barrels per day (bpd) to 8.13 million bpd, the lowest since June.

"With new U.S. virus cases still at very high levels, we think that it probably won't be until next year – once vaccines can have a material impact – that demand recovers to more normal levels," Capital Economics said in a note.

U.S. President-elect Joe Biden has urged people to forgo big family gatherings, wear protective masks and maintain social distancing for the Thanksgiving holiday in the face of the surging coronavirus pandemic. But Americans are defying pleas from officials to stay home.

The United States has recorded 2.3 million new infections in the past two weeks. - Reuters



Source: The Sun Daily

Sarawak oil palm planters oppose MPOB’s proposed RM5 cess on CPO for 2021

Soppoa says MPOB should ask the Finance Ministry for more funds for R&D instead of imposing the cess. — Picture by Yusof Mat Isa
Soppoa says MPOB should ask the Finance Ministry for more funds for R&D instead of imposing the cess. — Picture by Yusof Mat Isa

KUCHING, Nov 26 — Sarawak Oil Palm Plantation Owners Association (Soppoa) has objected to the Malaysian Palm Oil Board’s (MPOB) proposal to impose an additional cess of RM5 for every metric tonne of crude palm oil (CPO) and crude palm kernel oil for a year starting January 2021.

Its chief executive officer, Andrew Cheng, said MPOB was trying to raise more than RM100 million per annum from the plantation sector with the cess and the association would not support it.

He pointed out that there was already research and development (R&D) activities and that MPOB had the funds for them although the board said the cess was to finance such activities.

“MPOB should get the Ministry of Finance to support them if more funds are required instead of increasing the cess which amounts to a 35.7 per cent increase as against current RM13 plus the RM1 just implemented beginning of this year when the economic downturn caused by the Covid-19 pandemic struck us all,” said Cheng.

This year, the industry players are paying RM14 cess per metric tonne of palm oil produced, which was an increase of RM1 per metric tonne compared to the previous year.

The crude palm oil producers will have to pay RM19 cess per metric tonne if the proposed Malaysian Palm Oil Board (Cess) Order 2020 is approved, on top of the various levies and taxes that have been imposed on them.

According to an industry source, Sarawak produced 4 million metric tonnes of CPO in 2019.

“Times that (4 million metric tonne) say with RM19, you could easily fetch RM76 million,” the source said.

The source also said Malaysia produced more than 16 million metric tonnes of CPO in 2019.

In an announcement on the proposed Malaysian Palm Oil Board (Cess) Order 2020 on its website, MPOB said the RM5 cess would be levied on CPO and crude palm kernel oil.

It said the additional Cess payment was intended to contribute toward the dire need for R&D on palm oil mechanization and automation in Malaysia to overcome the incessant labour shortage in the plantation sector.

In an announcement on its licensing and enforcement division website (led.mpob.gov.my), MPOB said it was now welcoming public feedback on the draft of the Malaysian Palm Oil Board (Cess) Order 2020 until November 30.

The draft of the order in both Bahasa Malaysia and English can now be viewed online through the website.

It also proposed that a person who fails to comply with the order shall be guilty of an offence and shall, on conviction, be liable to a fine not exceeding RM1,000 or to imprisonment for a term not exceeding six months or to both. — Borneo Post Online




Source: Malay Mail

Honda Malaysia recalls 2,784 vehicles for Takata driver front airbag inflator replacements

Honda Malaysia is recalling 2,784 Honda vehicles to replace the Takata driver front airbag inflator. ― Reuters pic
Honda Malaysia is recalling 2,784 Honda vehicles to replace the Takata driver front airbag inflator. ― Reuters pic

KUALA LUMPUR, Nov 26 — Honda Malaysia is recalling 2,784 Honda vehicles to replace the Takata driver front airbag inflator, in line with Honda global Non-Azide Driver Airbag Inflator (NADI) recall.

The affected models recalled are 1,380 units of Accord (model year 1999) and 1,404 units of CR-V (model year 2000).

Honda Malaysia reassures that current selling models are not affected in this product recall, and the company will continue to uphold transparency and stringent controls for customers.

“The company believes this product recall is necessary as a preventive measure to address the possibility of the Takata driver front airbag inflator having excessive internal pressure and thus, causing the airbag to fail to function properly or to rupture”, it said in a statement today.

