HONG KONG, Jan 31 — Chinese smartphone maker Xiaomi Corp said today that its legal complaint against the US Department of Defence and the Treasury Department was to protect the company’s interests, in a notice on the Hong Kong stock exchange.
The company filed a complaint in a Washington district court on Friday against the US Defence and Treasury Departments, seeking to remove the Chinese smartphone maker from an official list of companies with ties to China’s military.
Xiaomi said the US decision to include the company as a “communist Chinese military company” was “factually incorrect” and said it had asked the courts to declare the decision illegal.
The Defence Department, under the Trump administration in mid-January, added Xiaomi and eight other companies to the list, which requires American investors to divest their holdings in the firms by a set deadline. Xiaomi has said that 75 per cent of the company’s voting rights, under a weighted structure, were held by co-founders Lin Bin and Lei Jun, with no ownership or control from an individual or entity affiliated with the military. — Reuters
KUALA LUMPUR, Jan 31 — The percentage of smallholders applying for the Rubber Production Incentive (IPG) is expected to increase this year, thus increasing their income by 25 per cent per month, according to the Ministry of Plantation Industries and Commodities.
Minister Datuk Mohd Khairuddin Aman Razali said the IPG assistance would be channelled directly to smallholders without a manual application process after middlemen and rubber buyers were required to use the RRIMniaga application from Jan 1 this year.
“With the help of IPG, the estimated income of smallholders is projected to increase by 25 per cent from RM933 to RM1,167 per month.
“This is based on the average farm ownership of two hectares and the farm price of rubber cuplump of RM2 per kilogramme,” he said in a statement Sunday.
Mohd Khairuddin said in 2020, a total of 30.16 per cent of smallholders who have a Rubber Transaction Authorisation Permit (PAT-G) had claimed IPG.
The number of active farmers submitting claims accounted for 135,632 out of a total of 495,296 PAT-G cardholders, involving rubber smallholdings spanning 294,095.79 hectares.
“The government has never stopped assisting smallholders, especially when rubber prices are low,” he said.
The IPG programme and use of the RRIMniaga application are among the initiatives taken by the ministry and Malaysian Rubber Board (MRB) to help cushion the impact of falling prices and ensure continuous production of the commodity products, as well as stabilise smallholders’ income.
The RRIMniaga application was launched by the MRB early last year to facilitate rubber transactions involving retailers, buyers and middlemen.
In Budget 2021, the allocation of IPG funds has been doubled to RM300 million from last year’s.
More than 450,000 rubber smallholders are still reeling from the challenging economic situation, which was worsened by the Covid-19 pandemic, since last year. — Bernama
NEW YORK, Jan 31 — When President Joe Biden unveiled a US$1.9 trillion (RM7.7 trillion) stimulus proposal earlier this month, few were surprised by the plan’s hefty price tag or sweeping scope.
More striking was Biden’s inclusion of a measure to more than double the federal minimum wage to US$15.
The move, backed by leading Democrats including left-wing Senator Bernie Sanders, establishes the fight for higher wages as a top priority for the new administration, potentially leading to one of Washington’s boldest adjustments in US social and labour policy in decades.
The fate of the initiative — which so far lacks support from Republicans — will help determine whether Biden delivers on a core pocketbook issue as US income inequality widens during the Covid-19 pandemic.
Sanders, a former presidential candidate, called the current federal minimum wage of US$7.25 an hour a “starvation wage” as he unveiled the proposal for an increase in Congress.
The senator said he hopes Republicans “will understand the severity of the crisis,” but added that Democrats should be prepared to enact the policy on a narrow party-line vote.
Such an increase would boost wages for more than 32 million US workers, according to the Economic Policy Institute, a progressive think tank.
The Sanders bill proposes “a significant increase in the minimum wage,” Ben Zipperer, an economist at the institute, told AFP. “Unfortunately, we have quite a big hole to dig out of in terms of providing what low-income workers need.”
Popular support
The bill would put the United States on par with a growing number of states and cities that have already enacted the hike at the urging of the “Fight for US$15” movement launched by fast-food workers in the early 2010s.
“The bump up made it a little bit easier,” said Maggie Breshears, who works at grocery store and retailer Fred Meyer in Seattle and has gone from making about US$10 per hour in 2013 to US$17.59 after Seattle lifted its minimum wage in 2014.
The US minimum wage was first enacted in 1938 as part of President Franklin Delano Roosevelt’s New Deal reforms.
The measure has been periodically increased since then, most recently in 2007, when Congress lifted it gradually from US$5.15 to US$7.25 an hour, which would equal a US$15,000 annual salary.
Barack Obama was unable to win a boost during his eight-year presidency from 2009 to 2017. In 2019, the House of Representatives approved an increase, but the bill died in the Republican-led Senate.
Compromise ahead?
Supporters of an increase draw hope from rising public support apparent in 2020, when Florida voters backed a hike to US$15 per hour at the same time the state voted for Republican President Donald Trump, who ended up losing re-election.
In Arkansas, another Republican state, 68 per cent of voters in 2018 backed gradually increasing the wage to US$11 an hour.
“If we had left it to the legislature, it would have stayed at US$6.25,” where it was before the most recent federal increase, said Kristin Foster, an Arkansas political consultant who directed the 2018 campaign. “The only way it was able to pass was through the ballot.”
Several large companies, including Amazon, Target and Starbucks, have set US$15 as their minimum wage for US workers.
Others that once fought the measure have given ground. These include McDonald’s, which said the discussion on the minimum wage represents an “important one that McDonald’s looks to advance, not impede.”
Supporters of the wage increase welcome large companies’ endorsements, but say it is too soon to know whether they will shift the politics of the issue.
The Business Roundtable, which represents the biggest US companies, said the Sanders bill was a starting point.
“We agree that the current federal minimum wage of US$7.25 is too low, and we are in favor of an increase at the federal level,” said a spokeswoman.
Small business scepticism
But the Sanders bill drew criticism from other groups, including those representing small businesses and restaurants, which say they have suffered more than large firms during Covid-19.
Howard Wright, the chief executive of Seattle Hospitality Group and the co-author of Seattle’s 2014 wage hike, said companies should be able to raise the wage as long as it is done gradually.
“What we are averse to is surprise and having things we can’t control,” said Wright, who favors correlating the wage level to the local cost of living, given the diversity of the US.
In response to written questions on whether to index local costs, Treasury Secretary Janet Yellen emphasised the need for a “nationwide” wage hike “phased in over time.”
Holly Sklar, the founder of activist network Business for a Fair Minimum Wage, rejected indexing the wage to regional costs.
“The minimum wage is supposed to be something that helps everyone rise,” she said. “Any state can go higher.” — AFP
KUALA LUMPUR, Jan 31 — The entertainment scene is taking an initiative to adapt to digitalisation with the rise in digital consumers as the masses are shifting towards more on-demand offerings from the traditional means of media consumption.
Hence, online streaming platform WeTV Malaysia foresees the growth of mobile content viewership to further increase in three years’ time, while there may be an increase in TV cable cutting as consumers are introduced to more options in the market.
Country manager Heng Aik Kuang said Malaysia has one of the highest smartphone ownership penetration rates in the region and as a result, WeTV is definitely seeing a huge shift towards mobile viewership with a high affinity for on-demand viewing as well.
“The majority of Malaysians’ first interaction with video content tends to be through smart devices as opposed to televisions and computers or laptops.
“Local content will also see a spike as the quality of the local entertainment industry improves from year to year,” he told Bernama.
Background
Launched in 2018, WeTV has quickly risen to be Malaysia’s leading over-the-top (OTT) platform, featuring high-quality local, international and Asian content for fans across the region to enjoy.
Since January 2020, the platform has seen a viewership growth of more than 10-fold, and digital streaming sites enjoys over 10 million downloads on both the Google Play Store and Apple App store.
The aim is to elevate the Malaysian film scene to the next level, Heng said, adding that he believes WeTV Originals will be able to achieve that gradually, via collaborations with Malaysian industry players.
