An investor monitors the stock prices in the gallery of the RHB Investment Bank Bhd headquarters in Kuala Lumpur March 17, 2020. ― Picture by Hari Anggara
KUALA LUMPUR, Dec 31 — Bursa Malaysia ended the year 2020 broadly lower in line with most regional markets, with the key index shedding 1.05 per cent weighed down by selling in heavyweights led by Sime Daby Plantation and IHH Healthcare.
The benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) fell 17.20 points to finish at 1,627.21, its intraday low, after hitting a high of 1,644.26 earlier.
The index opened 0.15 of-a-point easier at 1,644.26, compared to Wednesday’s close of 1,644.41.
Bursa Malaysia will be closed tomorrow for the New Year.
The overall market breadth was negative with losers outpacing gainers 620 to 474, while 501 counters were unchanged, 526 untraded and 56 others suspended.
Total volume decreased to 5.51 billion units worth RM3.11 billion from Wednesday’s 7.82 billion units worth RM3.65 billion.
Sime Darby Plantation slipped 18 sen to RM4.99, IHH Healthcare lost 21 sen to RM5.50, Press Metal declined 11 sen to RM8.39, and Petronas Chemicals slid seven sen to RM7.43.
Of the other heavyweights, Top Glove was flat at RM6.12, Maybank dipped 11 sen to RM8.46, Public Bank and TNB went down 10 sen each to RM20.60 and RM10.42, respectively, while CIMB decreased eight sen to RM4.30 and Hartalega was six sen easier at RM12.14.
Among the actives, Technodex rose two sen to 31.5 sen, Marine & General inched up half-a-sen to 18.5 sen, while AT Systematization, Iris Corp, MLabs Systems, Borneo Oil and XOX were all flat at 18.5 sen, 43.5 sen, eight sen, four sen, and 11 sen respectively.
Solid Automotive eased 1.5 sen to 23 sen.
On the index board, the FBM 70 shrank 105.92 points to 15,142.84, the FBM Emas Index fell 107.25 points to 11,761.93, the FBMT 100 Index declined 111.18 points to 11,501.99, and the FBM Emas Shariah Index slid 116 points to 13,159.15.
The Industrial Products and Services Index went down 0.81 of-a-point to 178.11, the Plantation Index decreased 109.97 points to 7,302.84 and the Financial Services Index slipped 160.04 points to 15,316.55. — Bernama
HONG KONG: Chinese regulators are reviewing equity investments held by Ant Group Co Ltd in dozens of companies, three people with knowledge of the matter said, intensifying a crackdown on billionaire Jack Ma's financial technology empire.
Regulators are considering whether to instruct Ant to divest some of its investments, mainly in technology and fintech start-ups, if they violate any rules such as creating unfair competition in the market, one of the three sources said.
Any enforced divestments would deprive the group of potentially lucrative investments, compounding existing regulatory pressure to revamp its business structure and put up more capital for its key consumer lending business.
Divestments would also significantly scale back Ant's influence over the country's fast-growing fintech industry, where it has sought synergies with its existing businesses via several investments in recent years.
China has been cracking down on anticompetitive behaviour in the country's booming internet sector. Regulators last week announced an antitrust investigation into Ant's sister firm Alibaba and ordered Ant to shake up its lending and other consumer finance operations.
A spokesman for Ant Group declined to comment after Reuters emailed the company questions about the regulatory probe.
The China Securities Regulatory Commission (CSRC), which two of the sources said was leading the probe, did not respond to a Reuters request for comment.
Regulators are looking into investments made by Ant over the past few years, the rationale behind such deals and their synergies, two of the three sources said. All three people declined to be named as they were not authorized to speak to the media.
Regulators want Ant, whose businesses include payment processing, consumer lending and insurance products distribution, to divest some of its investments unless they are indispensable to its business, according to one of the sources.
Ant has already started to tap prospective buyers including private equity firms for its holdings in more than a dozen of portfolio firms, including domestic bike-sharing start-up Hellobike, another of the sources said.
Hellobike declined to comment.
A fourth person with knowledge of the matter said Ant had not yet received any guidance from regulators about disposing its equity investments.
Chinese regulators have set about reining in Ma's financial and e-commerce empires since he publicly criticised the country's regulatory system in October for stifling innovation. That set off a chain of events that ultimately torpedoed Ant's $37 billion IPO, which would have been the world's largest, in November.
ANT UNDER PRESSURE
Ant traces its beginnings to Alipay, which was launched in 2004 as a payment service, and is 33% owned by Alibaba.
The fintech titan founded and controlled by Ma has made a total of 81 equity investments, including in a Chinese state bank and an Indian digital payment processor, worth $21.6 billion, according to Refinitiv data.
More than half its investments - 55 deals worth $17.4 billion - have been made at home, including the Postal Savings Bank Of China, the country's biggest bank by number of branches, and top ride-hailing firm Didi Chuxing.
Ant is considering folding most of its financial businesses, including consumer lending, into a holding company that would be tightly regulated like traditional financial firms, Reuters reported on Tuesday.
Reuters reported in early December that Ant was considering selling its 30% stake in Indian digital payment processor Paytm amid tensions between the two Asian neighbors and a toughening competitive landscape.
Paytm and Ant had at that time said the information was incorrect. Ant referred Reuters to its previous statement while Paytm did not immediately respond to a request for comment on Thursday. - Reuters
KUALA LUMPUR: The oil and gas industry outlook in 2021 is expected to remain challenging due to the unprecedented demand destruction from the COVID-19 pandemic which has made a profound impact on both the domestic and global markets, said Petroliam Nasional Bhd (Petronas).
The national oil company has maintained a prudent view despite the collapse in oil prices and will continue to accelerate the transition towards a low-carbon economy, spurring policy intervention and global collaborations across industries.
“Although gas remains a crucial and cleaner source of fuel, diversification into renewable energy is imperative.
“Petronas has taken measured steps that demonstrate our stronger commitment to sustainability as we take cognisance of the acceleration of the global energy transition, heightened by stakeholder expectations and the vast opportunities,” said president and group chief executive officer Tengku Muhammad Taufik in a statement.
Building on Petronas’ desire to drive a fundamental shift in the way energy is produced, he said the company announced its aspiration to achieve net zero carbon emissions by 2050 as part of its holistic approach to
sustainability that balances environment, social and governance (ESG) considerations across the value chain.
Petronas today released its annual Petronas Activity Outlook (PAO) for 2021-2023 to share the company’s insights into industry trends, demand outlook and the upcoming activities of Petronas’ Upstream, Gas and New Energy and Downstream businesses.
Meanwhile, vice president of group procurement Frieda Amat said that the current crisis presents the company with the need to remain resilient and agile, taking decisive measures in weathering the market volatility and energy transition.
“It is imperative for industry players to adapt and embrace the new normal. Working with tighter margins require industry players to shift the norms, embrace digitalisation, technology advancement, and creative partnership to unlock opportunities.
“Petronas foresees a steady outlook for production support, drilling, fabrication and installation of wellhead platforms and subsea facilities, as well as decommissioning activities. However, a modest outlook is expected for fabrication and installation of central processing platforms and project support vessels,” she said.
In the report, Petronas also shares insights that will have a positive impact on the industry, which include pushing further the increase in use of natural gas as a cleaner source of fuel in the energy transition while building capabilities in renewable energy.
The report also highlighted that the company is maturing the technologies to support its sustainability aspirations of achieving net zero carbon emissions by 2050. - Bernama
Homegrown label Transporter based in Petaling Jaya is the latest company to enter the e-hailing and delivery market in Malaysia. — Picture courtesy of Transporter
KUALA LUMPUR, Dec 31 — Homegrown label Transporter headquartered in Petaling Jaya, Selangor is the latest company to enter the e-hailing and delivery market in Malaysia and touts iself the safest, most affordable,and most hygienic service available.
The company is developed and operated by CabCar Sdn Bhd and touts itself the safest, most affordable,and most hygienic e-hailing, food delivery and dispatch service in the market
The company obtained its licence from the Land Public Transport Agency last month and rolled out today.
Transporter aims to create at least 1,000 jobs for now and offers to train and “reskill” those that join its company.
For now, the company is seeking to partner food and beverage outlets as well as those in the aviation sector. For now, it is conducting a promotional campaign.
“Transporter believes in having a heart. It’s not all about the money. A heart for each other. A heart to make an impact. Try us out,” Ballagee Chandra, the company’s co-founder and its chief transport officer, said in a statement today.
Its other co-founder and operations director Nanda Gopal said the company will be channelling a portion of its income into a fund called Tabing Transporter, or T2 for short, to help educate, equip and empower certain target communities.