Honda Malaysia attested that as at today, there is no report in Malaysia of any incidence or injury caused by the Takata driver front airbag in the vehicles of these two model years.

It said affected customers will be informed via notification letters, which will include details of the product recall. 

“Honda Malaysia urges all affected customers to contact any Honda authorised dealer to make an appointment upon receipt of notification to replace the driver front airbag inflator subject to parts availability.

“The company requests all affected customers to make an appointment in advance to ensure a smooth and quick driver front airbag replacement process.

“Customers are required to adhere to the Standard Operating Procedures (SOPs) set by the authorities, which include wearing face mask properly, maintaining physical distancing and, sanitising their hands at all times when visiting the dealerships,” it said.

The replacement of the affected Takata drive front airbag inflator is free of charge and all cost related to this replacement activity will be borne by Honda Malaysia.

The replacement stock will be available in stages, it added.

Vehicle owners can check their vehicles’ recall status either by logging on to www.honda.com.my or www.productrecall.honda.com.my or by calling Honda’s Toll Free number at 1-800-88-2020. — Bernama




Source: Malay Mail

Sales tax holiday to drive auto TIV recovery

PETALING JAYA: The sales tax holiday is expected to translate into a recovery sales volume for a stronger automotive sector earnings delivery quarter on quarter (qoq) in 3Q’20, according to a report from CGS-CIMB.

In October, total industry volume (TIV) grew marginally to 56,670 units from 56,444 units reported in the previous month due to new model launches such as Honda City and Proton X50 and ongoing promotional campaigns by dealerships.

The month saw a 0.7% higher demand for passenger vehicles, while commercial vehicles saw a 2.9% decline in demand from the previous month.

The Malaysian Automotive Association anticipates a TIV decline in November from the reduced footfalls to automotive showroom, in line with the full month impact from the implementation of conditional movement control order for all states in Peninsular Malaysia (except Perlis, Pahang and Kelantan).

For 2021, MAA projected the TIV to increase to 550,000 units from an expected 470,000 units in 2020F driven by new model launches and ongoing promotional campaigns by the dealers.

“We expect TIV to rise by 14% to 570,000 in 2021F driven by stronger demand for national brands; Proton and Perodua on the back of new model launches such as X50 and Perodua’s new compact SUV, D55L,” said CGS-CIMB.

It also foresees a stronger recovery from Japanese marques driven by new launches such as Honda City, Nissan Almera and Toyota Yaris facelift.

Meanwhile, Fitch Solutions believes Malaysia is well positioned to move up the automotive value chain as a strong focus of the country’s newly revised automotive policy puts more emphasis on high-tech automotive solutions.

It noted that the latest iteration of Malaysia’s National Automotive Policy (NAP2020) marks a significant leap from previous policy revision as it focuses on digital transformation of the country’s automotive industry.

Among the technological trends that have been identified by the government to shape the industry over the next decade are autonomous vehicle technology, big data analytics and artificial intelligence and others.

“We therefore believe the step taken by the Malaysian government to prioritize more tech-oriented automotive activities will provide sufficient competition to its regional peers as a tech hub for the automotive industry’s shift towards digital transformation,” said the research arm of Fitch Ratings.

It also opined that Malaysia has a solid foundation in promoting this new high-tech vision of its automotive industry with the potential to elevate the country’s automotive industry in the value chain.

It pointed out that the country performs particularly well under the country rewards pillar of its Autos Production Risk/Reward Index which measures the relative attractiveness of a market for automakers to establish a production base, as it outperforms regional peers under all four indicators; labour force size, labour cost, cost and availability of utilities as well as manufacturing capabilities.



Source: The Sun Daily

Asian shares advance as vaccine, recovery hopes triumph soft US data

A TV reporter stands in front of a large screen showing stock prices at the Tokyo Stock Exchange after market opens in Tokyo, Japan October 2, 2020. — Reuters pic
A TV reporter stands in front of a large screen showing stock prices at the Tokyo Stock Exchange after market opens in Tokyo, Japan October 2, 2020. — Reuters pic

TOKYO, Nov 26 — Asian shares advanced today as markets’ euphoric mood over Covid-19 vaccines and the prospects of more political predictability and economic stimulus under the incoming Biden administration overrode a slate of weak US economic data.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3 per cent while Japan’s Nikkei gained 0.6 per cent.

US S&P 500 future rose 0.2 per cent in today’s Asian trade while Nasdaq futures rallied 0.4 per cent.