“Last year, we saw a further increase in the number of people embracing streaming services, as a form of entertainment, skyrocketed because of the movement restriction laws imposed by the government due to the Covid-19 threat.
“While we see a significant impact to the entire industry, including theatres, the entertainment industry will remain resilient as it offers an important outlet for audiences,” he added.
He said for OTT, consumers continue to see great value in the convenience to binge content anywhere and at any time.
“With this accelerated adoption and even more first run content made available online, this trend will continue to improve this year.
“As for what drives subscriptions, we continue to learn from our users’ preferences and viewing habits and incorporate these learnings to our originally-produced local content,” he said.
Expounding on the differences between WeTV and other streaming platforms such as Netflix and Viu, Heng said WeTV is very local-centric and free for anyone to use.
“We also place a lot of our focus on nurturing local talents to ensure that Malaysia can showcase its own set of world-class talents.
“If you browse through WeTV, you will find a plethora of content directed and produced by Malaysian directors, starring amazing actors and actresses The Malaysian content streaming market is a highly competitive and vibrant one.
“In fact, Malaysian users are among the most engaged users in the region, and constantly demanding more content,” he said.
Partnership and Prospects
In November last year, WeTV inked a partnership with Media Prima Bhd which entailed a licencing deal that enabled the platform’s (WeTV) acquisition of both exclusive and library titles from Media Prima.
“As of now, we have three recently completed series available for audiences following the partnership with Media Prima, namely, Sang Pewaris, Bidadari Salju and Takdir Yang Tertulis, which were aired on November 26, 2020, December 15, 2020, and January 21, 2021, respectively.
“The partnership with Media Prima is a strategic and long term one, which also includes future opportunities in production collaboration We believe that this collaboration provides significant opportunities for us to continue to serve the needs of the local audience,” he said.
Going forward, Heng hopes the local content industry will overcome the challenges posed by Covid-19, as it has impacted the livelihoods of everyone connected to the industry, whether he/she is a director, an actor/actress, or a support crew.
“Over the longer term, I believe there is immense potential in our local content industry. We hope both government authorities and Malaysians alike continue to support the local content industry in an effort to elevate it to the international standards,” he said. — Bernama
BEIJING, Jan 31 — Factory activity in China slowed slightly in January, official data showed today, as the country rushed to stamp out a recent coronavirus wave in northern China.
The purchasing managers’ index (PMI), a key gauge of manufacturing activity, came in at 51.3 this month, as the world’s second-largest economy tightened Covid-19 precautions ahead of the Lunar New Year.
The figure was slightly below December’s reading of 51.9, although still above the 50-point mark separating growth from contraction.
“Recently, local clusters of the epidemic emerged successively in many places across the country, and the production and operations of some enterprises were temporarily affected,” said National Bureau of Statistics (NBS) senior statistician Zhao Qinghe.
Zhao added that the period around the Lunar New Year is traditionally an “off-peak season” for the manufacturing industry.
The latest data indicated that the business climate remains weak for small firms, although domestic consumption picked up ahead of the festive period.
Export demand slowed after Christmas as the pandemic continued spreading worldwide, the NBS added.
China’s non-manufacturing PMI saw a larger drop to 52.4, from 55.7 last month, taking a bigger hit from the domestic virus resurgence.
Industries including accommodation and catering saw a “more significant” drop in activity, while the construction industry went into an off-season.
The fall in the PMI reflects weakening growth momentum due to government measures to contain the new Covid-19 wave, including tightening social distancing rules, re-imposing lockdowns and travel bans in some parts of China, Nomura’s chief China economist Lu Ting told AFP.
“The inevitable, seasonal rise in population mobility and family gatherings in coming weeks, albeit likely much smaller than their pre-pandemic levels, may keep these Covid-19 prevention measures in place for a longer time,” he added.
Accordingly, non-manufacturing activity could dip further in February, he said.
But with migrant workers encouraged to stay in the cities where they work this year instead of returning home, manufacturing PMI might rebound slightly in the coming month, said Lu. — AFP
LONDON, Jan 31 — British online fashion retailer ASOS is on the verge of a deal to buy Topshop and Miss Selfridge from the administrators of British tycoon Philip Green’s Arcadia Group for almost £300 million pounds (RM1.6 billion), Sky News reported.
ASOS could announce a deal as early as tomorrow, Sky said.
Arcadia went into administration in November, putting more than 13,000 jobs at risk and becoming Britain’s biggest corporate casualty of the Covid-19 pandemic.
ASOS and the administrators of Arcadia both declined to comment.
Meanwhile, British online fashion retailer Boohoo said on Friday it has entered exclusive talks with the administrators of Philip Green’s collapsed Arcadia group over the purchase of the Dorothy Perkins, Wallis and Burton brands.
ASOS said on Monday it was in exclusive talks to buy the Topshop, Topman, Miss Selfridge and HIIT brands from the administrators of British tycoon Philip Green’s Arcadia Group. — Reuters
LONDON, Jan 31 — Britain will apply to join the Pacific free trade area, the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), the UK said yesterday, under its post-Brexit plans.
Britain’s International Trade Secretary Liz Truss is to formally request UK membership of the free trade bloc, which represents 11 Pacific Rim nations including Australia, Canada, Chile, Japan, Mexico and Vietnam, tomorrow.
The application to join the CPTPP will come one year after Britain formally left the European Union following more than forty years of membership.
Negotiations between the UK and the partnership are expected to start this year, the trade department said.
“One year after our departure for the EU we are forging new partnerships that will bring enormous economic benefits for the people of Britain,” British Prime Minister Boris Johnson said.
“Applying to be the first new country to join the CPTPP demonstrates our ambition to do business on the best terms with our friends and partners all over the world and be an enthusiastic champion of global free trade,” he added.
Truss, who has touted the prospect of British membership of the bloc as the UK agreed post-Brexit trading arrangements with Japan and Canada among other members of the CPTPP, said joining would offer “enormous opportunities”.
“It will mean lower tariffs for car manufacturers and whisky producers, and better access for our brilliant services providers, delivering quality jobs and greater prosperity for people here at home,” she added.
The CPTPP was launched in 2019 to remove trade barriers among the 11 nations representing nearly 500 million consumers in the Asia-Pacific region in a bid to counter China’s growing economic influence.
The United States, one of the major proponents of the Pacific bloc under former president Barack Obama, withdrew from the partnership under the Trump administration before it was ratified in 2017. — AFP
SAN FRANCISCO, Jan 30 — SpaceX’s first high-altitude test flight of its Starship rocket, which exploded last month while attempting to land after an otherwise successful test launch, violated the terms of its Federal Aviation Administration test license, the Verge reported yesterday, citing sources.
An investigation was opened that week focusing on the explosive landing and on SpaceX’s refusal to stick to the terms of what the FAA authorised, the Verge said.
SpaceX did not immediately respond to a request for comment.
The Starship rocket destroyed in the accident was a 16-storey-tall prototype for the heavy-lift launch vehicle being developed by billionaire entrepreneur Elon Musk’s private space company to carry humans and 100 tonnes of cargo on future missions to the moon and Mars.
The self-guided rocket blew up as it touched down on a landing pad following a controlled descent. The test flight had been intended to reach an altitude of 41,000 feet, propelled by three of SpaceX’s newly developed Raptor engines for the first time.
But the company left unclear whether the rocket had flown that high.
The FAA said it would evaluate additional information provided by SpaceX as part of its application to modify its launch license.
“We will approve the modification only after we are satisfied that SpaceX has taken the necessary steps to comply with regulatory requirements,” it said in a statement. — Reuters
NEW YORK, Jan 30 — Online broker Robinhood, one of the hottest venues in this week’s retail-trading frenzy, said it put temporary buying restrictions on a small number of securities as clearing house-mandated deposit requirements for equities increased ten-fold.
“...the required amount we had to deposit with the clearing house was so large — with individual volatile securities accounting for hundreds of millions of dollars in deposit requirements — that we had to take steps to limit buying in those volatile securities to ensure we could comfortably meet our requirements,” it said in a blog post late yesterday.