The Transporter app is available both on Android and iOS devices and aims to provide rides, food delivery and on demand services in a convenient, hassle free and affordable manner.
At lunch break, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) fell 9.04 points to 1,635.37, after moving between 1,633.30 and 1,644.26 throughout the session. ― Picture by Hari Anggara
KUALA LUMPUR, Dec 31 ― Bursa Malaysia continued its downtrend to end the morning trading session lower, as its key index was dragged down by persistent selling activities in heavyweights, led by Sime Darby Plantation and Press Metal Aluminium.
At lunch break, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) fell 9.04 points to 1,635.37, after moving between 1,633.30 and 1,644.26 throughout the session.
The index opened 0.15 of-a-point easier at 1,644.26, compared to Wednesday’s close of 1,644.41.
On the broader market, losers outpaced gainers 560 to 402, while 484 counters were unchanged, 675 untraded and 56 others suspended.
Volume stood at 2.98 billion units worth RM1.49 billion.
Sime Darby Plantation fell 17 sen or 3.29 per cent to RM5 after the United States Customs and Border Protection imposed a ban on its products over allegations of forced labour in its production process.
Meanwhile, Press Metal slipped 16 sen to RM8.34, Top Glove eased seven sen to RM6.05, while Maybank, IHH Healthcare and CIMB all shed five sen to RM8.52, RM5.66 and RM4.33, respectively.
Public Bank advanced eight sen to RM20.78, Petronas Gas was flat at RM17.34, TNB slid two sen to RM10.50 and Hartalega declined six sen to RM12.14.
Among the actives, MLabs edged up half-a-sen to 8.5 sen, Marina & General gained one sen to 19 sen, Technodex added 2.5 sen to 32 sen, Iris Corp, XOX and AT Systematization were flat at 43.5 sen, 11 sen and 18.5 sen, respectively, while Solid Automotive trimmed one sen to 23.5 sen.
On the index board, the FBM Emas Index was 54.22 points easier at 11,814.96, the FBMT 100 Index went down 57.12 points to 11,556.05, the FBM Emas Shariah Index reduced 71.27 points to 13,203.88, the FBM 70 weakened 48.84 points to 15,199.92, while the FBM ACE strengthened 94.46 points to 10,729.95.
The Industrial Products and Services Index inched down 0.74 of-a-point to 178.18, the Plantation Index decreased 76.09 points to 7,336.72, while the Financial Services Index shed 62.61 points to 15,413.98. ― Bernama
KUALA LUMPUR: Ukraine has maintained the momentum of its bilateral trade with Malaysia throughout 2020 despite the global economic slowdown and restrictions imposed in view of COVID-19, says Ukraine Ambassador to Malaysia, Olexander Nechytaylo.
He said the bilateral trade between Ukraine and Malaysia in 2020 saw an increase despite a drop in the global economic development and disruption in supply chain.
“Ukraine’s bilateral trade with other countries in (Asean) region generally dropped (due to COVID-19), but we maintain the momentum with Malaysia.
“In the first nine months of 2020, bilateral trade between two countries almost reached US$310 million (RM1.251 billion), showing increase of five per cent compared to the corresponding period in 2019,” he told Bernama in an exclusive interview at Wisma Bernama, recently.
Nechytaylo said in 2020, Ukraine increased its export of wheat to Malaysia by 200 per cent besides being the second biggest supplier of grain crops to Malaysia.
He said Ukraine also remains main supplier of sunflower oil where 47 per cent of all sunflower oil at the Malaysian market is of Ukraine origin.
“To balance the bilateral trade, we also increased by 50 per cent our import of palm oil from Malaysia comparing to the same period of last year (2019),” he said, adding Ukraine currently is the fourth largest importer of palm oil from Malaysia in Europe.
According to the State Statistics Service of Ukraine, Malaysia remains Ukraine’s third largest trading partner within Asean.
“(We are) seeing big potential for strengthening bilateral ties with Malaysia, we will continue to expand areas of cooperation,” he added.
Commenting further, Nechytaylo said in 2020, Ukraine opened a consulate in Georgetown, Penang, headed by the Honorary consul – an important step to further boost trade, investment and cultural cooperation.
“Penang port is one of the major gateways for Ukrainian goods to enter Malaysia. Moreover, Penang has the second largest number of Ukrainians living in Malaysia after Kuala Lumpur,” he said.
The envoy said next year would be an important year for Ukraine as the country will celebrate the 30th anniversary of Independence on 24th August 2021 besides hosting many important events.
“We hope that the Joint Trade Committee meeting between Malaysia and Ukraine chaired by Ministry of International Trade and Industry (MITI) and Ukraine’s Ministry of Economic Development and Trade will take place next year.
“And it will give a fresh jumpstart for even more fruitful and active trade relations between both countries,” he said. - Bernama
An employee works on the production line of a tyre factory under Tianjin Wanda Tyre Group, which exports its products to countries such as US and Japan, in Xingtai, Hebei province, China. — Reuters pic
BEIJING, Dec 31 ― China's factory activity expanded in December as hot export demand fueled a recovery in the world's second-largest economy from the coronavirus slump, although higher labour and transport costs slowed the pace of growth.
The official manufacturing Purchasing Manager's Index (PMI) fell to 51.9 in December from 52.1 in November, data from the National Bureau of Statistics (NBS) showed today.
The index remained above the 50-point mark that separates growth from contraction but was a tad below the 52.0 in a Reuters' poll of analysts.
China's vast industrial sector has staged an impressive recovery from the coronavirus shock thanks to surprisingly strong exports. The economy is expected to expand around 2 per cent for the full year ― the weakest pace in over three decades but much stronger than other major economies still struggling to contain infections.
However, tougher coronavirus control measures in many of its key trading partners in the west and recent domestic infections could dent industrial demand, weighing on the recovery.
The official PMI, which largely focuses on big and state-owned firms, showed the sub-index for new export orders stood at 51.3 in December, easing from 51.5 a month earlier.
But an index for factory prices rose strongly, reflecting solid overseas demand as well as increased shipping costs, even though some export markets are under lockdown, said Iris Pang, chief economist for Greater China at ING.
Economic indicators ranging from trade to producer prices all suggest a further pickup in the industrial sector.
A sub-index for small business activity stood at 48.8 in December, sharply down from November's 50.1 and returning to contraction.
Zhao Qinghe, an official at the NBS, said in a statement accompanying the data release that small businesses were pressured by higher labour, raw material and distribution costs.
"Small manufacturers also suffer from the problem of hiring labour as the service sector in China is competing for workers," said Pang.
A sub-index for employment in the official PMI stood at 49.6 in December, slightly up from November's 49.5.
China has also seen strong improvement in retail sales driven by firm demand for autos and communication equipment.
In the services sector, activity expanded for the 10th straight month, albeit at a somewhat slower clip. An indicator for construction activity rose at a faster pace.
Ahead of China's peak travel season, the capital Beijing imposed lockdowns on some Covid-infected areas, the first since the last coronavirus outbreak in the months of June and July. ― Reuters
SEOUL: South Korea's central bank chief said on Thursday that monetary policy will remain accommodative for some time, given the high uncertainties stemming from the coronavirus pandemic, but added that a buildup of financial imbalances is a worry.
Bank of Korea Governor Lee Ju-yeol also said policies should stay expansionary to support an economic recovery, while a targeted approach to help those vulnerable to COVID-19 should be strengthened.
"Monetary policy needs to stay accommodative until a stable recovery in our economy is seen, as there are high uncertainties to the growth path, while inflation is also expected to fall below the target level for a while," Lee said in a New Year's message.
Lee said global resurgences in COVID-19 cases, the discovery of virus variants and the possibilities of a reignition in global trade disputes are risks to the export-reliant economy, in addition to demographic and labour challenges.
In future, the bank also should consider employment as an important factor when assessing monetary policy, Lee added.
South Korea's economy has bounced back as exports recover, with analysts expecting a mild contraction for the year as a whole, but a sharp rise in new COVID-19 infections is clouding the recovery trajectory. The government unveiled a fresh 9.3 trillion won ($8.49 billion) package on Tuesday to support small businesses.
The bank has cut the key policy rate by a total 75 basis points to a record low of 0.50% this year, injected liquidity into the market and extended loans via a special purpose vehicle to cushion the impact of the pandemic on Asia's fourth-largest economy.
Lee pledged to take measures to stabilise financial markets if volatility increases, while expressing concerns over surging household debt, which could deepen financial imbalances. - Reuters
At 11.05am, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) slipped 10.29 points to 1,634.12 after opening at 1,644.26. ― Picture by Hari Anggara
KUALA LUMPUR, Dec 31 ― Bursa Malaysia remained lower at mid-morning today, as its key index fell 0.63 per cent, dragged down by heavyweights Sime Darby Plantations and Press Metal Aluminium.