MSCI’s broadest gauge of the world’s shares covering 49 markets added 0.1 per cent to bring its gains so far this month to 12.7 per cent, on course to make its biggest monthly gain on record.

The rally started after Democrat Joe Biden’s US election victory earlier this month raised hopes for more government spending to support the pandemic-hit economy and for more policy predictability after four years of Donald Trump’s presidency.

“Reduced policy uncertainties are helping markets. It will be easier for companies to make capital expenditures,” said Arihiro Nagata, general manager of global investment at Sumitomo Mitsui Bank.

“It’s true that stock prices are quite expensive but markets are finding fewer and fewer reasons to sell them. In this environment, you can’t make profits by selling. The only question to ask is what assets you should buy.”

On Wall Street on Wednesday, the S&P 500 index shed 0.16 per cent and the Dow Jones Industrial Average 0.58 per cent, though the tech-heavy Nasdaq Composite increased 0.47 per cent.

Traders attributed falls in S&P 500 and the Dow Jones to weak US economic data.

Figures from the US Labor Department’s weekly jobless claims suggested that an explosion in new Covid-19 infections and business restrictions were boosting layoffs and undermining the labour market recovery.

“I think a lot of people got ahead of themselves imagining that the recovery was taking shape. To me the recovery isn’t taking shape until we have a viable vaccine,” said Justin Lederer, Treasury analyst and trader at Cantor Fitzgerald.

But investors also noted markets will remain awash with cash to invest, with the world’s central banks ready to provide more support for the pandemic-stricken economy.

Minutes from the US Federal Reserve’s last policy meeting showed policymakers consider giving markets a better steer on how long they will continue to buy bonds to provide support to an economy under siege from a resurgence of coronavirus infections.

“It’s somewhat out of character that they mention taking this step “fairly soon” when they haven’t begun a discussion of this with the public,” wrote Michael Feroli, chief US economist at JP Morgan in New York.

The Fed could extend of the maturity of its Treasury purchases if its board members judge that deterioration in the pandemic warrants more policy accommodation, he added.

In commodities, oil prices rose for a fifth day as a surprise drop in US crude inventories added to the positive mood stemming from hopes of demand recovery.

US crude rose 0.77 per cent to US$46.06 per barrel and Brent gained 0.88 per cent to US$49.04

In the currency market, the US dollar stayed under pressure as riskier currencies benefited from the increased optimism.

The dollar’s index against a basket of major currencies dipped 0.07 per cent to 91.919, hitting its lowest levels in almost three months.

The euro held firm at US$1.1925 while sterling also stood near three-month high at US$1.3391.

The yen was little moved at ¥104.28 to the dollar.

Trade was slow as US financial markets will be closed today for the Thanksgiving holiday. US bonds and stocks will trade on a partial schedule tomorrow. — Reuters




Source: Malay Mail

S.Korea central bank hold rates, raises growth outlook slightly

SEOUL: South Korea's central bank kept its policy rate steady on Thursday and marginally raised its growth outlook for this year and next, even as the country faces a third wave of coronavirus infections.

The Bank of Korea kept the base rate steady at a historic low of 0.5% also as policymakers remain concerned about a red-hot property market. All 22 analysts in a Reuters poll had expected the move.

The central bank expects gross domestic product to shrink 1.1% this year from a previous forecast for a 1.3% contraction and sees GDP growing 3% in 2021, up from 2.8% previously.

Asia's fourth-largest economy returned to growth in the third quarter with support from fiscal and monetary stimulus, recovering from its sharpest contraction in more than a decade.

Preliminary exports data showed global demand for South Korean products rebounded in November, while industrial output saw its sharpest year-on-year growth in seven months in September.

But a third wave of infections prompted the government to tighten social distancing rules this week, threatening the budding recovery.

The BOK also flagged rising household debt as a key risk in its October meeting minutes, limiting the scope for further monetary easing.

"Further rate cuts are unlikely as it's time to allow previous cuts to flow through the economy. There are concerns about financial imbalances, and as inflation is expected to increase in a gradual manner, so policies will remain steady," said Park Seok-gil, economist at JP Morgan, before the meeting.

Investors are likely to focus on Governor Lee Ju-yeol's virtual news conference at 0220 GMT for any comments on a recent push by some lawmakers to revise the central bank's mandate to add the goal of job creation.