Robinhood’s fee-free and simple-to-use app has made it popular with a new generation of small-time traders and its restrictions on Thursday drew a heavy backlash from high-profile politicians and celebrities.
Retail investors using Robinhood and other apps drove the so-called “Reddit rally” that pushed up shares of GameStop Corp and other companies championed on social media platforms including Reddit, resulting in heavy losses for big hedge funds that had shorted the shares. — Reuters
KUALA LUMPUR, Jan 30 ― Malaysia’s external trade for 2021 is expected to remain modest with exports projected to rebound by 2.7 per cent, the Ministry of International Trade and Industry (MITI) said.
Senior minister Datuk Seri Mohamed Azmin Ali said the outlook for 2021 is expected to be better as the World Bank and International Monetary Fund (IMF) forecast that global growth will rebound by 4.0 per cent and 5.5 per cent, respectively.
“For world merchandise trade volume, the World Trade Organisation (WTO) projected a 7.2 per cent growth in 2021.
“In tandem with improvement in global growth and international trade, Malaysia’s gross domestic product (GDP) is expected to rebound by 6.5 per cent to 7.5 per cent, higher than the forecast growth for Asean-5, which is 5.2 per cent,” he said in a statement today.
Mohamed Azmin noted that Malaysia’s exports had been showing signs of recovery since September 2020 with positive year-on-year growth.
Higher demand for semiconductors and commodity-based products is anticipated to drive exports as global economic activities recover. The trade surplus recorded in 2020 marked the fourth consecutive year of double-digit growth, with an expansion of 26.9 per cent to RM184.79 billion compared to 2019.
It was also the largest trade surplus thus far, representing Malaysia’s achievement in sustaining trade surplus for 23 consecutive years since 1998.
Total trade in 2020 amounting to RM1.777 trillion, contracting by 3.6 per cent compared to 2019 while imports totalled RM796.19 billion, a decline of 6.3 per cent.
Malaysia’s exports in 2020, valued at RM980.99 billion, declined marginally by 1.4 per cent compared to the preceding year, in tandem with the unfavourable external environment due to the impact of the Covid-19 pandemic.
Exports rebounded in the second half of 2020, increasing by 4.8 per cent, a significant improvement from a 7.9 per cent contraction in the first half of 2020 as the economy progressively reopened and external demand gradually recovered.
Lower exports were recorded to Thailand, India, Bangladesh, Vietnam, and Japan while higher exports was registered to China, the US, Singapore, and Hong Kong.
“Malaysia’s trade performance was in tandem with countries in the region, notably Indonesia, Singapore, South Korea and Thailand.
“While trade with existing Free-Trade Agreement (FTA) partners in 2020 stood at RM1.185 trillion, registering a decrease of 3.7 per cent and accounting for 66.7 per cent of Malaysia’s total trade,” he said.
Mohamed Azmin said the recent signing of the Regional Comprehensive Economic Partnership (RCEP), the biggest FTA in the world, will provide Malaysian companies and businesses access to more than a third of the world’s market, attract foreign direct investment, and be a boon to Malaysia’s export growth.
“Going forward, investor confidence has been bolstered by Moody’s latest affirmation of Malaysia’s local and foreign currency long-term issuer ratings at A3, with a stable outlook.
“This is a testament to the government’s strong fiscal discipline and robust medium-term growth prospects and demonstrates Moody’s confidence in Malaysia as having strong credit standing,” he said.
While these are challenging times, the government’s priority is to place the nation firmly on the path of economic recovery particularly with the 12th Malaysian Plan as the blueprint for sustainable growth founded on sound economic fundamentals and decisive policy measures. ― Bernama
KUALA LUMPUR, Jan 30 — The ringgit is expected to further appreciate against the US dollar next week with investors keeping their focus on the progress of Covid-19 vaccination.
“The ringgit could appreciate further to reach RM4.03 per US dollar next week if there are positive developments regarding the vaccine rollout.
“Otherwise, the extension of the movement control order should prevent appreciation and perhaps lead to a weakening,” Bank Islam Malaysia Bhd economist Adam Mohamed Rahim told Bernama.
Malaysia’s Covid-19 vaccination programme will start in February, with a testing capacity of 150,000 shots a day being targeted by the middle of the year.
Prime Minister Tan Sri Muhyiddin Yassin said on Jan 11 that Malaysia was expected to receive the Pfizer vaccine under the first phase by end-February.
On another development, Adam said the progress of United States (US) President Joe Biden’s proposed US$1.9 trillion (RM7.6 trillion) economic relief package would be closely monitored next week, as it could help lift sentiment towards the emerging currencies, including the ringgit.
“It will definitely influence sentiment in the local market as a stimulus could boost consumption and demand for goods outside of the US and, later on, positively affect exports,” he said.
For this week, the ringgit started off on a weak note due to the extension of the second movement control order (MCO 2.0), weaker crude oil prices, the rising number of Covid-19 cases globally, and delayed vaccine rollouts.
The currency rebounded on Wednesday following gains in crude oil prices as well as the bullish global economic outlook by the International Monetary Fund.
The local currency ended the week firmer against the greenback as Moody’s Investors Service’s affirmation of Malaysia’s local and foreign currency long-term issuer ratings at A3, with a stable outlook, helped boost risk appetite in the market.
On a Friday-to-Friday basis, the ringgit was higher against the US dollar at 4.0400/0450 versus 4.0415/0445 in the previous week.
The local note also appreciated against the Singapore dollar to 3.0369/0416 from 3.0451/0485 a week earlier and strengthened against the yen to 3.8524/8575 from 3.8984/8021.
The ringgit rose vis-a-vis the British pound to 5.5207/5291 from 5.5231/5288 a week earlier and was firmer against the euro to 4.8945/9021 from 4.9197/9246 previously. — Bernama
KUALA LUMPUR, Jan 30 — Bursa Malaysia is expected to continue to trade in a cautious mode next week, driven by mixed sentiments on the regional and global economic outlook.
Bank Islam Malaysia Bhd economist Adam Mohamed Rahim said the local market was expected to see thin trading amid the holiday-shortened week, which will see the FTSE Bursa Malaysia KLCI (FBM KLCI) trading within a tight range.
The current resistance level is spotted at 1,600 points while the immediate support level stands at 1,560 points, he said.
“Additionally, the overall sentiment would be somewhat dampened following fresh geopolitical tensions after China warned Taiwan that an attempt to seek independence from China could mean war,” he told Bernama.
He said Moody’s Investors Service’s announcement on Thursday, wherein it reiterated a stable rating outlook for Malaysia, could boost investors confidence in the nation’s fiscal management.
Back in December, Fitch Ratings downgraded Malaysia’s rating.
“So, the latest rating is like a testament to the government’s management of its fiscal position,” said Adam.
On the other hand, he said the rise in today’s Covid-19 cases to record high could continue to attract interest in rubber glove counters which make up 10-13 per cent in terms of FBM KLCI’s market capitalisation.
“But, any surprise move to extend the movement control order (MCO) further could see some knee-jerk reaction in the market,” he added.
Meanwhile, Adam said restrictions over retail trading of stocks like GameStop and talks surrounding the further development of the US fiscal stimulus in the Senate also affected the mood in Asia.
“In fact on Bursa, rubber glove counters were firing on all cylinders amid a call on social media to take on short sellers. The concern was that the share prices, particularly of glove companies, have dropped in recent months despite the increasing profits reported by these firms.
“As such, glove counters were in high demand on Friday, pushing share prices sharply higher thanks to the calls made by some unknown investors over social media to take on the short sellers,” he added.
Despite the hefty gains in the major rubber glove counters, he said other stocks were mostly in the red amid fears that retail investors may want to enter other stocks which are part of the composite index.
On the forex market, he said the ringgit was 0.1 per cent higher against the US dollar amid Moody’s reiteration of a stable rating outlook for Malaysia.