At 11.05am, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) slipped 10.29 points to 1,634.12 after opening at 1,644.26.
Market breadth was easier as losers outpaced gainers 520 to 371, while 463 counters were unchanged, 767 untraded and 56 others suspended.
Volume stood at 2.62 billion units worth RM1.09 billion.
Among the heavyweights, Sime Darby Plantation lost 15 sen to RM5.02, Press Metal Aluminium decreased 16 sen to RM8.34, CIMB and Maxis discounted five sen each to RM4.33 and RM5.07, respectively, while Top Glove went down six sen to RM6.06.
Public Bank was flat at RM20.70, Maybank shed three sen to RM8.54, and TNB was two sen easier to RM10.50.
As for the actives, Marine & General rose one sen to 19 sen, MLabs, XOX and Tiger Synergy were flat at eight sen, 11 sen and 12 sen, respectively, while Solid Automotive and Iris Corp both inched down half-a-sen to 24 sen and 43 sen, respectively.
On the index board, the FBM Emas Index depreciated 56.31 points to 11,812.87, the FBM Emas Shariah Index decreased 68.39 points to 13,206.76, the FBMT 100 Index was 59.5 points lower at 11,553.67, the FBM 70 went down 27.09 points to 15,221.67, while the FBM ACE expanded 23.3 points to 10,658.79.
Meanwhile, the Plantation Index slid 76.04 points to 7,336.77, the Financial Services Index discounted 63.39 points to 15,413.2, and the Industrial Products and Services Index inched down 0.73 of-a-point to 178.19. ― Bernama
LONDON/BRUSSELS: British lawmakers approved Prime Minister Boris Johnson's post-Brexit trade deal with the European Union on Wednesday, as both sides looked to begin a new chapter of relations just days before their divorce becomes a reality.
Britain and the European Union signed the deal on Wednesday and the British parliament will finalise its implementation, ending over four years of negotiation and safeguarding nearly a $1 trillion of annual trade.
Both sides said it was a chance to begin a new chapter in a relationship forged as Europe rebuilt after World War Two, but which has often seen Britain as a reluctant participant in ever-tighter political and economic integration.
Johnson, in a specially convened sitting of parliament, said he hoped to work "hand in glove" with the EU when its interests aligned, using Britain's new-found sovereignty to reshape the British economy.
"Brexit is not an end but a beginning," Johnson said. "The responsibility now rests with all of us to make the best use of the powers that we regain, the tools that we've taken back into our hands."
Parliament's lower house voted 521 to 73 in favour of the deal.
Britain's Queen Elizabeth gave final approval to the legislation which enabled the government to implement and ratify the UK's trade deal with the European Union. The so-called Royal Assent was effectively a rubber-stamp for the law which passed through parliament.
"House of Lords is notified of Royal Assent to the European Union (Future Relationship) Act," the House of Lords said in a tweet after midnight.
The deal has been criticised on several fronts since it was agreed on Dec. 24. The opposition Labour Party say it is too thin and doesn't protect trade in services, fishermen rage that Johnson has sold out their interests, and Northern Ireland's status remains subject to much uncertainty.
Nevertheless, Johnson has won the support of his party's hardline Brexiteers - delivering a break with the EU far more radical than many imagined when Britain shocked the world in 2016 by voting to leave.
Long-time eurosceptic lawmaker Bill Cash said Johnson had saved Britain's democracy from four decades of "subjugation" to Brussels: "Like Alexander the Great, Boris has cut the Gordian knot."
Johnson said he hoped to end the "old, tired, vexed question of Britain's political relations with Europe" and instead become "the best friend and ally the EU could have."
NEW CHAPTER
Earlier, against a backdrop of EU flags, top EU officials signed the treaties struck on Dec. 24 to preserve Britain's tariff- and quota-free access to the bloc's 450 million consumers.
"It is of the utmost importance for the European Union and the United Kingdom to look forward, in view of opening a new chapter in their relations," the EU said in a statement.
A British Royal Air Force brought the documents, which bear the EU's golden stars on a blue leather folder, to Johnson who signed them sitting at a desk in front of his own backdrop of British flags.
"Have I read it? The answer is yes," Johnson quipped, holding a copy of the full 2,000-page document aloft.
Britain formally left the EU nearly a year ago and the new partnership agreement will regulate ties from Jan. 1 on everything from trade to transport, energy links and fishing.
After both sides have signed, the deal will be in place until the end of February, pending final approval by the European Parliament to make it permanent. - Reuters
BEIJING: China's factory activity expanded in December but at a slower pace, as the country leads a pack of major economies emerging from the coronavirus slump.
The official manufacturing Purchasing Manager's Index (PMI) fell to 51.9 in December from 52.1 in November, data from the National Bureau of Statistics (NBS) showed on Thursday, remaining above the 50-point mark that separates growth from contraction.
Analysts had expected it to fall slightly to 52.0.
China's vast industrial sector has staged an impressive recovery from the coronavirus shock thanks to the surprisingly strong exports.
But tougher coronavirus control measures in many of its key trading partners in the west and recent domestic infections could dent industrial demand, weighing on the recovery.
The official PMI, which largely focuses on big and state-owned firms, showed the sub-index for new export orders stood at 51.3 in December, easing from 51.5 a month earlier.
Economic indicators ranging from trade to producer prices all suggest a further pick up in the industrial sector.
A sub-index for small business activity stood at 48.8 in December, sharply down from November's 50.1 and returning to contractionary territory.
A sub-index for employment in the official PMI stood at 49.6 in December, slightly up from November's 49.5.
The Chinese economy is expected to expand around 2% for the full year - the weakest in over three decades but still much stronger than other major economies struggling to contain new infections.
China has seen a strong improvement in retail sales driven by firm demand for autos and communication equipment.
In the services sector, activity expanded for the 10th straight month, albeit at a somewhat slower clip.
Ahead of China's peak travel season, the capital Beijing imposed lockdowns on some COVID-infected areas, the first since the last coronavirus outbreak in the months of June and July. - Reuters
PETALING JAYA: The six-month extension to the 100% sales tax exemption on locally assembled or completely knocked-down (CKD) cars and 50% on imported or completely built-up (CBU) cars to June 30, 2021 under the short-term national economic recovery plan (Penjana) is expected to augur well for the sector.
Kenanga Research opined that this positive surprise for automakers and consumers should prompt a buying frenzy over the next few months and relieve the backlogged bookings.
“The sales tax exemption has resulted in reduced prices for passenger cars, although pick-up trucks are not eligible as they are classified as commercial vehicles,” it said in a report.
The research house envisaged a stronger recovery for the sector in 2021, with a total industry volume (TIV) target of 585,000 units, a 17% increase year on year.
It believes the new volume launches in the final quarter of 2020 – Proton X50, Honda City and Nissan Almera – could help improve consumer sentiment with back-logged booking to overflow into 2021 and boosted by the exemption extension, along with seasonal promotions and new launches in second-half 2021 (H2’21).
“Overall, the 2021 could potentially be a better year supported by the new launches in 2021 (e.g. Perodua D55L) along with better incentive programme under National Automotive Policy 2020, positive impact from the overnight policy rate cut and pre-emptive measures to assist those whom might be financially challenged by Covid-19 impact,” said Kenanga Research.
For the coming year, it holds the view that an expected global growth recovery and the impact of the large fiscal stimulus on the domestic economy would result in a projected growth rebound in gross domestic product (GDP) to 6.1% compared with GDP growth forecast of -5.1% in 2020.
Following the earnings upgrade for the SST-exempted sales extension, the research house have upgraded the sector’s call to overweight from neutral.
Similarly, TA Research believes the extension will provide a boost in car sales next year, as the initial sales exemption period from July to November saw a 14.5% growth (year on year). With that, the research house has increased its TIV projection by 5.9% to 627,000 units.
Accordingly, it adjusted earnings of companies under its coverage higher by 2.8% to 15.7% after factoring in higher car sales assumptions. This has raised 2021 sector earnings by 5.8%.
Consequently, TA Research has upgraded its call from neutral to overweight for the automotive sector.
“Coupled with other positive drivers such as economic recovery and the accommodative interest rate environment, the automotive industry is set to recover from Covid-19 next year,” it said.
Aside from the positive developments arising from the tax exemptions, PublicInvest Research pointed out the loan approval rate has shown improvement in the second half of this year and it believes more relaxed measures from the banks could help to partially spur sales volume demand.
For 2021, it forecast TIV to increase by 6% to 500,000 units, supported by new and facelifted models, coupled with low financing rates.