The government has pledged 310 trillion won ($274.83 billion) in fiscal spending to help cushion the blow from the pandemic, while the central bank has cut rates by a total of 75 basis points this year. - Reuters



Source: The Sun Daily

Ringgit retreats at opening but to remain steady against US dollar

The ringgit retreated to open slightly lower against the US dollar today. — Reuters pic
The ringgit retreated to open slightly lower against the US dollar today. — Reuters pic

KUALA LUMPUR, Nov 26 — The ringgit retreated to open slightly lower against the US dollar today, but is expected to remain steady as the greenback continues its downside.

The US dollar weakened on ambiguous minutes from the latest Federal Reserve meeting, as traders digested the recent US vast economic numbers, dealers said.

At 9.00am, the local currency stood at 4.0850/0880 against the greenback compared with yesterday’s close of 4.0835/0890.

Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the ringgit is expected to continue its uptrend, supported by the firmer crude oil prices.

“The Brent crude is really looking up as the prices have marched higher to US$48 per barrel.

“The rise in crude oil prices will always be associated to Malaysia’s economy in respect to government’s revenue and the oil and gas industry. These will be the key factors to supporting the ringgit in the immediate term,” he told Bernama.

Mohd Afzanizam said talks of the discovery of the Covid-19 vaccine alongside the possibility of the Organisation of the Petroleum Exporting Countries (Opec) delaying its plan to increase their production next year have also fuelled hope that the global economic recovery will be sustainable next year.

However, he noted that profit-taking could seep in since the ringgit has appreciated quite considerably.

“All eyes will be on the Budget 2021 approval from members of Parliament. So, there could be a chance that the ringgit could experience some weaknesses in light of the uncertainty on the budget (vote),” he added.

Meanwhile, the ringgit was also traded lower against other major currencies at opening.

The local note was lower against the Singapore dollar at 3.0503/0537 compared with yesterday’s close of  3.0408/0454 and declined versus the euro to 4.8705/8758 from 4.8606/8684.

It fell vis-a-vis the yen to 3.9155/9191 from 3.9125/9185 yesterday and decreased against the British pound to 5.4694/4746 from 5.4478/4568. — Bernama




Source: Malay Mail

Bursa Malaysia opens on mixed note ahead of budget vote

Bursa Malaysia opened on a mixed note today. — Bernama pic
Bursa Malaysia opened on a mixed note today. — Bernama pic

KUALA LUMPUR, Nov 26 — Bursa Malaysia opened on a mixed note today, as investors stayed on the sidelines ahead of Budget 2021 vote this afternoon. 

As at 9.02am, the benchmark index FTSE Bursa Malaysia KLCI (FBM KLCI) was 3.68 points lower at 1,593.90 compared with yesterday’s close of 1,597.69.

The market opened 0.11 of-a-point higher at 1,597.69 before slipping into the red a minute later.

Gainers surpassed losers 220 to 121, while 1454 counters were unchanged, 383 untraded and 333 others suspended.

Total volume stood at 1.20 billion worth RM446.92 million.

An analyst said the morning session would remain muted as the highlight of the day would take place in Parliament at 2pm today.

“Malaysia is already on the path of economic recovery but without the budget passing, it would hamper market sentiment until a new budget is drafted and passed.

“It would also put more tension on income during these trying times as civil servants rely on the budget for their salaries. This includes (assistance for) the frontliners,” he said.

With the passing of the budget, he said the local equity has a high chance of soaring upwards as the Leading Index (LI) showed strong gains in September.

MIDF Investment, in its investment insight today, said the country’s LI rose to 8.6 per cent year-on-year in September 2020 from 7.6 per cent in the previous month.

“This marks the fifth consecutive month of positive growth which indicates that Malaysia’s economy remains on a recovery path as domestic economic activities recover despite facing challenging circumstances,” it said. 

It added that the stronger performance of the index was mainly contributed by real imports of semi-conductors, particularly electronics integrated circuits, and number of new companies registered, especially in the wholesale and retail trade sub-sector.

On Bursa Malaysia, heavyweights Public Bank shed 30 sen to RM18.62, Press Metal declined 13 sen to RM6.27, Sime Darby Plantation dipped six sen to RM5.13, and Maybank reduced three sen to RM8.19. 

Among the actives, Vivocom shed 14 sen to 71.5 sen, AT Systematization added 1.5 sen to 18.5 sen and Saudee was flat at 52 sen.