“Aside from that, the US dollar is facing pressure amid nervousness that crept into the greenback following trading restrictions on GameStop shares.
“Looking ahead, the ringgit could appreciate further against the greenback to reach 4.03 per US dollar next week if there are positive developments regarding the vaccine roll-out,” he said.
On a Friday-to-Friday basis, the benchmark FBM KLCI slipped 30.34 points to 1,566.44 from last week’s 1,596.74.
On the scoreboard, the FBM Emas Index decreased 199.81 points to 11,363.81, the FBMT 100 Index slid 189.83 points to 11,104.93, the FBM 70 declined 154.34 points to 14,747.34, the FBM Emas Shariah Index eased 861.09 points to 12,187.86 and the FBM ACE Index rose 274.93 points to 11,032.94.
Sector-wise, the Financial Services Index was down 421.54 points to 14,464.06 and the Industrial Products and Services Index inched down 8.16 points to 169.19, while the Plantation Index dropped 125.27 points to 7,097.89.
The Energy Index decreased 40.93 points to 793.14, the Healthcare Index was 48.06 points higher at 3,597.85 and the Technology Index increased 1.32 points to 81.96.
For the holiday-shortened week, weekly turnover decreased to 25.57 billion units worth RM21.23 billion from 33.18 billion units worth RM22.61 billion in the previous week.
Main Market volume eased to 15.34 billion shares valued at RM17.64 billion from 18.94 billion shares valued at RM17.51 billion previously.
Warrants turnover rose to 2.04 billion units worth RM320.29 million from 1.98 billion units worth RM315.38 million in the previous week.
The ACE Market volume slipped to 8.19 billion shares valued at RM3.26 billion from 12.25 billion shares valued at RM4.78 billion previously. — Bernama
NEW YORK, Jan 30 — Some investors are growing concerned that wild swings in GameStop and other stocks driven by small-time traders could be fresh signs of overexuberance that foreshadow volatility for the broader stock market.
GameStop shares closed up 400 per cent for the week after the video game chain’s stock became a battleground between retail traders and Wall Street professionals, a tussle that captivated investors the world over.
Some market-watchers see those massive gains, as well as the moves in American Airlines and other heavily shorted stocks, as a sideshow in a rally underpinned by Federal Reserve support, anticipated coronavirus relief spending and expectations that vaccines against Covid-19 will help the US economy rebound later this year.
Fed Chairman Jerome Powell earlier this week pushed back on suggestions that the central bank’s super-low interest rates and massive bond purchases were creating asset bubbles.
But those comments failed to quell some investors’ worries that the Fed’s monetary policy has encouraged excessive risk-taking across broader markets: The S&P 500 is up 66 per cent since March and stocks stand near their highest valuations in two decades.
The action in GameStop and other stocks “definitely gives us some cause for concern,” said James Ragan, director of wealth management research at DA Davidson. “At the very least, you have to consider that there’s a chance of a market correction.”
The moves also drew some comparisons to the internet stock mania two decades earlier.
“Just the fact that you have a group of investors that are really chasing abnormal gains, that’s what is reminiscent of the dot-com bubble,” Ragan said.
Some barometres of general over-exuberance are already flashing: Citi said its “Panic/Euphoria” model is in “elevated euphoric territory.” And the latest fund manager survey from BofA Global Research noted that allocations to cash had dropped rapidly, indicating that investors are putting more funds into riskier assets.
The frenzied trading dominated the news on Wall Street this week, even as Apple Inc, Microsoft Corp and other corporate heavyweights reported quarterly results. The S&P 500 fell 3.3 per cent for the week, with trading volume surging above 24 billion shares on Wednesday, well above the 14.4 billion-share average of the past 20 sessions. The CBOE volatility index closed above 30 points this week for the first time since early November.
One potential catalyst for further volatility could come if hedge funds are forced to sell out of positions in order to cover failed short selling bets, although it was unclear whether there would be enough of such selling to create a broad risk to equities.
Already, some short-selling hedge funds appeared to be changing their approach. Short seller Andrew Left, whose company Citron Research was one of the hedge funds to spark this week’s battle with small-time traders over GameStop Corp, said in a YouTube video yesterday that his company would no longer publish short selling research.
Others said the ramped-up activity of retail investors — who last year helped drive rallies in shares of Tesla Inc and other names — could in itself be the latest sign of market frothiness.
“When you think about market bubbles, the last players that jump on board are retail, and that is generally what is happening right now,” said Mike Mullaney, director of global markets research at Boston Partners.
Analysts at LPL Financial doubt the recent ructions in GameStop and other names indicate a broader market bubble, noting that market breadth — which measures how many stocks are participating in a rally — remains healthy and credit markets are functioning “just fine.”
“Maybe it is simply time for a break” in the S&P 500’s rally, the firm said in a report yesterday.
Others, though, pointed to potential market turbulence ahead.
Stephen Suttmeier, technical research strategist at BofA Global Research, earlier this week urged clients to “take some profits” ahead of February, a comparatively weak month for stocks.
Other worrisome signs are the explosion of special purpose acquisition companies, or SPACs, and the surge in shares of electric vehicle companies on the heels of Tesla’s gains, said Scott Schermerhorn, chief investment officer at Granite Investment Advisors.
Still, he believes the frenzy over GameStop and other stocks is more of a “sideshow.”
Even after their rallies, the market capitalisation of GameStop and other companies that have recently seen their stocks soar are “like a rounding error” compared with the broader market, he said. — Reuters
CHICAGO, Jan 30 — United Airlines said yesterday it warned some 14,000 employees that they might be furloughed, and aviation unions made a new request to Congress and President Joe Biden for another US$15 billion (RM60.6 billion) in government assistance to keep workers on the payroll through at least September 30.
Chicago-based United warned that once a second round of payroll support expires on April 1, airlines could be forced to make drastic new cuts as the coronavirus pandemic has slashed demand for air travel.
United had recalled 13,000 employees from furlough when a US$15 billion airline industry payroll package was passed in December to protect jobs through March.
“Despite ongoing efforts to distribute vaccines, customer demand has not changed much,” United told employees, while saying it was monitoring demand and advocating for continued government support.
The US$15 billion in December helped bring back more than 32,000 airline employees and followed a US$50 billion package in March for passenger airlines divided between payroll assistance and low-cost government loans.
Two union leaders representing 75,000 flight attendants wrote congressional leaders seeking quick action to extend the payroll support programme “with US$15 billion to protect jobs” through September 30 or later.
Union leaders Sara Nelson and Julie Hedrick added: “The alternative is mass layoffs starting in April.”
American Airlines, which had furloughed 19,000 workers in October, did not immediately comment yesterday on whether it would issue new notices of potential layoffs.
Hawaiian Airlines said earlier it had issued furlough warnings to 900 employees.
United’s Friday memo said “we are all working hard toward the day when we can bring back our furloughed co-workers permanently.”
American Airlines chief executive Doug Parker said on Thursday that “April 1 is approaching and demand hasn’t gotten much better... So we are definitely going to need to address this, unless demand starts to pick up.”
Parker said the company’s unions “are already talking to the administration in Congress about this... We would obviously be supportive of that.” — Reuters
OAKLAND, Jan 30 — Social media services including Facebook Inc and Reddit restrict discussions about weapons, drugs and other illegal activity, but their rules do not specifically mention another lucrative regulated good: stocks.
Some people think they should. Users of a Reddit group, in which 5 million members exchange investment ideas, generated significant profits by gorging on shares of GameStop Corp and other out-of-favour companies that had been shorted by big hedge funds.
Investors have used social media for years. Anonymous posts have fuelled cryptocurrency pump and dump schemes, according to studies, but that obscure market generated less scrutiny. The “Reddit rally” however, has roiled global stock markets and drawn scrutiny of posts in which thousands of smaller investors trade tips on platforms from Facebook to Instagram to Telegram and Clubhouse.