“Nevertheless, we expect consumer sentiment to remain weak due to an uncertain economic environment that may curb spending on big-ticket items, hence retain our neutral stance on the sector,” said the research house.
It also believes that valuations on auto stocks have already priced in the positive development, as the sector is currently trading at 20x forward PER, compared to 5-years average PER of 14x. “Hence, valuations appear unattractive, in our view.”
As at 9.56am, Sime Darby Plantation lost 11 sen to RM5.06, with 70,400 shares traded. — Picture by Miera Zulyana
KUALA LUMPUR, Dec 31 ― Sime Darby Plantation Bhd’s (SDP) shares fell 2.13 per cent in early trade today due to the ban imposed by the United States (US) Customs and Border Protection (CBP) on its products over allegations of forced labour in its production process.
As at 9.56am, Sime Darby Plantation lost 11 sen to RM5.06, with 70,400 shares traded.
The US CBP had issued a “Withhold Release Order” (WRO) on palm oil and products containing palm oil produced by SDP and its subsidiaries, joint ventures, and affiliated entities, allowing it to detain shipments based on suspicion of forced labour involvement.
In a statement yesterday, CBP said the issuance of the WRO against SDP was based on information that reasonably indicated the presence of all 11 of the International Labour Organisation’s forced labour indicators in SDP’s production process.
In September, the CBP had issued a separate WRO against another Malaysian palm oil producer, FGV Holdings Bhd. ― Bernama
At 9.00am, the local currency improved to 4.0260/0310 versus the greenback, from yesterday's close of 4.0350/0390. — Picture by Hari Anggara
KUALA LUMPUR, Dec 31 ― The ringgit has remained on an uptrend this morning, opening stronger versus the US dollar as Covid-19 vaccine optimism wins the sentiments’ race against the negative pandemic developments, said Axi chief global market strategist Stephen Innes.
At 9.00am, the local currency improved to 4.0260/0310 versus the greenback, from yesterday's close of 4.0350/0390.
Innes said the quick roll-out of the vaccine in the United Kingdom (UK) is giving hope that the issues on the logistical distribution of the vaccine throughout the rest of the world will be easily overcome, resulting in a sooner-than-expected economic boom.
“The ringgit is a huge beneficiary as the stars around oil, exports, and travel are aligned with the vaccine optimism, and this should clear the runway for the ringgit’s strong headstart for 2021.
“The year-end activities are expected to dominate today, so currency trading will turn more transactional rather than speculative,” he told Bernama.
The firmer ringgit performance was also supported by higher oil prices. As of the time of writing, benchmark Brent crude increased by 0.5 per cent to US$51.34 per barrel.
Meanwhile, the ringgit was traded mostly easier against other major currencies.
It decreased against the Singapore dollar to 3.0447/0492 from 3.0441/0481 on Wednesday and was lower against the British pound to 5.4931/5011 from 5.4775/4846 previously.
However, the local note appreciated versus the euro to 4.9540/9618 from 4.9497/9559 yesterday and rose slightly against the Japanese yen to 3.9034/9087 from 3.9084/9126 previously. ― Bernama
At 9.10am, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) fell 5.07 points to 1,639.34 after opening 0.15 of-a-point easier at 1,644.26, compared to yesterday’s close of 1,644.41. ― Picture by Hari Anggara
KUALA LUMPUR, Dec 31 ― Bursa Malaysia entered the final day of 2020 lower due to the lack of buying momentum.
At 9.10am, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) fell 5.07 points to 1,639.34 after opening 0.15 of-a-point easier at 1,644.26, compared to yesterday’s close of 1,644.41.
Market breadth was negative with losers edging past gainers 244 to 218, while 368 counters were unchanged, 1,291 untraded and 56 others suspended.
Volume stood at 409.42 million units worth RM190.01 million.
In a note today, Malacca Securities Sdn Bhd expects trading interest on the local exchange to be positively skewed, in line with the United States stock markets which had closed marginally higher, coupled with the year-end window-dressing activities.
“Meanwhile, we believe Brent oil price may trade firmer on the back of greater-than-expected oil inventory draw of 6.1 million barrels for the week ended Dec 25.
“Market players may focus on recovery-themed stocks, as more countries allow vaccines for emergency use,” it said in a note today.
Of the heavyweights, Supermax gained three sen to RM6.01, Telekom Malaysia added one sen to RM5.44, while TNB, Petronas Chemicals and IHH Healthcare were flat at RM10.52, RM7.50 and RM5.71, respectively.
Meanwhile, Maybank fell four sen to RM8.53, both Public Bank and Hartalega declined six sen to RM20.64 and RM12.14, respectively, Top Glove and CIMB eased three sen to RM6.09 and RM4.35, respectively, while Maxis shed two sen to RM5.10.
Of the actives, Solid Automotive added one sen to 25.5 sen, K-One Technology increased 4.5 sen to 38.5 sen, BCM Alliance went up 1.5 sen to 30.5 sen, AT Systematization and Green Ocean were flat at 18.5 sen and 9.5 sen, respectively, while Techna-X inched down half-a-sen to 15.5 sen and Ecobuilt fell two sen to 26.5 sen.
On the index board, the FBM Emas Shariah Index slipped 25.39 points to 13,249.76, the FBM ACE advanced 28.69 points to 10,664.18, the FBM Emas Index went down 27.22 points to 11,841.96, the FBMT 100 Index shrunk 29.79 points to 11,583.38, and the FBM 70 depreciated 15.95 points to 15,232.81.
Meanwhile, the Industrial Products and Services Index slipped 0.35 of-a-point to 178.57, the Financial Services Index discounted 46.21 points to 15,430.38, and the Plantation Index shed 38.09 points to 7,374.72. ― Bernama
PETALING JAYA: Cloud services provider AVM Cloud Sdn Bhd sees growth opportunities in managing a larger load of users and data as well as maintaining reliable uptime and strong security measures amid and post-Covid pandemic.
AVM Cloud chief technology officer Kenny Lim (pix) said Covid-19 has propelled a new wave of business models that previously only relied on the traditional brick-and-mortar model. Now users expect business and even government bodies to have presence online and allow for transactions and agreements to be conducted digitally, hence businesses are forced to accelerate or enhance their digital transformation.
“For businesses to enjoy a successful digital transformation experience, they need to invest in the right technology solutions that enable them to support remote workers effectively, plan for data and storage capacity optimally, as well as ensure that all business-critical applications are available to remote workers and performing exceptionally,” he told SunBiz, adding that AVM Cloud and its partner NetApp can help organisations increase their IT capacity to manage the demands of a remote workforce while optimising their infrastructure and protecting their data.
Lim said based on its interactions with partners and customers, there is one clear change in terms of the current state of the industry, where businesses now have to reprioritise what projects should be put forward to stretch budgets further.
“We have also shifted our priorities to build product offerings that meet the demand of businesses under the new normal and provide solutions that help the customer to accelerate their digital transformation journey. We are shifting our priority to build services that can help business lower their cost of operation and offering competitively priced products.”
Lim said the Covid-19 situation made the management reassess its business strategy and review its business plan target.
“The impact on our business was minimal after we implemented some business recovery measures to ensure that customers continue to receive the same level of service we bring with our partners. However, the situation has affected some industries such as travel and as such our customers in those industries have postponed or put some plans on hold.”
Back in March before the movement control order was announced, AVM Cloud managed to quickly develop and introduce multiple business continuity planning solutions to customers who were preparing for the situation.
“One such example is the virtual workspace, which we have seen benefits employees who were working from home. We also saw an increase in cloud demand due to customers relying more on online ordering.”
AVM Cloud has been involved in the cloud business over the past 10 years, and its core business includes anything from public clouds offering a multi-tenanted Virtual Private Cloud (VPC)
service, a Cloud-in-a-Box which virtually co-located the VPC on any data centre or on-premises facility with consistent hybrid experience, and AVM Cloud Fusion for customers who want a hybrid backup and disaster recovery solution from their data centre to cloud.
“Our complete offering and experience with the requirements of the corporate customer enables us to provide comprehensive service beyond infra-as-a-service. We now have over 100 cloud service offerings with varying features from simple analytics to artificial intelligence/machine learning platforms,“ said Lim.
These services are provided via a monthly subscription. Based on the needs and complexity of the system, the monthly cost can range from RM100 up to RM1 million. In some cases, the solutions are scalable up or down which is a post-Covid-19 essential as businesses are more careful about utilising their budget.
Meanwhile, NetApp country manager for Malaysia & Brunei Azrin Abd Shukor observed a large shift in the attitude towards working from home by Malaysian businesses. He said organisations are more receptive towards it, now that they can see that it is not disruptive to the business and employees are still productive.