On the index board, the FBM Emas Index was 5.81 points higher at 11,446.24, the FBMT 100 Index inched down 7.94 points to 11,221.92, the FBM Emas Shariah Index jumped 14.37 points to 13,138.23, and the FBM 70 surged 60.23 points to 14,600.20.

The FBM ACE declined 29.04 points to 10,550.43, the Industrial Products and Services Index shed 0.30 of-a-point to 158.31, the Plantation Index dipped 31.07 points to 7,282.46, and the Financial Services Index gained 1.05 points to 14,226.36. — Bernama




Source: Malay Mail

Sirim offers new testing services for pharmaceuticals, medical device sectors

PETALING JAYA: Sirim Bhd’s Industrial Biotechnology Research Centre (IBRC) has introduced new testing services to support the pharmaceuticals and medical device industries in line with new requirements by regulatory authorities in the last two years.

The new services are extractables and leachables (E&L) for pharmaceuticals and medical devices; test for nitrosamines for pharmaceutical, medical devices and food; as well as permeation, degradation and migration tests in gloves for medical use and food handling.

E&L testing enables manufacturers to identify, quantify and identify the risk of leachable impurities migrating into a drug solution from container closure systems, processing equipment, packaging or medical devices.

IBRC general manager Dr Ahmad Hazri Ab Rashid said the new regulations and guidelines stemmed from the advancement in scientific knowledge on the effects of various compounds to human health and the lowest limits of analytical quantification of these compounds.

“Companies are now looking at labs that can perform these tests. As far as we know, we’re the only lab (in Malaysia) that is able to do the E&L test. For nitrosamines, the number of labs is limited as the equipment required to do the test is expensive. We’re one of the labs that is able to perform this test, while few labs offer permeation, degradation and migration tests in gloves,“ he said in a virtual interview last week.

He added that Sirim’s IBRC provides state-of-the-art facility for testing and offers an alternative for industries to get their products tested locally, rather than performing such tests overseas, thus saving costs and time.

“We’re offering these services to the industries so that they can meet the regulatory requirements, whether locally or globally. It’s a big advantage for the industries that they have a local lab (Sirim) that can assist them in their submissions to the regulatory authorities in Malaysia and around the world,“ said Hazri.

Besides serving top local pharmaceutical and glove companies, IBRC also serves international clients from Singapore, Thailand and New Zealand.

Permeation testing is designed to measure the breakthrough time for determination of the resistance of protective clothing, gloves and footwear materials to permeation by potential hazardous liquid chemicals under the condition of continuous contact. By doing such testing, glove manufacturers can classify their glove performance level.

Degradation testing is designed for the determination of the resistance of protective glove materials to degradation by dangerous chemicals with continuous contact. This testing is mandatory for all gloves that offer chemical protection.

The classification of gloves according to its permeation characteristics will enable users to choose the right type of gloves for their specific applications to ensure the safety of the users.

Hazri said the rigorous testing procedures are important to these industries as a quality assurance that products from manufacturers meet the quality requirements of each product in the form of technical specifications.

“The benefit derived by the public on the performance of all these rigorous testing on these health products is the assurance that the product complies at least to the minimum quality standards and is safe for consumption and application.”

Sirim is establishing a Medical Device Innovation Centre (MDIC) with a mission of developing the nation’s medical device industry as a whole to enhance its competitiveness, MDIC aims to assist in building capabilities to address manufacturing gaps and market regulations as well as growing the product innovation capabilities of medical device manufacturers in the country.

Sirim offers a wide range of services that include biomodelling and prototyping, industrial research and product innovation, technology commercialisation, accredited testing, certifications, training and consultation. Supported by its industrial research centres and subsidiaries, Sirim has an extensive range of capabilities, from research and development to commercialisation, that industry players can tap into to facilitate market access.

To ensure the success of MDIC, all parties involved, such as the government, industry and research institutes, have to work closely together. Essentially, the establishment of a solid platform will allow all industry players to move forward together for the benefit of both industry and the nation and ensure that nobody is left behind.