Individual investors won praise from elected officials and the general public for jabbing powerful hedge funds with a “short squeeze.” Yet critics have emerged, accusing social media users of manipulating markets unlawfully by pumping shares of weak companies. The manager of one Facebook trading community said she has turned down requests to tout individual stocks.
Social media companies are generally not liable for user activity under a statute commonly known as Section 230. Still, their rules bar illegal behaviour like facilitating gun and drug transactions or distributing offensive content that could rile advertisers or generate calls for tighter regulation.
Section 230 also has some carve-outs that in theory could lead to a tech company being penalised for user-generated content, including violations of federal criminal law, said Jeff Kosseff, a cybersecurity law scholar who wrote a book on the law.
He noted that the bar is high. The speech itself would need to be a criminal violation of a law that explicitly specified distribution of that speech as illegal.
In addition, First Amendment precedents typically hold that the companies must have knowledge of criminal speech posted on their platforms in order to be held responsible for it, said Kosseff.
Harvard Law School professor Jesse Fried said the stock trading forums appear to be “purely legal behaviour: irrationally exuberant buying by amateur investors.”
Prosecuting users for deceiving investors is tough but possible, said University of California, Berkeley law professor Stavros Gadinis, adding that social media companies should have the same ability stock market operators do to intervene to stop alleged manipulation.
Identifying bad actors among the frenzy is a challenge. “There’s all of these feedback loops and incentives behind the scenes,” said Sinan Aral, director of the MIT Initiative on the Digital Economy. “We don’t know exactly who was in the crowd.”
The vast majority of traffic on Stocktwits, a social media platform for investors, appears to be people talking about stocks without evidence of manipulation, said Rishi Khanna, its CEO. He said the platform was not taking any extra moderation actions on this activity.
Grey area
Although Reddit has stated platform-wide rules — including no illegal content or soliciting or facilitating illegal transactions — the service relies heavily on community-based moderation. Users who act as moderators make and enforce guidelines about what is permissible.
The founder of the WallStreetBets Reddit community Jaime Rogozinski, who was a moderator of the group until April 2020, said he tried to draw lines on what to allow. He said he and other moderators removed illegal attempts to game the market, such as claiming to have insider information. When there were gray areas, he said they played it safe.
“You’d have attempts for pumping up stock and I still to this day am not sure what the regulation was, but I never wanted to find out,” said Rogozinski.
Archived copies of the forum showed a ban on “market manipulation” topped its list of rules by April last year. The current moderators said they struggled to moderate the WallStreetBets group as traffic surged, briefly causing technical errors at Reddit this week.
A spokeswoman said earlier this week that Reddit would “review and cooperate with valid law enforcement investigations or actions as needed.”
Discord, which hosts many trading discussions, said its rules bar users from engaging in “any illegal behaviour.” Discord on Thursday said it was working with the “Wallstreetbets” room team to moderate its new server, after removing the previous server over hate speech and misinformation. It did not address stock market influence.
A lack of closer scrutiny on the matter has left open the opportunity for potential manipulation. Former Merrill Lynch financial adviser Cassandra Cummings, 47, who now manages 80,000-member Facebook trading group The Stocks and Stilettos Society, said she declined multiple requests in the last year to rally her group around a specific stock.
“They know that I have the power through my group to move that company stock price,” she said. — Reuters
NEW YORK, Jan 30 — Silver prices jumped and global equity markets sank yesterday amid a growing battle on Wall Street between hedge funds and retail investors, while a dispute over Covid-19 vaccine supply in Europe cooled risk appetite.
Disappointing vaccine data from Johnson & Johnson also hurt sentiment but the assault of retail traders using online forums to force hedge funds to reverse short positions — bets that stocks will fall — kept the market on edge.
Shares of GameStop Corp and AMC Entertainment Holdings Inc surged again after Robinhood and Interactive Brokers said they planned to ease restrictions after imposing buying halts on Thursday.
GameStop soared 67.9 per cent to US$325 (RM1,313.81) a share, five times its closing price a week ago yesterday, and AMC gained 53.7 per cent, both in heavy trade. AMC was one of the most active stocks on the New York Stock Exchange. Volume on US exchanges was 16.83 billion shares, up from the 10.6 billion average in the fourth quarter.
Silver rallied and was up 2 per cent at US$26.90 an ounce, taking gains to almost 10 per cent since messages began to circulate on Reddit early Thursday urging retail investors to pile into the market and drive up prices.
Anxiety has grown as investors ask whether hedge funds will need to liquidate other positions to address losses in stocks they have shorted, said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.
“Once this short squeeze inevitably ends and there aren’t any more greater fools to bid up these stocks, will retail investors get stuck holding the bag?” Arone asked.
“The unintended consequences of this potential volatility have markets on edge as we end the week,” Arone said.
Arone added that investors need to take a giant step back as earnings are strong, the economy is improving, fiscal and monetary policy is supportive and vaccines are rolling out.
MSCI’s benchmark for global equity markets fell 1.82 per cent to 642.57, while Europe’s broad FTSEurofirst 300 index closed down 1.95 per cent at 1,524.1 to post its worst weekly loss, at 3.3 per cent, since October.
On Wall Street, the Dow Jones Industrial Average fell 2.03 per cent, the S&P 500 lost 1.93 per cent and the Nasdaq Composite dropped 2 per cent. The three indexes suffered their biggest weekly fall since the end of October.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.1 per cent to post a weekly loss of 4.4 per cent. Japan’s Nikkei fell 1.9 per cent, recording its first weekly loss of the year.
Vaccine dispute
Delays in Covid-19 vaccine production have snowballed into a spat between Britain, the European Union and drugmakers over how best to direct limited supplies.
AstraZeneca Plc offered eight million more doses of its Covid-19 vaccine to the European Union after it unexpectedly announced supply cuts last week. But the bloc said that was far short of what was originally promised, an EU official told Reuters yesterday.
New variants of the novel coronavirus have prolonged lockdowns and delayed expectations of an economic rebound.
The US dollar retreated from its highest level since mid-November against the Japanese yen as investors rebalanced portfolios for month-end. The greenback slid 0.48 per cent against the yen and traded little changed against an index of currencies, falling 0.002 per cent.
Bitcoin jumped as much as 14 per cent to a two-week high after Tesla Inc chief Elon Musk tagged the cryptocurrency in his Twitter biography.
French 10-year government bond yields, which move inversely to price, rose four basis points after France’s gross domestic product contracted less than expected in the fourth quarter of 2020.
US Treasury yields rose, in line with those in Europe, after data showed inflation perked up last month, while employment costs rose, suggesting the world’s largest economy is on the mend from the devastating effects of the pandemic.
The US yield curve steepened as long yields increased, with the spread between 2-year and 10-year notes hitting 98.20 basis points, the widest in about a week.
The 10-year US Treasury note rose 2.1 basis points to yield 1.0757 per cent.
Oil prices traded mixed as demand concerns caused by new coronavirus variants and slow vaccine rollouts offset a cut in Saudi Arabian oil supply and falling US oil inventories.
Brent crude futures settled up 35 cents at US$55.88 a barrel. US crude futures fell 14 cents to settle at US$52.20 a barrel.
Spot gold prices rose 0.16 per cent to US$1,843.31 an ounce. US gold futures settled up 0.5 per cent to US$1,850.30 an ounce. — Reuters
NEW YORK, Jan 30 — US stock indexes dropped, closing out the Friday session with the biggest weekly fall since October, as investors gauged the ramifications of Johnson & Johnson’s Covid-19 vaccine trial results, while a standoff between Wall Street hedge funds and small, retail investors added to volatility.
Johnson & Johnson fell 3.56 per cent as one of the biggest weights on both the Dow and S&P500 after the drugmaker said its single-dose vaccine was 72 per cent effective in preventing Covid-19 in the United States, with a lower rate of 66 per cent observed globally.
The results compare to the high bar set by two authorised vaccines from Pfizer Inc/BioNTech SE and Moderna Inc, which were around 95 per cent effective in preventing symptomatic illness in key trials when given in two doses. Moderna shares climbed 8.53 per cent while Pfizer shares edged up 0.11 per cent.