“In fact, its customers have been investing a lot more into remote working solutions as they have seen their effectiveness, both in helping them drive business continuity during the pandemic and ensuring that they are better prepared for future crises,” he said, adding that the company helps organisations increase their IT capacity to manage the demands of a remote workforce while optimising their infrastructure and protecting their data.
E-Mini S&P futures rose 0.11 per cent to 3,728.5, while MSCI's gauge of Asia-Pacific shares excluding Japan was little changed at 661.76, a hair's breath from its record high of 661.80. — Reuters pic
NEW YORK, Dec 31 ― Asian shares are set to end a tumultuous 2020 by hovering near record highs today while riskier currencies cruised near 2-1/2-year peaks, buoyed by hopes that Covid-19 vaccine rollouts will help the world beat the pandemic.
The upbeat mood, reflected in overnight gains on Wall Street, drubbed the “safe-haven” dollar and drove currencies such as the euro, sterling, the Australian dollar and the New Zealand dollar overnight to highs not seen in more than 2-1/2 years.
E-Mini S&P futures rose 0.11 per cent to 3,728.5, while MSCI's gauge of Asia-Pacific shares excluding Japan was little changed at 661.76, a hair's breath from its record high of 661.80.
For the year, the MSCI index is up nearly 20 per cent, outpacing a 15.5 per cent gain in the US S&P 500.
Australian shares lost 0.23 per cent while the Japanese stock market is shut today.
Investors looking forward to a brighter 2021 will be eyeing China's official manufacturing Purchasing Manager's Index for December, due on Thursday at 0100 GMT.
Analysts expect the index to show China's factory sector growing at a solid pace in December as the world's second-largest economy steadily rebounds from the coronavirus crisis.
Still, some analysts warned that this year's heady gains in global stock markets could mean a lot less room for further appreciation in 2021.
“We'd say 80 per cent of all the baseline good news expected in 2021 is already incorporated,” analysts at DataTrek Research said in a note, adding that some “real surprises” would be needed next year for the US stock market to rise another 10 per cent.
For now, however, healthy risk appetites kept investors from the US dollar.
The struggling dollar dropped 0.46 per cent to 89.59 against a basket of currencies, plumbing a low not seen since April 2018.
A listless dollar helped the euro stand firm at a 32-month high of US$1.2298 (RM4.95). Sterling was also steady US$1.3611, a level last seen in May 2018. The Australian dollar and New Zealand dollar also held their ground at their respective 32-month highs of US$0.7665 and US$0.7215.
A battered dollar also supported gold, with bullion prices up a touch at US$1,894.225 an ounce.
Oil prices bucked the trend, however, retreating a shade as swelling year-over-year supply led some traders to view any economic recovery ahead to be gradual rather than swift.
US West Texas Intermediate crude shed 0.02 per cent to trade at US$48.39, far below about US$62 at the start of 2020.
Treasuries were little changed, with benchmark US 10-year yields at 0.9264 per cent and two-year yields at 0.1250 per cent. ― Reuters
In a statement, the Office of the US Trade Representative said it was adding tariffs on aircraft manufacturing parts and certain non-sparkling wines as well as cognacs and other brandies from France and Germany. — Reuters pic
WASHINGTON, Dec 31 ― US trade officials said yesterday they were increasing tariffs on certain European Union products, including aircraft-related parts and wines from France and Germany, amid an ongoing civil aircraft dispute between Washington and Brussels.
In a statement, the Office of the US Trade Representative said it was adding tariffs on aircraft manufacturing parts and certain non-sparkling wines as well as cognacs and other brandies from France and Germany.
The USTR did not say when the tariffs would take effect but noted that additional details would be “forthcoming.”
The new tariffs are the latest action in the 16-year US-EU dispute over civil aviation subsidies involving European aircraft company Airbus SE and its US-based rival Boeing Co.
The USTR said yesterday the EU had unfairly calculated tariffs against the United States allowed by a September World Trade Organisation ruling in the ongoing dispute: “The EU needs to take some measure to compensate for this unfairness.”
Representatives for the European Union could not be immediately reached for comment on the USTR action. ― Reuters
Podcasts have boomed in popularity in recent years, with people tuning in to hear compelling real or scripted stories as well as interviews. ― IStock.com/AFP pic
WASHINGTON, Dec 31 ― Amazon said yesterday it signed a deal to acquire the hit podcast production firm Wondery, in a move which boosts the US tech giant's efforts to round out its offerings from its music platform.
Wondery, which produces popular podcasts such as “Dirty John,” “Dr. Death,” and “The Shrink Next Door,” will be incorporated into Amazon Music, which is ramping up its efforts to compete with rivals like Spotify and began offering podcasts earlier this year.
“Together with Wondery, we will continue to bring more customers to streaming as we expand selection and ensure we are a destination for our customers to find, discover, and listen to the creators and artists they enjoy,” Amazon's music team said in a blog post.
“Wondery is an innovative podcast publisher with a track record of creating and producing top-rated podcasts that entertain and educate listeners.”
Terms of the deal were not disclosed, but reports this month said Wondery was seeking US$300 million (RM1.21 billion).
The deal, which has not yet been finalised, will allow Amazon Music subscribers to listen to Wondery podcasts through a variety of providers, an Amazon statement said.
Industry tracker Podtrac ranked Wondery as being the fourth most listened to podcast publisher in the US in November, with slightly more than 9 million people tuning in to audio programs it hosts.
Podcasts have boomed in popularity in recent years, with people tuning in to hear compelling real or scripted stories as well as interviews.
The move comes with Amazon facing increased scrutiny from antitrust enforcers for its growing dominance over key sectors of the economy as it expands in retail and streaming media. ― AFP
The pan-European STOXX 600 edged 0.3 per cent lower, still staying close to a 10-month high. — Reuters pic
FRANKFURT, Dec 31 ― European stocks ended a five-day winning streak yesterday as investors locked in recent gains, although positive vaccine and Brexit trends pointed to a stronger 2021 for regional markets.
The pan-European STOXX 600 edged 0.3 per cent lower, still staying close to a 10-month high. The index is set to shed more than 3 per cent this year, owing to disruptions caused by a second wave of coronavirus infections towards the end of the year.
But the signing of a Brexit deal, coupled with the rollout of a vaccine programme has made investors optimistic about a recovery in 2021.
“There are some things happening out there that suggests that risk appetite is strong,” said Russ Mould, investment director at AJ Bell.
“If you're looking through to 2021, we're hoping that the vaccines will begin to counteract the effect of the pandemic, and hopefully economic activity will begin to normalise.”
Travel and leisure stocks, one of the worst performing sectors this year, added 0.2 per cent, as they stand to be among the top beneficiaries of a coronavirus vaccine.
German shares ended a shortened session about 0.3 per cent lower, in their last trading day this year. But they added more than 3 per cent in 2020, thanks to flows into heavyweight technology stocks.
Spanish lender Unicaja rose 2.1 per cent, while Liberbank was down 4.1 per cent, after they announced an all-in share deal that would create the country's fifth-biggest bank.
The deal marks an acceleration of the sector's consolidation after the approval of a merger between state-owned Bankia and Caixabank earlier this month.
The wider banking index fell 0.3 per cent and is among the worst performing sectors this year alongside energy, as mounting bad loans due to the impact of the pandemic and record low interest rates hammered the appeal for the sector.
UK stocks ended lower despite the local approval of AstraZeneca's Covid-19 vaccine. Resource stocks were the biggest weight on the benchmark blue-chip index, due to weakness in metal prices.
Rio Tinto and Anglo American were among the biggest drags on the FTSE 100.
Meanwhile, Wall Street indexes hit all-time highs this week on hopes that US lawmakers will approve a large fiscal stimulus package despite delays. ― Reuters
The blue-chip FTSE 100 lost 0.7 per cent, after hitting a fresh 10-month high in the previous session. ― Reuters pic
LONDON, Dec 31 ― British stocks ended lower yesterday, reversing early gains as fears over a fast-spreading new strain of the coronavirus led to most of the country being placed under tighter restrictions, even as Britain approved AstraZeneca’s Covid-19 vaccine.
The blue-chip FTSE 100 lost 0.7 per cent, after hitting a fresh 10-month high in the previous session.
Miners and consumer stocks, mainly Rio Tinto, Anglo American, Diageo were the biggest drag on the index.
Health Secretary Matt Hancock said yesterday more areas of England would be placed under the strictest Covid-19 restrictions as a highly infectious variant of the virus is spreading across the country.