Source: The Sun Daily

Former World Bank chief and ‘voice for the poor’ Wolfensohn dies aged 86

James Wolfensohn testifies before the Senate Foreign Relations Committee on Capitol Hill in Washington June 30, 2005. — Reuters file pic
James Wolfensohn testifies before the Senate Foreign Relations Committee on Capitol Hill in Washington June 30, 2005. — Reuters file pic

WASHINGTON, Nov 26 — James Wolfensohn, a former investment banker who pushed through debt relief for the poorest nations during a decade at the helm of the World Bank, has died, the Bank said yesterday. He was 86.

Wolfensohn, a former Salomon Brothers partner, was appointed as president of the global development bank by then-US President Bill Clinton and led the Bank from June 1995 through May 2005. Born in Australia, he became a US citizen in 1980.

In 1979, he helped orchestrate the rescue of Chrysler Corp from the verge of bankruptcy, together with Chrysler’s chief executive Lee Iacocca and Paul Volcker, who was then president of the New York Federal Reserve.

Together with the International Monetary Fund, Wolfensohn in 1996 launched the Heavily Indebted Poor Countries Initiative, a programme that eventually provided more than US$53 billion (RM220 billion) in debt relief to 27 of the world’s poorest countries.

Current IMF Managing Director Kristalina Georgieva mourned the passing of her friend, mentor and former boss.

“He was a hero to me as he was to so many,” she said in a statement. “Jim transformed the world of development and he transformed the World Bank. In the process, he became, quite literally, the voice for the poor people on our planet.” — Reuters




Source: Malay Mail

Irish PM says ‘good result’ in UK trade talks possible, EU chief says ready for no-deal

Britain left the EU in January and a status quo transition period expires at the end of this year. — Reuters pic
Britain left the EU in January and a status quo transition period expires at the end of this year. — Reuters pic

BRUSSELS, Nov 26 — Ireland’s prime minister said yesterday there was still time for a “good result” in trade talks between Britain and the European Union, though the bloc’s chief executive said the risk of a no-deal split on December 31 remained.

The European Commission head, Ursula von der Leyen, said the bloc was ready for the possibility of Britain leaving the EU without a new trade accord despite “genuine progress” in the tortuous Brexit talks.

Britain left the EU in January and a status quo transition period expires at the end of this year. The estranged allies are in a last-ditch effort to agree terms to keep trade flowing without tariffs or quotas.

“Sometimes you can get a good result in extra time,” Ireland’s Micheal Martin said when asked if time was running out for an agreement.

The three main obstacles to a deal are fishing rights, ways to settle future disputes, and “level playing-field” rules to guarantee fair competition, including on state aid to companies.

Martin said he thought there was a “landing zone” in the negotiations over the level playing-field rules, which would lead to an agreement on a dispute resolution mechanism.

Von der Leyen said the coming days would be “decisive”.

“With very little time ahead of us, we will do all in our power to reach an agreement. We are ready to be creative. But we are not ready to put into question the integrity of our single market,” she told the European Parliament.

An official involved in the negotiations said a deal was possible, but not likely before the weekend at the earliest. An EU diplomat said it was more likely to come next week.

The European Commission — which is negotiating with Britain on behalf of the 27-nation bloc — was due to update national envoys to the EU hub Brussels at 0700 GMT tomorrow.

“We need to establish robust mechanisms, ensuring that competition is — and remains — free and fair over time. In the discussions about state aid, we still have serious issues, for instance when it comes to enforcement,” said von der Leyen.

The EU needed to be able to retaliate on trade if Britain undercuts labour or environmental standards, she said. It also wanted long-term predictability for its fishing industry, which faces a reduced catch after Brexit.

“Dramatically different”

British Prime Minister Boris Johnson told parliament yesterday the EU should accept “the reality that we must be able to control access to our waters” to make progress on fisheries.

Johnson has repeatedly said he wants a deal with the EU, but only if it respects British sovereignty.

The official involved in the talks said that the latest EU and UK ideas for solutions on the three main contentious issues — which include transition periods and review clauses — were still “dramatically different”.

While the EU wants to lock in joint production standards for the future, as well as ensuring a long-term perspective for its fishing industry, the official said, Britain wants to be able to drop any such commitments after several years. — Reuters




Source: Malay Mail

Tesla’s upcoming S&P 500 debut fuels ‘crazy’ trading volume

The Tesla logo is seen at the entrance to Tesla Motors' showroom in Manhattan's Meatpacking District in New York City, US, December 14, 2017. — Reuters pic
The Tesla logo is seen at the entrance to Tesla Motors' showroom in Manhattan's Meatpacking District in New York City, US, December 14, 2017. — Reuters pic

NEW YORK, Nov 26 — If you traded a stock in the past week, there’s a fair chance it was Tesla.