Worries of a short squeeze that began earlier in the week resurfaced after an army of retail investors returned to trade shares in stocks such as GameStop Corp and Koss Corp , which shot higher after brokers including Robinhood eased some of the restrictions they had placed on trading.
“The overall picture is that if there is any bad news that suggests or indicates there could be a longer hibernation period for us to be indoors and not consuming or spending that tends to set the market back and a lot of people sit on the sidelines, particularly with that news,” said Sylvia Jablonski, chief investment officer at Defiance ETFs in New York.
“And then what is going on with (Gamestop) and all that stuff, people are a little afraid to trade.”
The surge in volatility has led to a huge increase in volume, totaling over 20 billion shares in each of the past two sessions across US exchanges for the most active trading days on record going back to 2014, according to Refinitiv data.
Volume across US exchanges yesterday was 17.13 billion shares, compared with the 15.26 billion average for the full session over the last 20 trading days.
The US Securities and Exchange Commission said it was closely monitoring any potential wrongdoing, to both brokerages and social media traders.
The Dow Jones Industrial Average fell 620.74 points, or 2.03 per cent, to 29,982.62, the S&P 500 lost 73.14 points, or 1.93 per cent, to 3,714.24 and the Nasdaq Composite dropped 266.46 points, or 2 per cent, to 13,070.70.
All three main indexes suffered their biggest weekly fall since the end of October, as the Dow lost 3.28 per cent, the S&P fell 3.31 per cent and the Nasdaq declined 3.49 per cent. For the month, the Dow dipped 2.04 per cent, the S&P shed 1.12 per cent and the Nasdaq gained 1.42 per cent.
Both the S&P and Dow closed below their 50-day moving average, seen as a technical support level.
Market participants have speculated that volatility caused by the short squeezes have led to investor favourites including Apple Inc coming under pressure as hedge funds sell to cover billions of dollars in losses.
Apple shares declined 3.74 per cent while Microsoft fell 2.92 per cent.
Still, while concerns about rising Covid-19 cases and bumpy vaccine rollouts kept investors leery about a pullback and an increase in volatility in the near-term, the start to quarterly earnings has eased some concern about stretched stock valuations.
Of the 184 companies in the S&P 500 that have reported earnings through yesterday morning, 84.2 per cent have topped analyst expectations, well above the 75.5 per cent beat rate for the past four quarters, according to Refinitiv data.
Honeywell International lost 3.68 per cent after it posted a 13 per cent fall in quarterly profit.
The first known US cases of the South African Covid-19 variant, found to be partly resistant to current vaccines and antibody treatments, was detected in South Carolina on Thursday.
Data showed US labour costs rose more than expected in the fourth quarter amid a jump in wages, supporting views that inflation could accelerate this year, while another report showed US consumer spending fell for a second straight month in December.
Declining issues outnumbered advancing ones on the NYSE by a 2.88-to-1 ratio; on Nasdaq, a 2.38-to-1 ratio favoured decliners.
The S&P 500 posted 7 new 52-week highs and no new lows; the Nasdaq Composite recorded 64 new highs and 16 new lows. — Reuters
NEW YORK, Jan 30 — Wells Fargo & Co Chief Executive Officer Charles Scharf’s annual pay fell by about US$3 million (RM12.1 million), or 12 per cent, in 2020, a regulatory filing showed yesterday.
Scharf will receive US$20.3 million for his work during the year, compared with US$23 million in 2019, the bank said.
Scharf, who served as a top lieutenant to JPMorgan Chase and Co Chief Executive Jamie Dimon during the financial crisis of 2008, took over the reins at Wells Fargo in 2019.
The fall in Scharf’s pay compares with a 36 per cent drop in Goldman Sachs Chief Executive David Solomon’s salary and a 20 per cent jump in compensation for Morgan Stanley’s top boss James Gorman. JPMorgan held CEO Dimon’s annual pay at US$31.5 million.
Wells Fargo’s board cited the drop in the bank’s financial results for 2020 as one of the reasons for Scharf’s lower compensation, noting that the results were significantly impacted by the effects of the Covid-19 pandemic.
The bank last year posted its first quarterly loss since 2008 and also saw its profit plunge to just 1 penny per share in the first quarter of 2020. However, Wells Fargo ended the year with a rare quarterly profit beat.
The bank has operated under a dark cloud since 2016 when details emerged about millions of phony accounts employees had created in customers’ names without their permission to hit sales targets. — Reuters
KUALA LUMPUR: Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz has reassured that Malaysia will not implement a total lockdown on the economy even if the worst case scenario comes true.
Instead, he said the government will continue to focus on enforcing a more stringent standard operating procedure (SOP), should the number of COVID-19 cases remained high in the country.
”Base on the current model, we believe the number of cases will go down.
“Assuming worst case scenario (did come true), it will not be a total lockdown on the economy, we will continue to focus on more stringent SOP,” he said this during an interview with CNBC today.
Tengku Zafrul was responding to a question on whether or not that the government would shut down certain sectors, or which sectors would be the priority to be closed down if the Movement Control Order (MCO 2.0) has to be extended, or the COVID-19 vaccine rollout is not smooth as anticipated.
He said if the number of cases continued to rise, core issues such as the adherence and enforcement of the SOPs should be addressed.
Malaysia recorded 4,094 new COVID-19 cases on Thursday, taking the country’s infection tally to 198,208 cases.
Meanwhile, Tengku Zafrul dismissed the notion that the recent increase in the ringgit against the US dollar would impact the export performance.
“Yes, the ringgit has strengthened against the US dollar and other currencies, but as global trade is forecast to grow about eight per cent in 2021 versus 2020, Malaysia stands to benefit form that.
“And I believe the ringgit performance would not have the adverse impact on the exports,” he said. - Bernama
KUALA LUMPUR: Investors should remain cautiously optimistic about corporate earnings growth this year, although promising developments on COVID-19 vaccines have injected some optimism into the financial markets, said UOB Malaysia Bhd.
Its managing director and personal financial services country head, Ronnie Lim, said a full global economic recovery will likely require widespread COVID-19 vaccinations worldwide, continued government stimulus as well as stronger business and consumer sentiments.
The roll-out of additional government measures earlier this month in response to the current surge of
COVID-19 cases in Malaysia showed that the recovery journey could be bumpy, it noted.
“We believe that countries and industries that are supported by ongoing government stimulus can recover strongly this year, especially if COVID-19 vaccinations start by the middle of the year.
"As more people around the world are vaccinated, governments can slowly lift pandemic-related movement and travel restrictions, which will help the global economy to rebuild gradually in the second half of 2021,” he said in a statement today.
Lim said central banks would continue to keep monetary policies loose to support the economic recovery.
“However, UOB expects the recovery chart to show diverging paths because some regions and sectors will emerge from the recession sooner and in better shape, while others that have been hit harder will recover more slowly.
“For example, industries such as e-commerce, electronics, technology, gaming apps and services, and pharmaceuticals are thriving amid the pandemic.
“With low interest rates and higher economic growth, we expect corporate earnings to recover from
2020 levels this year,” he said.
Meanwhile, UOB expects Malaysia’s gross domestic product (GDP) to grow by 5.0 per cent this year
and will likely have to wait until at least 2022 to see a return to pre-pandemic levels.
Previously, the bank had initially forecast a 6.0 per cent expansion in Malaysia’s GDP in 2021.
“We revised our estimate after the reinstatement of the Movement Control Order (MCO) 2.0 in all states except Sarawak to curb the rise in COVID-19 cases.
“Assuming the affected states will be under strict MCO until the end of February with essential business sectors operating with only up to 70 per cent capacity, Malaysia may suffer an estimated economic loss of RM12 billion in 2021,” he explained. - Bernama
KUALA LUMPUR, Jan 29 — Global investor sentiments continued to improve amid expectations for an eventual normalisation of economic activities, following government authorisations on the use of Covid-19 vaccines by major economies, said Bank Negara Malaysia (BNM).