“More lockdowns doesn’t help market sentiment in the short term. There will be an economic knock-on effect upon that,” said Russ Mould, investment director at AJ Bell.
Britain is struggling to contain the coronavirus pandemic, with the country recording one of the world's highest death tolls of around 65,000 by mid-December, while the emergence of a more infectious virus variant has compounded its problems.
Britain yesterday became the first country in the world to approve the coronavirus vaccine developed by Oxford University and AstraZeneca, hoping that rapid action will help it stem a record surge of infections.
Shares of AstraZeneca closed 0.8 per cent lower.
“AstraZeneca said it will not look to profiteer from the vaccine which is fantastic for society, but the market saw it as selfish and ungrateful,” Mould said.
The mid-cap FTSE 250 index, considered a barometer of Brexit sentiment, shed 0.9 per cent, although British lawmakers approved Prime Minister Boris Johnson's post-Brexit trade deal with the European Union.
In a positive turn for the economy, British house prices rose faster than expected in December to record their biggest annual increase in six years, mortgage lender Nationwide said.
In company news, Energean rose 3.8 per cent after saying it would acquire the remaining 30 per cent stake in its Israeli offshore fields. ― Reuters
A Tiffany & Co logo is seen outside a store in Paris, France. — Reuters pic
WASHINGTON, Dec 31 ― Shareholders of US jeweller Tiffany yesterday overwhelmingly approved a merger with France's LVMH, ending months of drama with a marriage of two luxury icons.
About 99 per cent of shareholders voted in favour of the union during a special meeting that was held virtually, a spokesperson told AFP.
The green light was the last step needed to finalise the tie-up scheduled for early January.
The parent to luxury brands such as Louis Vuitton, Dior and Moet & Chandon, LVMH announced its plan to acquire Tiffany and its iconic robin's egg blue gift boxes at the end of 2019.
But the French company walked away from its proposal in September after claiming a series of poor decisions by Tiffany's board.
The companies buried the hatchet in October after Tiffany agreed to a lower price to prevent the deal from collapsing.
The price was dropped by US$3.50 (RM14.13) a share to US$131.50, lowering the value of the deal to US$15.8 billion from the original US$16.2 billion.
LVMH had already obtained authorisation from the authorities for the merger.
Tiffany will be removed from the New York Stock Exchange, but the French company has not yet said how it plans to transform the jeweller, which has suffered in recent years from competition from brands favored by millennials. ― AFP
The Dow Jones Industrial Average rose 73.89 points, or 0.24 per cent, to 30,409.56, the S&P 500 gained 5 points, or 0.13 per cent, to 3,732.04 and the Nasdaq Composite added 19.78 points, or 0.15 per cent, to 12,870.00. — Reuters pic
NEW YORK, Dec 31 ― Wall Street ended the session in positive territory and the dollar dipped to its lowest in more than two years yesterday, the penultimate trading day in a remarkable year of pandemic, recession and recovery.
All three major US stock indexes gained modestly, but short of all-time closing highs as recently enacted coronavirus relief and the ongoing rollout of Covid-19 vaccines fed optimism over economic recovery in 2021.
“It is light action today,” said JJ Kinahan, chief market strategist at TD Ameritrade in Chicago. “It's a little bit of 'Hey, we are going to finish the year strong,' everybody feels good and we will see what happens come January 4.”
“But at some point we are going to start to have volatility again related to Covid,” Kinahan added. “This is not a story that is going away in the first six months of 2021.”
That sentiment was shared by Matthew Keator, managing partner in the Keator Group, a wealth management firm in Lenox, Massachusetts.
“My anticipation is that (the economic rebound) will probably be more robust in the latter part of 2021,” Keator said. “Once there's the sense of an all-clear sign, we would anticipate a robust response from the consumer,” Keator added.
Britain approved a coronavirus vaccine developed by Oxford University and AstraZeneca in the latest development in the rapid progression, testing, approval and deployment of drugs to battle the disease.
The Dow Jones Industrial Average rose 73.89 points, or 0.24 per cent, to 30,409.56, the S&P 500 gained 5 points, or 0.13 per cent, to 3,732.04 and the Nasdaq Composite added 19.78 points, or 0.15 per cent, to 12,870.00.
European stocks reversed gains to end a five-day winning streak, closing lower as investors locked in year-end gains.
The pan-European STOXX 600 index lost 0.34 per cent and MSCI's gauge of stocks across the globe gained 0.35 per cent.
Emerging market stocks rose 1.73 per cent. MSCI's broadest index of Asia-Pacific shares outside Japan closed 1.85 per cent higher, while Japan's Nikkei lost 0.45 per cent.
The US Treasury yield curve flattened yesterday afternoon as traders bought longer-dated debt to rebalance their portfolios ahead of the month-end.
Benchmark 10-year notes last rose 4/32 in price to yield 0.9231 per cent, from 0.935 per cent late on Tuesday.
The 30-year bond last rose 12/32 in price to yield 1.6576 per cent, from 1.674 per cent late on Tuesday.
The dollar fell to the lowest since April 2018 against a basket of world currencies as investors bet on more fiscal support and positioned for year-end in light trading volume.
The dollar index fell 0.38 per cent, with the euro up 0.38 per cent at US$1.2293 (RM4.96).
The Japanese yen strengthened 0.30 per cent versus the greenback at 103.28 per dollar, while the British pound was last trading at US$1.3614, up 0.84 per cent on the day.
Crude oil prices advanced on the back of the weaker dollar and a dip in US inventories, but gains were capped by dimming hopes of a demand rebound.
US crude futures gained 0.83 per cent to settle at US$48.40 per barrel and Brent settled at US$51.34 per barrel, up 0.49 per cent on the day.
Gold prices rose, countering a dip in the greenback, although global Covid-19 vaccine rollouts and increased risk appetite limited the safe-haven metal's gains.
Spot gold added 0.8 per cent to US$1,892.06 an ounce. ― Reuters
Phillip Futures Sdn Bhd dealer Lee Pei Wan said today’s firmer ringgit had resulted in a higher price for the precious metal on the local front. — Reuters pic
KUALA LUMPUR, Dec 30 — The gold futures contract on Bursa Malaysia Derivatives ended untraded for the third consecutive day today on lack of demand due to a firmer ringgit against the US dollar, said a dealer.
Phillip Futures Sdn Bhd dealer Lee Pei Wan said today’s firmer ringgit had resulted in a higher price for the precious metal on the local front, as it made the ringgit-denominated gold more expensive to international buyers.
“The bullion is the safe-haven asset to hedge against the currency debasement while the coronavirus cases continue to soar globally,” he told Bernama.
At the close, gold futures on Bursa Malaysia for contract months December 2020, January 2021, February 2021, and March 2021 were all unchanged at RM247.50, RM235.60, RM233.60 and RM233.60 per gramme, respectively.
Volume remained nil, while open interest stood at 24 contracts.
At 5 pm today, the price of physical gold was down 95 sen to RM235.55 from RM236.50 per gramme yesterday. — Bernama
The Astra jab—which will be rolled out in Britain from January 4 — can be stored, transported and handled at normal refrigerated conditions. — Reuters pic
LONDON, Dec 30 — Europe’s stock markets mostly rose today after Britain became the first nation to approve a cheap coronavirus vaccine developed by UK pharmaceuticals giant AstraZeneca and Oxford University, eclipsing news of mounting infections and fears of tighter restrictions.
The Astra jab—which will be rolled out in Britain from January 4 — can be stored, transported and handled at normal refrigerated conditions.
It is therefore cheaper and easier to administer than the rival Pfizer/BioNTech and Moderna vaccines which require freezing, and has sparked renewed hope of a return to normality in 2021.
Around midday, London stocks gained 0.2 per cent with sentiment also lifted after European Union leaders signed their post-Brexit trade deal with Britain—with just one day to until the UK finally leaves the bloc.
In the eurozone, Paris stocks edged up 0.1 per cent while Frankfurt flatlined after this week’s record-breaking run as Germany mulled extending its virus lockdown in the face of rising cases and deaths.
Asia was also mostly firmer with vaccine and economic recovery optimism helping investors look past an alarming surge in Covid-19 cases around the world.
Worst behind us?
“Today’s vaccine news is helping European stocks,” AvaTrade analyst Naeem Aslam told AFP.
“It will not be a stretch ... to say that the worst may be behind us and things are likely to improve going in 2021.”
London’s FTSE 100 benchmark index surged 1.6 per cent on Tuesday, its first trading day since Prime Minister Boris Johnson unveiled the long-awaited Brexit agreement late on Christmas Eve.
“We expect global economic recovery to shift into a higher gear in 2021 and that means more gains for European markets,” added Aslam.