Shares in the electric car maker led by CEO Elon Musk rose almost 3 per cent yesterday and have now surged 40 per cent since November 16, when it was announced Tesla would join the S&P 500 in December. Investors rushed to buy shares ahead of index funds that will be forced to acquire over US$50 billion (RM204 billion) of its shares.

One of Wall Street’s most loved — and hated — stocks, Tesla was already the US stock market’s most traded companies by average daily value, but trading has surged in recent sessions, along with Tesla’s stock price.

“It’s been crazy. Since Tesla’s (announced) inclusion in the S&P, you’ve had a lot of managers out there that didn’t own enough of it having to buy more,” said Sahak Manuelian, managing director of trading at Wedbush Securities, in Los Angeles.

Retail investors using apps like Robinhood are also responsible for much of the recent volume spike, Manuelian added.

Traders bought and sold an average of nearly US$26 billion of Tesla shares per session over the five days ending on Tuesday, accounting for almost 8 per cent of all stock traded on US exchanges, according to Refinitiv data. That is more than the combined value of trades in Amazon.com Inc and Apple Inc over the same period.

At about halfway through yesterday’s session, traders had exchanged US$20 billion worth of Tesla shares, according to Refinitiv.

Up over 400 per cent in 2020, Tesla has become by far the world’s most valuable automaker, despite production that is a fraction of Toyota Motor Corp, Volkswagen or General Motors Co.

Over the past year, Tesla has averaged over US$16 billion a day in trades, followed by Apple, at about US$14 billion, according to Refinitiv data.

Trading in Chinese electric vehicle maker NIO Inc has also surged in recent weeks, with its shares nearly doubling in November.

Including NIO, trading of stocks in the nascent electric vehicle industry reached an average of US$38 billion a day in the past five sessions, accounting for 12 per cent of all trading on US exchanges. By comparison, traders in the same period bought and sold each day about US$8 billion worth of oil and gas stocks including Exxon Mobil and Chevron. — Reuters




Source: Malay Mail

Wednesday, November 25, 2020

EU chief warns Brexit deal must not hurt single market

European Commission President Ursula von der Leyen gives a press conference in Brussels, April 2, 2020. — AFP pic
European Commission President Ursula von der Leyen gives a press conference in Brussels, April 2, 2020. — AFP pic
BRUSSELS, Nov 25 — The president of the European Commission Ursula von der Leyen warned today any post-Brexit trade deal must not undermine the EU single market.

“We will do all in our power to reach an agreement, we’re ready to be creative,” she told the European Parliament, warning that Britain must agree to fair trade rules in any agreement.

“But we are not ready to put into question the integrity of the single market, the main safeguard for European prosperity and wealth.” — AFP

 




Source: Malay Mail

Hong Kong shares again finish on positive note

The Hang Seng Index rose 0.31 per cent, or 81.55 points, to 26,669.75. — AFP pic
The Hang Seng Index rose 0.31 per cent, or 81.55 points, to 26,669.75. — AFP pic
HONG KONG, Nov 25 — Hong Kong stocks ended today with gains for the fourth day in-a-row as traders cheered more positive vaccine news and an easing of political uncertainty in the United States.

The Hang Seng Index rose 0.31 per cent, or 81.55 points, to 26,669.75.

The benchmark Shanghai Composite Index dropped 1.19 per cent, or 40.50 points, to 3,462.33, while the Shenzhen Composite Index on China’s second exchange fell 1.74 per cent, or 39.85 points, to 2,254.30. — AFP

 




Source: Malay Mail

European stock markets climb at open

Frankfurt’s DAX 30 index also rose 0.2 per cent to 13,312.07 points and the Paris CAC 40 added 0.3 per cent to 5,574.26. — Reuters pic
Frankfurt’s DAX 30 index also rose 0.2 per cent to 13,312.07 points and the Paris CAC 40 added 0.3 per cent to 5,574.26. — Reuters pic
LONDON, Nov 25 — European stock markets climbed in opening deals today, with London’s benchmark FTSE 100 index gaining almost 0.2 per cent to 6,442.80 points.