This occurred despite some concerns on the potential slowing down of the global economic recovery, as several major economies introduced additional lockdown measures amid surges in Covid-19 infections in December 2020.
“Consequently, global and regional equity indices recorded gains, reflecting higher investor risk appetite for riskier assets. Similarly, the FBM KLCI increased by 4.1 per cent,” BNM said in its Monthly Highlights — December 2020 report.
The improved investor risk appetite also led to non-resident portfolio inflows into the domestic bond market amid yield-seeking activities by global investors.
As a result, the 10-year of Malaysian Government Securities (MGS) declined by nine basis points and the ringgit appreciated by 1.4 per cent against the US dollar.
Meanwhile, headline inflation was less negative at -1.4 per cent in December 2020 compared with -1.7 per cent in November due to to higher domestic retail fuel prices.
Underlying inflation, as measured by core inflation, remained stable at 0.7 per cent.
For 2020 as a whole, BNM said average headline inflation was lower at -1.2 per cent (2019: 0.7 per cent) mainly reflecting the substantially lower global oil prices.
Core inflation remained positive, averaging at 1.1 per cent (2019: 1.5 per cent).
Banking system asset quality remains healthy despite rising impairments. Gross impaired loans ratio continued to inch upwards, returning to levels comparable to 2019 (December 2020: 1.6 per cent; November 2020: 1.5 per cent).
“Banks continued to set aside additional provisions as a precaution against future credit losses with the total provisions to total loans ratio increasing to 1.7 per cent in December (November 2020: 1.6 per cent),” BNM said.
Net financing continued to expand amid a moderation in total outstanding loan growth (December 2020: 3.4 per cent, November 2020: 3.8 per cent), while outstanding corporate bond growth was sustained at 6.5 per cent (November 2020: 6.7 per cent).
For export growth, it improved to 4.3 per cent in November 2020 (October 2020: 0.2 per cent) due mainly to stronger electrical and electronics (E&E) exports mainly to destinations such as China, Hong Kong and Singapore.
Looking ahead, exports are expected to be supported by the recovery in global growth, continued demand for electronics exports and higher commodity prices.
“Nonetheless, the trade outlook remains contingent on global developments surrounding the COVID-19 pandemic,” BNM added. — Bernama
KUALA LUMPUR: The Malaysian plantation fraternity involved in the entire palm oil supply chain will continue to offer sectoral-related and most practical recommendations to the policymakers and the authorities to help mitigate the spread of COVID-19 in the industry.
In a joint statement, the associations called on all members and other stakeholders to work together to mitigate the spread of the virus by keeping all plantations and its entire supply chain safe and secure with very strict adherence to the Standard Operating Procedures (SOPs).
“We advocate that the plantation sector across its supply chain be allowed to continue to operate in compliance with strict SOPs, thereby sustaining its contribution to the national economy.
“This would be preferable to a total shutdown of an essential pillar of the national economy, with concomitant socio-economic consequences for the industry and hundreds of thousands of smallholders,” they said.
The joint statement was issued by eight associations including the Malaysian Palm Oil Association, Malaysian Estate Owners’ Association, National Association of Smallholders, Malayan Agricultural Producers Association and Palm Oil Millers Association.
The associations viewed that if field and mill operations are called upon to operate on reduced workforce, this would impact production capacities enormously, and the government would also stand to lose windfall profit levy each month and corporate income tax.
“These losses do not include the losses that will cascade to downstream refiners and the multiplier effect on supporting industries.
“The government can do a great deal for the people with the taxes, including mitigating the COVID-19 pandemic,” they said.
The associations also called on all stakeholders to continue with consultative engagements based on Sabah’s recent model, by seeking out and implementing inclusive discussions with the authorities in their respective states, and working towards adopting common but differentiated approaches which embrace sectoral-specificness.
“Let us engage in partnership towards accelerating an end to our common adversary even as we continue to support the dedication of all our hard-working frontliners to contain the COVID-19 virus,” they said. - BERNAMA
KUALA LUMPUR: Teleport Commerce Malaysia Sdn Bhd, the logistics venture of airasia digital, has been granted a licence as a forwarding agent by the Royal Malaysian Customs Department to digitally enable customs clearance for any shipper or recipient for its bulk or e-commerce delivery services.
Digital forwarding manager Chen Wei Kiat said customers can now experience a revolutionary customs clearance experience with lower cost and faster delivery from anywhere in Southeast Asia as the services will be end-to-end.
“Utilising technology that was built to replace the traditional manual processes of competitors, Teleport can now provide the Customs Department with accurate, fast and reliable declarations on all types of shipment.
“We also advise shippers and recipients with regards to customs requirements for cross-border shipments as Teleport acts as a digital forwarder between customers and the Malaysian Customs Department,” he said in a statement today.
Chen said the technology was built in-house as it aims to be a digital logistics solution provider and the forwarding agent application was handled by Herdawati and Nur Insyirah from the Digital Forwarding team. - BERNAMA
PETALING JAYA: Steel pole maker Mestron Holdings Bhd has entered into a head of agreement with Sinopharm Group’s Zhongyu Yexing (Chengdu) Industrial Co Ltd for the distribution of Covid-19 vaccine in Malaysia.
Zhongyu is one of the authorised distributors for Sinopharm’s China National Biotech Group vaccine.
With the agreement, both parties have mutually agreed to commence discussions and negotiations exclusively the details on the structure and terms of the proposed collaboration.
The two parties expect to finalise and enter into a definitive agreement within 30 days after the completion of the discussions and negotiations.
Mestron managing director Por Teong Eng stated that it has obtained a clearance letter from the Health Ministry to commence negotiation and cooperation with any companies from China for the importation, distribution, sale, marketing, use and application of the Covid-19 vaccine in Malaysia.
“Once we have firmed up the terms, we will submit an application to the National Pharmaceutical Regulatory Agency (NPRA) to register and get approval for the distribution of Covid-19 vaccine in Malaysia,” he said in a statement today.
Towards this goal, Por said that Zhongyu will provide support to ensure the group obtains the approval.
“Once we have obtained all the necessary approval, Zhongyu will supply the vaccine at preliminary estimation of 3 million doses or 1.5 million sets to Mestron in stages.”
For the venture, the group expects to invest RM20 million which will be funded via internally generated funds, bank loans and proceeds from private placement.
KUALA LUMPUR, Jan 29 ― Malaysia’s official reserve assets amounted to US$107.64 billion (RM436 billion) as at end-December 2020 while other foreign currency assets stood at US$561.1 million during the period, according to Bank Negara Malaysia (BNM).
In a statement today, the central bank said for the next 12 months, the pre-determined short-term outflows of foreign currency loans, securities and deposits, which include, among others, scheduled repayment of external borrowings by the government and the maturity of foreign currency Bank Negara Interbank Bills, amounted to US$7.31 million.
In addition, it said the short forward positions amounted to US$5.79 million and long forward positions amounted to US$535 million as at end-December 2020, reflecting the management of ringgit liquidity in the money market.
The central bank said in line with the practice adopted since April 2006, the data exclude projected foreign currency inflows arising from interest income and the drawdown of project loans.
It said projected foreign currency inflows amounted to US$2.47 million in the next 12 months.
BNM said the only contingent short-term net drain on foreign currency assets are government guarantees of foreign currency debt due within one year, amounting to US$327.6 million.
“There are no foreign currency loans with embedded options, no undrawn, unconditional credit lines provided by or to other central banks, international organisations, banks and other financial institutions.
“Bank Negara Malaysia also does not engage in foreign currency options vis-à-vis ringgit,” it said.
Overall, it said the detailed breakdown of international reserves under the IMF (International Monetary Fund) Special Data Dissemination Standard (IMF SDDS) format indicated that as at end-December 2020, Malaysia’s international reserves remained usable. ― Bernama
KUALA LUMPUR, Jan 29 — The Malaysia Digital Economy Corporation (MDEC) has recently launched its Alternative Funding Programme for 2021.