“In addition to this, the Brexit trade deal is highly likely to provide massive tailwind for UK and European stocks.”
In foreign exchange activity, the US dollar languished around 2.5-year lows versus the euro and pound, as investor appetite grew for riskier assets like equities.
Bitcoin, the world’s most popular cyber currency, extended his month’s blistering run to strike another record high at US$28,572.10 (RM115,346).
Pharma propels stocks
Back in London, today’s announcement sent AstraZeneca shares racing 0.9 per cent higher to 7,530 pence.
However, the stock remains about 1.0 per cent down over the course of this year despite development of the group’s landmark vaccine.
Drugs rival GlaxoSmithKline shares rose by 0.5 per cent but has shed almost a quarter in value since the start of 2020.
“The pharmaceuticals and biotech sector is down nearly 10 per cent for the year,” AJ Bell investment director Russ Mould told AFP.
“This seems like rank ingratitude given the importance of the vaccines upon which they are working, with the AstraZeneca-University of Oxford product due for roll-out any day now—and GlaxoSmithKline hopeful of launching a product in late 2021.
“Yet through their very success, the drug firms are helping to promote the share prices of others—companies which will benefit much more dramatically from any success in the effort to contain and beat back the virus and permit any degree of return to economic normality.”
The UK government has ordered 100 million doses of the Astra jab, with 40 million scheduled to be available by the end of March.
Britain approved a shot produced by Pfizer-BioNTech on December 2, and has already vaccinated around 800,000 people with the first dose.
The upbeat Astra news comes as a mutated strain of the disease—which spreads more quickly but is no more deadly—has been detected in several countries. That has put severe pressure on governments to impose stricter containment measures.
Wall Street had dipped Tuesday on disappointment that Republicans had blocked a move to ramp up stimulus cash handouts, though US lawmakers will likely push ahead with more support measures after Joe Biden takes over at the White House. — AFP
At 6pm, the local currency improved 130 basis points (bps) to 4.0350/0390 against the greenback from yesterday’s close of 4.0480/0510. — AFP pic
KUALA LUMPUR, Dec 30 — The ringgit settled higher versus the US dollar today, rebounding from yesterday’s losses on renewed demand and in line with the steadier in crude oil prices, an analyst said.
At 6pm, the local currency improved 130 basis points (bps) to 4.0350/0390 against the greenback from yesterday’s close of 4.0480/0510.
Axi chief global market strategist Stephen Innes said with the vaccines on their way, it would brighten the prospects for the global economy whereby emerging markets and their respective currencies would be the huge beneficiaries into 2021.
“Today oil prices remain supported on vaccine optimism, which boosted market sentiment for emerging currencies including the local currency,” he told Bernama.
At the time of writing, the benchmark Brent crude rose 0.8 per cent to US$51.50 (RM208) per barrel.
Meanwhile, the ringgit was traded mixed other major currencies.
It improved against the Singapore dollar to 3.0441/0481 from 3.0484/0509 on Wednesday and appreciated versus the euro to 4.9497/9559 from 4.9584/9625 yesterday.
The local note, however, fell versus the Japanese yen to 3.9084/9126 from 3.9039/9080 and dropped against the British pound to 5.4775/4846 from 5.4527/4587 previously. — Bernama
The SC cautioned the public against dealing with unlicensed investment advisers as they could be defrauded. — Picture from Twitter/SCMalaysia
KUALA LUMPUR, Dec 30 — The Securities Commission Malaysia (SC) today issued a guidance note to provide clarity to the industry and the public on conduct which it would consider as falling within the regulated activity of providing investment advice under the Capital Markets and Services Act 2007 (CMSA).
“(The note) is issued in response to the increasing number of queries and complaints received regarding various social media, chat rooms and messaging applications that appear to be providing specific stock recommendations and/or investment advice to members of the public, who are given access to these recommendations and/or advice upon payment of a fee,” the regulator said in a statement today.
The SC cautioned the public against dealing with unlicensed investment advisers as they could be defrauded or used as part of a market manipulation scheme.
Investors were reminded to verify the licensing status of platforms, companies and individuals offering capital market services or products, including the provision of investment advice, before making any investment decision.
It added that any person carrying on a business of giving investment advice without a license commits an offence under the CMSA which is punishable with a fine not exceeding RM10 million or imprisonment not exceeding 10 years or both, if found guilty.
“Members of the public who have any information on any person providing investment advice without a licence may contact the SC’s Consumers and Investors Department at 03-6204 8999 or email aduan@seccom.com.my,” it said. — Bernama
The FTSE Bursa Malaysia KLCI saw its steepest fall in March. — Bernama pic
KUALA LUMPUR, Dec 30 — A decade low to stunning recovery and some bumpy rides in between, Malaysia’s equities market saw it all in the year that was filled with unprecedented challenges.
When the Covid-19 pandemic first shook China in February, analysts had placed an outlook that the virus outbreak would put economies under pressure and worst hit the local market one month later.
The benchmark index, the FTSE Bursa Malaysia KLCI (FBM KLCI) recorded its steepest fall in March, when it slumped to an intraday low of 1,207.80, the lowest mark in 11 years.
This was due to the rapid spread of Covid-19 across the world, wreaking havoc in its wake, with declining oil prices, weak consumer data, and closure of international borders which leaves cyclical stocks especially airlines, automobiles and consumer chains under heavy pressure.
The downturn not only witnessed the sharp contraction in local equities but also global benchmarks such as the US Dow Jones Industrial Average, Singapore’s Straits Times Index, Hong Kong’s Hang Seng Index, Japan’s Nikkei 225, and Asia’s emerging market benchmark, the South Korean KOSPI.
On the local market, the sharp fall had led regulators to implement a freeze on short selling to reduce market volatility as retail participants leapt to record high, driven by the six-month blanket banking moratorium that was given to all Malaysians.
Besides Covid-19, the local political scenario, US Presidential election, inflation, economic outlook, global interest rates, oil and other commodity prices, as well as the global equity performance were the highlights.
However, in every downturn, there is a silver lining.
After the sharp downturn in March, the FBM KLCI had steadily staged a rebound to surpass the 1,690 level before the market heads to a quiet year-end.
This was driven by virus containment success and the decline in unemployment data as the movement restrictions were gradually lifted, as businesses resumed operations and started embracing the new normal.
The 30-stock market bellwether which now stands at RM1.07 trillion in terms of market capitalisation, moved between 1,207.80 to 1,695.96 during the 52 weeks, and recorded an annual return of 4.77 per cent, despite the downturn in March, with a healthy market price-earnings ratio of 23.21 times.
As at December 28, international investors had sold equities worth RM24.6 billion net this year, and as the year-end approaches, foreign investors have turned net buyers during the window dressing period, targeting oversold stocks.
From the technical perspective, the index is heading towards a full recovery from before the brouhaha due to the US-China trade tensions that led to a global market slide in 2019.
On the overall market, the healthcare index, on a year-to-date performance, increased more than 200 per cent to become the best performing index for the year.
Glove counters, namely Top Glove Corp Bhd, Hartalega Holdings Bhd, Supermax Corp Bhd, and Kossan Rubber Industries Bhd, all recorded more than 400 per cent surge in their share prices, mainly attributed to the high demand for gloves.
Besides healthcare, technology stocks have also seen an upside as Covid-19 pushed digitisation and digitalisation efforts on every front, from individuals to businesses as they embrace the new norm.
The technology index saw a 100 per cent surge from the start of the year till date, and the uptrend is expected to continue at a steady pace.
While the healthcare and technology sectors continue to record gains, the energy index has been under pressure until air travel returns to normal.
The index, which dipped about 30 per cent this year, will continue to be volatile at least until the end of the first quarter of next year, with an upward momentum.
As of today, the Brent crude oil price is hovering at US$51 (US$1 = RM4.04) per barrel and is heading towards a recovery towards the level recorded on Jan 1 this year at US$62 per barrel.
With the bullish uptrend in place, an economic recovery is on the horizon with mass vaccination against Covid-19 taking place globally. Analysts are hoping that the dark clouds that have been cast on the global economy will soon pass.
The Finance Ministry, in its 2021 economic outlook, has forecast that Malaysia’s gross domestic product will expand between 6.5 per cent and 7.5 per cent in 2021 after a contraction of 4.5 per cent this year.
“However, this could hinge on two major factors—successful containment of Covid-19 and recovery of external demand,” said the report.
Analysts meanwhile remain cautious on the outlook especially in the first quarter of 2021 as Malaysia is facing challenges in managing its hospital capacity in treating the Covid-19 cases.
“The process of containment plays a vital role for now especially in attracting foreign inflows. Besides that, political stability is also crucial in retaining confidence.