Frankfurt’s DAX 30 index also rose 0.2 per cent to 13,312.07 points and the Paris CAC 40 added 0.3 per cent to 5,574.26. — AFP




Source: Malay Mail

UOA net profit rises to RM208.92m in Q3

Revenue declined to RM134.33 million in Q3 2020 from RM288.43 million in the corresponding period, it said in a filing with Bursa Malaysia today. — Bernama pic
Revenue declined to RM134.33 million in Q3 2020 from RM288.43 million in the corresponding period, it said in a filing with Bursa Malaysia today. — Bernama pic
KUALA LUMPUR, Nov 25 — UOA Development Bhd’s (UOA) net profIt rose to RM208.92 million in the third quarter ended September 30, 2020 (Q3 2020) from RM101.91 million in the same period last year.

However, revenue declined to RM134.33 million in Q3 2020 from RM288.43 million in the corresponding period, it said in a filing with Bursa Malaysia today.

UOA said the group’s revenue and profit were mainly derived from the progressive recognition of the group’s ongoing development projects, namely South Link Lifestyle Apartments and Aster Green Residence.

“The lower revenue and gross profit were mainly due to higher progressive recognition in the corresponding quarter of the previous financial year in respect of United Point Residence and Sentul Point Suite Apartment, and higher sales of stocks,” it said.

Meanwhile, it said the higher profit was mainly due to the fair value adjustment on investment properties of RM114 million with the revaluation of UOA Corporate Tower.

It said the total new property sales for the period ended Sept 30, 2020 was RM234.22 million and the property sales were mainly derived from Aster Green Residence, The Goodwood Residence, United Point Residence and Sentul Point.

On prospects, UOA said the group maintains its focus on development at targeted geographical locations while exploring for strategic development lands that meet the group’s objective. — Bernama




Source: Malay Mail

AirAsia needs more than one round of fund raising, says CGS-CIMB Securities

CGS-CIMB Securities also expects a right issue would likely take place in the next three months as without the equity issue, AAGB might fall into a net liability position by end financial year 2021. — Reuters pic
CGS-CIMB Securities also expects a right issue would likely take place in the next three months as without the equity issue, AAGB might fall into a net liability position by end financial year 2021. — Reuters pic
KUALA LUMPUR, Nov 25 — CGS-CIMB Securities Sdn Bhd expects AirAsia Group Bhd’s (AAGB) one round of fund raising exercise will unlikely be enough, and the low-cost airline may need to raise more funds to keep its business afloat.

In a note today, the research firm also said AAGB is living on the edge as it has no support from the government.

Based on current assumptions on traffic recovery, the RM2.4 billion fund from the capital raising exercise should be just barely enough for the group, but is cutting it very thin, it said.

“The high level of infections in Malaysia, Indonesia and the Philippines is worrisome and could postpone the recovery.

“Also, AirAsia Indonesia (IAA) and AirAsia Philippines (PAA) are left to their own devices, but if they fail to raise new debt, AAGB will likely have to pump in cash,” it said.

CGS-CIMB Securities also projected the fourth quarter would be tough for the airline group in view of its low cash position.

AAGB’s third quarter 2020 (3Q20) core net loss of RM1.4 billion was more than double the RM600 million loss in the same quarter last year and only marginally lower than the RM1.5 billion loss in the second quarter of 2020 despite the partial domestic travel recovery seen for Malaysia AirAsia (MAA), IAA, PAA and AirAsia Thailand (TAA).

Although AAGB reported RM2.6 billion in net loss for a cumulative nine months of 2020 (9M20), its cash position declined by “only” RM2 billion, by deferring payments to its suppliers and aircraft lessors.

Aircraft lease instalments and debt principal repayments totalled RM761 million in the first quarter, but only RM300 million was paid in the next two quarters.

AAGB, which also raised cash by selling tickets and its spare engines in 3Q20, saw its cash balance fell from RM2.6 billion as at December 31, 2019 to RM618 million at end-September 2020, which could last less than three months at the actual burn rate of RM222 million per month during 9M20.

“The reimposition of the conditional movement control order from October to November in Malaysia has curtailed domestic travel again, coinciding with the progressive resumption of lease instalments, making the fourth quarter of 2020 tougher than expected,” it added.

CGS-CIMB Securities also expects a right issue would likely take place in the next three months as without the equity issue, AAGB might fall into a net liability position by end financial year 2021.

As at 3.13pm, shares of AAGB rose two sen to 73 sen. — Bernama




Source: Malay Mail