This programme will see MDEC partnering with 11 crowdfunding operators to help entrepreneurs tide over the economic challenges brought on by the Covid-19 onslaught.
Chief executive officer Surina Shukri said this is MDEC’s second year running the Alternative Funding Programme led by its Global Growth Acceleration Division (GGA) following its successful launch in 2020 which culminated in 16 companies being listed on participating platforms with a total of RM19.89 million raised.
“Realising the pressing need that startups had in terms of business funding at the start of the Covid-19 pandemic, MDEC immediately sprung into action with a few funding facilitation programmes,” she said in a statement today.
Launched in April 2020, the Alternative Funding Programme saw MDEC partnering with seven crowdfunding operators to offer alternative channels for startups to obtain funding as traditional routes posed a strong challenge.
Venture Capitalists (VCs) were also being less than receptive to new investments, especially towards early-stage startups due to the uncertainties caused by the pandemic.
Among the startups that successfully raised funding through the programme include PolicyStreet who raised US$1.8 million (RM7.8 million), the largest fund raised to date from an equity crowd funding (ECF) platform in Malaysia.
“With the continued disruption to businesses caused by Covid-19 in 2020, it is crucial for startups in Malaysia to be able to explore multiple avenues for funding.
“While initiatives like the Dana Penjana Nasional have done much to address the funding gaps for startups in Malaysia, it is in the best interest of MDEC for them to have more options to ensure sustainable cash flow. Backed by the strong outcomes from last year’s programme, I believe ECF and peer-to-peer (P2P) are great fundraising avenues for startups to consider.
“While we were ranked 11th in the emerging startup ecosystem globally by Startup Genome in 2020, our ultimate goal is to be the top-ranking startup ecosystem in the world.
“Funding facilitation initiatives like our Alternative Funding Programme are just one of the many efforts we are making to nurture our startup ecosystem to be top-ranked, which will further help the many as we strive towards Malaysia 5.0 and become the ‘Heart of Digital Asean’,” Surina said.
A total of five ECF — ATA Plus, CrowdPlus.asia, Eurecca, Leet Capital, and pitchIN, as well as six P2P platforms — B2B Finpal, CapBay, Funding Societies, microLEAP, MoneySave, and QuicKash, are taking part in this year’s Alternative Funding Programme by MDEC.
Entrepreneurs, who wish to explore this alternative financing option, may submit their interest at https://mdec.my/gain/alternative-funding/. This drive begins on Jan 27 and ends on March 31, 2021.
MDEC will offer priority assessment to all applicants by expediting the eligibility screening process before submitting the profiles to the applicants’ choice of ECF/P2P operator. — Bernama
PETALING JAYA: Malaysia’s exports saw the highest monthly export value at RM95.7 billion in December 2020, a 10.8% year-on-year (yoy) increase from the same month in 2019, outpacing import growth for eight straight months, according to the latest figures by the Statistics department.
Following nine straight months of decline, the country saw imports rebound to grow at 1.6% yoy to RM75 billion.
In the previous year, Malaysia’s total trade amounted to RM1.8 trillion.
Malaysia’s chief statistician Datuk Seri Mohd Uzir Mahidin commented that exports continued its positive momentum in December last year, supported by both re-exports and domestic exports.
“Re-exports stood at RM17.6 billion contributed 18.4% to the total exports, surged by 22.9%. While the domestic export was valued at RM78.1 billion grew by 8.3%yoy,” he said in a statement.
On the other other hand, trade surplus soared by 64.9% to RM20.7 billion yoy.
“Total trade in December 2020, amounted to RM170.8 billion widened by 6.5% as compared to December 2019,” said Uzir.
According to the department, the growth in exports was supported mainly by higher exports to Singapore (RM2.2 billion), China (RM1.9 billion), the United States (RM1.7 billion), India (+RM1.62 billion), Hong Kong (RM1.60 billion) and the European Union (RM988.1 million).
Meanwhile, increases in imports were mainly from China (RM2.1 billion), India (RM772.9 million), Hong Kong (RM518.7 million) and Taiwan (RM466.0 million).
It elaborated that the main products which contributed to the increase in exports were electrical and electronic products (RM5.6 billion); rubber products (RM3.0 billion) and palm oil and palm oil-based agriculture products (RM2.6 billion).
Meanwhile, expansion in imports were noted for electrical and electronic products (RM2.7 billion) and chemical & chemical products (RM734.7 million).
For the month, the statistics department also saw imports by end use grew for consumption goods rose 3.3% or RM223.9 million to RM7.0 billion, which made up 9.4% of total imports.
On the other hand, imports for intermediate goods and capital goods posted a decrease. It revealed that imports of intermediate goods valued at RM39.8 billion or 53.1% share of total imports, a decline of 5.0% (-RM2.1 billion) and the imports of capital goods went down by 2.0% or RM169.5 million to RM8.4 billion.
“In addition, exports for the fourth quarter of 2020, also grew by 5.% from RM258.2 billion in 4Q’19 to RM271.5 billion. However, imports in Q4 of 2020, shrank by 4.5% from RM221.4 billion in 4Q’19 to RM211.6 billion, resulting in a trade surplus of RM483.0 billion (+0.7%),” said the chief statistician.
On the whole, he pointed out that Malaysia’s total trade in Q4’20, rebounded by 0.7% to RM483.0 billion from a decline of 0.5% in Q3’20.
“In tandem with softer global demand and unfavourable external economic conditions due to the Covid-19, Malaysia’s total exports in 2020 contracted by 1.4% to RM981.0 billion, from the preceding year while imports declined by 6.3% or RM53.2 billion to RM796.2 billion,” said Uzir.
In 2020, the country’s total trade reached RM1.8 billion, a yoy decline of 3.6%, while trade surplus widened by 26.9% to RM184.8 billion, the largest trade surplus ever recorded thus far.
KUALA LUMPUR, Jan 29 ― Malaysia’s trade surplus widened by 26.9 per cent to RM184.8 billion in 2020, the largest trade surplus ever recorded thus far, while total trade amounted to RM1.8 trillion, down 3.6 per cent year-on-year (y-o-y), said the Department of Statistics Malaysia (DoSM).
Chief statistician Datuk Seri Dr Mohd Uzir Mahidin said in tandem with softer global demand and unfavourable external economic conditions due to the Covid-19 pandemic, total exports in 2020 contracted by 1.4 per cent to RM981.0 billion from the preceding year, while imports declined by 6.3 per cent or RM53.2 billion to RM796.2 billion.
He said December 2020 recorded the highest monthly export value of RM95.7 billion, up by 10.8 per cent from the same month in 2019, outpacing import growth for eight consecutive months.
Mohd Uzir said after nine consecutive months of decline, imports rebounded to post a growth of 1.6 per cent to RM75.0 billion.
“Malaysia’s exports continued its positive momentum in December 2020. The expansion in exports was supported by both re-exports and domestic exports.
“Re-exports stood at RM17.6 billion, up 22.9 per cent, and contributed 18.4 per cent to the total exports, while domestic export was valued at RM78.1 billion, recording a growth of 8.3 per cent y-o-y,” he said in a statement today.
The trade surplus soared by 64.9 per cent to RM20.7 billion y-o- y, he noted.
Mohd Uzir said Malaysia's export expansion was supported mainly by higher export to Singapore (+RM2.2 billion), China (+RM1.9 billion), the United States (+RM1.7 billion), India (+RM1.62 billion), Hong Kong (+RM1.60 billion), and the European Union (+RM988.1 million).
The main products which contributed to the increase in exports were electrical and electronics products (+RM5.6 billion); rubber products (+RM3.0 billion) and palm oil and palm oil-based agriculture products (+RM2.6 billion).
Meanwhile, increases in imports were mainly from China (+RM2.1 billion), India (+RM772.9 million), Hong Kong (+RM518.7 million) and Taiwan (+RM466.0 million).
The expansion in imports was noted for electrical and electronics products (+RM2.7 billion) and chemical and chemical products (+RM734.7 million). ― Bernama