“This is in line with expectations that the 15th General Election might be called once Covid-19 is under control which is expected to be in the second quarter of 2021,” an analyst told Bernama.
She added that the current overbought position on certain index linked stocks will be corrected once short selling is lifted come Jan 1.
“Once the technical correction takes place, the index could reach an upside of 1,740 next year, barring any unforeseen circumstances,” she said.
Meanwhile, Public Investment Bank said the market remains relatively undervalued from a risk-reward perspective, considering the record-low interest rate environment.
“We believe the fervour should continue going into the first half of 2021. There are potential speed bumps along the way, the decisive one being foreign capital flight as a result of sovereign rating downgrades, though this possibility remains remote for now.”
The market remains a trading-oriented one amid the ongoing Covid19 pandemic which may rage on well into late-2021 despite the number of vaccines coming on-stream.
Hence, the investment bank’s end-2021 FBM KLCI target is at 1,750 points. — Bernama
KUALA LUMPUR, Dec 30 — UEM Sunrise Bhd’s wholly-owned subsidiaries, UEM Land Bhd and Nusajaya Heights Sdn Bhd, is proposing to dispose of 72 of the companies’ freehold industrial plots in Johor Bahru to AME Elite Consortium Bhd’s units, Pentagon Land Sdn Bhd and Greenhill SILC Sdn Bhd for RM434.3 million.
In a filing with Bursa Malaysia today, UEM said the parties had entered into several definitive agreements on the sale of the industrial plots, measuring approximately 68.7 hectares, which are located in Phase 3 of the Southern Industrial and Logistics Clusters (SiLC) in Johor Bahru.
In a separate statement, UEM Sunrise’s Performance Delivery and Commercial chief officer Anuar Kasim said the sale marks the start of a strategic collaboration between UEM Sunrise — the landowner and master developer of Iskandar Puteri—and AME Elite Consortium, a specialist in the construction of customised large manufacturing plants and design-and-build and development of industrial parks.
“We are confident that this collaboration with AME Elite Consortium will be another catalyst for the Iskandar Puteri Development Masterplan, particularly in accelerating the growth and development of SiLC.
“This will have a positive impact on the rapidly growing township of Iskandar Puteri, enhancing its livable qualities for the surrounding communities,” he said.
He said the sale is expected to steadily contribute to UEM Sunrise group’s earnings over the next three to four years, with proceeds to be channelled towards the company’s strategic initiatives, including new land banking opportunities.
Anuar said with Phases 1 and 2 of the SiLC sold out, the collaboration with AME Elite Consortium would enable the roll-out of Phase 3 more rapidly as UEM Sunrise would be dealing with an industrial park specialist rather than several plot buyers.
He added that AME Elite Consortium has given its commitment via the definitive agreements to acquire the entire balance of the industrial plots in SiLC Phase 3.
Meanwhile, AME Elite Consortium managing director Kelvin Lee Chai said the company aims to generate more than RM1.5 billion in gross development value (GDV) through the land acquisitions.
He said with the new lands, its total landbank would increase to 93.9 hectares, allowing them to generate sizeable GDV over the development period.
“The enlarged scale of developments would extend the sustainability of our earnings even further,” said Lee.
AME is currently developing two integrated industrial parks in Johor—i-Park@Indahpura (Phase 3) and i-Park@Senai Airport City (Phase 1, 2 and 3). — Bernama
JAKARTA: Indonesia and a unit of South Korean firm LG Group have signed a memorandum of understanding (MOU) on a $9.8 billion electric vehicle (EV) battery investment deal, the head of Indonesia's Investment Coordinating Board said on Wednesday.
The deal was signed on Dec. 18 and includes investments across the EV supply chain, the board head, Bahlil Lahadalia, told a news conference.
An official at LG Energy Solution, a unit of LG Group, South Korea's fourth-largest conglomerate, confirmed it had agreed an MOU but could not provide details or the deal's value. LG Group in Seoul referred Reuters to its affiliate.
Bahlil said the agreement made Indonesia the first country in the world to integrate the electric battery industry from mining to producing electric car lithium batteries.
"We have signed an MOU for the construction of an integrated electric battery factory from upstream to downstream," Bahlil said.
"Mines, smelters, precursors, cathodes, cars to recycling facilities will be built in Indonesia," he said, adding that the project will be located in North Maluku and Central Java.
Under the MOU, at least 70% of the nickel ore used to produce the EV batteries must be processed in Indonesia, he said.
Indonesia aims to start processing its rich supplies of nickel laterite ore for use in lithium batteries as part of a bid to eventually become a global hub for producing and exporting EVs.
Indonesia said earlier this month that U.S. automaker Tesla , will send delegations to Indonesia in January to discuss potential investment in a supply chain for its electric vehicles. - Reuters
TOKYO: Asian shares hit a record high on Wednesday with investors betting on a strong economic recovery next year, as there is little sign policymakers wind back massive stimulus efforts aimed at staving off coronavirus-fuelled downturns.
MSCI's gauge of Asia-Pacific shares excluding Japan rose 1.2% to hit a record high, led by gains in Chinese shares and bringing its gains so far this year to 18.9%.
Japan's Nikkei share average lost 0.45% on its last trading day of 2020 after jumping to a 30-year high on Tuesday. For the year, it was up 16.0%.
European shares are seen dipping slightly with Euro Stoxx 50 futures down 0.2% and FTSE futures losing 0.1%.
Convictions that global monetary authorities will continue to pump liquidity into the banking system to support the pandemic-stricken economy underpin risk assets.
"We think continued monetary and fiscal policy support means investors should take risk. Stocks will do better than bonds. Within bonds, corporate bonds should beat government bonds," said Hiroshi Yokotani, head of Asia-Pacific fixed-income business at State Street Global Advisors.
E-Mini futures for the S&P 500 rose 0.41%, erasing losses made in the previous day after U.S. Senate Majority Leader Mitch McConnell put off a vote on President Donald Trump's call to boost COVID-19 relief checks.
Although many Republican Senators remain adamantly opposed, worried about the cost to taxpayers, support is growing among them, including two from Georgia, who are running in the crucial races that will determine who will control the Senate.
END OF ILLUSION?
Even an alarming spread of a COVID-19 variant in many countries has so far done little to curb investors' appetite.
The United States has detected its first-known case of the highly infectious coronavirus strain already spotted in Britain and South Africa.
But a crack may be appearing in market euphoria, said Yasuo Sakuma, chief investment officer at Libra Investments, noting some red-hot U.S. small cap shares, such as biotech and software-as-a-service stocks, have failed to catch up with a broader rally.
"There are lots of loss-making companies that are valued at more than $10 billion. I think the time is up for the illusion that they can make money by doing business only in a virtual world. Soon these firms could find themselves no longer able to attract money just because they have a nice business idea or some nice test products." he said.
The Russell 2000, a U.S. stock index that includes small cap shares, fell 1.85% on Tuesday.
In the currency market, the dollar dropped on the first day of trading for settlement in 2021 as traders started to dump the safe-haven U.S. currency anew.
The euro rose 0.3% to $1.2295, a level last seen in April 2018.
"The start of COVID-19 immunization campaigns in several countries as well as additional U.S. fiscal support reduce downside risk to the global economy and bode well for general financial market sentiment," analysts at Commonwealth Bank of Australia said in a note.
The Australian dollar rose 0.6% to $0.7663, hitting a 2 1/2-year high, while sterling traded up 0.30% at $1.3556.
The Japanese yen also gained 0.15% to 103.36 per dollar.
The U.S. dollar index losing 0.25% to stand at 89.798, having hit a 2 1/2-year low of 89.711 at one point.
A sluggish dollar supported gold, with bullion prices up 0.14% at $1,880.70 an ounce.
Oil prices extended gains after a rebound overnight as investors hoped that an expanded U.S. pandemic aid stimulus would spur fuel demand and stoke economic growth.
U.S. West Texas Intermediate crude futures were up 0.21% at $48.10 a barrel.
Treasuries were little changed after trading sideways overnight in thin trade amid the year-end holidays. U.S. two-year yields were steady at 0.127% and benchmark 10-year yields stood at 0.9364%. - Reuters
.JPG "An investor monitors the stock prices in the gallery of the RHB Investment Bank Bhd headquarters in Kuala Lumpur March 17, 2020. ― Picture by Hari Anggara")
.JPG "At lunch break, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) fell 9.04 points to 1,635.37, after moving between 1,633.30 and 1,644.26 throughout the session. ― Picture by Hari Anggara")
.JPG "At 11.05am, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) slipped 10.29 points to 1,634.12 after opening at 1,644.26. ― Picture by Hari Anggara")
